Healthcare Broker Commissions: Navigating an Unpredictable Landscape

The 2024 healthcare brokerage landscape embodies a high degree of unpredictability, driven largely by sweeping regulatory change from the Centers for Medicare & Medicaid Services (CMS). This often volatile environment can pose significant challenges for healthcare brokers, who must navigate a complex and shifting terrain to maintain efficiency and effectiveness in their work.

A complex environment

Healthcare brokerage’s unpredictability stems primarily from both the continuous evolution of healthcare policies and the equally dynamic, inherently complex nature of commissions. These factors are ever-urgent as CMS frequently updates its guidelines, and they can have far-reaching implications for broker commissions and operational protocols. For instance, alterations in Medicare Advantage plan structures or adjustments to commission caps directly affect how brokers strategize and execute their services.

These regulatory modifications often require brokers and payers to pivot quickly, adopting new strategies to align with the latest rules and ensuring compliance while still delivering value. Such turbulence in the sector necessitates a high level of adaptability and vigilance as brokers and payers constantly monitor legislative updates and macroeconomic trends. Ideally, this perpetual alertness allows for quicker response times and minimal disruptions to brokers’ and payers workflow – but it also necessitates a consistent emphasis on professional development and education to ensure compliance in an increasingly crowded market.

Along the way, sales performance management (SPM) entities like EvolveNXT have found a productive niche in streamlining this process and simplifying an otherwise harrowing balancing act in the regulatory environment.

“Commissions are always increasing in complexity,” EvolveNXT Senior Business Analyst Leonard Brown said. “Carriers are always coming up with new ways of incentivizing brokers, so they are always having to navigate a deep regulatory landscape. For instance, [CMS] will set the max amount you can pay a writing agent for a certain sale, [or] they will determine how many months of the year you can be paid for a specific enrollment. That's where we come in; we essentially ensure that you stay CMS-compliant and make sure that your brokers are paid accurately and on time.”

Maintaining cohesion

Moreover, the fast pace of regulatory changes can strain relationships between brokers and their payers, pushing brokers to establish reliable communication solutions and keep payers apprised of changes to their coverage. In this sense, technological advancements play a crucial role in helping brokers and payers manage the macro complexities while upholding transparency. Cutting-edge software solutions enable brokers and payers to streamline administrative tasks, track regulatory updates and valuable data analytics, and manage relationships more efficiently.

However, the integration of new technologies can also rapidly shift due to overarching CMS changes, which adds critical nuance to the adaptation process for developers and other IT staff.

“We had been working on a TMO module built for star ratings,” Brown said. “There is a super high demand for that in the industry right now, and after we developed it, [CMS’s new regulations] came out and essentially killed the module because they essentially said we couldn’t pay extra incentives, which is what that whole module is based on.”

Maximizing future impact

Despite these challenges, the healthcare brokerage sector’s future presents opportunities for brokers and payers who can remain focused and forward-thinking. Brokers and payers who are proactive in adapting to new regulations and leveraging technology can differentiate themselves in the marketplace, offering more tailored, responsive services and satisfied customers. Those implementing industry-specific SPM can maximize this impact beyond compliance and standardization alone.

“Since [EvolveNXT’s portal] focuses exclusively on the healthcare industry, we are uniquely positioned to go after innovation,” EvolveNXT Director of Product Management Severin Bender said. “We know the health insurance market so well and are always open to developing new functionalities covering a very specific need in this space. That’s something our clients really appreciate – that we go after fast innovation.”

This dedication to intuitive solution ideation is perhaps the only steadfast means of preparing for a nebulous future dictated, in part, by a shifting macro healthcare environment and an array of burgeoning technological, economic, and societal disruptions – all of which impact the broader CMS landscape.

“It’s a little hard to say what’s coming down the road,” Bender said. “Our core group of client needs hasn’t changed much in recent years, but we are always reacting to what CMS dictates on a yearly basis, and that sometimes requires entire processes and workflows to be adjusted in as short as a quarter. If you want to be at the forefront of change, you have to be ready to adapt.”

Jeff Fox is a seasoned executive leader currently serving as an operating partner with Chicago Pacific Founders (CPF), a private equity firm focused on thesis- and technology-driven innovation within health services and senior living. For over 30 years, Fox has become adept in developing, administrating, and improving progressive healthcare plans – as well as building market-growth initiatives delivering returns in local and national markets alike.