Center Comments on Medicare Advantage Rates, Part C and Part D Payment Policies

March 4, 2016

VIA ELECTRONIC SUBMISSION
AdvanceNotice2017@cms.hhs.gov

Andrew Slavitt, Acting Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016

Re: Advance Notice of Methodological Changes for Calendar Year 2017 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2017 Call Letter

Dear Acting Administrator Slavitt:

The Center for Medicare Advocacy (Center) is pleased to provide the Centers for Medicare & Medicaid Services (CMS) comments on the draft 2017 Call Letter.  The Center, founded in 1986, is a national, non-partisan education and advocacy organization that works to ensure fair access to Medicare and to quality healthcare. At the Center, we educate older people and people with disabilities to help secure fair access to necessary health care services. We draw upon our direct experience with thousands of individuals to educate policy makers about how their decisions affect the lives of real people. Additionally, we provide legal representation to ensure that people receive the health care benefits to which they are legally entitled, and to the quality health care they need.

Attachment II: Changes to Part C Payment Methodology for CY 2017

Section G. MA Employer Group Waiver Plans (p. 23)

CMS proposes to waive the bidding requirements for MA Employer Group Waiver Plans (EGWPs) and to pay these plans using an alternative payment mechanism. According to CMS, these changes are intended to reduce administrative burdens on employer plans and to more accurately capture EGWP costs by eliminating existing incentives to submit bids that are higher than actual projected costs.

These arguments are supported by findings from the Medicare Payment Advisory Commission (MedPAC). According to MedPAC, average Medicare payments to EGWPs are 106 percent of traditional Medicare costs for comparable beneficiaries. CMS notes that while EGWPs tend to have healthier, lower-cost enrollees than other MA plans and face lower administrative costs related to enrollment and marketing, on average, their bids are higher. MedPAC has previously recommended that CMS take steps to determine payments for EGWPs in a manner more consistent with how other MA plans are paid.[1]

Given these findings and general notions of equity, we generally support the proposed changes to EGWP waivers and payments. Yet, we are concerned about the abrupt impact these changes may have on retiree health benefits. For example, under the revised payment model, EGWPs would no longer be able to pay the Part B premium on behalf of enrollees and may be not able to offer the supplemental benefits that their enrollees have come to depend upon. 

CMS argues that this change is appropriate because EGWPs do not need to use supplemental benefits to attract enrollees (as other MA plans do), but benefits such as vision, dental, and enhanced Part D formularies are not merely marketing tools—they are important protections against significant costs and unmet medical needs. As such, we encourage CMS to consider ways to mitigate the effects of the proposed changes, such as by permitting EGWPs to separately reimburse members for their Part B premiums or by phasing in reductions in payments. 

Attachment VI: Draft Call Letter

            Section I – Parts C and D

Contracting Organizations with Ratings of Fewer Than Three Stars in Three Consecutive Years – Timeline for Application of Termination Authority (p. 100)

We support CMS’ exercise of its authority to terminate consistently low-performing health plans in 2017. We expect this will enhance public confidence in the utility of the Star Ratings Program, drive quality improvement in the MA program, and safeguard the health and well-being of people enrolled in MA plans.

We want to emphasize the importance of providing clear and timely notice to affected enrollees when their plans are terminated for this or any other reason. These notices should inform beneficiaries of their full range of options and offer the support necessary to promote informed decision-making. Detailed notices, including information about access to a Special Enrollment Period (SEP) and Medigap enrollment rights, should be developed for enrollees who are affected by low-performance related terminations. In particular, enrollees with unique needs, such as those in Special Needs Plans (SNPs), should receive notice and information that specifically addresses their options.

Enhancements to the 2017 Star Ratings and Beyond

D. Impact of Socio-economic and Disability Status on Star Ratings (p. 107)

From the draft Call Letter, it appears that CMS is proposing to utilize the Categorical Adjustment Index (CAI) over the Indirect Standardization (IS) because CMS believes that the intra-contract comparison in the CAI method will not mask disparities. As CMS has decided not to move forward with the IS alternative proposal for adjustment, we are focusing our comments on the CAI model that CMS is proposing to utilize for the 2017 Star Ratings.

The Center appreciates CMS’s stated objective of ensuring that the Star Ratings accurately reflect plan quality. CMS states in the draft Call Letter that adjustment is only appropriate if it does not “risk… masking true differences in quality.” However, we are concerned that despite this stated objective, the methodology that CMS is proposing for adjusting Star Ratings based on socioeconomic and disability status, might in fact run the risk of masking true differences in quality for these populations. The proposed adjustment risks masking poor quality for these vulnerable patients within a contract, just as the IS model that CMS has rejected, risks masking poor quality between contracts.   We are concerned that this adjustment would not meet CMS’ requirement that “policies implemented must result in high quality of care and improved health outcomes” for all beneficiaries.

