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HMA Summary of 2020 Medicare Advantage and Part D Flexibility Final Rule

This week, our In Focus reviews the Calendar Year (CY) 2020 Medicare Advantage (MA) and Part D Flexibility Final Rule (Final Rule) issued by the Centers for Medicare & Medicaid Services (CMS) on April 5, 2019. The Final Rule implemented various provisions contained in the Bipartisan Budget Act of 2018 (BBA), which required the expansion of MA telehealth benefits and established new criteria for Dual Eligible Special Needs Plans (D-SNPs) integration requirements and streamlined Medicare and Medicaid grievance and appeals processes. The Final Rule also established rules to improve MA and Part D program quality and accessibility, clarified program integrity policies, and established new rules for the MA and Part D Quality Rating System.

While many of the provisions included in the Final Rule set parameters based on legislative requirements, the Administration maintained its commitment to providing states and plans with flexibility to customize their offerings. Despite numerous comments requesting more standardization of requirements, CMS adopted many of its original proposals and indicated that additional technical support or clarification may be provided through sub-regulatory guidance.

CMS opted not to address its Risk Adjustment Data Validation (RADV) extrapolation proposal in the Final Rule, due to a recent extension of the comment period to April 30, 2019. Instead, CMS indicates it will address the RADV proposal and comments received in subsequent rulemaking.

2020 Medicare Advantage and Part D Flexibility Final Rule Highlights

Expansion of MA telehealth benefits: In accordance with the BBA, beginning in 2020, MA plans will have greater flexibility to cover telehealth benefits. Specifically, MA plans will be permitted categorize “additional telehealth benefits” (telehealth benefits beyond those covered under Medicare Fee-For-Service Part B) as basic benefits rather than supplemental benefits, ensuring concrete reimbursement for these services. MA plans may cover areas of telehealth previously unavailable to most Medicare beneficiaries, such as telehealth visits originating in urban areas or from the enrollee’s home. In addition, CMS made final its proposals that plans covering additional telehealth benefits as a basic benefit:

  • Have the discretion to determine which services are clinically appropriate for telehealth,
  • Must offer comparable telehealth and in-person services,
  • May establish differential cost-sharing for telehealth and in-person visits,
  • Must ensure telehealth providers serving their enrollees are in-network providers, and
  • May not include telehealth capital and infrastructure costs (e.g., information technology hardware and software) in their annual bids.

CMS chose to delay rulemaking on telehealth-related network adequacy requirements and encounter data submission requirements, instead reinforcing that these two requirements remain in place without changes at this time. Finally, CMS chose not to make final a proposal requiring MA plans to identify the individual telehealth services they cover to enrollees in the plans’ Evidence of Coverage document.

Adoption of D-SNP Integration Requirements: CMS made final its proposal that, by 2021, D-SNPs would be required to meet one of the following three standards for Medicare and Medicaid integration as required by the BBA:

  • Qualify as a Fully Integrated Dual Eligible SNP (FIDE SNP), a D-SNP with a capitated contract with the state Medicaid agency to cover comprehensive Medicare and Medicaid services, including long-term services and supports (LTSS) and behavioral health.
  • Qualify as a Highly Integrated Dual Eligible SNP (HIDE SNP), a D-SNP that has, or whose parent organization or another entity owned and controlled by the parent organization has, a capitated contract with state Medicaid agency in the state it operates that includes LTSS, behavioral health, or both
  • Notify the state Medicaid agency, or entities designated by the state Medicaid agency, when certain high-risk, full-benefit dual eligible individuals, as determined by the state Medicaid agency, are hospitalized or have a skilled nursing facility admission. CMS clarified in the Final Rule that D-SNPs are permitted to authorize other entities, such as network providers, to notify the state Medicaid agency or designated entity on the D-SNP’s behalf, though D-SNPs would retain the responsibility for compliance.

CMS also made final its proposal to impose intermediate sanctions to suspend enrollment if a D-SNP fails to meet one of the above requirements. Determinations regarding whether these sanctions will apply at the plan-level or contract-level will be made on a case-by-case basis. Non-compliant plans will be required to submit a corrective action plan describing how they intend to come into compliance.

CMS received numerous comments requesting additional clarity and direction to facilitate compliance with the integration requirements. CMS indicated the agency anticipates issuing sub-regulatory guidance to further clarify how D-SNPs can coordinate Medicare and Medicaid benefits.

