2021 Medicare Advantage and Part D Rate Announcement Fact Sheet

On April 6th, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year (CY) 2021 Rate Announcement, finalizing Medicare Advantage (MA) and Part D payment methodologies for CY 2021. This Rate Announcement addresses comments received on Parts I and II of the CY 2021 Advance Notice, published on January 6 and February 5, 2020, respectively. The final policies in the Rate Announcement will continue to modernize and maximize competition within the MA and Part D programs. 

COVID-19 Outbreak

The health and safety of America’s patients and provider workforce in the face of the Coronavirus Disease 2019 (COVID-19) outbreak is the top priority of the Trump Administration and CMS. We are working around the clock to equip the American healthcare system with maximum flexibility to respond to the 2019 Novel Coronavirus (COVID-19) pandemic. The 2021 Rate Announcement is an example of how CMS is focused on implementing the policies that matter most for ensuring continuous and predictable payments across the health care system and ensure care can be provided where it is needed. While the Rate Announcement does not catalog CMS’ actions related to the COVID-19 outbreak, an overview of CMS’ actions related to the outbreak for MA organizations, PACE organizations, and Part D sponsors can be found at: https://www.cms.gov/files/document/covid-ma-and-part-d.pdf. The agency is also communicating with stakeholders, responding to inquiries through the HPMS system, and developing further guidance on issues related to the COVID-19 outbreak.

To keep up with the White House Task Force actions in response to the COVID-19 outbreak, visit Coronavirus.gov.  For information specific to CMS, please visit the Current Emergencies Website.

2021 Rate Announcement

After considering all comments received, CMS is finalizing updates and changes to the methodologies used to pay MA organizations, PACE organizations, and Part D sponsors discussed in Parts I and II of the CY 2021 Advance Notice.

Net Payment Impact

The chart below indicates the expected impact of the updated methodologies on plan payments relative to last year. 

Year-over-Year Percentage Change in Payment

1Rebasing/re-pricing impact is dependent on finalization of the average geographic adjustment index, which was not available with the publication of the 2021 Advance Notice.

2For 2021, the rebasing/repricing impact reflects the impact of the kidney acquisition cost carve-out.

3The total does not include an adjustment for underlying coding trend. For 2021, CMS expects the underlying coding trend to increase risk scores, on average, by 3.56%.

2021 Part C Risk Adjustment Model

CMS is finalizing as proposed the continued phase-in of the 2020 CMS-Hierarchical Condition Categories (HCC) model. The 21st Century Cures Act requires that CMS phase in changes to risk adjustment payments based on section 1853(a)(1)(I) of the Social Security Act over a three-year period, with full implementation by 2022. In order to continue phasing in the model that meets statutory requirements (i.e., the 2020 CMS-HCC model), CMS is finalizing the proposal to calculate risk scores for CY 2021 payments to MA organizations and certain demonstrations as the sum of:

• 75% of the risk score calculated with the 2020 CMS-HCC model and
• 25% of the risk score calculated with the 2017 CMS-HCC model.

This represents a change from the blend for CY 2020 of 50% of the risk score calculated with the 2020 CMS-HCC model and 50% of the risk score calculated with the 2017 CMS-HCC model.

Using Encounter Data

CMS calculates risk scores using diagnoses submitted by MA organizations and from Medicare fee-for-service (FFS) claims. Historically, CMS has used diagnoses submitted into CMS’ Risk Adjustment Processing System (RAPS) by MA organizations for the purpose of calculating risk scores for payment. In recent years, CMS began collecting encounter data from MA organizations, which also includes diagnostic information. CMS began using diagnoses from encounter data to calculate risk scores for CY 2015, and for CY 2016, CMS blended 10% of the encounter data-based risk score with 90% of the RAPS-based risk score. CMS has since continued to use a blend, calculating risk scores with 25% encounter data and 75% RAPS data for CY 2017, 15% encounter data and 85% RAPS data for CY 2018, 25% encounter data and 75% RAPS data for CY 2019, and 50% encounter data and 50% RAPS data for CY 2020.

