On February 5, 2020, the Centers for Medicare & Medicaid Services (CMS) announced it will not be publishing a Call Letter for 2021. Rather, CMS is codifying guidance typically published in the Call Letter through a proposed rule (CMS-4190-P) which, if finalized, will amend regulations for the Medicare Advantage (MA) Part C program, Medicare Prescription Drug Benefit Part D program, Medicaid program, Medicare Cost Plan program, and Programs of All-Inclusive Care for the Elderly (PACE). This proposed rule would also enhance the Part C and D programs and codify several existing CMS policies.
Following are some highlights of proposed changes that, if finalized by CMS, may have strategic, operational or compliance implications for plans.
1. Second Specialty Tier
CMS is proposing to (1) allow Plans to establish a second, “preferred,” specialty tier at a lower cost-sharing threshold than the current specialty tier; (2) codify the existing maximum cost sharing for the highest specialty tier; (3) codify a methodology to determine annually the specialty tier cost threshold using ingredient cost and increase the threshold when certain conditions are met; (4) require sponsors to permit tiering exceptions between the two specialty tiers; and (5) permit sponsors to determine which drugs go on either tier.
This change would allow a secondary tier for specialty products, and the current 5 tier setup that’s common in the industry will now become a 6 tier setup. From an operational perspective, plans will need to ensure claims are processing at the appropriate formulary tier and benefit setup. Plans will also need to adjust their tier exception policy to allow tier exceptions to the preferred specialty tier. Plans will now be able to strategize more with specialty products to negotiate higher rebates with specialty product manufactures for preferred tier placement. Beneficiaries should also have some reduction in cost-sharing on preferred specialty products. Plans will need to consider how the addition of this tier would be communicated to minimize beneficiary confusion.
2. Beneficiary Real Time Benefit Tool (RTBT)
With continued focus on consumer choice and transparency, CMS is proposing Plans implement a beneficiary RTBT that would allow enrollees to view accurate, timely, and clinically appropriate patient-specific real-time formulary and benefit information, effective January 1, 2022. The tool should allow enrollees to view a plan-defined subset of the information included in the prescriber RTBT, which includes accurate, timely, and clinically appropriate patient-specific real-time formulary and benefit information (including enrollee cost-sharing information, clinically appropriate formulary alternatives, subject to some exceptions, and the formulary status of each drug presented including any utilization management requirements applicable to each alternative drug). Plans are encouraged, but would not be required, to include the negotiated price. This would also include a requirement that plans make this information available to enrollees via their customer service call center.
The beneficiary RTBT will be a considerable effort to develop and maintain. Most Plans will look to their PBMs to develop and maintain this tool.
In order to encourage use of the beneficiary RTBT, CMS is proposing to allow Plans to offer rewards and incentives (RI) to their enrollees who use the tool. The RI must be of nominal value, which OIG guidance specifies as no more than $15 per login or $75 in the aggregate annually. CMS will be aligning this RI with some of the Medicare Part C RI rules and regulations. This will be a strategic consideration for Plans.
3. Pharmacy Performance Measure Reporting
CMS is proposing to amend existing regulations to require Plans to disclose to CMS the measures they use to evaluate pharmacy performance, as established in their network pharmacy agreement. Given the growing use of pharmacy performance measures in determining the final cost of a drug under Part D and the impact of these recoupment practices on the amount a beneficiary pays for a Part D drug at the POS, it is believed this information is essential if there is to be predictable reimbursement for pharmacies and cost sharing for beneficiaries. Once collected, CMS would publish the list of pharmacy performance measures to increase public transparency.
Plan should consider their ability to collect and report on some of the following data measures that are being considered. Collected data elements would be limited to those necessary to identify and understand each measure and how it is applied by pharmacy type, if applicable, and may include:
- Name of the performance measure
- Performance calculation methodology
- Success/failure threshold(s)
- Financial implications of success/failure to achieve threshold(s)
- Pharmacy appeal requirements; and
- Method of payment of collection
4. Drug Management Plans (DMPs)
The proposed rule would make it mandatory that Plans implement DMPs, starting in plan year 2022. As Plans prepare their drug management programs (DMPs) for CY2021 and beyond, they should be sure to consider the opioid provisions that must be implemented. For a deeper dive, click here.
5. Medication Therapy Management
Effective January 1, 2021 CMS is expanding the Medicare Part D Medication Therapy Management (MTM) Program to include beneficiaries identified as at-risk-beneficiaries (ARBs) under DMPs. ARBs are expected to receive all aspects of the MTM program that beneficiaries who are enrolled based on existing drug spend, condition, and drug criteria would receive. Plans should assess how their MTM volume would increase with the addition of ARBs and if they are staffed for such increases.
