New CMS rules boost consumer protections in exchange plans

CMS Friday issued final market rules for 2016 (PDF) for the state and federal insurance exchanges. The regulations include stronger requirements for insurers to provide accessible, reliable information about provider networks and drug formularies so that exchange customers can make informed choices. 

“CMS is working to improve the consumer experience and promote accountability, uniformity and transparency in private health insurance,” CMS Administrator Marilyn Tavenner said in a written statement. Tavenner is stepping down from the agency's top post later this month. 

For 2016 coverage, the open-enrollment period will run from Nov. 1 through Jan. 31, moving it up by two weeks from this year. Previously, the CMS had proposed closing the sign-up period on Dec. 15, 2015. “We were persuaded by the concerns expressed by many commenters about the additional burden caused by shifting the annual open-enrollment period, and therefore we are finalizing an annual open-enrollment period for the 2016 benefit year that begins one month later than the one we had proposed,” the final rule states.

Critics, though, said the agency should either have moved the enrollment period up to before the Christmas holiday period or moved it back to coincide with tax return filing season.

In addition, the agency announced that there will be a 3.5% fee assessed on premiums purchased through the federal exchange to cover operational costs. That's the same assessment level as in the first two years of operations and is expected to raise $1.5 billion. 

The final rule indicates that HHS is monitoring the adequacy of provider networks offered by exchange health plans. But the agency reiterated that it is waiting to see how a model law being drafted by the National Association of Insurance Commissioners turns out before it takes additional regulatory action. 

However, HHS is encouraging insurers to allow new customers a 30-day grace period to find an in-network provider to meet their needs before imposing out-of-network cost-sharing. That would allow clients to continue getting the treatment they need without worrying about incurring exorbitant medical bills. 

After hearing widespread complaints of insurers not having up-to-date provider directories, HHS is expecting health plans to publish up-to-date, accurate, and complete provider directories, including information on which providers are accepting new patients, the provider’s location, contact information and any institutional affiliations in a manner that is easily accessible.

As part of this requirement, insurers must update the directory information at least once a month. A provider directory will be considered easily accessible when the general public is able to view all of the current providers for a plan on a public website through a clearly identifiable link or tab without having to create or access an account or enter a policy number.

Similarly, HHS is requiring health plans to post their drug formularies on their websites and that they be updated in real time. In addition, HHS is requiring that drug formularies and provider networks be made available in “machine-readable” files. That will allow independent entities to extract the data and create tools to help consumers make more informed choices about which plans will best meet their needs. 

The agency increased protections for consumers to appeal decisions when they find out that drugs aren't covered by their plans. Under the final rule, insurers must review those decisions within 72 hours if a customer files an appeal. In addition, the client can seek an expedited review that must be conducted within 24 hours. The customer can also ask for an external review of the decision to deny coverage for the drug in some circumstances. 

The CMS also issued updated rules for risk-mitigation programs designed to shield insurers selling products on the exchanges from exorbitant financial losses if they sign up a sicker-than-expected member pool. The reinsurance program, which provides financial relief to insurers that end up with exorbitantly expensive customers, is expected to cost $4 billion in 2016. Insurers will be able to offset 50% of costs for customers whose medical bills top $90,000 up until they reach $250,000. During the current year, insurers can begin collecting reinsurance funds when a customer's medical bills reach $45,000. 

“We believe setting the coinsurance rate at 50% and increasing the attachment point allows for the reinsurance program to help pay for nearly the same group of high-cost enrollees as was the case for the 2014 and 2015 benefit years, while still encouraging issuers to contain costs,” the rule states. 

HHS also reiterated that it expects the risk corridor program to be budget-neutral, but indicated that it will make good on all payments if that does not prove to be the case. Under that program, insurers that end up with a disproportionately expensive exchange customer pool receive payments from the federal government, while those that attract a healthier, less-costly customer pool must pay into the fund. 

“HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers,” the rule states. “In the unlikely event that risk corridors collections, including any potential carryover from the prior years, are insufficient to make risk corridors payments for the 2016 program year, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.”

HHS is also bolstering language requirements for insurers selling products through the state and federal exchanges. They'll now be compelled to provide interpreter services in at least 150 languages. However, HHS opted not to implement the same language-access requirement for navigators that help individuals enroll in coverage. The agency also opted not to move forward with any language requirements for written materials. 

Some consumer advocates had been lobbying HHS to include pregnancy as a life-change circumstance that would allow women to enroll in coverage outside of the open-enrollment window. But the agency didn't include such a provision in the final rule. Insurers had strongly opposed it, arguing that would lead some women to wait to sign up for coverage until they got pregnant, leading to adverse selection and higher costs.

