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Blog

Proposed rule changes for mental health parity requirements and impacts on local and regional MCOs

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Previously, Wakely Consulting Group, an HMA company, reviewed aspects of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requirements proposed rule published by the Internal Revenue Service (IRS), Employee Benefits Security Administration (EBSA), and Centers for Medicare & Medicaid Services (CMS) on August 3, 2023. The agencies accepted comments on the proposed rule through October 17, 2023. Because the proposed rule, if finalized as put forward, will have a significant impact on the compliance obligations of managed care organizations (MCOs) related to mental health parity requirements for the 2025 plan year in the group market and 2026 plan year in the individual market, MCOs will need to ensure, as they enter 2024, that they are in a position undertake any necessary steps to meet such obligations. This blog post outlines three specific requirements in the proposed the rule related to non-quantitative treatment limitations (NQTL) and their implications for a subset of MCOs: regional and local MCOs.

No More Restrictive Requirement

In the proposed rule, the IRS, EBSA, and CMS restate that MCOs may not apply any NQTL to mental health/substance use disorder (MH/SUD) benefits in any classification that is more restrictive, in policy or practice, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. To ensure compliance with this requirement, the proposed rule specifies exactly how an MCO must determine if the requirement is met.

First, the proposed rule outlines in detail how an MCO must complete a quantitative calculation to determine whether an NQTL applies to substantially all medical/surgical benefits in the classification at issue. If the NQTL does apply to substantially all medical/surgical benefits in the classification, the proposed rule then outlines exactly how the MCO must determine what version of the NQTL counts as the predominant one within the classification as well. Finally, once the predominant variation of the NQTL is established for an NQTL that applies to substantially all medical/surgical benefits in the classification, an MCO would have to use the proposed rule’s definition of “restrictive” (i.e., “imposes conditions, terms, or requirements that limit access to benefits under the terms of the plan,”) to determine if the NQTL applied to the relevant MH/SUD benefit is no more restrictive than the applicable medical/surgical benefit NQTL.

For local and regional MCOs, while the no more restrictive standard is not new, the steps required to ensure compliance likely represent—at the very least—an area where materially more intensive and sophisticated capabilities will need to be brought to bear. Completing the steps outlined above will require a cross-functional approach that leverages such areas as actuarial, behavioral health, clinical, compliance, financial analytics, and legal. The necessary people and processes will need to be deployed not only to accomplish the work effort but to do so in a way that is intelligible to federal and state regulators.

Design Requirement

In the proposed rule, the IRS, EBSA, and CMS seek to make explicit a requirement which mandates that MCOs cannot impose an NQTL on MH/SUD benefits in any classification unless the factors used in designing and applying the NQTL to MH/SUD benefits in the classification are comparable to, and are applied no more stringently than, the factors used in designing and applying the NQTL to medical/surgical benefits in the classification. The agencies note that the regulatory revisions offered only seek to codify what has been a longstanding position of the agencies on this issue.

The most notable and innovative provision put forward by the agencies for purposes of determining comparability is one that would prohibit MCOs from relying on any factor in the design or application of an NQTL if the information on which the factor is based discriminates against MH/SUD benefits when compared to medical/surgical benefits. In this context, the proposed rule makes clear that discriminating against MH/SUD benefits means being biased or not objective, in a manner that results in less favorable treatment of MH/SUD benefits, based on all the relevant facts and circumstances.

For local and regional MCOs, it is advisable, given both the prudence of mitigating forthcoming potential compliance risks and likely limitations on the resources that can be devoted to compliance efforts in a discrete time period, to begin to evaluate upon entering 2024, whether NQTLs imposed on MH/SUD benefits have been designed and applied in a way that comports with this proposal by the agencies. For example, an MCO should evaluate whether factors currently employed rely on historical data or other historical information from a time when coverage was not subject to MHPAEA or was in violation of MHPAEA’s requirements where the use of such data results in less favorable treatment of MH/SUD benefits, as this would be prohibited. To this point, the agencies specifically note that MCOs would not be permitted to calculate reimbursement rates based on historical data on total spending for each specialty that is divided between MH/SUD providers and medical/surgical providers, when the total spending was based on a time period when coverage was not subject to MHPAEA or was in violation of MHPAEA, if the data results in less favorable treatment of MH/SUD benefits.

