The rising cost of drugs in the U.S. is frequently in the news. So it is not surprising that in its contract year 2019 Proposed Medicare Advantage and Part D Regulations (Proposed Rule), the Centers for Medicare & Medicaid Services (CMS) seeks to address Part D drug prices. CMS proposes making certain changes that might lower drug costs (for Plan Sponsors and beneficiaries) and requests information regarding avenues to potentially lower Medicare beneficiaries’ point-of-sale drug costs. The three provisions in the Proposed Rule that most directly relate to drug pricing address: (1) generic drug formulary placement, (2) cost-sharing for follow-on biological products, and (3) whether and how to reduce point-of-sale drug prices based on manufacturer rebates and pharmacy price concessions that a Plan Sponsor might receive months after the beneficiary receives the drugs. We will concentrate on the first two provision in this post. The third provision, which is a request for information, will be discussed in a later post.  Continue Reading Proposed Medicare Advantage and Part D Regulations for CY 2019 – CMS Takes Aim at Drug Prices

On May 6, 2015, CMS issued interim final rules relating to Medicare Part D beneficiary access to Part D drugs.  Through the rules, CMS announced updates regarding the impending prescriber enroll or opt-out effective date, provisional supplies, and “other authorized prescribers” (a newly defined term).  CMS initially proposed rules relating to these topics in January 2014 as discussed in our earlier post.  After issuance of these rules, many parties voiced their concerns that the proposed requirements would result in many beneficiaries losing access or having delayed access to their Part D drugs.  The changes that CMS announced on May 6, 2015 appear positioned to address these concerns.

Under the interim final rules, prescribers (which include physicians and eligible professionals) now have until January 1, 2016 to enroll in Medicare or file an opt-out affidavit.  This is the second time that CMS has delayed the requirement; first from June 1, 2015 to December 1, 2015, and now to January 1, 2016.  By allowing prescribers more time to enroll or out-opt, CMS believes that fewer beneficiaries will be faced with the prospect of submitting a prescription to a pharmacy written by a prescriber who failed to meet the initial or second deadline.

The other two significant announcements in the internal final rules, those relating to other authorized prescribers and provisional supplies and beneficiary notices, may have a more significant impact on beneficiary access than CMS’s decision to delay the enroll/opt-out effective date. Continue Reading CMS Changes Medicare Prescriber Enrollment Requirements

In its February 20, 2015 Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter, CMS addressed a variety of issues relating to its Star Ratings system. The three most notable being (1) changes and new considerations in the Star Ratings system, (2) an announcement of the quality bonus payment percentage, and (3) the establishment of the timeline under which plans will receive notification that their contracts will be terminated as a result of having three consecutive years of star ratings below three stars. The topics themselves demonstrate that the information in the Call Letter sets the stage for plans to be very big winners or very big losers.

Changes to the System

The most noteworthy announcement related to Star Ratings in the Call Letter is CMS’s discussion of whether plans with a high percentage of dual eligibles and/or low income subsidy (LIS) enrollees are disadvantaged by the current Start Ratings system when compared to plans that do not serve a large duals or LIS population. CMS had previously released a Request for Information that gave interested parties the opportunity to provide analysis and research that demonstrated that dual status negatively impacts Parts C and D quality measures. CMS received multiple comments from a variety of entities relating to this topic and conducted its own extensive research, and while it seems to still be questioning the causal link, has proposed to reduce the weight of six Part C measures and one Part D measure for all plans. The affected Part C measures are: breast cancer screening, colorectal cancer screening, diabetes care – blood sugar controlled, osteoporosis management in women who had a fracture, rheumatoid arthritis management, and reducing the risk of falling. The affected Part D only (not MA-PD) measure is medication adherence for hypertension. CMS recognized that after additional research, it may be appropriate in the long term to adjust Star Ratings where scientific evidence supports that certain measures are impacted by factors including comorbidities, disability, or duals/LIS status. CMS also announced that it is considering developing an integrated Star Ratings system for the Financial Alignment Initiative Medicare-Medicaid Plans (MMPs).

Like last year, CMS included a detailed discussion of changes that will be made to certain measures that comprise the Star Ratings system. Significantly, as proposed in the 2015 Call Letter, CMS has decided to remove pre-determined 4-star measure thresholds for the 2016 Star Ratings. This change impacts 22 Part C and 5 Part D measures. CMS explained that it has seen plans achieve greater improvements in measures without pre-determined 4-star thresholds and believes that the thresholds can sometimes skew ratings when plans are close to the threshold but fall on different sides of the line.

Some of the measures that are being added, returning, or adjusted include the following categories: MTM completion rate for comprehensive medication reviews (Part D), breast cancer screening, beneficiary access and performance problems (Parts C and D), controlling blood pressure (Part C), timely decisions about appeals (Part C), all-cause readmissions (Part C), complaints about plans (Parts C and D), and certain medication adherence measures relating to diabetes medications, hypertension, and cholesterol. The Call Letter also lists measures that are being retired or temporarily removed. Continue Reading CMS Call Letter: Changes to and Implications of Star Ratings

Written by: Laurence J. Freedman, Theresa Carnegie, and Kimberly Gold

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its Fiscal Year 2015 Work Plan on October 31.  The Work Plan provides the OIG’s planned reviews and activities with respect to HHS programs and operations during the current fiscal year and beyond.

