“Regulations do have their role. They’re very important to assuring patient safety and quality and for program integrity, but there’s a fine line between being helpful and being a hindrance,” – Seema Verma, Administrator for the Centers for Medicare and Medicaid Services

That quote captures CMS’s current sentiment. The agency is striving to reduce overly burdensome regulations on providers and payers to enable them to spend more time taking care of patients and less time on paperwork, reporting and compliance measurement. This sentiment was backed by the new policies of the Medicare Advantage (MA) and Part D Final Rule and Final Call Letter, released on April 2nd of 2018.

The policies of the Final Rule are reflective of collective input CMS solicited from beneficiaries, plan sponsors and advocacy groups on how MA and Part D plans could be transformed to give beneficiaries more coverage options and payers the tools and efficiencies needed to deliver IT innovation. The policy changes of the Final Rule, coupled by those outlined in the Final Call Letter, represent steps being taken to reduce regulatory obstacles to improved healthcare delivery and expansion of options available to beneficiaries.

While the Final Rules will not go in effect until January 1, 2019, below are some of the highlight changes so you can start thinking ahead:

Return of Medicare Advantage Open Enrollment

The Medicare Advantage Open Enrollment Period will return in 2019 in replacement of the existing MA disenrollment period that takes place from January 1st through February 14th. The New MA open enrollment period (OEP) will occur January 1st through March 31st and willl allow newly MA-eligible individuals, as well as current MA enrollees, to make a one-time election to switch to another MA plan, leave their MA plan or return to Original Medicare Part A and Part B. MA beneficiaries can also add or drop Part D coverage, however, this enrollment period does not allow for Part D changes for individuals enrolled in Original Medicare, including those with enrollment in stand-alone PDPs.

CMS expects approximately 558,000 Medicare beneficiaries will use the OEP to make an enrollment change. Reinstitution of OEP will allow those who missed out on the fall Annual Enrollment Period to have another opportunity to get into Medicare Advantage or to change from one plan to another. This is part of CMS’s initiative to give beneficiaries more time and information to make smart decisions about their healthcare and pharmacy benefits.

Expansion of Patients over Paperwork Initiative

Earlier in the year CMS launched a “Patients Over Paperwork Initiative,” which aims to reduce unnecessary burden regulation in order to improve quality and speed of care.

The final rule furthers this initiative by:

• Authorizing CMS to permit plans to use notice of electronic posting (and provision of copies upon request) to satisfy disclosure requirements for certain bulky documents to Medicare beneficiaries, thereby empowering patients with the information to make their own healthcare decisions
• Eliminates requirements that plans submit, in addition to their bids, similar and overlapping accounting information
• Makes it easier for plans to communicate with beneficiaries by streamlining government review and approval of marketing materials used by plans
• Eliminates enrollment requirements for healthcare providers and prescribers that bring value to Medicare Advantage and Part D beneficiaries

Separation & Allowance of EOC E-Delivery

CMS is separating the delivery date of the Annual Notice of Change (ANOC) from the Evidence of Coverage (EOC) so that Medicare beneficiaries receive the ANOC first, as a stand-alone document, in order to give beneficiaries the information they need to make a fully informed plan selection decision. As noted by CMS, the “ANOC must be delivered 15 days prior to the Annual Election Period (AEP) and will be received by enrollees ahead of the EOC, thus allowing enrollees to focus on materials that drive decision-making during the AEP.”  Plans should aim to have EOC’s delivered before or at the start of AEP—October 15th.

In addition, MA and Part D sponsors can now provide certain materials, such as the EOC, electronically. When doing so, plans are required to provide beneficiaries with easy access to hardcopy materials upon request. Although they did not specifically reference mandatory disclosure materials, beyond the EOC, the agency stated that they are permitting plans to use notice of electronic posting—and provision of copies upon request—to satisfy disclosure requirements for certain bulky documents to Medicare beneficiaries. Noting that approximately two-thirds of Americans 65 and older now use the internet, CMS hopes to bring Medicare communications into the online era and estimates the change will result in savings of almost $55 million per year.

