Medicare Advantage Regulatory Changes Proposed by CMS
Continuing our series of analyzes of the recently proposed policy for policy year 2023 and technical changes to the rules for the Medicare Advantage and Medicare Prescription Drug Benefit (proposed rule) programs, this article focuses on a few things specific to Medicare Advantage plans. (MY). Here we discuss CMS proposals to (1) require initial and extended service area applicants to submit their proposed contract networks during the application process, (2) clarify that recipient access requirements during disasters and emergencies apply when there is a “disruption to access to health care,” (3) reverting to medical loss ratio (MLR) reporting requirements from 2014 to 2017, and (4) adjusting how the maximum disbursement limit (MOOP) is calculated for dual eligible beneficiaries.
Network adequacy standards
MA regulations require MA organizations (MAOs) to maintain a network of appropriate providers sufficient to provide adequate access to covered services for enrollees. The standards define specific time and distance thresholds for each combination of provider or type of facility specialty and each county – MAOs must ensure that at least 85% of beneficiaries in micro, rural or counties with extreme access conditions have access to at least one provider/facility of each specialty type within published time and distance standards (requirement is 90% for recipients residing in major metropolitan and metropolitan counties) . Additionally, AAMs must attest to compliance with these network adequacy standards during the application process for a new or expanded service area.
Beyond this certification, there is currently no obligation for an AAM to to prove compliance during the application process and CMS relies primarily on its triennial network review process to ensure compliance with these standards. While CMS may consider information relating to a MAO’s prior non-compliance with an MA contract due to network access and adequacy issues resulting in penalties or civil monetary penalties, CMS will not deny not an application based on AAM’s network assessment for a new or expanded service area and has not conducted network adequacy reviews during the application process since 2018 (for the year contract 2019).
As CMS notes in the proposed rule, since removing network adequacy reviews from the application process in 2018, it observed a series of gaps in its network reviews once MA plans were operational. . In response, the proposed rule would require initial and expanded service area applicants to submit their proposed contract networks during the application process beginning with the 2024 application cycle. CMS is also proposing to award OMA applicants a credit of 10% points on time-distance percentage requirements for a new service area or service area extension.
Access of beneficiaries to care during disasters and emergencies
Current regulations require AAMs to cover services provided by noncontracted providers and waive referral requirements when health plan services are impacted by disasters or emergencies, including public health emergencies (PHEs). The purpose of these regulations is to (1) ensure that IA recipients have access to health care services and (2) inform out-of-network (OON) providers of payment terms for providing services to enrollees. involved in disasters or emergencies. In response to questions received on the applicability of certain requirements during the COVID-19 PHE, CMS proposes to clarify that MAOs are required to comply with these standards when there is both a declaration of a disaster or an emergency. and disruption of access to health care. A “disruption to access to health care” is defined as “an interruption or interference in the service area such that enrollees are unable to access contracted providers or that contracted providers lack the capacity to provide needed services, which prevents AAMs from responding to normal patterns of community health care delivery in the service area.” CMS is also proposing technical changes to clarify the period during which AAMs must comply with these obligations.
Medical Loss Ratio Report
MLR is a measure of revenue used for patient care relative to other items, such as administrative expenses or profit. The Affordable Care Act instituted MLR standards for a wide variety of payers, including those operating under MA and Part D plans, the commercial market, and Medicaid. For MA plans, MLR reflects the percentage of contract revenue spent on claims incurred for all enrollees (including prescription drug costs for Medicare Advantage Prescription Drug (MAPD) plans), initiatives and the amounts used to reduce Part B premiums. For Part D plans, the MLR reflects the percentage of contract revenue spent on incurred claims (reduced by direct and indirect compensation) for all Part D prescription drug and quality initiative enrollees.
The MLR requirements for MA and Part D plans, which came into effect from 2014, require MA and Part D plans to achieve a minimum MLR of 85% or face sanctions and financial penalties. Between 2014 and 2017, CMS required MA and Part D plans to report MLR data on forms modeled after commercial MLR reporting requirements, with the purported aim of requiring payers to use different MLR reporting forms for their commercial products versus Medicare. burden on these organizations. The reports used for 2014-2017 required the underlying data used to calculate and verify the MLR and any payout amounts, such as claims incurred, total revenues, expenditures for quality improvement activities, costs not related to claims, taxes and regulatory fees. However, in response to President Trump’s Executive Order on Reducing Regulation and Controlling Regulatory Costs (2017), CMS significantly streamlined Medicare reporting requirements for MLR in 2018, requiring MA and Part D plans not to report that the following seven items: Contract Year, Contract Number, Organization Name, MLR Form Finalization Date, Contact Information, Adjusted MLR, and MLR Rebate Amount Due.
CMS is proposing to reinstate the detailed MLR reporting requirements that were in effect for contract years 2014 through 2017. CMS is also proposing to collect additional details about plan expenditures to allow them to better assess the accuracy of MLR submissions, services provided to registrants and the impacts of recent rule changes.
Maximum Disbursement Policy for Dually Eligible Beneficiaries
Current regulations require MA plans to establish a limit on beneficiary cost sharing for Medicare Part A and B services, after which the plan pays 100% of the service costs. MA plans for dual-eligibility beneficiaries have the option of only counting amounts that the individual enrollee is responsible for paying, net of any state liability or cost-sharing waiver toward the MOOP limit, rather than the cost-sharing amounts for services that the plan has established in its benefits package. CMS found that this resulted in virtually no cap on the amount a state could pay for the cost-sharing of a dual-eligible recipient’s MA. Essentially, state Medicaid programs end up paying more in Medicare cost-sharing for dual-eligible enrollees than if the plan calculated reaching the MOOP limit based on cost-sharing amounts for services in its benefit package. .
Accordingly, CMS proposes to require that the MOOP limit for an MA plan be calculated based on the accumulation of all Medicare cost shares in the plan, that this Medicare cost share be paid by the beneficiary, Medicaid, another secondary insurance, or remains unpaid due to state limits on the amounts paid for Medicare cost sharing and the exemption of those eligible for Medicare cost sharing. CMS expects this change to create significant savings for state Medicaid agencies and increase payments to providers serving dual-eligibility beneficiaries.
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