Medicare

Medicare

Medicare drug negotiation guidance: what you need to know

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This week our In Focus section reviews the Centers for Medicare and Medicaid Services’ (CMS) announcement of initial guidance for the new Medicare Drug Price Negotiation Program for 2026. This initial guidance is one of many steps CMS described in the Medicare Drug Price Negotiation Program timeline for the first year of negotiation.

The Drug Price Negotiation Program was approved as part of the Inflation Reduction Act (IRA) (P.L. 117- 169) in August 2022. As discussed in our previous In Focus, the IRA includes several other policies aimed at addressing cost, affordability and access to prescription drugs within the Medicare program.

The Drug Negotiation Program allows the U.S. Department of Health and Human Services (HHS) to negotiate maximum fair prices (MFPs) for Part D drugs. Negotiations between HHS and prescription drug manufactures will begin in 2023 and continue into 2024 before negotiated prices go into effect Jan. 1, 2026.

For Medicare payment in 2026, HHS can negotiate prices for up to 10 Part D drugs that do not have generic or biosimilar competition. CMS can increase the number of Part D drugs selected for price negotiation each subsequent year. Starting in 2028, the agency can annually add up to 20 new Part B or Part D drugs to the program.

The published guidance describes CMS’ approach for identifying the drugs selected for the initial year of the program. However, CMS is finalizing these policies as announced for the initial drug negotiation year.

The initial guidance also details the requirements and procedures for implementing the process for the first set of negotiations. For example, the guidance details aspects related to the offer-counter-offer exchange process, confidentiality terms following an agreement, penalties for violations, and the dispute resolution process.

Key Considerations

The drug negotiation program presents numerous operational and policy questions for CMS, manufacturers, and the healthcare sector broadly. The program is expected to have a direct impact on prices and affordability for the Medicare program and its beneficiaries. Additionally, other public and commercial payers will want to consider the potential downstream impacts on their costs. Ongoing monitoring of HHS’ implantation of the drug negotiation program and the pharmaceutical industry’s response to the drug negotiation program will help health plans, providers, and other interested stakeholders navigate this new landscape.

What’s Next

In the short-run, CMS will benefit from feedback from stakeholders about the outstanding policy and operational issues the agency has identified. Comments can be submitted until April 14, 2023

CMS anticipates issuing revised guidance for the first year of negotiation in Summer 2023. By September 1, 2023, CMS plans to publish the first 10 Part D drugs selected for the initial program year. The negotiated maximum fair prices for these drugs will be published by September 1, 2024 and prices will be in effect starting January 1, 2026.

HMA and HMA companies will continue to analyze this and subsequent guidance. We have analytical capabilities and expertise to assist with tailored analysis for manufacturers, providers, patient groups, health plans, and other stakeholders. HMA has the ability to model policy impacts of the drug negotiation program, support the drafting of feedback to CMS as the program is designed and implemented, and provide technical assistance in considering how this new program may interact with other Medicare and Medicaid initiatives.

If you have questions about the Drug Negotiation Program or other aspects of the Inflation Reduction Act and how it will affect manufacturers, Medicare providers, Medicaid programs and patients, contact Kevin Kirby (kmkirby@themorancompany.com), Amy Bassano (abassano@healthmanagement.com) or Andrea Maresca (amaresca@healthmanagement.com).

Financial impact summary of the 2024 Medicare Advantage Advance Notice

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This week, our In Focus section highlights a Wakely, an HMA Company, summary and analysis of the 2024 Medicare Advantage Advance Notice, prepared for America’s Health Insurance Plans (AHIP). The Centers for Medicare & Medicaid Services (CMS) released the contract year (CY) 2024 Advance Notice with an accompanying fact sheet on February 1, 2023. AHIP has retained Wakely Consulting Group to provide a financial impact summary report of the information presented in the notice. Specifically, Wakely was asked to analyze changes to Medicare Advantage (MA) revenue, risk adjustment models, and fee-for-service (FFS) normalization.

