HHS Rule: Contract Year 2023 Policy, Technical Changes to Medicare Advantage, Medicare Prescription Drug Benefit Programs
The rule was issued by Secretary
DATES: Effective dates: These regulations are effective on
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This final rule will revise the Medicare Advantage (MA) (Part C) program and Medicare Prescription Drug Benefit (Part D) program regulations to implement changes related to marketing and communications, past performance, Star Ratings, network adequacy, medical loss ratio reporting, special requirements during disasters or public emergencies, and pharmacy price concessions.
This final rule will also revise regulations related to dual eligible special needs plans (D-SNPs), other special needs plans, and cost contract plans.
This final rule finalizes certain 2021 and 2022 Star Ratings provisions that were included in two interim final rules with comment period (IFC) that CMS issued on
SUPPLEMENTARY INFORMATION:
Acronyms
ACCAutomated Criteria Check
AHCAccountable Health Communities
AKSAnti-kickback Statute
ANOCAnnual Notice of Change
ARBAt-Risk Beneficiaries
BBABipartisan Budget Act
CAHPSConsumer Assessment of Healthcare Providers and Systems
CAICategorical Adjustment Index
CMSCenters for Medicare & Medicaid Services
COICollection of Information
COVID-19Coronavirus 2019 Disease
C-SNPChronic Condition Special Needs Plan
DMEDurable Medical Equipment
D-SNPDual Eligible Special Needs Plan
EGWPEmployer Group Waiver Plan
EOCEvidence of Coverage
FAIFinancial Alignment Initiative
FDRFirst-Tier Downstream and Related Entity
FFSFee-for-Service
FIDESNP Fully Integrated Dual Eligible Special Needs Plan
HEDISHealthcare Effectiveness Data and Information Set
HHSDepartment of
HIDE SNPHighly Integrated Dual Eligible Special Needs Plan
HIPAAHealth Insurance Portability and Accountability Act of 1996
HPMSHealth Plan Management System
HRAHealth Risk Assessment
HSDHealth Service Delivery
ICRInformation Collection Requirement
IREIndependent Review Entity
I-SNPInstitutional Special Needs Plan
LOILetter of Intent
LTSSLong Term Services and Supports
MAMedicare Advantage
MACMedicare Administrative Contractor
MACPACMedicaid and
MA-PDMedicare Advantage Prescription Drug
MACPACMedicaid and
MIPPAMedicare Improvements for Patients and Providers Act
MLRMedical Loss Ratio
MMAMedicare Prescription Drug, Improvement, and Modernization Act
MMCOMedicare-Medicaid Coordination Office
MMPMedicare-Medicaid Plan
MOCModel of Care
MOOPMaximum Out-of-Pocket
NAMBANational Average Monthly Bid Amount
NEMTNon-emergency Medical Transportation
NMMNetwork Management Module
OACTOffice of the Actuary
OMBOffice of Management and Budget
PACEPrograms of All-Inclusive Care for the Elderly
PAHPPrepaid Ambulatory Health Plan
PBPPlan Benefit Package
PDEPrescription Drug Event
PDPPrescription Drug Plan
PHEPublic Health Emergency
PIHPPrepaid Inpatient Health Plan
PRAPaperwork Reduction Act
RFIRequest for Information
RFARegulatory Flexibilities Act
SAEService Area Expansion
SBSummary of Benefits
SDOHSocial Determinants of Health
SNPSpecial Needs Plan
SSBCISpecial Supplemental Benefits for the Chronically Ill
Additional information regarding the applicability dates: The Star Ratings provision at Section 422.166(i)(12) is applicable to the calculation of the 2023 Star Ratings released in October, 2022, as discussed in section II.D.2. of this final rule. The definition of "fully integrated dual eligible special needs plans (FIDE SNP)" in Section 422.2 at paragraphs (2)(i) and (iii) through (v), (5), and (6) as discussed in section II.A.5 of this final rule are applicable beginning
I. Executive Summary
A. Purpose
Over 29 million individuals receive their Medicare benefits through Medicare Advantage (MA or Part C), including plans that offer Medicare Prescription Drug Benefit (Part D) coverage. Over 23 million individuals receive Part D coverage through standalone Part D plans. The primary purpose of this final rule is to implement changes to the MA and Part D programs. This final rule implements changes related to marketing and communications, past performance, Star Ratings, network adequacy, medical loss ratio reporting, special requirements during disasters or public emergencies, and pharmacy price concessions. This final rule also revises regulations related to dual eligible special needs plans (D-SNPs), other special needs plans, and Medicare cost contract plans.