We have concerns with the premise used to support the need for adjustment, the adjustment methodology outlined in the proposal, and the lack of information regarding CMS monitoring processes of adjustment and the impacts on quality of care.

CMS is proposing to compute values by adjusting measure scores in specific areas for dual eligible or low-income subsidy enrollees, or enrollees with disabilities within contracts.  This proposal is based on a premise that plans have asserted, that differences in outcomes for vulnerable populations within contracts are the direct result of enrollee behavior and enrollee health. MA organizations and PDP sponsors that have a high percentage of vulnerable enrollees in their plans have argued that a correlation between high enrollment of such individuals and poor plan performance can be viewed as causation for poor plan performance.

However, correlation does not imply causation. Demonstrating that a contract can have better outcomes among higher income individuals than the same contract has among vulnerable individuals, does not prove that having vulnerable individuals enrolled has caused the poor performance.

In fact, there is extensive research that indicates that plans that employ interventions targeted specifically at addressing the needs of vulnerable populations lead to improved outcomes among these populations, lead to better quality, and correspondingly higher Star Ratings. In January 2016, CMS’ Office of Minority Health (CMS OMH) released the Guide to Preventing Readmissions among Racially and Ethnically Diverse Medicare Beneficiaries, which is designed to assist in identifying root causes and developing solutions for preventing avoidable readmissions among racially and ethnically diverse Medicare beneficiaries.[2]

This CMS guide underscores the critical notion that it in order to improve care and outcomes, it is essential to identify and address the underlying causes of the disparity in health outcomes for vulnerable populations. Addressing the root causes is foundational in developing and employing changes that target these causes in order to improve care.  We are concerned that the proposed adjustment will not only conceal these real disparities, but will also remove incentives to determining and employing such interventions.

Again, though we agree that the research suggests that disadvantaged patients disproportionately receive poor care, the data do not indicate that disadvantaged patients cause poor quality ratings. Without this data it is premature to make changes to the Star Ratings program. The data that will be available later this year from the IMPACT Act will be essential for CMS in making determinations regarding quality assessment. We continue to urge CMS to review the results of the data made available as a result of this Act, prior to making changes to the Star Ratings Program for the proposed measures, and any additional measures in the future.

Though CMS states that the aim of this adjustment is to accurately reflect quality and improve outcomes for all beneficiaries, is unclear how this will be achieved by adjusting measurement in areas specifically selected exactly because those areas tend to have poorer outcomes for vulnerable beneficiaries.  CMS’ modeling shows that in the majority of cases where there is a change in ratings as a result of the adjustment, this type of adjustment will lead to increases in Star Ratings for contracts. Of the 12 contracts that had a half-star change in the rating, 11 increased by a half-star, with only one decreasing by a half-star (though that one contract was inactive and did not have any enrollees). (Table 6, page 117).  It is significant to note that the total number of beneficiaries impacted by the increase in Star Ratings is numbered at 276,937, while there are zero beneficiaries in the contract that decreased in the ratings as a result of the adjustment. (Table 6, page 117).  Therefore, a significant number of enrollees will have their plan’s quality rating increase without any changes in the quality of care.  We disagree with characterizations that adjustments resulting in a half-star change in rating are minimal.  First of all, if the Star Ratings Program is to have meaning, then it must be an accurate reflection of quality.  Secondly, as long as plan payment is tied to the Star Ratings Program, then plan incentives are rooted in making improvements in the Star Ratings Program. Also, plans with 5 Stars are subject to special enrollment periods, and consistently poor performing plans are subject to termination. In this discussion, it is essential to underscore that the purpose of the Star Ratings Program is to reflect accurate quality and to improve the quality of care for all patients.

We also have concerns with the measures that CMS has selected to adjust. CMS has selected 7 measures (6 in part C and 1 in Part D for PDPs) for adjustment in the Star Rating program. CMS has determined that differences in outcome exist between LIS/DE and or disability beneficiaries for these measures, which include certain cancer screenings.

Multiple measures included in CMS’ list are outcomes-based measures, including the Diabetes Care – Blood Sugar Controlled measure and the Medication Adherence for Hypertension (RAS antagonists) measure. These measures are essential to improving the population health of dual eligibles, LIS, and disabled beneficiaries, many of whom suffer from multiple chronic conditions like diabetes and high blood pressure. By implementing this proposal, CMS risks that patients will receive lower quality care and may ultimately have worse outcomes.

We are also concerned that these measures generally relate to preventive services. Preventive services like screenings and fall prevention are essential services that improve long term patient outcomes and patient quality of life. Additionally, there are increased costs associated with treating advanced conditions when compared to cost-effective screenings.

