CMS Proposes Changes to the Medicare Advantage and Part D Programs Aimed at Improving Beneficiary Protections, Access to Care, and Addressing Agent and Broker Compensation

King & Spalding

On November 6, 2023, CMS released a pre-publication version of a proposed rule (Proposed Rule) that is set to publish in the Federal Register on November 15, 2023, and that would amend the regulations governing Medicare Advantage (MA or Part C), the Medicare Prescription Drug Benefit (Part D), Medicare cost plans, and Programs of All-Inclusive Care for the Elderly (PACE). According to CMS, the Proposed Rule changes aim to increase beneficiary protections, promote healthy competition, improve access to care, and promote equity in coverage and care. Comments on the Proposed Rule are due by 5:00 p.m. on January 5, 2024.

Some of the proposed changes are highlighted below.

Redefining Agent and Broker Compensation

The Proposed Rule seeks to address CMS concerns that agent and broker compensation may incentivize agents and brokers to enroll individuals in certain MA plans that CMS alleges can result in steering beneficiaries to some MA plans over others rather than recommending plans based on the prospective enrollee’s best interests.

CMS proposes to: (1) broaden the scope of “compensation” so that it includes activities associated with the sales to and enrollment of a beneficiary into an MA plan or Part D plan; (2) set a national fixed compensation amount that agents and brokers receive from MA organizations for new MA enrollments at $642 (compared to the existing national compensation which is a cap of no more than $611); and (3) prohibit contract terms that result in volume-based bonuses for enrollment.

Improving Access to Behavioral Health Services

The Proposed Rule seeks to strengthen network adequacy requirements and improve access to behavioral health care services for MA enrollees by adding a range of behavioral health providers under one category called “Outpatient Behavioral Health” as a facility specialty for which CMS sets MA plan network adequacy standards. Specialists under this category include marriage and family therapists, mental health counselors, addiction medicine physicians, Opioid Treatment Program providers, Community Mental Health Centers, and other providers who provide addiction medicine and behavioral health counseling or therapy services.

CMS proposes adding this Outpatient Behavioral Health facility specialty to the list of the specialty types that will receive a 10% credit if the MA organization’s contracted network of providers includes one or more telehealth providers of that specialty type who provide additional telehealth benefits for covered services.

Notifying Enrollees of Available Supplemental Benefits

The Proposed Rule seeks to help make consumers aware of their plan benefits by proposing an annual “Mid-Year Enrollee Notification of Unused Supplemental Benefits,” personalized to each enrollee, that includes a list of any supplemental benefits the enrollee has not accessed during the first six months of the year. Supplemental benefits are extra benefits offered by MA plans that go beyond regular Medicare Parts A and B benefits. The notification would include the scope of the benefit, cost-sharing, instructions on accessing the benefit, any network application information, and a customer service number.

New Standards for Special Supplemental Benefits for the Chronically Ill

The Proposed Rule aims to help ensure a robust and competitive MA marketplace by requiring MA plans to demonstrate, by the time they submit bids, that special supplemental benefits for the chronically ill (SSBCI) items and services meet the legal threshold of having a reasonable expectation of improving the health or overall function of chronically ill enrollees and are supported by research. CMS proposes that MA plans establish and maintain bibliographies of relevant research studies or other data demonstrating that an SSBCI meets these requirements. CMS also proposes to update SSBCI marketing requirements to prevent misleading marketing related to these benefits that would make it appear that the SSBCI benefits are available to everyone.

Promoting Health Equity - Annual Health Equity Analysis of UM Policies and Procedures

The Proposed Rule seeks to create additional transparency and identify disproportionate impacts of Utilization Management (UM) policies and procedures on enrollees who receive the Part D low-income subsidy, are dually eligible, or have a disability by proposing updates to the composition of, and responsibilities for, the MA organization’s UM committee to require: (1) a member of the UM committee to have expertise in health equity; (2) the UM committee conduct an annual health equity analysis of prior authorization policies and procedures used by the MA organization; and (3) MA organizations to publish the results of the analysis on their website.