Outcomes Data Use Requirement

In the proposed rule, the IRS, EBSA, and CMS note that substantially disparate results are often a red flag that an MCO may be imposing an NQTL in a manner that does not comply with MHPAEA and so the agencies have included a proposal to add a requirement that, when designing and applying an NQTL, an MCO must collect and evaluate relevant outcome data in a manner reasonably designed to assess the impact of the NQTL on access to MH/SUD benefits and medical/surgical benefits as well as consider the impact as part of the MCO’s analysis of whether such NQTL complies with MHPAEA.

At minimum, MCOs would have to collect and evaluate data for all NQTLs that includes, but is not limited to, the number and percentage of relevant claims denials, as well as any other data relevant to the NQTLs as required by state law or private accreditation standards. Furthermore, due a specific concern of the agencies about network composition, the proposed rule would mandate that MCOs also collect additional applicable data for NQTLs that relate to network composition such as in-network and out-of-network utilization rates, network adequacy metrics (i.e., time and distance data and data on providers accepting new patients), and provider reimbursement rates. To the extent that data collected and analyzed demonstrates significant differences in access to MH/SUD benefits when compared to medical/surgical benefits, the MCO would be required to take reasonable action to address these differences in access as necessary to ensure compliance with MHPAEA.

For local and regional MCOs, beginning in 2024 to inventory readily available data sources that would be able to be leveraged to comply with this proposal is an important step in order to be prepared to comply during the 2025 plan year in the group market and 2026 plan year in the individual market. Additionally, assessing analytic capabilities to determine the level of readiness to be able to complete the evaluation based on the data collected is also an important component of preparing for this proposed new compliance obligation.

For More Information

If you have questions about how HMA can support your efforts related to the proposed rule’s implications for local and regional MCOs, please contact Michael Engelhard, Managing Director or Patrick Tigue, Managing Director.

Brief & Report

Medicaid Business Transformation DC: Recommendations for Technical Assistance

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HMA was engaged by the Washington, District of Columbia Department of Health Care Finance (DHCF) to lead their Medicaid Business Transformation D.C. Initiative, assessing the technical assistance needs of Medicaid providers and organizations in the areas of legal analysis, budgeting, and business development as they move toward value-based care arrangements. HMA partnered with the D.C. Behavioral Health Association (BHA), Medical Society of the District of Columbia (MSDC), D.C. Primary Care Association (DCPCA), and DHCF to engage, recruit, and collaborate with organizations and stakeholders across the District.

The HMA team implemented a mixed-methods assessment approach that included a literature review of national value-based payment (VBP) best practices, focus groups, interviews, and a technical assistance (TA) survey of District organizations, agencies, and stakeholders. This strategy identified the TA needs of   District healthcare providers that informed the design of an intensive 3-month technical assistance program that included a variety of tools, webinars, and trainings. All resources and tools are available on the Integrated Care DC webpage. https://www.integratedcaredc.com/medicaid-business-transformation-dc/  The report and other information about the program were published this week at https://dhcf.dc.gov/innovation.

Experts from HMA as well as Wakely Consulting Group and Lovell Communications, both HMA subsidiaries, contributed to this report. We offer our clients a wide range of deep technical, analytical, policy, and communications support to providers, state agencies, and recommendations on ways to improve value-based payment models.

Report authors include Caitlin Thomas-Henkel, Suzanne Daub, Art Jones, Hunter Schouweiler, Amanda White Kanaley, and Vicki Loner. It was peer reviewed by Jean Glossa and Sam DiPaolo.

Webinar

Webinar replay: collaborating to improve children’s behavioral health – a comprehensive playbook to fostering wellbeing in children

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This webinar was held on December 12, 2023. 

Beyond the statistics lie the stories of countless children and families needing immediate and critical access to behavioral health services and community-based supports. Addressing these issues requires comprehensive cross-system reforms, including policies that promote integrated financing, enhanced care coordination, increased provider collaboration, and bolster upstream prevention efforts. HMA is working with these national partner organizations to prioritize and focus on cross system integrated and interoperable solutions to address the needs of children, youth, and families with complex behavioral health needs.

HMA hosted a webinar in partnership with the National Association of State Mental Health Program Directors (NASMHPD), National Association of Medicaid Directors (NAMD), Child Welfare League of America (CWLA), American Public Human Services Association (APHSA), and with support from the Annie E. Casey Foundation, Casey Family Programs and other funders. Together, these organizations have developed a multi-state policy lab to be held in February 2024. Applications for state agency participation opened the week of November 11th. State agency decision makers can click here to fill out and submit your state agency’s application. This webinar focused on the overall effort and for states to hear from this partnership on the importance of collaborating to strengthen the children’s behavioral health system.

