The Centers for Medicare and Medicaid Services finalized plans to strengthen oversight of Medicare Advantage plans Friday.
CMS will increase oversight of third-party marketing organizations and require plans that work with these groups to make sure they follow applicable policies. Plans will also need to once again include multi-language inserts in certain materials.
Additionally, the agency laid out more reasons for denying a new contract or contract expansion for a plan based on past performance. Low Star Ratings, bankruptcy filings and exceeding a CMS-designated threshold for compliance actions could all lead to an application denial under the new rule.
Plans applying for Medicare Advantage approval will also now need to demonstrate a sufficient provider network before CMS approves the application for a new or expanded plan. CMS updated the policy from its earlier proposal to allow applicants to use letters of intent in place of signed provider contracts.
Insurance trade group AHIP expressed concern before the final rule that the policy could be especially difficult for plans in rural and medically underserved areas.
CMS is bringing back medical loss ratio requirements previously in place from 2014 through 2017. Medicare Advantage plans and Part D sponsors will have to report the underlying cost and revenue information used to calculate their ratio. CMS will also require Medicare Advantage insurers report how much they spend on supplemental benefits.
The final rule comes just one day after federal inspectors released findings that Medicare Advantage plans’ use of prior authorization can hamper enrollees’ access to care. While Friday’s final rule doesn’t include policies related to prior authorization, CMS agreed with the inspectors’ recommendations to ease the problem.
CMS also finalized a slate of proposals Thursday aimed at improving dual-eligible special needs plans, which serve Medicare beneficiaries who are also eligible for Medicaid.
Dual special needs plans’ growth has skyrocketed in recent years, with the plans growing more than 16% during the past year. But policy experts have cautioned that it’s difficult to assess plan quality with current data.
CMS finalized a policy that may help better assess quality—states with integrated care programs can now require Medicare Advantage insurers to establish D-SNP-only contracts, which would allow Star Ratings to showcase the D-SNPs’ performance.
D-SNPs will have to establish advisory enrollee committees and add standardized questions on housing, food security and transportation access to health risk assessments. CMS will require MA plans’ maximum out-of-pocket cost limits to be based on all Medicare cost-sharing in the benefit, whether the cost is paid by the beneficiary, Medicaid or remains unpaid.
The agency moved forward with a proposal to transition states’ Medicare-Medicaid Plans, D-SNP alternatives run through a CMS demonstration, into integrated D-SNPs. The proposal drew ire from some Medicare-Medicaid Plan beneficiaries, who worried certain aspects of the model couldn’t be replicated in a D-SNP.
CMS said it will allow states to continue Medicare-Medicaid Plans through 2025, but states wishing to transition their programs into integrated D-SNPs will need to submit a transition plan by Oct. 1, 2022. If a state chooses not to transition their plan, CMS will work with the state to conclude their program by the end of 2023.
The final rule also requires pharmacy benefit managers to stop clawing back fees from pharmacies, slightly modifying the policy from CMS’ original proposal so that it applies to all phases of the Medicare Part D benefit, including the coverage gap.
The agency said the policy will reduce beneficiary out-of-pocket costs and improve market competition. The Biden administration has placed an emphasis on lowering consumers’ costs, after failing to spur congressional action to lower Medicare drug prices.
PBMs and insurers have claimed the policy contradicts Medicare law, setting the stage for legal action against the policy.
The requirement that Part D plans pass price concessions received from pharmacies through to beneficiaries at the point of sale will start January 2024. Other policies in the rule will be effective June 28.
CMS tightens oversight for Medicare Advantage plans is written by Maya Goldman for www.modernhealthcare.com