Key highlights of the analysis are:

  • The CY 2024 FFS growth rate is lower than projections from the 2023 Final Announcement. A portion of the downward restatement is driven by a technical change. CMS has not commented on the additional drivers.
  • Based on a large sample of plans, Wakely estimated that the proposed Part C risk adjustment model is expected to decrease plan risk adjusted payment by 3.7 percent overall, which represents a bigger headwind than the CMS estimated decrease of 3.12 percent. The impacts vary significantly by model segment and geographic region, and for individual plans.
  • The proposed FFS normalization factor excludes PY 2021 risk scores in the calculation of the underlying trend. The exclusion of PY 2021 increases the FFS normalization factor which decreases PY 2024 risk scores.

The report, released March 6, 2023, provides additional detail and discussion of these issues. For questions, please contact Tim Courtney or Rachel Stewart.

Click here to read the report.

CMS announces plans to pursue new Medicare and Medicaid drug payment models

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This week our In Focus section reviews the Centers for Medicare and Medicaid Services’ (CMS) announcement that the agency will explore three new prescription drug payment models in the Medicare and Medicaid programs:

  • Medicare High-Value Drug List Model
  • Cell and Gene Therapy (CGT) Access Model
  • Accelerating Clinical Evidence Model

The announcement – and accompanying report – responds to President Biden’s October 2022 Executive Order directing CMS’ Center for Medicare and Medicaid Innovation (the Innovation Center) to identify models that could lower cost sharing for commonly used drugs and include value-based payment for drugs.

Notably, the Innovation Center offered varying levels of specificity about the models, leaving unanswered many questions about the structures and timelines for the potential models. The Innovation Center will need to conduct more robust analysis to determine the design specifications for each model, stakeholder interest, and practical and political feasibility for each. In addition, each model will need to have its own application or rulemaking process to identify participants and other key model parameters. While this makes it difficult for the Innovation Center to specify timelines, it provides stakeholders some flexibility to analyze and develop recommendations for the potential models over the next several months.

HMA’s experts are also closely tracking CMS’ work on additional areas identified for the agency to research. For example, CMS could consider other regulatory pathways, partnerships, or campaigns to promote the following changes:

  • Opportunities to encourage price transparency for prescription drugs
  • Options to improve biosimilar adoption
  • Medicare fee-for-service options to support CGT access and affordability

The drug payment models build on other federal and state-level efforts to address prescription drug costs and total cost of care initiatives. For example, CMS’ drug payment model announcement comes just a week after the agency released its implementation approach for the drug payment policies approved as part of the inflation Reduction Act of 2022 (IRA) (P.L. 117-169). CMS is balancing the extensive implementation needs for the IRA while also acknowledging the new law may not directly address other value-based considerations impacting cost and access for certain prescription medications.

Below are some of the highlights of the Innovation Center’s drug payment models.

Medicare High Value Drug List Model

The Medicare High Value Drug List model would provide standardized approach to cost sharing for specified Part D medications. CMS suggests a standardized list with consistent cost-sharing to allow providers to easily identify and prescribe appropriate medications. Part D Sponsors could offer a Medicare-defined standard set of approximately 150 high-value generic drugs with a maximum co-payment of $2 for a month’s supply. Under this model, generic drugs included in the standardized list would not be subject to step therapy, prior authorization, quantity limits, or pharmacy network restrictions.

According to the report, CMS could explore leveraging existing systems, which would allow for a streamlined implementation. CMS also plans to seek input from beneficiaries, Part D Sponsors, manufacturers, and providers, but the agency did not provide a more specific timeline for announcing the Model specifications and start date.

