红领巾瓜报

This week, our In Focus section reviews a wide-ranging and comprehensive final rule released April 4, 2024, by the Centers for Medicare & Medicaid Services (CMS).鈥疶he  revises and updates policies that affect Medicare Advantage (MA) and Medicare Part D coverage beginning in the upcoming plan year. 

The policies adopted in the final rule aim to strengthen consumer protections and guardrails, promote fair competition, and ensure MA and Part D plans can best meet the healthcare needs of Medicare beneficiaries, including individuals dually eligible for Medicare and Medicaid.鈥疘n addition, the final rule includes important new policies to expand access to behavioral health providers, promote equity in healthcare coverage, and improve access to and use of Medicare Advantage supplemental benefits.鈥疶hese policy changes complement payment policy changes that were recently finalized in the April 1, 2024,  and will take effect June 3, 2024.  

Below 红领巾瓜报 experts walk through the major policies CMS finalized. 

Expanding Access to Behavioral Health Providers 

CMS finalized several regulatory changes to improve Medicare beneficiaries鈥� access to behavioral health services through strengthened MA network adequacy standards. These changes include: 

• Establishing network evaluation standards for a new facility-specialty provider category, called outpatient behavioral health. This category includes a range of behavioral health providers, including marriage and family therapists (MFTs), mental health counselors (MHCs), opioid treatment programs, community mental health centers, addiction medicine specialists and facilities.鈥疧utpatient behavioral health will be included in network adequacy evaluations. 
• Permitting MFTs and MHCs to enroll and start billing Medicare鈥攁s a result of statutory changes established in the Consolidated Appropriations Act (CAA) of 2023鈥攁nd establishing corresponding changes to network adequacy standards for MA plans. 
• Requiring MA plans to independently verify that behavioral health providers added to their network furnish services to at least 20 patients within a 12-month period. 
• Adding outpatient behavioral health facility-specialty to the list of the specialties that will receive a 10 percent credit toward meeting network adequacy time and distance standards. 

Impact: Adding the outpatient behavioral health category is expected to enhance Medicare beneficiaries鈥� access to a broader scope of behavioral health specialists. As result of the new policy and network expectations, MA plans may need broaden their networks, and providers that contract with MA plans may need to strengthen their capacity to address Medicare billing and reporting requirements, including quality reporting initiatives.  

Require Mid-Year Enrollee Notification of Supplemental Benefits 

The number of MA plans that offer supplemental benefits to beneficiaries is increasing, with the most frequently offered supplemental benefits including coverage for vision, dental, and hearing services.鈥� Moreover, many MA plans also are offering supplemental benefits to address unmet social determinants of health needs, including home meal delivery, transportation, and in-home services and supports.鈥疉t the same time, use of these benefits is reportedly low, and there are gaps in research and data analysis about how these benefit offerings are affecting beneficiaries鈥� cost and health outcomes.鈥�  

As a result, CMS is finalizing policies that require MA plans to engage in outreach to beneficiaries.鈥疭pecifically, the final rule requires MA plans to send enrollees a mid-year notification regarding their unused supplemental benefits.鈥疶he notification must include information on the scope of the benefit, patient cost-sharing, and detailed instructions on how beneficiaries can access their unused benefits.鈥� 

Impact: This change is intended to improve beneficiary awareness of plans鈥� supplemental benefit offerings and encourage greater use of these benefits. As a result of the regulatory changes, MA plans may look to further refine and adjust their MA supplemental benefit offerings to further improve the healthcare experience for Medicare beneficiaries. 

New Standards for Supplemental Benefits under SSBCI 

MA plans also offer supplemental benefits to beneficiaries through the Special Supplemental Benefits for the Chronically Ill (SSBCI) program, whereby people with ongoing and complex chronic conditions can receive supplemental benefits that are tailored to their specific health and social needs.鈥疘n the final rule, CMS establishes new requirements for MA plans to demonstrate the value of these services by submitting evidence that the item or service will improve or maintain the overall health of chronically ill beneficiaries.鈥�  

Impact: This new reporting requirement is intended to ensure that SSBCI items and services are evidence-based and meaningful. As these regulatory changes are implemented under tight timelines, plans will need to move quickly to compile clinical data and evidence on the effectiveness of these targeted benefits, while also considering changes in their benefit offerings to better meet the needs of beneficiaries with complex and chronic conditions. 