For example, falls prevention is essential for seniors. Evidence-based fall prevention programs offer promising directions for simple, cost-effective interventions through eliminating known risk factors, offering treatments that promote behavior change, and leveraging community networks to link clinical treatment and social services. We are concerned that adjusting the proposed measures will disincentivize contracts serving significant dual populations to develop programs and methods to encourage these essential preventive services.

Though the modeling in the draft call letter shows that many contracts will not have their overall Star Rating impacted through the currently proposed adjustment, we are concerned that this is a first step toward future adjustments. It is unclear from the draft proposal how long these adjustments will take place, how they will be monitored and reviewed for impacts on beneficiaries, and what processes are available for potentially expanding adjustments in the future.

Should CMS move ahead with one of the proposed adjustment schemes, we suggest the following:

• Develop a plan to phase out the adjustment: We appreciate that CMS is presenting the proposed adjustment as an interim proposal, until the measure owners can update specific measures. Yet, we urge CMS to identify a timeline to phase out the proposed risk adjustment multiplier. Once introduced to the system, we believe the adjustments will be difficult to undo without clear expectations on a timeline. As such, we encourage CMS to identify a plan for the termination of the adjustment.
• Engage multiple stakeholders: We strongly encourage CMS to establish a multi-stakeholder workgroup (including, but not limited to beneficiaries, consumer advocates, health plans, health care providers, and measure developers) to evaluate all of the evidence and consider whether adjustments to Star Ratings are required to account for higher enrollment of LIS/DE beneficiaries.

If this group determines adjustments are required, they should be charged with examining the beneficiary impact of any such proposed changes to Star Ratings and be required to develop a plan to ensure disparities will not be masked or exacerbated. CMS and this multi-stakeholder group should also closely monitor whether high performing plans with high enrollment of individuals with low socioeconomic status witness drop-off or changes in performance on quality measures after the adjustment.

• Publish both adjusted and un-adjusted scores: In order to promote understanding of the range and degree of the change in score created by this policy, we urge CMS to make both sets of scores available to the public. In particular, we suggest that CMS publish only the non-adjusted scores on Plan Finder, utilizing the adjusted measures only for the purposes of establishing bonus payments. In addition, we suggest that CMS carefully consider which of the two measure sets should be used for the purposes of determining beneficiary Special Enrollment Periods (SEPs) and how best to communicate about that measure set to beneficiaries.

Medicare Parts C & D Enforcement Actions (p. 153)

Compliance and Enforcement Actions Related to Part D Auto-Forwards      (p. 153)

We are alarmed by CMS’ finding that “(t)he volume of cases auto-forwarded to the IRE has been significant and sustained over the past several years.”  While we applaud CMS’ intent to notify plan sponsors that it will continue to increase the level and severity of the compliance and enforcement actions imposed on plans that substantially fail to comply with adjudication requirements for coverage determinations and redeterminations, we are troubled that CMS will be focusing primarily on “outliers” and a “sponsor’s inordinately high auto-forward rate”.  As CMS states elsewhere, “all auto-forwarded cases represent non-compliance with CMS requirements for timely processing” and that such “failures adversely affect (or have the substantial likelihood of adversely affecting) beneficiaries by causing inappropriate delays in accessing needed prescription drugs and/or financial hardship to beneficiaries.”  Instead of focusing on outliers, CMS should ramp up enforcement actions related to any and all instances of auto-forwarding.

More broadly, we urge CMS to do more to publicize plan’s non-compliance with program rules.  In reviewing the CMS actions imposing both the civil monetary penalties and suspensions of enrollments, we have noted that the underlying plan violations have been substantial, not just with respect to Part D appeals but also with many other Part D and Part C beneficiary protections. We appreciate that CMS has been transparent about plan deficiencies by posting the enforcement letters.  We believe, however, that the impact of CMS enforcement could be strengthened if the agency also issued a press release whenever a civil monetary penalty or suspension of enrollment is imposed.  We also ask that CMS require affected plans to do more to alert beneficiaries.  Currently plans with suspended enrollment merely indicate on their website that they are not currently accepting enrollment.  There is no requirement to post enforcement action notices or otherwise alert members or potential members to plan deficiencies or to the reason for enrollment suspension.  We ask CMS to consider imposing more disclosure requirements on plans, such as publication of sanctions on plan websites, on Plan Finder, and otherwise about such enforcement actions where compliance failures are uncovered.

