Medicare Advantage and Medicare Part D Changes for 2016 Released

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On February 6, 2015, the Centers for Medicare & Medicaid Services (CMS) released a final rule regarding changes to Medicare Advantage and Medicare Part D to take effect in 2016. According to CMS, this final rule “implements statutory requirements, improves program efficiencies, strengthens beneficiary protections, clarifies program requirements, improves payment accuracy, and makes technical changes for Contract Year (CY) 2016.”

The final rule includes the following key provisions:

  • Revises the rule requiring efficient dispensing to Part D enrollees in long-term care facilities and expands quality improvement program regulations;
  • Requires Medicare Advantage Prescription Drug plans to establish and maintain a process with network pharmacies to ensure timely and accurate point-of-sale transactions;
  • Requires Medicare Advantage organizations and Part D sponsors to develop and implement business continuity plans meeting certain requirements;
  • Clarifies the responsibilities of Medicare Advantage organizations when health plan services are affected by public health emergencies or disasters;
  • Allows CMS to require Medicare Advantage organizations or Part D plan sponsors to hire an independent auditor to validate correction of CMS audit findings;
  • Codifies for Part D, language found in the Part C regulation that requires Medicare Advantage organizations and Part D sponsors to provide annual notice to CMS of changes to plan rules for marketing material review and to all enrollees at least 15 days prior to the annual coordinated election period for changes that are effective with a new plan year;
  • Finalizes the requirement that Part D sponsors offering employer group waiver plans provide applicable discounts to plan enrollees as determined consistent with the defined standard benefit;
  • Permits CMS to assign an entity, such as a Medicare Advantage organization or Part D sponsor, to act on its behalf to review good cause requests following involuntary disenrollment for non-payment of premiums and to effectuate reinstatements of beneficiary enrollment when criteria are met;
  • Imposes a two-year Part D applications ban on organizations approved by CMS as qualified to enter into stand-alone prescription drug plan sponsor contracts but which elect, after CMS’s announcement of the low-income subsidy (LIS) benchmark, not to enter into such contracts and withdraw their prescription drug plan bids;
  • Eliminates the requirement that agents and brokers be trained and tested with CMS endorsed or approved documents;
  • Creates a new step in the application and contracting process with newly contracted entities operating as stand-alone prescription drug plan sponsors or Medicare Advantage organizations offering Part D plans;
  • Requires a sponsor’s pharmacy and therapeutics committee to articulate and document processes for determining that certain requirements have been met, including those related to disclosure of financial interests that are conflicts of interest and management recusal due to conflicts;
  • Clarifies CMS’s intended standard for when it is appropriate for a Medicare Advantage organization to extend an adjudication time frame;
  • Establishes lawful presence or U.S. citizenship as eligibility criteria for enrollment in cost, Medicare Advantage and Part D plans;
  • Amends text to expressly apply the two-year prohibition to applications for service area expansions in addition to applications for new contracts.

It is important to note that the final rule does not include the following provisions that appeared in the proposed rule: (1) lifting the protected class designation on three drug classes – antidepressants, antipsychotics and immunosuppressants for transplant rejection; (2) requiring Medicare Part D sponsors to include any pharmacy willing to accept the terms and conditions to participate in narrower pharmacy networks that offer preferred cost sharing to beneficiaries; (3) reducing the number of Part D plans a sponsor may offer; and (4) codifying CMS’s interpretation of the Part D non-interference provision.

The final rule was published in the Federal Register on February 12, 2015 and will take effect 30 days after publication.

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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