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Operational Impact of the Contract Year 2021 Final Rule

By June 17, 2020June 23rd, 2020COVID19, MA, SEPs, Star Ratings, SUPD

Operational Impact of the Contract Year 2021 Final Rule

On June 2, 2020 CMS released the Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program and Medicare Cost Plan Program Final Rule (CMS-4190-F). One of the most notable things about the Final Rule is that it only addresses those provisions from the February 18, 2020 proposed rule that CMS deemed most helpful for bidding, that address the COVID-19 pandemic and public health emergency, or that advance the MA program.  CMS intends to address the remaining proposals from the February 18, 2020 proposed rule not finalized here in subsequent rulemaking.

Despite the many items that were not finalized in this rule (see table below for list of changes not finalized), there were some noteworthy changes codified in this rule that have operational impacts for plans.

Star Rating Changes

As plans consider their Star Rating improvement strategies, they should consider the following changes which were finalized in this rule.

One of the most significant changes finalized in this rule was to change the weight for patient experience ratings from a weighting of 2 to 4 beginning in the 2021 measurement period.  Patient experience measures are often difficult to project or influence because of the often-subjective nature of patient experience and how that information is collected.  While this has always been an important measure, it will now become an even greater priority for plans with its doubled weight.

CMS also postponed the implementation of the highly debated Tukey outlier method to begin measurement in 2022 and inclusion in 2024 Star Ratings.  This will allow plans more time to assess how this methodology might impact their performance.

Starting with the 2021 measurement year and the 2023 Star Ratings, the Statin Use in Persons with Diabetes (SUPD) category was modified from an intermediate outcome measure to be a process measure changing the weight from a 3 to 1 (see more details in our Star White Paper).  Additionally, the Rheumatoid Arthritis Management measure was removed from the Part C Star ratings for the 2021 measurement year.

In addition, CMS adopted changes set forth in the March 31, 2020, Interim Final Rule with Comment Period (CMS-1744-IFC) for the 2021 and 2022 Star Ratings to accommodate challenges arising from the COVID-19 public health emergency (see more details in our Star White Paper).

MA Plan Options for End-Stage Renal Disease (ESRD) Beneficiaries

Beginning January 1, 2021, ESRD beneficiaries will no longer be prohibited from enrolling in MA plans and plans must accept their enrollment.

In addition, beginning January 1, 2021, MA organizations and MMPs will no longer be responsible for costs for organ acquisitions for kidney transplants for their beneficiaries. Instead, Medicare Fee-for-Service (FFS) will be required to cover the kidney acquisition costs for such beneficiaries.  Accordingly, effective for the plan year beginning January 1, 2021, CMS is removing costs for organ acquisitions for kidney transplants from the calculation of MA benchmarks and annual capitation rates. This will have significant financial impacts for plans.

These changes are a big shift for plans and plans should ensure they are widely communicated to enrollment, claims, finance, call centers, sales agents, and other impacted stakeholders.

Special Election Periods (SEPs) for Exceptional Conditions

In another change impacting enrollment departments, CMS has renamed and added new SEPs for exceptional circumstances.  CMS is renaming the “SEP for Individuals Affected by a FEMA-Declared Weather-Related Emergency or Major Disaster” to “SEP for Government Entity-Declared Disaster or Other Emergency”.  CMS is also establishing two new SEPs for exceptional circumstances: the SEP for Individuals Enrolled in a Plan Placed in Receivership and the SEP for Individuals Enrolled in a Plan that has been identified by CMS as a Consistent Poor Performer.  CMS is also codifying a number of SEPs that it has adopted and implemented through sub-regulatory guidance as exceptional circumstances SEPs.

Enrollment departments should ensure that their system is configured to handle these SEPs and that Customer Service Reps are aware of these SEPs.

Encouraging Telehealth Through Network Adequacy

In order to continue promoting telehealth, CMS is reducing the compliance threshold MA organizations must meet in order to comply with CMS network adequacy standards.  First, CMS is allowing MA plans to receive a 10 percent credit towards the percentage of beneficiaries that must reside within published time and distance standards when they contract with telehealth providers in specific specialty types (dermatology, psychiatry, cardiology, neurology, otolaryngology, ophthalmology, allergy and immunology, nephrology, primary care, gynecology / OB/GYN, endocrinology and infectious diseases ) that have adopted telehealth technology.  Plans that have added telehealth providers in the identified specialties should re-assess the impact on their network.

In addition to this telehealth credit, CMS is also allowing MA plans to receive a 10 percent credit towards the percentage of beneficiaries residing within published time and distance standards for affected provider and facility types in states that have Certificate of Need (CON) laws, or other state imposed anti-competitive restrictions, that limit the number of providers or facilities in a county or state.  In HPMS, CMS will identify the states, counties and provider/facility specialty types where the CON law credit will be available for MA organizations.  This CON law credit will only be available in counties or states where CMS has not already customized the standards.  Plans will be required to submit a credit request to CMS for each provider or facility type they believe has been affected by the CON or anticompetitive laws.

Finally, to help expand access to MA plans where network development can be challenging, CMS is reducing the required percentage of beneficiaries residing within maximum time and distance standards in non-urban counties (Micro, Rural, and Counties with Extreme Access Considerations (CEAC)) from 90 percent to 85 percent.

Plans should ensure their team responsible for maintaining network adequacy are aware of these changes, as they may make it easier for the Plan to comply with CMS network adequacy standards.

Exhibit A –  Proposals NOT Being Finalized at this Time

Proposals From the February 18, 2020 Proposed Rule Not Finalized at this Time

1. Implementation of Certain Provisions of the Bipartisan Budget Act
  1. Improvements to Care Management Requirements for Special Needs Plans
  2. Coverage Gap Discount Program Updates
2.   Implementation of Several Opioid Provisions of the SUPPORT Act


  1. Mandatory Drug Management Programs (DMPs)
  2. Beneficiaries with History of Opioid-Related Overdose Included in DMPs
  3. Information on the Safe Disposal of Prescription Drugs
  4. Beneficiary Education on Opioid Risks and Alternative Treatments
  5. Eligibility for Medication Therapy Management Programs (MTMPs)
  6. Automatic Escalation to External Review under a Medicare Part D DMP for At-Risk Beneficiaries
  7. Suspension of Pharmacy Payments Pending Investigation of Credible Allegations of Fraud and Program Integrity Transparency Measures
3.   Enhancements to the Part C and D Program


  1. Out-of-Network Telehealth at Plan Option
  2. Supplemental Benefits, Including Reductions in Cost Sharing
  3. Referral/Finder’s Fee
  4. Permitting a Second “Preferred” Specialty Tier in Part D
  5. Beneficiary Real Time Benefit Tool (RTBT)
  6. Establishing Pharmacy Performance Measure Reporting Requirements
  7. Dismissal and Withdrawal of Medicare Part C Organization Determination and Reconsideration and Part C Coverage Determination and Redetermination Requests
  8. Methodology for Increasing Civil Monetary Penalties (CMPs)
4.   Codifying Existing Part C and D Program Policy


  1. Maximum Out-of-Pocket (MOOP) Limits for Medicare Parts A and B Services
  2. Cost Sharing Limits
  3. Plan Crosswalks for MA Plans and Cost Plans
  4. MA Change of Ownership Limited to the Medicare Book of Business
  5. Supplemental Benefit Requirements
  6. Rewards and Incentive Program Regulations for Part C Enrollees
  7. Requirements for Medicare Communications and Marketing
  8. Prescription Drug Plan Limits
  9. Definition of a Parent Organization
  10. Call Center Requirements
5. Changes to PACE  
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