For CY 2021, CMS is finalizing the proposal to calculate risk scores for payment to MA organizations and certain demonstrations as the sum of 75% of the encounter data-based risk score and 25% of the RAPS-based risk score. CMS is finalizing the proposal to calculate the encounter data-based risk scores with the 2020 CMS-HCC model and the RAPS-based risk scores with the 2017 CMS-HCC model.

For Programs of All-Inclusive Care for the Elderly (PACE) organizations for CY 2021, CMS is finalizing the proposal to continue to calculate risk scores using the 2017 CMS-HCC model by pooling risk adjustment-eligible diagnoses from encounter data, RAPS data, and FFS claims (with no weighting).

Medicare Advantage Coding Pattern Adjustment

Each year, as required by law, CMS makes an adjustment to plan payments to reflect differences in diagnosis coding between MA organizations and FFS providers. For CY 2021, CMS is finalizing the proposal to apply a coding pattern adjustment of 5.90%, which is the minimum adjustment for coding intensity required by the statute.

Medicare Advantage End-Stage Renal Disease (ESRD) Payment

Pursuant to section 1853(a)(1)(H) of the Act, CMS establishes “separate rates of payment” for ESRD beneficiaries enrolled in MA plans. Outside of the exclusion of organ acquisition costs for kidney transplants from MA ESRD rates (mandated by the 21st Century Cures Act; discussed below), the methodology proposed in the Advance Notice and finalized in the Rate Announcement for the CY 2021 ESRD rates remains unchanged from the methodology used continuously for the past several years. The final trend factor that will apply to the MA ESRD state-level rates for 2021 is 4.04%, which is higher than the Advance Notice estimate of 2.8%.

Exclusion of Kidney Organ Acquisition Costs from MA Benchmarks

The 21st Century Cures Act amended the Social Security Act to allow all Medicare-eligible individuals with ESRD to enroll in MA plans beginning January 1, 2021. With this enrollment policy change, the Cures Act also made related payment changes in the MA and FFS programs. Effective January 1, 2021, MA organizations will no longer be responsible for organ acquisition costs for kidney transplants for MA beneficiaries, and such costs will be excluded from MA benchmarks and covered under the FFS program instead. The CY 2021 Advance Notice provided a step-by-step description of the methodology by which CMS will estimate the kidney organ acquisition costs to carve out from MA ESRD and non-ESRD benchmarks, which we are finalizing through the Rate Announcement. PACE organizations will continue to cover organ acquisition costs for kidney transplants and CMS will continue to include the costs for kidney acquisitions in the development of PACE payment rates.

Puerto Rico
A far greater proportion of Medicare beneficiaries receive benefits through MA in Puerto Rico than in any other state or territory. The policies finalized for 2021 will continue to provide stability for the MA program in the Commonwealth and to Puerto Ricans enrolled in MA plans. These policies include basing the MA county rates in Puerto Rico on the relatively higher costs of beneficiaries in FFS who have both Medicare Parts A and B, continuing the statutory interpretation that permits certain counties in Puerto Rico to qualify for an increased quality bonus adjusted benchmark, and applying an adjustment to reflect the nationwide propensity of beneficiaries with zero claims.

Part C and D Star Ratings

As part of the Administration’s effort to increase transparency and seek public comment on the Part C and D Star Ratings program, CMS codified the methodology for the Part C and D Star Ratings program in the CY 2019 Medicare Part C and D Final Rule, published in April 2018 for the 2021 Star Ratings. The Advance Notice provided information and updates that those regulations require us to announce through the process described in section 1853(b) of the Social Security Act for changes in, and adoption of, payment and risk adjustment policies. In addition, we solicited input on future measures and concepts as we continue to enhance the Star Ratings over time.

