Medicare Advantage insurers face new regulations governing marketing, prior authorizations and supplemental benefits under a proposed rule the Centers for Medicare and Medicaid Services issued Monday.
The draft regulation also would raise network adequacy standards and promote the use of biosimilar medications, and is another step in a campaign by President Joe Biden's administration to rein in the health insurance companies participating in Medicare Advantage.
CMS reduced the base rate paid to Medicare Advantage carriers by 1.1% for 2024, introduced a risk-adjustment model that excludes 2,000 diagnoses that insurers and risk-bearing providers used to catalog members' illnesses, tightened audits, and made star ratings quality bonuses harder to earn.
Some Medicare Advantage carriers have responded to these policy changes by laying off workers and curtailing extra benefits. Humana sued to stop CMS from recouping an estimated $4.7 billion the agency determined Medicare overpaid.
Under the proposed rule published Monday, health insurance company payments to brokers and independent agents would be capped at $632 per Medicare Advantage enrollment starting in 2025. CMS also proposed all but banning volume-based bonuses insurers pay marketing companies for steering customers to specific plans.
CMS aims to limit practices it says lead to Medicare beneficiaries being directed to plans that are most lucrative for salespeople and insurers, and not necessarily best suited to their needs. "Today’s proposals further our efforts to curb predatory marketing and inappropriate steering that distorts healthy competition among plans,” CMS Administrator Chiquita Brooks-LaSure said in a news release.
The agency also proposed:
- Ordering Medicare Advantage carriers to conduct and publicly report how their prior authorization policies impact people with disabilities, members in special needs plans and low-income enrollees who receive Medicare Part D subsidies.
- Mandating that Medicare Advantage carriers include marriage and family therapists, mental health counselors, addiction medicine clinicians, and opioid-use disorder providers in their networks.
- Requiring insurers to design supplemental benefits using clinical evidence and to notify members who haven't utilized these benefits by mid-year.
- Putting independent contractors—not the insurers themselves, as is the current practice—in charge of reviewing members’ appeals for longer nursing home, outpatient or home health care.
- Limiting Medicare Advantage insurer challenges to risk-adjustment audits.
- Lifting a rule that carriers must notify regulators about changes to coverage of biosimilar drugs when the medicines are interchangeable.