Enforcement Actions Related to One Third Financial Audit Findings (p. 154)

We support CMS’ intent to “begin to consider the findings of noncompliance from the one-third financial audits for potential enforcement actions, in accordance with 42 CFR §§422.752(c)(i) and 423.752(c)(i)”  given that “[f]indings of noncompliance from these audits have identified significant financial errors, disallowed costs, and internal control weaknesses” and that “certain findings with adverse beneficiary impact, such as incorrect or increased cost-sharing or copayments for beneficiaries, warrant further enforcement actions.”  In order to broaden CMS’ ability to provide oversight of MA and Part D plans, we encourage CMS to revisit its decision not to require plans to hire outside auditors except in limited cases.

Note: Language Access

We are disappointed that there is nothing in the Call Letter addressing the continuing needs of limited-English proficient (LEP) beneficiaries to receive vital documents from Medicare Advantage and Part D plans in a language that they can understand.  Currently CMS imposes a narrow set of translation requirements for plans, limited to marketing documents enumerated in the Medicare Marketing Guidelines at 30.5.  For those documents, all of which are connected with program enrollment, plans must translate into a language that is spoken by 5 percent of the population in the plan service area and must include a multi-language insert announcing, in fifteen languages, the availability of free interpreter assistance.   Translations are not required for such vital documents as notices of disenrollment, notices of premiums due, notices of Medigap rights and notices with respect to organizational determinations, coverage determinations and appeals.  The current requirements are insufficient to protect the rights of LEP beneficiaries and, particularly in light of the requirements of Section 1557, an expansion is long overdue. 

Section II – Part C

Note: In-Home Enrollee Risk Assessments

Notably absent from the draft Call Letter is the topic of MA in-home risk assessments.  We are disappointed that CMS has not moved further along in its effort to regulate in-home risk assessments to ensure that the services provided to beneficiaries through these visits are meaningful and effective, not simply a means for collecting risk adjustment diagnoses without ensuring that meaningful follow-up care is delivered.  We note that we supported CMS’ initial proposal to exclude, for payment purposes, diagnoses from in-home risk assessments that were not confirmed by a subsequent clinical encounter (a policy change also supported by MedPAC), but CMS did not finalize these proposals.

We are concerned that voluntary best practices – a proposal from last year’s Call Letter – will not achieve CMS’ goal of linking heightened risk scores to care that addresses beneficiaries health needs. Use of such best practices should be only an interim step while CMS works to develop a strong evidence-based in-home assessment tool. We again urge CMS to exclude, for payment purposes, diagnoses identified during a home visit that are not confirmed by a subsequent clinical encounter. Simply enhancing a risk profile without benefiting enrollees serves no useful purpose to the Medicare program or its beneficiaries.

Guidance on the Future of Provider Directory Requirements and Best Practices          (p. 155)

As discussed below, we generally support CMS’ efforts to improve MA provider directory information, but urge CMS to do much more concerning the broader issue of MA enrollee access to providers, including network adequacy and mid-year provider terminations.

Provider Directories

With respect to provider directories, we appreciate and encourage CMS’ focus of making sure they “are accurate for Medicare beneficiaries and their caregivers who rely on them to make informed decisions regarding their health care choices.”  As proposed in the Call Letter, we urge CMS to strengthen required data elements in future regulatory updates.  One element missing from CMS’ list, which we support, is whether or not individual physicians and group practices are accepting new patients.

Looking forward, we continue to believe that provider directory integration in Plan Finder would greatly enhance beneficiaries’ ability to choose among MA plans based upon the criteria most important to them. Incorporating accurate provider directories in a searchable and integrated way would significantly improve the utility of Plan Finder for MA searches and ease plan selection for people with Medicare. As such, we strongly encourage CMS to incorporate this goal in the agency’s planning as it develops future policy on this issue.

            Need to Address Broader Oversight and Network Adequacy Issues

As CMS is aware, the General Accounting Office (GAO) recently released a report entitled “Medicare Advantage: Actions Needed to Enhance CMS Oversight of Provider Network Adequacy”.[3]  GAO examined several factors relating to CMS’ oversight of MA organization (MAO) network adequacy, and made corresponding findings, including:

• How CMS defines network adequacy and how its criteria compares with other programs: GAO concluded that “MA criteria do not reflect aspects of provider availability, such as how often a provider practices at a given location …[w]ithout taking availability into account, as is done in some other programs, MA provider networks may appear to CMS and beneficiaries as more robust than they actually are.”
• How and when CMS applies its network adequacy criteria: GAO concluded that CMS applies such standards “narrowly” – for example, from 2013 to 2015, CMS’ reviews accounted for less than 1% of all networks; CMS currently facilitates reviews of networks via standardized data collection; GAO concluded that “[u]ntil CMS takes steps to verify MAO provider information … the agency cannot be confident that MAOs meet network adequacy criteria.”
• The extent to which CMS conducts ongoing monitoring of MA organization networks: GAO found that “CMS does not require MAOs to routinely submit updated network information for review” and while CMS may learn of any network adequacy issues through broader oversight and/or complaints, “contrary to internal control standards, CMS does not measure ongoing MAO networks against its current MA criteria.”  GAO concludes: “Because a plan’s providers may change at any time, CMS cannot be assured that networks continue to be adequate and provide sufficient access for enrollees until the agency collects evidence of compliance on a regular basis.”; and
• How CMS ensures that MA organizations inform beneficiaries about terminations: GAO found that while CMS requires MAOs to provide enrollees with advance notice of provider terminations, “the agency has not established information requirements for those notices and does not review sample notices sent to enrollees” and concluded that “[w]ithout a minimum set of required information elements and a check on adherence to them, the agency cannot ensure that MAO communications are clear, accurate, and consistent.”

As a result of this review and these findings, GAO recommended that “[t]he Administrator of CMS should augment oversight of MA networks to address provider availability, verify provider information submitted by MAOs, conduct more periodic reviews of MAO network information, and set minimum information requirements for MAO enrollee notification letters.”  

While the efforts articulated in the draft Call Letter take a first step to address the deficiencies highlighted by GAO, CMS’ statements concerning enhanced oversight focus primarily on provider directories alone.  CMS notes that “[t]he data collected through our monitoring activities could drive additional reviews of network adequacy, as well as future monitoring and/or audit-based activities” [emphasis added].  We urge CMS to more broadly expand its oversight and definition of network adequacy, as suggested by GAO.

            Need to Address Provider Network Terminations

We remain deeply disappointed that CMS has taken no further action, either in Call Letters or in rulemaking, to strengthen consumer protections surrounding MAO mid-year provider network terminations. The most effective way to protect consumers from being trapped in their plans after their own doctors are involuntarily terminated is to prohibit MAOs from terminating network providers mid-year without cause.  Not only did CMS retreat from this option in the final 2015 Call Letter, but there has been no attempt to extend the current 30-day advance notice to affected beneficiaries, as also suggested in the 2015’s Draft Call Letter.  Further, CMS has failed to strengthen or otherwise expand the limited special enrollment period (SEP) right available only to beneficiaries affected by “significant” network terminations.  In addition, the availability of this limited SEP right is not adequately expressed in beneficiary-oriented materials, including those issued by plan sponsors (e.g. the Annual Notice of Change) or by CMS (e.g. Medicare & You and the www.medicare.gov website).  More accurate provider directories, while a welcome improvement in consumer information, is not a cure for this disease.

Prohibition on Billing Medicare-Medicaid Enrollees for Medicare Cost-Sharing      (p. 174)

We applaud CMS for the strong, clear language reminding MAOs about their obligations to prevent illegal balance billing of QMB and dual eligible plan members.  The findings of the CMS Access to Care paper and the reports we hear from advocates across the country demonstrate that illegal balance billing is pervasive and is exacting a heavy toll on low income beneficiaries.  We see a great deal of confusion among beneficiaries, providers and plan staff about plan and provider obligations with respect to balance billing.  There is an urgent need to get accurate information out and to improve compliance.  More active partnership by MAOs will be an important step in achieving these goals. 

We particularly appreciate that the Call Letter emphasizes that all MAOs, not just D-SNPs have balance billing obligations and that all providers, not just those that are enrolled in state Medicaid programs, are prohibited from collecting co-payments and deductibles. 

We ask that CMS add one more element to this section, specifically, a reminder that the discrimination protections in the Medicare Managed Care Manual, Ch. 4 at 10.5.2 also prohibit in-network plan providers from discriminating against dual eligibles and QMBs because of their balance billing protections. 

We have also appreciated the many efforts of CMS to bring more attention to balance billing protections through CMS publications and public outreach.  We hope that, as a follow-up to the Call Letter, CMS will work with MAOs to assist them in creating accurate and effective provider education tools and will circulate best practices both for provider education and for handling balance billing complaints. 

We note that CMS suggests that MAOs monitor balance billing complaints through plan grievance and CMS CTM data.  If it has not already been done, we ask that CMS establish CMS codes and categories specifically for balance billing so that both MAOs and CMS can adequately track complaints on the topic.

Section III- Part D

Formulary Submissions (p. 178)

The Center, along with other consumer advocates, remains concerned about diminished drug coverage on low-income subsidy (LIS) benchmark plan formularies. According to data provided by Avalere Health, the percent of available drugs included on LIS benchmark plans declined each year from 2013-2016. In addition, the share of brand drugs on LIS benchmark plan formularies also declined each year over this period.