Additionally, Plans must provide all beneficiaries enrolled its MTM program with information on the safe disposal of all medications (not just controlled substances). This information must be provided at least annually, but can be included as part of the Comprehensive Medication Review (CMR), quarterly Targeted Medication Reviews (TMRs) or as a follow up. Plans will need to become familiar with the current criteria in Section 1852 (n)(2) to determine how best to disseminate this information to its beneficiaries.
6. Medical Loss Ratio (MLR)
CMS is proposing to allow plans to include in the MLR numerator as “incurred claims” all amounts paid for covered services, including amounts paid to individuals or entities that do not meet the current regulatory definition of “provider”.
Currently, only claims submitted by a provider can be included in the MLR numerator. CMS is clarifying which supplemental benefits can be used in the MLR numerator. This will have operational and compliance impacts to MA plans as they may need to adjust their MLR process to account for the addition of any applicable supplemental benefit. This may also give Plans an opportunity to be more strategic with supplemental benefit options, as such benefits may now be recognized within the MLR ratio calculation.
7. Changes to Special Election Periods (SEPs)
Plan operational and enrollment areas should be aware of the two newly established SEPs, and ensure that their current policies, procedures and documentation are aligned with both the existing requirements of SEPs and the new provisions:
- SEP for Individuals Enrolled in a Plan Placed in Receivership – for individuals enrolled in plans offered by MA organizations that has been placed in receivership. This SEP allows individuals enrolled in such Plans to discontinue enrollment in the MA plan and enroll in a different MA plan or original Medicare, with or without enrolling in a standalone Medicare prescription drug plan. The SEP would begin the month the receivership is effective and continue until the enrollee enrolls in a different MA plan or original Medicare or the receivership is no longer in effect, whichever occurs first. When instructed by CMS, the MA plan that has been placed under receivership must notify its enrollees of their eligibility for this SEP and how to use the SEP.
- SEP for Individuals Enrolled in a Plan that has been Identified by CMS as a Consistent Poor Performer – for individuals enrolled in plans identified with the low performing icon, which is assigned to contracts that have summary ratings of less than 3 Stars for three or more years. This allows beneficiaries enrolled in these contracts to discontinue enrollment in a consistently poor performing MA plan and enroll in an MA plan with an overall Star Rating of 3 or more stars or original Medicare, with or without enrolling in a standalone Medicare prescription drug plan.
8. Dismissal and Withdrawal of Medicare Part C Organization Determination and Reconsideration and Part C Coverage Determination and Redetermination Requests
Based on the absence of Part C and Part D regulations, CMS is proposing regulations that would codify current industry practices related to the withdrawal or dismissal of Part C organization determination and reconsideration requests and Part D coverage determination and reconsideration requests, including those applicable to the Part C and Part D IRE. The proposals specifically address under what circumstances it would be appropriate to dismiss a coverage request or appeal at the plan or IRE level, as well as proposing rules for how a party may request to withdraw their coverage request or appeal at the plan or IRE level. For example, the proposal indicates that only a timely written request can be used to withdraw a request whereas previous guidance (1/7/2020) indicated that verbal notification was acceptable. Plan sponsors should closely review their policies and procedures regarding all areas outlined within dismissal and withdrawal proposals to identify any potential gaps in current operations that are not in alignment with CMS’s assumptions and proposals.
9. Special Supplemental Benefits for the Chronically Ill (SSBCI)
Plans that are anticipating offering SSBCI should evaluate their definition of a chronically ill enrollee and ensure it aligns with the definition CMS proposes to codify. Further, plans must have policies and procedures in place that demonstrate how they will identify and document their determination of an enrollee’s eligibility for SSBCI based on the statutory definition of a chronically ill enrollee. When an enrollee requests the provision of a SSBCI and is determined to be eligible based on their chronically ill status, the plan must have written, objective criteria to apply when rendering the organization determination. This criteria should clearly demonstrate how the SSBCI will be reasonably expected to improve and/or maintain the health or overall function of the chronically ill enrollee. There must be procedures to ensure a complaint against an adverse determination, whether due to not meeting the definition of chronically ill or because the requested SSBCI would not reasonably improve and/or maintain the health or overall function of the enrollee, is processed as an appeal. Appeal procedures must ensure the reconsideration is processed in accordance with the written criteria.
10. Star Ratings
CMS is proposing routine measure updates and an increase in the weight of patient experience/complaints and access measures. It is also proposing some technical clarifications of the current rules for the QBP ratings methodology. CMS also proposes the use of Tukey outlier deletion, which is a standard statistical methodology for removing outliers, to increase the stability and predictability of the Star measure cut points.
For a closer look at the details of these Star rating changes click here.
Plans should note that, at this time, the changes outlined above are only proposed and not yet final. CMS is accepting comments on the proposed rule through 5 p.m. ET on April 6, 2020. CMS will review comments and may adjust provisions of the proposed rule prior to issuing a final rule.