On November 6, 2023, the Centers for Medicare & Medicaid Services (CMS) released its Medicare Program: Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly; Health Information Technology Standards and Implementation Specifications (CMS-4205-P)  with a fact sheet and press release. The proposed rule contains policies for Medicare Advantage (MA) and Medicare Part D plans in contract year (CY) 2025.

The policies proposed in this new rule include:

• New MA and Part D plan agent and broker compensation policies to guard against anti-competitive and anti-consumer steering,
• Improvements in MA plan enrollee access to behavioral health care providers,
• Requirement of MA plan mid-year enrollee notifications for available supplemental benefits,
• New standards for MA special supplemental benefits for the chronically ill (SSBCI),
• Requirement that MA plans incorporate health equity into their analyses of utilization management (UM) policies and procedures,
• Improvements in MA beneficiary access to fast-track appeals currently available to traditional Medicare beneficiaries,
• Changes to the current quarterly special enrollment period (SEP) and creation of a new integrated care SEP to increase the number of dually eligible MA plan enrollees who are in plans that also cover Medicaid,
• Addition of limits for out-of-network cost-sharing in Dual Eligible Special Needs Plan (D-SNP) preferred provider organizations (PPOs),
• Lowering the threshold for identifying D-SNP look-alikes,
• Standardization of the MA plan Risk Adjustment Data Validation (RADV) appeals process, and
• Increased Part D plan formulary flexibility regarding substitutions of biosimilar biological products other than interchangeable biological products.

CMS has not yet addressed all proposals from its prior December 14, 2022 proposed rule (CMS-4201)[1] and has indicated that it intends to address several remaining provisions in future rulemaking, including in the final version of this rule. Specifically, CMS does not address its previously outlined proposals for new Part D plan formulary flexibility regarding immediate formulary substitutions for interchangeable biological products, authorized generics, and unbranded biological products or the addition of new requirements for Part D Medication Therapy Management (MTM) programs to improve patient access.

The rule will be published in the Federal Register on November 15, 2023. Comments are due January 5, 2024.

CMS PROPOSES GUARDRAILS FOR AGENTS AND BROKERS TO PREVENT PATIENT STEERING

Due to concerns with the currently highly consolidated MA marketplace and the impact of current compensation for broker and agents on beneficiary plan choice, CMS proposes to:

• Redefine and revise the scope of “compensation” to set a clear, fixed amount for all agents and brokers paid regardless of the plan the beneficiary enrolls in, at $632 which would eliminate payment variability,
• Generally prohibit contract terms between MA organizations and third-party marketing organizations, agents, or brokers that may interfere with an agent’s or broker’s objectivity; and
• Eliminate the regulatory framework that currently permits separate administrative payments to brokers and agents.

These proposals are designed to ensure a robust and competitive MA marketplace with meaningful benefits, aligned with President Biden’s Competition Council and Executive Order signed in July 2021.

CMS estimates a paperwork burden of about $31 million annually for these provisions.

CMS PROPOSES SEVERAL CHANGES TO IMPROVE BEHAVIORAL HEALTH ACCESS

CMS proposes several significant changes to enhance access to behavioral health care within the MA program which align with statutory changes and ongoing efforts to enhance network adequacy standards.

CMS proposes to add a new facility-specialty type called “Outpatient Behavioral Health” to the existing list of facility-specialty types evaluated in MA plan network adequacy reviews. This new specialty type will encompass various providers and facilities, including Marriage and Family Therapists (MFTs), Mental Health Counselors (MHCs), Opioid Treatment Program (OTP) providers, Community Mental Health Centers, and other behavioral health and addiction medicine specialists and facilities. The addition of MFTs and MHCs is in response to the Consolidated Appropriations Act (CAA) of 2023, which allows these providers to bill Medicare directly for services starting on January 1, 2024. This change will affect approximately 400,000 MFTs and MHCs who can bill Medicare for their services starting on January 1, 2024.

