CMS Releases MA and Part D Advance Notice and Draft Call Letter

February 2019 ~

On January 30, 2019, CMS released Part II of the Advance Notice of Methodological Changes for Calendar Year (CY) 2020 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2020 Draft Call Letter. The updates documents outline the proposed changes for the Medicare Advantage and Part D programs as well as the agency’s new Center for Medicare and Medicaid Innovation (CMMI) programs. According to CMS, these proposals will increase plan choices and benefits and also includes important actions to address the opioid crisis.

Key provisions of the Advance Notice and Call Letter can be seen below.

2020 Advance Notice

Payment Changes

MA plan revenues are expected to increase an average of 1.59% in 2020 (compared to a 3.4% increase in 2019). CMS will announce the final rates on April 1. According to the announcement, this change does not factor in CMS’ assumption for its estimate of the underlying coding trend, which is expected to increase average plan risk scores by 3.3%.

Net Payment Impact
The chart below, provided by CMS, indicates the expected impact of the proposed policy changes on plan payments relative to last year.

2020 Part C Risk Adjustment Model Proposals
CMS is also proposing changes to the CMS- Hierarchical Condition Category (HCC) Risk Adjustment model that is used to pay for beneficiaries enrolled in Medicare Advantage plans. The 21st Century Cures Act requires CMS to make adjustments to the risk adjustment model to take into account the number of conditions an individual beneficiary may have, and to make an additional adjustment as the number of conditions increases. For 2020, the agency suggests implementation of the model proposed, but not finalized in the 2019 Rate Announcement. According to CMS, the model adds variables that count the number of conditions a beneficiary may have that are in the risk adjustment model (“payment conditions”). Additionally, the agency is presenting an alternate Payment Condition Count model that is similar, but also includes additional condition categories not in the current risk adjustment model for pressure ulcers and dementia.

The 21st Century Cures Act requires that CMS fully phase in the required changes to the risk adjustment model by 2022, in response to this, CMS is proposing to begin the phase in of this new model in 2020, starting with a blend of 50% of the risk adjustment model first used for payment in 2017 and 50% of the new risk adjustment model proposed.

Using Encounter Data
For 2020, CMS proposes to calculate risk scores by adding 50% of the risk score calculated using diagnoses from encounter data, Risk Adjustment Processing System (RAPS)  inpatient diagnoses, and Fee-For Service (FFS) diagnoses, and 50% of the risk score calculated with diagnoses from RAPS and FFS diagnoses. CMS is also proposing to implement the phase-in of the new risk adjustment model by calculating the encounter data-based risk scores exclusively with the new risk adjustment model, while continuing use of the risk adjustment model first implemented for 2017 payment for calculating risk scores with RAPS data.

Coding Pattern Adjustment
Each year, as required by law, CMS makes an adjustment to plan payments to reflect differences in diagnosis coding between Medicare Advantage organizations and FFS providers. In CY 2020, CMS proposes to apply a coding pattern adjustment of 5.9%, which is also the minimum adjustment for coding intensity required by the statute.

Medicare Employer Retiree Plans 
In 2019, CMS completed the transition to administratively-set rates for Retiree Plans that was originally scheduled to be completed in 2018. For 2020, CMS is proposing to continue the payment policy that was finalized for 2019.

2020 Draft Call Letter

Improved Drug Utilization Review Controls

The Call Letter outlines several measures focused on reducing opioid abuse. CMS urges Part D plans to place opioid reversal agents on tiers with lower cost-sharing to ensure access to these drugs. As stated in the announcement, given the urgency and scope of the continuing national opioid epidemic, CMS is proposing a number of additional policies for 2020 to help Medicare plan sponsors prevent and combat prescription opioid overuse.

Pain Management and Complementary and Integrative Treatments in Medicare Advantage: CMS is encouraging plans to take advantage of the new flexibilities to offer targeted benefits and cost sharing reductions for patients with chronic pain or undergoing addiction treatment.