If the link above (https://healthmanagement.qualtrics.com/jfe/form/SV_9YwdBb5xJzIVfIq) to the online form causes problems or does not work for you, please use this fillable PDF application and send it to [email protected] with all relevant attachments. Applicants must submit the full application no later than 5 pm on December 20, 2023.

Key highlights of this webinar include:

  • Explaining the need to develop a collaborative multi-system response to meet the behavioral health needs of children, youth and their families
  • The opportunity for 8 state child serving agency teams to participate in the children’s behavioral health policy lab

Featured Speakers:

Julie Collins, MSW, LCSW, VP, Practice Excellence, CWLA
David Miller, M.P.Aff., Senior Operations & Project Director, NASMHPD
Sheila Poole, Vice President, External Relations, APHSA
Joe Ribsam, JD, Child Welfare and Juvenile Justice Policy Director, AECF

 

Brief & Report

A Look at Swedish Maternity Care with Medicaid in Mind

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Health Management Associates (HMA) collaborates with state and federal agencies, health service providers, and community-based organizations to enhance access to comprehensive reproductive healthcare and address disparities in birth outcomes, particularly in the context of Medicaid. This involves evaluating and supporting the implementation of perinatal care models, addressing health determinants affecting birth outcomes, and overcoming barriers to reproductive health services. In an effort to inform these initiatives, Diana Rodin, an associate principal at HMA interviewed Swedish experts to understand the country’s universal, publicly funded maternity and reproductive healthcare system. The Swedish model emphasizes universal healthcare, generous socioeconomic supports, and collaborative team-based perinatal care led by midwives. Lessons from Sweden, such as the utilization of “kulturdoulas” for culturally aligned support, a consensus-driven decision-making approach, and a centralized perinatal data system, provide valuable insights for improving birth outcomes for Medicaid recipients in the United States. 

Blog

HMA Fall Conference: Highlights and Takeaways

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HMA Fall Conference October 2023

As we look back at our 2023 Fall Conference on publicly sponsored healthcare held in October, we wanted to highlight a few key takeaways from the event:

  • Behavioral Health Pre-Conference workshop: An impactful pre-conference session convened influential leaders in behavioral health to deliberate on the urgent need for a purposeful disruption of mental health accessibility across multiple sectors. Participants were actively challenged to reimagine strategies that could effectively disrupt the prevailing status quo in behavioral health, focusing on three key components essential for constructing a comprehensive system of care: population health and prevention, quality, and network.

The discourse highlighted pervasive issues such as silos that contribute to a lack of accountability within the system. There was a unanimous recognition of the imperative to eliminate barriers to access, accompanied by a resounding call for a pivotal transformation in payer models. Throughout the session, a prevailing theme underscored the critical need for fostering collaborative efforts across different sectors, emphasizing the creation of opportunities for cross-sector groups to work together.

Participants echoed a shared sentiment regarding the urgency of dismantling the current lacking system and replacing it with a more inclusive, patient-centered approach. The session served as a platform for thought-provoking discussions, inspiring innovative solutions to address the challenges in behavioral health, paving the way for a more effective and accessible system.

The three main conference themes – Equitable Access, Digital Innovation, and Value-based Care – were touched upon in many of the panels and plenary sessions.

