Healthcare Business News

CMS to hold Part C, D sponsors to quality standard

By Jessica Zigmond
Posted: April 2, 2012 - 3:45 pm ET

Starting in 2015, the CMS may terminate the contracts of Medicare Part C (Medicare Advantage) and Part D (prescription drug plan) sponsors that have failed to achieve at least a three-star rating on a five-star quality scale, the agency announced in a final rule (PDF).

The new policy takes effect with plan ratings in 2013. Those plan ratings, according to the CMS, are based on measures that correspond to operational requirements of the Part C and D programs. The rule also noted that the CMS will require plan sponsors with a rating below the three-star level to develop corrective action plans.

Also included in the rule is the combined effect of the Medicare Advantage growth rate percentage and the fee-for-service percentage, which is estimated to be 3.07%. It's this metric that measures the estimated growth in per-capita expenditures for Medicare beneficiaries and helps decide the benchmarks for Medicare Advantage plans. According to CMS officials, this 3.07% estimated payment update is just one piece that is used in calculating payments to plans. Those payments will vary based on the geographic location and star ratings of plans, as well as a requirement in the health reform law for the Medicare Advantage benchmarks to transition toward Medicare fee-for-service costs. The CMS also posted final benchmarks in the rule Monday.

Meanwhile, eligible drug-plan enrollees with liability for the prescription drug doughnut hole will pay 47.5% of the cost of covered brand-name drugs in 2013. For generic drugs in the gap, cost-sharing for beneficiaries will be 79% in 2013, down from 86% this year.

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In an effort to reduce program costs and waste, the rule establishes a daily cost-sharing rate requirement that will allow people with Medicare to talk with their prescribers about whether less than a month's supply of a drug is appropriate. “By doing so, a Part D plan sponsor will be able to apply a lower, pro-rated, cost-sharing amount when the prescription is dispensed,” the CMS noted in a fact sheet about the guidance (PDF). “This will lower costs to beneficiaries for trial fills or less-than-30 day fills and enables them to align their refill dates.”

The guidance also calls for more transparency among pharmacy benefit managers, as it requires Part D sponsors and their contracted pharmacy benefit managers to report certain data elements on Part D transactions.

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