Narrowing Marketing Material Oversight

Acknowledging that its previous definition of marketing material was too broad, CMS changed the definition of what is considered a marketing material to only items that “are most likely to lead to a beneficiary to make an enrollment decision.” They will now only review and approve marketing material aimed at influencing beneficiary decisions in order to reduce the amount of materials health plan marketers need to submit for approval. To account for the materials that will now fall outside of the new marketing definition, CMS is adopting more appropriate requirements and oversight for a new category of materials and activities called “communications.” By streamlining government review and approval of marketing materials used by plans, CMS hopes to make it easier for plans to communicate with beneficiaries.

In conjunction with these efforts to reduce required data submissions and reviews, CMS also narrowed the amount of data that MAOs must provide in their annual Medical Loss Ratio (MLR) reports. Rather than providing line item information about the various expense categories, MAOs will now be required to provide four reportable pieces of MLR information: the organization’s name, contract number, adjusted MLR and remittance amount.

Expanding and Improving Benefits Design

The Final Rule and the Final Call Letter implemented significant changes to the uniform benefit, supplemental benefit, and meaningful difference rules, giving MAOs substantially more flexibility in designing and targeting benefits for members with specialized medical needs.

The meaningful difference requirement set regulations in place for how MA plans offered by the same organization in the same county must differ. Beginning CY 2019, CMS is eliminating this requirement as they believe that it can at times prompt plans to reduce the value of certain benefit offerings in order to comply. Without the meaningful difference limitation, MAOs will have the ability to offer multiple plans with slightly varied benefit designs in order to target new disease- and condition-specific benefit plans towards particular populations.

CMS also reinterpreted uniformity requirements to expand the ways MA plans can offer supplemental healthcare benefits to beneficiaries. Previously, MAOs were required to offer plans with uniform benefits, premiums and cost-sharing throughout the plan’s service area, but in a “reinterpretation” of this authority, MAOs can offer tailored supplemental benefits, so long as there is a connection between the benefit and the health condition  the benefit is designed to address, confirmed through diagnosis. “It must diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization,” CMS stated. Though CMS did not specify what kinds of “extras” could now be included, speculation has emerged that services as diverse as home meal delivery, ride-sharing transportation to medical appointments, assistance devices, and non-skilled, in-home care could become regular benefits, even though similar options are not allowed in traditional Medicare.

By 2020, MA plans will be able to offer three categories of supplemental benefits: standard (offered to all enrollees), targeted (based on health status or disease state) and chronic (offered to the chronically ill). MA plans will need to identify the category of each benefit being offered in their bids and Evidence of Coverage documents.

Standardizing Star Ratings Methodologies

CMS finalized regulations for the Quality Star Ratings program, which assigns rating to sponsors that are used in plan marketing materials and which Quality Bonus Payments are based upon. In addition to codifying the Star Ratings system so beneficiaries can make more informed coverage choices, CMS put measures in place to ensure that the quality and consistency of data submitted is reflected in these ratings. These measures include using an enrollment-weighed average to calculate the Star Ratings for recently consolidated contracts and standardizing its star reduction calculation policy for contracts with data integrity issues.

Conclusion

Verma noted that these policies “should serve as tangible examples of our commitment to putting patients first and empowering them with the information they need to make healthcare decisions that are right for them, lowering their drug costs and reducing provider burden to allow them to spend more time on their primary mission—improving their patients’ health and lower drug prices for seniors on Medicare.”

CMS also claims that the final changes will result in an estimated $295 million in savings a year for the Medicare program over 5 years (2019 through 2023) – resulting in lower premiums or additional benefits.

For payers, these Final Rules not only mean lower drug costs and premiums for their members, but greater flexibility on their end to deliver personalized communications, engagement and benefits to members at reduced cost and higher efficiency. The expansion of supplemental benefits could also spur the development of a new healthcare model, as it opens the doors to integration with new partners and technologies to deliver services that address the social determinants of health. While CMS indicated that more detailed guidance would be released later in the year on supplemental benefits, the ability to potentially offer varied benefits to different populations signifies a major shift towards a personalized, patient-first healthcare delivery model.