  • Equitable Access: Several panels and speakers talked about health equity as a moral imperative as well as an organizational priority. Payers and providers understand that the Centers for Medicare and Medicaid Services (CMS) is developing metrics and measures to incorporate equity into accreditation and reimbursement and are anxious to get down to the details of the specific items that will be included. There was also robust discussion about how to incorporate community-based organizations and social services into Medicaid managed care plans to ensure that health-related social needs are being addressed in a more holistic way. There are opportunities to ensure contracting parameters and quality metrics work as intended to enable payers and providers to improve outcomes and reduce inequities of all types.
  • Digital Innovation: In addition to a “shark tank” style presentation of innovative technology vendors, the HMA conference featured a panel of experts in data liquidity and interoperability. They discussed the opportunity to embrace application programming interfaces (APIs) and digital health as a strategic imperative instead of a compliance issue. The new electronic prior authorization requirements are already starting to produce big results by expediting approvals, which is good for patients, but also reducing workload to allow staff to be redeployed to other areas of need. The panel also discussed the real need to improve digital access for rural health clinics (RHCs) and federally qualified health centers (FQHCs) that serve rural communities, where fee-for-service payment creates barriers to greater data coordination. And finally, the panel discussed the need to improve Medicaid procurement, so it does not impose barriers to digital innovation for vulnerable populations.
  • Lessons of Value-Based Care: This session featured a lively conversation about how value-based care is more important than ever, and frankly, that it is the right thing to do for mission-driven organizations to improve the health of patients. The organizations represented discussed how it has not been easy to learn new approaches to care coordination and managing financial risk, but they can do what is best for the patient by investing in the right things up front. Value-based care approaches are proliferating, including FQHCs where the providers’ motivation to serve vulnerable families is now supported by the right financial incentives.

HMA is committed to bringing together experts from across the healthcare spectrum, and advancing the conversation about ways to improve access, equity, and innovation in healthcare. In early March 2024, we will be offering an HMA Spring Workshop on value-based care in Chicago. Registration will open soon; to receive the invitation, please be sure you are subscribed to the HMA News and Events list.

Brief & Report

Opportunities to Enhance HCBS for Older Adults and Individuals Providing Care

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Minnesota Department of Human Services partnered with HMA to study Minnesota’s home- and community-based services (HCBS) trends; changes in its demographics, including the experiences of diverse communities; and successful local and national HCBS models to inform future efforts to improve access to supports for older Minnesotans and their informal caregivers. The report outlines recommendations to help address several of the challenges outlined in the brief, and identified several areas for DHS to consider for future innovations.

HMA has extensive expertise in HCBS and long-term services and supports (LTSS). If you would like to learn more about what HMA can do for your organization, you can contact the report authors Susan McGeehan, Barry J. Jacobs, Chris Dickerson, Aaron Tripp, Erica Reaves, and Anya Yermishkin.

Blog

Proposed changes to opioid treatment: what they will mean for providers, payers, and regulators

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After more than two decades, SAMHSA and its Center for Substance Abuse Treatment (CSAT) is revisiting regulations governing opioid treatment programs (OTPs), as required by the 2023 Consolidated Appropriations Act passed by Congress. These new federal rules around treatment will change how medications are delivered to persons with opioid use disorder (OUD), offering opioid treatment centers a unique opportunity to advance person-centered care, and can build on the lessons learned from the flexibilities offered during the public health emergency.

This is a real opportunity to change how care is delivered. It will increase access to lifesaving medications, including:

  • A change in take-home schedules, which will allow for additional take-home medications sooner in the treatment process to reduce the burden of coming to the program daily, alleviating transportation challenges and the disruption of work and family routines.
  • Emphasizing and codifying the importance of harm reduction.
  • Clarifying diagnoses required for admission to be active moderate-to-severe OUD, OUD in remission, or at high risk for recurrence or overdose.
  • Removing access barriers for persons under 18; expanding use of telehealth; and finally, expanding interim maintenance dosing up to 180 days in a 12-month period. 

These new changes will help alleviate admission barriers caused by workforce shortages and allow patients better access to medication and treatment. The increase in use of telehealth combined with medications for opioid use disorder (MOUD) will remove time and travel barriers for treatment, allowing persons treated with methadone and buprenorphine, including new persons, to be treated remotely.

What does this mean for the field?

OTPs have historically been reimbursed based on volume, with daily attendance as a steady source of revenue and a “captive” audience for counseling services. For persons with OUD to feel the full benefits of the new rule, changes will need to be made at all levels:

  • OTPs will need to rethink their clinical models to develop a service mix driven by a person’s need as opposed to regulations. Engagement will drive attendance, outcomes and thus revenue. Additionally, there will be a need to:
    • Retrain staff.
    • Work with medical team to develop new clinical protocols.
    • Structure revenue cycle management processes and business models of service delivery.
  • Regulators will need to adapt state licensing rules and re-train licensing staff.
  • Payers have an opportunity to move Value-Based Payment (VBP) more steadily into the OUD treatment space and will need to realign payment structures to incentivize providers to provide care according to a person’s need.