CMS further proposes the introduction of maximum time and distance standards for the new “Outpatient Behavioral Health” facility-specialty type. Standards are based on county types (e.g., large metro, metro, micro) and aim to ensure that beneficiaries can access necessary services within reasonable geographic distances.

In addition, in response to the increasing role of telehealth in behavioral health services delivery, regarding network adequacy, CMS proposes adding the new “Outpatient Behavioral Health” facility-specialty type to the list of specialty types for which the MA plan will receive a 10-percentage point credit. This credit is towards the percentage of beneficiaries that reside within published time and distance standards for certain providers when the plan includes one or more telehealth providers of certain specialty types that provide additional telehealth benefits in its contracted network. Currently, CMS specifies 14 specialty types for which the 10-percentage point credit is available.

Due to incomplete data, CMS notes that it cannot quantify the effects of these proposals though it expects it may increase access which may qualitatively increase utilization.

TO ENSURE BENEFICIARY AWARENESS OF SUPPLEMENTAL BENEFITS, CMS PROPOSES PLANS ISSUE ENROLLEES A MID-YEAR NOTIFICATION OF UNUSED BENEFITS

Nearly all MA plans offer supplemental benefits, with over 99 percent of plans offering at least one supplemental benefit in 2022. The most frequently offered supplemental benefits in 2022 were vision, hearing, fitness, and dental. Supplemental benefits may also address social determinants of health needs such as food insecurity or inadequate transportation access. Despite widespread offering, plans have reported enrollee utilization of many supplemental benefits is low, and it is unclear to CMS whether plans actively encourage beneficiaries to utilize these benefits.

To ensure beneficiaries are aware of these benefits and that supplemental benefits are not primarily used as a marketing tactic, CMS proposes to require plans issue a “Mid-Year Enrollee Notification of Unused Supplemental Benefits.” This notification would be issued annually by June 30 of each year, personalized to each enrollee, and include a list of any supplemental benefits not accessed during the first half of the year. The notification would also provide information on the scope of the benefit, cost-sharing, directions for accessing the benefit, and any network application information.

These proposals are designed to facilitate better-decision-making and consumer choice, aligned with President Biden’s Competition Council and Executive Order signed in July 2021.

CMS estimates that these provisions will ultimately result in savings to the Medicare Trust Fund but cannot currently quantify the impact as it is new and CMS lacks data.

CMS PROPOSES NEW STANDARDS FOR SUPPLEMENTAL BENEFITS FOR THE CHRONICALLY ILL

Special supplemental benefits for the chronically ill (SSBCI) are benefits for eligible chronically ill enrollees, where MA plans have the flexibility to design and implement benefits to address an enrollee’s specific conditions and needs. An item or service covered as an SSCBI must have a reasonable expectation of maintaining or improving the beneficiary’s health or overall function. The number of plans offering these benefits has significantly increased. As such, CMS is proposing policies to update its processes for reviewing and approving SSCBI and ensuring compliance with statutory requirements.

SSBCI items and services must meet the legal threshold of having a reasonable expectation of improving the health or overall function of chronically ill enrollees. To increase efficiency in establishing whether the “reasonable expectation” standard has been met for an SSCBCI, CMS is shifting responsibility from itself to plans to make this determination.

CMS proposes that plans including SSBCI in their bids must, among other requirements, establish and maintain bibliographies of relevant research studies or data to demonstrate an SSBCI meets the requirements. “Relevant acceptable evidence” to be used in bibliographies largely mirrors CMS’s standards for sufficiently high-quality clinical literature in the context of an MAO establishing internal clinical criteria for certain Medicare basic benefits, as discussed in the April 2023 MA PD final rule. Plans must also document denials of SSBCI eligibility rather than approvals.

CMS is also proposing a number of changes to prevent misleading marketing of SSBCI benefits, including expanding the SSBCI disclaimer to clarify what must occur for a beneficiary to be eligible for the SSCBI and requiring MAOs to clarify in disclaimers that enrollees may not be eligible for SSCBCI due to the statutory definition of “chronically ill enrollee” even if an enrollee has a specific chronic condition.

