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Just in time for the holidays, the Centers for Medicare and Medicaid Services (“CMS”) issued the Contract Year 2024 Proposed Rule for Medicare Advantage organizations (“MAOs”) and Part D sponsors (the “Proposed Rule”). The Proposed Rule includes changes on an array of topics including: Star Ratings, medication therapy management, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, behavioral health services, identification of overpayments, requirements for valid contract applications, and formulary changes. 

We’ve summarized some of the key changes in the Proposed Rule. Comments are due February 13, 2023.

1. Star Ratings

  • Addition of a Health Equity Index Reward

CMS proposes adding a health equity index (“HEI”) reward for the 2027 Star Ratings to further incentivize MAOs and Part D sponsors to focus on improving care for enrollees with social risk factors (“SRFs”). A health equity index summarizes contract performance among those with specified SRFs across multiple measures into a single score. The HEI would reward contracts for obtaining high measure-level scores for the subset of enrollees with specified SRFs. It is CMS’s intent in implementing an HEI to improve health equity by incentivizing MA, cost plan, and PDP contracts to perform well among enrollees with specified SRFs. That is, the HEI is specifically designed to create an incentive to reduce disparities in care. The HEI for the 2027 Star Ratings would be calculated using data collected or used for the 2026 and 2027 Star Ratings, and would replace the current reward factor that has been in place since the 2009 Star Ratings. Receipt of the low income subsidy or being dually eligible (“LIS/DE”) or having a disability would be the initial group of SRFs used to calculate the HEI. The SRFs included in the HEI may be expanded over time.

  • Other Changes

CMS is also proposing to make changes in the specific measures used in the Star Ratings System, which would:

  • Remove the Part C Diabetes Care— Kidney Disease Monitoring measure;
  • Remove the stand-alone Part C Medication Reconciliation Post-discharge measure;
  • Add the updated Part C Colorectal Cancer Screening measure with the NCQA specification change;
  • Add the updated Part C Care for Older Adults—Functional Status Assessment measures with the NCQA specification change;
  • Add the updated Part D Medication Adherence for Diabetes Medication, Medication Adherence for Hypertension (RAS Antagonists), Medication Adherence for Cholesterol (Statins) measures (including non-substantive changes to the specifications);
  • Add the Part C Kidney Health Evaluation for Patients with Diabetes measure;
  • Add the Part D Concurrent Use of Opioids and Benzodiazepines measure;
  • Add the Part D Polypharmacy Use of Multiple Anticholinergic Medications in Older Adults measure; and
  • Add the Part D Polypharmacy Use of Multiple Central Nervous System Active Medications in Older Adults measure.

CMS also proposes several methodological changes that would:

  • Reduce the weight of patient experience/complaints and access measures to further align the Part C and Part D Quality Rating System with other CMS quality programs;
  • Remove guardrails when determining measure-specificthresholds for non-Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures;
  • Modify the hold harmless policy for the Health Plan Quality Improvement and Drug Plan Quality Improvement measures;
  • Add an additional basis for the subregulatory removal of Star Ratings measures; and
  • Remove the 60 percent rule for the adjustment for extreme and uncontrollable circumstances (generally called the adjustment for disasters).

Finally, CMS is proposing a series of technical clarifications of the existing rules related to adjustments for disasters, quality bonus payment appeals, contract consolidations, and weighting of measures with a substantive specification change. These proposed changes would apply for the 2024 measurement period and the 2026 Star Ratings except for the removal of the Part C Diabetes Care—Kidney Disease Monitoring measure, which would apply for the 2022 measurement period and the 2024 Star Ratings; the HEI reward, which would include data from the 2024 and 2025 measurement periods and apply for the 2027 Star Ratings; and the risk adjustment based on sociodemographic status characteristics to the three adherence measures, which would be implemented for the 2026 measurement period and the 2028 Star Ratings.