Expanding Enrollees’ Rights to Appeal MA Plan’s Decision to Terminate Coverage for Non-Hospital Services

CMS proposes to expand the rights of MA plan enrollees to access the Quality Improvement Organization (QIO) review of fast-track appeals available to beneficiaries in traditional Medicare. The Proposed Rule would: (1) require the QIO, rather than the MA plan, to review untimely fast-track appeals of an MA plan’s decision to terminate services in a skilled nursing facility, comprehensive outpatient rehabilitation facility, or by a home health agency; and (2) eliminate the provision requiring forfeiture of an enrollee’s right to appeal a termination decision when the enrollee leaves the facility.

Expanding Access to Integrated Medicare and Medicaid Services for Dually Eligible Enrollees

The Proposed Rule seeks to increase the percentage of dually eligible MA plan enrollees who are in plans that also cover Medicaid by offering more opportunities to enroll in plans that integrate Medicare and Medicaid and more opportunities to switch to traditional Medicare, as opposed to MA plans that differ from the enrollee’s Medicaid plan. The Proposed Rule would revise the current quarterly special enrollment period (SEP) for dually eligible and other Part D low-income subsidy (LIS) enrolled individuals to a once-per-month SEP to enroll in a standalone prescription drug plan and create a new integrated care SEP, to allow dually eligible individuals to elect an integrated dual eligible special needs plan (D-SNP) on a monthly basis.

Limiting Out-of-Network Cost Sharing for D-SNP PPOs

CMS proposes to limit out-of-network cost sharing for D-SNP preferred provider organizations (PPOs) for specific services, beginning in 2026. The Proposed Rule would decrease cost shifting to Medicaid, protect dually eligible enrollees from unaffordable costs, expand dually eligible enrollees’ access to providers, and increase payments to safety net providers.

Increasing Access to Lower Cost Biosimilar Biological Products

The Proposed Rule seeks to promote access to affordable biosimilar and generic products by permitting Part D sponsors to treat formulary substitutions of biosimilar biological products other than interchangeable biological products for their reference products as “maintenance changes” that would not require prior approval by CMS. CMS currently requires plans to obtain explicit approval from CMS before substituting with biosimilar biological products other than interchangeable biological products, and such substitutions apply only to enrollees who begin therapy after the effective date of the change, which would delay access to lower cost options. Treating such substitutions as maintenance changes would mean that any substitutions would apply to all enrollees following a 30-day notice, and enrollees would have earlier access to equally effective and potentially more affordable options.

Standardizing Appeals for MA Plan Risk Adjustment Data Validation (RADV)

The Proposed Rule aims to standardize the RADV appeals process and address operational constraints of the appeals process. Currently, if MA organizations appeal both medical record review determinations and payment error calculations resulting from RADV audits, both issues must be appealed and move through the appeals process concurrently, which could result in inconsistent appeal adjudications at different levels of appeal that impact recalculations of the payment error. CMS proposes that MA organizations must exhaust all three levels of appeal for medical record review determinations before requesting a payment error calculation appeal.

The Proposed Rule would clarify that a revised audit report containing a recalculated payment error calculation will be issued when a medical record review determination appeal or a payment error calculation appeal is final, as applicable, and will not be issued at each level of appeal. Moreover, the Proposed Rule would require that if the CMS Administrator does not decline to review or elect to review within 90 days of receiving the MA organization’s or CMS’s timely request for review, the hearing officer’s decision becomes final.

Lowering the D-SNP Look-Alike Threshold

The Proposed Rule aims to address the continued increase of MA plans that are serving high percentages of dually eligible individuals without meeting the requirements to be a D-SNP by proposing to lower the D-SNP look-alike threshold from 80% to 70% in 2025 and to 60% in 2026. A D-SNP look-alike is an MA plan that is not a SNP but in which dually eligible enrollees account for 80% or more of the total enrollment.

The CMS fact sheet on the Proposed Rule is available here. The Proposed Rule is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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