Cell and Gene Therapy (CGT) Access

The Cell and Gene Therapy (CGT) Access model would be a voluntary opportunity for states and manufacturers. The model builds on existing state Medicaid initiatives to develop outcomes-based agreements (OBAs) with certain manufacturers of high-cost and breakthrough medications. CMS suggests the multistate test could inform a more permanent framework for evaluating, financing, and delivering CGTs on a broader scale. This model may also help address complexities with the federal drug rebate requirements in states that wish to pursue value-based contracting arrangements. Under this model a state Medicaid agency could choose to adopt the CMS structure for multi-state OBAs with participating manufacturers. CMS would be responsible for implementing, monitoring, reconciling, and evaluating financial and clinical outcomes. Initially the model would focus on CGTs for illnesses like sickle cell disease and cancer.  This approach could remove some of the barriers that have slowed state uptake of OBAs.

CMS plans to begin model development in 2023, announce the model sometime in 2024-25, and test it as early as 2026.

Accelerating Clinical Evidence Model

The Innovation Center is considering mandatory participation for Medicare Part B providers in the Accelerating Clinical Evidence Model. Under this potential model, the agency would adjust Medicare Part B payment amounts for Accelerated Approval Program (AAP) drugs to determine if adjustments incentivize manufacturers to timely complete trials, which in turn may facilitate earlier availability of clinical evidence.

The Innovation Center identified some challenging aspects for this model and stated the agency will need to consult with the U.S. Food and Drug Administration (FDA) in 2023 to consider approaches for this model. Statements from agency officials about the model also indicate the need for consultation with the Medicare Payment Advisory Commission (MedPAC) and other stakeholders, including through an Advance Notice of Proposed Rulemaking.

If the Innovation Center determines this model is feasible, the agency will provide more details about a targeted launch. The Innovation Center has previously attempted to implement mandatory Part B drug payment models but never implemented them due to legal challenges and stakeholder opposition.

HMA and HMA companies will continue to analyze these potential models and initiatives developing in parallel with the Innovation Center’s work. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts of the potential models, and to support the drafting of feedback to CMS as it considers these options.

If you have questions about the Innovation Center’s proposed models and how it will affect manufacturers, Medicare providers, Medicaid programs and patients, contact Amy Bassano (abassano@healthmanagement.com), Kevin Kirby (kmkirby@themoranccompany.com) or Andrea Maresca (amaresca@healthmanagement.com).

How will changes to Medicare Part C and D Star Ratings impact your plan?

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What are your plans to minimize your risk to avoid dropping in your Star Rating or to plan a head to maintain or improve your Star Rating?

On February 1, 2023, the Center for Medicare and Medicaid Services (CMS) released the 2024 Advance Notice and included some key specifics on the upcoming changes to the Medicare Star Rating program. CMS is proposing changes that will align with the recently announced “Universal Foundation” of quality measures, a core set of measures that are aligned across CMS quality rating and value-based care programs. The Advance Notice also included information on substantive measure specification updates, new measure concepts, and the addition of measures to align with other CMS programs.

You can learn more about these proposed changes along with a blueprint for improving your Medicare Advantage Star Ratings at the HMA quality conference on March 6 in Chicago. The working session “Moving the Needle on Medicare Stars Ratings” will feature speakers Katharine Iskrant, MPH, CHCA, CPHQ, HEDIS/Stars Auditor, President and Owner, Healthy People; John Myers, BS, M.Eng., VP of Health Quality & Stars, Humana; Vanita Pindolia, PharmD, MBA, VP of Stars Program, Emergent Holdings; and Dr. Kate Koplan, MD, MPH, FACP, CPPS, Chief Quality Officer & Associate Medical Director Quality and Safety, Kaiser Permanente of Georgia

Moderators of this session are HMA’s Mary Walter, Managing Director of Quality and Accreditation, and David Wedemeyer, Principal. Both have health plan legacy experience in Stars strategy, execution and getting results.

