Fact Sheets

Contract Year 2024 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs Proposed Rule (CMS-4201-P)


On December 14, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that proposes revisions to regulations governing Medicare Advantage (MA or Part C), the Medicare Prescription Drug Benefit (Part D), Medicare cost plans and Programs of All-Inclusive Care for the Elderly (PACE). The proposed rule includes policies that would improve beneficiary protections and shore up guardrails that help CMS work to best meet the needs of beneficiaries. In addition, the proposed policies would increase access to care, including behavioral health services, and promote equity in coverage and care. The proposed rule is informed by feedback from the approximately 4,000 responses received to the July 2022 MA request for information. 

This fact sheet discusses the major provisions of the proposed rule. The proposed rule can be downloaded here:

Enhancements to Medicare Advantage and Medicare Part D

Ensuring Timely Access to Care: Utilization Management Requirements

CMS has received numerous inquiries regarding concerns about the use of prior authorization by Medicare Advantage (MA) plans and the effect on beneficiary access to care, including recommendations from the Office of the Inspector General (OIG). In the rule, CMS proposes impactful changes to address these concerns to ensure enrollees have timely access to medically necessary care.

The proposed rule proposes clarifications and revisions to the regulations governing when and how Medicare Advantage plans develop and use coverage criteria and utilization management policies to ensure that MA enrollees receive the same access to medically necessary care they would receive in Traditional Medicare. CMS proposes that in situations when no applicable Medicare statute, regulation, National Coverage Determinations (NCD), or Local Coverage Determinations (LCD) establishes when an item or service must be covered, MA organizations must include current evidence in widely used treatment guidelines or clinical literature made publicly available to CMS, enrollees, and providers when creating internal clinical coverage criteria. These and other related proposed changes, including requiring that the physician or other health care professional used by the MA plan have expertise in the field of medicine that is appropriate for the service be involved before the MA plan can deny coverage, would help ensure enrollees have consistent access to medically necessary care.

The proposed rule also would streamline prior authorization requirements, including adding continuity of care requirements and reducing disruption in ongoing care for beneficiaries by requiring that when an enrollee is granted prior authorization approval it will remain valid for the full course of treatment. First, CMS proposes that prior authorization policies for coordinated care plans may only be used to confirm the presence of diagnoses or other clinical criteria and/or ensure that an item or service is medically necessary. Second, CMS proposes that plans must provide a minimum 90-day transition period when an enrollee currently undergoing treatment switches to a new MA plan. Third, to ensure prior authorization is being used appropriately, CMS proposes to require that all MA plans establish a Utilization Management Committee to review policies annually and ensure consistency with Traditional Medicare’s national and local coverage decisions and guidelines.

Protecting Beneficiaries: Marketing Requirements

The proposed rule also takes critical steps to protect MA and Part D enrollees and people shopping for Medicare coverage from confusing and potentially misleading marketing while also ensuring they have accurate and necessary information to make coverage choices that best meet their needs. The proliferation of certain television advertisements generically promoting enrollment in MA plans has been a specific topic of concern. To address these concerns, CMS proposes prohibiting ads that do not mention a specific plan name as well as ads that use words and imagery, such as the Medicare name or logo, that may confuse beneficiaries in a way that is misleading, confusing, or misrepresents the plan. In the rule, CMS also proposes to newly codify past guidance containing important protections that increases beneficiary protections against high-pressure and misleading marketing, ensures beneficiaries are not pressured into enrolling in certain plans or attending events as well as prevent predatory marketing, and codifies policy that strengthens the role of plans in monitoring agent and broker activity.  These proposals include, but are not limited to, a ban on sales presentations that immediately follow an educational event; a ban on agent distribution and collection of Scope of Appointment and Business Reply Cards at educational events; rules banning agents conducting a sales and/or enrollment meeting with a beneficiary within 48 hours after a beneficiary’s consent; new prohibitions on use of Medicare language or logos in advertisements that mislead Medicare enrollees into believing these advertisements are from the government; and requiring plans to report to CMS agents who fail to adhere to CMS requirements, and work with state Departments of Insurance (DOI) to address any issues.

CMS also proposes requirements to further protect Medicare beneficiaries by ensuring they receive accurate information about Medicare coverage and are aware of how to access accurate information from other available sources. These include, but are not limited to, requiring agents to disclose to beneficiaries all the plans the agent sells; requiring agents to inform beneficiaries that they can obtain complete Medicare options/information from 1-800-MEDICARE, SHIPs, or; requiring agents to ask a standardized list of questions that address a beneficiary’s health care needs, current providers, and prescriptions, prior to enrolling a beneficiary into a plan; and requiring agents to provide the pre-enrollment checklist to prospective enrollees, which would include the effect on current coverage if he or she changes plans. For telephonic enrollments, agents would be required to thoroughly review the pre-enrollment checklist with prospective enrollees prior to completing enrollments.

Strengthening Quality: Star Ratings Program

CMS continues improvements to the Star Ratings program by proposing new methodological enhancements to further drive quality improvement for all enrollees. In this rule, CMS proposes a health equity index (HEI) reward, beginning with the 2027 Star Ratings using measure data from the 2024 and 2025 measurement years, to further encourage MA and Part D plans to improve care for enrollees with certain social risk factors (dual eligibility, low-income subsidies, and disability). CMS also proposes to reduce the weight of patient experience/complaints and access measures by half (from four to two) to further align with other CMS quality programs and the current CMS Quality Strategy that promotes quality outcomes. In addition, CMS proposes to remove guardrails (bi-directional caps that restrict upward and downward movement of a measure’s cut points compared to the prior year) when determining measure-specific-thresholds for non-Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures; modify the Improvement Measure hold harmless policy; include an additional rule for the removal of Star Ratings measures; and remove the 60 percent rule that is part of the adjustment for extreme and uncontrollable circumstances. The proposed changes would further drive quality improvement and health equity in MA and Part D.

