CMS releases Medicare Advantage, Part D proposed rule: 7 changes to know

CMS is proposing a new rule that aims to cut prescription drug costs, increase contract vetting and improve health equity, according to a Jan. 6 news release

The proposed changes primarily target Medicare Advantage and Part D plans. CMS also noted that the proposed changes come with "modest costs" that should not affect bidding, premiums or benefits. 

Seven things to know about the proposed changes:

1. One proposal targets an emerging Part D plan negotiation practice that results in a discrepancy between a negotiated drug price reported to CMS and what is paid to pharmacies. The difference results in savings for payers. The new rule would redefine the typically-lower negotiated price as the new baseline, resulting in reduced out-of-pocket costs. 

2. CMS is increasing regulations on third-party marketing for Medicare Advantage and Part D plans. The rule aims to target "deceptive marketing tactics," but also expands translation services and overhauls some disclaimers. 

3. Medicare Advantage plans would be required to comply with special requirements — including covering non-contracted provider services and waiving gatekeeper referral requirements — during a declaration of disaster, emergency or public health emergency, and there is a disruption in access to care.

4. Payers looking to secure a new contract or expand their service may now have their requests denied for having a Star Rating of 2.5 or lower, declaring bankruptcy or exceeding compliance actions administered by CMS. 

5. Payers will also face additional network scrutiny when applying for Medicare Advantage contracts or expansions. Plans must meet a network adequacy standard established by CMS or be within a 10-percentage point credit almost one year in advance of the contract year. 

6. CMS is seeking to reinstate medical loss ratio reporting standards implemented from 2014-2017. The move would also require Medicare Advantage plans to report how much is spent on benefits not covered by traditional Medicare. 

7. Under the proposed rule, dual eligible special needs plans would be required to have at least one enrollee advisory committee to consult for health equity needs. Special needs plans must also include new standardized questions on housing stability, food security, and access to transportation on annual enrollee health risk assessments. 

To learn more about all the provisions of the proposed rule, click here.

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