CMS Updates Medicare Advantage and Part D (Prescription Drug Benefit)

April 9, 2018

On April 2, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule, updating Medicare Advantage (MA) and the prescription drug benefit program (Part D).  The Final Rule includes, among other provisions:

·         Preclusion List Requirements for Prescribers in Part D and Individuals and Entities in Medicare Advantage, Cost Plans, and PACE: The Final Rule eliminates the MA and Part D prescriber and provider enrollment requirement.  Instead, CMS is compiling a “Preclusion List” of prescribers, individuals, and entities that: (1) are currently revoked from Medicare, under an active reenrollment bar, or have engaged in behavior for which CMS could have revoked enrollment in Medicare and (2) in addition, CMS determines that the underlying conduct is detrimental to the best interests of the Medicare program. The Preclusion List will be made available to MA plans and Part D prescription drug plans, which must deny payment for claims submitted by, or associated with prescriptions written by prescribers and providers on the list.

·         Eliminating “Meaningful Difference” Requirements: Beginning with CY 2019 bid submissions, CMS has eliminated the requirement that MA plans offered by the same organization in the same county comply with the “meaningful difference” requirements, which limit the variety of plans an MA organization can offer in the same county.

The Final Rule also eliminates the “meaningful difference” requirement for PDP Enhanced Alternative (EA) benefit designs offered by the same organization in the same region, but does not change this requirement as between PDP Basic and EA prescription drug plan offerings.

·         Medicare Advantage Uniformity Requirements Flexibility: As an option for all MA plans, the Final Rule allows the plans to reduce cost sharing for certain covered benefits, offer specific tailored supplemental benefits, and offer different deductibles for beneficiaries that meet specific medical criteria.

·         Definition of Marketing: The Final Rule changes the definition of “marketing” to include only materials that are most likely to lead to a beneficiary to make an enrollment decision.  CMS is adopting requirements for a new category called “communications,” comprised of materials and activities that fall outside the new definition of marketing.

·         Comprehensive Addiction and Recovery Act of 2016 (CARA) Implementation: In accordance with CARA, CMS established a framework allowing Part D sponsors to implement drug management programs that limit access to coverage for frequently abused drugs for at-risk beneficiaries, beginning with the 2019 plan year.  Beneficiaries being treated for active cancer-related pain, are receiving palliative or end-of-life care, or are in hospice or long-term care from drug management programs will be exempt from the programs. CMS will designate opioids and benzodiazepines as frequently abused drugs.  The framework includes, among other provisions:

·         Integration of the drug management programs with the existing Overutilization Monitoring System (OMS). The clinical guidelines for determining whether a beneficiary is potentially at-risk (based on using opioids from multiple prescribers and/or multiple pharmacies) will be expanded. Sponsors will be allowed to “lock in” an at-risk beneficiary’s access to frequently abused drugs to selected prescribers and/or pharmacies. In order to implement these limitations, Part D sponsors must have engaged in case management with the prescribers, and allow beneficiaries to submit prescriber and pharmacy preferences.

·         CMS is limiting the availability of the special enrollment period (SEP) for dually or other low income subsidy (LIS) eligible beneficiaries who are identified as at-risk or potentially at-risk for prescription drug abuse.

·         At-risk determinations, including prescriber and pharmacy lock-in, will be subject to the existing beneficiary appeals process.

·         Any Willing Pharmacy Provisions and Revised Definition of Retail Pharmacy: The regulations clarify statutorily-required “any willing pharmacy provisions”, and revise the definition of “retail pharmacy.” The Final rule also sets deadlines for Part D sponsors to respond to requests for pharmacy contracting standard terms and conditions.

·         Decreased Transition Supply Days for Long Term Care: The Final Rule reduces the transition supply in the long term care setting from 90 days to 30 days (currently provided in the outpatient setting ) so that the transition supply in both settings is for the same period.

·         Part D Tiering Exceptions: The Final Rule provides that Part D plans are no longer allowed to exclude a dedicated generic tier from the tiering exceptions process.

