Judge overturns rule limiting broker payments in Medicare Advantage

Dive Brief:

A federal judge has vacated a Biden-era rule that would have curbed Medicare Advantage plans’ payouts to agents and brokers.

On Monday, Judge Reed O’Connor of the Texas Northern District Court ruled that the CMS overstepped its authority in trying to cap payments to MA sales organizations beyond direct compensation, and in prohibiting contracts that incentivize brokers to steer seniors to specific plans.

“CMS may only regulate how compensation is used, not engage in ratemaking,” O’Connor wrote in his decision. It’s a loss for smaller plans, which argue that the status quo benefits larger and wealthier insurers, and a setback for efforts to curb predatory marketing in the privatized Medicare program.

Dive Insight:

MA plans reimburse independent agents and brokers for