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CMS Proposes Significant Changes to Medicare Advantage & Part D for 2021 and Beyond, Part 1: Updates to the Star Rating System and Suspension of the Past Performance Methodology

As we reported last week, the Centers for Medicare & Medicaid Services (CMS) recently 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 supplemental Health Plan Management System (HPMS) memos that propose several significant changes to Medicare Advantage (MA) and Part D policies. This blog post highlights the key details of the proposed changes to the star rating system and past performance methodology and their potential impact on MA and Part D plans.     

Star Rating Proposed Changes

The Proposed Rule includes several changes to CMS’s star rating system.  If finalized, these changes would impact data collection for the 2021 measurement period and the star ratings for 2023.  Below are some of the key changes proposed by CMS.

Modifying Cut Point Methodology for Non-CAHPS Measures

CMS is proposing to modify how it identifies cut points for star measures that are not part of the Consumer Assessment of Healthcare Providers & Systems (CAHPS) survey by changing the methodology it uses to identify and remove outliers.  Modifying the cut points has been an ongoing process by CMS, which first solicited comments on this issue in November 2018 through the proposed rule entitled Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Benefit, Programs for All-inclusive Care for the Elderly (PACE), Medicaid Fee-for-Service, and Medicaid Managed Care Programs for Years 2020 and 2021.   

Building on past comments, CMS proposes to use a statistical methodology known as the Tukey outer fence methodology to identify and delete outliers. Under this methodology, outliers are defined as “measure scores below a certain point (first quartile - 3.0 x (third quartile - first quartile)) or above a certain point (third quartile + 3.0 x (third quartile - first quartile)).”  Values that meet this definition are deleted as outliers.  Based on its analysis, CMS found that this methodology would delete more outliers on the lower end of measure scores, thus increasing the 1-star and 2-star thresholds.  CMS anticipates that this deletion methodology would create a savings of over $800 million for 2024 and increasing to $1.45 billion in savings by 2030.

Increasing the Weight of Patient Experience/Complaints and Access Measures

Under the current regulations for star ratings, CMS will be weighting patient experience/complaints and access measures by 2 when calculating a plan’s overall star rating beginning in 2021.  In the Proposed Rule, CMS is proposing to increase that weight to 4 for the 2023 star ratings.  

The measures affected by this increased weight would include the patient experience of care measures collected through the CAHPS survey, Members Choosing to Leave the Plan, Appeals, Call Center, and Complaints measures.  The increased weighted value would not change the calculation of the stars at the measurement level; rather, it would impact the calculation of the overall and summary ratings.  CMS decided to increase the weight of these measures given the growing importance of “hearing the voice of patients when evaluating the quality of care provided” and to further emphasize the importance of patient experience/complaints and access issues.

Adding and Deleting Star Measures

CMS proposes to remove the Rheumatoid Arthritis Management measure from the MA star ratings for the 2021 measurement year because the National Committee for Quality Assurance (NCQA) is retiring this measure from the Healthcare Effectiveness Data and Information Set (HEDIS) measurement set. In terms of additions, CMS proposes to add the following measures:

  • Transitions of Care:  Percentage of discharges for members 18 years of age and older who had each of the following: 1) notification of admission and post-discharge; 2) receipt of discharge information; 3) patient engagement; and 4) medication reconciliation.
  • Follow-up after Emergency Department (ED) Visit for Patients with Multiple Chronic Conditions:  Percentage of ED visits for members 18 years old and older who have multiple high-risk chronic conditions who had a follow-up service within 7 days of an ED visit.
  • Statin Use in Persons with Diabetes:  Percentage of plan members 40 to 75 years old who were dispensed at least two diabetes medication fills and received a statin medication fill.

Updating the Definition of "New MA Plan" and Codifying Existing Guidance on QBP Ratings

CMS states that it is “proposing to codify current policy (for how we have historically assigned [Quality Bonus Payment (QBP)] ratings) without any changes.”  Specifically, this codification involves clarifying how CMS assigns QBP ratings for new contracts under existing parent organizations and amending the definition of “new MA plan.”  CMS is proposing the following definition for "new MA plan":

[A] plan that meets the following: (1) is offered under a new MA contract; and (2) is offered under an MA contract that is held by a parent organization defined at [42 C.F.R.] § 422.2 that has not had an MA contract in the prior 3 years.

These changes have the ability to impact plans’ star ratings and payments under QBP ratings. 

Suspension of Past Performance Methodology

Under 42 C.F.R. §§ 422.502(b) and 423.503(b), CMS has the authority to deny a MA or Part D application submitted by an organization that has failed to comply with the requirements of a previous MA or Part D contract.  Historically, CMS would release Past Performance Review Methodology each application cycle to evaluate past performance.  (For example, the 2019 Past Performance Review Methodology can be found here.)

In an HPMS memo dated February 6, 2020, CMS stated that it was suspending the use of the Past Performance Methodology but will continue to consider past performance of organizations in making contracting decisions, as set out in the applicable regulation.  In the Proposed Rule, CMS is seeking to amend the regulation text by adding the criteria that it will use to deny an application based on prior contract performance.  Specifically, CMS is proposing to add the following three factors that could serve as a basis for denying an MA or Part D application:

  • The imposition of civil money penalties or intermediate sanctions;
  • Low star ratings scores; and
  • The failure to maintain a fiscally sound operation.

Under the Proposed Rule, CMS may deny an application due to the presence of any one of these factors. For those applicants with no recent MA or Part D contracting history, CMS is proposing that it would continue to consider the performance of contracts held by the applicant’s parent organization or another organization controlled by the same parent.  Although the suspension of the detailed Past Performance Methodology may come as a relief to plans, the proposed regulations would provide CMS with wide latitude to deny new applications.  
CMS is accepting comments on these proposals through April 6, 2020. 

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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.
Lauren advises pharmacies, PBMs, managed care organizations, and other payors on transactional, regulatory, and fraud and abuse matters, drawing upon her experience working for the Federal Coordinated Health Care Office.