Potential Changes on the Horizon for 2020 and Beyond

After getting ready for all the changes a new contract year brings, Medicare Advantage (MA) Plans and Part D sponsors await the issuance of the Draft Call Letter for early indications of the next line-up of changes that may be coming their way.  The recently released 2020 Draft Call Letter had a few noteworthy changes:

• Part C:
  • Additional Flexibilities on Certain Supplemental Benefits: Starting in 2020, MA Plans have new flexibilities as related to special supplemental benefits for chronically ill (SSBIC) beneficiaries, including the ability to offer cost-sharing specific to a chronic illness and the ability to offer supplemental benefits that are not primarily health related when they meet certain requirements;
  • New third maximum out-of-pocket (MOOP) limit in 2021.
• Part D:
  • Further action to address the opioid crisis;
  • The Part D cost sharing out-of-pocket threshold will jump from $5,100 in 2019 to $6,350 in 2020;
  • Effective in 2019, the Transition Monitoring Program and Formulary Administration Analysis oversight monitoring projects are discontinued, and those Display Measures are retired.

However, the Draft Call Letter isn’t the only early indicator of changes on the horizon.  Proposed rules are also another indicator of potential changes.  Plans should be aware of four significant proposed rules released within the past few months that could be finalized later this year, in 2020 or beyond.

1. In October 2018, the Centers for Medicare & Medicaid Services (“CMS”) published a proposed rule which, if finalized, will amend the Medicaid and Medicare Parts A, B, C, and D programs to change the requirements around television advertisements of certain prescription drugs.  Specifically, the rule proposes to require direct-to-consumer television advertisements of prescription drugs and biological products payable, directly or indirectly, by Medicare or Medicaid (collectively, “drugs”) to include the Wholesale Acquisition Cost, otherwise known as the “list price”, of such drug or product.  Drugs with a list price less than $35 for a 30-day supply or typical course of treatment would be exempt from this rule.While Plans may think this rule only impacts pharmaceutical manufacturers, there is some speculation that the implementation of this proposed rule could cause beneficiary confusion.  This is because seeing the list price of a drug in a television advertisement could lead beneficiaries to think that is the price they will be charged for the drug, when in reality those insured by such Plans may be charged a substantially lower price based on their benefit design or the lower pharmacy benefit manager (PBM) negotiated price.  Accordingly, the proposed rule requires television advertisements of drugs to contain, along with the list price for a 30-day supply of the drug, a statement that if health insurances covers the cost of the drug, the cost charged to the beneficiary may be different from the list price.  Nonetheless, beneficiaries confused by the difference in the price they saw in the advertisement and what they were charged could drive an increase in member services calls to Plans.Comments on this proposed rule were due in December 2018, so CMS could issue a final rule at any time.

2. In November 2018, CMS published a proposed rule titled “Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program of All-Inclusive Care for the Elderly (PACE), Medicaid Fee-for-Service, and Medicaid Managed Care Programs for Years 2020 and 2021”.  If finalized, this proposed rule would drive a substantial number of changes, including:

• Starting in plan year 2020, the proposed rule would permit MA plans to offer—as part of the basic benefit package—certain additional telehealth benefits beyond what is currently allowable under the original Medicare telehealth benefit;
• Development of new grievance and appeals processes unified with those of Medicaid for certain highly integrated dual eligible special needs plans (HIDE SNP) and fully integrated dual eligible special needs plans (FIDE SNP);
• Starting in 2021, the proposed rule would require that all D–SNPs meet certain new minimum criteria for integration of Medicare and Medicaid benefits;
• Starting in 2020, would permit Prescription Drug Plans (PDP) that provides prescription drug benefits under Medicare Part D to request and receive standardized extracts of Medicare claims data about its current plan enrollees, if it agrees to limit use of the data to permitted purposes;
• For the 2022 and 2023 Star Ratings, the proposed rule would make certain substantive updates to the specifications for a few measures and to the rules for calculating Star Ratings in the case of extreme and uncontrollable circumstances;
• To address instances in which a prescriber’s supporting statement is not timely received for an exception request, the proposed rule would require Plans to notify the enrollee (and the prescribing physician or other prescriber involved, as appropriate) of its decision within no later than 72 hours (or 24 hours in the case of an expedited decision) of receipt of the prescriber’s supporting statement or 14 calendar days after receipt of the exception request, whichever occurs first;
• Starting with payment year 2011 contract-level Risk Adjustment Data Validation (RADV) contract level audits, the proposed rule would authorize use of extrapolation in RADV contract-level audits using statistically valid random sampling at the contract level as well as the use of subcohort of enrollees for whom a particular hierarchical condition category (HCC) was reported.

