Kusserow on Compliance: CMS Proposed Payment and Policy Updates for Managed Care and Drug Plans

CMS has released proposed policy and payment updates to the Medicare Advantage (MA) and Part D Prescription Drug Programs that will further move the Medicare program toward paying providers based on the quality of patient care rather than quantity of care. Significant proposed changes include:

  • Refining the Medicare Advantage star rating system to encourage improved quality by modifying the system to prevent penalization of plans for enrolling dual eligible or low-income beneficiaries; and enhancing the in-home assessment value to support care planning and coordination.
  • Increasing beneficiary access to providers by ensuring MA plans maintain and make available accurate provider directories.
  • Changes in the Advance Rate Notice expected to affect MA plan growth positively by 1.05 percent.

CMS is proposing only minor adjustments to MA and Part D plan payment and policies for 2016. Some individual plans will be more impacted than others by the new payment rates based on their location and enrollee mix. The most significant would likely be felt by Part D beneficiaries, as the Advance Notice highlights increased drug expenses, signaling that Part D premiums will likely be on the rise for the coming plan year. CMS projects a 1.7 percent increase in county benchmarks offset by a 0.9 percent national average reduction due to the continued phase-in of the new methodology for MA benchmarks established in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The effects of the reduction could be much more significant (reductions of up to 4 to 5 percent) for plans in counties subject to the six-year phase-in of the ACA methodology.

Comments on the proposed Advance Notice and draft Call Letter must be submitted by 6:00 PM Eastern Standard Time on March 6, 2015. Comments may be submitted electronically to AdvanceNotice2016@cms.hhs.gov. The 2016 Final Rate Announcement and Call Letter will be published on April 6, 2015.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.