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CMS has finalized a series of policy and technical changes to Medicare Advantage (MA) and the Medicare Prescription Drug Benefit Program, among others, in final rules for Medicare Programs in contract year 2022. At nearly 300 pages in length, the publication lays out important additions, updates and clarifications to the MA Star Ratings program. These rules also outline new requirements for Medicare Advantage plan sponsors.
Here are six key takeaways every Medicare Advantage plan executive should know about the CMS 2022 Medicare Advantage final rules issued in January 2021.
1. Two New Part C HEDIS Measures for 2022.
In 2022 Medicare Advantage plans will report on two new HEDIS measures for 2024 Star Ratings. CMS finalized the addition of the HEDIS Transitions of Care and the HEDIS Follow-up after Emergency Department Visit for People with Multiple High-Risk Chronic Conditions measures covering the contract year 2022 performance period.
The 2022 implementation, a one-year delay, reflects the January 2021 timing of the final rule. CMS acknowledged that plans would benefit from the extra time, given that implementation of a new measure during a pandemic is likely to pose challenges. The Transitions of Care measure, in particular, is described by industry observers as a game changer for how health plans will facilitate patients and, importantly, information about their care moving between care settings in the future.
2. Two Updated Part C HOS Measures.
CMS finalized substantive changes to two Medicare Health Outcomes Survey (HOS) measures: the Improving or Maintaining Physical Health Measure, and the Improving or Maintaining Mental Health Measure for Part C Star Ratings. The measures are on display for 2024 and 2025 MA Star Ratings and will return for 2026 MA Star Ratings.
Both measures have been modified in two ways. A change to the case mix adjustment methodology affects calculations that capture how individual beneficiaries’ physical health and mental health change over time. The methodology has been updated to allow the use of a mean value drawn from other beneficiary records when an adjuster value, such as income level, is missing from a beneficiary record. The other change simply aligns the measures with their respective HEDIS measures by increasing the denominators from 30 to 100.
3. Policy Clarified for Extreme and Uncontrollable Circumstances.
CMS finalized elements of its extreme and uncontrollable circumstances policy related to how it will treat MA Star Ratings data from plans affected by back-to-back disasters. CMS will use the higher of the current year’s MA Star Rating or what the previous year’s MA Star Rating would have been in the absence of any disaster adjustments. Moreover, CMS also uses the measure score associated with that year, regardless of the scores. These changes apply to the 2022 measurement year and the 2024 MA Star Ratings.
4. Green Light on Second ‘‘Preferred’’ Specialty Tier in Part D.
Beginning in contract year 2022, Medicare Advantage Prescription Drug plans have a new option to leverage a two-tier specialty medication formulary similar to those commonly employed in the commercial market. The rule gives these plans latitude to establish a second, ‘‘preferred’’ specialty tier with a reduced cost-sharing threshold as compared to the current specialty tier. There are a few requirements of plans, however. They must:
- Set an upper limit on cost sharing,
- Establish a method for calculating the specialty tier cost threshold each year,
- Clarify that sponsors must allow exceptions between the tiers, and
- Choose which drugs belong on the preferred specialty tier
This change, advocated by stakeholders and by the Medicare Payment Advisory Commission (MedPAC), is expected to promote savings and competition. MedPAC told Congress in 2016 that evidence suggests a two-tier specialty formulary can drive consumers to use lower-cost biosimilars, or biologics. The structure may also promote a greater degree of competition among the existing specialty drugs available to Part D enrollees. CMS says the newly finalized rule is expected to give Part D plans more room to maneuver at the negotiation table with drug manufacturers, a feature that could deliver lower out-of-pocket costs for many enrollees.
5. Part D Plans Must Implement a Real-Time Benefit Tool (RTBT) by January 2023.
Another measure in the CMS 2022 Medicare Advantage final rule engages consumers as partners in tackling prescription drug costs. The rule makes Medicare Advantage Prescription Drug plans responsible for giving consumers access to a real-time benefit tool (RTBT) by January 1, 2023. CMS wants consumers to have the ability to identify and compare the costs of alternative therapeutics, including a real-time comparison of their respective out-of-pocket costs.
The measure is likely to cause a scramble for many health plans because CMS envisions a robust system that allows consumers to view the same information that prescribers see in their RTBT system. This includes accurate, timely, and clinically appropriate patient-specific, real-time formulary and benefit information (including cost, formulary alternatives and utilization management requirements).
6. Part D Plans Must Reveal Pharmacy Measures Beginning January 2022.
CMS has finalized a rule that requires Medicare Advantage Part D sponsors to reveal the performance measures they use to evaluate pharmacy partner performance. CMS wants to understand how plans apply measures and whether they are applied uniformly and fairly. In addition, CMS says it wants to understand pharmacy quality and the underlying drivers of rising financial penalties.
It appears that CMS aims to support the eventual industry-wide alignment of pharmacy performance measures. Ultimately, the agency intends to publish a list of measures used across the industry and to encourage dialog and consensus-building.
This reporting requirement becomes effective January 1, 2022.
Get a Head Start — Improve CAHPS® Scores.
Changes finalized by this rule represent a fundamental shift in the makeup of MA Star Ratings. An increasing emphasis on consumer experience will give CAHPS scores a 2x weight for 2021 and 2022 Star Ratings and a 4x weight for 2023 Star Ratings.
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