Objectives of this session:

  1. Overview of the CMS proposed changes and their impact on the Stars program
  2. Attendees will obtain a blueprint for improving Medicare Advantage Star Ratings, including the importance of ensuring executive management buy-in
  3. Discussion of how the use of data analytics can help plans to identify quality gaps, target interventions, and track improvement
  4. Strategies to avoid the type of siloed initiatives that often fail to achieve lasting results
  5. Speakers will also address the importance of quality in achieving market viability and financial
    sustainability

Stay in the know about the upcoming proposed changes and develop your organization’s strategy in this interactive impactful working session. This session will allow attendees to integrate any learnings and take-aways into your Stars program to meet your overall Star Rating strategic goal.

Follow #HMAtalksQuality on Twitter and LinkedIn for more updates on Stars and quality initiative efforts throughout the year. View the full agenda and register for HMA’s first annual quality conference on March 6 in Chicago. Registration closes on February 21, 2023.

CMS creating a ‘Universal Foundation’ to align quality measures

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Leaders at the Centers for Medicare and Medicaid Services (CMS) announced in the New England Journal of Medicine this month a new initiative called the “Universal Foundation,” which seeks to align quality measures across the more than 20 CMS quality initiatives. The implications for the broader healthcare system are immense. 

At Health Management Associates upcoming quality conference March 6 in Chicago, Dr. Lee Fleisher, one of the authors of the Universal Foundation initiative and, Chief Medical Officer and Director, CMS’ Center for Clinical Standards and Quality, will deliver the keynote address “A Vision for Healthcare Quality: How Policy Can Drive Improved Outcomes.”

Attendees will hear from industry leaders and policy makers about evolving healthcare quality initiatives and participate in substantive workshops where they will learn about and discuss solutions that are using quality frameworks to create a more equitable health system. In addition to Dr. Fleisher, featured speakers will include executives from American College of Surgeons, ANCOR, CareJourney, CareOregon, Commonwealth Care Alliance, Council on Quality and Leadership, Denver Health, Institute on Public Policy for People with Disabilities, Intermountain Health, NCQA, Reema Health, Kaiser Permanente, Social Interventions Research and Evaluation Network, UnitedHealth Group, United Hospital Fund, 3M, and many other organizations.

The Universal Foundation seeks to align quality measures to “focus providers’ attention on measures that are meaningful for the health of broad segments of the population; reduce provider burden by streamlining and aligning measures; advance equity with the use of measures that will help CMS recognize and track disparities in care among and within populations; aid the transition from manual reporting of quality measures to seamless, automatic digital reporting; and permit comparisons among various quality and value-based care programs, to help the agency better understand what drives quality improvement and what does not.”

CMS has established a cross-center working group focused on coordination of these processes and on development and implementation of aligned measures to support a consistent approach. As part of this announcement, the group published a list of Preliminary Adult and Pediatric Universal Foundation Measures. This new quality program will affect clinicians, healthcare settings such as hospitals or skilled nursing facilities, health insurers, and value-based entities such as accountable care organizations.

HMA can help organizations improve their quality efforts in line with the new CMS Universal Foundation initiative. HMA’s more than 500 consultants include past roles as senior officials in Medicaid and Medicare, directors of large nonprofit and social services organizations, top-level advisors, C-level executives at hospitals, health systems and health plans, and senior-level physicians. Our depth of industry-leading policy expertise and clinical experience provides comprehensive solutions that make healthcare and human services work better for people.

To learn more about HMA and Quality, follow #HMAtalksQuality on Twitter and LinkedIn. View the full agenda and register for HMA’s first annual quality conference on March 6 in Chicago. Registration closes on February 21, 2023.

CMS Introduces Advance Notice of Methodological Changes for MA Capitation Rates and Medicare Part C and Part D Payment Policies

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This week, our In Focus section reviews recently announced major policy updates from the Centers for Medicare & Medicaid Services (CMS) that affect the Medicare Advantage (MA) and Part D programs. First, on January 30, CMS released the final Risk Adjustment Data Validation Final Rule, a highly anticipated and controversial policy that establishes the agency’s approach to auditing MA Organizations’ (MAOs) risk-adjustment payments and collecting overpayments as needed.