2. Part D Medication Therapy Management Program

CMS proposes several changes to its medical therapy management (“MTM”) program to reduce eligibility gaps so that more Part D enrollees with complex drug regimens at increased risk of medication therapy problems would be eligible for MTM services. According to CMS, the changes would also better align MTM eligibility criteria with statutory goals to reduce medication errors and optimize therapeutic outcomes for beneficiaries with multiple chronic conditions taking multiple Part D drugs, while maintaining a reasonable cost criterion. These changes are: (1) requiring plan sponsors to target all core chronic diseases identified by CMS, codifying the current 9 core chronic diseases and adding HIV/AIDS for a total of 10 core chronic diseases; (2) lowering the maximum number of covered Part D drugs a sponsor may require from 8 to 5 drugs and requiring sponsors to include all Part D maintenance drugs in their targeting criteria; and (3) revising the methodology for calculating the cost threshold ($4,935 in 2023) to be commensurate with the average annual cost of 5 generic drugs ($1,004 in 2020).

3. Translation and Accessible Format Requirements for Medicare Advantage, Part D, and D–SNP Enrollee Marketing and Communication Materials

The Proposed Rule would require MAOs and Part D sponsors to provide materials to enrollees on a standing basis in any non-English language that is the primary language of at least 5 percent of the individuals in a plan benefit package service area or accessible format using auxiliary aids and services upon receiving a request for the materials or otherwise learning of the enrollee’s preferred language and/or need for an accessible format using auxiliary aids and services. This requirement would also apply to individualized plans of care for special needs plans. In addition, fully integrated dual eligible special needs plans (“FIDE SNPs”), highly integrated dual eligible special needs plans (“HIDE SNPs”), and applicable integrated plans (“AIPs”) as defined at 42 C.F.R. § 422.561, would be required to translate required materials into any languages required by the Medicare translation standard at 42 C.F.R. § 422.2267(a) (as amended by the Proposed Rule) plus any additional languages required by the Medicaid translation standard as specified through such plans’ Medicaid capitated contracts.

4. Health Equity in Medicare Advantage

CMS proposed several changes to the MA program to achieve its policy goal to advance health equity across its programs and pursue a comprehensive approach to advancing health equity for all, including those who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality. These changes include:

  • Amending 42 C.F.R. 422.112(a)(8) to require MAOs to ensure that services are provided in a culturally competent manner and to promote equitable access to all enrollees, including: (i) people with limited English proficiency or reading skills; (ii) people of ethnic, cultural, racial, or religious minorities; (iii) people with disabilities; (iv) people who identify as lesbian, gay, bisexual, or other diverse sexual orientations; (v) people who identify as transgender, nonbinary, and other diverse gender identities, or people who were born intersex; (vi) people living in rural areas and other areas with high levels of deprivation; and (vii) people otherwise adversely affected by persistent poverty or inequality.
  • Codifying CMS best practices provided to MAOs by requiring them to include providers’ cultural and linguistic capabilities (including American Sign Language) in provider directories.
  • Requiring MAOs to develop and maintain procedures to identify and offer digital health education to enrollees with low digital health literacy to assist with accessing any medically necessary covered telehealth benefits.
  • Requiring MAOs to incorporate one or more activities into their overall Quality Improvement program that reduce disparities in health and health care among their enrollees. These activities must be broadly accessible irrespective of race, ethnicity, national origin, religion, sex, or gender. They may be based upon health status and health needs, geography, or factors that are not listed only as appropriate to address the relevant disparities in health and health care. According to CMS, MAOs may implement activities such as improving communication, developing and using linguistically and culturally appropriate materials (to distribute to enrollees or use in communicating with enrollees), hiring bilingual staff, community outreach, or similar activities.

5. Utilization Management Requirements Including Prior Authorizations

The prior authorization requirements of MAOs have been the focus of a report by the Department of Health and Human Services Office of Inspector General as well as another recent proposed rule by CMS. The Proposed Rule would impose several requirements on MAOs with respect to their use of prior authorization in order to address questions regarding access to benefits:

  • Prior authorization policies for coordinated care plans could only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary based on standards specified in the Proposed Rule.
  • An approval granted through prior authorization processes would be valid for the duration of the approved course of treatment and plans would be required to provide a minimum 90-day transition period when an enrollee who is currently undergoing treatment switches to a new MA plan.
  • MA plans would be required to comply with national coverage determinations (“NCD”), local coverage determinations (“LCD”), and, unless superseded by laws applicable to MA plans, general coverage and benefit conditions included in Original Medicare statutes and regulations as interpreted by CMS.
  • MAOs would be prohibited from denying coverage of a Medicare covered item or service based on internal, proprietary, or external clinical criteria not found in Original Medicare coverage policies. When there are no applicable coverage criteria in Medicare statute, regulation, NCD, or LCD, MAOs would be permitted to create internal coverage criteria that are based on current evidence in widely used treatment guidelines or clinical literature that is made publicly available to CMS, enrollees, and providers. Current, widely-used treatment guidelines are those developed by organizations representing clinical medical specialties, and refer to guidelines for the treatment of specific diseases or conditions. Acceptable clinical literature includes large, randomized controlled trials or prospective cohort studies with clear results, published in a peer-reviewed journal, and specifically designed to answer the relevant clinical question, or large systematic reviews or meta-analyses summarizing the literature of the specific clinical question. For internal coverage policies, the MAO must provide:
    • A publicly accessible summary of evidence that was considered during the development of the internal coverage criteria used to make medical necessity determinations;
    • A list of the sources of such evidence; and
    • An explanation of the rationale that supports the adoption of the coverage criteria used to make a medical necessity determination
  • To ensure prior authorization is being used appropriately, MAOs would be required to establish a Utilization Management Committee that is led by the MAO’s medical director, to review all utilization management, including prior authorization, policies annually and ensure they are consistent with current, Original Medicare’s NCDs, LCDs and guidelines. The UM committee must include a majority of members who are practicing physicians; include at least one practicing physician who is independent and free of conflict relative to the MAO and MA plan; include at least one practicing physician who is an expert regarding care of elderly or disabled individuals; and include members representing various clinical specialties (for example, primary care, behavioral health) to ensure that a wide range of conditions are adequately considered in the development of the MA plan’s utilization management policies. CMS solicits comments on recommendations for other types of providers, practitioners, or other health care professionals that should also be included on the UM committee and whether additional standards for composition of the UM committee are necessary with regard to expertise, freedom of conflicts of interest, or representation by an enrollee representative. In addition, CMS solicits comments on whether to include a requirement, that when the proposed UM committee reviews UM policies applicable to an item or service, that the review must be conducted with the participation of at least one UM committee member who has expertise in the use or medical need for that specific item or service.

6. MA and Part D Marketing

In 2022, MA and Part D marketing was the subject of a Congressional investigation, CMS rulemaking and CMS subregulatory guidance. Please refer to our blog posts of November 4, 2022, October 31, 2022, and May 16, 2022. The Proposed Rule includes additional changes to the Part C and Part D marketing requirements including:

  • Requiring enrollees to be notified annually, in writing, of the ability to opt out of phone calls regarding MA and Part D plan business;
  • Requiring agents to explain the effect of an enrollee’s enrollment choice on their current coverage whenever the enrollee makes an enrollment decision;
  • Requiring agents to share key pre-enrollment information with potential enrollees when processing telephonic enrollments;
  • Simplifying plan comparisons by requiring medical benefits be in a specific order and listed at the top of a plan’s Summary of Benefits;
  • Limiting the time that a sales agent can call a potential enrollee to no more than six months following the date that the enrollee first asked for information;
  • Limiting the requirement to record calls between third-party marketing organizations (“TPMOs”) and beneficiaries to marketing (sales) and enrollment calls;
  • Clarifying that the prohibition on door-to-door contact without a prior appointment still applies after collection of a business reply card or scope of appointment;
  • Prohibiting marketing of benefits in a service area where those benefits are not available;
  • Prohibiting the marketing of information about savings available to potential enrollees that are based on a comparison of typical expenses borne by uninsured individuals, unpaid costs of dually eligible beneficiaries, or other unrealized costs of a Medicare beneficiary;
  • Requiring TPMOs to list or mention all of the MAOs or Part D sponsors that they sell;
  • Requiring MAOs and Part D sponsors to have an oversight plan that monitors agent/broker activities and reports agent/broker non-compliance to CMS;
  • Modifying the TPMO disclaimer to add SHIPs as an option for beneficiaries to obtain additional help;
  • Placing discrete limits around the use of the Medicare name, logo, and Medicare card;
  • Prohibiting the use of superlatives (e.g., “best” or “most”) in marketing unless the material provides documentation to support the statement, and the documentation is for the current or prior year; and
  • Clarifying that the requirement to record calls between TPMOs and beneficiaries includes virtual connections such as video conferencing and other virtual telepresence methods.

