Medicare Prescription Drug Benefit Program (PLAN)

Attachment 5a - Description of Compensation Structure(s)
Submission Requirements for MA and PDP Organizations Paying
Compensation to Marketing Organizations
Instructions
For any MA or PDP organization that did not sell products
through agents and brokers in any given year, such
organization is not required to provide such information
for such year. Nonetheless, every organization must
provide 2019 information and information for the other
years in which they participated in Medicare Advantage and
the prescription drug programs.





Submit Certification (Attachment 1a)
Using Attachment 2a (or if your organization has the
schedule(s) in a workbook, or some other format, you may
submit that documentation in lieu of Attachment 2a)
o Organizations must submit each unique MA and PDP
plan compensation structure where plans pay
contracted marketing organizations (such as Field
Marketing Organizations (FMOs)).
o Include all of the compensation structures for years
2016 through 2019.
o Each structure must be assigned a unique identifying
number (include plan year as the first four digits
in the ID number) and the structure must be clearly
identified in the data submission with that number.
For each compensation structure, complete the template
Excel worksheet entitled “Contracting Org Info Sheet” in
the Excel workbook “Covered Agent Information Sheet
Workbook” (Attachment 3), and provide:
o The structure’s unique identifying number;
o The marketing organization’s name and address, and
the phone number and email address for a contact at
each marketing organization with whom you contract;
and
o The number of agents affiliated with these marketing
organizations that sell on behalf of your
organization and are covered by each compensation
structure.

1

Attachment 5b - Description of Compensation Structure
Requirements for Writing Agents, Including Agents Paid
Directly by MA and PDP Organization and Agents Paid by
Marketing Organization(s) Contracted By Plans
Instructions
For any MA or PDP organization that did not sell products
through agents and brokers in any given year, such
organization is not required to provide such information
for such year. Nonetheless, every organization must
provide 2019 information and information for the other
years in which they participated in Medicare Advantage and
the prescription drug programs.
When completing the required templates, for “initial”
compensation in years 2015-2017, use the amount an agent
was initially paid for enrolling a beneficiary in a plan.
This information collection includes: 1) compensation
structures concerning payment to contracted marketing
organizations; 2) compensation structures concerning
payment directly to writing agents by the MA or PDP
organization; and 3) compensation structures concerning
payment directly to writing agents by those marketing
organizations contracted by plans. Organizations must
complete all applicable collections.





Submit Certification (Attachment 1a) – (Plans providing
compensation information for both their contracted
marketing organizations and agent need only submit one
Attachment 1a.)
Submit Certification (Attachment 1b) - only if using
Option One, described below, for determining 2019
compensations
Using Attachment 2b (or if your organization has the
schedule(s) in a workbook, or some other format, you may
submit that documentation in lieu of Attachment 2b),
o Organizations must submit each unique compensation
structure for writing agents (street level) selling
their MA and PDP plans paid directly by the plan.
o Organizations must submit each unique compensation
structure for writing agents (street level) paid
directly by the MA or PDP organization.
o Organizations must also submit each unique
compensation structure for writing agents (street
2

level) paid by marketing organization(s) with which
they contract.
o Include each compensation structure for years 2016
through 2019.
o Each structure must be assigned a unique identifying
number and the structure must be clearly identified
in the data submission with that number.
 The first four digits of the ID should be the
plan year
 The fifth digit of the ID should be a “P” if
the structure is paid directly by the plan and
a “M” if the structure is paid by a marketing
organization)


For each compensation structure, complete the template
Excel workbook worksheet entitled “Writing Agents (Plan
Paid)” in the Excel workbook “Covered Agent Information
Sheets Workbook”, and provide:
o The unique identifying number and
o The number of agents covered by each compensation
structure.

2019 Compensation Structures
Note: For purposes of both of the options listed below for
determining 2019 compensation structures, the “area” in
which the plan is offered corresponds to whatever area the
organization uses to determine any geographic adjustments
to the amount paid. If the organization pays the same
amount in each county, or MSA, or Statewide, that would be
the area in question. For “initial” compensation in years
2016-2018, use the amount an agent was initially paid for
enrolling a beneficiary in a plan.


For each plan type in existence in 2016 for a given area,
there are two options for determining 2019 compensation
structures:
Option One -- Certify that the renewal rate for 2019 for
that same plan type is 50% of the plan type’s 2016
initial year compensation, adjusted for the following
growth rates:

For all MA products use the following rates: 20162017 4.59%; 2017-2018 6.34%; 2018-2019 3.74%;

For all PDP products use the following rates: 20162017 6.86%; 2017-2018 6.19%; 2018-2019 5.97%;
3

or
Option Two -- Perform a market analysis of the 2016 and
2017 compensation structures for the same types of plans
in that area. The plan type’s 2019 renewal rate must be
50% of the market rate for initial compensation for that
period, based on the market analysis to be commensurate
with the “market” rates paid by all organizations in the
area for an initial enrollment in the plan type in
question during 2016 and 2017, also adjusted for the
growth rates above. (Essentially, any rates in excess of
what was paid by organizations in the area would have to
be justified.) Based on the data we receive from MA and
Part D contractors (including contractors that have
elected to meet the requirement by Option One above) we
will determine if the compensation structures are
commensurate with fair market value.


