CMS Proposes Rate Adjustments and Policy Changes for Medicare Advantage and Medicare Part D Programs: Draft Rate Notice and “Call Letter” for 2015 Plan Year Released

On February 21, 2014, the Centers for Medicare & Medicaid Services (“CMS”) released its Advance Notice of Methodological Changes for Calendar Year 2015 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies (the “Draft Rate Notice”), as well as its draft “Call letter” for the 2015 Medicare Advantage and Medicare Part D plan year.  (The draft Call Letter is set forth as Appendix VI – beginning on page 62 – of the Draft Rate Notice.) Medicare Advantage is Medicare’s “Part C” managed medical benefit, and the Part D benefit is the outpatient drug benefit that is offered as a stand-alone plan, or as an adjunct to a Medicare Advantage plan.  CMS will accept public comments submitted by 6:00 PM EST on Friday, March 7, 2014.

CMS estimates a reduction in Medicare Advantage plan benchmarks of 1.9 percent for 2015, as described in the accompanying press release.  However, the actual reduction in rates paid to plans will likely be greater, due to a number of factors (including, among other things, plan Star Ratings). Separately, in its annual draft Call Letter, CMS proposes information plan applicants “need to take into consideration in preparing their 2015 bids”.  In the past, CMS has also used this issuance to announce policy priorities, as well as key dates, relevant to the Medicare Part C and D plans.

Topics addressed in this draft Call Letter include:

  • Incomplete submissions
  • Inaccurate submissions
  • Formulary submissions
  • Plan Corrections
  • Contracting Organizations with Ratings of Less Than Three Stars in Three Consecutive Years – Effective Date of Termination Authority
  • Proposed Enhancements to the 2015 Star Ratings and Beyond (CMS proposes a number of changes, including but not limited to a new 2015 star rating measure for Special Needs Plan (SNP) Care Management (Part C SNPs), as well as changes to other star rating measures, removal of the Glaucoma Testing (Part C) measure, and including “low enrollment contracts” in the star ratings)

With respect to Medicare Part C specifically, CMS addresses a number of issues, including, but not limited to:

  • Plans with low enrollment
  • Meaningful Difference (substantially duplicative plan offerings)
  •  Total Beneficiary Cost (TBC)
  • Maximum Out-of-Pocket (MOOP) Limits
  • Per Member per Month Actuarial Equivalent Cost Sharing Limits
  • Part C Cost-Sharing Standards
  • Part C Supplemental Benefits
  • Part C Policy Updates including:
    • Increasing Transparency for Beneficiary Part C Cost Sharing for Inpatient Stays
    • Transferability of MOOP Contributions When an Enrollee Changes Plans During the Contract Year
    • Memory Fitness Activities
    • Part C PBP Notes Update for CY 2015
    • Part C ER/Urgent Care Deductible
    • Requirements for Home Health Services
    • Tiered Cost Sharing of Medical Benefits
    • Part C Services Via Remote Access Technologies
    • Exceptions to Policies Permitting Plans to Limit Durable Medical Equipment (DME) to Certain Brands and Manufacturers
    • Innovations in Health Plan Design
    • Minimum Enrollment Guidance
    • Part C Provider Contract Termination Guidance
    • Part C ANOC/EOC Review Timeframe
    • Part C Third-Party Marketing of Non-Health-Related Benefits
    • Ongoing, Off-cycle Submission of Summaries of Model of Care (MOC) Changes
    • Part C Change of Ownership Transactions Requiring Service Area Expansions

With respect to Medicare Part D specifically, CMS addresses a number of issues, including, but not limited to:

  • Additional Guidance for All Enhanced Alternative (EA) Plans
  • Access to Preferred Cost Sharing
  • Appropriate Utilization of Prior Authorization Requirements to Determine Part D Drug Status
  • Enhancements and Clarifications on Improving Utilization Review Controls (CMS specifically addresses Acetaminophen, and Opiods)
  • Medication Therapy Management
  • Part D Benefit Parameters for Non-Defined Standard Plans
  • Employer Group Waiver Plan (EGWP) Policy Reminders
  • Antipsychotic Drug Use Data
  • Coordination of Benefits (COB) User Fee
  • Extended Days’ Supply Indicator
  • Low Enrollment
  • Renewal of LI NET Demonstration

We encourage all interested stakeholders to review the Draft Rate Notice and Call Letter and consider providing comments to CMS on relevant issues.  Because this is not a formal rulemaking, CMS has permitted only two weeks for comments (which timeframe is consistent with its similar issuances).  Readers should note that March 7, 2014 is also the date which comments are due to CMS on its proposed rule, discussed here.

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