7. Behavioral Health in Medicare Advantage

On March 1, 2022, President Biden announced a national strategy regarding behavioral health to strengthen system capacity and connect more individuals to care by ensuring that the nation’s health and social services infrastructure addresses mental health holistically and equitably. The 2022 CMS Strategic Framework also describes CMS’s broad goals to expand coverage and enhance access to equitable health care services for those covered under CMS programs. To support these goals, the Proposed Rule would make various changes that focus on access to behavioral health for MA enrollees, including:

  • Strengthening network adequacy requirements for MA plans as they relate to behavioral health such as:
    • adding clinical psychology, clinical social work, and prescribers of Medication for Opioid Use Disorder (“MOUD”) to the list at § 422.116(b)(1) of specialty types subject to network adequacy evaluation;proposing base time and distance standards and minimum number of in-person providers in each county type for each new specialty type;adding all the new behavioral health specialty types to the list at § 422.116(d)(5) of the specialty types that that will receive the 10% credit towards the percentage of beneficiaries residing within published and distance standards if the MAO’s contracted network of providers includes one or more telehealth providers of that specialty type that provide additional telehealth benefits, as defined in § 422.135; and
    • amending the list of health care providers in the existing access to services standards at § 422.112(a)(1)(i) to include that the network must also include providers that specialize in behavioral health services.
  • Revising the continuity of care and integration of services requirements at § 422.112(b)(3) to include behavioral health services to ensure access to care coordination and specific types of behavioral health providers;
  • Amending the definition of “emergency medical condition” at § 422.113(b)(1)(i) to mean a “mental or physical condition,” to ensure that enrollees have access to emergency behavioral health services in parity with access to other medical emergency services; and
  • Codifying appointment wait time standards for primary care and behavioral health services that correspond with the Medicare Managed Care Manual. These new minimum appointment wait time standards would be added to the existing requirement that MAOs establish written policies for the timeliness of access to care and member services so that MAOs must have appointment wait times that meet or exceed the standards that CMS proposes.

8. Enrollee Notification Requirements for Medicare Advantage Provider Contract Terminations

The Proposed Rule would revise the disclosure requirements at § 422.111(e) by establishing specific enrollee notification requirements for no-cause and for-cause provider contract terminations and adding specific and more stringent enrollee notification requirements when primary care and behavioral health provider contract terminations occur, in order to raise the standards for the stability of enrollees’ primary care and behavioral health treatment. These proposals include:

  • Preserving the “good faith effort” to notify enrollees of for-cause provider contract terminations but removing it for no-cause provider contract terminations,
  • Adding behavioral health providers to the current requirement at § 422.111(e) that all enrollees who are patients of a terminating primary care provider must be notified (not just those enrollees who are patients seen on a regular basis by the terminating provider, which is the case for all other specialty types), and expand the scope of this requirement to refer to all enrollees who have ever been as patients of these terminating primary care or behavioral health providers (not just current patients),
  • Requiring MAOs to provide notice to enrollees at least 45 calendar days before the termination effective date for contract terminations that involve a primary care or behavioral health provider, which is longer than the 30-day standard for all other specialty types, and
  • Requiring both written and telephonic notice for contract terminations that involve a primary care or behavioral health provider, while only written notice is required for all other specialty types.

