The proposed rule would revise Medicare Advantage (MA) and Medicare Part D regulations related to marketing and communications, Star ratings, the criteria used to review applications for new or expanded plans, provider network adequacy requirements, medical loss ratio reporting, special requirements during disasters or public emergencies, and the use of pharmacy price concessions to reduce the out-of-pocket costs for prescription drugs under Part D.
The Centers for Medicare & Medicaid Services (CMS) issued a 360-page proposed rule Thursday that aims to improve Medicare beneficiaries’ experiences with MA and Part D, particularly individuals who are dually eligible for Medicare and Medicaid.
Ultimately, CMS said in an announcement about the rule, it is taking action to hold MA and Part D plans to a higher standard in offering benefits and improve health equity in the programs.
“We are dedicated to ensuring older Americans and those with disabilities who are served by the Medicare program have access to quality, affordable health care, including prescription drugs and therapies,” said CMS Administrator Chiquita Brooks-LaSure. “Today’s proposed actions follow our guiding principles by improving health equity and enhancing access to prescription medications.”
CMS doesn’t expect costs associated with the provisions in the proposed rule to significantly change MA plans’ bids, supplemental benefits, or beneficiary premiums.
Here are nine changes outlined in the proposed rule:
Stricter oversight of marketing and communications
CMS is proposing changes to marketing and communications requirements to ensure Medicare beneficiaries receive accurate and accessible information about Medicare coverage. The agency wants to strengthen oversight of third-party marketing organizations to detect and prevent the use of deceptive marketing tactics to enroll beneficiaries in MA and Part D plans.
The agency said in the proposed rule that it has received an increase in beneficiary complaints about the marketing practices of third-party marketing organizations (TPMO) that sell multiple MA and Part D products. RISE had heard similar concerns from attendees at last year’s RISE Medicare Marketing & Sales Summit and the AEP Medicare Readiness Summit about wide spread problems when seniors responded to television commercials featuring celebrities who promoted rich health benefits for MA plans.
In 2020, CMS said it received 15,497 complaints related to marketing. In 2021, excluding December, the number of complaints increased to 39,617.
“We are unable to say that every one of the complaints are a result of TPMO marketing activities, but based on a targeted search, we do know that many are related to TPMO marketing. In addition, we have seen an increase in third party print and television ads, which appears to be corroborated by state partners,” CMS said.
To address these concerns, the agency wants to:
- Remove any ambiguity associated with MA plans/Part D sponsors’ responsibilities for TPMO activities associated with the selling of MA and Part D plans
- Add a new disclaimer that would be required when TPMOs market MA plans/Part D products
- Provide additional plan oversight requirements associated with TPMOs, in addition to what is already required if the TPMO is a first tier, downstream, or related entity (FDRs)
CMS also wants to:
- Reinstate the inclusion of a multi-language insert in specified materials to inform beneficiaries of the availability of free language and translation services for the top 15 languages spoken in the United States
- Codify additional guidance that was not included in the January 2021 final rule related to member ID card standards, requirements related to a disclaimer for limited access to preferred cost sharing pharmacies, plan website instructions on how to appoint a representative, and the website posting of enrollment instructions and forms
Lower beneficiary cost-sharing at pharmacies
CMS said that in recent years, more Part D plans have entered arrangements with pharmacies that may pay less money for dispensed drugs if pharmacies do not meet certain criteria. The negotiated price for a drug is the price reported to CMS at the point of sale, which is used to calculate beneficiary cost-sharing and generally adjudicate the Part D benefit. The payment arrangements have led to the negotiated price being frequently higher than the final payment to pharmacies. The higher negotiated prices lead to beneficiaries paying higher costs and quickly going through the Part D benefit.
To address this issue, CMS proposes that Part D plans apply all price concessions they receive from network pharmacies to the point of sale so that the beneficiary can also share in the savings. CMS wants to redefine the negotiated price as the baseline, or lowest possible, payment to a pharmacy beginning Jan. 1, 2023. This policy would receive a beneficiary’s out-of-pocket costs and improve price transparency and market competition in the Part D program.
