CMS ISSUES INTERIM FINAL RULE: CHANGES TO THE MEDICARE ADVANTAGE AND PRESCRIPTION DRUG BENEFIT PROGRAMS (CMS 4138-IFC)
The Medicare Improvements for Patients and Providers Act (MIPPA), enacted in July 2008, made a number of changes to the Medicare Advantage (MA) and Medicare prescription drug benefit programs (Part D). MIPPA required that CMS create marketing standards in a variety of specified areas, placed new requirements on Special Needs Plans (SNP), created new restrictions on non-network private fee for service (PFFS) plans, and created new PFFS quality reporting requirements.
Although the regulation goes into effect upon publication and plans are required to comply with the rules in accordance with the effective dates, comments will be accepted until 5:00 p.m. Eastern time 60 days after publication.
Marketing (All provisions are for both the Medicare Advantage and Part D programs)
Nominal Gifts (Effective October 1, 2008)
The CMS Marketing Guidelines limited nominal gifts to prospective enrollees to $15 or less. This provision is now being codified in the Medicare Advantage and prescription drug plan (PDP) regulations. The regulation allows for CMS to adjust the nominal gift amount in guidance based on inflation and other factors. The nominal gift amount must be calculated based on retail value, not actual price paid. Examples of nominal gifts include items like pens, pencils, and calendars.
Co-Branding (Effective October 1, 2008)
The CMS Marketing Guidelines prohibited the use of the name or logo of a co-branded network on MA and PDP membership cards. In addition, if a co-branded network name or logo is used on marketing materials, the plan must include a disclaimer that other providers are available in the network. MA plans may include provider names and/or logos on the member identification card related to member selection of specific providers or provider organizations. These provisions are being codified in the MA and PDP regulations.
Inclusion of Plan Type in Plan Name (Effective for Plan Year 2010)
MIPPA requires beginning in 2010 that MA organizations and PDP sponsors include the plan type in the plan’s name.
Scope of Appointments (Effective October 1, 2008)
The new rules limit any marketing appointment to the scope of healthcare-related products agreed upon by the beneficiary in advance. For an in-person appointment, the scope agreed upon must be documented in writing. If the appointment is made over the phone, the conversation must be recorded.
Agent and Broker Compensation (Effective October 1, 2008)
To reduce “churning,” or moving a beneficiary from one plan to another plan based on financial incentives, the regulation establishes a compensation structure for agents and brokers. Key aspects of the compensation structure include:
- Defining compensation to include commissions, bonuses, and other financial and non-financial remuneration related to the sale or renewal of a policy;
- Establishing a six-year compensation structure that limits first-year compensation for an agent or broker to no more than 200 percent of the total compensation for each of the next five renewal years;
- Requiring that an agent or broker can only earn compensation in months 4 through 12 of the enrollment year. If the beneficiary leaves before month 4, no compensation is earned; additionally, agents and brokers may only be paid for months in which the beneficiary is enrolled in that plan. This means that plans may pay agents and brokers up-front or prorate compensation payments over 12 months or over months 4 through 12; but when a beneficiary disenrolls from the plan, the plan must recover all compensation paid: for months in which the beneficiary is not enrolled; and during months 1 through 3 if the beneficiary disenrolls during the first three months.
Agent and Broker Training and Testing (Effective October 1, 2008)
Agents/brokers must receive initial training and testing on the products they sell as well as annual retraining and retesting.
Plan Reporting of Terminated Agents (Effective October 1, 2008)
Plans must report terminations of agents/brokers to the applicable state(s) and, if required by state law, the reason for the termination.
Special Needs Plans
MIPAA extended the Secretary’s authority to restrict enrollments from January 1, 2010, to the period before January 1, 2011. In other words, this provision maintains the existence of SNPs through plan year 2010.
Contracts with States (Effective Plan Year 2010)
Beginning in 2010, new dual eligible SNP applicants and dual SNPs seeking to expand their service areas must have a contract with the state Medicaid agency to provide or coordinate benefits under Medicaid, or a Medicare SNP contact cannot be awarded or expanded. From January 1 through December 31, 2010, existing dual SNPs that do not have a contract with the state Medicaid agency may continue to operate but may not expand their service areas. States are not required to enter into contracts with dual SNPs.