Then, on February 1, CMS published the Calendar Year (CY) 2024 Advance Notice for the MA (Part C) and Part D Prescription Drug Programs. Between these two directives and the proposed MA policy changes CMS announced in December 2022, the Administration continues its efforts to actively manage Medicare Advantage and strengthen quality and oversight of the program. HMA’s summary of the December 2022 proposed rule is available here.

Below are some highlights of the 2024 Advance Notice. By law, CMS must notify the public of planned changes in the MA capitation rate methodology and risk adjustment methodology annually. The deadline for submitting comments to CMS is Friday, March 3, 2023.

Payment Impact in MA: CMS is projecting an average increase in revenue of 1.09 percent in plan payments from last year. This percentage increase is based on a net number that reflects multiple factors including growth rates, change in STAR ratings, and risk score trends.

Risk Adjustment: CMS is seeking to make some refinements to the Part C risk-adjustment model. For example, CMS will begin using the International Classification of Diseases (ICD)-10 classification system (instead of the ICD-9 classification system) and updated underlying fee for service data years. More specifically, diagnoses data years are being updated from 2014 to 2018, and expenditure years are being updated from 2015 to 2019 to reflect changes in costs.

Star Ratings: CMS is proposing updates and refinements to the Star Ratings program, including:

  • Retiring the diabetes care-kidney disease monitoring and Medication Reconciliation Post-Discharge
  • Expanding the age range for colorectal cancer screening measure to 45−75 years old to align with the preventive task force
  • Adding the Care for Older Adults (COA)—Functional Status Assessment measure back to the Star Ratings, and introducing Kidney Health Evaluation for Patients with Diabetes (KED), Concurrent Use of Opioids and Benzodiazepines (COB), Polypharmacy Use of Multiple Anticholinergic Medications in Older Adults (Poly-ACH), and polypharmacy Use of Multiple Central Nervous System Active Medications in Older Adults (Poly-CNS)
  • Introducing a case-mix adjustment to Part D medication adherence measures for diabetes, hypertension, and cholesterol.

CMS also is seeking to potentially align measures with other CMS programs. Specifically, the agency is introducing a “Universal Foundation” of quality measures, which is a core set of metrics aligned across programs. Additional information can be found in this New England Journal of Medicine “Perspective”.

Part D Impact

The Advance Notice also notifies plans on the changes to the Part D benefit occurring in 2024 as a result of the Inflation Reduction Act (IRA), including:

  • Beginning in CY 2024, CMS will eliminate cost-sharing for Part D drugs prescribed to beneficiaries in the catastrophic phase of coverage.
  • Beginning in CY 2024, the Low-Income Subsidy program (LIS) under Part D will be expanded so that beneficiaries who earn 135−150 percent of the federal poverty level and meet statutory resource limit requirements will receive the full LIS subsidies that were available only to beneficiaries earning less than 135 percent of the federal poverty level prior to 2024.
  • During CY 2024, CMS will prohibit Part D plans from applying the deductible to any Part D covered insulin product and from charging more than $35 for each month’s supply of a covered insulin product in the initial coverage phase and the coverage gap phase.
  • During CY 2024, CMS will prohibit Part D plans from applying the deductible to an adult vaccine recommended by the Advisory Committee on Immunization Practices and from charging any cost-sharing payments at any point in the benefit for these vaccinations.
  • Beginning in CY 2024, CMS will cap the growth in the Base Beneficiary Premium at 6 percent. The Base Beneficiary Premium for Part D is limited to the lesser of a 6 percent annual increase or the amount that would otherwise apply under the prior methodology had the IRA not been enacted.

The HMA Medicare team will continue to analyze these proposed changes. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts across the multiple rules, and to support the drafting of comment letters on this notice.

If you have questions about the contents of CMS’s MA advance notice and how it will affect MA plans, providers, and patients, contact Julie Faulhaber (jfaulhaber@healthmanagement.com), Amy Bassano (abassano@healthmanagement.com), or Andrea Maresca (amaresca@healthmanagement.com).

