Final Rule for Medicare Parts C and D Includes Weakened Standards for Medicare Advantage Networks

On May 22, 2020, the Centers for Medicare & Medicaid Services (CMS) published a final rule regarding Medicare Advantage (Medicare Part C) and Part D prescription drug plans (“C & D Rule”). The rule is entitled “Medicare Program; Contract Year 2021 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program.”  It is available for public reviewing online (hereinafter referred to as “non-Federal Register version) but will be published in the Federal Register on June 2, 2020.  CMS has also issued a fact sheet describing the final rule.

I. Overview

The Center for Medicare Advocacy submitted comments regarding the proposed rule, which was published in February 2020.  In the final rule, CMS finalizes some provisions from the proposed rule, which will be effective on or before January 1, 2021, but left other proposals to subsequent rulemaking to be effective no earlier than January 1, 2022.  In the final rule, CMS notes that the “remaining proposals will be addressed in a separate final rule that we expect to publish later in 2020” (p. 295, non-Federal Register version).

Focusing on issues we raised in our comments to the proposed rule, we highlight here some of the provisions in the proposed rule that were included in the final rule, as well as some that were deferred for future rulemaking (note this is not a comprehensive list).   Changes to Medicare Advantage network adequacy rules are discussed in more detail below. The Center will continue advocacy on these issues.

II. Provisions That Are Included in the Final Rule

• Weakened Medicare Advantage (MA) Network Adequacy Requirements – As discussed in more detail below, and of concern for beneficiaries, CMS is relaxing requirements that MA plans must meet in order for their provider networks to meet minimum standards.
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• Limit on Dually Eligible Special Needs Plan (D-SNP) “Look-Alikes” The Center expressed concern about these look-alike plans that market aggressively to dually eligible individuals. The plans are made up of mostly dually eligible beneficiaries, but are not subject to the federal regulatory and state contracting requirements applicable to D-SNPs, and do not provide Medicaid integration.
  • Under the final rule, CMS will not enter into a contract:
    • Starting in 2022, for a new MA plan – other than a SNP – that projects in its bid that 80 percent or more of the plan’s total enrollment will be entitled to Medicaid, or
    • Starting for 2023, for a renewing MA plan – other than a SNP – that has actual enrollment of 80 percent or more of enrollees who are entitled to Medicaid, unless the MA plan has been active for less than one year and has enrollment of 200 or fewer individuals at the time of such determination.
  • Also under the final rule, D-SNP look-alike plans would be able to transition their membership into a D-SNP or other qualifying zero-premium plan offered by the MA organization beginning for the 2021 plan year. The final rule allows one additional year for existing D-SNP look-alike plans to phase out as compared to the proposed rule.
  • The Center commented on the proposal and expressed support for CMS’s effort to limit D-SNPs, but urged CMS to use a stricter threshold number than the 80% enrollment needed to define which plans constitute a look-alike, and to add additional protections for beneficiaries.

• Special Election Periods (SEPs) Codified – SEPs for MA and Part D plan enrollment and disenrollment that previously existed in sub-regulatory guidance are now codified in regulations, with some additional clarifications and 2 new SEPs.
  • The new SEPs, both of which the Center supported, are:
    • SEP for Individuals Enrolled in a Plan Placed in Receivership, and
    • SEP for Individuals Enrolled in a Plan that has been identified by CMS as a Consistent Poor Performer.
  • CMS is retaining the ability to grant case-by-case exceptional circumstance SEPs, which are “situations in which it is in the best interest of the beneficiary that she or he be provided an enrollment (or disenrollment) opportunity.” CMS provides important guidance regarding what types of situations will be considered. In the preamble to the final rule (pp. 275-6, non-Federal Register version), CMS states it “will consider granting an enrollment exception when one or more of the following factors is present:
    • Extraordinary Circumstances – Circumstances beyond the beneficiary’s control that prevented him or her from submitting a timely request to enroll or disenroll from a plan during a valid enrollment period. This is inclusive of, but not limited to, a serious medical emergency of the beneficiary or their authorized representative during an entire election period, a change in hospice status, or mailed enrollment forms returned as undeliverable on or after the last day of an enrollment period.
    • Erroneous Election – Situations in which a beneficiary provides a verbal or written allegation that his or her enrollment in a MA or Part D plan was based upon misleading or incorrect information provided by a plan representative or State Health Insurance Assistance Program (SHIP) counselor, including situations where a beneficiary states he or she was enrolled into a plan without his or her knowledge or consent, and requests cancellation of the enrollment or disenrollment from the plan.
    • Plan Accessibility – A SEP may be warranted to ensure beneficiaries have access to services and when, without the approval of an enrollment exception, there could be adverse health consequences for the beneficiary. This is inclusive of, but not limited to, maintaining continuity of care for a chronic condition and preventing an interruption in treatment.”
  • The Center for Medicare Advocacy urged CMS to clarify, in regulatory language, that an SEP is available when there are errors in the Medicare Plan Finder (MPF) – as was the case in the Fall/Winter of 2019 – or other CMS issued or managed information platforms that beneficiaries used when making their decisions.
    • CMS’ response: “As the MPF and other CMS-issued or managed information platforms are the responsibility of the federal government, a beneficiary who relied on erroneous information on these platforms would be eligible for this SEP [SEP for Individuals Affected by a Federal Employee Error]. As a result, we do not see a need to revise the current regulatory text or establish a new, separate SEP” (p. 269, non-Federal Register version).
  • Of note – in response to a commenter’s question concerning proof of eligibility for an SEP, CMS replied “Consistent with longstanding policy regarding eligibility for any SEP, an applicant’s written or verbal attestation of SEP eligibility is sufficient” (p. 272, non-Federal Register version).
  • The Center for Medicare Advocacy made several suggestions for broadening the scope of existing SEPs (including allowing an SEP when an enrollee’s provider is terminated, rather than a “significant” amount of providers terminated) and creating additional SEPs, however these suggestions were not adopted.
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• MA and Part D Star Rating Changes – The final rule includes updates to the methodology and measures for the Star Ratings program. As the Center for Medicare Advocacy expressed in our comments to the proposed rule, we appreciate the increase in the weight of patient experience/complaints and access measures, as these reflect key considerations for beneficiaries when evaluating and choosing a plan under these programs.We also, however, continue to encourage CMS to adopt measures to assess MA plan compliance with the Jimmo v. Sebelius settlement, which explicitly rejects a strict “improvement standard” and clarifies that Medicare coverage is available for skilled services provided to help Medicare beneficiaries maintain their condition or prevent further deterioration, in skilled nursing facilities, home health agencies, and outpatient clinics. Such measures should focus on access to such care and the practical outcomes in these settings. The addition of such measures are key to determining the degree of access to skilled “maintenance” care provided for beneficiaries in MA plans and for holding MA plans accountable for ensuring access to these essential services.