Model of Care (Effective Plan Year 2010)
To assure that the beneficiaries enrolled in SNPs receive the specialized care they need, all SNPs are required to have a model of care that includes--
- appropriate provider/specialist networks
- initial/annual (re)assessments of individuals
- a plan identifying goals, objectives, and measurable outcomes
- an interdisciplinary care management team
Cost-Sharing (Effective Plan Year 2010)
For full-benefit dual eligible individuals or qualified Medicare beneficiaries in SNPs, plans may not impose cost sharing exceeding the amount that would be permitted to the individual under the State Medicaid program under title XIX if the individual were not enrolled in the SNP.
Disclosure of Information (Effective Plan Year 2010)
Dual eligible special needs plans must provide, for each prospective dual-eligible enrollee, prior to enrollment, a comprehensive written statement describing cost sharing protections and benefits that the individual is entitled to under the State Medicaid program under title XIX. The statement must be included with any description of benefits offered by the plan.
Reporting of Quality Measures (Effective Plan Year 2010)
MIPPA expands quality improvement program requirements for SNPs to collect, analyze, and report data that permits the measurement of health outcomes and other indices of quality related to model of care and other requirements. Such data may be based on claims data and shall be at the plan level (See also Quality Improvement Program section below).
Private-Fee-for Service Plans (Effective 2011)
Currently, both employer and non-employer PFFS plans may meet access requirements through a contracted network of providers that meets CMS requirements, or through providers accepting the plans terms and conditions of payment on a patient by patient, visit by visit basis (deeming), or a combination of both.
Employer/Union PFFS Plans
All employer PFFS plans must meet Medicare access requirements through contracts with providers.
Non-Employer/Union PFFS Plans
- All non-employer/union PFFS plans must meet Medicare access requirements through contracts with providers beginning in 2011, if two competing MA network-based plans are operating in the PFFS plan’s service areas or portion of a service area (county level). Network-based plans for this purpose are coordinated care plans (excluding SNPs and non-network regional PPO plans), network MSAs, and cost plans. In areas where no network options exist, or only one network-based plan is available, the PFFS plan may meet access requirements through deeming in accordance with current PFFS access requirements.
- Although payment rates to providers may not vary based on utilization of a provider’s services, such rates may vary based on the provider’s specialty, location, or other factors not related to utilization.
Quality Improvement Program: Medicare Medical Savings Account Plans and Private-Fee-for-Service Plans (2010)
Currently PFFS and MSA plans are not required to provide quality data and improvement programs to CMS. Beginning in 2011, all PFFS and MSA plans must have a quality improvement program meeting the requirements described in §422.152(e) of Title 42 of the Code of Federal Regulations, that is, the same requirements as for local and regional preferred provider organizations. MIPPA requires that in 2010, PFFS and MSA plans must meet quality improvement program requirements through administrative claims data.
Eliminating the Late Enrollment Penalties for Low Income Beneficiaries(2009)
Since the beginning of the Part D program, CMS has used its demonstration authority to waive the late enrollment penalty for low-income subsidy enrollees. As required by MIPPA, the rule codifies the waiver of the late enrollment for low-income subsidy enrollees.
Prompt Payment of Clean Claims (Part D, 2010)
Requires PDPs and MA-PDs to pay electronic claims within 14 days and paper claims within 30 days, defines timeframes for adjudicating unclean claims, and requires plans to pay interest on unpaid claims.
In addition to the provisions described above, the interim final rule also includes provisions addressing:
- Phase out of indirect costs for medical education from MA capitation rates (2010);
- Extension and modification of the cost plan contracts (effective immediately);
- Claims submission timeframes for long term care pharmacies (2010);
- MIPPA-related revisions to the recently released Part D data rule (effective immediately);
- Updating of prescription drug pricing standard used by PDPs and MA-PDs (2009);
- Exemptions to the income and resource requirements for low-income subsidy eligibility determination (2010, Part D); and
- Use of Part D data for determining e-prescribing-related physician payment incentives (2009, Part D).
The Interim Final Rule dealing with agent commissions and other MIPPA provisions may be viewed at http://www.cms.hhs.gov/HealthPlansGenInfo/.
Comments are due at 5:00 p.m. Eastern time on November 15, 2008.