Draft Call Letter for 2014
The bad news in the 45 day notice is proposed payment cuts to Medicare Advantage plans for 2014 and big changes to risk adjustment but there is also good news about the reduction in almost all of the Part D benefit parameters. The draft Call Letter, which accompanied the proposed rate announcement, also included some news-worthy developments for MA and Part D plans. The document shows that CMS is actively using its regulatory and purchasing authority. CMS is planning to take action in several areas where oversight and monitoring have identified problems or where beneficiary complaints have been noted. In addition, CMS is signaling its intent to use MA plans as laboratories for achieving the Triple Aim.
CMS is proposing to limit beneficiary costs and to ensure fewer plans with clear choices in plan benefits for 2014. CMS is proposing to lower the threshold for increased Total Beneficiary Costs in the MA bids from $36 to $30 per member per month. In addition, CMS is proposing to reduce the minimum monthly cost-sharing out of pocket cost (OOPC) difference between Part D basic and enhanced plans from $23 in 2013 to $21 in 2014. The difference between enhanced plan offerings will be increased from $12 this year to $18 in 2014. And CMS will review supplemental benefits to assure that they provide reasonable value and not excess profits and retentions for plan sponsors
CMS continues to refine the Star Rating measures and is proposing to modify the methodology to calculate the overall Summary Ratings for MA and Part D for 2014. In addition CMS is proposing to modify the methodology to identify low performing plans by changing from a metric of 3 stars to 2.5 stars for any combination of part C or Part D summary ratings for three consecutive years.
CMS is signaling its interest in changing policies in the future in a number of areas. For example, CMS is planning to issue regulations to revise agent/broker compensation to pay renewal amounts for years seven and beyond. CMS is considering proposing requirements to ensure continuation of essential plan operations and critical IT systems in times of disaster. CMS is seeking comments on ways to reduce overutilization of drugs, for example by expanding the required Utilization Review programs beyond opioids to 4 other drug categories. CMS will also undertake a significant revision to the Summary of Benefits to make it more user-friendly for beneficiaries.
CMS is seeking to improve the health care system through private plans. For example, CMS is encouraging plans to use the Blue Button Initiative to make it easier for enrollees to share personal health information with their health team. CMS is encouraging plans to participate in the Million Hearts Initiative for example by lowering the costs of anti-hypertensive medications and expanding their MTM programs. CMS is asking plans for recommendations on shared decision making programs so that CMS can establish standards for such approaches as a feature in MA plans. CMS is asking for plan comments on reward and incentive programs so these can also be further expanded.
CMS monitoring has identified some unacceptable plan practices that will be corrected. CMS will require beneficiary consent for each new prescription or refill prior to delivery under auto-ship refill programs in Part D to avoid waste and excess costs. The draft Call Letter cites several examples where plans are inappropriately shifting drug coverage from Part B to Part D which is not allowed. CMS will require prior authorization for hospice and ESRD drugs to assure appropriate payment under Parts A, B or D. Plans may not inappropriately steer enrollees to sponsor or PBM mail order pharmacies. Plans will be required to have real-time access to critical systems in delegated entities in the future. CMS is tightening up guidance on post-point-of-sale full claim pharmacy adjustments to address abuse. CMS will also assure that costs are not higher in preferred pharmacy networks than non-preferred networks. CMS will monitor MAO and PDP marketing efforts to assure that there are no misrepesentations in areas where Medicare-Medicaid Capitated Financial Alignment demonstrations are operating.
Resources
Listen in to John Gorman’s take on the draft call letter and his thoughts on the implications for Medicare Advantage health plans – and their providers.
Gorman Health Group Senior Vice President Bill MacBain explains the logic behind the proposed rate change, and shares a brief analysis of the impact in this regulatory summary.
Gorman Health Group Senior Vice President Jean LeMasurier summarizes the 2014 CMS Draft Call Letter.