In the introduction to the Work Plan, OIG stated that, in the coming year, it plans to continue to focus on issues such as emerging payment, eligibility, management, IT security vulnerabilities, care quality and access in Medicare and Medicaid, public health and human services programs, and appropriateness of Medicare and Medicaid payments.

OIG’s course remains relatively steady, with a wide range of reviews under Part A and Part B, and additional close scrutiny of certain Medicare Advantage and prescription drug plan issues.  OIG has added substantial areas of review under the Affordable Care Act of 2010, now that enrollment and exchanges are in the implementation stage. Continue Reading Key Takeaways from OIG’s 2015 Work Plan

Since the beginning of the Medicare Part D program, CMS has introduced many reporting mechanisms for trying to understand drug pricing, price concessions, and the cost of providing services to Part D members.  The tool CMS has turned to most often is the direct and indirect remuneration (“DIR”) report.  The stated purpose of DIR reporting is for a plan sponsor to report all price concessions it received throughout the plan year that impacted how much it cost to provide Part D services to its members.  CMS then reconciles its payments to plan sponsors based on their DIR reports.  Over the last eight years, CMS has continuously expanded DIR reporting requirements trying to further understand the costs associated with the Part D program.  The DIR reports required to be filed this year for contract year 2013 included more than twice the number of DIR categories and columns as when the Part D program started in 2006.  The number of new columns and newly discovered or created categories of DIR or other remuneration that need to be reported on a DIR report (even though it is not DIR, for example, bona fide service fees) grow so quickly that at times it has been nearly impossible to obtain substantive guidance from CMS regarding what types of amounts go into what categories, often leaving plan sponsors in a frustrating and at times scary position. Continue Reading Front End Changes and, Again, More DIR Columns

Last Friday, the HHS Office of the Inspector General issued a highly anticipated proposed rule that provides new and modified regulatory safe harbors to the Anti-Kickback Statute, amends regulatory provisions related to enforcement of the Beneficiary Inducement Civil Monetary Penalty Law (CMP) provisions, and attempts to narrow the prohibitions covered by the Gainsharing CMP.   The proposed rule affects a wide range of increasingly common health care business arrangements, including referral services, cost-sharing waivers (including under Medicare Part D), free transportation services, coupons, rebates, and retailer reward programs.

A Health Care Alert authored by my colleagues Theresa Carnegie, Thomas Crane, Carrie Roll, and Stephanie Willis provides an in-depth summary and analysis of the OIG’s proposals and notes areas ripe for stakeholder input.  Comments to the Proposed Rule are due December 2, 2014.

Written by:  Tara E. Swenson

Last week CMS announced that it would not execute its option to terminate its 2015 contracts with Medicare Advantage Plans and Part D plans that had scored three stars or less for three consecutive years.  At the same time, CMS announced that it was seeking information from insurers and others in the industry regarding how serving a disproportionate share of dual eligible enrollees causes Medicare Advantage and Part D plans to receive lower quality measure scores.  In the alternative, CMS is also seeking information regarding how certain Medicare plans that serve dual eligible achieve high performance levels.   In order to be considered, comments must be received by November 3, 2014.

While CMS seeks this information, it is continuing to confront a variety of challenges to its Duals Demonstration Project under which it is attempting to partner with states to coordinate providing care through managed care entities able to provide both Medicare and Medicaid services.  Since the start of the Duals Demonstration, CMS has seen some states exhibit interest in participating but ultimately decline to engage and some managed care organizations go through the process to be approved to provide the plans and then pull out of participating.  The Duals Demonstration is currently facing legal challenges in California where a variety of groups are claiming that the passive enrollment process violates individuals’ due process rights.

CMS’ RFI provides a good opportunity for industry participants to explain the challenges of serving and providing managed care to a low income population that can be more difficult to contact and engage than the traditional Medicare population.

Written by:  Theresa C. Carnegie

Following an onslaught of criticism, CMS told Congress today that it will not move forward with certain controversial provisions of its proposed rule on the Medicare Advantage and Medicare Part D prescription drug program.

In a letter to House Ways and Means Committee Ranking Member Sander Levin (D-MI), CMS Administrator Marilyn Tavenner stated that the agency will not finalize proposals to (i) lift the protected class definition of three drug classes, (ii) set standards on Medicare Part D plans’ requirements to participate in preferred pharmacy networks, (iii) reduce the number of Part D plans a sponsor may offer, and (iv) clarify the Part D non-interference provisions.  Tavenner states:

Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time.  We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years.

Continue Reading CMS Abandons Certain Controversial Provisions in its Proposed Medicare Part D Rule

Written by Roy Albert and Theresa Carnegie

Earlier today, CMS made available its 2013 Medicare Health Plan Quality and Performance Ratings, also called “Star Ratings.”  The Star Ratings will assist enrollees during the annual enrollment period that extends from October 15, 2012 to December 7, 2012 and will also play a significant role in determining reimbursement rates for Medicare Advantage Plans.

In the past, Star Ratings were used both as an informational tool for beneficiaries and as a way for CMS to help identify poor performing Medicare Advantage and Prescription Drug Plans.  These ratings have become increasingly important since the enactment of the Affordable Care Act and its requirement that Medicare Advantage quality bonus payments be tied to Star Ratings. Continue Reading New Star Ratings for Medicare Advantage and Prescription Drug Plans Go Live