Similarly, CMS proposes to revise § 422.2267(e)(12) to specify requirements for the content of the notification to enrollees about a provider contract termination, to codify best practices that have been in CMS guidance since 2016. CMS’ proposals would require:

  • that the provider termination notice informs the enrollee that the provider will no longer be in the network and the date the provider will leave the network,
  • inclusion of information currently described in the best practices guidance such as: names and phone numbers of in-network providers that the enrollee may access for continued care, how the enrollee may request a continuation of ongoing medical treatment or therapies with their current provider, and the MAO’s call center telephone number, TTY number, and hours and days of operation,
  • that MAOs provide information about the Annual Coordinated Election Period and the MA Open Enrollment Period and explain that an enrollee who is impacted by the provider termination may contact 1– 800–MEDICARE to request assistance in identifying and switching to other coverage, or to request consideration for a special election period, as specified in § 422.62(b)(26), based on the individual’s unique circumstances and consistent with existing parameters for this SEP, and
  • that the telephonic notice of provider termination specified in proposed § 422.111(e)(1)(i) must relay the same information as the written provider termination notice.

9. Other Areas Addressed in the Proposed Rule

  • Clarifying prohibitions on Part C and Part D midyear benefit changes and Part D sponsors’ obligations with respect to incorrect collections of premiums and cost-sharing amounts

CMS proposes to clarify the Part C prohibitions on midyear benefit changes to prohibit changes to non-drug benefits, premiums, and cost sharing by MAOs starting after plans are permitted to begin marketing prospective contract year offerings on October 1 of each year, to maintain the integrity of the bidding process and reduce unfair advantages that MAOs could receive by altering an approved plan after marketing has begun. For example, after marketing is permitted to begin for the 2024 contract year, MAOs must offer the benefits described in approved bids through the end of the 2024 contract year. Similarly, the Proposed Rule would prohibit Part D sponsors from making midyear changes to the benefit design or waiving or reducing premiums, bid-level cost sharing, to maintain the integrity of the bidding process as well as the uniform benefit provisions set forth in § 423.104(b). 

Finally, within a 3-year lookback period, Part D sponsors would be required to: (1) refund incorrect collections of premiums and cost sharing, and (2) recover underpayments of premiums and cost sharing within 45 days of the Part D sponsor’s receipt of such information. The Proposed Rule specifies the applicable refund methods (e.g., lump sum, premium reduction, etc.) and a de minimis amount for applicable refunds and recoveries to remove administrative burdens on plan sponsors and the government.

  • Clarifying CMS’s authority related to application submissions

The Proposed Rule would codify at § 422.502 and § 423.503 CMS’s authority to decline to consider a substantially incomplete application for a new or expanded Part C or Part D contract. CMS also proposed to codify its definition of a substantially incomplete application as one that does not include responsive materials to one or more sections of its MA or Part D application, respectively. CMS provides the following as examples of incomplete applications:

  • An MA application that failed to upload either a State license or documentation that the State received a licensure application from the applicant before the CMS application due date.
  • An MA application that failed to upload network adequacy materials, including failing to submit network lists for designated provider types, submitting fictitious providers, or submitting a list that contained so few providers that CMS could only conclude that no good faith effort had been made to create a complete network.
  • A SNP application that failed to upload a model of care that would allow CMS to determine whether or not it met MOC element requirements. This would include failure to submit MOC documents at all or submitting incomplete documents that did not contain all of the required MOC elements.

10. Request for Comments on the Rewards and Incentives Program Regulations for Part C Enrollees

Under § 422.134’s Reward and Incentive (“R&I”) Programs, MA plans have the option to uniformly offer enrollees rewards in exchange for participating in health related activities which either promote improved health, prevent injury and illness, or promote efficient use of health care resources. In January 2021, CMS finalized a provision permitting R&I programs to offer a gift card “that can be redeemed only at specific retailers or retail chains or for a specific category of items or services.” Since then, CMS has received suggestions to revise and clarify the definition of “cash equivalent” in the MA plan R&I context due to varying guidance on big-box store gift cards in several other contexts, including a 2020 OIG rule and a CMS final rule for a separate R&I program in connection with a Part D real time benefit tool requirement at § 423.128(d)(4) and (5).

In response, CMS is soliciting comments on whether it should further clarify the definition of “cash equivalent” as that term is used in § 422.134. CMS is particularly interested in stakeholder feedback on whether it should include parameters for permissible gift cards being offered as MA reward items. CMS also seeks information on how MA plans interpret and implement its current guidance and whether stakeholders believe that more specific guidance on permissible gift card reward items is necessary.