MA Star Rating Changes 

In the final rule, CMS describes its ongoing work to streamline quality measures, including the agency鈥檚 progress in moving toward the Universal Foundation of core quality measures that are aligned across CMS鈥檚 quality and value-based programs.鈥疌MS notes that MA plans are beginning to report additional measures that are part of the Universal Foundation.鈥疷nder previous regulations, CMS proposed to make the following changes to specific measures in the Star Ratings system: 

• Remove the standalone Part C medication reconciliation post-discharge measure
• Add the updated Part C colorectal cancer screening measure with the NCQA (National Committee for Quality Assurance) specification change 
• Add the updated Part C care for older adults鈭抐unctional status measure with the NCQA specification change. 

Impact: These changes build on earlier CMS efforts to improve the Star Rating system, including adding a health equity index and reducing the weight of patient experience and access measures to better align with the CMS Quality Strategy. 

Ensure More Dual-Eligible Managed Care Beneficiaries Receive Medicare and Medicaid Services from the Same Organization 

CMS finalized several significant changes designed to improve access to integrated care for dually eligible beneficiaries, including the following:  

• CMS is limiting enrollment in certain Dual Eligible Special Needs Plans (D-SNPs) to individuals who are also enrolled in an affiliated Medicaid managed care organization (MCO).  
• CMS also limits the number of D-SNP benefit packages that an MA organization can offer in the same service area as an affiliated Medicaid MCO. If a state Medicaid agency requires it, MA plans may offer more than one D-SNP for full-benefit dually eligible individuals in the same service area as the MA organization鈥檚 affiliated Medicaid MCO.  
• Dually eligible鈥痓eneficiaries will have an opportunity to enroll in an鈥痠ntegrated D-SNP monthly under a new integrated care special enrollment period (SEP). 
• CMS is lowering the D-SNP look-alike threshold from 80 percent to 70 percent for plan year 2025 and to 60 percent for plan year 2026 and into the future.  

Impact: These are considerable changes that are designed to increase the percentage of dually eligible beneficiaries enrolled in MA plans that also are contracted to cover Medicaid benefits. In addition, these changes will expand access to integrated member materials, unified appeals processes across Medicare and Medicaid, and continued beneficiary access to Medicare services during an appeal.鈥� 

Require Health Equity Assessments of Utilization Management Practices and Procedures 

CMS finalized several regulatory changes to the composition and responsibilities of MA plans鈥� utilization management (UM) committees, including the following:  

• At least one member of the UM committee must have expertise in heath equity. 
• The UM committee must conduct an annual assessment of UM practices and procedures on health equity, with a particular focus on the impact on beneficiaries who are low-income, dually eligible for Medicare and Medicaid, or have a disability. 
• MA plans must make the health equity analysis publicly available on the plan鈥檚 website. 

Impact: These policy changes are aimed at assessing the impact of utilization management through a health equity lens and ensuring that these policies and procedures do not have a disproportionate impact on access to medically necessary care for underserved populations.  

Other Provisions 

The final rule makes several other notable regulatory changes to MA and Part D, which include: 

• Allowing Part D plans to substitute biosimilars for the reference biologic product during the plan year as part of formulary maintenance changes, which is expected to expand access to lower cost biosimilars for Medicare beneficiaries  
• Limiting out-of-network cost sharing for D-SNP PPOs 
• Standardizing the MA risk adjustment data validation appeals process 
• Establishing new guardrails for plan compensation to agents and brokers to prevent anti-competitive steering of beneficiaries and new requirements to third-party marketing organizations   
• Changes to Medicare Part D medication therapy management (MTM) eligibility criteria 

What鈥檚 Next  

CMS continues its work to incorporate requirements for consumer engagement and transparency of data to address health equity. This final rule is poised to have a significant impact on plan benefit design and the landscape of health insurance markets in states and regions of states. CMS has created additional opportunities for states to advance integrated care initiatives that align with Medicaid, which will have downstream implications for MA and Medicaid plans, providers, and partnering organizations.  