Lee Fleisher of CMS to keynote HMA national quality conference

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Join us on Monday, March 6, 2023, at the Fairmont Chicago, Millennium Park, for “Healthcare Quality Conference: A Deep Dive on What’s Next for Providers, Payers, and Policymakers,” where Lee Fleisher, MD, chief medical officer and director of CMS’ Center for Clinical Standards and Quality, will deliver the keynote titled A Vision for Healthcare Quality: How Policy Can Drive Improved Outcomes.

HMA’s first annual quality conference will provide organizations the opportunity to “Focus on Quality to Improve Patients’ Lives.” Attendees will hear from industry leaders and policy makers about evolving health care quality initiatives and participate in substantive workshops where they will learn about and discuss solutions that are using quality frameworks to create a more equitable health system.

In addition to Fleisher, featured speakers will executives from ANCOR, CareOregon, Commonwealth Care Alliance, Council on Quality and Leadership, Intermountain Healthcare, NCQA, Reema Health, Kaiser Permanente, United Hospital Fund, and others.

Working sessions will provide expert-led discussions about how quality is driving federal and state policy, behavioral health integration, approaches to improving equity and measuring the social determinants of health, integration of disability support services, stronger Medicaid core measures, strategies for Medicare Star Ratings, value-based payments, and digital measures and measurement tools. Speakers will provide case studies and innovative approaches to ensuring quality efforts result in lasting improvements in health outcomes.

“What’s different about this conference is that participants will engage in working sessions that provide healthcare executives tools and models for directly impacting quality at their organizations,” said Carl Mercurio, Principal and Publisher, HMA Information Services. 

View the Full Agenda

Early Bird registration ends January 30. Visit the conference website for complete details or contact Carl Mercurio at 212-575-5929/cmercurio@healthmanagement.com.  Group rates and sponsorships are available.

Register Now

An HMA toolkit and webinar to advance health equity & access for rural dually eligible individuals

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In 2022, HMA convened stakeholder roundtables in three states – including New Mexico, North Dakota, and Tennessee to identify the challenges facing dually eligible individuals living in rural areas and to propose solutions to these challenges. Informed by this process, HMA developed the Health Equity & Access for Rural Dually Eligible Individuals (HEARD) Toolkit.

The toolkit is structured around three domains used to organize eight solutions. For each solution, HMA provides a description of the rural access challenge, the proposed solution, and the proposed tool. Each tool is powered by some type of lever available to the federal and state government. We anticipate that policymakers will build upon this toolkit through continued dialogue with rural communities. The toolkit’s framework, goals, and actionable solutions are summarized in the figure below.

HEARD Toolkit framework domains

HMA Principal Ellen Breslin, Consultant Samantha Di Paola, and Senior Consultant Susan McGeehan authored the toolkit, with research contributions from HMA Principals Rebecca Kellenberg and Andrea Maresca.

The toolkit is available here.

On February 2, 2023, 1pm ET, HMA will host a webinar on the HEARD toolkit. During this webinar, HMA experts and panelists including Dr. Kevin Bennett (USC-SOM Columbia, SC CRPH), Dennis Heaphy (DPC), Pam Parker (SNP Alliance), and Tallie Tolen (New Mexico Medicaid) will summarize and discuss the toolkit’s actionable solutions for improving rural dually eligible individuals’ health and social outcomes.

Click here to register.

The Health Equity & Access for Rural Dually Eligible Individuals Toolkit: Raising Rural Voices

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Download the Toolkit

A public health crisis is growing more acute in rural America, disproportionately impacting individuals with both Medicaid and Medicare (the “dually eligible”). Dually eligible individuals residing in rural areas represent about 5 percent of all rural residents. They reside at the intersection of a public health crisis and a fragmented Medicaid and Medicare care delivery system. As HMA wrote in Health Affairs, this small population is at risk of falling through the cracks of this crisis and suffering a steep rural mortality penalty.

