Final 2016 CMS Call Letter for Medicare Parts C and D Released

Every year, the Centers for Medicare and Medicaid Services (CMS) issues payment, performance and other rules that apply to Medicare Advantage (MA) and Part D plans that choose to participate in the Medicare program in the following calendar year. Commonly referred to as the “Call Letter,” this document is first released in draft form, subject to public comment, and is finalized a few months later, usually in April. The draft 2016 Call Letter was released on February 20, 2015, and the final 2016 letter was released on April 6, 2015.

The Center, in collaboration with several other advocacy organizations, submitted comments to the Call Letter.

Similar to the draft Call Letter, the final document contains many provisions that we support, and others of concern.

Medicare Advantage Payment Increase

For the third year in a row, CMS has reversed a proposal in the draft Call Letter to implement minor MA payment reductions, which, similar to previous years, was followed by an intensive lobbying campaign by the health insurance industry, supported by many members of Congress, in opposition to reductions.  Instead of an anticipated payment reduction of 0.95%, CMS announced an expected average MA revenue increase of 1.05% — or up to 3.25%, anticipating a continuing trend of some plans seeking higher risk-adjusted payment based upon how they report the health status of their enrollees.   We remain concerned that, contrary to the intent of the Affordable Care Act to achieve greater payment parity between MA plans and Traditional Medicare, MA plans continue to be overpaid in comparison to what Traditional Medicare spends on a given beneficiary.

Making the Exceptions and Appeals Processes More Accessible for Beneficiaries

We commend CMS for moving forward with efforts to improve the MA and Part D appeals process for Medicare beneficiaries, including improving Part D denial notices, clarifying plan sponsors’ obligations, expanding data collection regarding Part D appeals, and exploring a streamlined Part D appeals process that is initiated when a request for coverage of a prescription drug is denied at the pharmacy counter.  Among other things, the Final Call Letter announced a pilot program to help identify options for resolving certain point-of-sale claims rejections without an enrollee having to request a coverage determination from a plan. In addition, CMS is moving forward with improved data collection concerning Part D appeals data, with an implementation target of 2018.

MA and Part D Plan Star Ratings

In the Draft Call Letter, CMS proposed to reduce the weights of certain plan quality measures in an attempt to account for differences in plans’ quality ratings due to enrollees’ dual eligibility for Medicare and Medicaid.   We expressed significant concerns about how decreasing the weight of measures that CMS has found to disproportionately impact dual eligible will in essence increase the quality Start Ratings for plans without actually improving care for dual eligibles in these areas.   We commend CMS for their decision not to move forward with this proposal in the Final Call Letter.  As noted by CMS, additional research is necessary before making such changes.  We strongly agree with CMS’ statement that “[w]e cannot risk the potential for masking disparities in care or jeopardizing the integrity of the Star Ratings Program by implementing changes that are not grounded in scientific evidence.”

MA Plan Provider Directories  

On the one hand, we commend CMS for moving forward with their proposal to improve oversight of and consumer information about MA provider networks.  Specifically, CMS reminds plan sponsors that they are “expected to establish and maintain a proactive, structured process that enables them to assess, on a timely basis, the true availability of contracted providers which includes, as needed, an analysis to verify that the provider network is sufficient to provide adequate access to covered services for all enrollees.”  In addition, plans “must include in their online provider directories all active contracted providers, with specific notations to highlight those providers who are closed or not accepting new patients.”  On the other hand, we reiterate our disappointment that CMS has taken no further action to strengthen consumer protections surrounding MA plan mid-year provider network terminations.  The most effective way to protect consumers from being trapped in their plans after their own doctors are involuntarily terminated is to prohibit MA plans from terminating network providers mid-year without cause.  CMS has stated they will not impose such a requirement on plans, and has not proposed any additional consumer safeguards or relief.