Business Continuity Plans under 422.504(o) and 423.505(p)

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.

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

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o Organizations must also submit each unique
compensation structure for writing agents (street
level) paid by marketing organization(s) with which
they contract.
o Include each compensation structure for years
2016through 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: 2016-

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2017 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%;

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.

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PRA Disclosure Statement
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unless it displays a valid OMB control number. The valid OMB control number for this information collection is
0938-0964 (Expires XX/XX/XXXX). 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.

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