COVID-19 News, TOP STORY—Transparency and lower costs part of proposed Medicare Part C, D changes, (Jan 7, 2022)

By Cathleen Calhoun, J.D.

CMS looks to improve access and transparency, and to lower costs, under Medicare Advantage (Part C) and Part D drug programs.

CMS is proposing a rule with the goal of lowering out-of-pocket prescription drug prices and improving consumer protections and health disparities under the Medicare Advantage (Part C) and Part D drug pro ...

By Cathleen Calhoun, J.D.

CMS looks to improve access and transparency, and to lower costs, under Medicare Advantage (Part C) and Part D drug programs.

CMS is proposing a rule with the goal of lowering out-of-pocket prescription drug prices and improving consumer protections and health disparities under the Medicare Advantage (Part C) and Part D drug programs. Lowering beneficiary cost-sharing at the pharmacy counter, strengthening oversight of third-party marketing organizations, ensuring beneficiaries have access during natural disasters and emergencies (including public health emergencies), creating additional bases for denying a contract based on past performances, and reinstating medical loss ration (MLR) reporting requirements that were in effect from 2014 through 2017 are among the changes included in the proposed rule.

Lowering costs. Under the proposed rule, Part D plans would be required to apply all price concessions that they receive from network pharmacies at the point of sale so that the consumer can also receive savings. CMS would redefine the negotiated price as the lowest possible payment to a pharmacy, effective January 1, 2023. CMS believes that this would reduce beneficiary out-of-pocket costs, improve price transparency, and improve market competition in the Part D program.

Marketing oversight. With the goal of protecting Medicare beneficiaries from inaccurate and inaccessible information about Medicare coverage, CMS proposes to make changes to marketing oversight. Specifically, among the changes, CMS would:

  1. Strengthen oversight of third-party marketing tactics aimed at enrolling beneficiaries in Medicare Advantage and Part D plans

  2. Reinstate the inclusion of a multi-language insert in specified materials

  3. Codify enrollee ID card standards

  4. Plan website instructions on how to appoint a representative and website posting of enrollment instructions and forms

Contract denials. CMS would like to hold plans to a higher standard and, to do that, proposes additional bases for denying a new contract or service area expansion of an existing contract based on past performance. Currently, CMS can deny applications for organizations under sanction or that fail CMS’ net worth requirements during a performance period. Under the proposed rule, Star Ratings (2.5 or lower), bankruptcy or bankruptcy filings, and exceeding a CMS designated threshold for compliance actions are added as bases for denying a new application or a service area expansion application.

Reinstating MLR reporting. Medicare Advantage (Part C) and Plan D sponsors would be required to report the underlying cost and revenue information needed to calculate and verify the medical loss ratio (MLR) percentage and remittance amount under the proposed rule. CMS also proposes requiring Medicare Advantage organizations to report amounts they spend on different types of supplemental benefits not available under the original Medicare programs such as dental, vision, hearing, and transportation.

Dual eligible special needs plans. The proposed rule makes changes to improve the experiences of dually eligible beneficiaries who are enrolled in dual eligible special needs plans (D-SNPs). Medicare advantage organizations with a D-SNP must establish, maintain, and consult with one or more enrollee advisory committees to ensure the experiences of people with both Medicare and Medicaid are considered in plan decision making under the proposed rule, along with other requirements.

2023 Part C Star Ratings calculations. CMS is proposing a technical change to allow CMS to calculate 2023 Part C Star Ratings for the three healthcare effectiveness data and information set (HEDIS) measures collected through the health outcomes survey (HOS): monitoring physical activity, reducing the risk of falling, and improving bladder control. According to CMS, without this technical change, it would be unable to calculate 2023 Star Ratings for these measures for any Medicare Advantage contact because all contracts qualify for the extreme and uncontrollable circumstances adjustment for COVID-19.

Comments on the proposed rule must be received by March 7, 2022.

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