February 13, 2020

CMS Proposes Medicare Advantage and Prescription Drug Rule Changes

The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit (Part D) program to give seniors more choices, lower out-of-pocket costs and encourage price transparency.

In addition, CMS released a proposed Advance Notice Part II to modernize and maximize competition among MA and Part D plans. These changes would lower beneficiary cost sharing on some of the most expensive prescription drugs, promote the use of generic drugs, and allow beneficiaries to know in advance and compare their out-of-pocket payments for different prescription drugs.

The proposed rule also addresses the opioid epidemic across CMS programs and continues CMS’s Patients Over Paperwork initiative to reduce unnecessary burden, increase efficiencies and improve the beneficiary experience. If finalized, the proposed changes would result in an estimated $4.4 billion savings to the federal government over ten years, largely from proposed refinements to the MA and Part D Quality Star Rating system.

Medicare Advantage and Part D Advance Notice Part II

Through the Calendar Year 2021 Advance Notice, CMS is proposing updates and changes to the methodologies used to pay Medicare Advantage plans, Programs of All-Inclusive Care for the Elderly (PACE) organizations and Part D sponsors. The proposed updates will continue to modernize and maximize competition among MA and Part D plans.

There are several meaningful provisions that include net payment impact, risk score calculations, coding pattern adjustments, and part C and D program star ratings. The proposed changes described in the Advance Notice are expected to increase plan revenue by 0.93%.

CMS is soliciting feedback on future measures and concepts as the agency continues to enhance program star ratings over time, generic utilization Part D measurement concepts. It will encourage greater use of lower price generics and biosimilars.

In the Advance Notice, CMS is seeking comment on potentially developing measures of generic and biosimilar utilization in Medicare Part D as part of a plan’s star rating. Other measurement concepts that CMS is soliciting feedback on include:

  • End-Stage Renal Disease (ESRD) measures (Part C)
  • Prior Authorizations (Part C)
  • Physical Functioning Activities of Daily Living Patient-reported measure (Part C)
  • Initial Opioid Prescribing (Part D)

Related to prior authorization, CMS acknowledges prior authorization has proven an effective process for controlling improper payments and managing costs, but recognizes that prior authorization can affect needed access to patient care when processes are not in place to quickly review and approve requests for tests, services, and supplies that may be medically necessary for the beneficiary. Thus, CMS is interested in feedback from stakeholders on any potential quality measures that could assess the performance of plans related to how well they administer and automate electronic prior authorizations. CMS encourages affected parties to submit comments on the proposals outlined above by March 6, 2020.

Medicare Advantage and Part D Advance Notice Part II

The 2021 Medicare Advantage and Part D Advance Notice Part II Fact Sheet

Comments on all proposals in the Advance Notice will be accepted through Friday, March 6, 2020, before publishing the final Rate Announcement by April 6, 2020.

Part D Enhancements

The proposed rule would require Part D plans to offer real-time drug price comparison tools to beneficiaries starting Jan. 1, 2022, so consumers can shop for lower-cost alternative therapies under their prescription drug benefit plan. To encourage enrollees to use the beneficiary real-time benefit tool (RTBT), CMS proposes to allow plans to offer rewards and incentives to their enrollees who log on to the beneficiary RTBT or seek to access this information via the plan’s customer service call center. 

The proposed rule, beginning Jan. 1, 2021, will allow Part D sponsors to establish a second, “preferred” specialty tier with a lower cost sharing amount than the current specialty tier. This proposal is designed to give Part D plans more tools to lower out-of-pocket costs for enrollees. Plans would be able to demand a better deal from manufacturers of the highest-cost drugs in exchange for placing their products on the “preferred” specialty tier.

Under the Part D program, plans currently do not have to disclose to CMS the measures they use to evaluate pharmacy performance in their network agreements. The measures used by plans potentially impact pharmacy reimbursements. The proposed rule would require Part D plans to disclose such information to enable CMS to track how plans are measuring and applying pharmacy performance measures. In addition, CMS will be able to report this information publicly to increase transparency on the process and to inform the industry in its new efforts to develop a standard set of pharmacy performance measures.

CMS is also seeking comment on Part D pharmacy performance measures more broadly, including stakeholders’ recommendations for potential Part D Star Ratings metrics that could incentivize the uptake of a standard set of measures once the industry establishes one.

The proposed rule would implement several provisions of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act. They require Part D plans to educate beneficiaries on opioid risks, alternate pain treatments and safe disposal of opioids.

The proposed rule also expands drug management programs and medication therapy management programs, through which Part D plans review with providers opioid utilization trends that may put beneficiaries at-risk and provide beneficiary-centric interventions. CMS hopes these provisions will prevent and treat opioid overuse.

Medicare Advantage Enhancements

The Star Rating system helps people with Medicare, their families and their caregivers compare the quality of health and drug plans being offered. CMS is proposing to enhance the Medicare Advantage and Part D Star Ratings to further increase the impact that patient experience and access measures have on a plan’s star rating.

Beginning this year, Medicare Advantage beneficiaries are able to access additional telehealth benefits not offered under Medicare Fee-for-Service. This would give patients the option to receive health care services from more convenient locations, such as their homes.

CMS is proposing to build on the current benefits and give Medicare Advantage plans more flexibility to count telehealth providers in certain specialty areas, such as psychiatry, neurology or cardiology towards network adequacy standards. CMS is soliciting comment regarding whether to expand this credit to other specialty provider types. These proposed changes aim to give seniors more plan choices in rural areas, while increasing competition between plans and allowing providers to take advantage of the latest health care technologies and innovations.

Currently, beneficiaries with End-Stage Renal Disease (ESRD) are only allowed to enroll in Medicare Advantage plans under limited circumstances. The proposed rule implements the 21st Century Cures Act requirements to give all beneficiaries with ESRD the option to enroll in a Medicare Advantage plan starting in 2021. This will give patients with ESRD access to more affordable Medicare coverage choices and extra benefits such as transportation or home-delivered meals.

CMS proposes to limit MA plans that are Dual Eligible Special Needs Plan (D-SNP) “look-alikes.” These “look-alike” plans, which have similar levels of dual eligible enrollment as D-SNPs but are not subject to the federal regulatory and state contracting requirements applicable to D-SNPs, circumvent federal regulatory and state contracting requirements that otherwise apply to D-SNP products. Under the proposed rule, CMS proposes to not enter into or renew a contract for an MA plan that is a non-SNP plan. MA plans exceeding defined thresholds would be able to transition their membership into a D-SNP or another zero-premium plan offered by the MA organization.

As part of the Patients Over Paperwork initiative, in the proposed rule, CMS is seeking comment on many longstanding policies on the Medicare Advantage and Part D programs that have been adopted through sub-regulatory guidance, such as the annual Call Letter and other guidance documents.

CMS will not be publishing a Call Letter for 2021. CMS is proposing to codify much of the guidance typically included in the annual Call Letter through the CY 2021 and 2022 MA and Part D Proposed Rule.

CMS will also separately issue Part C and Part D bidding instructions and information previously provided through the Call Letter. CMS welcomes feedback on the proposed rule and advanced notice.

Comments on the proposed rule are due no later than 5 pm on April 6, 2020.

The proposed rule can be downloaded from the Federal Register.

A fact sheet on the CY 2021/2022 Medicare Advantage and Part D Proposed Rule (CMS-4190-P) is available from CMS.

Questions regarding this proposed rule or advance notice may be directed to the American College of Radiology®’s Alicia Blakey (ablakey@acr.org) or Christina Berry (cberry@acr.org).