CMS final rule tightens Medicare Advantage and Part D transparency
Insurers are now required to pass along price concessions received from pharmacies at the point of sale.
Photo: Justin Paget/Getty Images
The Centers for Medicare and Medicaid Services issued a final rule on Friday with policies meant to provide greater transparency for Medicare Advantage and Part D plans.
The 2023 Medicare Advantage and Part D Final Rule also advances more affordable healthcare, CMS said, by reducing out-of-pocket costs for prescription drugs starting in 2024.
CMS finalized the policy that requires Part D plans to apply all price concessions they receive from network pharmacies to the negotiated price at the point of sale. This means the beneficiary can share in the savings, CMS said, because the policy reduces beneficiary out-of-pocket costs and improves price transparency and market competition in the Part D program.
Specifically, CMS is redefining the negotiated price as the baseline, or lowest possible, payment to a pharmacy, effective January 1, 2024.
Matt Eyles, president and CEO of AHIP, a trade association for health insurers, said, "While we continue to review the final rule, we are very disappointed that CMS has not withdrawn its proposal to require all possible pharmacy price concessions to be included in a Part D plan's point-of-sale negotiated price. Only pharmacists benefit from this requirement, with seniors and taxpayers paying the price through higher premiums. We do appreciate CMS delaying implementation of the rule to 2024, so that Part D plan sponsors and health insurance providers will have some time to attempt to mitigate the impact on seniors."
The rule also clarifies policies to provide beneficiaries enrolled in MA plans uninterrupted access to necessary services during disasters and emergencies, such as the COVID-19 pandemic.
Another policy revises marketing requirements to strengthen oversight of third-party organizations from potentially misleading activities to enroll members.
To strengthen network adequacy standards, MA applicants must demonstrate they have a sufficient network of contracted providers to care for beneficiaries before CMS will approve an application for a new or expanded contract.
The final rule adds Star Ratings of 2.5 or lower, bankruptcy or a filing of bankruptcy and exceeding designated thresholds for compliance actions as reasons for CMS to deny a new application or service area expansion application.
To promote sustainability of the Medicare program. CMS is reinstating medical loss ratio reporting requirements and expanding reporting requirements for MA supplemental benefits.
"This will improve transparency into MA and Part D plans' underlying costs, revenue, and supplemental benefits, which will benefit beneficiaries and taxpayers," CMS said.
CMS is reinstating the medical loss ratio reporting requirements that were in effect from 2014-2017. This requires MA and Part D plans to report the underlying cost and revenue information needed to calculate and verify the MLR percentage and remittance amount, if any.
Also, plans will need to report the amounts they spend on various types of supplemental benefits not available under original Medicare.
CMS is finalizing a technical change to enable CMS to calculate the 2023 Part C Star Ratings for the three Healthcare Effectiveness Data and Information Set (HEDIS) measures collected through the Health Outcomes Survey: Monitoring Physical Activity; Reducing the Risk of Falling; and Bladder Control.
Without this technical change, CMS would be unable to calculate 2023 Star Ratings for these measures for any MA contract since all contracts qualify for the extreme and uncontrollable circumstances adjustment for COVID-19, CMS said.
CMS is also finalizing a series of changes that were established in the March 31, 2020 COVID-19 interim final rule and the September 2, 2020 COVID-19 interim final rule to the 2021 and 2022 Star Ratings to accommodate the disruption to data collection posed by the COVID-19 pandemic.
The rule also strengthens coordination between states and CMS in serving people dually eligible for Medicare and Medicaid. This includes codifying a mechanism through which states can require dual eligible special needs plans to use integrated materials that make it easier for dually eligible individuals to understand the full scope of their Medicare and Medicaid benefits.
The rule also requires all MA special needs plans to annually assess certain social risk factors for their enrollees because identifying social needs is a key step to delivering person-centered care.
In addition, CMS is closing a loophole for dually eligible MA enrollees who have high medical costs that exceed the maximum out-of-pocket limit established by the MA plan. This loophole had resulted in lower payment to providers serving dually eligible MA enrollees than providers serving non-dually eligible MA enrollees.
WHY THIS MATTERS
CMS released the rule on the day that the Office of Inspector General released an unflattering report on Medicare Advantage prior authorization denials, as compared to original Medicare. MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules, the report said.
No mention of the OIG report was made by CMS, but the agency made clear it wants to know where MA plans are spending their government dollars, for reasons of both transparency and for better support of the social determinants of health.
"Fiscal stewardship is a central principle of the work we do every day," said CMS Deputy Administrator and Director of the Center for Medicare Dr. Meena Seshamani. "As responsible stewards of the program, this rule enables us to learn more about how the Medicare dollar is being spent on certain Medicare Advantage benefits, such as housing, food, and transportation assistance, in order to better understand how we can most effectively support the health and social needs of people with Medicare."
THE LARGER TREND
Dual eligibility in Medicare and Medicaid is a predictor of social risk and poor health outcomes, CMS said. Many dually eligible individuals experience challenges such as housing insecurity and homelessness, food insecurity, lack of access to transportation, and low levels of health literacy.
The final rule will help close health disparities by delivering person-centered integrated care that can lead to better health outcomes for enrollees and improve the operational functions of these programs, CMS said.
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
