Health agents prepare for potential class action suit against CMS

A Washington law firm is interviewing health advisors who were unfairly targeted by the Centers for Medicare and Medicaid Services in preparation for a potential class action lawsuit against the federal agency for its use of algorithms to punish agents who enrolled consumers in Affordable Care Act coverage.

Diceros Law wants to interview agents who tried to enroll clients in the ACA marketplace in 2024, only to find out they were kicked out of the CMS online enrollment system and suspended from selling coverage because CMS algorithms erroneously flagged them as committing fraud.

Agents told InsuranceNewsNet in November that they were suspended from using the ACA online platform and lost their books of business as a result. Although agents were eventually reinstated, they lost income.

Diceros is working with Health Agents for America to identify agents who were harmed and interview them for the possible lawsuit. In addition, Diceros has been asked to provide witness testimony on the issue to the House Committee on Oversight and Government Reform. The law firm is seeking testimony from agents who lost income as well as clients who were unable to enroll in health insurance because of CMS actions.

“We are taking these actions to help secure compensation that the many agents and brokers who have been affected by CMS’ erroneous suspensions or terminations deserve,” HAFA said in a statement.

About 20 agents have agreed to be interviewed by Diceros so far, and the law firm wants to interview a total of 50 to 60 agents, Clayton Napoli, executive assistant at Diceros, told InsuranceNewsNet.

“What we’re looking for is to get a settlement for the agents and clients who were harmed,” he said.

Jim Napoli, Diceros managing partner, told InsuranceNewsNet the issue with CMS is that although the agents who were erroneously suspended or terminated from the ACA marketplace have been reinstated, they lost commissions and lost clients.

“Many have lost their business, their entire book, because they were heavily in the ACA market,” he said.

Napoli said his law firm is dealing with three parties in order to make the agents whole: CMS, the health insurance carriers and the state insurance departments.

Working with carriers as well as CMS

“What we are doing now is working with the carriers to recover commissions that were withheld, as well as to reinstate their producer agreements with agents to the extent that the grounds for terminating that agreement was CMS’ termination of that individual agent.”

He said his firm also is working with state insurance departments who suspended or revoked the licenses of agents who were wrongly suspended by CMS.

Diceros Law is reaching out to agents and consumers who were affected by the CMS suspensions “to put a human face to the storyline,” Napoli said.

“There is an entire group of individuals in these agents and brokers, who had absolutely no due process given them before they had their licenses taken away, their livelihoods taken away and – in many instances – their entire business lost by losing their ability to sell and also to keep their current client base.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.