If you want to learn more about the changes ahead, HMA hosted a 3-part webinar series on the effect of proposed regulations on delivery of opioid treatment services. The series New Rules in Treatment of Opioid Addiction was aimed at helping stakeholders prepare for and adapt to these changes to ensure a successful transition for the people they serve. Our series focuses on three areas where changes can help those managing OUD:

  1. How do OTPs deliver services to better support persons with OUD?
  2. How do payers create the right financial incentives to help providers deliver better behavioral health solutions for OUD?
  3. How do state regulators make changes to rules and laws to promote a treatment system that prioritizes a person’s health and recovery?

Watch here:

Part 1 Opioid Treatment Providers

Part 2 Opioid State Payers – Aligning Incentives for Treatment

Part 3 Opportunities for State Regulators to Shape Policy and Regulation of Treatment

If you are ready to explore these changes in your organization, HMA can help. We have experience in:

  • Developing clinical workflows
  • Aligning revenue cycle and clinical operations
  • Developing and implementing state OUD code
  • Supporting health plans and providers in moving into VBP
  • Supporting health plans in adapting to new clinical models

Blog

Advancing the Life Sciences with expertise from all aspects of healthcare

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Your organization’s success relies on understanding evolving market dynamics and navigating a complex statutory and regulatory environment. Drug, device, and diagnostic firms, from established to start-up, come to HMA when they want experienced partners who can help with regulatory strategy, coding, coverage, and payment solutions, investment strategy, navigating the complexities of federal and state law, or even creating new policy. HMA, working with our partner companies, provides consulting with depth and breadth throughout the life sciences sector and the broader healthcare industry.

We work with drug, device, and diagnostic companies and their trade associations, pharmacies, physician specialty societies, hospitals, health systems, and community health centers, as well as investment firms and their portfolio companies.

Before joining HMA, our team spent years as senior officials in Medicare and Medicaid; cabinet-level health secretaries; and policy advisors to governors and other elected officials. They also served as directors of large nonprofit and social services organizations, top-level advisors, and C-level executives. Our team is expert in federal and state policy, reimbursement, actuarial consulting, medical coding support, public affairs, and corporate development.

Our Life Sciences team, comprised of experts across our firm, can help with:

We help you navigate the complexities of FDA regulation to help with product development and marketing authorization strategies and regulation throughout the product lifecycle. 

Regulatory policy counseling

Product development and target product profile

FDA authorization strategy

Post-approval compliance  

Contact our FDA Experts:

Clay Alspach, Principal, Leavitt Partners
Ralph Hall, Principal, Leavitt Partners
Eric Marshall, Principal, Leavitt Partners
Amy Rick, Principal, Leavitt Partners
Vince Ventimiglia, CEO, Leavitt Partners Collaborative Advocates

We help your organization understand the commercial market for life sciences products and develop strategies to support patient access, product launches and growth, and value.

Market intelligence, including market, customer, and stakeholder analysis

Strategic planning, considering risk-based contracting, value-based care, and population health

Business development and strategy

Formulary and market access insights

Go-to-market and launch strategies

Contact our Commercial Experts:

Jeremy Bahr, VP, Client Relations, HMA
Thomas Gubbay, Senior Consultant, Leavitt Partners
David Kulick, Managing Director, The Focus Group
Spencer Morrison, Associate Principal, Leavitt Partners
Rebecca Nielsen, Managing Director, Leavitt Partners
Alex Rich, Managing Director, The Focus Group

Experts in Medicare, Medicaid, and the commercial market, we help you understand and navigate the complexities of coding, coverage, and payment for approved products and develop and execute strategies to support product access and value.

Code assessment and recommendation

Coverage mapping and guidance

Payment strategy across settings

CMS engagement

Emerging technology strategies

Alternative payment model (APM) development

Payment change impact modeling

Contact our Reimbursement Experts:

Amy Bassano, Managing Director, Medicare, HMA
Mark Desmarais, Principal, The Moran Company
Charlene Frizzera, Advisor, Leavitt Partners
Zach Gaumer, Principal, HMA
Kevin Kirby, Managing Director, The Moran Company
Rachel Kramer, Principal, The Moran Company
Anne Marie Lauterbach, Principal, Leavitt Partners
Clare Mamerow, Principal, The Moran Company

We help you understand how evolving Federal policy impacts your business and develop strategies for creating and advancing Federal policy that advances value and your business.

