CMS issues final 2023 Medicare Advantage, Part D prescription drug rule: 10 things to know

CMS issued its final 2023 Medicare Advantage and Part D rule that aims to expand access to care and improve health equity through lower out-of-pocket prescription drug costs and improved consumer protections, according to an April 29 press release.

The rule was first proposed January 6 and is scheduled for full release May 9.

"The Biden-Harris Administration has remained committed to ensuring equity in healthcare for all," CMS Administrator Chiquita Brooks-LaSure said. "This rule improves the healthcare experience and affordability for millions of people with Medicare Advantage and Part D coverage, including dually eligible individuals, and provides needed support to populations often left behind."

America's Health Insurance Plans issued some criticism of the final rule April 29. 

President and CEO Matt Eyles wrote, "While we continue to review the final rule, we are very disappointed that CMS has not withdrawn its proposal to require all possible pharmacy price concessions to be included in a Part D plan's point-of-sale negotiated price. Only pharmacists benefit from this requirement, with seniors and taxpayers paying the price through higher premiums. We do appreciate CMS delaying implementation of the rule to 2024, so that Part D plan sponsors and health insurance providers will have some time to attempt to mitigate the impact on seniors."

10 changes to know:

  • Part D plans must apply all price concessions from network pharmacies to the negotiated price at the point of sale so savings are pushed to beneficiaries. CMS is redefining the negotiated price as the lowest possible payment to a pharmacy, effective Jan. 1, 2024. The agency is applying the new policy across all phases of the Part D benefit to reduce costs and increase market competition for Part D rates.

  • CMS revised time frame and coverage obligation policies around Medicare Advantage plans during a disaster or emergency to ensure uninterrupted access, and plans must comply with the new requirements.

  • The final rule adds Star Ratings (2.5 or lower), bankruptcy or bankruptcy filings and exceeding a CMS designated threshold for compliance actions as reasons for CMS denying an application for a new contract or a service area expansion from Medicare Advantage and Part D organizations.

  • CMS is requiring Medicare Advantage applicants to show they have a sufficient network of contracted providers to care for beneficiaries before CMS will approve an application for a new or expanded Medicare Advantage contract.

  • CMS is reinstating medical loss ratio reporting requirements that were in effect for contract years 2014-17. The final rule requires Medicare Advantage organizations and Part D sponsors to report the underlying cost and revenue information needed to calculate and verify the medical loss ratio percentage and remittance amount, if any. CMS will also require Medicare Advantage organizations to report the amounts they spend on various types of supplemental benefits not available under original Medicare.

  • CMS will begin calculating 2023 Part C Star Ratings using three measures collected through a health outcomes survey: monitoring physical activity, reducing the risk of falling and improving bladder control.

  • All dual eligible special needs plans must establish and maintain one or more enrollee advisory committees for each state in which the plan is offered and consult with the committees on ways to improve health equity for underserved populations.

  • All special needs plans must complete member health risk assessments at enrollment and annually. The assessments must include at least one question from a list of screening instruments specified by CMS on each of these three domains: housing stability, food security and access to transportation. Special needs plans do not all need to use the same questions. 

  • Certain states with integrated care programs can require Medicare Advantage organizations to establish a contract that only includes one or more dual eligible special needs plans. This will allow for Star Ratings for that contract to reflect the plans' local performance and more easily identify disparities between dual eligible special needs plans and other Medicare Advantage plans.

  • The maximum out-of-pocket limits in a Medicare Advantage plan must be calculated based on the accrual of all Medicare cost-sharing in the plan benefit, whether that cost-sharing is paid by the beneficiary, Medicaid or other secondary insurance, or remains unpaid. CMS projects the change will save state Medicaid agencies $2 billion over 10 years while increasing payment to providers serving dually eligible beneficiaries by $8 billion over 10 years.

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