Please note that in the Medicare and Medicaid Programs: Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency Interim Final Rule (CMS-1744-IFC); https://www.federalregister.gov/documents/2020/04/06/2020-06990/medicare-and-medicaid-programs-policy-and-regulatory-revisions-in-response-to-the-covid-19-public) put on display at the Office of the Federal Register website on March 31, 2020 and scheduled to be published in the Federal Register on April 6, 2020, CMS adopted several changes to the 2021 Star Ratings to address the disruption to data collection and plan performance in 2020 posed by the COVID-19 pandemic. Specifically, this rule eliminates the 2020 collections of Healthcare Effectiveness Data and Information Set (HEDIS) and Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) data and replaces the measures calculated based on those HEDIS and CAHPS data collections with earlier values from the 2020 Star Ratings that would not have been affected by the public health threats posed by COVID-19. It establishes how we will assign Star Ratings for 2021 in the event that the virus prevents CMS from having validated data or results in systemic data integrity issues, or if CMS’s functions become focused on only continued performance of essential Agency functions due to the pandemic. It also modifies the current rules for the 2021 Star Ratings to replace any measure that has a systemic data quality issue due to the COVID-19 outbreak with the measure-level Star Rating and score from the 2020 Star Ratings. 

The IFC also makes changes for the 2022 Star Ratings to remove guardrails and expand the hold harmless provision for the Part C and D improvement measures to include all contracts. For just the 2022 Quality Bonus Payment (QBP) ratings that are based on 2021 Star Ratings, we are modifying the definition of new MA plan: we will treat an MA plan as a new MA plan if it is offered by a parent organization that has not had another MA contract for the previous 4 years.

In Attachment VI of the the CY 2021 Rate Announcement, CMS is finalizing June 30, 2020 as the date by which plans must submit their requests for review of the appeals and complaints measures data. The Rate Announcement also lists the measures included in the Part C and D Improvement measures and the values for the Categorical Adjustment Index for the 2021 Star Ratings. The policy for adjustments to Star Ratings in the event of extreme and uncontrollable circumstances, such as major hurricanes, is the same as the one implemented for the 2020 Star Ratings and codified in regulation for the 2022 Star Ratings. This policy will only impact measures that do not already revert back to the 2020 measure-level Star Rating and associated measure score, as a result of the adjustments to the 2021 Star Ratings codified in the Interim Final Rule. 

Additionally, as part of our efforts to lower prescription drug costs for Medicare beneficiaries and strengthen competition for generic products, CMS solicited feedback on a generic utilization Part D measurement concept through the CY 2021 Advance Notice. CMS encourages Part D sponsors to leverage favorable tier placement and effective formulary management tools to incentivize beneficiaries to fill generic alternatives over branded products. We reviewed the feedback received and will consider it for any potential future development of generic utilization measures for the Part D Star Ratings program.

Other measurement concepts that CMS solicited feedback on include:

• End-Stage Renal Disease (ESRD) measures (Part C)
• Prior Authorizations (Part C)
• Physical Functioning Activities of Daily Living Patient-reported measure (Part C)
• Initial Opioid Prescribing (Part D)

CMS will take feedback received into consideration and where appropriate share with the measure stewards.

Process

The CY 2021 Rate Announcement may be viewed by going to: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html and selecting “2021 Announcement.”

CMS will offer stakeholders an opportunity to discuss the 2021 Rate Announcement, as well as guidance related to the COVID-19 outbreak for MA organizations, PACE organizations, and Part D sponsors, with CMS staff during a call that will be scheduled in the near future. We will provide further details on this stakeholder call soon.

https://www.cms.gov/newsroom/fact-sheets/2021-medicare-advantage-and-part-d-rate-announcement-fact-sheet

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

Medicare and Medicaid Programs: Changes to OPPS, Data Sources Expanded and New Appeals Process for MAO's

Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Physician-Owned Hospitals: Data Sources for Expansion Exception; Physician Certification of Inpatient Hospital Services; Medicare Advantage Organizations and Part D Sponsors: Appeals Process for Overpayments Associated With Submitted Data

This proposed rule would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2015 to implement applicable statutory requirements and changes arising from our continuing experience with these systems. In this proposed rule, we describe the proposed changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.