Comments on this proposed rule were due in December 2018, so CMS could issue a final rule at any time.

3. Also in November 2018, CMS issued a proposed rule titled “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses”.  If finalized, this proposed rule would introduce sweeping changes for Part D sponsors, including:

• Providing Part D sponsors with certain flexibilities to manage protected classes of drugs on their formularies, including the ability in plan year 2020 to exclude any single-source protected class drug or biological product from their formulary if the wholesale acquisition cost (WAC) has increased beyond a certain threshold over a specified time period;
• Effective January 1, 2020, the proposed rule would prohibit Part D sponsors from including “gag clauses” in their network pharmacy contracts. “Gag clauses” means contract provisions that restrict the ability of pharmacies to discuss with plan enrollees the availability of prescriptions at a cash price that is less than the amount the enrollee would be charged when obtaining the prescription through their insurance;
• Effective January 1, 2020, the proposed rule would require Part D sponsors to implement an electronic real-time benefit tool (RTBT) capable of integrating with at least one of prescribers’ e-Prescribing (eRx) and electronic medical record (EMR) systems to provide complete, accurate, and patient-specific real-time formulary and benefit information to the prescriber;
• Requiring Part D sponsors to include information about negotiated price changes and lower-cost therapeutic alternatives in Part D Explanations of Benefits (EOBs);
• Effective in 2020, the proposed rule proposes requirements under which Plans could apply step therapy as a utilization management tool for Part B drugs;
• Modifying Part C adjudication time periods for organization determinations and appeals involving Part B drugs;
• Effective as early as January 1, 2020, the proposed rule would eliminate the exception for excluding contingent pharmacy concessions from the “negotiated prices” of drugs.  Currently, the “negotiated prices” of drugs must include all pharmacy payment adjustments, except those contingent amounts that cannot reasonably be determined at the point-of-sale.

Comments on this proposed rule were due in January 2018, so CMS could issue a final rule at any time.

4. In February 2019, the Office of Inspector General, Department of Health and Human Services, published a proposed rule removing an Anti-Kickback Statute safe harbor protection for pharmacy rebates and creating two new safe harbor protections for certain point-of-sale price reductions on prescription drugs and certain pharmacy benefit manager service fees. If finalized, this proposed rule would either dramatically change the way pharmaceutical rebates work or eliminate such rebates completely.  The changes proposed include:

• Effective January 1, 2020, the proposed rule would amend the Anti-Kickback discount safe harbor.  The safe harbor would no longer protect price reductions or other remuneration from a pharmaceutical manufacturer to Part D sponsors, Medicaid managed care organizations (MCO), or PBMs acting under contract with either entity, in connection with the sale or purchase of prescription drugs, unless the price reduction is required by law;
• Effective 60 days after the final rule is published, create two new safe harbors:

1. To protect manufacturer point-of-sale reductions in price on prescription pharmaceutical products to a Part D sponsor, a Medicaid MCO, or a PBM acting under contract with either entity, if certain conditions are met (notably, the price reduction cannot involve a rebate and must be completely passed through to the beneficiary);
2. To protect certain fixed service fees that pharmaceutical manufacturers pay to PBMs for services rendered, if certain conditions are met.

Comments on this proposed rule are due in April 2019.  So, CMS could issue a final rule by late spring or early summer 2019.

Do you want to feel more confident that your Plan is staying abreast of the steady stream of industry changes?  BluePeak can help.  By enrolling in BluePeak ADVANTAGE™, your Plan will receive summaries of significant proposed and final rules and guidance, a weekly Guidance Monitor delivered to your inbox that gives you a consolidated list of the previous week’s CMS guidance and highlights what is most important for your Plan, weekly delivery of the BluePeak Buzz™ to summarize key industry current events, and a BluePeak Consultant available to help answer any questions you may have.