Medication Therapy Management: Increased CMR Costs Can be Offset by Closing Drug Therapy Problem (DTP) Gaps that Reduce MA Medical Costs

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Polypharmacy without vigilant oversight presents significant risks for health plan members, particularly those with complex health needs and non-clinical stressors from challenges with social determinants of health (SDOH). Potentially harmful medication errors are common during transitions of care, and seniors at home often struggle to take the right medications at the right times from day to day

 The goal of Medication Therapy Management (MTM) is to ensure health plan members have access to a personalized comprehensive medication review (CMR) and medication management services from a qualified pharmacist. In this way, they’re able to avoid potential side effects and readmissions, improve health outcomes, and avoid excess medical spending by preventing future acute health incidents (and costs). 

“CMS acknowledges that as MTM is being administered today, it does not align well with the original intent of the program,” noted Nate Lucena, Senior Consultant at Rex Wallace Consulting in a recent AdhereHealth webinar. In fact, the 2024 proposed changes for MTM aim to resolve current shortcomings to help expand access for an increased number of individuals on MA plans. But this will in turn present a financial challenge for plans in terms of providing services for a massive influx of newly eligible beneficiaries. 

Per CMS 

“We estimate that these proposed changes would increase the number and percentage of Part D enrollees eligible for MTM services from 4.5 million (9 percent) to 11 million (23 percent). The increase in MTM program enrollment is estimated to cost approximately $336 million annually for required MTM services. We cannot definitively score this proposal because there may be other administrative costs attributable to MTM, which is not a specific line item that can be easily extracted from plan bids. Also, there is evidence that MTM services may generate overall medical savings, but we cannot quantify those savings at this time.”

To address the changes to MTM arriving in the all-too-near future, MA plans need a solid strategy in place to identify and reconcile drug therapy problem (DTP) gaps as a means to reduce unnecessary medical costs due to suboptimal medication usage. This gap resolution allows for improved plan member health outcomes and avoidance of associated future medical spending, savings which can help MA plans fund the MTM program.   

The growing need for MTM  

With more than half of older adults taking four or more medications on a regular basis, it’s no wonder CMS is reexamining its medication therapy management (MTM) requirements for Medicare Advantage (MA) plans.   

Though just a single-weighted Stars measure, expanding eligibility criteria will hold MA plans to much higher standards for delivering MTM services. Stated Lucena, “CMS is aiming to maximize the value of medication management to improve member experiences, further control costs and foster better health outcomes.” 

MTM has been required of MA health plans since 2006, but the criteria for member eligibility have changed over time. In its proposed rule for contract year 2024, CMS is planning to make further adjustments—this time, in a big way.    

Breaking down MTM rule changes for CY 2024  

The current iteration of the MTM program focuses on some of the most complex and costly members of Part D plans. As of 2023, members are eligible for MTM services if they have three or more targeted chronic conditions, are on 8 or more Part D drugs and meet the spending threshold of $4,935.  

But historically, the program hasn’t worked quite as well as CMS had hoped.  

In an analysis by Rex Wallace Consulting, the firm points out that just 8% of MA beneficiaries are being considered eligible under current CMS guidelines, a significantly lower number than the 25% CMS hoped for at launch in 2006.  

Many plans have been using only the narrowest definitions of eligibility to reduce their costs of administering MTM programs. Meanwhile, the increasing availability of less expensive generic drugs has dropped the per-member drug spending rate, allowing many beneficiaries to slip under the minimum cost threshold even if they are taking multiple medications.  

Additional research indicates that only a small proportion of eligible beneficiaries are actually participating in a CMR. In 2018, just over 30% of eligible Part D beneficiaries reported completing a CMR, despite the fact that the service was appropriately offered to the vast majority of eligible plan members. In 2024, CMS is proposing to cast a much wider net to expand eligibility and use the powerful leverage of the Star Ratings system to incent plans to go above and beyond the minimum.  

