CMS has released its proposed payment changes to the Medicare Advantage (MA) and Part D prescription drug programs through its 2018 Advance Notice and Draft Call Letter. The net payment impact of the proposed updates would result in a modest increase of 0.25 percent on average for MA plans, though the coding of medical services may cause an additional 2.5 percent increase, resulting in an expected average 2.75 percent increase in revenue. This growth is consistent with last year’s increase and reflects a similar pattern in Medicare fee-for-service (FFS). Plans that improve the quality of care they deliver to enrollees may realize higher increases. Comments on the proposed Advance Notice and Draft Call Letter must be submitted by March 3, 2017. The 2018 Final Rate Announcement and Call Letter will be published on Monday, April 3, 2017.
Advance Notice. In recent years, CMS began collecting encounter data from MA organizations (MAOs) to develop more accurate payment models. By 2016, CMS began using diagnoses from encounter data to calculate risk scores, by blending encounter data-based risk scores with its Risk Adjustment Processing System (RAPS)-based risk scores. In 2017, CMS continued using a blend, incorporating a higher percentage of encounter data-based risk scores. For 2018, CMS is proposing to continue using the 2017 blend for payment. CMS is also requesting comments on whether and how to apply a uniform industry-wide adjustment to the encounter data-based portion of the blended risk score under the Part C and end-stage renal disease (ESRD) models for payment to MAOs.
CMS is required to adjust MA plan payments to reflect differences in diagnosis coding between MAOs and FFS providers. In CY 2018, CMS proposes to make an adjustment reflective of the statutory minimum of 5.91 percent.
For 2017, CMS waived the requirement for MA Employer Group Waiver Plans (EGWPs) to submit Part C bid pricing information. Instead, it adopted a payment methodology by which their payment rates are administratively set. For 2018, CMS is proposing to continue the policy of administratively setting rates for these plans using the same approach as 2017.
Draft Call Letter. For 2018, CMS is proposing to continue to use an analytic adjustment to the star ratings to account for the impact of dual-eligible and disabled status on plans’ star ratings. It is also proposing modifications to the current "beneficiary access and performance problems" measure to reflect the magnitude of any civil money penalties and to use more recent data.
As stated in the final 2017 Call Letter, CMS is proposing to eliminate cost sharing for the first 20 days of the skilled nursing facility benefit for 2018 to align with original Medicare FFS. To protect against potentially discriminatory and high cost sharing, CMS is also proposing to add cost sharing thresholds for cardiac rehabilitation services, intensive cardiac rehabilitation services, and pulmonary rehabilitation services for 2018.
In addition, CMS is proposing to increase the Emergency Care/Post Stabilization Care limit for plans for 2018 to act as an incentive for beneficiaries to use primary and specialty care services for routine care and reduce the use of emergency room visits for non-emergent routine services.
To address the opioid epidemic, CMS has implemented two policies: (1) a medication safety approach by which sponsors are expected to reduce beneficiary overutilization of opioids and maintain access to needed medications; and (2) an Overutilization Monitoring System (OMS) to help oversee sponsors’ compliance with the CMS overutilization guidance. For 2018, CMS is proposing a number of updates to these policies intended to address drug utilization concerns within the Part D program. These proposals include:
- revisions to the retrospective drug utilization review criteria used to identify potential opioid over utilizers through the OMS to better align with the Centers for Disease Control and Prevention (CDC) guideline on opioid prescribing, reduce false positives, and maintain a policy that is still manageable for sponsors; and
- establishing the expectation for sponsors to implement hard formulary-level safety edits based on a cumulative morphine equivalent dose (MED) approach to prospectively prevent opioid overuse at point of sale at the pharmacy.
Part D benefit parameters. The annual deductible, initial coverage limit, annual out-of-pocket threshold, and beneficiary cost-sharing after the annual out-of-pocket is met are adjusted annually.
For 2018, CMS is proposing an annual deductible of $405, up from $400 in 2017; an initial coverage limit of $3,750, up from $3,700 in 2017; and an annual out-of-pocket threshold of $5,000, up from $4,950 in 2017. In 2018, once a Part D beneficiary reaches the annual out-of-pocket threshold, it is proposed that his or her cost-sharing will be $3.35 for a generic drug or a preferred multiple source drug and $8.35 for a brand name drug.
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