In this document, we also are proposing changes to the data sources used for expansion requests for physician owned hospitals under the physician self-referral regulations; changes to the underlying authority for the requirement of an admission order for all hospital inpatient admissions and changes to require physician certification for hospital inpatient admissions only for long-stay cases and outlier cases; and changes to establish a three-level appeals process for Medicare Advantage (MA) organizations and Part D sponsors that would be applicable to CMS-identified overpayments associated with data submitted by these organizations and sponsors.

Read More:

https://www.federalregister.gov/articles/2014/07/14/2014-15939/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical

Medicare Program; Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs

 A Rule by the Centers for Medicare & Medicaid Services on 05/23/2014

Summary of the Major Provisions

1. Modifying the Agent/Broker Requirements, Specifically Agent/Broker Compensation

The former regulatory compensation structure was comprised of a 6-year cycle that ended December 31, 2013. Under that structure, MA organizations and Part D sponsors provided an initial compensation payment to independent agents for new enrollees (Year 1), and paid a renewal rate (equal to 50 percent of the initial year compensation) for Years 2 through 6. MA organizations and Part D sponsors had the option to pay the 50 percent renewal rate for CY2014 (year 1). This compensation structure proved to be complicated to implement and monitor, and also created an incentive for agents to move beneficiaries as long as the fair market value (FMV) continued to increase each year. To resolve these issues, we proposed to revise the compensation structure. Under our proposal, MA organizations and Part D sponsors would continue to have the discretion to decide, on an annual basis, whether or not to use independent agents. Also, for new enrollments, MA organizations and Part D sponsors could determine what their initial rate would be, up to the CMS designated FMV amount. For renewals in Year 2 and subsequent years, with no end date, the MA organization or Part D sponsor could pay up to 35 percent of the current FMV amount for that year. We believed that revising the existing compensationstructure to allow MA organizations or Part D sponsors to pay up to 35 percent of the FMV for year 2 and subsequent years was appropriate based on a couple of factors. First, we believed that a 2 tiered payment system (that is, initial and renewal) would be significantly less complicated than a 3-tiered system (that is, initial, 50 percent renewal for years 2 through 6, and 25 percent residual for years 7 and subsequent years), and would reduce administrative burden and confusion for plan sponsors. Second, our analysis determined that 35 percent was the renewal compensation level at which the present value of overall payments under a 2-tiered system would be relatively equal to the present value of overall payments under a 3-tiered system (taking into account the estimated life expectancy for several beneficiary age cohorts). In addition to revising the agent and broker compensation structures, we proposed to amend the training and testing requirements as well as setting limits on referral fees ($100) for agents and brokers.

We received more than 140 comments from agents, health plans, and trade associations opposing the 35 percent renewal rate, and instead suggesting that CMS maintain the 50 percent renewal rate. A number of commenters expressed concerns that the proposed reduction in compensation would represent a significant decrease from the current compensation limit, and a rate set at 50 percent of FMV would be in line with industry standard. They noted that the higher compensation amount would be particularly important for stand-alone prescription drug plans, as 35 percent would be insufficient to cover an agent's costs associated with the renewal transaction and could discourage agents from assisting in the annual evaluation of a Medicare beneficiary's options. Commenters also stated that, compared to current practice, the proposed 35 percent renewal rate is a reduction since a number of MA plans began offering a renewal rate of 50 percent for 10 years or more at the end of the 6-year cycle (2013). The majority of commenters also stated that agents play an important role in educating beneficiaries about Medicare and the proposed reduction in the renewal rate could reduce the level and quality of services provided to beneficiaries, thereby resulting in less information sharing and poorer plan choices by beneficiaries. Many commenters also stated that agents spend a significant amount of time in training, preparing, and educating beneficiaries and that the compensation is already low relative to the hours spent. Some commenters also expressed concern that the lower compensation rate would discourage new agents from entering the MA market. Many agents stated they would have to stop selling MA products and instead sell other more profitable products. No plans strongly supported the 35 percent renewal rate. Therefore, we are modifying the compensation renewal rate from up to 35 percent to up to 50 percent. These changes will be applicable for enrollments effective January 2015. Because the proposed rate is similar to previous regulatory requirements, present CMS guidance, and industry practice, we believe this implementation timeframe is reasonable and appropriate. We are not finalizing the proposed changes to agent and broker training and testing at this time. We are finalizing limits on referral fees for agents as proposed.

