The news is out and one thing is clear: CMS is proposing significant changes across all focus areas for Medicare Advantage (MA) plans in the 2021 Advance Notice and 2021/2022 Proposed Rule. On top of that, CMS has announced that there will be no draft or final call letter this year. Instead, items typically released in the call letter will be provided through a combination of rulemaking (in the case of policy) and HPMS memos providing process instructions and other guidance.

With bid submissions on the horizon, these announcements must be top of mind for MA plans. Below are the key takeaways for product strategy leaders to prepare for 2021:

1. In 2021, Medicare beneficiaries with ESRD will be able to enroll in MA plans. Also, organ acquisition costs for kidney transplants will be excluded from MA benchmarks, except for PACE organizations. Plans will need to account for this in the development of 2021 bids. In addition, plans will need to change enrollment forms, enrollment scripts and other materials that reference ESRD eligibility for 2021.
   
   
2. In 2021, MA Part D (MAPD) and Prescription Drug Plans (PDPs) will be able to offer a second tier for specialty drugs with lower beneficiary cost sharing. This change allows plans to negotiate better deals with manufacturers in exchange for placing their drugs on the preferred tier. Plans will need to work closely with their Pharmacy Benefit Managers (PBMs) to understand if this will be offered and the types of drugs that will be on the list. Plans who extend this to their members have the opportunity to utilize it as a retention opportunity for current membership, as well as a sales opportunity.
   
   
3. Plans will have more flexibility to include telehealth providers in certain specialty areas (e.g., psychiatry, neurology, and cardiology) and will be allowed a 10% reduction in the number of beneficiaries required to meet time and distance standards. This is especially important for rural areas. Plans that were not able to enter counties because of network issues in the past may want to revisit this for 2021.
   
   
4. CMS is clarifying and codifying its previous guidance on supplemental benefits. For Special Supplemental Benefits for the Chronically Ill (SSBCI), there is a minor clarification to expand the chronic conditions for which SSBCI may be offered. Hopefully, CMS will release this guidance soon.
   
   
5. CMS is not a fan of D-SNP look alike for many reasons. For plans where either the bid or actual enrollment exceeds 80% of members entitled to medical assistance, CMS proposes to not enter or non-renew the plan’s contract. (Where threshold exceeds 80%, members could be transitioned to a D-SNP offered by the organization.) If you don’t currently have a D-SNP, this could be a loss of membership. Plans who compete against these D-SNP look alike plans may see an increase in membership this year.

With the February enrollment data officially released, look out for another article next week on the results of the Annual Enrollment Period (AEP). And, join us on March 4^th for an exclusive webinar on the Supplemental Benefits Trends to Address in 2021. In that webinar, Diane Hollie will highlight what we are seeing in the market that may influence your benefit and product decisions for 2021. Click here to register.

If you need help navigating the product and benefit design implications of CMS’ recently released policies, contact Diane Hollie at dhollie@ghgadvisors.com.