Advancing Health Equity

CMS is committed to advancing health equity for all, including those who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality.[1] CMS proposes further clarification of a current requirement for MA plans to provide culturally competent care by expanding the list of populations that MA organizations must provide services to in a culturally competent manner. This includes people: (1) with limited English proficiency or reading skills; (2) of ethnic, cultural, racial, or religious minority groups; (3) with disabilities; (4) who identify as lesbian, gay, bisexual, or other diverse sexual orientations; (5) who identify as transgender, nonbinary, and other diverse gender identities, or people who were born intersex; (6) who live in rural areas and other areas with high levels of deprivation; and (7) otherwise adversely affected by persistent poverty or inequality.

Studies demonstrate that low digital health literacy, especially among populations experiencing health disparities, continues to impede telehealth access and worsen care gaps particularly among older adults. CMS proposes requiring MA organizations to develop and maintain procedures to offer digital health education to enrollees to improve access to medically necessary covered telehealth benefits. In addition, CMS proposes building on current best practices by requiring MA organizations to include providers’ cultural and linguistic capabilities in provider directories. If finalized, this change would improve the quality and usability of provider directories, particularly for non-English speakers, limited English proficient individuals, and enrollees who use American Sign Language. Finally, CMS is proposing that MA organizations must address health disparities as part of existing requirements to develop and maintain quality improvement programs.

Improving Access to Behavioral Health

CMS proposes policies to strengthen network adequacy requirements and reaffirming MA organizations’ responsibilities to provide behavioral health services. Specifically, CMS proposes to: (1) add Clinical Psychologists, Licensed Clinical Social Workers, and Prescribers of Medication for Opioid Use Disorder as specialty types for which we set specific minimum standards and on which we evaluate MA networks, and make these specialty types eligible for the existing 10 percentage point telehealth credit; (2) amend general access to services standards to explicitly include behavioral health services; (3) codify standards for appointment wait times for both primary care and behavioral health services; (4) clarify that emergency medical services that must not be subject to prior authorization include behavioral health services to evaluate and stabilize an emergency medical condition; (5) require that MA organizations notify enrollees when the enrollee’s behavioral health or primary care provider(s) are dropped midyear from networks; and (6) require MA organizations to establish care coordination programs, including coordination of community, social, and behavioral health services to help move towards parity between behavioral health and physical health services and advance whole-person care.

Improving Drug Affordability and Access in Part D

To provide Part D sponsors with additional tools to manage drug costs, we propose greater formulary flexibility for certain biological products and authorized generics. While certain formulary changes are subject to CMS approval and 30 days’ advance notice to affected beneficiaries, current regulations permit Part D sponsors to immediately remove from the formulary a brand name drug and substitute its newly released generic equivalent. Part D sponsors meeting these requirements can provide notice of specific changes, including direct notice to affected beneficiaries, after they take place and do not need to provide a transition supply of the substituted drug. Consistent with these requirements, CMS proposes to permit Part D sponsors to immediately substitute: (1) a new interchangeable biological product for its corresponding reference product; (2) a new unbranded biological product for its corresponding brand name biological product; and (3) a new authorized generic for its corresponding brand name equivalent.

In addition, CMS proposes several new requirements for Part D sponsors related to Medication Therapy Management (MTM) programs. Part D sponsors are required to provide an MTM program that ensures Part D drugs are appropriately used to optimize health outcomes through improved medication use and to reduce the risk of adverse events. After an extensive analysis to identify potential disparities in MTM program eligibility and access, CMS is proposing changes to MTM eligibility criteria to promote consistent, equitable, and expanded access. CMS proposes: (1) adding HIV/AIDS to the list of core chronic diseases, and requiring plan sponsors to include all core chronic diseases previously identified by CMS in their targeting criteria; (2) lowering the maximum number of covered Part D drugs a sponsor may require from eight to five drugs and requiring sponsors to include all Part D maintenance drugs in their targeting criteria; and (3) revising the methodology for calculating the cost threshold ($4,935 in 2023) to be commensurate with the average annual cost of five generic drugs ($1,004 in 2020). 

Implementation of Certain Provisions of the Consolidated Appropriations Act, 2021 and the Inflation Reduction Act of 2022

The proposed rule also makes changes to implement certain provisions enacted in the Inflation Reduction Act (IRA) of 2022 and the Consolidated Appropriations Act, 2021 (CAA) related to the Medicare Part C and Part D programs.

Making Permanent: Limited Income Newly Eligible Transition (LI NET) Program

LI NET currently operates as a demonstration program that provides immediate and retroactive Part D coverage for eligible low-income beneficiaries who do not yet have prescription drug coverage. In this proposed rule, CMS proposes making the LI NET program a permanent part of Medicare Part D, as required by section 118 of Division CC, title I, subtitle B of the CAA.

Enhancing Financial Stability: Expanding Low-Income Subsidies Under Part D

To further access to affordable Medicare prescription drug coverage, CMS proposes to implement section 11404 of the Inflation Reduction Act (IRA), which expands eligibility under the low-income subsidy (LIS) program. Under the IRA provision and proposal, individuals with incomes up to 150 percent of the federal poverty level (FPL) and who meet statutory resource requirements will qualify for the full low-income subsidy beginning on or after January 1, 2024. This change will provide the full subsidy to those who currently qualify for the partial subsidy, improving affordability of prescription drug coverage for certain people with Medicare.