2. Drug Categories or Classes of Clinical Concern

We are not finalizing any new criteria and will maintain the existing six protected classes.

3. Improving Payment Accuracy—Implementing Overpayment Provisions of Section 1128J(d) of the Social Security Act (§§ 422.326 and 423.360)

These proposed regulatory provisions codify the Affordable Care Act requirement establishing section 1128J(d) of the Act that MA organizations and Part D sponsors report and return identified Medicare overpayments.

We proposed to adopt the statutory definition of overpayment for both Part C and Part D, which means any funds that an MA organization or Part D sponsor has received or retained under Title XVIII of the Act to which the MA organization or Part D sponsor, after applicable reconciliation, is not entitled under such title. To reflect the unique structure of Part C and Part D payments to plan sponsors, we also propose to define two terms included in the statutory definition of overpayments: “funds” and “applicable reconciliation.” We proposed to define funds as payments an MA organization or Part D sponsor has received that are based on data that these organizations submitted to CMS for payment purposes. For Part C we proposed that applicable reconciliation occurs on the annual final risk adjustment data submission deadline. For Part D, we proposed that applicable reconciliation occurs on the date that is the later of either the annual deadline for submitting prescription drug event (PDE) data for the annual Part D payment reconciliations referred to in § 423.343(c) and (d) or the annual deadline for submitting DIR data.

In addition, we proposed to state in regulation that an MA organization or Part D sponsor has identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment. An MA organization or Part D sponsor must report and return any identified overpayment it received no later than 60 days after the date on which it identified it received an overpayment. The MA organization or Part D sponsor must notify CMS, using a notification process determined by CMS, of the amount and reason for the overpayment. Finally, we proposed a look-back period with an exception for overpayments resulting from fraud, whereby MA organizations and Part D sponsors would be held accountable for reporting overpayments within the 6 most recent completed payment years for which the applicable reconciliation has been completed.

We received approximately 30 comments from organizations and individuals. Generally, commenters supported establishing separate applicable reconciliation dates for Part C and Part D. Many commenters questioned when the 60-day period for reporting and returning begins, and what activities constitute reporting and returning an overpayment to CMS, including questions about estimating an amount of overpayment. A number of commenters also requested to clarify the standards for “identifying” an overpayment, including questions about the meaning of reasonable diligence. Finally, a few commenters recommended that we impose the same limitation on the look-back period for all overpayments, even those relating to fraud.

We are finalizing the provisions at §§ 422.326 and 423.360, with the following modifications. First, we add at the end of paragraph § 422.326(d) the phrase “unless otherwise directed by CMS for the purpose of § 422.311.” Also, to increase clarity we revise §§ 422.326(c) and 423.360(c) regarding identified overpayments. Finally, we strike the following sentence in the proposed paragraphs on the 6-year look-back period: “Overpayments resulting from fraud are not subject to this limitation of the lookback period.”

