CMS Releases Contract Year (CY) 2020 Medicare Advantage and Part D Flexibility Proposed Rule

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On October 26, 2018, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule revising Medicare Advantage program (MA or Part C) and Prescription Drug Benefit program (Part D) regulations, implementing certain provisions of the Bipartisan Budget Act of 2018. The 362- page proposed rule includes changes that expand telehealth benefits under MA plans, improve the quality and accountability of MA plans and Part D sponsors, and change certain program integrity policies to permit CMS to more easily identify and recover overpayments from MA plans.

CMS states the proposed rule, “Contract Year (CY) 2020 Medicare Advantage and Part D Flexibility” (“Proposed Rule”), meets the “Administration’s priorities to reduce burden across the Medicare program by reducing unnecessary regulatory complexity, and improve the regulatory framework to facilitate development of Part C and Part D products that better meet the individual beneficiary’s healthcare needs.”

To better meet MA beneficiaries’ healthcare needs, the Proposed Rule would permit MA plans to offer telehealth services “as basic benefits for purposes of bid submission and payment by CMS” starting in 2020 – including telehealth services that are not reimbursable under original Medicare.  The new rule would provide “greater ability for [MA] enrollees to receive telehealth from places like their homes, rather than requiring them to go to a health care facility to receive telehealth services. Plans would also have greater flexibility to offer clinically-appropriate telehealth benefits that are not otherwise available to Medicare beneficiaries.” 

The Proposed Rule seeks to improve accountability and bolster program integrity by including changes to the calculation of Star Ratings and a policy to adjust the methodology for Star Ratings for affected MA and Part D plans in the event of extreme and uncontrollable circumstances, such as hurricanes. Star Ratings provide information to consumers on plan quality and CMS believes that the proposed changes on how Star Ratings would be calculated will increase “stability and predictability” for plans.

The Proposed Rule also includes “critical updates” regarding plan integrity.  For example, in April 2018, CMS announced that they would “prohibit payment for Part D drugs and MA items or services that are prescribed or furnished by prescribers and providers on a ‘preclusion list’.” The Proposed Rule would clarify the preclusion list process to explain the expectations for stakeholders.

Additional proposed changes would help CMS recover overpayments made to MA plans. Specifically, the Proposed Rule would allow CMS to extrapolate audit recovery findings under Risk Adjustment Data validation audits. CMS notes that this would result in an estimated $4.5 billion in savings to the Medicare Trust Funds over a ten year period.

CMS is soliciting comments from stakeholders on the various aspects of its proposal. The Proposed Rule is available in its entirety here. CMS’ fact sheet on the Proposed Rule can be found here and CMS’s press release can be found here.  Comments on the Proposed Rule must be received by CMS by December 31, 2018 and may be submitted electronically 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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