·         Expedited Substitutions of Certain Generics and Midyear Formulary Changes: The Final Rule allows Part D sponsors to immediately substitute generics for brand name drugs on the same or lower cost-sharing tier if they meet certain requirements.

·         Part A and Part B Premium Adjustments as “Initial Determinations:”The Final Rule codifies existing policy of treating FFS premium adjustments as initial determinations that can be appealed.

·         Lengthening Part D Adjudication Timeframes: The Final Rule lengthens the maximum timeframes for adjudicating enrollee payment appeal requests at the redetermination and independent review entity (IRE) reconsideration levels from 7 to 14 calendar days.

·         Eliminating MA Plan Notice of Forwarded Appeals: CMS has removed the redundant requirement that MA plans notify an appellant when his/her appeal case file is forwarded to Medicare’s Part C IRE, and the Part C IRE will continue to notify MA enrollees of forwarded cases.

·         Default Enrollment: The Final Rule changes the current enrollment mechanism that to allow MA organizations to provide continuation of coverage for beneficiaries once they become Medicare eligible.

·         Passive Enrollment for Dually Eligible Beneficiaries:The Final Rule provides passive enrollment for full-benefit dually eligible beneficiaries from a non-renewing integrated D-SNP to another comparable plan, after consulting with a state Medicaid agency, and where other conditions are met relating to continuity and quality of care.

·         Limitation to the Part D Special Enrollment Period for Dual and Other LIS-Eligible Beneficiaries: The Final Rule converts the Special Election Period (SEP) for dual-eligible and LIS beneficiaries from an open-ended monthly SEP to one that may be used only once per calendar quarter during the first nine months of the year.  The Final Rule also includes separate SEPs that can be used: (1) within a prescribed time after a CMS or state-initiated enrollment; and (2) within a prescribed time after a change to an individual’s LIS or Medicaid status.

·         Similar Treatment of Biosimilar and Interchangeable Biological Products and Generic Drugs for Purposes of Low Income Subsidy (LIS) Cost Sharing.: CMS is applying generic cost-sharing to biosimilar and interchangeable biological products for LIS enrollees in all phases of the Part D benefit.

·         Maximum Out-of-Pocket (MOOP) and Cost Sharing Limits: CMS is revising the regulations controlling maximum out-of-pocket (MOOP) limits, to enable future changes to CMS’s existing methodology.

·         Restoration of the Medicare Advantage Open Enrollment Period: Effective for 2019, the Final Rule implements a new Medicare Advantage open enrollment period (OEP) that will take place from January 1st through March 31st annually, and that will allow individuals to make a one-time election to go to another MA plan or Original Medicare.

·         Removing the Quality Improvement Project (QIP) from Quality Improvement Requirements: The Final Rule removes the QIP from quality improvement requirements.  According to CMS, the QIP was duplicative of activities MA plans were already doing to meet other plan needs and requirements, and its elimination allows MA plans to focus on one project that supports improving the management of chronic conditions.

·         Reduction in Required Medical Loss Ratio (MLR) Data: The Final Rule is reducing the amount of MLR data that MA organizations and Part D sponsors must provide on an annual basis.

·         Electronic Delivery of Beneficiary Documents: CMS is separating the delivery dates so that beneficiaries receive the Annual Notice of Change (ANOC) first, followed by the Evidence of Coverage (EOC). MA and Part D sponsors can now provide certain materials electronically, such as the EOC (or via hard copy if the beneficiary prefers).

·         Star Ratings Methodology: In the Final Rule, CMS provided increased transparency for the MA and Part D Star Ratings methodology, codifying principles for adding, updating, and removing measures, and the methodology for calculating and weighting measures used in the ratings process. The Final Rule also established new rules related to how Star Ratings are assigned when contracts consolidate and new methods for applying scaled reductions when CMS determines that the data for the appeals measures are not complete.

Update to Part D Electronic Transaction Standard:  CMS is updating the current electronic prescribing standard for the Part D e-Prescribing Program (the National Council for Prescription Drug Programs (NCPDP) SCRIPT Standard).

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