III. Provisions That Are Not Included In Final Rule

• Codifying Requirements for Medicare Communications and Marketing – CMS proposed to codify sub-regulatory guidance contained in the existing Medicare Communications & Marketing Guidelines (MCMG). As noted in our comments, the Center has significant concerns about the substantive changes CMS made to the MCMG in 2019 and the manner in which it was done. CMS rescinded important consumer protections from the final 2020 marketing guidelines, without any public comment, resulting in watered down standards.  Of note, such changes include blurring the division between educational and marketing events, apparently in conflict with federal law.As stated in our comments, “these revisions appear to violate MIPPA [Medicare Improvements for Patients and Providers Act of 2008]. CMS has an obligation to explain how these revisions do not violate MIPPA. Further, since this was done without public comment, we ask CMS to disclose from whom they received requests to make these changes, and, if no such requests were made, why the agency did this.  We strenuously object to this change, and urge CMS to reverse this end-run around the MIPPA provisions mandating a distinction between marketing and educational events.” We await CMS’ response.
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• Permitting a Second, “Preferred”, Specialty Tier in Part D – the Center opposed this proposal, noting in our comments that it “will further complicate an already complicated benefit, and may not yield meaningful savings for beneficiaries.”
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• Beneficiary Real Time Benefit Tool (RTBT) – CMS proposed that each Part D plan implement a beneficiary RTBT that will allow enrollees to view plan-provided, patient-specific, real-time formulary and benefit information by January 1, 2022. While the Center expressed general support for requiring plans to implement an RTBT, we asserted, among other things, that “further efforts to provide individuals with such information should be made prior to enrollment in a given Part D plans.”
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• Codifying Service Category Cost Sharing Limits for Medicare Parts A and B Services and per Member per Month Actuarial Equivalence Cost Sharing – in addition to comments about cost-sharing for specific services/items such as dialysis, home health and durable medical equipment (DME), the Center offered general comments, including that “we object to allowing cost-sharing as high as 50% for certain services, even with a lower applicable [maximum out-of-pocket limit for MA plans] MOOP amount. Requiring significant cost-sharing, let alone up to half of costs of a given service, serves as a deterrent to obtaining medically necessary care and is simply out of reach, financially, for a large number of beneficiaries. Further, allowing multiple MOOP levels with varying levels of cost-sharing for varying services makes comparing and choosing plans more difficult.  From a consumer advocacy perspective, MA plan benefits should be more standardized, not less.”

Also of note: although there were technical changes made to regulations reflecting the fact that starting in 2021 individuals with End Stage Renal Disease (ESRD) may join MA plans, CMS remained virtually silent on protections for such individuals. In our comments, we urged “CMS to take action to prevent discriminatory benefit design in MA plans relating to people with ESRD by prohibiting –or at the very least minimizing –cost-sharing for dialysis.  Before MA plans submit their bids for 2021, CMS should issue clear statements to plans that benefit designs that charge 20% coinsurance for dialysis will be deemed discriminatory and will not be tolerated.” We have seen no such guidance from CMS.

