CMS Releases New Medicare Advantage and Medicare Part D Rules, Implements Several Provisions of ACA

On April 12, 2012, the Centers for Medicare & Medicaid Services (“CMS”) released a final rule with comment period (“Final Rules”) implementing changes to the Medicare Advantage program and Medicare’s prescription drug benefit program, referred to as Medicare Parts C and D, respectively. Part C and D plan sponsors and other participants should carefully review the changes, particularly those related to increased transparency and exclusion from Parts C and D. The Final Rules are the latest effort by CMS to improve accountability, transparency, and effectiveness of the Medicare program.

Included among these regulations are changes to the law under the Affordable Care Act (“ACA”). The Final Rules codify Medicare’s Coverage Gap Discount program, a program enacted in January 2011 through the ACA to eliminate the prescription drug coverage “donut hole.” They also implement section 6005 of the ACA, which requires Medicare Part D sponsors and other entities with pharmacy benefit managers to report certain information and also provides that such reports will remain confidential. Penalties will be imposed for failure to comply with the reporting requirements.

The Final Rules make several additional changes to Medicare Parts C and D including:

  1. CMS’ adoption of the authority to exclude any plan sponsors who fail to achieve at least a 3-star rating for three consecutive years on CMS’ performance quality rating;
  2. Changing the Part D appeals process to allow prescribers to request a reconsideration on an enrollee’s behalf without first obtaining an appointed representative form;
  3. Allowing dual eligible special needs plans that meet integration and performance standards to expand their supplemental benefit offerings to include benefits such as nonskilled nursing services, personal care services, or other long term care services where CMS finds that the benefit will improve integration of care for the dual eligible population;
  4. Permitting Medicare Advantage plans to limit durable medical equipment to ‘‘preferred’’ brands and manufacturers so long as beneficiary access protections are in place including access to all preferred brands, a transition period during plan changes that allow enrollees to retain durable medical equipment, providing medical necessity exceptions to plan limitations and appeal rights for brand or manufacturer based denials, and full disclosure of plan limitations on durable medical equipment;
  5. Application of a lower, pro-rated cost sharing when prescriptions are dispensed with less than a month’s supply where appropriate; and,
  6. Requiring Part D sponsors to include an active and valid prescriber National Provider Identifier on prescription drug event records submitted to CMS.

Read CMS’ announcement on the changes here.