For contractors who did not offer plan types in 2016 in
an area in which they will be offering plans in 2019, or
did offer a plan of the type in question in 2016, but did
not use agents and brokers to sell that product, those
contractors must use Option Two above.



If an organization was in existence in 2016 but did not
offer a plan in a specific geographic area in which they
now operate, they may utilize Option 1 by considering the
2016 compensation the organization paid for similar plan
types in similar geographic areas.

4

Attachment 5c – Initial and Total Compensation Excel
Workbook “Agent Compensation Information” (Attachment 4).

Instructions
For any MA or PDP organization that did not sell products
through agents and brokers in any given year, such
organization is not required to provide such information
for such year. Nonetheless, every organization must
provide 2019 information and information for the other
years in which they participated in Medicare Advantage and
the prescription drug programs.
In addition to the compensation structures requested in
attachments 2a and 2b, each MA and PDP Parent Organization
must submit a separate CMS template Excel workbook
(Attachment 4 - Agent Compensation Information Workbook)
that provides data on both the Initial and Life
Compensations paid in 2016 – 2018, and the compensation
schedule set for 2019. This information must be provided
describing the compensation paid directly to writing agents
(street level) by the plan; compensation paid directly to
writing agents (street level) by marketing organizations
contracted by the plan; and the compensation paid by the
plan to the contracted marketing organizations.
Structure of Excel Workbook


The excel workbook is divided into separate worksheets
for years 2016 through 2019. For each year, it is also
divided into three worksheets:
o “Marketing Organizations” – Collects data on
compensation paid by an MA or PDP Organization to an
intermediary, such as a field marketing
organization.
o “Writing Agents (Plan Paid)” - agents paid directly
by the MA and PDP Organizations, and
o “Writing Agents (M.O. Paid) – agents paid directly
by marketing organizations contracted by the plan

Finally, each worksheet for years 2016-2018 is also divided
to include both initial compensation actually paid and
total compensation expected to be paid over the life of the
compensation structure.

5

Years 2016-2018 Initial Compensation Actually Paid


For each of the years 2016 through 2018, the following
data must be provided for initial compensation actually
paid under structures applying to payment in three
situations. This information must be provided describing
the compensation paid directly to writing agents (street
level) by the plan; compensation paid directly to writing
agents (street level) by marketing organizations
contracted by the plan; and the compensation paid by the
plan to the contracted marketing organizations:


o Contract/pbp number.
o Number of beneficiaries -- This number is the number
of beneficiaries enrolled in that contract/pbp in
that year for which the compensation was paid.
o Minimum – This is a number calculated based on the
initial compensation actually paid from the year’s
structure(s) with the lowest initial compensation
for that contract/pbp. Minimum equals the total of
all the initial compensation actually paid from such
structure(s) divided by the number of beneficiaries
whose enrollment was paid for under such
structure(s).
o Maximum – This is a number calculated based on the
initial compensation actually paid from the year’s
structure(s) with the highest initial compensation
for that contract/pbp. Maximum equals the total of
all the initial compensation actually paid from such
structure(s) divided by the number of beneficiaries
whose enrollment was paid for under such
structure(s).
o Mean -- This is a number calculated based on the
initial compensation actually paid from all the
year’s structure(s) applicable to that contract/pbp.
Mean equals the total of all the initial
compensation actually paid from all the structure(s)
applicable to that contract/pbp, divided by the
number of beneficiaries whose enrollment was paid
under such structure(s).
o Median -- This is a number derived from calculating
the initial compensation actually paid for each
schedule applicable to that contract/pbp. The median
is derived by arraying all the initial compensation
values from low to high and selecting the midpoint
value. If there are an even number of values, and,

6

therefore, no midpoint value, calculate the median
by averaging the two values closest to the midpoint.
Years 2016-2018 Total Compensation Expected to be Paid over
Life of Compensation Structure
Note: when completing the required templates, for the “life
cycle” compensation, enter the total amount an agent could
potentially be paid if the beneficiary the agent helped
enroll stays in that plan.


