Medicare Advantage plans could soon see stricter marketing guidelines and more oversight of how Medicare revenue is spent if the Centers for Medicare and Medicaid Services finalizes a new proposed rule.
Medicare Part D plans could face changes in how they can use savings from pricing arrangements with pharmacies. CMS published the proposed 2023 Medicare Advantage and Part D regulation Thursday.
In addition, the draft regulation includes several proposals aimed at improving Medicare Advantage for beneficiaries who are dually eligible for Medicare and Medicaid.
CMS wants to bolster oversight of third-party marketing organizations to weed out what it characterizes as deceptive marketing tactics in Medicare Advantage and Medicare Part D.
The number of beneficiary complaints related to practices of third-party marketing organizations has more than doubled, from 15,497 in 2020 to 39,617 in 2021, CMS wrote in Thursday's proposed rule.
Because of this, CMS proposes defining third-party marketing organizations in statute to minimize confusion over MA and Part D plans' responsibility for these organizations' activities. CMS also wants to require organizations to use a disclaimer that clarifies they do not offer every plan available in an area.
Plans that work with third-party organizations would also have to make sure the organizations follow any requirements that apply to the plan.
"In order to ensure beneficiaries are enrolled in the plan that best meets their needs, MA organizations and Part D sponsors must have knowledge and oversee all leads and enrollments," CMS wrote.
The agency proposes bringing back the requirement that plans include multi-language inserts in certain materials informing customers about free language and translation services. The rule would also would codify enrollee ID card standards, requirements for disclaimers of limited access to preferred cost-sharing pharmacies and website requirements.
Additionally, CMS wants to strengthen plan oversight by instituting additional causes for denying a new contract or a service area expansion based on carriers' previous performance. CMS proposes adding a 2.5 or lower star rating, bankruptcy or bankruptcy filings and exceeding the CMS threshold for compliance actions as bases for denying applications.
Network adequacy standards would also see a boost. CMS proposes requiring plan applicants to show they'll have a sufficient selection of contracted providers as part of the application for new and expanded service areas.
CMS also aims to lower beneficiary out-of-pocket drug costs through the rule. Part D plans can create agreements with pharmacies to pay less for drugs if the pharmacy doesn't meet certain metrics. CMS wants to require those insurers to apply all savings from these deals to the negotiated price of drugs. This would help beneficiaries share in the savings, according to a CMS fact sheet. The agency also proposes redefining the negotiated price as the lowest admissible payment to a pharmacy, starting Jan. 1, 2023.
"We are dedicated to ensuring older Americans and those with disabilities who are served by the Medicare program have access to quality, affordable health care, including prescription drugs and therapies," CMS Administrator Chiquita Brooks-LaSure said in a news release. "Today's proposed actions follow our guiding principles by improving health equity and enhancing access to prescription medications."
The agency wants to increase plan accountability for how they spend Medicare revenue. CMS proposes reinstating medical loss ratio reporting requirements next year that were in use from 2014 through 2017. Medicare Advantage and Part D carriers currently have to report the percent of revenue they spend on patient care and quality improvement, along with how much has to be paid back to CMS if they don't use at least 85% of the money on those activities. CMS wants also to make Medicare Advantage and Part D organizations report the underlying cost and revenue information needed to calculate and verify the medical loss ratio percentage and remittance amount.
CMS also proposes requiring Medicare Advantage plans to report the amount they spend on supplemental benefits not available through traditional Medicare.
Additionally, CMS offers several proposals to improve dual-eligible enrollees' experiences with Medicare Advantage, a move agency officials hinted at this fall. The proposed changes start with a requirement that all dual-eligible special needs plans establish and maintain at least one enrollee advisory committee. Insurers should consult with advisory committees on health equity topics, CMS said.
"We believe the health system is stronger when we listen to the people we serve," CMS said in the fact sheet.
The agency also proposes including questions on housing, food security and transportation access to health risk assessments for special needs plans.
The agency wants to codify a system for states to require certain dual eligible special needs plans to integrate their Medicare and Medicaid materials for enrollees to make it easier for enrollees to understand their benefits.
CMS proposes creating an additional pathway for states with integrated care programs to require Medicare Advantage plans establish contracts that only have dual eligible special needs plans. The agency expects this to help illuminate disparities between dual eligible special needs plans and other Medicare Advantage plans and to spur improvements for dually eligible beneficiaries.
Finally, CMS wants to specify that the maximum out-of-pocket limits for Medicare Advantage plans should be calculated based on the accumulation of all Medicare cost-sharing in the plans' benefits, regardless of whether Medicaid, the policyholder or another payer covered the expenses, or they remained unpaid. CMS believes this would save state Medicaid agencies $2 billion and increase payment to providers serving dual eligible beneficiaries by $8 billion over over 10 years.
Comments on the proposed rule are due by March 7.