Congressional and Administration intelligence and strategy

Policy development and strategy

Multi-sector alliances to create and advance new policy

Policy modeling and CBO scoring projections

Contact our Federal Experts:

Clay Alspach, Principal, Leavitt Partners
Amy Bassano, Managing Director, Medicare, HMA
Mark Desmarais, Principal, The Moran Company
Zach Gaumer, Principal, HMA
Ralph Hall, Principal, Leavitt Partners
Kevin Kirby, Managing Director, The Moran Company
Rachel Kramer, Principal, The Moran Company
Anne Marie Lauterbach, Principal, Leavitt Partners
Clare Mamerow, Principal, The Moran Company
Eric Marshall, Principal, Leavitt Partners
Sara Singleton, Principal, Leavitt Partners
Josh Trent, Managing Principal, Leavitt Partners
Vince Ventimiglia, CEO, Leavitt Partners Collaborative Advocates
Liz Wroe, Principal, Leavitt Partners

We help you understand how evolving State policy impacts your business and develop strategies to support product access and value in Medicaid programs.

State-related access issues

State policy impact modeling

State research support

Contact our State Experts:

Clay Alspach, Principal, Leavitt Partners
Anne Marie Lauterbach, Principal, Leavitt Partners
Stephen Palmer, Managing Principal, HMA
Matt Powers, Managing Director, HMA
Josh Trent, Managing Principal, Leavitt Partners

We work with investment firms and their portfolio companies to provide insight that helps you invest wisely in the rapidly evolving healthcare marketplace.

Comprehensive due diligence studies

In-depth research projects

Billing and compliance reviews

Identification, analysis, and outlook on federal, state, and local reimbursement/regulatory issues

Contact our Investment Strategy Experts:

David Kulick, Managing Director, The Focus Group
Greg Nersessian, Managing Director, HMA
Alex Rich, Managing Director, The Focus Group

Project Spotlight

Pipeline research and policy recommendations to address new innovative therapies

A large national pharmaceutical manufacturer hired HMA, The Moran Company, and Leavitt Partners, both HMA subsidiaries, to assess the current pipeline of innovative therapies, examine current reimbursement policies to assess long-term compatibility with the adoption of innovative therapies and novel delivery mechanisms, and make policy recommendations to address any challenges identified through the process.

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Blog

CMS proposes significant changes to Medicare Advantage and Medicare prescription drug benefit programs for 2025

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This week, our In Focus section reviews a wide-ranging proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) on November 6, 2023. The rule would update various policies 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. These proposed policy reforms would implement changes related to Star Ratings, marketing and communications, agent/broker compensation, health equity, dual eligible special needs plans (D-SNPs), utilization management, network adequacy, and other programmatic areas. The proposals reflect the agency’s continuing focus on increasing program transparency, improving health equity, reducing the cost of care for Medicare beneficiaries, and expanding access to behavioral health services.

MA and Part D stakeholders are encouraged to provide CMS with feedback and analysis regarding the potential impact of these changes. Comments on the proposed rule are due by January 5, 2024. The final rule would take effect in contract year 2025.

Improving Access to Behavioral Health Care Providers

CMS proposes regulatory changes intended to improve access to behavioral healthcare by adding certain provider specialties to the MA network adequacy standards as follows.

  • CMS proposes to add a new facility-specialty type to the existing list of facility-specialty types evaluated as part of its plan network adequacy reviews. The new facility-specialty type, outpatient behavioral health, would be included in network adequacy evaluations, including marriage and family therapists (MFTs), mental health counselors (MHCs), opioid treatment programs, community mental health centers, and/or other behavioral health and addiction medicine specialists and facilities.
  • MFTs and MHCs will be eligible to enroll in Medicare and start billing for services beginning January 1, 2024, because of the new statutory benefit category established in the Consolidated Appropriations Act (CAA) of 2023. CMS proposes to make corresponding changes to its network adequacy requirements for MA organizations.
  • For purposes of the network adequacy requirements, the new facility-specialty type would be evaluated using time and distance and minimum number standards in the proposed regulation.

Increased Transparency for Special Supplemental Benefits for the Chronically Ill

In 2018, Congress enacted new authorities pertaining to supplemental benefits for MA members with chronic health conditions. CMS refers to this category of benefits as Special Supplemental Benefits for the Chronically Ill (SSBCI). These services are available only to enrollees with ongoing conditions and who meet certain criteria established in the statute. In contrast to the general policy that MA benefits should be offered uniformly to all plan members, MA plans may offer SSBCI tailored to a qualifying individual’s specific medical diagnosis and needs.

