CMS Tightens Oversight of Medicare Advantage Plans

The Centers for Medicare and Medicaid Services finalized plans Friday to strengthen oversight of Medicare Advantage plans.

The CMS will increase oversight of third party marketing organizations and will require plans that work with third party groups to ensure that groups follow applicable policies. There will also be a need to re-enable multilingual inserts in some content.

In addition, the agency outlined additional reasons for denying a new contract or contract extension for a plan based on past work. Poor starting ratings, bankruptcy filings, and exceeding the threshold for compliance action set by CMS may result in an application being rejected under the new rule.

Plans applying for Medicare Advantage approval will now also need to demonstrate a sufficient network of providers before CMS approves an application for a new or expanded plan. CMS has updated the policy from its previous proposal to allow applicants to use letters of intent to meet county networking standards and job types as needed.

Insurance trade group AHIP raised concerns ahead of the final rule that the policy could be particularly difficult for plans in rural and underserved areas.

CMS is bringing back the previous medical loss rate requirements from 2014 to 2017. Medicare Advantage Plans and Part D sponsors will need to report basic expenses and income information.

The final rule comes just a day after federal inspectors released findings that using Medicare Advantage plans with prior authorization could make it harder for members to access health care. Although Friday’s final rule does not include a policy related to prior clearance, CMS agreed with the inspectors’ recommendations to ease the problem.

CMS has also finalized a list of proposals to improve dual-eligibility special needs plans that serve Medicare recipients who are also eligible for Medicaid.

In recent years, the growth in the number of plans for people with special needs has skyrocketed, growing by more than 16% in the last year. But policy experts have warned that it is difficult to assess the quality of the plan with the current data available.

CMS has finalized a policy that can help better measure quality – states with integrated care programs can now require Medicare Advantage insurers to contract only for D-SNP, allowing Star Ratings to demonstrate the effectiveness of D-SNP.

D-SNPs will be required to set up advisory committees for enrollees and add standard questions about housing, food security, and access to transportation to assess health risks. CMS will require that maximum out-of-pocket spending limits in MA plans be based on the entire Medicare benefit share, whether the costs are paid by the beneficiary, Medicaid, or remain unpaid.

The final rule also requires pharmacy benefit managers to stop charging pharmacies, slightly changing CMS’s initial offer policy so that it applies to all stages of Medicare Part D benefit, including the coverage gap.

The agency stated that this policy will reduce the out-of-pocket spending of beneficiaries and improve market competition. The Biden administration has focused on lowering consumer spending after failing to spur congressional action to lower the price of Medicare drugs.

PBM and the insurers said the policy was contrary to Medicare law, setting the stage for a lawsuit against the policy.

The requirement for Part D plans to pass on pharmacy price credits to point-of-sale beneficiaries will go into effect in January 2024. The other rules in the rule will go into effect on June 28.