Access to Opioid Reversal Agents: CMS is strongly encouraging Part D sponsors to provide lower cost-sharing for opioid-reversal agents, such as naloxone.

Star Ratings: CMS is proposing to take steps to advance opioid-related measures through the Star Ratings development process. CMS is updating the methodology for measures currently on or under consideration for its display page, including: Use of Opioids at High Dosage and from Multiple Providers (OHDMP) (current display measure); Use of Opioids at High Dosage (OHD) and Use of Opioids from Multiple Providers (OMP) measures (proposed display measure); and Concurrent Use of Opioids and Benzodiazepines (COB) (proposed display measure). Reporting measures on the display page is a necessary step before the measure can be formally adopted as part of the Star Ratings through rulemaking.

Changes to Star Ratings

CMS proposes several changes to the Star Ratings program including a policy to adjust the 2020 Star Ratings in the event of extreme and uncontrollable circumstances, such as major hurricane weather events. The proposed policy to adjust star ratings in the event of extreme and uncontrollable circumstances is similar to the policy that CMS implemented for the 2019 Star Ratings and the policy that CMS proposed in the CY 2020 Parts C and D Policy and Technical Changes Notice of Proposed Rulemaking in November 2018.

CMS is also proposing several measure updates and announcing the removal of three measures from the 2022 Star Ratings. The agency is proposing the removal of the following measures from the 2022 Star Ratings program due to the measures showing low statistical reliability:

  • Adult BMI Assessment (Part C)
  • Appeals Auto-Forward (Part D)
  • Appeals Upheld (Part D)

CMS is proposing to temporarily remove the Controlling High Blood Pressure (Part C) measure from the 2020 and 2021 Star Ratings due to a substantive measure specification change to align with the release of new hypertension treatment guidelines from the American College of Cardiology and American Heart Association.

In addition, CMS is seeking feedback on suggestions for new Star Ratings concepts related to Part D appeals. CMS will continue to monitor sponsors’ processing of Part C and D appeals through several means and take enforcement actions as appropriate for access or compliance issues.

Supplemental Benefits for the Chronically Ill

CMS is proposing implementation of certain provisions of the Bipartisan Budget Act of 2018 (Public Law No. 115-123) that allow MA plans to vary supplemental benefit offerings based on the medical conditions and needs of chronically ill enrollees. Beginning with the 2019 plan year, CMS determined that plans can provide certain enrollees with access to different benefits and services. Specifically, Medicare Advantage plans can offer targeted supplemental benefits, including reductions from FFS Medicare-equivalent cost sharing, for specific enrollee populations based on health status or disease state in a manner that ensures that similarly situated individuals are treated uniformly.

The Bipartisan Budget Act of 2018 amended the statute to allow MA plans, beginning CY2020, to offer non-primarily health related supplemental benefits to chronically ill enrollees. The law also permits the Secretary, only with respect to supplemental benefits provided to a chronically ill enrollee under the new provision, to waive uniformity requirements, allowing MA plans to vary these supplemental benefits based on the individual enrollee’s specific medical condition and needs.  Special supplemental benefits for the chronically ill do not have to be uniform across the entire population of the chronically ill and may include, but are not limited to, transportation for non-medical needs, home-delivered meals (beyond the current allowable limited basis), food and produce. In the draft Call Letter, CMS provides guidance about these new special supplemental benefits for the chronically ill, including the definition of a chronic condition and how to submit these benefits in the MA bid.

Comments are due by 6:00 PM EST on Friday, March 1, 2019. The final Announcement and Call Letter will be published on April 1, 2019.

Source(s): 2020 Medicare Advantage and Part D Advance Notice Part II and Draft Call Letter Fact Sheet; CMS proposes Medicare Advantage and Part D payment and Policy Updates to Maximize Competition and Coverage Press Release; Advance Notice of Methodological Changes for Calendar Year (CY) 2020 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2020 Draft Call Letter (PDF); Modern Healthcare; Health Management Associates Blog; McDermott Will & Emery; Policy & Medicine; National Law Review; Lexology; JD Supra;