Date: May 17, 2022
Grassroots Advocacy Forum: CMS Issues Final Rules on Marketplace Standards and Medicare Advantage and Part D Plans
The Centers for Medicare and Medicaid Services (CMS) recently released two final rules – one finalizing new Marketplace standards and another revising Medicare Advantage (MA) and Part D regulations. Please see below for key provisions of the rules.
CY 2023 Medicare Advantage and Part D Final Rule
Key changes to CMS final rural implementing changes to Medicare Advantage (MA) and Part D regulation include revising regulations on marketing and communications, new criteria used to review applications for new or expanded MA and Part D plans, special requirements during disasters or public emergencies, and changes to how MA organizations calculate attainment of maximum out-of-pocket limits. All changes will apply to coverage beginning January 1, 2023, which is a one-year delay in implementation. The regulations will be effective June 13, 2022, meaning that MA plan bids submitted for CY 2023 will be evaluated using the regulations below.
Rural enrollment of Medicare beneficiaries in the Medicare Part D prescription drug program has historically lagged urban enrollment. Rural Part D enrollees are overwhelmingly in standalone prescription drug plans (PDPs), whereas urban beneficiaries are more likely to be enrolled in Medicare Advantage with Prescription Drug (MA-PD) plans. However, enrollment in MA plans has grown tremendously with MA plans as an alternative to traditional Medicare becoming increasingly popular among rural beneficiaries according to the RUPRI Center for Rural Health Policy Analysis. As Part D enrollment grows in rural areas, these proposed changes become more relevant for rural Medicare beneficiaries.
Direct and Indirect Remuneration (DIR) Fees. Starting next year, Medicare Part D prescription drug plans and MA plans must include direct and indirect remuneration (DIR) fees at the point of sale, not retroactively. NRHA anticipates this change to help with rural hospital and pharmacy contract relationships. The new requirement will take effect in 2024.
Beneficiary Cost Sharing at Pharmacies. The rule also modifies the definition of “lowest price,” which influences the lowest reimbursement a pharmacy can receive from a Part D drug plan. CMS is finalizing a 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, so that the beneficiary can also share in the savings. CMS is redefining the negotiated price as the baseline, or lowest possible, payment to a pharmacy, effective January 1, 2024. This will reduce beneficiary out-of-pocket costs.
Maximum Out-of-Pocket (MOOP) Costs. Currently, MA plans have the option to count only the amounts that the enrollee is responsible for paying, but not count state cost-sharing or unpaid cost-sharing towards the MOOP limit. This final rule specifies that the MOOP limit in an MA plan (after which the plan pays 100 percent of MA costs) is calculated based on the accrual of all Medicare cost-sharing in the plan benefit, whether that Medicare cost-sharing is paid by the beneficiary, Medicaid, or other secondary insurance, or remains unpaid.
MA Plan Networks. CMS is improving application standards and oversight of MA applicants’ provider networks to ensure enrollees will have access to a sufficient network of providers before CMS will approve for the first time or allow an existing MA contract to expand. CMS will also protect Medicare beneficiaries by holding plans accountable to detect and prevent the use of confusing or potentially misleading marketing tactics by third-party marketing organizations.
Emergencies and Disasters. CMS is revising and clarifying timeframes and standards associated with coverage obligations of MA plans during disasters and emergencies. The final rule will clarify that an MA plan must comply with the special requirements when there is both a declaration of disaster or emergency (including a public health emergency) and disruption in access to health care in the MA plan’s service area.
Social Determinants of Health. CMS is finalizing requirements for all Special Needs Plans (SNPs) health risk assessments to include standardized questions regarding housing stability, food security, and access to transportation. All SNPs must include at least one question for each of these categories, but not all SNPs must use the same question.
Appeals and Grievance Processes. This final rule simplifies the appeals and grievance processes and extends the protection of continuation of benefits pending appeal to additional dually eligible beneficiaries.
MA Organization Past Performance. CMS will add Star Ratings (2.5 or lower), bankruptcy or bankruptcy filings, and exceeding a CMS designated threshold for compliance actions as bases for CMS denying a new application or a service area expansion application to a MA or Part D organization.
Simplifying Dually Eligible Special Needs Program (D-SNP) Enrollee Materials. Many dually eligible beneficiaries have low health literacy yet must navigate a more complex system than non-dually eligible beneficiaries. This final rule codifies a mechanism through which states can require the D-SNPs in D-SNP-only contracts to use integrated materials to make it easier to understand the full scope of Medicare and Medicaid benefits available through the D-SNPs.
Please find the final rule here. CMS’ fact sheet can be found here. These regulations are effective June 28, 2022.
Marketplace Final Rule FY 2023
Standardized Plan Options. Beginning in plan year (PY) 2023, CMS proposes to require that all issuers offer standardized plan options at every product network type, at every metal level, and throughout every service area that they offer non-standardized plan options.
User Fees. CMS is finalizing a Federally-facilitated Marketplace (FFM) user fee rate of 2.75% of premium and a State-based Marketplaces on the Federal Platform (SBM-FP) fee of 2.25% of premium.
Advancing Health Equity. CMS refines its essential health benefits (EHB) nondiscrimination policy to ensure that benefit designs, particularly benefit limitations and plan coverage requirements for EHB, are based on clinical evidence. CMS provides examples of presumptive discriminatory plan designs, such as discrimination based upon age and health conditions.
Special Enrollment Period Verification. CMS finalizes changes to scale back pre-enrollment special enrollment period (SEP) verification in the FFMs and SBM-FPs to include only the SEP for loss of minimum essential coverage-the SEP type that comprises the majority of all SEP enrollments on the Marketplaces on the federal platform-and to clarify that Marketplaces maintain the option to verify eligibility for any SEP types and may provide an exception to pre-enrollment SEP verification when verification may cause undue burden, such as during natural disasters or public health emergencies impacting consumers or the Marketplace.
Please find the final rule here. CMS’ fact sheet can be found here. These regulations are effective July 1, 2022.
If you have any questions, please contact Alexa McKinley, NRHA’s Government Affairs and Policy Coordinator, at amckinley@ruralhealth.us or another member of the Government Affairs team.