Supplemental benefits, including SSBCI, are generally funded with MA plan rebate dollars. CMS notes that the number of MA plans that offer SSBCI—and the number and scope of SSBCI that individual plans provide—has increased since their introduction in 2019.

Under the proposed rule:

  • MA organizations would be required to demonstrate, through relevant and acceptable evidence, that an item or service offered as SSBCI has a reasonable likelihood of improving or maintaining the health or overall function of chronically ill beneficiaries. MA plans also must, by the date on which they submit a bid to CMS, include a bibliography of evidence supporting this position. According to CMS, this expectation would shift the burden of proof from the agency to MA organizations, requiring plans to demonstrate compliance with this standard and that SSBCI items and services are evidence-based.
  • MA plans must follow their written policies based on objective criteria for determining enrollee eligibility for SSBCI when making determinations.
  • Require that MA plans document denials of SSBCI eligibility rather than its approvals.
  • CMS would codify its authority to review and deny approval of an MA organization’s bid if the plan cannot demonstrate, through relevant and acceptable evidence, that its proposed SSBCI has a reasonable expectation of improving or maintaining the health or overall function of a chronically ill enrollee.
  • CMS also would codify its authority to review SSBCI offerings annually for compliance and in light of the available evidence.

According to CMS, these proposals, if implemented, would better ensure that the benefits offered as SSBCI are reasonably expected to positively affect the health and well-being of chronically ill beneficiaries and guard against the use of MA rebate dollars for SSBCI that unsubstantiated.

In addition, CMS is proposing new policies to improve transparency regarding SSBCI so that beneficiaries are aware that SSBCI are only available to enrollees who meet the eligibility criteria. More specifically, CMS proposes to:

  • Modify the current requirements for the SSBCI disclaimer that MA organizations must use whenever SSBCI are mentioned. The SSBCI disclaimer would have to list the relevant chronic condition(s) that qualify for the benefits that MA organizations offer.
  • Establish specific font and reading pace parameters for the SSBCI disclaimer in print, television, online, social media, radio, other voice-based ads, and outdoor advertising, including billboards. Finally, it would clarify that MA organizations must include the disclaimer in all marketing and communications materials that mention SSBCI.

Requiring Mid-Year Enrollee Notification of Available Supplemental Benefits

As noted previously, over the past several years, the number of MA plans offering supplemental benefits has increased. The benefits offered are broader in scope and variety, and an increasing amount of MA rebate dollars are being directed toward these benefits. At the same time, plans have reported that the number of enrollees who use many of these benefits is low.

  • CMS proposes requiring MA plans to notify enrollees mid-year of the unused supplemental benefits available to them. The notice would list any supplemental benefits that a beneficiary does not use during the first six months of the year (January 1−June 30).
  • At present, MA plans are not required to send any communication specific to an enrollee’s usage of supplemental benefits. This policy is intended to educate enrollees on their access to supplemental benefits and encourage greater use of these benefits.

Enhancing “Guardrails” for Agent and Broker Compensation

For many years, CMS has set upper limits on the compensation that agents and brokers can receive for enrolling Medicare beneficiaries in MA and Part D plans. CMS believes that many MA and prescription drug payment plans, as well as third-party entities with which they contract, make structured payments to agents and brokers that circumvent these compensation caps.

  • In this regulation, CMS proposes to generally prohibit contract terms between MA organizations and agents, brokers, or other third party marketing organizations (TPMOs) that may interfere with the agent’s or broker’s ability to objectively assess and recommend the plan that best-suited to a beneficiary’s healthcare needs; to set a single reimbursement rate for all plans; to revise the scope of items and services included within agent and broker compensation; and to eliminate the regulatory framework that currently allows for separate payment to agents and brokers for administrative services.
  • The agency would make conforming changes to the Part D agent broker compensation rules.

Requiring an Annual Health Equity Analysis of Utilization Management Policies and Procedures

CMS proposes several regulatory changes to the composition and responsibilities of an MA organization’s utilization management (UM) committee.

