New Directions for Medicare Advantage and the Medicare Drug Plan in 2021

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update Medicare Advantage plan (MA, or Part C) and the Medicare prescription drug benefit (Part D) program.

In years past, CMS has also issued a “call letter,” not subject to the regulatory process, to provide additional information for plans to use in preparing their bids for the upcoming year. However, CMS is now changing its method. CMS is now seeking comments from the public on proposals to codify many longstanding policies on the MA and Part D programs that have been previously adopted through sub-regulatory guidance. They will not issue the call letters for 2021 and beyond.

CMS has used sub-regulatory guidance in many of its programs. However, recent concerns, both legal and political, have led CMS to reduce the use of this guidance and rely more on the regulatory process, which gives the public more opportunities to review and comment on proposals. This could herald a significant change in the way CMS operates its programs.

This new proposed rule codifies a number of statutory requirements passed by Congress in the last several years. These include the following:

  • Medicare Advantage plan options for end-stage renal disease (ESRD) beneficiaries – allowing all Medicare beneficiaries with ESRD to enroll in Medicare Advantage plan. It also implements related MA and Medicare FFS payment changes made by the 21st Century Cures Act – FFS coverage of kidney acquisition costs for MA beneficiaries, and exclusion of such costs from MA benchmarks.
  • Changes to Star Ratings – including routine measure updates and technical clarifications to the Star Ratings, reducing the influence of outliers, and increasing the measure weights for patient experience/complaints and access measures from 2 to 4, further strengthening CMS’s commitment to patients
  • Additional tier for drug plan formularies – allowing Part D sponsors to establish a second, “preferred” specialty tier, with lower cost-sharing than the current specialty tier.
  • Beneficiary real-time benefit tool (RTBT) – each Part D plan must implement a beneficiary RTBT that will allow enrollees to view plan-provided, patient-specific, real-time formulary and benefit information by Jan. 1, 2022. Plans would be able to use existing secure patient portals, develop a new portal, or use a computer application to fulfill this requirement.

CMS will be codifying and expanding policies on the following:

  • Network adequacy, improving access in rural areas and encouraging the use of telehealth in all areas.
  • Supplemental benefits, including mandating that cost-sharing reductions are an allowed benefit.
  • Clarifying and extending special election periods (SEPs) for exceptional conditions.

CMS also issued a second part of the advance notice, detailing payment and risk adjustment model changes for Part C and D plans, and additional Star rating changes.

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