B. Summary of Major Provisions
1. Enrollee Participation in Plan Governance ( Section 422.107)
Managed care plans derive significant value from engaging enrollees in defining, designing, participating in, and assessing their care systems.[1] Through this final rule, we require that any MA organization offering a D-SNP establish one or more enrollee advisory committees in each State to solicit direct input on enrollee experiences. We also establish that the committee must include a reasonably representative sample of individuals enrolled in theD-SNP(s) and solicit input on, among other topics, ways to improve access to covered services, coordination of services, and health equity for underserved populations. Public comments on our proposal reinforced our belief that the establishment and maintenance of an enrollee advisory committee is a valuable beneficiary protection to ensure that enrollee feedback is heard by managed care plans and to help identify and address barriers to high-quality, coordinated care for dually eligible individuals.
2.
Section 1859(f)(5)(A)(ii)(I) of the Social Security Act (hereafter known as the Act) requires each special needs plan (SNP) to conduct an initial assessment and an annual reassessment of the individual's physical, psychosocial, and functional needs. We codified this requirement at Section 422.101(f)(1)(i) as part of the model of care requirements for all MA SNPs. Certain social risk factors can lead to unmet social needs that directly influence an individual's physical, psychosocial, and functional status. Many dually eligible individuals contend with multiple social risk factors such as homelessness, food insecurity, lack of access to transportation, and low levels of health literacy. Building on CMS's experience with other programs and model tests, and with broad support from public commenters, we are finalizing a requirement that all SNPs include one or more questions from a list of screening instruments specified in sub-regulatory guidance on housing stability, food security, and access to transportation as part of their health risk assessments (HRAs). However, based on public comments, we are not finalizing our proposal that all SNPs use the same specific standardized questions.
Our final rule will result in SNPs having a more complete picture of the risk factors that may inhibit enrollees from accessing care and achieving optimal health outcomes and independence. We believe this knowledge will better equip the MA organizations offering these SNPs to meet the needs of their members. Our final rule will also equip these MA organizations with person-level information that will help them better connect people to covered services, social service organizations, and public programs that can help resolve housing instability, food insecurity, or transportation challenges.
3. Refining Definitions for Fully Integrated and Highly IntegratedD-SNPs ( Sections 422.2 and 422.107)
Dually eligible individuals have an array of choices for how to receive their Medicare coverage. We proposed several changes to how we define fully integrated dual eligible special needs plan (FIDE SNP) and highly integrated dual eligible special needs plan (HIDE SNP) to help differentiate various types of D-SNPs, clarify options for beneficiaries, and increase integration for these types of D-SNPs.
In this final rule, we are requiring, for 2025 and subsequent years, that all FIDE SNPs have exclusively aligned enrollment, as defined in Section 422.2, and cover Medicare cost-sharing and three specific categories of Medicaid benefits: Home health services (as defined in Section 440.70), medical supplies, equipment, and appliances (as described in Section 440.70(b)(3)), and behavioral health services through a capitated contract between the State Medicaid agency and the Medicaid managed care organization that is the same legal entity as the MA organization that offers the FIDE SNP. In addition, we are requiring that, for plan year 2025 and subsequent years, each HIDE SNP have a service area that completely overlaps the service area of the affiliated Medicaid managed care plan with the capitated contract with the State. Consistent with existing policy outlined in sub-regulatory guidance, this final rule also codifies specific, limited carve-outs of the Medicaid long-term services and supports and Medicaid behavioral health services covered under the Medicaid capitated contract affiliated with FIDE SNPs and HIDE SNPs.
We believe these policies will create better experiences for beneficiaries and move FIDE SNPs and HIDE SNPs toward greater integration, which we believe is a purpose of the amendments to section 1859(f) of the Act regarding integration made by section 50311(b) of the BBA of 2018.