Past performance could lead to the denial of a new contract or service area expansion
To hold plans to a higher standard, CMS proposes additional bases for denying a new contract or service area expansion of an existing contract based on past performance. The current regulations permit CMS to deny applications from organizations under sanction or failing CMS’ net worth requirements during the performance period. The proposed rule adds Star ratings (2.5 or lower), bankruptcy or bankruptcy filings, and exceeding a CMS designated threshold for compliance actions as bases for CMS denying a new application or a service area expansion application.
Changes to Part C Star ratings measure calculations due to COVID-19 Public Health Emergency
CMS wants to make a technical change to enable the agency to calculate 2023 Part C Star ratings cut point for the three Healthcare Effectiveness Data and Information Set (HEDIS) measures collected through the 2021 Health Outcomes Survey:
- Monitoring physical activity
- Reducing the risk of falling
- Improving bladder control
By removing the 60 percent rule, all contracts affected by the 2020 COVID-19 pandemic with at least 25 percent of their enrollees in Individual Assistance areas at the time of the disaster will receive the higher of the 2022- or 2023-Star rating (and corresponding measure score) for each of the HEDIS measures collected through the HOS survey.
Beneficiary access to care during disasters and emergencies
To ensure that beneficiaries have uninterrupted accesses to needed service, CMS plans to revise and clarify timeframes and standards associated with disasters and emergencies. Current regulations have special requirements for MA plans during disasters or emergencies, including requirements for plans to cover services provided by non-contracted providers and to waive gatekeeper referral requirements. The proposed changes would require MA plans to comply with the special requirements when there is a declaration of disaster or emergency (including a public health emergency) and disruptions in access to health care.
Proof of network adequacy
CMS wants plan applicants to demonstrate they have a sufficient network of contracted providers to care for beneficiaries before the agency will approve an application for a new or expanded MA plan. The change would also provide MA organizations with information regarding their network adequacy ahead of bid submissions, mitigating current issues with late changes to the bid that may affect the bid pricing tool.
Due to the proposed changes in the timing of the network adequacy reviews and potential difficulties MA organizations may face with building a full network almost one year in advance of the contract year, CMS also proposes to allow a 10-percentage point credit toward the percentage of beneficiaries residing within published time and distance standards for new or expanding service area applicants. Once the coverage year starts (January 1), the 10-percentage point credit would no longer apply and plans would need to meet full compliance.
Greater transparency in medical loss ratio (MLR) reporting
The agency also intends to reinstate MLR reporting requirements that were in effect for contract years 2014–2017. Current regulations require that MA organizations and Part D sponsors report to CMS the percentage of revenue spent on patient care and quality improvement and the amount of any remittance that must be paid to CMS for failure to meet the 85 percent minimum MLR requirement.
CMS proposes to require MA organizations and Part D sponsors to report the underlying cost and revenue information needed to calculate and verify the MLR percentage and remittance amount, if any. It also wants to require MA organizations to report the amounts they spend on various types of supplemental benefits not available under original Medicare (e.g., dental, vision, hearing, transportation).
Steps to improve experience of beneficiaries in D-SNPs
The proposed rule also aims to improve experiences for dually eligible beneficiaries who are enrolled in Dual Eligible Special Needs Plans (D-SNPs). CMS intends to require MA organizations with a D-SNP to establish, maintain, and consult with one or more enrollee advisory committee to ensure the experiences of people with both Medicare and Medicaid are considered in plan decision-making. CMS also wants to simplify materials that describe how to access Medicare and Medicaid services and streamline the grievance and appeals processes in certain D-SNPs. Furthermore, the agency proposes a change to MA cost-sharing rules that would result in more equitable payments to providers who serve dual eligible individuals and may improve their access to providers.
Steps to address risk factors for social determinants of health
All SNPs must complete enrollee health risk assessments (HRA) at enrollment and annually. CMS Proposes that all HRAs include specific standardized questions on housing stability, food security, and access to transportation, all known to be important contributors to overall health. CMS said the proposal would help better identify and enable MA SNPs to take steps to address the risk factors that may inhibit enrollees from accessing care and achieving optimal health outcomes and independence.
The proposed rule is scheduled to be published in the Federal Register on January 12. For more information, check out the CMS announcement, fact sheet, and a pdf of the unpublished rule. CMS will accept comments about the rule by March 7.