These proposals are designed to ensure a robust and competitive MA marketplace with meaningful benefits, aligned with President Biden’s Competition Council and Executive Order signed in July 2021.

CMS does not expect these proposals will have an economic impact on the Medicare Trust fund.

CMS POLICIES PROPOSED TO ENSURE MA PLANS ANALYZE UTILIZATION MANAGEMENT POLICIES WITH A HEALTH EQUITY LENS

Noting that prior authorization (PA) policies and procedures may have a disproportionate impact on underserved populations and that these policies may delay or prevent access to certain services, CMS proposes policies that would require MA plans to analyze utilization management (UM) policies and procedures with a health equity lens. CMS specifically proposes three updates to Utilization Management committee composition and responsibilities requiring:

1. A member of the UM committee to have health equity expertise. Health equity expertise may include educational degrees or credentials that emphasize health equity, experience conducting studies that identify disparities, experience leading organization-wide efforts to achieve health equity or experience leading advocacy efforts to achieve health equity.
2. The UM committee to conduct an annual health equity analysis of the plan’s PA policies and procedures. CMS proposes that the health equity analysis examine the impact of PA policies on beneficiaries with at least one of the following social risk-factors: 1) receipt of the Part D LIS, 2) dual eligibility for Medicare and Medicaid, or 3) having disability. The analysis would compare the impact of PA practices on beneficiaries with social risk factors (SRFs) versus beneficiaries without the SRFs and would be conducted at the plan level. CMS has outlined eight metrics that plans would be required to use in the proposed analysis, including the percentage of prior authorization requests that were approved or denied. Each metric will be reported in the aggregate.[2]
3. MAOs to make the results of health equity analyses public on their website by July 1, 2025. CMS proposes that the member of the UM committee with health equity expertise would approve the final report before it is publicly posted. CMS notes that making results of health equity analyses publicly available will assist researchers and other third-parties in developing tools and conducting studies to further inform the public.

CMS is seeking comments on the proposal and is also seeking comments on several areas related to the topic, including:

• What additional populations CMS should consider including in its health equity analysis;
• If there should be a definition for “expertise in health equity;” and
• If there are specific items or services or groups of items or services that CMS should consider disaggregating in the analysis to consider in future rulemaking.

CMS does not expect these proposals will have an economic impact on the Medicare Trust Fund.

CMS PROPOSES TO EXPAND FAST-TRACK APPEALS RIGHTS FOR MA BENEFICIARIES

Beneficiaries enrolled in Traditional Medicare and MA plans have the right to a fast-track appeal by an Independent Review Entity (IRE) when their covered skilled nursing facility (SNF), home health, or comprehensive outpatient rehabilitation facility (CORF) services are being terminated.

Currently, MA enrollees do not have the same access to Quality Improvement Organizations (QIO) review of a fast-track appeal as traditional Medicare beneficiaries. Beneficiaries are notified of the MA organization’s decision to terminate services through a Notice of Medicare Non-Coverage (NOMNC). Quality Improvement Organizations (QIOs) act as the IRE and conduct these reviews. Thus, if an MA enrollee misses the deadline to appeal as stated on the NOMNC, the appeal is considered untimely, and the enrollee loses their right to a fast-track appeal to the QIO. Further, MA enrollees forfeit their right to appeal to the QIO if they leave a facility or otherwise end services prior to the termination date listed on the NOMNC, even if their appeal requests to the QIO are timely.

This proposed rule would modify the existing regulations regarding fast-track appeals for enrollees when they submit an untimely appeal request to the QIO, or still wish to appeal after they end services on or before the planned termination date. Specifically, CMS proposes to require the QIO, instead of the MA plan, to review untimely fast-track appeals of an MA plan’s decision to terminate services in a home health agency, CORF, or SNF. Additionally, CMS proposes to fully eliminate the provision requiring the forfeiture of an enrollee’s right to appeal a termination of services decision when they leave the facility. CMS believes these proposals would align MA regulations with the parallel reviews available to Medicare beneficiaries and expand the rights of MA beneficiaries to access the fast-track appeals process.

