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CMS Proposes Program Changes For Medicare Advantage And Prescription Drug Benefit Programs For Contract Year 2015 (CMS-4159-P)


On January 6, 2014, the Centers for Medicare & Medicaid Services (CMS) issued aproposed rule with comment period that would strengthen protections, improve healthcare quality and reduce costs for Medicare beneficiaries with private MedicareAdvantage (MA) and Part D prescription drug plans in Contract Year (CY) 2015. Amongthe technical and program changes this rule proposes are new criteria for identifyingprotected classes of drugs, revisions that promote competition in Part D plans, changesto the regulatory definition of negotiated prices, and changes to ensure that planchoices are meaningful for beneficiaries. This fact sheet discusses the major provisionsof the proposed rule. The proposed rule would save $1.3 billion over the five years 2015– 2019 if finalized.

Summary of Proposed Changes

New criteria for drug categories or classes of clinical concern:
In the first year ofthe Medicare prescription drug benefit, CMS implemented a policy that required all PartD plans to include on their formularies “all or substantially all” Part D drugs within sixdrug classes—antineoplastics, anticonvulsants, antiretrovirals, antipsychotics,antidepressants, and immunosuppressants. The Affordable Care Act later codified thispolicy, and allowed CMS to specify criteria for identifying protected classes throughnotice and comment rulemaking. CMS proposes to change the categories or classes ofPart D drugs of clinical concern using criteria established through this notice andcomment rulemaking. Under the proposed criteria, CMS would require formularyinclusion of all drugs within the antineoplastic, anticonvulsant, and antiretroviral drugclasses (subject to proposed exceptions), but would no longer require all drugs from theantidepressant and immunosuppressant drug classes to be on all Part D formularies. AAlthough antipsychotics do not meet the criteria, they will remain protected at leastthrough 2015 while CMS evaluates additional considerations and the need for any otherformulary exceptions.

Increased competition: In response to anti-competitive tactics that have contributed toinconsistencies in bidding, payments, and market price signals for Medicare Part Dplans, the rule proposes to revise the regulatory definition of negotiated prices to requireall price concessions from pharmacies to be reflected in negotiated prices. Theproposed rule would require greater cost savings for beneficiaries in return for offeringpreferred cost sharing so that sponsors cannot incentivize use of selected pharmacies,including the sponsors’ own related-party pharmacies that charge higher rates than theircompetitors.

More meaningful plan choices: In order to ensure that beneficiaries have betteraccess to health plan services with meaningfully different benefits and transparentcosts, and because the Affordable Care Act’s closing of the “donut hole” has reducedthe need for plans offering enhanced benefits, CMS proposes that Prescription DrugPlans Sponsors offer no more than two Part D plans in the same service area. CMSseeks comments on ways to ensure that a plan sponsor’s basic Part D bid representsits lowest-premium plan offering. This provision would not be effective until 2016. Theproposed rule would also prohibit MA plans from offering new plans that simply replaceplans CMS has required to be terminated or consolidated due to low enrollment.

Improving payment accuracy: The proposed regulation also would implement theAffordable Care Act requirement that MA plans and Part D sponsors report and returnidentified Medicare overpayments.

Improved MA risk-adjustment data validation (RADV) audit process: The proposedrule would strengthen RADV by streamlining the RADV audit process by combiningerror rate calculation appeals and medical record review-determination appeals into onecombined process.

Expanded Part D data sharing: CMS proposes to expand the release of unencryptedprescriber, plan and pharmacy identifiers contained in prescription drug event (PDE)records to give researchers broader access to health care data. This would supportCMS’s growing role as a value-based purchaser of health care. The release of this datawould still be subject to CMS’s “minimum necessary,” “legitimate researcher” and “nonrelease for commercial purposes” policies as required by law.

Expanded prevention and health improvement incentives: The rule proposes to expand rewards and incentive programs that do not discriminate against any MA beneficiaries that focus on encouraging participation in activities that promote improved health, efficient use of health care resources and prevent injuries and illness.

Fraud and abuse: Section 6405 of the Affordable Care Act requires that physicians and non-physician practitioners who order durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) or certify home health care must be enrolled in Medicare. The statute also permits the Secretary to extend these Medicare enrollment requirements to physicians and non-physician practitioners who order or certify all other categories of items or services in Medicare, including covered Part D drugs. CMS is proposing to require that physicians or non-physician practitioners who write prescriptions for covered Part D drugs must be enrolled in Medicare for their prescriptions to be covered under Part D.

For a fact sheet on CMS’ strategy to prevent fraud and abuse under Part D, please see:

CMS welcomes public comments to these proposed program changes; they will beaccepted from all stakeholders through the close of business 60 days after the date ofdisplay of the proposed rule in the Federal Register. CMS will consider these commentsin developing the final rule, which will generally be effective for Contract Year 2015operations.

The proposed rule will be published in the Federal Register on January 10, 2014. CMSwill accept comments on the proposed rule until March 7, 2014.

For more information, please see:http://www.ofr.govinspection.aspx?AspxAutoDetectCookieSupport=1.




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