The Centers for Medicare and Medicaid Services' Medicare Advantage and Medicare Part D final rule for 2024 aims to further the agency's efforts to strengthen federal oversight of health insurance companies.
CMS published the regulation Wednesday, and it includes major changes to the standards for quality metics, prior authorizations, marketing and health equity. The agency issued the proposed rule in December.
“Today, we're announcing a rule that will crack down on misleading marketing schemes by the health insurance companies that offer Medicare Advantage plans, those that offer Part D prescription drug plans and their downstream entities,” Health and Human Services Secretary Xavier Becerra said during a news conference Wednesday.
The stronger regulations unveiled Wednesday arrive just after CMS issued its final 2024 rate notice for Medicare Advantage and Part D, which contains less severe payment policies than insurers feared.
"We are carefully reviewing and analyzing the final rule that makes changes to the [Medicare Advantage] and Part D program rules for 2024," health insurance industry association AHIP said in a news release. “As noted in our comment letter on the proposed rule, we supported a number of proposals that would strengthen consumer protections while retaining flexibility, choice, competition and value. At the same time, we also expressed concerns with proposed changes that would reduce funding or increase costs without benefiting seniors and people with disabilities."
The Association for Community Affiliated Plans and the Alliance of Community Health Plans did not provide comment.
“CMS’ final policy rule for 2024 will support Medicare Advantage’s efforts in bridging the health equity gap and providing high-quality care," Better Medicare Alliance President and CEO Mary Beth Donahue said in a news release. "We support provisions to streamline the prior authorization process to ensure timely access to care as well as steps to ensure transparency and accountability within Medicare Advantage."
"This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained healthcare workforce," Ashley Thompson, senior vice president for public policy analysis and development at the American Hospital Association, said in a news release.
CMS received nearly 40,000 marketing misconduct complaints from beneficiaries in 2021, a 157% increase over the prior year, the agency previously reported. Based on this evidence of growing problems, the final rule imposes new restrictions on marketing by health insurers, brokers and others. The regulation prohibits advertisements that do not use specific plan names and materials that include words or images that could be misleading, such as a Medicare logo.
CMS relaxed its Star Ratings quality assessments during the COVID-19 pandemic, contributing to a record number of Medicare Advantage carriers earning the highest scores and biggest bonuses in 2022. Health insurance companies have been steeling themselves for this trend to reverse and negatively affect their revenue. CMS will replace the reward factor with a health equity index and reduce the weight of patient experience and complaints on quality scores. CMS doubled the effects of patient surveys on ratings last year, which insurers cited to explain declines.
The health equity provisions and other aspects of the regulation are intended to reward health insurance companies for ensuring people from underserved communities receive quality care, Center for Medicare Director and CMS Deputy Administrator Dr. Meena Seshamani said. CMS estimates the health equity index, which begins with the 2027 Star Ratings, and new patient experience provisions will save taxpayers more than $8 billion combined over 10 years.
The final rule also continues CMS' efforts to reduce the prior authorizations burden on providers and patients. Insurers must halve the length of time they take to respond to prior authorization requests and extend approvals through the full course of a patient's treatments, and may no longer require preapproval for emergency behavioral healthcare.
“We want to make sure that where there is care that's needed, that a decision to offer it and pay for it is made by those who know about the value of the care, not by those who are just trying to save money at the expense of the patient,” Becerra said.
Insurers have to explain denials and publish data on their decisions. Patients in active treatment who change carriers must be given at least 90 days before the new insurer can require another prior authorization. Major insurance companies such as UnitedHealth Group and Cigna have already begun revamping their internal processes in anticipation of new regulations.
“The rule removes barriers to care created by complex coverage criteria and utilization management," Becerra said. "It's important that we don't let the bureaucracy within the health insurance company's plan make it impossible or difficult for seniors and Americans with disabilities to get the right plan for their needs."
Mental health, equity, drug costs
CMS also requires insurers notify beneficiaries when behavioral health or primary care providers leave their networks. Networks must include clinical psychologists, licensed clinical social workers and opioid use disorder medication prescribers.
In addition to including a health equity metric in the Star Ratings program, the final rule requires Medicare Advantage insurers to provide access to healthcare in a "culturally competent manner” by including the languages providers speak in network directories, offering digital health education and addressing health disparities in quality improvement programs.
The regulation also implements prescription drug pricing provisions from the Inflation Reduction Act of 2022.