By Elizabeth B. Lippincott

If you, like us here at SHL, have been waiting for insights into the Biden Administration’s vision and agenda for the Medicare Advantage and Part D programs, the wait is over. On Thursday, January 6, CMS proposed Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs, [CMS-4192-P].

Comments on the proposed rule are due March 7, 2022. We encourage health care companies to comment individually on their highest priority issues in addition to contributing to comment letters submitted by industry associations.

Here are some key proposals affecting MA organizations and Part D plan sponsors:

Part D Pharmacy Rebates – CMS proposes to require all Part D price concessions received from a pharmacy to be applied at the point of sale by eliminating the exception for contingent pharmacy price concessions from the negotiated price definition. This proposal would not affect drug rebates negotiated between plans (or PBMs) and manufacturers.

Marketing and Communications – The rule proposes to tighten oversight of third-party marketing organizations (TPMOs) who sell multiple organizations’ Medicare products by creating a definition of TPMOs to clarify that MA organizations are responsible for their activities. CMS would also add specific disclaimers when TPMOs market Medicare plans and require enhanced plan oversight of TPMOs, in addition to what is generally required of first tier and downstream entities. CMS also proposes to require plans to include, in all mandatory beneficiary communications, a multi-language insert to inform enrollees in the top 15 language spoken in the U.S. that interpreter services are available for free.

Networks for New MA Plans – The proposed rule would reinstate an earlier requirement that applicants for new MA contracts or expanded service areas demonstrate an adequate provider network at the time the application is submitted in February—i.e., well before the following year’s January 1 go-live date. The rule would allow a time-limited 10 percentage point credit toward meeting the standards for the network before the plan goes live. In recent years, applicants have had several more months to contract with providers before CMS performed network adequacy testing in June before the start of the coverage year.

Medical Loss Ratio (MLR) Reporting – CMS proposes to reinstate detailed MLR requirements that were in effect from 2014 to 2017, and which require MA organizations and Part D sponsors to report underlying cost and revenue information to allow CMS to validate the MLR percentage and any required remittance amount. MA organizations would be required to report the amount spent on specific supplemental benefits, such as dental and vision.

D-SNP Reforms – CMS proposes that MA organizations offering Dual-Eligible Special Needs Plans (D-SNPs) must establish state-specific enrollee advisory committees to solicit direct input on enrollee experience. Additionally, MA plans would be required to include standardized questions on housing stability, food security, and transportation access as part of their health risk assessments. Structural reforms for D-SNPs include requiring fully integrated dual eligible special needs plans (FIDE SNPs) to cover Medicaid home health, durable medical equipment, and behavioral health through a capitated contract with the State Medicaid agency.

Maximum Out-of-Pocket (MOOP) Limit – Currently, amounts that are either paid by Medicaid or otherwise unpaid do not count towards an enrollee’s MOOP in an MA plan. CMS proposes to include all cost-sharing amounts in MOOP, whether they are paid by the enrollee, Medicaid, other insurance, or remain unpaid because of State limits on cost sharing or exemption from Medicare cost-sharing for duals.

Past Performance Methodology – CMS proposes to expand its review of an organization’s past performance to include its record of Star Ratings, bankruptcy issues, and compliance actions when evaluating a request to enter into a contract or expand an existing contract.

Disaster and Emergency Clarifications – CMS proposes to clarify the timeframe during which its special requirements for MA plans during disasters or emergencies, including public health emergencies, would be in effect. These special requirements include coverage of services by non-contracted providers and waiver of gatekeeper referral requirements.