4. Risk Adjustment Data Requirements

We proposed several amendments to § 422.310 to strengthen existing regulations related to the accuracy ofrisk adjustment data, including: (1) A requirement that medical record reviews, if used, be designed to determine the accuracy of diagnoses submitted under §§ 422.308(c)(1) and 422.310(g)(2); (2) a revision in the deadlines for submission of risk adjustment data; and (3) a limitation on the type and purpose of late data submissions. We also proposed a restructuring of subparagraph (g)(2) as part of the revisions. We received approximately 25 comments from organizations and individuals regarding these proposals; many of the comments were concerned and critical of the proposals, highlighting vagueness and the potential for operational instability. For reasons discussed in more detail below in section III.B.2 of the preamble, we are not finalizing the proposed amendment regarding the scope of medical reviews and we are not finalizing at this time the proposal to change the date for final risk adjustment data submission. We are finalizing as proposed the restructuring of §§ 422.310(g)(2) and the 422.310(g)(2)(ii) provision to prohibit submission of diagnoses for additional payment after the final risk adjustment data submission deadline.

C. Summary of Costs and Benefits

Table 2—Summary of Costs and Benefits Back to Top

Provision description	Total costs	Transfers
Modifying the agent/broker requirements, specifically agent/broker compensation	N/A	N/A
Improving Payment Accuracy	N/A	N/A
Eligibility of Enrollment for Incarcerated Individuals		We estimate that this change could save the MA program up to $27 million in 2015, increasing to $103 million in 2024 (total of $650 million over this period), and could save the Part D program (includes the Part D portion of MA PD plans) up to $46 million in 2015, increasing to $153 million in 2024 (total of $965 million over this period).

II. BackgroundBack to Top

A. General Overview and Regulatory History

The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) created a new “Part C” in the Medicare statute (sections 1851 through 1859 of the Social Security Act (the Act)) which established what is now known as the Medicare Advantage (MA) program. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173), enacted on December 8, 2003, added a new “Part D” to the Medicare statute (sections 1860D-1 through 42 of the Act) entitled the Medicare Prescription Drug Benefit Program (PDP), and made significant changes to the existing Part C program, which it named the Medicare Advantage (MA) Program. The MMA directed that important aspects of the Part D program be similar to, and coordinated with, regulations for the MA program. Generally, the provisions enacted in the MMA took effect January 1, 2006. The final rules implementing the MMA for the MA and Part D prescription drug programs appeared in the Federal Register on January 28, 2005 (70 FR 4588 through 4741 and 70 FR 4194 through 4585, respectively).

Since the inception of both Parts C and D, we have periodically revised our regulations either to implement statutory directives or to incorporate knowledge obtained through experience with both programs. For instance, in the September 18, 2008 and January 12, 2009 Federal Register (73 FR 54226 and 74 FR 1494, respectively), we issued Part C and D regulations to implement provisions in the Medicare Improvement for Patients and Providers Act (MIPPA) (Pub. L. 110-275). We promulgated a separate interim final rule in January 16, 2009 (74 FR 2881) to address MIPPA provisions related to Part D plan formularies. In the final rule that appeared in the April 15, 2010 Federal Register (75 FR 19678), we made changes to the Part C and D regulations which strengthened various program participation and exit requirements; strengthened beneficiary protections; ensured that plan offerings to beneficiaries included meaningful differences; improved plan payment rules and processes; improved data collection for oversight and quality assessment; implemented new policies; and clarified existing program policy.

In a final rule that appeared in the April 15, 2011 Federal Register (76 FR 21432), we continued our process of implementing improvements in policy consistent with those included in the April 2010 final rule, and also implemented changes to the Part C and Part D programs made by recent legislative changes. The Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted on March 23, 2010, as passed by the Senate on December 24, 2009, and the House on March 21, 2010. The Health Care and Education Reconciliation Act (Pub. L. 111-152), which was enacted on March 30, 2010, modified a number of Medicare provisions in Pub. L. 111-148 and added several new provisions. The Patient Protection and Affordable Care Act (Pub. L. 111-148) and the Health Care and Education Reconciliation Act (Pub. L. 111-152) are collectively referred to as the Affordable Care Act. The Affordable Care Act included significant reforms to both the private health insurance industry and the Medicare and Medicaid programs. Provisions in the Affordable Care Act concerning the Part C and D programs largely focused on beneficiary protections, MA payments, and simplification of MA and Part D program processes. These provisions affected implementation of our policies regarding beneficiary cost-sharing, assessing bids for meaningful differences, and ensuring that cost-sharing structures in a plan are transparent to beneficiaries and not excessive. In the April 2011 final rule, we revised regulations on a variety of issues based on the Affordable Care Act and our experience in administering the MA and Part D programs. The rule covered areas such as marketing, including agent/broker training; payments to MA organizations based on quality ratings; standards for determining if organizations are fiscally sound; low income subsidy policy under the Part D program; payment rules for non-contract health care providers; extending current network adequacy standards to Medicare medical savings account (MSA) plans that employ a network of providers; establishing limits on out-of-pocket expenses for MA enrollees; and several revisions to the special needs plan requirements, including changes concerning SNP approvals.