With support from Arnold Ventures, HMA prepared “The Health Equity & Access for Rural Dually Eligible Individuals (HEARD) Toolkit: Raising Rural Voices from New Mexico, North Dakota, and Tennessee to Create Action. The toolkit contains eight actionable solutions for federal and state policymakers to use and tailor to states’ needs. Ellen Breslin, Samantha Di Paola, and Susan McGeehan authored the toolkit, with research contributions from Rebecca Kellenberg and Andrea Maresca. The toolkit is available here.

CMS introduces significant proposed changes to Medicare Advantage and Medicare Prescription Drug Benefit Programs for 2024

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This week, our In Focus section reviews a rule proposed by the Centers for Medicare & Medicaid Services (CMS) on December 14, 2022, that would revise regulations governing Medicare Advantage (MA or Part C), the Medicare Prescription Drug Benefit (Part D), Medicare cost plans and Programs of All-Inclusive Care for the Elderly (PACE).

Background

The proposed rule reflects the agency’s focus on increasing transparency, improving health equity, reducing the cost of care, and improving access to behavioral health services. Collectively, these are among the most impactful policy changes CMS has proposed to the MA and Part D programs in recent years. CMS also writes that many of the policy proposals are informed by public comments to the agency’s earlier requests for input.

MA and Part D stakeholders will want to consider providing feedback and analysis to CMS regarding the impact of these changes. The changes would begin to take effect for contract year 2024, but stakeholders can begin gap assessments and strategic planning now. Comments on the proposed rule are due by February 13, 2023.

Increased Transparency in Utilization Management and Marketing Policies

The rule proposes to increase the transparency of MA plans’ utilization management and prior authorization policies, with the goal of ensuring that MA enrollees receive the same access to medically necessary care they would receive in Traditional Medicare.

  • CMS proposes that MA organizations must include current evidence in widely used treatment guidelines or clinical literature made publicly available to CMS, enrollees, and providers when creating internal clinical coverage criteria, in situations when no applicable Medicare statute, regulation, National Coverage Determinations (NCD), or Local Coverage Determinations (LCD) establishes when an item or service must be covered.
  • The proposed rule also would streamline prior authorization requirements, including adding continuity of care requirements in ongoing care for beneficiaries by requiring that when an enrollee is granted prior authorization approval it will remain valid for the full course of treatment.
  • The rule would require all MA plans to establish a Utilization Management Committee to review policies annually and ensure consistency with Traditional Medicare’s national and local coverage decisions and guidelines.

The proposed rule also takes steps to address potentially misleading marketing while also ensuring that Medicare beneficiaries have accurate information to make coverage choices.

Increased Focus on Health Equity and Culturally Competent Care

The prosed rule includes several policies designed to increase health equity across the program.

  • In addition to a number of other changes in the Star Ratings program, which measures the quality of care across MA and Part D plans, the proposed rule introduces a health equity index (HEI) reward, beginning with the 2027 plan year. This reward will use data from 2024 and 2025 and is intended to further encourage MA and Part D plans to improve care for enrollees with certain social risk factors (dual eligibility, low-income subsidies, and disability).
  • CMS also proposes clarification of a current requirement for MA organizations to expand the list of populations that they must provide services to in a culturally competent manner.
  • CMS proposes requiring MA organizations to develop and maintain procedures to offer digital health education to enrollees to improve access to medically necessary covered telehealth benefits.
  • In addition, CMS proposes requiring MA organizations to include providers’ cultural and linguistic capabilities in provider directories.
  • CMS proposes that MA organizations must address health disparities as part of existing requirements to develop and maintain quality improvement programs.
  • CMS also proposes to specify in Medicare regulations that MA organizations, cost plans, and Part D sponsors must provide materials to enrollees on a standing basis in any non-English language that is the primary language of at least 5 percent of the individuals in a plan benefit package service area or accessible format using auxiliary aids and services upon receiving a request for the materials or otherwise learning of the enrollee’s preferred language and/or need for an accessible format using auxiliary aids and services. The agency also proposes to extend this requirement to individualized plans of care for special needs plans.