The 红领巾瓜报 team will continue to analyze and assess these regulatory changes that CMS has finalized. We have the depth, experience, and expertise to assist in tailored analysis and model policy impacts of the recently finalized changes.鈥� For more information or questions about the policies described, contact our featured experts.

This week, our In Focus section reviews the recently  policy and payment updates from the Centers for Medicare & Medicaid Services (CMS) that will affect Medicare Advantage (MA) and Medicare Part D programs in calendar year (CY) 2025. We also take a look at the CY 2025 Part D Redesign Program . 

Both the rate announcement and program instructions include important technical updates and payment policy changes that will affect MA and Part D plans.鈥疌MS previously released a proposed rule in November 2023 that included proposed policy changes to MA and Part D. 红领巾瓜报, Inc., colleagues are closely monitoring how the final Rate Notice will shape the industry鈥檚 approach to the separately proposed policies for supplemental benefits, integrated dual eligible special needs plans (D-SNPs), and encounter data policies among others.  

The following are highlights from the CY 2025 Rate Announcement and significant changes CMS made from the Advance Notice released earlier this year. 

Payment Impact on MA 

CMS estimates that the final ate announcement will lead to a 3.70 percent increase in average payments to MA plans in CY 2025. This reflects the net payment impact of policy changes and updates to MA plan payments relative to 2024 and is the same amount as proposed in the CY 2025 Advance Notice released on January 31, 2024.鈥疉s a result, MA plans will receive an estimated $16 billion increase in payments for CY 2025, and according to CMS, the federal government is expected to make $500鈭�$600 billion in payments to MA plans in 2025.鈥疶his reimbursement increase鈥攚hich include all the various elements affecting MA plan payments, including the MA risk score trend鈥攔epresents the average payment increase across all MA plans, although the actual impact on each plan will vary. 

Effective Growth Rate 

The effective growth rate finalized in the CY 2025 rate announcement is 2.33 percent, down slightly from 2.44 percent in the advance notice.鈥疶he effective growth rate is driven largely by growth in Medicare fee-for-service expenditures, and the CY 2025 Rate Announcement was updated to include program payments during the fourth quarter of 2023.鈥疘n addition, the technical medical education adjustment has declined from 67 percent in the Advance Notice to 52 percent in the Rate Announcement. 

Medicare Advantage Risk Adjustment and Coding 

The rate announcement continues to phase in the updated risk adjustment model by blending 67 percent of the risk score calculated using the updated 2024 MA risk adjustment model with 33 percent of the risk score calculated using the 2020 MA risk adjustment model.鈥� These revisions to the MA risk adjustment model, which include important technical updates to improve the model鈥檚 predictive accuracy, were finalized last year under the CY 2024 Rate Announcement with a three-year phase-in.鈥疶he Rate Announcement also finalizes that CMS will adopt a new methodology for normalizing risk scores to more accurately address the effects of the COVID-19 pandemic. 

Consistent with what the agency proposed in the Advance Notice, in CY 2025, CMS will apply the statutory minimum 5.90 percent MA coding pattern difference adjustment. 

Star Ratings 

CMS continues work toward implementing the 鈥淯niversal Foundation鈥� of quality measures鈥攁 subset of metrics aligned across public programs.鈥疌MS invites stakeholder feedback as it continues to explore adding measures to the Star Ratings, which are components of the Universal Foundation. 

For the CY 2025 rate announcement, Star Ratings changes include the types disasters that are included in the adjustment, updates to the non-substantive measure specification, and the list of metrics for inclusion in the MA and Part D improvement measures and Categorical Adjustment Index for 2025 Star Ratings. 

Part D Design and Part D Risk Adjustment Changes 

The Rate Announcement details several important changes to the standard Part D drug benefit for CY 2025 as required by the Inflation Reduction Act (IRA). These adjustments include eliminating the coverage gap phase from a three-phase benefit (deductible, initial coverage, and catastrophic) and setting the annual cap on patient out-of-pocket prescription drug costs at $2,000.鈥疶he changes in Part D coverage design will have a significant impact on liability for Medicare beneficiaries, Part D plans, drug manufacturers, and CMS.  