In a final rule that appeared in the April 12, 2012 Federal Register (77 FR 22072 through 22175), we made several changes to the Part C and Part Dprograms required by statute, including the Affordable Care Act, as well as made improvements to both programs through modifications reflecting experience we have obtained administering the Part C and Part D programs. Key provisions of that final rule implemented changes closing the Part D coverage gap, or “donut hole,” for Medicare beneficiaries who do not already receive low-income subsidies from us by establishing the Medicare Coverage Gap Discount Program. We also included provisions providing new benefit flexibility for fully-integrated dual eligible special needs plans, clarifying coverage of durable medical equipment, and combatting possible fraudulent activity by requiring Part D sponsors to include an active and valid prescriber National Provider Identifier on prescription drug event records.

B. Issuance of a Notice of Proposed Rulemaking

In the proposed rule titled “Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs,” which appeared in the January 10, 2014Federal Register (79 FR 1918), we proposed to revise the Medicare Advantage (MA) program (Part C) regulations and prescription drug benefit program (Part D) regulations to implement statutory requirements; strengthen beneficiary protections; exclude plans that perform poorly; improve program efficiencies; and clarify program requirements. The proposed rule also included several provisions designed to improve payment accuracy.

C. Public Comments Received in Response to the CY 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs Proposed Rule

We received approximately 7,600 timely pieces of correspondence containing multiple comments on the CY 2014 proposed rule. While we are finalizing several of the provisions from the proposed rule, there are a number of provisions from the proposed rule (for example, enrollment eligibility criteria for individuals not lawfully present in the United States) that we intend to address later and a few which we do not intend to finalize. We also note that some of the public comments were outside of the scope of the proposed rule. These out-of-scope public comments are not addressed in this final rule. Summaries of the public comments that are within the scope of the proposed rule and our responses to those public comments are set forth in the various sections of this final rule under the appropriate heading. However, we note that in this final rule we are not addressing comments received with respect to the provisions of the proposed rule that we are not finalizing at this time. Rather, we will address them at a later time, in a subsequent rulemaking document, as appropriate.

https://www.federalregister.gov/articles/2014/05/23/2014-11734/medicare-program-contract-year-2015-policy-and-technical-changes-to-the-medicare-advantage-and-the#h-15

Medicare Program; Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs

This rule would set forth programmatic and operational changes to the Medicare Advantage (MA) and prescription drug benefit programs for contract year 2015.

Medicare Program; Contract Year 2015 
Policy and Technical Changes to the 
Medicare Advantage and the Medicare 
Prescription Drug Benefit Programs 

AGENCY: Centers for Medicare & 
Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: The proposed rule would 
revise the Medicare Advantage (MA) 
program (Part C) regulations and 
prescription drug benefit program (Part 
D) regulations to implement statutory 
requirements; strengthen beneficiary 
protections; exclude plans that perform 
poorly; improve program efficiencies; 
and clarify program requirements. The 
proposed rule also includes several 
provisions designed to improve 
payment accuracy. 

DATES: To be assured consideration, 
comments must be received at one of 
the addresses provided below, no later 

than 5 p.m. on March 7, 2014.

Read more: http://www.gpo.gov/fdsys/pkg/FR-2014-01-10/pdf/2013-31497.pdf