“We believe the Department of Health and Human Services can and should fix this problem," Christina Postolowski, health policy manager at Young Invincibles, said in a written statement. "The average cost of maternity care and delivery without complications is $23,000. HHS has stood on the side of expanding access to coverage for millions of people. That shouldn't change now."

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http://www.modernhealthcare.com/article/20150220/NEWS/150229986

CY2016 Medicare Part C and D Advance Notice

February 20, 2015

NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and
Other Interested Parties

SUBJECT: Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for
Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016
Call Letter

In accordance with section 1853(b)(2) of the Social Security Act, we are notifying you of
planned changes in the MA capitation rate methodology and risk adjustment methodology
applied under Part C of the Act for CY 2016. Also included with this notice are proposed
changes in the payment methodology for CY 2016 for Part D benefits and annual adjustments for
CY 2016 to the Medicare Part D benefit parameters for the defined standard benefit. For 2016,
CMS will announce the MA capitation rates and final payment policies on Monday, April 6,
2015, in accordance with the timetable established in the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA).

Attachment I shows the preliminary estimates of the national per capita MA growth percentage
and the national Medicare fee-for-service growth percentage, which are key factors in
determining the MA capitation rates. Attachment II sets forth changes in the Part C payment
methodology for CY 2016. Attachment III sets forth the changes in payment methodology for
CY 2016 for Part D benefits. Attachment IV presents the annual adjustments for CY 2016 to the
Medicare Part D benefit parameters for the defined standard benefit. Attachment V presents the
preliminary risk adjustment factors.

Attachment VI provides the draft CY 2016 Call Letter for MA organizations; section 1876 costbased
contractors; prescription drug plan (PDP) sponsors; demonstrations; Programs of AllInclusive
Care for the Elderly (PACE) organizations; and employer and union-sponsored group
plans, including both employer/union-only group health plans (EGWPs) and direct contract
plans. The Call Letter contains information these plan sponsor organizations will find useful as
they prepare their bids for the new contract year.

Comments or questions may be submitted electronically to the following address:
AdvanceNotice2016@cms.hhs.gov.


READ 2016 Advance Notice

CMS announces new initiative in Advanced Primary Care

Advanced Primary Care Initiatives

The Centers for Medicare & Medicaid Services (CMS) is seeking input on initiatives to test innovations in advanced primary care, particularly mechanisms to encourage more comprehensiveness in primary care delivery; to improve the care of complex patients; to facilitate robust connections to the medical neighborhood and community-based services; and to move reimbursement from encounter-based towards value-driven, population-based care.

Background

Advanced primary care is based on principles of the Patient Centered Medical Home and builds on the care delivery models employed in other CMS model tests, including the Comprehensive Primary Care Initiative. Next generation model(s) for advanced primary care would seek to improve further the delivery of patient-centered care and population health. General topics of interest include:

• increased comprehensiveness of, and patient continuity with, primary care (i.e., care provided with greater depth and breadth and through longitudinal relationships between patients and primary care providers),
• care of patients with complex needs, 
• closer connections between primary care and other clinical care (“the medical neighborhood”) and community-based services, 
• moving from encounter-based payment or encounter-based payment with care management fees towards population-based payments (PBPs) to support the infrastructure needed for advanced primary care, create incentives for innovation in care delivery, and promote accountability for costs and quality of care, including consideration of appropriate mechanisms to assign beneficiaries to unique practices, 
• mechanisms to support small primary care practices in the transformation to advanced primary care,
• advanced primary care within accountable care organizations (ACOs),
• multi-payer participation,
• performance measurement that is meaningful to beneficiaries and clinicians,
• matching documentation requirements to the goals of advanced primary care while protecting MS program integrity, and
• use of health information technology (HIT), including electronic health records, data analytics, and population health tools, to support advanced primary care.

Request For Information

CMS seeks broad input from consumers and consumer organizations, health care providers, associations, purchasers and health plans, Medicaid agencies and other state offices, quality review organizations, social service providers, HIT vendors, and other stakeholders. Submissions must be supplied using the Request for Information (RFI) (PDF). To be assured consideration, comments must be received on or before 11:59pm EDT, March 16, 2015. For questions regarding RFI submission please contact APC@cms.hhs.gov.

Additional Information

• Request for Information (RFI) (PDF)

Medicare Program; Contract Year 2016 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs

Executive Summary

1. Purpose

The purpose of this final rule is to revise the Medicare Advantage (MA) program (Part C) regulations and Medicare Prescription Drug Benefit Program (Part D) regulations to implement statutory requirements, improve program efficiencies, strengthen beneficiary protections, clarify program requirements, improve payment accuracy, and make various technical changes for contract year 2016.