The trend in which the percentage of available drugs covered on benchmark plan formularies is reduced each year is very troubling, especially given the vulnerable population affected. We have historically supported CMS’ stringent review of formularies offered in Medicare Part D and urge CMS to use its authority to ensure that LIS beneficiaries are not faced with more limited access to their drugs each year. We also strongly urge CMS to analyze formularies to determine whether appropriate access is afforded to needed drugs and classes of drugs.

We are also concerned about the possibility of discriminatory cost-sharing by plans, an issue that CMS has raised in past Call Letters. We believe this issue is particularly relevant to the specialty tier, where discrimination would most likely be prevalent due to the high costs of specialty tier medications. Considerable focus has been trained on the practice employed by some state-based exchange plans of placing all drugs in class on the specialty tier. We are concerned that this trend will become prevalent in Part D as well and encourage CMS to exercise its authority to prevent plans from offering discriminatory formularies to the fullest extent.

Improving Clinical Decision-Making for Certain Part D Coverage Determinations        (p. 183)

CMS proposes to allow extensions to Part D coverage determination timelines, which require plans to issue a decision no more than 72 hours for standard requests and no more than 24 hours for expedited requests.  In general, we share the agency’s concern that at times expediency may occur at the expense of sound clinical decision-making, resulting in access delays for affected enrollees who must request an appeal. We agree with CMS’ assertion that “a decision to deny the coverage request based solely on the lack of clinical information places the burden on the enrollee to request an appeal in order to have the request reviewed.”

However, we have some concerns about the additional flexibility contemplated for rulemaking. In particular, we want to ensure that, if misapplied or abused by plan sponsors, this exception does not become the norm, and simply lead to a wholesale extension of decision-making timeframes. Given well-documented and persistent shortcomings in Part D sponsor compliance with existing coverage determination and appeals processes, we believe this concern is warranted.   These shortcomings include not only substantive review of beneficiary appeals, but also neglect of required timeframes. For example, elsewhere in the draft Call Letter, CMS reports that “[t]he volume of cases auto-forwarded to the IRE [by plan sponsors] has been significant and sustained over the past several years” highlighting plan sponsors’ shortcomings in processing timely appeals. As such, we recommend that CMS test this flexibility through a carefully designed pilot before the agency proceeds with rulemaking. We urge that the pilot include control groups to determine how frequently plans will invoke this flexibility and how the time from presentation of prescription to access varies under the new rules and the existing system. CMS should also involve multiple stakeholders in the pilot design and make publicly available a description and evaluation of the pilot.

Access to Preferred Cost-Sharing Pharmacies (p. 185)

In the CY 2016 Call Letter, CMS announced that it would post information about 2016 Preferred Cost-Sharing Pharmacy (PCSP) access levels on the CMS website and require plans who were outliers with respect to access to PCSPs to disclose that their plan’s PCSP network offered lower access than other plans. Based on results of recent CMS analysis of outlier access rates, CMS does not plan to make significant changes for 2017.

The Center recommends that CMS require plans to prominently display their designation as a PCSP outlier. Currently, it is challenging to locate the required information in some of the plan marketing materials. CMS should provide greater oversight of marketing materials given that the PCSP outlier language can be difficult to find.  In addition, CMS should include information regarding PCSP access in the Plan Finder so that beneficiaries can make a more informed choice when shopping for drug plans.

Tier Labeling and Composition (p. 186)

Organizations serving and representing Medicare beneficiaries have been increasingly concerned about rapidly increasing generic drug costs and the fact that more and more generic drugs are being covered on non-generic tiers.  According to analysis from Avalere, between 2013 and 2016, generic drug coverage on non-generic tiers increased from 14% to 47%.  The increase has been particularly alarming for generic drug coverage on non-preferred brand tiers, which grew from 4% to 23% during this period – an almost 600% increase.   

We strongly agree with CMS’ statement that “we expect Drug Tier Labels to be representative of the drugs that make up that tier.” Clearly, that is not currently the case. Generic drug coverage on non-generic tiers defies logic and is extremely confusing for Medicare beneficiaries attempting to shop for the most affordable plan that best meets their needs. A simple remedy to this problem is to prohibit plans from covering generic drugs on non-generic tiers. While we understand that this raises other issues regarding flexibility to reach the coinsurance target threshold, we urge CMS to give this suggestion serious consideration, as it represents the clearest way for beneficiaries to understand tier labeling. While we appreciate CMS’ continued efforts to “provide tier label options that provide flexibility and transparency in benefit design,” we fear that insufficient attention is being given to providing clarity for beneficiaries.

