The Centers for Medicare & Medicaid Services (CMS) last week issued a proposed rule that makes policy and technical changes to Medicare Advantage and Medicare Part D Prescription Drug (Part D) programs. The agency’s plans include coverage of anti-obesity medications, guardrails for prior authorization and artificial intelligence, improved access to behavioral health, enhanced oversight of marketing and communications materials, adjusted MLR calculations, oversight of prior directories, and duals integration.
"Our loved ones with Medicare deserve care that puts their interests first. HHS is proposing to improve transparency, accountability, and consumer protections in Medicare Advantage and Part D plans so that everyone receives high-quality care,” said Department of Health and Human Services Secretary Xavier Becerra in an announcement. “To achieve that, we want to remove barriers that delay care or deny people services and medications they need to be healthy. In addition, we continue to promote competition for pharmacies and other health care businesses.”
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The proposed rule is scheduled to be published in the Federal Register on December 10. CMS will accept comments on the proposals through January 27, 2025. Here is a summary of some of the major proposals:
Prior authorization and utilization management
CMS said it wants to take additional steps to rein in inappropriate prior authorization and utilization management practices that unnecessarily limit access to care, create a system-wide burden, and negatively impact rural hospitals and other proposes. In response to information from recent audits, CMS said that it wants to change the definition of “internal coverage criteria” to clarify when Medicare Advantage plans can apply utilization management, ensuring plan internal coverage policies are transparent and readily available to the public, ensuring plans are making enrollees aware of appeals rights, and addressing after-the-fact overturns that can impact payment, including for rural hospitals.
In addition, CMS said efforts are underway to allow the agency to collect detailed information from initial coverage decisions and plan-level appeals, such as decision rationales for items, services, or diagnosis codes that will provide a better line of sight on utilization management and prior authorization practices. CMS said that the proposed rule also includes modifications to strengthen existing regulations regarding Medicare Advantage’s coverage and responsibility to provide all reasonable and necessary Medicare Part A and B benefits.
Artificial intelligence
CMS wants to revise provisions to ensure that the use of AI doesn’t result in inequitable treatment or bias within the health care system. The revised language would require Medicare Advantage plans to ensure services are provided equitably, regardless of whether it was delivered from human or automated systems, and not discriminate based on any factor that is related to the enrollee’s health status.
Coverage of anti-obesity medication
As previously announced, CMS wants to pay for anti-obesity medications to treat obesity when indicated to reduce excess body weight and maintain weight reduction long-term for individuals with obesity. The revised interpretation would recognize obesity as a chronic disease based on changes in medical consensus. However, CMS would continue to exclude the medication from Part D coverage when used by individuals who are overweight without obesity.
Provider directories on the Medicare Plan Finder
CMS wants to require Medicare Advantage plans to make provider directory information available on the Medicare Plan Finder, the online tool that current and prospective Medicare members can use to compare and shop for coverage. The information would be searchable and updated when there is a change in provider information.
Improved access to behavioral health
The agency wants to improve access to behavioral health care by ensuring that in-network cost sharing is not greater than cost sharing in traditional Medicare for these services. CMS proposes a 20 percent coinsurance for mental health specialty services, psychiatric services, partial hospitalization/intensive outpatient services, and outpatient substance abuse services (current standard: and 30 to 50 percent coinsurance based on the plan’s maximum out-of-pocket. In addition, it proposes zero cost sharing for opioid treatment program services and 100 percent of estimated Medicare Fee-For-Service cost sharing for inpatient hospital psychiatric services.
Marketing and communications materials
To improve oversight of marketing and communications materials and help people make informed enrollment decisions when using agents and brokers, CMS wants to change the definition of “marketing” to increase the number and type of advertisements that plans must submit to the agency for review before their use. CMS said this will allow it to ensure that current or potential enrollees don’t receive misleading, inaccurate, or confusing information.
Furthermore, CMS wants to expand the number of topics that an agent or broker must provide to potential enrollees before they enroll in coverage. Agents and brokers would have to discuss the individual’s potential eligibility for the Low-Income Subsidy and Medicare Savings Programs, as well as the potential impact of Medicare Advantage enrollment on future Medigap guaranteed issue rights and where an individual might access additional information about these programs.
Supplemental benefits via debit cards
To provide clarity to both Medicare Advantage organizations and beneficiaries on the parameters around the appropriate use of plan debit cards, CMS proposes to:
- Describe when, how, and in what manner debit cards can be used by a Medicare Advantage organization and enrollee
- Introduce additional disclosure requirements to increase transparency around supplemental benefits and plan debit cards
- Allow a member to receive covered benefits in a different way if there is an issue with a plan debit card
- Ensure debit cards are electronically linked to plan covered items and services through a real-time identification mechanism
- Clarify what types of over-the-counter products are acceptable as primarily health-related supplemental benefit
- Prohibit Medicare Advantage organizations from marketing the dollar value of a supplemental benefit or the method a supplemental benefit is administered
Medical Loss Ratio (MLR) reporting
CMS proposes to update regulations to improve the meaningfulness and comparability of the MLR across plan contracts and align the regulations with the commercial and Medicaid MLR programs. Among the proposals, CMS wants to:
- Tie provider incentive and bonus arrangements to clinical or quality improvement standards in order to be included in the Medicare Advantage MLR numerator.
- Exclude administrative costs from quality-improving activities in the Medicare Advantage and Part D MLR numerators.
- Codify the current practice in which Medicare Advantage and Part D MLR reports include a description of how expenses are allocated across lines of business.
- Establish compliance standards for Medicare Advantage and Part D MLR audits. CMS wants to set standards for selecting contracts for audits, clarify compliance actions that it will take due to audit findings, and outline an appeals process.
Dually eligible enrollees
CMS aims to establish new federal requirements for certain dual eligible special needs plans (D-SNPs) to:\
- Have integrated member identification (ID) cards that serve as the ID cards for both the Medicare and Medicaid plans in which an enrollee is enrolled
- Conduct an integrated health risk assessment (HRA) for Medicare and Medicaid, rather than separate HRAs for each program
- Codify timeframes for all SNPs to conduct HRAs and individualized care plans (ICPs) and involve the enrollee or the enrollee’s representative in the development of the ICPs
Community-based services
CMS said that some organizations that provide covered benefits may not be included in a Medicare Advantage organization’s provider directory. To ensure individual protections and transparency, CMS wants to:
- Codify definitions of community-based organizations (CBOs) and in-home or at-home supplemental benefit providers and direct furnishing entities
- Require plans to identify, within the provider directory, which providers and direct furnishing entities meet the proposed definition of a CBO
- Require plans to identify in-home or at-home supplemental benefit providers and direct furnishing entities, including those that provide a hybrid of services (both in-home or at-home, and in-office services), either through a subset list within the provider directory or through a separate list comprising in-home or at-home supplemental benefit providers and direct furnishing entities
- Clarify existing policy by stating that all direct furnishing entities must be included within the provider directory