Tag Archives: CMS

How does risk adjustment affect CMS episode-based payment models?

Each episode-based payment model has its own specific set of risk arrangements for providers to consider. Risk adjustment or risk stratification is present in these alternative payment models to amend payment levels and reflect cost considerations outside a provider’s control.

In this paper, Milliman’s Samuel Bennett and Tom Snook provide a high-level guide on risk adjustment within the broader scope of four episode-based payment models administered by the Centers for Medicare and Medicaid Services.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Issues and challenges in measuring and improving the quality of healthcare
The Congressional Budget Office (CBO) released a new paper providing an overview of the current state of measuring healthcare quality. The agency uses the Medicare program to illustrate the key issues and challenges that arise in doing so.

To download the paper, click here.

Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) enforcement report published
The Centers for Medicare and Medicaid Services (CMS) has published a new report to increase transparency with respect to enforcement of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Although CMS has taken action to ensure compliance with MHPAEA since its enactment in 2008, this report only includes MHPAEA investigations completed in 2016 and beyond.

To download the report, click here.

 

CMS proposed rules would impact Part D drug costs and plan designs

On November 16, 2017, the Centers for Medicare and Medicaid Services (CMS) released 713 pages of proposed changes to Medicare Advantage (MA) and the Medicare Part D prescription drug benefit. The proposed changes (file code CMS-4182-P) would take effect for contract year 2019 and are intended to manage utilization of opioids, reduce costs, and provide more plan choices. The updates present major changes to the way the programs operate. According to CMS, “the proposed changes would result in an estimated $195 million in savings a year for the Medicare program over 5 years (2019 through 2023).”

Some significant impacts on Part D that plans need to be aware of would include:

Midyear formulary changes: Plans would have more flexibility to immediately incorporate generic drugs as soon as they are available.

• Plans could assess the cost impact of each new generic drug based on member utilization to weigh against administration and disruption issues.
• This proposed rule could be significant, especially if the increases in generic approvals continue. According to Milliman’s internal research, there were about 14 and 31 significant first generic launches in 2015 and 2016, respectively. And this year the U.S. Food and Drug Administration (FDA) has continued to speed up the generic approval process.

Opioid treatment: Plans would be able to restrict access and manage opioid utilization. The proposed rules codify and expand upon the current Part D Opioid Drug Utilization Review Policy and Overutilizing Monitoring System.

Biosimilars: Plans would be able to categorize certain low-cost biosimilars as generics for low-income subsidy (LIS) cost sharing and non-LIS catastrophic cost sharing. Because the LIS copays in 2018 will be $3.35 for generics and $8.35 for brands, this is likely not to have a large impact on 1) lowering member costs, or 2) increasing biosimilar utilization.

Point-of-sale costs: The proposal includes a request for information (RFI) regarding applying price concessions and rebates at the point of sale, which could lower member cost sharing when taking brand medications that offer rebates, but may increase premiums and government cost.

Meaningful differences testing: With the elimination or modification of this testing, plans may be able to add more enhanced alternative Part D plans to their product portfolios in the same region.

A link to the Fact Sheet issued by CMS can be found here. CMS is accepting comments until January 16, 2018.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

CMS issues revocation notice bulletin
The Centers for Medicare and Medicaid Services (CMS) released a notice by issuer or third-party administrator for employers/plan sponsors of revocation of the accommodation for certain preventive services. The bulletin addresses notice requirements in the recently published interim final rules addressing the religious and moral exemptions from the requirement to provide contraceptive benefits in group health plans and health insurance coverage.

For more information, click here.

Ninety-day delay of applicability date for disability claims procedure amendments
The U.S. Department of Labor (DOL) has announced a 90-day delay of the applicability date for ERISA plans to comply with a final rule amending the claims procedure requirements applicable to disability benefits.

The three-month delay of the applicability date announced today is intended to give interested stakeholders the opportunity to submit, and for the DOL to consider, data and information related to concerns by some insurance industry and employer groups, and some members of Congress, that the claims procedure amendments will drive up disability benefit plan costs, cause an increase in litigation, and, in so doing, impair workers’ access to disability insurance benefits.

The final rule amending the disability benefits claims procedure requirements for ERISA plans was published in the Federal Register on December 19, 2016. The amendments were to become applicable to claims for disability benefits filed on or after January 1, 2018.

For more information, click here.

Financial implications for Next Generation ACO Program

The Centers for Medicare and Medicaid Services has released the 2016 financial results for each of the Next Generation Accountable Care Organizations (NGACOs). The financial results may influence key decisions that each NGACO needs to make very soon regarding the magnitude of their risk parameters for 2018.  In this article, Milliman consultants explains those results and offer considerations for NGACOs to think about.

Medicare Advantage proposed rule could have a profound impact on product development for 2019 and beyond

The Medicare Advantage (MA) and Prescription Drug (PD) Benefit Program proposed rule for 2019 discusses important policy updates that may have a significant impact on the product development process for 2019. The proposed changes provide new opportunities for plans to innovate benefit designs and tailor packages for selected enrollees. The Centers for Medicare and Medicaid Services (CMS) is also requesting feedback on Part D rebates and price concessions that could have a profound impact on the way formularies and pharmacy benefits are managed. Finally, we also highlight additional proposed changes in enrollment policies that may result in strategic implications.

The key advantage for product development is CMS’s proposal to discontinue the use of “meaningful differences” requirements. By removing the restriction that limits the number of plans a Medicare Advantage Organization (MAO) could offer, MAOs would be in a position to develop a more diverse portfolio of products. In addition, plans can focus on creating product designs that are meaningful to beneficiaries instead of making benefit decisions based on the results of the CMS out-of-pocket cost (OOPC) calculator prescribed methodology. CMS did not propose waiving the Total Beneficiary Cost (TBC) requirements, meaning that plans would still need to rely on the OOPC methodology to determine year-over-year plan changes.

CMS is proposing additional flexibility in the benefit design process. One proposal would allow plans to offer different cost sharing and/or additional supplemental benefits for specific subsets of enrollees based on defined health conditions (e.g., zero cost share for diabetic supplies for patients diagnosed with diabetes). In addition, CMS also proposes to allow additional flexibility with plan designs for segments within plans by being able to offer different supplemental benefit packages by segment. Finally, CMS also discusses the possibility of additional maximum out-of-pocket (MOOP) levels and associated cost-sharing limits to allow plans a greater range of options versus the currently prescribed mandatory levels and to encourage plan offerings with lower MOOP limits.

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