Operating Medicare Part C and Part D plans has become increasingly complicated. The Affordable Care Act and a growing number of rules and regulations added each year have heightened the complexity and associated compliance burden for the health insurance companies that sell and administer these plans.
Actuaries are instrumental in developing the bids that plan sponsors submit annually to the Centers for Medicare and Medicaid Services (CMS). Those bids include a plan benefit package and Part C and Part D bid pricing tools. The bid submission also includes a set of supporting documentation describing how the financial projections were developed and demonstrating compliance with the many bidding rules.
During desk review, CMS independently confirms that the bids pass compliance tests. It is critical that plan sponsors understand the tests and confirm compliance before bids are submitted.
In this paper, Chris Girod and Shyam Kolli discuss a relatively narrow area of rules that is sometimes loosely referred to as actuarial compliance. This information can be useful for actuaries and other professionals who are tasked with understanding and following the many rules and regulations as they relate to Parts C and D.