Fact Sheets


Details for: CMS ANNOUNCES 2013 PAYMENT AND POLICY UPDATES FOR MEDICARE DRUG AND HEALTH PLANS TO ENSURE CHOICE AND IMPROVE QUALITY



For Immediate Release: Monday, April 02, 2012
Contact: CMS Media Relations
202-690-6145


CMS ANNOUNCES 2013 PAYMENT AND POLICY UPDATES FOR MEDICARE DRUG AND HEALTH PLANS TO ENSURE CHOICE AND IMPROVE QUALITY

The Centers for Medicare & Medicaid Services (CMS) today announced payment and policy guidance for Medicare Advantage (Part C) and Medicare prescription drug (Part D) plans for Calendar Year (CY) 2013 that will continue the trend of lower premiums and stable or improved benefits that beneficiaries in these programs have experienced over the last two years. This guidance describes payment changes that reflect an estimated annual average growth rate of 3.07 percent, which will sustain a stable Medicare Advantage landscape next year.

For the 2013 benefit year, as in 2012, CMS combined the Rate Announcement and the Call Letter into one single guidance document that contains revisions to payment methodologies, and other policy and operational process updates for Part C organizations and Part D sponsors.  This guidance includes:

  • Growth Percentages:  The MA Growth Percentage and the FFS Growth Percentage, which are trend factors applied to the county rates.  The combined effect of these growth percentages is estimated to be 3.07 percent.  This metric measures the estimated growth in per capita expenditures for Medicare beneficiaries and will help determine the benchmarks for Medicare Advantage plans.  
  • Benchmarks:  Transition of MA benchmarks toward Medicare fee-for-service costs, as required by the Affordable Care Act, and incorporation of plan quality ratings into the MA payment system. CMS discusses the transition to fee-for-service-based rates and the quality bonus payments.  Final benchmarks were also announced and posted today.
  • Coding Pattern Adjustment: Continuing with a coding pattern adjustment of 3.41% that is applied to the risk scores of beneficiaries enrolled in MA plans to account for differences in coding between Medicare Advantage plans and Medicare Part A and Part B providers.

Other CY 2013 program guidance highlights:

  • Controlling Beneficiary Costs and Premium Increases: CMS will again exercise its authority under the Affordable Care Act to deny bids, if it determines that the bid proposes too significant an increase in cost sharing or decrease in benefits from one year to the next.
  • Lower drug costs: CMS will address improvements in the Medicare prescription drug benefit, specifically those provisions that close the Part D coverage gap, or “donut hole.”   As a result of the Affordable Care Act, in 2013, eligible drug plan enrollees with liability in the donut hole will only pay 47.5 percent of the costs of covered brand-name drugs.  For generic drugs in the gap, cost sharing shrinks to 79 percent, from 86 percent in 2012. People enrolled in Medicare Part D who do not receive the low income subsidy and enter the coverage gap will pay less each year until 2020, when they will pay only 25% for covered brand-name and generic drugs, closing the donut hole.
  • Stronger Part D & MA plan quality:  In 2013, CMS will alert plan members if their drug or health plan has failed for three straight years to achieve at least a three (out of five) star quality rating and offer a special enrollment period that will allow the member to move to a higher quality plan. For MA plans, the three-year Quality Bonus Payment demonstration will continue to provide financial incentives to improve quality of care for people with Medicare.
  • Reducing inappropriate overuse of prescription drugs: For Part D plans, CMS describes drug utilization management improvements to address overprescribing and overutilization of opiates and other medications to ensure beneficiary safety and prevent fraud. 
  • Supplemental Benefits: CMS is clarifying its definition of certain supplemental benefits in an effort to ensure transparency and consistency across all MA plans that choose to offer such benefits.  CMS is also extending additional supplemental benefit options to qualifying dual eligible special needs plans (D-SNPs).
  • Part D Benefit Parameters:  Statutory updates to the annual benefit parameters for the defined standard Part D prescription drug benefit in Calendar Year (CY) 2013. They include:

 

 Part D Benefit Parameters

CY 2012

CY 2013

Defined Standard Benefit

 

 

Deductible

$320

$325

Initial Coverage Limit (Total drug costs after deductible before hitting coverage gap)

$2,930

$2,970

Out-of-Pocket Threshold  (Total amount beneficiary pays before hitting catastrophic phase)

$4,700

$4,750

Minimum Cost-sharing for Generic/Preferred Multi-Source Drugs in the Catastrophic Phase

$2.60

$2.65

Minimum Cost-sharing for Other Drugs in the Catastrophic Phase

$6.50

$6.60

Retiree Drug Subsidy

 

 

 Cost Threshold (Amount RDS sponsor must spend before claiming the RDS subsidy.)

$320

$325

Cost Limit (Amount after which RDS sponsor claims no RDS subsidy.)

$6,500

$6,600

 (Note: The changes from 2012 to 2013 are rounded to the closest appropriate level.)

 

The Rate Announcement and final Call Letter may be viewed using the following link: http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/ then click on “Announcements and Documents” for access to the 2013 files.

 

Access to the CMS final rule, filed today at the Federal Register, can be found at: http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1

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