Implementation of Unified Grievances and Appeals Processes for D-SNPs: As mandated by the BBA, CMS made final its proposals to unify Medicare and Medicaid grievance and appeals processes for certain D-SNPs and companion Medicaid managed care plans by 2021. The unification requirements apply only to D-SNPs and affiliated Medicaid managed care plans with “exclusively aligned enrollment”, meaning all of the D-SNP enrollees receive Medicaid coverage through the D-SNP or an affiliated Medicaid managed care organization operated by the D-SNP’s parent organization. CMS notes that the vast majority of D-SNP enrollment is not exclusively aligned, and therefore, these requirements would only apply to a limited number of plans in 2021. In developing the unified requirements, CMS proposed and made final processes that were most protective of the beneficiary, as directed by the BBA. These include:

  • Enrollee assistance: Plans must offer to assist members with Medicaid-related coverage issues and resolution of grievances
  • Integrated organization determination: All requests for benefits covered by plans must be subject to the same integrated organization determination process
  • Integrated grievances: Plans must accept grievances filed orally or in writing at any time, consistent with Medicaid standards
  • Integrated reconsiderations/appeals: Plans are permitted to have only one level of integrated reconsideration for an enrollee; enrollees must file an integrated reconsideration within 60 days of the denial, consistent with MA and Medicaid managed care requirements

Several commenters requested clarity regarding the circumstances under which providers may request organization determinations or integrated reconsiderations on behalf of an enrollee. In the Final Rule, CMS explicitly states that any providers that furnish, or intend to furnish, a service to an enrollee may request an integrated organization determination or an integrated reconsideration but may only request pre-service appeals without the enrollee’s consent, and that they must provide notice to the enrollee of that request.

Updates to MA and Part D Plan (PDP) Quality Rating System: Following an effort to improve the transparency of the Star Rating methodology and advance notice to plans in the CY 2019 Final Rule, the 2020 Final Rule updates specifications for three measures: 1) Controlling High Blood Pressure (Part C) (effective for 2022 Star Ratings); 2) Medicare Plan Finder (MPF) Price Accuracy (Part D) (effective for 2022 Star Ratings); and 3) Plan All-Cause Readmissions (Part C) (effective for 2023 Star Ratings). As required in regulation, the Controlling High Blood Pressure and the Plan All-Cause Readmissions measures will have a weight of 1 in the first year after being reintroduced back into the Star Ratings. CMS also finalized its proposal to exclude from the Improvement Measures calculation any measure that receives a measure-level Star Rating reduction for data integrity concerns for the current or prior year.

The Final Rule adopts enhancements to the cut-point methodology for measures effective for the 2022 Star Ratings, including implementation of a guardrail. The guardrail will provide some stability by capping the amount by which cut points will increase or decrease from year to year (no more than 5 percent). However, CMS declined to establish pre-determined cut points (such as pre-determined 4-star thresholds) in advance of the measurement period despite industry feedback.

With some changes, CMS made final its proposed methodology for calculating Star Ratings to account for extreme and uncontrollable circumstances, such as hurricanes and other natural disasters. This will apply to the 2020 measurement period and the 2022 Star Ratings. CMS received many comments related to the issue of socioeconomic status (SES) and Star Ratings, but indicated this issue was outside the scope of this regulation. Instead, CMS described ongoing efforts for identifying and addressing impact of social risk factors on quality measurement outcomes.

Refinements to Preclusion List Requirements. In the 2019 Final Rule CMS eliminated the requirement that all prescribers and suppliers of services enroll in Medicare but announced that the agency would prohibit payment for Part D drugs and MA services prescribed or furnished by providers included on a “preclusion list”. The preclusion list includes providers whose Medicare enrollment has been revoked as well as providers who present program integrity concerns. MA plans and PDP Sponsors are required to reject claims from providers on the preclusion list and implemented certain beneficiary protections, such as enabling access to a provisional drug supply. In the 2020 Final Rule, CMS continues to make refinements to its preclusion list policy, such as modifying the provider appeals process and requiring beneficiary notification. However, CMS declined to delay the effective date of the preclusion list. To avoid duplicative administrative processes, CMS also codified that a similar provider exclusion list created by the Office of Inspector General (OIG) will take precedence over CMS’s preclusion list.

Expansion of PDP Access to Part A and B Data. CMS made final its proposal to give PDP Sponsors access to enrollee Part A and B claims data for purposes of optimizing therapeutic outcomes, improving care coordination, engaging in fraud and abuse or compliance activities, and supporting other health care operations. Data will be available on a quarterly basis, upon a PDP Sponsor’s request, provided in a standardized format. These data will include seven types of claims: inpatient, outpatient, carrier, durable medical equipment, hospice, home health, and skilled nursing facility. These data will not include Part C or D data, or HCC or RxHCC risk scores.

HMA continues to analyze these provisions and others included in the Final Rule. For more information or questions about HMA’s Medicare Practice, please contact Mary Hsieh or Jon Blum.

Link to 2020 Medicare Advantage and Part D Flexibility Final Rule