The proposal to permit plans to substitute a tier labeled “non-preferred drugs” for a tier labeled “non-preferred brand drugs” is a small step in the right direction, since it would no longer have generics included in brand categories.  However, the proposal still falls far short of making it easier for beneficiaries to understand tier labeling and make informed choices among plans. In some instances, it may make things even more confusing. 

First, since plans will have the option to use either (a) “non-preferred drugs” or (b) “non-preferred brand drugs” labels, it will be increasingly confusing for beneficiaries to choose between one plan that uses option (a), and another plan that uses option (b). Second, it appears that the proposed options will not apply to preferred drug labeling. If this is correct, the differential treatment would likely add to beneficiary confusion. What is the rationale for applying the option only to non-preferred, but not preferred, tier labels?

CMS needs to give higher priority to making it easier for beneficiaries to make wise choices among competing, very complex plan options, and should not sacrifice clarity and simplicity at the altar of flexibility. In our view, the clearest labeling may be to have four relevant categories: (1) preferred generic drugs; (2) preferred brand drugs; (3) non-preferred generic drugs; and (4) non-preferred brand drugs, while prohibiting generic coverage on brand categories and vice versa. However, given the presence of more expensive generic drugs and our suggestion for stricter rules on tier placement, we want to be sure not to create any incentives for plans to leave these generics off formulary. We also have concerns expressed below about moving generic drug cost sharing to coinsurance instead of copayments. It may be helpful to further engage a range of stakeholders on these issues. 

With regard to the use of coinsurance versus copays in non-preferred tiers, we appreciate CMS’ discussion of this important issue for beneficiaries, but want to first note our concern that many beneficiaries lack a fundamental understanding of the difference. This is an area that needs additional basic education. For example, we recommend that more explanatory display boxes could be offered to give simple examples of the different impacts on consumers’ costs.

We are also concerned that coinsurance percentages can be difficult to understand, and potentially misleading, without information on the denominator. Beneficiaries simply want to know how much they will need to pay out-of-pocket, which is more easily and accurately conveyed with specific copayment dollar amounts. Consumers tend to prefer the predictability of flat copayments. Without clear information on the dollar amount the percentage is based on, coinsurance rates alone are not consumer-friendly, and could lead to choices that may not be in the best interest of beneficiaries. Clearly, these concerns have important implications for information provided on Plan Finder.  

Notwithstanding our tier labeling suggestions and coinsurance concerns above, we appreciate CMS’ efforts to “provide a more equivalent benefit to those beneficiaries who use less expensive generic medications that are placed on a non-preferred drug tier.”  We agree that additional analysis is needed since, although the proposal could help enrollees using generic drugs, it will not help enrollees using brand drugs and the total impact will be mixed.

Specialty Tiers (p. 192)

In the 2017 Advance Notice and Comment Letter, CMS increases the specialty tier threshold for the first time since 2008—to $670. Related to this change, we encourage CMS to release the detailed specialty tier methodology, as it did in 2014 and 2015. We appreciate that CMS will test the proposed increase and continue to perform additional analysis to assess whether future adjustments are needed, and we urge CMS to also make this information publicly available. Further, we support CMS’ proposal to include a link on Medicare.gov to the Medicare Drug Spending Dashboard, but we encourage CMS to consult with beneficiaries and consumer advocates about how to introduce that information without adding confusion to an already information-dense search tool. 

It is important to note that we remain concerned about Part D specialty tiers in two respects. First, we continue to urge that CMS allow tiering exceptions for prescription drugs placed on a plan’s specialty tier, both as a matter of fairness and to promote affordable access to high-cost medications. We urge CMS to allow tiering exceptions for all specialty medications, or to consider limited cases where these exceptions would benefit a sizable share of Medicare beneficiaries. At a minimum, we encourage CMS to investigate the effects of allowing tiering exceptions on the specialty tier. Important, unanswered questions include:

• What proportion of prescription drugs placed on the specialty tier have a therapeutic equivalent on a lower tier that would ultimately allow for a tiering exception? We understand that most medications placed on the specialty tier are single-source medications, suggesting that many prescription drugs lack the equivalent medication on a lower tier to permit tiering exceptions.
• How frequently are tiering exceptions requested, and with what frequency could we expect that people with Medicare would request tiering exceptions for prescription drugs placed on the specialty tier? Our general sense is that requests for tiering exceptions are exceedingly rare. We continue to urge CMS to strengthen beneficiary and provider outreach and education on the availability of tiering exceptions. Nevertheless, the frequency of these requests is an important consideration in evaluating how an allowance for tiering exceptions on the special tier would affect both enrollees and plans.
• Given the questions above, what is the magnitude of the expected costs to Part D plans? And would there be an impact on Part D plan premiums?

