Fact Sheets

Contract Year 2022 Medicare Advantage and Part D Final Rule (CMS-4190-F2) Fact Sheet

In the June 2, 2020 Federal Register, the Centers for Medicare & Medicaid Services (CMS) issued the Contract Year 2021 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program final rule (85 FR 33796) that implemented a subset of the proposals from the February 2020 proposed rule (85 FR 9002). That final rule focused on more immediate regulatory actions and was primarily intended to implement certain changes before the contract year 2021, stemming from the Bipartisan Budget Act of 2018 (BBA of 2018) and the 21st Century Cures Act (Cures Act). That final rule also codified several existing CMS policies and implemented other technical changes.  

In this second, and related final rule, CMS addresses the remaining proposals, with a few exceptions, from the February 2020 proposed rule. The final rule, in provisions which are of considerable substantive significance, establishes that the provisions adopted in this second final rule will be in effect during 2021 and that most provisions will be applicable to coverage that begins January 1, 2022.

The changes finalized in this rule are expected to result in an estimated $75.4 million savings to the federal government over ten years, arising exclusively from Drug Management Program (DMP) savings on reduced prescription drug spending.

As part of the Patients Over Paperwork initiative to reduce unnecessary burden to increase efficiencies and the beneficiary experience, CMS is codifying many longstanding policies in the MA and Part D programs that were previously included in sub-regulatory guidance. CMS believes that codifying the policies in regulation can provide additional transparency and program stability, and allows MA organizations and Part D plan sponsors to develop more innovative plan designs.

This fact sheet discusses the major provisions of the final rule, including a number of changes to strengthen and improve the MA and D programs and the Programs of All-Inclusive Care for the Elderly (PACE), and other changes for contract year 2022. The final rule can be downloaded from the Federal Register at:

 Enhancements to the Part C and D Programs

Beneficiary Real Time Benefit Tool (RTBT)

The final rule will require Part D plans to offer real-time comparison tools to enrollees starting January 1, 2023, so enrollees have access to real-time formulary and benefit information, including cost-sharing, to shop for lower-cost alternative therapies under their prescription drug benefit plan. Enrollees would be able to compare cost sharing to find the most cost-effective prescription drugs for their health needs. For example, if a doctor recommends a specific cholesterol-lowering drug, the enrollee could look up what the copay would be and see if a different, similarly effective option might save the enrollee money. With this tool, enrollees will be better able to know what they’ll need to pay before they’re standing at the pharmacy cash counter.

Permitting a Second, “Preferred,” Specialty Tier in Part D

Under the final rule, beginning January 1, 2022, CMS is allowing Part D plans to have a second, “preferred” specialty tier with a lower cost sharing amount than their other specialty tier. This change is designed to give Part D plans more tools to negotiate better deals with manufacturers and lower out-of-pocket costs for enrollees in exchange for placing those products on the “preferred” specialty tier.

Medicare Advantage (MA) and Part D Prescription Drug Program Quality Rating System

This final rule codifies routine updates to the Star Ratings, including measure updates, technical clarifications regarding the calculation of scores for contracts that consolidate and for the extreme and uncontrollable circumstances policy when a measure score has a data integrity issue, and Quality Bonus Payment (QBP) rating rules for new contracts under existing parent organizations.

Establishing Pharmacy Performance Measures Reporting Requirements

Under the Part D program, plans currently do not have to disclose to CMS the measures they use to evaluate pharmacy performance in their network agreements. CMS has heard concerns from pharmacies that the measures plans use to assess their performance are unattainable or otherwise unfair. The measures used by plans potentially impact pharmacy reimbursements. Therefore, starting January 1, 2022, CMS is requiring Part D plans to disclose pharmacy performance measures to CMS, which will enable CMS to better understand how such measures are applied. CMS will also be able to report pharmacy performance measures publicly to increase transparency on the process and to inform the industry in its new efforts to develop a standard set of pharmacy performance measures.

Implementing Several Opioid Provisions of the SUPPORT Act

Continuing the fight against the opioid epidemic, the final rule implements several provisions of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act that require Part D plans to educate beneficiaries on opioid risks, alternate pain treatments, and safe disposal of prescription drugs that are controlled substances, including opioids. The final rule also expands drug management programs, through which Part D plans review with providers opioid utilization trends that may put beneficiaries at-risk, and medication therapy management programs, through which Part D plans provide beneficiary-centric interventions. These provisions will help prevent and treat opioid overuse. The final rule also implements new requirements for Medicare Part D plan sponsors to report certain payment suspensions taken based on credible allegations of fraud against pharmacies when they are based on the SUPPORT Act authority (rather than previously existing bases such as contracts). It also implements new requirements that MA and Part D plan sponsors (including MA organizations offering MA-PD plans) report certain information related to inappropriate prescribing of opioids and any plan corrective actions to CMS via a secure internet portal.

Codifying Existing Part C and D Program Policy

Supplemental Benefit Requirements

We are codifying existing policy with respect to supplemental benefits, including the Medicare Managed Care Manual (Chapter 4) criteria for a supplemental benefit, the expanded definition of “primarily health related,” and the reinterpreted uniformity requirements, including that reductions in cost-sharing are an allowable supplemental benefit.

Changes to the Programs of All-Inclusive Care for the Elderly (PACE)

CMS is finalizing a number of provisions that will reduce the administrative burden for PACE organizations related to the service determination request process and improve participants’ care and experience, including the participant appeals process and participant rights, and strengthen requirements related to the provision of services and record keeping.

CMS will be updating its sub-regulatory guidance to be co-extensive with the policies in the final regulation and eliminate from guidance any inconsistencies, so it is clear the final regulation text sets forth the complete extent of CMS requirements.