Medicare Compliance & Reimbursement

CMS wants to know what you think about the suggested changes.

The latest Medicare Advantage (MA) and Part D proposals highlight the feds’ continued focus on health equity and consumer rights. Read on for the details.

Lowdown: On Jan. 12, the Centers for Medicare & Medicaid Services (CMS) published the calendar year (CY) 2023 Medicare Advantage and Part D proposed rule in the Federal Register. As more and more beneficiaries navigate the MA and Part D waters, CMS wants to utilize its rulemaking to “improve beneficiaries’ experiences with MA and Part D, with a strong emphasis on individuals who are dually eligible for Medicare and Medicaid,” mentions an agency release.

Additionally, the proposed rule aims to modernize policies, offer Part D cost-cutting options, and align with other CMS initiatives. The proposed regulatory reforms also address equity and healthcare discrepancies revealed during the pandemic, which continue to be central themes among all of CMS’ recent rule rollouts.

“We are dedicated to ensuring older Americans and those with disabilities who are served by the Medicare program have access to quality, affordable health care, including prescription drugs and therapies,” said CMS Administrator Chiquita Brooks-LaSure in a release on the proposed rule. “Today’s proposed actions follow our guiding principles by improving health equity and enhancing access to prescription medications.”

Understand What’s on the Table

From lowering beneficiaries’ prescription drug costs to updating MA and Part D marketing, quality ratings, and more, the proposed rule is chock full of policy shifts, adapting to the changing healthcare environment — and new management.

“The changes proposed are, overall, modest in scope. In the main, CMS is reversing some policies adopted in the prior Administration, for example by reinstating reporting requirements related to plans’ Medical Loss Ratios (MLRs) and increasing scrutiny of new Medicare Advantage (MA) plans’ networks of contracted providers,” explain attorneys Alex Dworkowitz, Adam Finkelstein, and Michael Kolber and healthcare consultant Jonathan DiBello with law firm Manatt, Phelps & Phillips, LLP. in online analysis.

Here’s a peek at the top five MA and Part D items that you may want to review — and comment on — before CMS makes changes for CY 2023:

1. Network adequacy: CMS wants to know before MA plans apply that they have a “sufficient network of contracted providers” to adequately care for Medicare beneficiaries, the agency notes.

“CMS is proposing to require (for 2024 and beyond) demonstration of an adequate network as part of the February application process, moving up the dates by which a plan must have its network in place,” clarify Dworkowitz, Finkelstein, Kolber, and DiBello.

The proposed update isn’t all bad, though. “As a modest concession, CMS will allow a 10% credit toward meeting time and distance standards for new applicants, holding them to a slightly laxer standard,” Dworkowitz, Finkelstein, Kolber, and DiBello point out.

2. MA Star Ratings: Under the COVID-19 Public Health Emergency (PHE), MA contracts qualified for extreme and uncontrollable circumstances adjustments, but this impacts CMS’ ability to calculate 2023 Star Ratings, the agency says. “We are proposing a technical change to enable CMS to calculate 2023 Part C Star Ratings for the three Healthcare Effectiveness Data and Information Set (HEDIS) measures collected through the Health Outcomes Survey (HOS): Monitoring Physical Activity, Reducing the Risk of Falling, and Improving Bladder Control,” the fact sheet notes.

4. Medical loss ratio: The Affordable Care Act (ACA) required payers to show MLR or “data on the proportion of premium revenues spent on clinical services and quality improvement,” CMS guidance suggests. But the past administration drastically reduced the level of MLR that insurers were required to submit — and now, CMS wants to revert back to the 2014-2017 contract year standards, according to the proposed rule.

How the MLR is calculated is different for MA and Part D plans, but quality factors into the calculations for both. “For MA plans, the MLR reflects the percentage of revenue received under the contract spent on incurred claims for all enrollees (including prescription drug cost for Medicare Advantage Prescription Drug (MAPD) plans), quality initiatives, and amounts used to reduce Part B premiums,” explain attorneys Xavier Hardy and Bridgette Keller with law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. “For Part D plans, the MLR reflects the percentage of revenue received under the contract spent on incurred claims (reduced by direct and indirection remuneration) for all enrollees for Part D prescription drugs and on quality initiatives,” Hardy and Keller say in online legal analysis of the rule.

5. Pharmacy concessions: Pricing arrangements between Part D plans and pharmacies often ratchet up the final costs for beneficiaries — and that needs to change, according to the proposed rule. “The negotiated price is frequently higher than the final payment to pharmacies. Higher negotiated prices lead to higher beneficiary cost-sharing and faster beneficiary advancement through the Part D benefit,” CMS says.