5 January 202311 minute read

What healthcare providers need to know about the Contract Year 2024 proposed Medicare Advantage and Part D Rule

On December 27, 2022, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule that would revise regulations governing the Medicare Advantage (MA) program, the Medicare Prescription Drug Benefit (known as Part D), and certain other plans and programs, including the Programs of All-Inclusive Care for the Elderly (PACE). The lengthy Proposed Rule will materially impact MA organizations, Part D plan sponsors and a variety of other payors and their downstream vendors, including pharmacy benefit managers, third-party marketers, agents, and brokers.

The Proposed Rule covers a large variety of matters relevant to MA organizations, Part D plan sponsors and PACE organizations, among other plans. These matters include Star Ratings, medication therapy management, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, passive enrollment, network adequacy, identification of overpayments, formulary changes and other programmatic areas (eg, change of ownership requirements).

At the same time, the Proposed Rule also stands to materially impact health care providers and their relationships and interactions with plans and patients, who are enrollees of those plans. The following summarizes key proposals in the Proposed Rule that are most relevant to providers. Comments on the Proposed Rule are due by 5 p.m. on February 13, 2023.

Digital health education for MA enrollees using telehealth

CMS notes in the Proposed Rule that almost 99 percent of MA plans offered some form of telehealth benefits in contract year 2022. Those benefits were either “additional telehealth benefits” (ATB) falling within an MA plan’s Medicare Parts A and B basic benefit coverage or the plan’s “supplemental” telehealth benefits. This coverage represented a 16 percent increase since contract year 2018. MA organizations have only been permitted to offer ATBs since January 1, 2020.

While supportive of the growth in telehealth offerings by MA organizations, CMS expresses concern in the Proposed Rule about the difficulty in attaining health equity due to barriers to telehealth access. Those barriers may include, for example, a lack of technology (smartphone, tablet, or computer), poor or no internet access, lack of space for virtual visits, limited providers offering telehealth, language barriers, and lack of third-party auxiliary aids and services (eg, live captioners).

To help address health equity in telehealth access, CMS is proposing to add a requirement for MA organizations to develop and maintain procedures to identify and offer digital health education to enrollees with low digital health literacy to assist them with accessing any medically necessary covered telehealth benefits. CMS identified that this requirement would involve a screening program to identify current enrollees with low digital health literacy. Enrollees identified through such screening programs would then be offered a digital health education program.

MA organizations would need to take steps to ensure that no system requirements (eg, online portal enrollment) act as barriers to accessing covered telehealth benefits or digital health education. Through supplemental benefits, CMS notes that MA organizations may be able to provide enrollees with smartphones, tablets, or even cellular data plans for primarily health related purposes. In the case of special supplemental benefits for the chronically ill (SSBCI), MA organizations may be able to allow those devices or cellular plans to be used for non-primarily health related purposes as well. CMS fully expects that improved digital health literacy would increase telehealth visits and, therefore, prevent MA enrollee illness.

Should this proposal be finalized, providers offering telehealth services would likely see an increase in demand for their services from MA enrollees. This proposal may likewise offer opportunities for innovative technologies that overcome health equity barriers and for plan-provider cooperation regarding digital health literacy efforts.

Overpayment obligations in Medicare Parts A, B, C, and D

In one proposal that extends beyond Medicare Advantage and Part D, CMS proposes to amend existing Medicare regulations for Parts A, B, C, and D regarding the standard for an “identified” overpayment. This proposal appears to be a response to two cases, UnitedHealthcare Insurance Co. v. Azar and UnitedHealthcare Ins. Co. v. Becerra, that litigated various aspects of CMS’ overpayment regulations. CMS is proposing to drop its existing “reasonable diligence” standard that seemed to create False Claim Act liability for mere negligence and to instead align the regulations with existing statutory language and definitions by clarifying that an overpayment is only identified if there is actual knowledge of an overpayment or reckless disregard or deliberate ignorance of the overpayment. Providers will want to carefully assess the impact of this proposed regulatory change on their efforts to identify and return overpayments to Medicare or other payors.

Utilization management requirements

CMS is proposing a variety of rules governing MA utilization management (eg, prior authorization) that are likely to be of great interest to providers and MA enrollees.

This proposal would result in less flexibility to MA organizations when denying or limiting coverage of “basic” benefits (ie, Medicare Parts A and B benefits). CMS would establish standards to ensure that basic benefit coverage for MA enrollees is no more restrictive than traditional Medicare. In other words, the proposal would prohibit MA organizations from limiting or denying coverage when an item or service would be covered under traditional Medicare. MA organizations may not use internal, proprietary, or external clinical criteria not found in traditional Medicare coverage policies. They would not be able to use any utilization management processes (eg, clinical treatment guidelines) not specified in a national coverage determination (NCD) or local coverage determination (LCD) or other Medicare statute or regulation. Along these lines, CMS expects MA organizations to make medical necessity determinations similar to Medicare Administrative Contractors in traditional Medicare with respect to Medicare Parts A and B benefits.

Nothing in this proposal would restrict an MA organization from using certain utilization management tools (eg, prior authorization or post-claim review). They may continue to implement mechanisms to control utilization, including prior authorization, gatekeeper referrals, and compliant financial arrangements with providers. In particular, an MA organization may continue to encourage patients to see more cost-effective providers through, for example, more favorable cost sharing with those providers. Under this proposal, MA organizations may continue to choose “who” provides Parts A and B benefits through its contracted networks but would be much more limited regarding “when” and “how” those benefits are furnished when traditional Medicare covers different provider types or settings.