4. Additional Opportunities for Integration Through State Medicaid Agency Contracts ( Section 422.107)
Section 164 of Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275) amended section 1859(f) of the Act to require that a D-SNP contract with the State Medicaid agency in each State in which the D-SNP operates to provide benefits, or arrange for the provision of Medicaid benefits, to which an individual is entitled. States have used these contracts to better integrate care for dually eligible individuals. In this final rule we codify new pathways through which States can use these contracts to require that certain D-SNPs with exclusively aligned enrollment (a) establish contracts that only include one or more D-SNPs within a State, and (b) use certain integrated materials and notices for enrollees. Where States choose this opportunity, it will help individuals better understand their coverage. Because Star Ratings are assigned at the contract level, this final rule will also provide a mechanism to provide States and the public with greater transparency on the quality ratings for the D-SNP(s), helping CMS and States better identify disparities between dually eligible beneficiaries and other beneficiaries and target interventions accordingly.
We also codify mechanisms to better coordinate State and CMS monitoring and oversight of certain D-SNPs when a State has elected to require these additional levels of integration, including granting State access to certain CMS information systems. Collectively, our proposals will improve Federal and State oversight of certainD-SNPs (and their affiliated Medicaid managed care plans) through greater information-sharing among government regulators.
5. Attainment of the Maximum Out-of-Pocket Limit ( Sections 422.100 and 422.101)
In order to ensure that MA plan benefits do not discriminate against higher cost, less healthy enrollees, MA plans are required to establish a limit on beneficiary cost-sharing for Medicare Part A and B services after which the plan pays 100 percent of the service costs. Current guidance allows MA plans, including D-SNPs, to not count Medicaid-paid amounts or unpaid amounts toward this maximum out-of-pocket (MOOP) limit, which results in increased State payments of Medicare cost-sharing and disadvantages providers serving dually eligible individuals in MA plans. In this final rule we specify that the MOOP limit in an MA plan (after which the plan pays 100 percent of MA costs for Part A and Part B services) must be calculated based on the accrual of all cost-sharing in the plan benefit, regardless of whether that cost-sharing is paid by the beneficiary, Medicaid, other secondary insurance, or remains unpaid (including cost-sharing that remains unpaid because of State limits on the amounts paid for Medicare cost-sharing and dually eligible individuals' exemption from Medicare cost-sharing). The change will result in more equitable payment for MA providers serving dually eligible beneficiaries. We project that our requirement as finalized will result in increased bid costs for the MOOP for some MA plans. A portion of those higher bid costs will result in increased Medicare spending of
6. Special Requirements During a Disaster or Emergency for Medicare Advantage Plans ( Section 422.100(m))
In order to ensure enrollees have uninterrupted access to care, current regulations provide for special requirements at Section 422.100(m) for MA plans during disasters or emergencies, including public health emergencies (PHEs), such as requirements for plans to cover services provided by non-contracted providers and to waive gatekeeper referral requirements. The timeframe during which these special rules apply can be very specific depending on the type or scope of the disaster or emergency, while other situations, like the PHE for COVID-19, may have an uncertain end date. Currently, the regulation states that a disaster or emergency ends (thus ending the obligation for MA plans to comply with the special requirements) the earlier of when an end date is declared or when, if no end date was identified in the declaration or by the official that declared the disaster or emergency, 30 days have passed since the declaration. This has caused some confusion among stakeholders, who are unsure whether to continue special requirements during a state of disaster or emergency after 30 days, or whether those special requirements do not apply after the 30-day time period has elapsed. In this final rule, we clarify the period of time during which MA organizations must comply with the special requirements. Under this final rule, MA organizations must ensure access for enrollees to covered services throughout the disaster or emergency period, including when the end date is unclear and the period renews several times, so long as there is a disruption of access to healthcare.
7. Amend MA Network Adequacy Rules by Requiring a Compliant Network at Application ( Section 422.116)
We proposed to amend Section 422.116 to require applicants to demonstrate that they meet the network adequacy standards for the pending service area as part of the MA application process for new and expanding service areas and to adopt a time-limited 10-percentage point credit toward meeting the applicable network adequacy standards for the application evaluation. Under our current rules, we require that an applicant attest that it has an adequate provider network that provides enrollees with sufficient access to covered services, and we will not deny an application based on the evaluation of the MA plan's network. Network adequacy reviews are a critical component for confirming that access to care is available for enrollees. As such, we believe that requiring applicants to meet network adequacy standards as part of the application process will strengthen our oversight of an organization's ability to provide an adequate network of providers to deliver care to MA enrollees. This change will also provide MA organizations with information regarding their network adequacy ahead of bid submissions, mitigating current issues with late changes to the bid that may affect the bid pricing tool. Finally, we understand that it may be difficult for applicants to have a full network in place almost 1 year ahead of the beginning of the contract as the proposed change for network adequacy rules will require. Therefore, the final rule includes a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards for new or expanding service area applicants. Once the contract is operational, the 10-percentage point credit will no longer apply and MA organizations will need to meet full compliance.
