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Medicare Advantage and Medicare Part D Rule Changes by CMS for 2021 Plan Year

May 29, 2020

On May 22, 2020 the Centers for Medicare & Medicaid Services (CMS) finalized a subset of rules that impact Medicare Advantage (MA) and Part D plans. The rules, which will be published on June 2, 2020, were part of a larger set of rules proposed by CMS in February. While the rest of the rules will be finalized later this year, the group of rules finalized in May are intended to provide greater access to a wider range of benefits for plan participants.

The new rules will do the following in time for the 2021 plan year.

Increase Access to Telehealth for Seniors in MA plans

According to the Kaiser Family Foundation, 77% of MA enrollees have access to telehealth benefits as part of their plan. Access to telehealth has become a focus for public health experts as a way to encourage vulnerable populations to avoid potential exposure to the virus while still maintaining necessary access to medical care during the COVID-19 pandemic. A recent survey indicated that only a quarter of seniors on MA plans have used telehealth during the COVID-19 crisis. However, of those who had used telehealth services, 91% reported it as a favorable experience and 78% said they would be likely to use it again. Since March, the U.S. government has undertaken several steps to increase access to telehealth for Medicare enrollees—through the passage of a $500 billion spending package for an emergency telehealth program, and through the announcement that Medicare will cover an additional 80 telehealth services.

Under the regulation finalized in May, CMS is incentivizing MA plans to contract with telehealth providers for dermatology, psychiatry, cardiology, otolaryngology, neurology, ophthalmology, allergy and immunology, nephrology, primary care, gynecology/OB/GYN, endocrinology and infectious diseases. Plans will be able to count those telehealth providers in meeting CMS network adequacy standards.

Expand Special Supplemental Benefits for the Chronically Ill

Expand Special Supplemental Benefits for the Chronically Ill (SSBCI) to apply to a wider breadth of chronic conditions. SSBCI is a set of guidelines within the MA program that went into effect on January 1, 2020. SSBCI allows MA plans to offer supplemental benefits and services (that are not primarily health related) to certain chronically ill enrollees, provided the benefits/services have a reasonable expectation of improving or maintaining the health or overall function of the enrollee as it relates to the chronic condition or illness. Examples of SSBCI services include non-medical transportation, in-home personal care, air conditioners, nutrition benefits, pest control, food deliveries, health and fitness devices and support for service dogs.

Previously, CMS limited the chronic conditions an enrollee must have to be eligible under SSBCI to those conditions outlined in the Medicare Managed Care Manual. Beginning in contract year 2021, CMS is allowing plans to target other chronic conditions.

Expand Support in Rural Communities

Provide support for more MA options for beneficiaries in rural communities. Rural areas have long lagged in MA enrollment. Stakeholders in the system cite a variety of reasons for this fact (e.g., provider payment rates, the scarcity of rural providers, and network adequacy issues). In the regulations finalized in May, CMS reduced the required percentage of beneficiaries that must reside within the maximum time and distance standards from 90% to 85% in rural areas. The intent of this change is to expand MA plan options for beneficiaries by helping MA organizations to build networks in these areas.

Additional New Rules

  • Expand access to MA for patients with End Stage Renal Disease (ESRD). The 21st Century Cures Act (Cures Act) amended the Social Security Act to allow all Medicare-eligible individuals with ESRD to enroll in MA plans beginning on January 1, 2021. CMS codified this statutory change in the regulations. The final rule also implements related payment changes made by the Cures Act regarding kidney acquisition costs for MA beneficiaries.
  • Codify and enact new Special Election Periods (SEPs) for MA and Part D plans. A SEP is a time period during which Medicare beneficiaries can change their MA or Part D coverage outside of the normal annual open enrollment period and after their initial enrollment period has ended. The regulation codifies the SEP for Employer/Union Group Health Plan elections and the SEP for Individuals Who Disenroll in Connection with a CMS Sanction. It also expands the scope of the SEP for Individuals Affected by a FEMA-Declared Weather-Related Emergency or Major Disaster to apply to emergency declarations issued by a federal, state or local government entity. It also establishes two new SEPs—the SEP for Individuals Enrolled in a Plan that has been identified by CMS as a Consistent Poor Performer and the SEP for Individuals Enrolled in a Plan Placed in Receivership.
  • Amend CMS medical loss ratio (MLR) regulations. MA plans are required under the Affordable Care Act (ACA) to have an MLR of at least 85%. Stated another way, those plans are required to spend 85% of premium dollars on medical benefits. The new rules allow the inclusion of payments for supplemental services to be counted as payments to “providers” for purposes of calculating the MLR. Additionally, CMS made an adjustment to the MLR calculation for MA medical savings account (MSA) contracts, so as to remove a potential deterrent to the offering of MSAs by MA organizations concerned about their impact on MLR.
  • Change the way in which CMS analyzes the data that go into the Part C and D Star Rating System. CMS publishes the Part C and D Star Ratings each year to: 1) measure quality in MA and Part D plans; 2) assist beneficiaries in choosing plans; and 3) determine MA Quality Bonus Payments. The finalized regulations made enhancements intended to add greater weight to patient experience measures and reduce the weight of outliers in categorizing data. Finally, the new rules modify the calculation of the 2021 and 2022 Part C and D Star Ratings to address the expected disruption to data collection and impact on scores posed by the COVID-19 pandemic.

Most of the changes in the finalized regulations will produce modest benefits for MA and Part D participants. However, we see these changes as moves toward providing more options and better services for MA and Part D enrollees.

For more information, please contact your Account Manager.


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