CMS AIMS TO INCREASE THE PERCENTAGE OF DUALLY ELIGIBLE BENEFICIARIES RECEIVING INTEGRATED MEDICARE AND MEDICAID SERVICES

Individuals dually eligible for Medicare and Medicaid services face a complex range of enrollment options based on MA plan types, enrollment eligibility, and plan performance, but the enrollee’s Medicaid choice is not considered. Many of the coverage options available to dually eligible individuals—even including many D-SNPs—do not meaningfully integrate Medicare and Medicaid.

In response to concerns that current practices have resulted in in a proliferation of D-SNPs and leave dually eligible individuals susceptible to aggressive marketing tactics from agents and brokers throughout the year, CMS proposes to:

• Replace the current quarterly SEP with a one-time-per month SEP for dually eligible individuals and others enrolled in the Part D low-income subsidy (LIS) program to elect a standalone prescription drug plan (PDP),
• Create a new integrated care SEP to allow dually eligible individuals to elect an integrated D-SNP on a monthly basis,
• Limit enrollment in certain D-SNPs to those individuals who are also enrolled in an affiliated Medicaid managed care organization (MCO), and
• Limit the number of D-SNP plan benefit packages an MA organization, its parent organization, or entity that shares a parent organization with the MA organization, can offer in the same service area as an affiliated Medicaid MCO.

CMS believes these proposals would increase the percentage of dually eligible MA enrollees who are in plans that are also contracted to cover Medicaid benefits, thereby expanding access to integrated processes across Medicare and Medicaid, and continued Medicare services during an appeal. As a result of these proposals, CMS estimates a $1.3 billion savings to the Trust Fund for Part D plans and an additional $1 billion savings to the Trust Fund for Part C plans over 10 years.

NEW LIMITS PROPOSED TO OUT-OF-NETWORK COST SHARING FOR D-SNP PPOS

CMS has proposed that, starting in 2026, MA organizations offering a D-SNP must cap out-of-network cost sharing at the same level as in-network cost sharing for the same services. This would apply only to professional services, as defined at 42 CFR § 422.100(f)(6)(iii), including primary care services, physician specialist services, partial hospitalization, and rehabilitation services.

CMS notes the proposal is driven by concerns over increasing cost shifting to State Medicaid agencies, concerns over payments for associated providers, and impact on cost sharing for beneficiaries. CMS’ review found that cost sharing for out-of-network services for D-SNP PPOs was often well above cost sharing for the same services in FFS Medicare. As the dually eligible members in such plans are protected from being billed for services covered by Medicare providers, this results in the increased out-of-network cost sharing being passed on to State Medicaid agencies. In addition, if a State’s Medicaid rates are below the rate paid to the provider by the D-SNP, then the provider is not reimbursed for the cost sharing portion. CMS’s proposal is meant to address concerns that these high out-of-network cost sharing figures can raise costs for State Medicaid programs that cover cost sharing, lower reimbursement for out-of-network safety net providers in states that don’t cover the cost sharing, and hurt dually eligible beneficiaries who are not Qualified Medicare Beneficiaries (QMBs) and are therefore liable for all out of network cost sharing for providers not enrolled in Medicaid.

CMS does not expect this proposal to financially impact the Medicare Trust Fund.

D-SNP LOOK-ALIKE THRESHOLD PROPOSED TO LOWER TO 60 PERCENT OVER TWO-YEAR PERIOD

CMS is proposing to lower the D-SNP look-alike threshold from 80 percent to 70 percent in 2025 and from 70 percent to 60 percent in 2026. D-SNPs lookalikes are plans that that are not D-SNP plans but that have a very high dually eligible beneficiary population. Because they are not real D-SNPs, these plans are not required to comply with any laws governing D-SNP plans, such as the obligation to coordinate Medicare and Medicaid benefits for enrollees.