  • The new rules would require that a member of the UM committee have expertise in health equity and that the UM committee conduct an annual health equity analysis of the use of prior authorization.
  • The proposed analysis would examine the impact of prior authorization on enrollees with one or both of the following social risk factors (SRFs): receipt of the low-income subsidy, dual eligibility for Medicare and Medicaid (LIS/DE), or a disability.
  • The proposed analysis must compare metrics related to the use of prior authorization for enrollees with the specified SRFs with enrollees without the specified SRFs. The results of the analysis must be made publicly available on the MA organization’s website in an easily accessed manner.

Enhancing Enrollees’ Right to Appeal an MA Plan’s Decision to Terminate Coverage for Non-Hospital Provider Services

Beneficiaries enrolled in traditional Medicare and MA plans have the right to a fast-track appeal by an independent review entity (IRE) when their covered skilled nursing facility (SNF), home health agency (HHA), or comprehensive outpatient rehabilitation facility (CORF) services are being terminated. At present, quality improvement organizations (QIOs) function as IREs and conduct these reviews.

Furthermore, MA enrollees do not have the same access to QIO review of a fast-track appeal as traditional Medicare beneficiaries.

CMS proposes to:

  • Require that QIOs, instead of MA plans, review untimely fast-track appeals of an MA plan’s decision to terminate HHA, CORF, or SNF services
  • Fully eliminate the provision requiring the forfeiture of an enrollee’s right to appeal a termination of services decision when they leave the facility

According to CMS, these proposals would align MA regulations with the parallel reviews available to beneficiaries in traditional Medicare and expand the rights of MA beneficiaries to access the fast-track appeals process.

Increasing the Percentage of Dually Eligible Managed Care Enrollees Who Receive Medicare and Medicaid Services from the Same Organization

In the proposed rule, CMS expresses concern that a significant number of dually eligible enrollees receive Medicare services through one managed care entity and Medicaid services through another (misaligned enrollment), rather than from one organization (aligned enrollment. The proposed rule states that in the long run, “for dually eligible individuals who are in Medicare and Medicaid managed care, we believe that we should continue to drive toward increasing aligned enrollment until it is the normative, if not only, managed care enrollment scenario…. For dually eligible individuals that elect MA plans, we are focused on increasing enrollment in integrated D-SNPs: fully integrated dual eligible special needs plans (FIDE SNPs), highly integrated dual eligible special needs plans (HIDE SNPs), and applicable integrated plans (AIPs) [pages 286-287].”

To move in this direction, CMS offers several interconnected proposals as follows:

  • Replace the current quarterly special enrollment period (SEP) with a monthly SEP for dually eligible individuals and others enrolled in the Part D low-income subsidy program to elect a standalone PDP
  • Create a new integrated care SEP to allow dually eligible individuals to elect an integrated D-SNP on a monthly basis
  • Limit enrollment in certain D-SNPs to individuals who are also enrolled in an affiliated Medicaid managed care organization (MCO)
  • Limit the number of D-SNP plan benefit packages an MA organization, its parent organization, or an entity that shares a parent company with the MA organization, can offer in the same service area as an affiliated Medicaid MCO

According to CMS, these initiatives would increase the percentage of dually eligible MA enrollees who are in plans that are also contracted to cover Medicaid benefits, thereby expanding access to integrated materials, unified appeal processes across Medicare and Medicaid, and continued Medicare services during an appeal.

Impose New Contracting Standards for Dual Eligible Special Needs Plan (D-SNP) Look-Alikes

Under existing regulations, CMS does not contract with and will not renew the contract of a D-SNP look-alike; that is, an MA plan that is not a SNP but in which dually eligible enrollees account for 80 percent or more of total enrollment. CMS proposes to lower the D-SNP look-alike threshold from 80 percent to 70 percent in 2025 and to 60 percent in 2026. CMS states that this proposal is intended to help address the continued proliferation of MA plans that serve high percentages of dually eligible individuals without meeting D-SNP requirements.

Other Topics in the Proposed Rule

In addition, the proposed rule calls for:  

  • Providing greater flexibility for Part D plan sponsors to substitute biosimilar products during the plan year
  • Limiting out-of-network cost sharing for D-SNP PPOs
  • Standardizing the MA risk adjustment data validation appeals process
  • Expanding permissible data use and data disclosure for MA encounter data including for support for Medicaid and state Medicaid agencies to better coordinate care for dually eligible individuals

The Health Management Associates 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. For more information or questions about the policies described, contact Amy Bassano ([email protected]), Julie Faulhaber ([email protected]), Andrea Maresca ([email protected]), or John Richardson ([email protected]).