Proposed changes include:  

  • Lowering the number of qualifying drugs from 8 to 5 and including all Part D maintenance drugs in eligibility decisions 
  • Lowering the cost threshold from close to $5,000 to just $1,004, in line with the average annual cost of 5 generic drugs in 2020 
  • Requiring plans to use a list of ten common chronic diseases in eligibility requirements, now including HIV/AIDS 
  • Requiring that CMRs include an “interactive consultation” performed in real-time, whether via telehealth or in person 
  • Mandating that a beneficiary is only unable to accept an offer to participate in a CMR if they are cognitively impaired and unable to make their own medical decisions  

How these proposed changes will impact MA plans 

“The revamped criteria will have a major impact on how MA plans administer their MTM programs,” said Lucena. “This will cause the biggest expected increase in enrollment in some time. It’s going to double the number of enrollees in MTM. That brings the program more in line with what CMS was thinking in the beginning, but it’s going to be a major cost driver over the next 10 years.” 

The costs will largely come from the added scale and complexity of administering an expanded MTM program—and managing the avalanche of new data that comes along with a huge boost in enrollment numbers.   

“Whether you use a partner to administer your MTM or you perform those tasks in-house, you’ll need to prepare to manage those increased costs and that much bigger denominator for your Stars calculations,” Lucena cautioned. “If you don’t manage it well, you’re going to get hit on the MTM Stars metric and on the member experience piece of the ratings system.” 

Managing the additional cost of future MTM programs

As CMS changes will significantly increase the number of members eligible for MTM, accurately projecting eligibility and cost to run expanded programs is an important first step. The next consideration is bandwidth and cost management.  

“MA plans will need to be proactive about and prepared for enhanced MTM requirements, especially in a time of economic uncertainty,” stated Kempton Presley, Chief Analytics Officer at AdhereHealth, during the recent webinar. He continued, “Plans have finite budgets, and as the Star Ratings system continues its evolution, MTM will be a key investment need.”   

When considering increased costs of future MTM programs as noted by CMS, plans may be able to realize some relief in the MTM partner they choose. For example, solutions that leverage pharmacy claims data alongside medical claims data allow plans to identify a broader range of drug therapy problems (DTPs). This is possible by uncovering primary adherence issues where there are medical diagnoses not correlated to pharmacy fills. “In this way,” stated Presley, “health plans are able to uncover and resolve up to 70% more gaps in care, building on a program that already averages a cost savings of $613 per patient per year1—a significant medical cost reduction. This savings can help fund the MTM program itself.”  

Best practices for improving MTM and achieving higher Star Ratings

“The key will be to get predictive and start to forecast how the criteria changes will affect your specific population,” Presley added. “To do that, you need the right data modeling tools and analytics platforms to surface critical information for identifying eligible beneficiaries, understanding their needs and tracking their engagement with MTM activities over time.” 

 During this process, plans will also need to equip the pharmacists conducting MTM activities with the resources to address the real roots of medication management concerns.    

Leveraging member engagement strategies, such as motivational interviewing, is critical to identify relevant SDOH factors or daily functioning limitations that make self-management difficult. These details help ensure members are empowered to better understand and advocate for their own needs. MTM staff should also have the capability to offer suggestions about community-based services. This helps ensure members can follow up appropriately with local resources to resolve root barriers to care.

Treating MTM with their intended purpose to improve population health and drive down medical claims cost can be the key to getting the most from this CMS-mandated activity and funding additional costs from a larger MTM program.  

“MTM is intended to be much more than just a regulatory exercise in checking the right boxes,” Presley said. “It can be a very effective vehicle for changing the trajectory of health while impacting all the other Stars measures around outcomes and experiences. You need a holistic strategy that combines analytics with action. That’s going to be the best way for MA plans to manage the changes from a financial and operational standpoint, while ensuring the best possible outcomes for their members.”  

To learn more about successfully preparing for the new MTM landscape, request an AdhereHealth consultation today and sign up for our next webinar on March 22, 2023: Get Ahead of CMS Rule Changes for MTM and More: The Time is Now 

1Wang, M. L., & Peterson, E. (2019). Impact of medication therapy management on Medicare advantage plan costs. American Journal of Managed Care, 25(8), e241-e249.