IV. Medicare Advantage (MA) Network Adequacy Rules Weakened, Not “Strengthened”

Network adequacy rules exist in order to ensure that enrollees of Medicare Advantage (MA) plans that restrict access to services to a contracted network of providers are able to still access essential services.  CMS’ own guidance outlining network adequacy rules state that relevant criteria “include provider and facility specialty types that must be available consistent with CMS number, time, and distance standards. Access to each specialty type is assessed using quantitative standards based on the local availability of providers to ensure that organizations contract with a sufficient number of providers and facilities in order to provide healthcare services without placing undue burden on enrollees trying to obtain covered services.”

Remarkably, CMS contends that this final rule has “strengthened” network adequacy rules for MA plans (see, e.g., CMS Fact Sheet) when it appears that they have actually done the opposite.

As noted in the final rule (p. 8 of the non-Federal Register version), “In order to expand access to MA plans where network development can be challenging, we are reducing the percentage of beneficiaries that must reside within the maximum time and distance standards in non-urban counties […] from 90 percent to 85 percent in order for an MA plan to comply with network adequacy standards.”

CMS also allows plan sponsors to meet weaker standards if they provide certain services via telehealth:  “Also, MA plans will be eligible to receive a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards when they contract with telehealth providers in the following provider specialty types: Dermatology, Psychiatry, Cardiology, Otolaryngology, Neurology, Ophthalmology, Allergy and Immunology, Nephrology, Primary Care, Gynecology/ OB/GYN, Endocrinology, and Infectious Diseases.”

CMS also provides a “10-percentage point credit” towards meeting time and distance standards for affected providers in states that have certificate of need (CON) laws “or other state imposed anti-competitive restrictions that limit the number of providers or facilities in a county or state.”  The telehealth and the CON credits can be combined together to reduce the percentage of beneficiaries that are within the maximum time and distance requirements (down to 65 percent in rural counties, and 70 in non-rural counties; see p. 255 of non-Federal Register version).

In the Center’s comments objecting to these rule changes, we noted that

“[t]he current COVID-19 crisis has made the importance of access to telehealth more apparent, particularly when there are significant restrictions on the ability of beneficiaries and providers to interact with one another. While the Center generally supports exploring ways to increase access to care through the use of telehealth, such access should not come at the expense of providing quality care to enrollees. As CMS notes in the preamble, in response to previous rulemaking, providers had more concerns than health plans ‘that telehealth services could be used to replace in-person healthcare delivery.’ […] Although CMS notes it is not proposing to make any changes to how minimum provider requirements are calculated, giving a 10-percentage point credit to plans nonetheless dilutes access to care by allowing plans to provide less than adequate access to a greater percentage of their enrollees. As noted by CMS, “our data indicates that existing failures in MA plans’ meeting the time and distance standards frequently occur at the range between 80-89 percent of beneficiaries” [citations omitted].

And, perhaps most alarming, CMS is loosening standards concerning access to dialysis providers – just as MA plans will be required to accept people with ESRD in 2021.  As stated in the above-referenced CMS Fact Sheet, “To recognize greater competition and greater use of other dialysis treatment modalities in different communities, we are providing for a more flexible approach to meeting network adequacy standards for Outpatient Dialysis than the current pre-determined time and distance requirements.”

Jackson Williams, Vice President of Public Policy at Dialysis Patient Citizens, wrote in correspondence to the Center re: the changes concerning access to dialysis facilities:

The regulation eliminates time and distance limits from network adequacy requirements for dialysis facilities. Network adequacy requirements for health plans ensure that patients can have access to all necessary providers with reasonable promptness. Time and distance limits prescribe a maximum driving time or distance in miles that a consumer must travel to get to a doctor or facility, and apply to the great majority of provider types.

CMS replaced the time and distance limits with another standard, a network “consistent with the prevailing community pattern of health care delivery in the area.” This standard was previously applied only to services for which patients don’t regularly travel to receive. In the [proposed rule], CMS had floated the possibility of loosening network adequacy standards to give health plans greater leverage in network contracting negotiations to counter consolidation in the dialysis market.

Beneficiary advocates oppose diluting network adequacy requirements, intended to protect patients’ access to care, to vindicate policy objectives unrelated to it. This change could lead to smaller numbers of dialysis clinics in MA plan networks and make Medicare Advantage less attractive to ESRD patients when they are able to enroll in them for 2021.

As the Center noted in our comments objecting to these rule changes, “If an MA plan sponsor cannot contract with an adequate number of providers within reasonable time and distance standards to the maximum number of enrollees it should not be allowed to offer a plan in the area.  Offering an MA plan with too few providers, too far away, who are reasonably accessible to too few enrollees does not serve a rural population well […]  Existing rules should not be diluted in order to enable more plans to meet such rules; network adequacy should not be graded on a curve.”

The change makes it easier for plans to meet their minimum obligations, at the expense of beneficiaries, who the plans are supposed to serve. In addition to an Orwellian use of the term “strengthen” when referring to plan requirements that actually weaken network adequacy, the rule is a disservice to MA plan enrollees.

D. Lipschutz