2. Summary of the Major Provisions

a. Changes to Audit and Inspection Authority (§§ 422.503(d)(2), 423.504(d)(2))

We proposed three changes to our audit and inspection authority. Due to significant concerns raised during the public comment period, we are finalizing only two of those three proposals. First, under section 6408 of the Affordable Care Act, new authority was provided to the Secretary that now requires that each contract provide the right to “timely” inspection and audit.

We are revising both §§ 422.503(d)(2) and 423.504(d)(2) to insert the word “timely” at the end of both of the introductory paragraphs.

We are also adding language to §§ 422.503(d)(2) and 423.504(d)(2) that will allow us to require that a sponsoring organization hire an independent auditor, working in accordance with CMS specifications, to validate if the deficiencies that were found during a CMS full or partial program audit have been corrected and provide CMS with a copy of the audit findings.

The proposal to require MA organizations and Part D plan sponsors to hire an independent auditor to conduct full or partial program audits will not be finalized.

b. Enrollment Eligibility for Individuals Not Lawfully Present in the United States (§§ 417.2, 417.420, 417.422, 417.460, 422.1, 422.50, 422.74, 423.1, 423.30, 423.44)

After consideration of the public comments, we are finalizing the policies mostly as proposed, with the exception of changes to the regulation text at §§ 417.422, 417.460, 422.50, 423.1, 423.3 and 423.44 to clarify that any individual not lawfully present is no longer eligible to remain enrolled in a cost, MA, or Part D plan, to establish the disenrollment effective date to be the first of the month following notice by CMS of ineligibility, and to delete the term “qualified alien.” Further, we are redesignating the current text at § 417.460(b)(2)(iv) as paragraph (b)(2)(v) and finalizing the provision establishing a lack of lawful presence as a basis for disenrollment from a cost plan at paragraph (b)(2)(iv). This provision is consistent with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and with recommendations made by the Office of the Inspector General (OIG) in its January 2013 and October 2013 reports.

c. Business Continuity for MA Organizations & PDP Sponsors (§§ 422.504(o) and 423.505(p))

To respond to concerns raised during the comment period, we revised the regulation text by providing a 72, rather than 24 hour, restoration time period for MA organizations and Part D sponsors after a systems failure. We also revised text as necessary to make clear that we require MA organizations and sponsors to “plan to” restore essential functions within the 72-hour time period, rather than guarantee complete restoration within the timeframe. Some commenters thought our intent was to require continuous operations under all conditions, and we revised language from the proposed regulation to make clear that that was not the case in our final rule. Lastly commenters distinguished between Part C and D operations and noted, for instance, that provider payments are not a 24-hour critical function for MA plans since payment is allowed to be made within 30 days and that health and safety would not be put at risk by failure of Part C claims processing and appeals processing. We removed language related to that requirement for MA plans.

d. Efficient Dispensing in Long Term Care Facilities and Other Changes (§ 423.154)

We are finalizing changes to the rule requiring efficient dispensing to Medicare Part D enrollees in long term care (LTC) facilities. Some Part D sponsors (or their pharmacy benefit managers) implemented the short-cycle dispensing requirement by pro-rating monthly dispensing fees, which penalize the offering and adoption of more efficient LTC dispensing techniques compared to less efficient LTC dispensing techniques. This is because when a medication is discontinued before a month's supply has been dispensed, a pharmacy that dispenses the maximum amount of the medication at a time permitted under § 423.154 (which is 14 days' supplies), collects more in dispensing fees than a pharmacy that utilizes dispensing techniques that result in less than maximum quantities being dispensed at a time. In other words, a less efficient pharmacy collects more in dispensing fees than a more efficient pharmacy. This is contrary to the Congress' intent in enacting section 3310 of the Affordable Care Act, which is to reduce medication waste. Therefore, we have finalized a prohibition on payment arrangements that penalize the offering and adoption of more efficient LTC dispensing techniques by prorating dispensing fees based on days' supply or quantity dispensed. We have also finalized a requirement to ensure that any difference in payment methodology among LTC pharmacies incentivizes more efficient dispensing techniques. Other changes to the rule requiring efficient dispensing to Medicare Part D enrollees in LTC facilities are eliminating language that has been misinterpreted as requiring the proration of dispensing fees and making a technical change to the requirement that Part D sponsors report on the nature and quantity of unused brand and generic drugs. We are not finalizing an additional waiver for LTC pharmacies using restock and reuse dispensing methodologies under certain conditions at this time.

Read More: https://www.federalregister.gov/articles/2015/02/12/2015-02671/medicare-program-contract-year-2016-policy-and-technical-changes-to-the-medicare-advantage-and-the