We strongly believe that an analysis of this kind is necessary to determine whether the long-standing prohibition on tiering exceptions on the specialty tier is warranted. Particularly if any such analysis were to reveal that allowing tiering exceptions would have a minimal effect on plan costs, we would hope this policy would be revisited. We urge CMS to conduct research along these lines and make its analyses publicly available. Second, we remain concerned that beneficiaries living on low, fixed incomes—though not low enough to qualify for the Part D Low-Income Subsidy (LIS or Extra Help)—are going without needed prescriptions due to high cost sharing on the specialty tier, as well as the non-preferred brand tier.

Generic Tier $0 Copay Plans (p. 193)

The Center appreciates CMS’s sharing of information and data on utilizing $0 cost sharing for vaccines and generic drugs, and the finding that suggests higher generic substitution rates occur when plans use $0 copays for their generic tiers.  We urge CMS to go further and encourage plans to use this option for LIS enrollees to increase generic use without a change in the statutory cost-sharing amounts.

Improving Drug Utilization Review Controls in Medicare Part D (p. 196)

While we remain concerned about CMS’ encouragement of the blanket use of prior authorization for prescription drugs that have a high likelihood of use for a non-medically-accepted indication, we appreciate the agency’s reminder to plans about the use of “grandfathering” policies. We share CMS’ favorable outlook on the use of these policies, particularly for people with chronic conditions. We encourage CMS to take this policy further and require “grandfathering” policies in these and other instances. We appreciate that plans will need to periodically assess whether “grandfathering” remains appropriate; yet, we urge CMS to encourage retrospective drug utilization reviews as opposed to limits on “grandfathering” processes to promote uninterrupted access to needed medications.

Point of Sale Pilot (p. 207)

We appreciate CMS’ continued focus on improving the beneficiary experience with Part D denials and appeals, especially as we continue to observe that people with Medicare struggle to navigate an overly onerous Part D appeals process—resulting in delays in access to needed prescription drugs, abandonment of prescribed medications, reduced adherence to treatment protocols, and higher than appropriate out-of-pocket health care costs for older adults, people with disabilities, and their families.[4]

We continue to believe that Medicare beneficiaries refused access to a medication at the pharmacy counter would best be served through reforms to the Part D appeals process, both by making additional information available at the POS and by eliminating needless steps in the appeals process. Part D enrollees experience this “turning away” at the POS as a denial, and many struggle to understand why a formal request for coverage must be made to the plan with the support of the prescribing physician.

As such, we strongly believe that access to information about the reason for a plan denial—provided at the pharmacy counter—will both eliminate significant beneficiary confusion and limit delays in accessing needed medications. Armed with information about why a prescription drug was refused at the POS, Part D enrollees and their providers will be better equipped to determine the best course of action for the beneficiary’s health.

Along these same lines, we strongly support allowing the pharmacy counter refusal to serve as the coverage determination. This proposal serves the dual purpose of removing a burdensome step for beneficiaries and their prescribers, first by explicitly stating why the drug is not covered and, second, by expediting the appeals process for those who need it.

We appreciate CMS’ reporting on the Part D POS pilot, and we continue to support the agency’s desire to conduct additional research on how to help beneficiaries secure coverage for needed medications after being turned away at the POS. Still, we have significant concerns about the design of the POS Pilot, leading us to question how useful its findings will be for the development of future policy in this area. We agree with the concerns regarding the Pilot, and recommendations following from the Pilot that our colleagues at the Medicare Rights Center outlined in their comments on the draft Call letter.

We urge CMS to prioritize solutions that strengthen the Part D appeals process, including the initiatives identified by the agency in the 2016 Announcement and Final Call Letter. While we support CMS’ ongoing efforts to help people with Medicare secure access to medications absent coverage determinations and appeals, we believe it is critically important that the underlying Part D appeals system work properly. It is essential that people with Medicare have the information and tools necessary to navigate this multi-step process.

Establishing Mail Order Protocols for Urgent Need Fills to Prevent Gaps in Therapy (p. 209)

We appreciate that CMS is requiring stronger protocols for rush orders from mail order pharmacies.  Plans have been aggressive in encouraging members to use mail-order services, many of which are fully owned by the plan sponsor.  It is critically important that beneficiaries can rely on ser

vices from those pharmacies.  We ask that CMS closely monitor plan performance not just in establishing those protocols and informing beneficiaries, but also in consistently delivering orders on time.

Conclusion

We appreciate the opportunity to submit these comments. For additional information, please contact David Lipschutz, Senior Policy Attorney, dlipschutz@medicareadvocacy.org, and Kata Kertesz, Policy Attorney, kkertesz@medicareadvocacy.org, both at 202-293-5760.

David A. Lipschutz                                                    Kata Kertesz
Senior Policy Attorney                                               Policy Attorney

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