For each of the years 2016 through 2018 the following
data must be provided for total compensation actually
paid over the life of the compensation structures
applying to payment in three situations. This information
must be provided describing the compensation paid
directly to writing agents (street level) by the plan;
compensation paid directly to writing agents (street
level) by marketing organizations contracted by the plan;
and the compensation paid by the plan to the contracted
marketing organizations: :
o Contract/pbp number.
o Number of beneficiaries -- This number is the number
of beneficiaries enrolled in that contract/pbp in
that year for which compensation was paid.
o Minimum – This is a number calculated based on the
total compensation expected to be paid from the
year’s structure(s) that have the lowest total
compensation amount paid over the structure’s life
for that contract/pbp. Minimum equals the total of
all the expected compensation to be paid over the
life of the structure(s) divided by the number of
beneficiaries whose enrollment in that year was
initially paid for under such structure(s).
o Maximum – This is a number calculated based on the
total compensation expected to be paid from the
year’s structure(s) with the highest total
compensation amount paid over the structure’s life
for that contract/pbp. Maximum equals the total of
all the expected compensation to be paid over the
structure(s) life divided by the number of
beneficiaries whose enrollment in that year was
initially paid for under such structure(s).
o Mean -- This is a number calculated based on the
total compensation expected to be paid over the
structure’s life represented by all of the year’s
structure(s) applicable to that contract/pbp. Mean

7

equals the total of all the expected compensation to
be paid over the life of all the structure(s)
applicable to that contract/pbp, divided by the
number of beneficiaries whose enrollment was
initially paid under such structure(s)in that year.
o Median -- This is a number derived from calculating
the total compensation expected to be paid over the
structure’s life for each schedule applicable to
that contract/pbp. The median is derived by arraying
all the total compensation values from low to high
and selecting the midpoint value. If there are an
even number of values, and, therefore, no midpoint
value, calculate the median by averaging the two
values closest to the midpoint.
Year 2019 Initial and Renewal Year Compensation and
Compensation Paid over the Life of the Structure –
Contracted Marketing Organizations
For 2019, the following data must be provided for
structures applying to payment to contracted marketing
organizations (Worksheet: “2009 Marketing Orgs”):
o Contract/pbp number – Provide each contract/pbp
number in as many rows as there are compensation
structures that apply to it.
o Structure number – Provide each unique number
identifying each compensation structure applicable
to the contract/pbp number. (The structure number
should match the structures submitted under
Attachment 2a.)
o Initial Compensation – Enter the amount to be paid
to the contracted marketing organization for an
initial enrollment.
o Renewal Years – Enter the amount to be paid to the
contracted marketing organization for renewal
compensation. The spreadsheet has ten renewal years
listed - complete as many renewal years as needed
for life cycle structure. Do not delete columns – if
no commission is paid in a renewal year listed on
the spreadsheet enter a zero (0).
o Number of Agents – Enter the number of agents
contracted to sell under the compensation structure
for that contract/pbp. (As of November 15, 2008)

8

Year 2019 Initial and Renewal Year Compensation and
Compensation Paid over the Life of the Structure - Writing
Agents (Paid by Plan and Paid by Marketing Organization)


For 2019, the following data must be provided for
structures applying to payment to agents and brokers paid
directly by the MA and PDP organization (Worksheet: “2019
Writing Agents (Plan Paid)”) and payment to agents and
brokers paid by marketing organizations (Worksheet: “2019
Writing Agents (M.O. Paid)”):
o Contract/pbp number – Provide each contract/pbp
number in as many rows as there are compensation
structures that apply to it.
o Option One or Option Two: Plans should indicate “1”
or “2” indicating which option they used for
calculating the 2019 renewal compensation amount.
o Structure number – Provide each unique number
identifying each compensation structure applicable
to the contract/pbp number. (The structure number
should match the structures submitted under
Attachment 2b.)
o Initial Compensation – Enter the amount to be paid
for an initial enrollment. This amount should equal
200 percent of the annual renewal compensation
amount.
o Renewal Years 1 through 5 – Enter the renewal
compensation amount to be paid in each of the years
1 through 5. This amount should be calculated in
accordance with the instructions in Attachment 5b,
under “2009 Compensation Structures”, and should be
the same for all renewal years.
o Number of Agents – Enter the number of agents
contracted to sell under the compensation structure
for that contract/pbp. (As of November 15, 2008)

Other Instructions


Complete the sheets exactly as requested. Plans must use
the Excel format provided:
9

o The workbook should be at the Parent Organization
level.
o Round to whole dollars, no punctuation, no decimal
points.
o Put only one dollar amount in each cell.
o Insert “0” if the value is zero.
o If there are no data for a year, leave cell(s)
blank.
o Do not modify the worksheets in any way.
o If the same values apply to multiple contract/PBPs,
enter those amounts multiple times (separately for
each contract/PDP).


Save the file in Excel 2003 version.
o Use the naming convention “Attachment[insert
Attachment number]_Organization_[insert additional
identifying information as necessary]”



For those organizations using Option 1, submit the
certification (Attachment 1b) by November 13, 2018. In
addition, all organizations (including those
organizations using Option 1) must submit all remaining
data and certification 1a in a zip file to
[email protected] no later than
November 17, 2018.

PRA Disclosure Statement
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information
unless it displays a valid OMB control number. The valid OMB control number for this information collection is
0938-0964 (expires 10/18). The time required to complete this information collection is estimated to average 49 hours
per response, including the time to review instructions, search existing data resources, gather the data needed, and
complete and review the information collection. If you have comments concerning the accuracy of the time estimate(s)
or suggestions for improving this form, please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance
Officer, Mail Stop C4-26-05, Baltimore, Maryland 21244-1850.

10