We are finalizing our proposal, with one modification; to allow applicants to utilize Letters of Intent (LOIs) to meet network standards in counties and specialty types as needed. Once the contract is operational, MA organizations must have signed contracts with providers and facilities to be in full compliance.
8. Part C and Part D Quality Rating System
Due to the scope and duration of the COVID-19 PHE, we adopted a technical change to the 2022 Star Ratings methodology for extreme and uncontrollable circumstances in the "Medicare and Medicaid Programs, Clinical Laboratory Improvement Amendments (CLIA), and Patient Protection and Affordable Care Act; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency" published in the
9. Past Performance Methodology to Better Hold Plans Accountable for Violating CMS Rules ( Sections 422.502 and 422.503)
In a previous rulemaking cycle, CMS modified the past performance methodology, revising the elements that are reviewed to determine if CMS should permit an organization to enter into a new contract or expand an existing contract. The current regulatory language prohibits an organization from expanding or entering into a new contract if it has a negative net worth or has been under sanction during the performance timeframe. In this final rule, we include an organization's record of Star Ratings, bankruptcy issues, and compliance actions in our methodology going forward.
10. Marketing and Communications Requirements on MA and Part D Plans To Assist Their Enrollees ( Sections 422.2260 and 423.2260, 422.2267 and 423.2267, 422.2274 and 423.2274)
CMS has seen an increase in beneficiary complaints associated with third-party marketing organizations (TPMOs) and has received feedback from beneficiary advocates and stakeholders concerned about the marketing practices of TPMOs who sell multiple MA and Part D products. In 2020, we received a total of 15,497 complaints related to marketing. In 2021, excluding December, the total was 39,617. We are unable to say that every one of the complaints is a result of TPMO marketing activities, but based on a targeted search, we do know that many are related to TPMO marketing. In addition, we have seen an increase in third party print and television ads, which appears to be corroborated by State partners. Through this final rule, we will address the concerns with TPMOs by means of the following three updates to the communications and marketing requirements under 42 CFR parts 422 and 423, subpart V: (1) We define TPMOs in the regulation at Sections 422.2260 and 423.2260 to remove any ambiguity associated with MA plans/Part D sponsors responsibilities for TPMO activities associated with the selling of MA and Part D plans; (2) we add a new disclaimer that will be required when TPMOs market MA plans/Part D products ( Sections 422.2267(e) and 423.2267(e)); and (3) we update Sections 422.2274 and 423.2274 to require additional plan oversight requirements associated with TPMOs, in addition to what is already required under Sections 422.504(i) and 423.505(i) if the TPMO is a first tier, downstream or related entity (FDR).
CMS'
Finally, in this final rule we are codifying a number of current sub-regulatory communications and marketing requirements that were inadvertently not included during the previous updates to 42 CFR parts 422 and 423, subpart V.
11. Greater Transparency in Medical Loss Ratio Reporting ( Sections 422.2460 and 423.2460)
To improve transparency and oversight concerning the use of
12. Pharmacy Price Concessions to Drug Prices at the Point of Sale ( Sections 423.100 and 423.2305)
The "negotiated prices" of drugs, as the term is currently defined in Section 423.100, must include all network pharmacy price concessions except those contingent amounts that cannot "reasonably be determined" at the point-of-sale. Under this exception, negotiated prices typically do not reflect any performance-based pharmacy price concessions that lower the price a sponsor ultimately pays for a drug, based on the rationale that these amounts are contingent upon performance measured over a period that extends beyond the point of sale and thus cannot reasonably be determined at the point of sale. We proposed to eliminate this exception for contingent pharmacy price concessions (87 FR 1842,
In this final rule, we add a definition of "price concession" at Section 423.100. Although "price concession" is a term important to the adjudication of the Part D program, it had not yet been defined in the Part D statute, Part D regulations, or sub-regulatory guidance. We define price concession to include any form of discount, direct or indirect subsidy, or rebate received by the Part D sponsor or its intermediary contracting organization from any source that serves to decrease the costs incurred under the Part D plan by the Part D sponsor.
Dated:
Secretary,
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The document was published in the
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