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CMS Medicare Advantage and Section 1876 Cost Plan Network Adequacy Update

This week, our In Focus section examines new guidance issued by the Centers for Medicare & Medicaid Services (CMS) regarding Medicare Advantage (MA) plan network adequacy requirements. On June 17, 2020, CMS released updated Medicare Advantage and 1876 Cost Plan Network Adequacy Guidance for Medicare Advantage (MA) health plans to use now for Contract Year 2021 network submission. 

While the majority of the network adequacy provisions were previously outlined in sub-regulatory guidance, these regulations are now codified through the rulemaking process and included in the Part C and D final rule that was issued on May 22, 2020. CMS uses the annual process by which MA health plans submit its network to CMS for review to ensure network adequacy for beneficiaries choosing a MA health plan.  CMS requires MA health plans to submit their networks through Health Service Delivery (HSD tables) on 13 facility types and 27 provider specialty types. CMS performs time and distance tests based on the service area type where the MA health plan offers services to ensure each health plan’s network meets minimum thresholds. MA health plans attest that they are able to provide adequate beneficiary access to specialty types not required for the network submission.

The updated MA and 1876 Cost Plan Network Adequacy Guidance modifications ease network adequacy requirements for MA health plans as described below:

Facility specialty types subject to network adequacy reviews:  Outpatient dialysis was removed from the list of provider types subject to network adequacy reviews.

CMS noted in the Part C and D final rule that there are a number of ways members may receive dialysis services including in home, inpatient and outpatient settings so limiting the review to just one setting was too narrow. Additionally, this change will help some MA plans serving members in concentrated areas achieve network adequacy despite the consolidation of the outpatient dialysis industry. In the final rule, CMS indicated that it would allow plans to attest to providing medically necessary dialysis. To date, CMS has not outlined the process or specific requirements for attestation.

County type designations and ratios: The time and distance standard was reduced from 90 percent to 85 percent in Micro, Rural, and Counties with Extreme Access Considerations (CEAC) counties.

Reducing the time and distance standard in Micro, Rural and CEAC Counties will allow more health plan options in these areas and is based on the changes that states have made to their Medicaid programs to achieve this goal.  It is anticipated that this change will occur automatically when plans file their networks or HSD tables.

Minimum number requirements and time and distance standards:

  • Telehealth Credit. Organizations will receive a 10 percent credit towards the percentage of the time and distance standards calculation to determine if beneficiaries are residing within areas with access to at least one provider/facility of each specialty type when health plans contract with telehealth providers in the following specialties: Dermatology, Psychiatry, Cardiology, Otolaryngology, Neurology, Ophthalmology, Allergy and Immunology, Nephrology, Primary Care, Gynecology/OB/GYN, Endocrinology, and Infectious Diseases.

While using telehealth to meet network adequacy has been under consideration for some time, CMS indicated that the successful use of telehealth during the pandemic has reinforced the Agency’s commitment to providing additional telehealth flexibilities to MA health plans.  MA health plans may only use telehealth as a supplement to in person services. The system that MA health plans use to file their networks, Health Plan Management System (HPMS), has been updated to include telehealth options by specialty.  If appropriate, health plans may choose telehealth options when submitting their networks.

  • Certificate of Need (CON) credit. Some states developed CON laws and similar restrictions that require government approvals before health care facilities may expand to promote resource savings and prevent investments that could raise hospital costs. In a state with CON laws, or other state imposed anti-competitive restrictions that limit the number of providers or facilities in the state or a county in the state, CMS will either award the organization a 10% credit towards the percentage of beneficiaries residing within published time and distance standards for affected providers and facilities or, when necessary due to utilization or supply patterns, customize the base time and distance standards.

In the Part C and D final rule, CMS asserted that states with CON laws restrict the supply of healthcare services which has an impact on the ability of an MA plan to develop and maintain an adequate network. To help offset the adverse effects that CON laws have on MA plans, CMS has instituted a 10 percent credit towards meeting the time and distance standards in those service areas where CON or similar restrictions apply.  HPMS has been updated with information on whether a service area qualifies for the CON credit.

HMA will continue to monitor new policy changes impacting Medicare Advantage network adequacy. For more information on the changes discussed here or other Medicare policy questions, please contact Julie Faulhaber.

Link to Medicare Advantage and Section 1876 Cost Plan Network Adequacy Guidance