Major Rule Proposes Many Positives for MA, Part D Plans

Reprinted from RADAR ON MEDICARE ADVANTAGE, biweekly strategies and analysis for Medicare Advantage, Medicare Part D and managed Medicaid. 

By Lauren Flynn Kelly, Managing Editor

December 7, 2017 Volume 23 Issue 23

Increased plan flexibility and reduced burden were two key themes in a sweeping rule proposed late last month containing policy and technical changes for Medicare Advantage and Part D plans starting in Contract Year 2019. At the same time, the rule (82 Fed. Reg. 56336, Nov. 28, 2017) sought to codify and/or clarify existing policies and revisited a few topics CMS has chosen not to act on in previous rulemakings, such as any willing pharmacy provisions (see story, p. 3).

“There’s a lot for the plans to like” in the new rule, says John Gorman, founder and executive chairman of Gorman Health Group. “It is abundantly clear that the primary goal of this rule is to reduce burden and to [the agency’s] credit, CMS has done it without really imperiling beneficiaries.”

In addition to significantly reducing the amount of medical loss ratio data that plans must submit, CMS proposed to explicitly allow plans to treat expenses related to all fraud reduction activities, including fraud prevention, detection and recovery, as quality improvement activities and therefore apply them in the numerator of the MLR calculation. This would replace the current method of counting claim payments recovered through fraud reduction efforts, not to exceed the amount of fraud reduction expenses, as an adjustment to incurred claims in the MLR numerator.

“This a big win for the insurance commissioners and a big win for the plans,” says Gorman. “I think a lot of the plans would be investing more in fraud detection and remediation if they could be counted in their MLR and not under administrative expense, so we hope this will mean that the plans will get a lot more aggressive in their own fraud detection activity.”

Michael Adelberg, principal with FaegreBD Consulting and a former top CMS MA official, concurs. “Permitting [fraud, waste and abuse] efforts to count as ‘good’ MLR expenses incents plans to invest in fraud and abuse detection — which is a good thing,” he tells AIS Health. “This also sets an important precedent: CMS is de-harmonizing MLR requirements by market, something that it would not permit under the previous Administration.”

CMS also proposed to codify current “default enrollment” standards by which MA organizations may provide seamless continuation of coverage when newly MA-eligible individuals are currently enrolled in non-Medicare plans offered by the MAO. The agency said it would limit these enrollments to people remaining in a Medicaid managed care plan offered by the same parent organization. CMS added that it plans to establish, through subregulatory guidance, a simplified “opt-in” election process that would make it easier to enroll newly MA-eligible individuals who already are covered by the sponsor’s commercial, Medicare or other non-Medicare plans.

In addition, the rule proposed some flexibility around MA uniformity requirements, which is a key element of the Value-Based Insurance Design model that is now in its third application cycle (see story, p. 5). CMS discussed a new interpretation of uniformity requirements that would allow MAOs, for example, to lower cost sharing for certain covered benefits or offer different deductibles for beneficiaries who meet specific medical criteria. Additionally, plans would be able to vary supplemental benefits by MA plan segment. CMS said it planned to address the operational details of this policy in the upcoming call letter.

Gorman points out that such flexibility would have particular significance if Congress fails to reauthorize Special Needs Plans for 2019 and beyond. “Those 2.5 million medically complex beneficiaries [could] end up enrolling in cheap mainstream MA plans. And if this provision makes it into the final rule, it would give those mainstream plans the flexibility to design benefits that meet some of their complex needs. So that’s a big deal and a nice hook for agents and brokers.”

CMS Seeks to Restore Longer OEP

Another proposal that would create new opportunities for agents and brokers is restoring the three-month open enrollment period (OEP) that allows individuals enrolled in an MA plan to make a one-time election to go to another MA plan or Original Medicare, adds Gorman. This is significant because the Medicare Access and CHIP Reauthorization Act bans the sale of first-dollar Medigap policies starting in 2020, “so that is going to directly impact the popular types C and F plans and...will force beneficiaries to reconsider what product they’re in,” he says. “So, that MA open enrollment period takes on new significance.”

Moreover, the rule proposed to eliminate meaningful difference requirements, which CMS said place “artificial limits” on the variety of plans an MAO can offer in the same county, and ease marketing efforts by reviewing only those materials designed to lead a beneficiary into an enrollment decision and categorizing other materials as “communications” that would be subject to different oversight standards.

CMS also proposed to codify key aspects of the Parts C and D star ratings methodology, but the stars-related change that may have the most immediate impact is a proposal to use an enrollment-weighted average to determine the star rating when contracts are consolidated. If CMS proceeds with the proposed change, it will be significant, suggests Ankur Goel, a partner in the Washington, D.C., office of the McDermott Will & Emery law firm. “Whether it’s viewed as positive or negative, I suspect CMS will get a lot of different viewpoints on that from different types of plans,” he tells AIS Health.

Additionally, CMS issued a request for information (RFI) on how cut points for specific measures are determined and at what levels ratings should be assigned, such as the plan level or the contract level. “Those topics have been considered in the past, with certain judgments made, and I think the RFI signals they are wanting to go back and think about and consider those issues as well,” adds Goel.

Rule Would Limit Opioid Coverage

On the Part D side, the proposed rule included several “positives,” adds Steve Arbaugh, managing principal and CEO of ATTAC Consulting Group, LLC. These include tiering exceptions as well as expedited substitutions of certain generics and other midyear formulary changes. Additionally, a “really good move” is the proposed implementation of provisions from the Comprehensive Addiction and Recovery Act of 2016 that allow Part D sponsors to establish a drug management program to limit coverage of opioids. That program could include the locking in of at-risk members to select pharmacies and/or prescribers or the use of point-of-sale claim edits. CMS said it would borrow criteria from its successful Part D Opioid Overutilization policy and Overutilization Monitoring System to establish clinical guidelines for identifying potentially at-risk beneficiaries.

One caveat, offers Arbaugh, is that certain beneficiaries (e.g., cancer patients) will be exempt from the drug management program, and it may be difficult for pharmacists to determine whether a patient is in remission and may actually qualify for the program.

Comments on the proposed rule are due no later than Jan. 16, 2018. View the proposed rule at https://tinyurl.com/yarx3neq.

https://aishealth.com/archive/nman120717-02