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.