CMS expresses concern in the Proposed Rule that prior authorization might be used inappropriately to delay or discourage care. CMS expects prior authorization to be used only to confirm the presence of diagnoses or other medical criteria and to ensure the medically necessity of the service or benefit (or clinical appropriateness, in the case of supplemental benefits). CMS is proposing specific regulations to codify this expectation. CMS expressly encourages the practice of “gold-carding,” whereby plans relax or reduce prior authorization requirements for contracted providers that have demonstrated a consistent pattern of compliance with plan policies and procedures. CMS expressed that it believed such gold-carding programs could alleviate the burden associated with prior authorization and facilitate the more efficient and timely delivery of services to enrollees.

If this proposal is finalized, providers should expect to see MA organizations more closely aligning their coverage decisions with traditional Medicare with respect to their basic benefits. Nevertheless, this may not always be the case, especially where an NCD or LCD allows for different approaches. Providers should still expect to need to carefully navigate each MA organization’s utilization management processes that remain permissible.

Behavioral health in Medicare Advantage

CMS is proposing several changes that are intended to strengthen MA organizations’ network adequacy with respect to behavioral health providers and to otherwise increase access to behavioral health care. Proposed changes include:

  • Ensuring specific types of providers in behavioral health specialties (ie, clinical psychology, licensed clinical social workers, and providers who offer medication for opioid use disorder (MOUD)) are accessible within proposed base time and distance standards and by requiring a minimum number of in-person providers in each county type for each new specialty. The details for these requirements are described more fully in the Proposed Rule.
  • Requiring that behavioral health care services are included as part of an MA enrollee’s care coordination, including requirements to coordinate care with community and social services.
  • Clarifying that certain behavioral health services are emergency medical conditions that are not subject to prior authorization and may be covered when provided by non-contracting providers.
  • Applying primary care wait times to behavioral health services.

CMS expects that these proposed changes will help MA enrollees find needed behavioral health assistance in a timely manner, while mitigating any interruption in services.

Enrollee notification for MA provider contract terminations

If finalized, providers should expect more clarity around when their patients may be notified by an MA organization when a provider leaves an MA organization’s network. Currently, MA organizations must make a “good faith effort” to notify enrollees within 30 calendar days. Generally, MA organizations must notify enrollees who are seen “on a regular basis” by the provider, but, in the case of a primary care professional, the notice must go to all enrollees who are patients of that professional.

CMS is proposing to retain the “good faith effort” standard only for “for cause” terminations. CMS does not believe that flexible standard is needed for “without cause” terminations, which are more predictable. In those cases, there would be no flexibility in meeting the 30-calendar day timeframe.

CMS is also proposing to include behavioral health providers within the special rule for primary care notifications. This would result in potentially more patients being notified about a behavioral health provider leaving a plan’s network.

Among the other changes being proposed, CMS would further revise existing regulations as follows with respect to primary care and behavioral health notices:

  • Require 45 days’ notice for primary care and behavioral health notices, instead of 30 days for all other provider types.
  • Require not only written but also telephonic notices for primary care and behavioral health notices.
  • Alter the specific enrollees who must be notified so that notices would go to any enrollees who have “ever been” patients of primary care and behavioral health providers, while notices would only need to continue going to enrollees seen “on a regular basis” by any other provider types.

Changes to MA organizations’ provider directories

The Proposed Rule would require several changes to MA organizations’ provider directories that would expand information about providers and could make searching for providers easier. These changes include:

  • Codifying current CMS guidance to identify non-English languages spoken by each provider and the provider/location’s accessibility for people with physical disabilities.
  • Including an entirely new data element in directories for MOUD providers. This data element would allow MA enrollees to search directories for providers with special training to provide MOUD and who are allowed to administer, dispense, or prescribe those medications in an office setting. If finalized, providers should expect MA organizations to begin collecting this data element along with its other demographic surveys of providers. MA organizations might also identify applicable providers through the Buprenorphine Practitioner Locator maintained by the Substance Abuse and Mental Health Services Administration.
  • Making all elements required by CMS’ model provider directory searchable. If this proposal is finalized, patients may generally find it easier to tailor their searches in provider directories.

Changes to plan marketing requirements and obligations

While not necessarily directly relevant to providers, CMS is proposing a variety of changes to the marketing rules governing MA organizations and Part D plan sponsors, including third-party marketing organizations (TPMO). If finalized, CMS intends for these changes to increase the accuracy of marketing. That could include better communications with prospective enrollees regarding providers in a plan’s network and about benefits actually covered by the plan. Improvements in these areas could help ensure that patients have more appropriate coverage that includes a patient’s preferred providers in the plan network. Additionally, where a provider is assisting with marketing or other communications about coverage options (whether with a plan or a TPMO), providers will want to ensure that their activities do not run afoul of any of the proposed marketing rule changes.

Next steps

As noted above, the foregoing focuses on key issues within the Proposed Rule that may be of interest to providers. Nevertheless, given the breadth of the Proposed Rule, there are many other topics not covered here that would still be of interest to providers (including changes regarding step therapy requirements, medication therapy management programs, plan translation requirements, and, in the case of providers with ownership interests in one or more MA organization or Part D plan sponsor, plan change of ownership requirements).

These proposals remain subject to the ongoing comment period and further changes by CMS in any final rule that may be issued at a later date. Interested providers may want to consider submitting comments by the February 13, 2023 due date.

Learn more about the Proposed Rule by contacting the authors or your usual DLA Piper relationship attorney.