CMS also finalized updates to the Part D risk-adjustment model to reflect Part D design changes included in the IRA and to ensure Part D plan sponsors can develop accurate bids for CY 2025.鈥疶hese changes include calibrating the Part D risk model using more recent data years and updating the normalization factor to reflect differences between MA-PD plan and standalone Part D plan risk score trends. 

Key Considerations 

Overall the final rate notice maintains stability and the opportunity for beneficiary choices in the MA program even as it continues to implement noteworthy changes in risk adjustment. The payment policies finalized in the CY 2025 Rate Announcement will have varying effects across MA plans, with some experiencing larger or smaller impacts in CY 2025.鈥疨lans should assess these effects as they prepare their bid submissions for 2025. 

In the CY 2025 rate announcement, CMS indicates that the 3.70 percent increase will provide continued stability in beneficiary access, choice, and benefits while ensuring accurate, appropriate payments to Medicare Advantage organizations. 

Looking ahead, CMS also has proposed policy and technical changes to the MA and Part D programs, which are expected to be finalized in the coming days.鈥�红领巾瓜报鈥檚 summary analysis homes in on key issues that likely will be included in the final rule. CMS continues to solicit feedback from stakeholders on ways to reinforce and improve transparency in the MA program through the CMS  on MA data collection. Comments are due May 29, 2024. 

The 红领巾瓜报 team will continue to analyze the important payment and technical changes finalized in the CY 2025 rate announcement.鈥疻e have the depth, experience, and subject matter expertise to assist with tailored analysis and the modeling capabilities to assess the policy impacts across the multiple rules and guidance. 

If you have questions about the comments of the CY 2025 Rate Announcement and payment policies that impact MA plans, providers, and beneficiaries, contact our featured experts.

This week, our In Focus section looks at the voluntary Accountable Care Organization Primary Care Flex (ACO PC Flex) Model, which the Centers for Medicare & Medicaid Services (CMS) Innovation Center announced on March 19, 2024. This model is designed to increase the number of low revenue ACOs in the Medicare Shared Savings Program (MSSP). Model participants will receive a one-time advanced shared savings payment and monthly prospective population-based payments. The ACO PC Flex Model is intended aims to support care delivery transformation, innovation, and team-based approaches to improve quality and reduce costs of care.

The ACO PC Flex Model is structured to increase the number of low revenue ACOs (i.e., ACOs composed of physicians, a small hospital, and/or serve rural areas). CMS  results in August 2022 indicating  that low revenue ACOs generated $113 more per capita savings than their high revenue counterparts.  CMS  in July of 2023 that the agency was seeking new opportunities for ACOs to serve Medicare beneficiaries. With this model, the Innovation Center is providing flexible payment to support innovative, team-based, person-centered, and proactive approaches to care for a subset of ACOs that have historically generated savings.

ACO PC Flex Model payments are structured to provide advanced shared savings to support administrative activities necessary for the model and ongoing payments specifically for primary care. The payment approach includes:

• A monthly prospective primary care payment consisting of 1) a county base rate determined by average primary care spending, and 2) payment enhancements to support increased access to primary care, provision of care, and care coordination, which are exempt from CMS recoupment
• An advanced shared savings payment as a one-time advance the changes needed to support needed operations and administration

With the approach, the Innovation Center anticipates CMS will be able to improve access to primary care services, particularly for underserved communities, and empower providers through flexible, stable payments to innovate care delivery to better meet their patients鈥� needs.

The demonstration will start January 1, 2025, and run for five years. The request for applicants (RFA) is expected in the second quarter of 2024, and ACOs must apply for participation in MSSP as a new or renewing organization to be eligible for ACO PC Flex. Applications for MSSP close June 17, 2024.

More details are expected to be included in the RFA. If you are interested learning more about the ACO PC Flex Model, please contact our featured experts.