PROPOSED CHANGES TO THE MEDICARE ADVANTAGE AND THE MEDICARE PRESCRIPTION DRUG BENEFIT

Background

This proposed rule implements provisions of the Patient Protection and Affordable Care Act and the Health Care Education and Reconciliation Act of 2010 (the Affordable Care Act) that are related to the Medicare Advantage (MA, or Part C) and Prescription Drug Benefit (Part D) Programs.  This proposed rule also sets forth programmatic and operational changes to the Medicare Advantage and Prescription Drug Benefit programs for contract year 2012 based on our continued experience with the administration of the Parts C and D programs.  We are proposing to publish the final rule before the beginning of the 2012 contract year, in time to prepare plans for 2012 bids.  Most provisions will be in effect 60 days after the publication of the final rule (see Tables 1 and 2 in the proposed rule for provisions with different effective dates).

In addition to the proposed rule, CMS is posting the 2011 Medicare Plan Star Ratings and announcing a Demonstration Project to accelerate quality bonus payments for four and five-star plans and add quality bonus payments for three and three ½ star plans.  The Demonstration Project builds on the quality-related bonus payments authorized in the Affordable Care Act by providing stronger incentives for plans to improve their performance thereby accelerating quality improvements during the three-year period of the demonstration. 

PROPOSED RULE

The proposed rule addresses the following:

• Implementing provisions of the Affordable Care Act;
• Clarifying various program participation requirements;
• Strengthening beneficiary protections;
• Strengthening Medicare’s ability to distinguish stronger health plans for participation in Medicare Parts C and D and to remove consistently poor performers; and
• Implementing other clarifications and technical changes.

Implementing the Provisions of the Affordable Care Act

Key Affordable Care Act provisions we propose to implement and clarifications to provide for this rule include:  

• Limiting cost-sharing under MA and section 1876 cost plans for specified services (administration of chemotherapy services, renal dialysis services, and skilled nursing care) at Original Medicare levels; and limiting cost-sharing for home health services to that charged under Original Medicare.
• Prohibiting MA and section 1876 cost plans from charging cost-sharing for in-network preventive services for which there is no cost sharing under Original Medicare.
• Clarifying that the Secretary is not required to accept any or every Parts C and D bids and to clarifying the Secretary’s authority to deny bids that propose significant increases in cost-sharing or decreases in benefits.
• Codifying in regulations the voluntary de minimis policy for subsidy-eligible individuals enrolled in MA-PD Plans and standalone prescription drug plans (Section 3303(b) of the Affordable Care Act).
• Developing regulations to implement a monthly adjustment amount for higher income Part D beneficiaries due to the Income Related Monthly Adjustment Amount.
• Eliminating Part D cost-sharing for Medicare beneficiaries who are eligible for full Medicaid benefits and who are receiving home- and community-based services instead of being institutionalized.

• Codifying statutory changes to close the Part D coverage gap (Section 1101 of the Reconciliation Act)

• Describing the methodology for using quality ratings to determine MA bonus payments provided for in section 1102 of the Reconciliation Act.

• Implementing policies to reduce wasteful dispensing of Part D drugs for beneficiaries in long-term care facilities

Clarifying program participation requirements

These proposals include:

• Prohibiting Part C and D program participation by MA organizations and Part D sponsors whose owners, directors, or management employees served in a similar capacity with another organization that terminated its Medicare contract within the previous 2 years.
• Requiring that Part C organizations employ (1) physicians or other appropriate health care professionals with sufficient medical and other expertise, including knowledge of the Medicare program, to review organization determinations involving medical necessity, and (2) a Medical Director who is responsible for ensuring the clinical accuracy of all organization determinations and reconsiderations regarding medical necessity.  Similarly Part D plan sponsors must employ physicians or other appropriate health care professionals with sufficient medical and other expertise, including knowledge of the Medicare program, to review coverage determinations and a Medical Director who is responsible for ensuring the clinical accuracy of all coverage determinations and redeterminations involving medical necessity.

Strengthening beneficiary protections

These proposals include:

• Requiring that Medicare Advantage organizations and Part D sponsors provide interpreters in their customer call centers for all non-English speaking and limited English proficient callers.
• Requiring Medicare Advantage organizations to periodically disclose specific data for enrollees to use to compare utilization and out-of-pocket costs in the current plan year to the following plan year.
• Extending the mandatory maximum out-of-pocket amount requirements to regional preferred provider organizations (PPOs).
• Prohibiting the use of tiered cost-sharing of medical benefits by Medicare Advantage organizations to ensure greater transparency in benefits for enrollees and to protect them from inappropriate cost-sharing increases.

·         Requiring pharmacies to provide a printed notice at the point of sale to beneficiaries explaining how to contact their plan to request a coverage determination.  

·         Requiring Medicare Advantage organizations' and Part D sponsors' agents and brokers to receive training and testing via a CMS endorsed or approved training program.

Strengthening CMS’ ability to distinguish for approval stronger applicants for Parts C and D program participation and to remove consistently poor performers

These proposals include:

·         Setting requirements for fiscal solvency of plans participating in Part C or D.

·         In the absence of 14 months performance history, denying a new application or service area expansion request based on a lack of information available to determine an applicant's capacity to comply with the requirements of the Part C or Part D program.

Cost and savings analysis

·         Taking into account both costs and savings estimated in this proposed rule, we estimate a net savings to the Medicare program of about $78 billion as a result of the provisions in this proposed rule for fiscal years (FYs) 2011 through 2016.

2011 Medicare Plan Star Ratings

·         The Medicare Plan Finder web site provides tools to help beneficiaries compare Medicare health plans with or without prescription drug plans, and stand-alone prescription drug plans.  It includes Medicare Plan Star Ratings, which measure plan quality and performance.  This information will help beneficiaries choose a plan that meets their specific needs. 

·         Plans receive a star rating for each category and every individual measure within the category. A contract can get ratings between one to five stars:

★                    means poor performance

★ ★               means below average performance

★ ★ ★          means average performance

★ ★ ★★      means above average performance

★ ★ ★★★ means excellent performance

·         Additionally, health and drug plans receive an “Overall Plan Rating” that summarizes all category measures into a single rating: one for health plans, one for health plans with prescription drug coverage, and one for stand-alone prescription drug plans. This overall rating includes half-stars to provide more differentiation between contracts. 

To download full version of the fact sheet please visit URL http://www.cms.gov/apps/docs/Fact-Sheet-2011-Landscape-for-MAe-and-Part-D-FINAL111010.pdf