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CMS Proposes Significant Changes to Medicare Advantage and Part D for 2021 and Beyond

This week, the U.S. Department for Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) released a proposed rule (the Medicare and Medicaid Programs: Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program and Programs of All-Inclusive Care for the Elderly) (the Proposed Rule), the 2021 Medicare Advantage and Part D Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (Part II) (the Advance Notice), and multiple Health Plan Management System (HPMS) memos and notices covering topics including Medicare Advantage (MA) benefits, Medicare Part D bidding, and suspension of its Past Performance Review Methodology.  

In addition to multiple proposed substantive changes to standards and operations for MA and Part D plans, CMS has also proposed to codify many longstanding MA and Part D policies that have historically been announced through sub-regulatory guidance.  As a result of this proposal, CMS has decided not to publish a Call Letter for 2021.

Some of the changes proposed or announced in the Proposed Rule, Advance Notice, and HPMS memos include:

  • Implementing changes adopted in the Cures Act to allow Medicare beneficiaries with ESRD to enroll into MA plans (Proposed Rule, Advance Notice, and MA Benefits Review and Evaluation HPMS Memo);
  • Changes to the Star Rating System and suspension of CMS’s current Past Performance Review Methodology (Proposed Rule and Advance Notice);
  • Supplemental Benefits (Proposed Rule), including:
    • Codifying CMS’ current sub-regulatory guidance regarding supplemental benefits;
    • Updating MA Medical Loss Ratio (MLR) to account for CMS’ broadened definition of supplemental benefits; and
    • Increasing the number of chronic conditions that MA plans may use Special Supplemental Benefits to target;
  • Recognizing the importance of telehealth in rural areas by changing network adequacy rules (Proposed Rule);
  • Seeking to improve Part D members’ access to specialty drugs with new tiering (Proposed Rule);
  • Providing more real time benefit tools in Part D, which echoes the focus on transparency present in HHS’ November 2019 proposed rule for group health plans, which we previously discussed here (Proposed Rule);
  • Requiring Part D plans to report the metrics they use to evaluate pharmacy performance (Proposed Rule);
  • Various changes to the Programs of All-Inclusive Care for the Elderly (PACE) to increase CMS’ access to records, improve participants’ rights, and streamlining the service delivery request process (Proposed Rule); and
  • Continuing to transition to the use of encounter data and the 2020 CMS-HCC Model (moving from 50% RAPS/2017 CMS-HCC Model and 50% encounter data/2020 CMS-HCC Model for 2020 to 25% RAPS/2017 CMS-HCC Model and 75% encounter data/2020 CMS-HCC Model for 2021) (Advanced Notice).

In the coming weeks, we will be running a series of posts focusing on these key policy proposals.

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Tara advises managed care organizations, pharmaceutical services providers such as PBMs, and integrated delivery systems, and companies that invest in them, on matters relating to compliance with federal health care program regulations, federal and state fraud, waste and abuse laws and plan benefits.