Key Takeaways From CMS’s Contract Year 2021 Medicare Advantage and Part D Final Rule

Will modest incentives for Medicare Advantage organizations to supplement networks with telehealth providers be a look into CMS’s post-pandemic view of telehealth?

CMS recently issued the Contract Year 2021 Medicare Advantage and Part D Final Rule (the “Final Rule”).  The Final Rule will revise regulations for the Medicare Advantage (“MA” or “Part C”) program, the Medicare Prescription Drug Benefit (“Part D”) program, and the Medicare Cost Plan program to implement certain sections of the Bipartisan Budget Act (“BBA”) of 2018 and the 21st Century Cures Act (the “Cures Act”).  This Final Rule focused on finalizing prior proposals addressing COVID-19, and those proposals most helpful to MA and Part D plans in light of the June bidding deadline.  Any proposals not addressed in this Final Rule will be addressed in a second Final Rule and will become applicable no earlier than January 1, 2022.  A high-level summary of the Final Rule follows below.

  1. MA and Cost Plan Network Adequacy

CMS is strengthening network adequacy rules for MA plans by codifying the existing network adequacy methodology and finalizing new policies to provide support for more plan options in rural areas and encourage the use of telehealth in all areas.  Specifically:

    • For rural areas, CMS is reducing the required percentage of beneficiaries that must reside within the maximum time and distance standards from 90% to 85%. This could help MA organizations build networks in these areas, which would provide additional MA plan options for beneficiaries.
    • CMS is also taking steps to encourage and account for telehealth providers in contracted networks. MA plans will receive a 10% credit towards the percentage of beneficiaries that must reside within published time and distance standards when the plan contracts with telehealth providers for Dermatology, Psychiatry, Cardiology, Otolaryngology, Neurology, Ophthalmology, Allergy and Immunology, Nephrology, Primary Care, Gynecology / OB/GYN, Endocrinology, and Infectious Diseases.

CMS believes the 10% credit is significant enough to have an impact on MA plans and encourage the use of telehealth, while being proportionate to the role that telehealth providers have in a contracted network.  With this incentive and increased demand due to COVID-19, MA plans may contract with more telehealth providers.

    • CMS will also allow MA organizations to receive a 10% credit towards the percentage of beneficiaries residing within published time and distance standards for affected provider and facility types in states that have CON laws, or other state imposed anti-competitive restrictions, that limit the number of providers or facilities in a county or state.
  1. MA Plan Options for End-Stage Renal Disease (“ESRD”) Beneficiaries

 Since the beginning of the MA program, individuals with ESRD have not been able to enroll in MA plans (subject to limited exceptions).  In following the Cures Act, effective for the plan year beginning January 1, 2021, CMS is removing the prohibition on beneficiaries with ESRD enrolling in an MA plan.  CMS is also implementing related MA and Medicare fee-for-service (“FFS”) payment changes made by the Cures Act.

  1. MA and Part D Prescription Drug Program Quality Rating System

CMS utilizes the Star Ratings system to measure the quality of health and drug services received by beneficiaries enrolled in MA and Part D plans.  These plans are measured on how well they perform in various categories.  CMS is finalizing:

    • An increase in the weight of patient experience/complaints and access measures.
    • A reduction in the influence of outliers on cut points by adding Tukey outlier deletion prior to clustering (application delayed until the 2022 measurement year, which will impact the 2024 Star Ratings produced in October 2023).
    • Removal of the Rheumatoid Arthritis Management measure.
    • An update to the Part D Statin Use in Persons with Diabetes measure weighting category.

Remaining Star Ratings proposals will be addressed in later rulemaking.  Note that CMS previously adopted several changes to the 2021 and 2022 Star Ratings to address the expected disruption to data collection and core measures scores posed by COVID-19.

    4.  Special Election Periods (“SEPs”) for Exceptional Conditions

Under certain circumstances, an individual may request enrollment in an MA plan or discontinue the election of an MA plan and change his or her election to Original Medicare or to a different MA plan.  Likewise, under certain circumstances, an individual may enroll in a stand-alone Part D prescription drug plan (“PDP”) or disenroll from a PDP and enroll in another PDP or in an MA plan that includes Part D benefits (“MA-PD plan”).  In the Final Rule, CMS is codifying a number of SEPs adopted and implemented through sub-regulatory guidance as exceptional circumstances SEPs.  CMS is also establishing two new SEPs for exceptional circumstances.

Of note, CMS is expanding the scope of the SEP for individuals affected by a FEMA-declared weather-related emergency or major disaster to apply to FEMA-declared emergencies, as well as emergency declarations issued by a federal, state, or local government entity.  This SEP (which will now be referred to as “SEP for Government Entity-Declared Disaster or Other Emergency”) will be available in the geographic areas identified in the emergency/disaster declaration.

  1. Implementing Certain BBA of 2018 Provisions

CMS is finalizing a minor policy update to Special Supplemental Benefits for the Chronically Ill (“SSBCI”).  Previously, eligibility for SSBCI was limited to those chronic conditions outlined in the Medicare Managed Care Manual (Chapter 16b).  Beginning in contract year 2021, CMS is allowing plans to target other chronic conditions.  CMS is also finalizing a proposal to limit Dual Eligible Special Needs Plan (“D-SNP”) “look-alikes”.

For any questions regarding the Contract Year 2021 Medicare Advantage and Part D Final Rule, please contact Advis at (708) 478-7030.

Published: June 1, 2020