Improving Access to Behavioral Health

CMS proposes policies to strengthen network adequacy requirements and reaffirms the responsibility of MA organizations to provide behavioral health services.

  • Specifically, CMS proposes to specify certain types of mental health professionals as specialty types for which there are specific minimum standards and on which MA networks are evaluated by CMS; amend general access to services standards to explicitly include behavioral health services; codify standards for appointment wait times for both primary care and behavioral health services; clarify that the emergency medical services that must not be subject to prior authorization include behavioral health services to evaluate and stabilize an emergency medical condition; require that MA organizations notify enrollees when the enrollee’s behavioral health or primary care provider(s) are dropped midyear from networks; and require MA organizations to establish care coordination programs, including coordination of community, social, and behavioral health services.
  • CMS also proposes to require organizations to identify certain providers waived to treat patients with medications for opioid use disorder (MOUD) in their provider directories.

Improving Drug Affordability and Access in Part D

CMS proposes greater formulary flexibility for MA and Part D plans for certain biological products and authorized generics. CMS proposes to permit Part D sponsors to immediately substitute: (1) a new interchangeable biological product for its corresponding reference product; (2) a new unbranded biological product for its corresponding brand name biological product; and (3) a new authorized generic for its corresponding brand name equivalent.

In addition, CMS proposes several new requirements for Part D sponsors related to Medication Therapy Management (MTM) programs.

  • Part D sponsors are required to provide an MTM program that ensures Part D drugs are appropriately used to optimize health outcomes through improved medication use and to reduce the risk of adverse events.
  • CMS is proposing several changes to MTM eligibility criteria with the goal of promoting more consistent, equitable, and expanded access to MTM services.

Making Permanent the Limited Income Newly Eligible Transition (LI NET) Program

The LI NET program currently operates as a demonstration program that provides immediate and retroactive Part D coverage for eligible low-income beneficiaries who do not yet have prescription drug coverage. In this proposed rule, CMS proposes making the LI NET program a permanent part of Medicare Part D, as required by statute.

Expanding Low-Income Subsidies Under Part D

CMS proposes to implement a section of the Inflation Reduction Act (IRA), enacted in August 2022, which expands eligibility under the Part D low-income subsidy (LIS) program. Under the provision, individuals with incomes up to 150 percent of the federal poverty level (FPL) and who meet statutory resource requirements will qualify for the full low-income subsidy beginning on or after January 1, 2024. This change will provide the full subsidy to those who currently qualify for only a partial subsidy.

Strengthening Current Policies for MA Plans Serving Populations with Special Needs

The proposed rule includes several proposals to codify existing policies that govern special needs

plans (SNP), which are MA plans specifically designed to provide targeted care and limit enrollment to special needs individuals. Specifically, CMS proposes to codify recent statutory requirements concerning the definition of severe or disabling chronic condition and several other provisions relating to the definition of a Chronic Condition SNP. The rule also proposes several updates to policies governing Programs of All-Inclusive Care for the Elderly (PACE), including technical changes to PACE contracting and application evaluation processes, requirements for medical clearance of PACE personnel, requirements for contracting for specialty services, and codification of certain care planning and care coordination requirements.

The HMA Medicare team will continue to analyze these proposed changes. We have the depth and breadth of expertise to assist with tailored analysis, to model policy impacts, and to support the drafting of comment letters to this rule.

If you have questions about the contents of CMS’s Medicare Advantage proposed rule and how it will impact MA plans, providers, and patients, please contact John Richardson (jrichardson@healthmanagement.com), Julie Faulhaber (jfaulhaber@healthmanagement.com), Amy Bassano (abassano@healthmanagement.com), or Andrea Maresca (amaresca@healthmanagement.com).

Link to proposed rule.