The 60 percent threshold in the current CMS proposal was chosen because it is above the share of dually eligible individuals in any MA plans service area, meaning that any plan that exceeded this level was likely targeting dually eligible members. Plans that have been active for less than a year or have 200 or fewer enrollees would be exempt from the proposed threshold.

CMS estimates that this proposal would have an average annual impact of less than $1 million.

CMS PROPOSES STANDARDIZING THE MA PLAN RISK ADJUSTMENT DATA VALIDATION APPEALS PROCESS

To ensure that Medicare Advantage Organizations (MAOs) are not up-coding their diagnoses to receive increased payments via risk scoring adjustments, CMS conducts Risk Adjustment Data Validation (RADV) audits of MAO diagnosis data to check that this data matches beneficiaries medical records. Currently, MAOs have 60 days from receiving a RADV audit report to file a written appeal request. MAOs can appeal RADV medical record review determinations and/or the MA RADV payment error calculations. There are three levels to the appeal: reconsideration, hearing, and CMS Administrator review.

Under the proposed rule, MAOs would have to go through all three levels of appeal for medical record review determinations before appealing payment error calculations, as the payment error calculations are based on the outcomes of the medical record review determinations. If an MAO has no issues with the medical record review determinations, it could exclusively appeal the payment error calculations. Recalculated payment error calculations would not be issued at each level of appeal but rather when the appeal is final. CMS is also proposing that, if the administrator does not decline or elect to review a decision within 90 days of the MAO or CMS’s timely request for review, the decision made in the hearing officer review (second stage of appeal) will become final.

 

CMS PROPOSES CHANGES TO PART D FORMULARY SUBSTITUTIONS OF BIOSIMILAR BIOLOGICAL PRODUCTS

Under current policy, Part D plans must obtain explicit approval prior to substituting with biosimilar biological products other than interchangeable biological products. These substitutions apply only to enrollees who begin therapy after the effective date of the change.

In response to comments to the CY 2024 proposed rule[3], CMS is proposing to treat formulary substitutions of biosimilar biological products other than interchangeable biological products as “maintenance changes,” which are changes generally expected to pose a minimal risk of disrupting drug therapy or are warranted to address safety concerns or administrative needs. Treating these substitutions as maintenance changes would mean that any substitutions would apply to all enrollees following 30 days’ notice. CMS believes this proposal would improve beneficiary access to equally effective, but potentially more affordable treatments.

This proposal is in addition to other proposals on formulary flexibility in the CY 2024 proposed rule[4] to permit Part D sponsors to immediately substitute:

(1) A new interchangeable biological product for its corresponding reference product,

(2) A new unbranded biological product for its corresponding brand name biological product, and

(3) A new authorized generic for its corresponding brand name equivalent.

These proposals were not finalized in the CY 2024 Medicare Advantage and Part D final rule[5] and are not addressed in the current proposed rule.

However, CMS invites feedback on these changes and intends to address these proposals, in addition to those from the CY 2024 proposed rule, in subsequent rulemaking for an earliest effective date of January 1, 2025.

********

This Applied Policy® Summary was prepared by Stephanie Lomas with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact Stephanie Lomas at slomas@appliedpolicy.com or at 202-558-5272.

[1] https://www.federalregister.gov/public-inspection/2022-26956/medicare-program-contract-year-2024-policy-and-technical-changes-to-the-medicare-advantage-program

[2] See page 199 of the unpublished final rule for a complete list of metrics.

[3] https://www.federalregister.gov/public-inspection/2022-26956/medicare-program-contract-year-2024-policy-and-technical-changes-to-the-medicare-advantage-program

[4] Ibid.

[5] https://www.federalregister.gov/documents/2023/04/12/2023-07115/medicare-program-contract-year-2024-policy-and-technical-changes-to-the-medicare-advantage-program

x

x

x