Press Releases

(REVISED) CMS ISSUES GUIDANCE FOR MEDICARE ADVANTAGE AND PRESCRIPTION DRUG PLANS FOR 2010

The Centers for Medicare & Medicaid Services (CMS) today announced steps it is taking to provide beneficiaries with more meaningful choices among Medicare Advantage and Medicare prescription drug plans.  In addition, CMS will continue to build on its ongoing oversight efforts relating to Medicare health and drug plans.

“Having more transparent information available to help people with Medicare make confident choices in their health and drug coverage is important to President Obama and CMS,” said Jonathan Blum, acting director of CMS’s Center for Drug and Health Plan Choice. “By strengthening our oversight efforts, we are protecting beneficiaries and taxpayers by ensuring that the data provided by plan sponsors is reliable and correct.” 

The requirements issued by CMS today are part of the annual Call Letter which is issued to organizations that intend to offer Medicare Advantage and Prescription Drug plans in 2010.  These organizations use this guidance to prepare bids which will be submitted on June 1 and helps to ensure that beneficiaries have the information they need to choose the best plan for them during the annual enrollment period which begins Nov. 15, 2009.  More than 10 million beneficiaries are enrolled in Medicare Advantage plans and more than 17 million are enrolled in Part D prescription drug plans.

For 2010, CMS will also be taking new steps in its review of Medicare Advantage plan cost-sharing to ensure that sicker beneficiaries will be protected from discriminatory out-of-pocket charges for the health care services they need.  For example, CMS will be reviewing plan benefits to ensure that cost-sharing for such services as renal dialysis, Part B drugs or home health or skilled nursing services is not discriminatory.   CMS will also establish more transparent cost sharing by encouraging Medicare Advantage plans to cap beneficiaries’ out-of-pocket costs for all Original Medicare services.,

CMS is also asking Medicare Advantage organizations to make sure the plans they offer in 2010 significantly differ from one another to ensure that beneficiaries have the tools they need to make informed decisions.  Many plan sponsors offer multiple plans with very little distinguishing characteristics and low enrollment.  These low-volume plans crowd the field and makes selecting a plan much more difficult for Medicare beneficiaries.  Twenty-seven percent of total Medicare

Advantage plans have fewer than 10 enrollees.  Very few beneficiaries would be affected by Medicare Advantage organizations dropping the plans in question – less than one percent of all Medicare Advantage enrollees.  CMS will assist any beneficiaries affected by their Medicare Advantage plan being terminated in enrolling in a similar Medicare Advantage plan offered by the same organization in order to avoid any disruption in benefits. 

By eliminating these plans, beneficiaries should then be easily able to see differences in the types of plans offered, including clear differences in the benefits offered through each different plan or differences in other plan features, such as the same formulary or similar out-of-pocket costs. Plan improvements for 2010 are designed to enable beneficiaries to select plans that best fit their individual needs.   Beneficiaries will be able to enroll in most Medicare Advantage or prescription drug plans at www.medicare.gov through the enhanced online enrollment center during the open enrollment period.

As part of CMS’s efforts to improve beneficiary understanding of prescription drug plan options, prescription drug plan sponsors will be required to outline all the tools used by the plan to lower costs and improve outcomes, known as utilization management criteria, on their Web sites.  Plan sponsors will list specific details about quantity limits and step therapy requirements in addition to providing comprehensive information about other types of utilization management tools such as prior authorization. 

Prescription drug plan sponsors will also be required to provide additional and easy to understand information about coverage in the gap on the Medicare Prescription Drug Plan Finder Web site at www.medicare.gov later this fall.  This information will include how the plan will cover both brand and generic drugs in the gap.

CMS is committed to promoting the appropriate use of preventive health care benefits as part of Medicare’s effort to help keep beneficiaries healthy.  Medicare covers a broad range of services to help beneficiaries prevent disease, detect and manage their disease early – when they are most treatable and curable – and avoid complications related to their care.  Medicare Advantage plans are required to provide all Medicare covered preventive benefits.  Organizations are reminded in the 2010 Call Letter that they may not use inappropriate incentives or rewards to enroll beneficiaries into these programs. 

As part of CMS’ oversight efforts of the Medicare Advantage and Prescription Drug plans, sponsoring organizations are being asked to conduct audits on the data provided to CMS about the operation of their plans.  These new audits will be in addition to the current CMS financial and program compliance audits.  The existing Program compliance audits will be strengthened by becoming more targeted, data-driven and risk-based. They will focus on high-risk areas that have the greatest potential for beneficiary harm, such as enrollment operations, appeals and grievances, and marketing. 

“By strengthening these data collection processes, we will have an early warning system in place to be sure beneficiaries are not at risk of losing access to prescription drugs or health care services if plans have problems,” said Blum. 

The 2010 Call Letter is live on the website:

Direct link to the page:

www.cms.hhs.gov/PrescriptionDrugCovContra/

Direct link to the document:

http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/2010CallLetter.pdf

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REVISION NOTE:   “…higher than the cost sharing amounts under Original Medicare” was deleted from the sentence “For example, CMS will be reviewing plan benefits to ensure that cost-sharing for such services as renal dialysis, Part B drugs or home health or skilled nursing services is not higher than the cost sharing amounts under Original Medicare.”  It was replaced with “…discriminatory.  CMS will also establish more transparent cost sharing by encouraging Medicare Advantage plans to cap beneficiaries’ out-of-pocket costs for all Original Medicare services.”