The Biden administration on Wednesday finalized a rule requiring Medicare Advantage plans to comply with coverage rules in traditional Medicare and cracking down on deceptive marketing practices for the privately-run Medicare plans.
The CMS said the new utilization management policies will remove barriers for MA patients to access medically necessary care.
Both hospital and payer groups came out in support of the final rule, finding common ground in the need to streamline prior authorization. Provider groups also cheered the Biden administration for regulating MA plans, which have come under fire for inappropriate care denials.
Research has found that some MA plans routinely deny appropriate prior authorization requests. A 2018 government audit found MA plans ultimately approved 75% of appealed requests that were originally denied.
The CMS is now requiring MA plans to comply with national and local coverage determinations and general coverage and benefit conditions included in traditional Medicare regulations, starting in the 2024 plan year.
Where there isn’t a Medicare coverage determination, MA plans can establish their own internal coverage criteria. That criteria must follow widely accepted available clinical guidelines, and be reviewed annually by a clinical committee, the final rule says.
In addition, if a utilization management policy like a prior authorization could lead to a partial or full denial of care, it needs to be reviewed by a clinician.
"We want to make sure that where there is care that’s needed, that the decision to offer it and pay for it is made by those who know about the value of the care, not by those who are just trying to save money at the expense of the patient,” HHS Secretary Xavier Becerra said on a Wednesday call with reporters.
The CMS plans to enforce the stipulations through oversight and audits, with punishment for MA plans dependent on the scope of the violation and beneficiary harm, said CMS Medicare Director Meena Seshamani on the call.
The final rule also requires an approved prior authorization to remain valid for as long as is medically necessary, and requires plans to provide a 90-day transition period when an enrollee in an active course of treatment switches to new coverage.
Large private health insurers, like UnitedHealthcare, have been paring back their prior authorization requirements in advance of the regulation.
In a statement, MA lobbying group the Better Medicare Alliance said it supported the new prior authorization provisions.
Provider groups, including the Medical Group Management Association and the American Hospital Association, also cheered policies to create greater consistency between MA and Medicare coverage.
“We appreciate the agency’s increased attention to oversight of Medicare Advantage plans,” AHA Senior Vice President of public policy Ashley Thompson said.
Marketing, star ratings, behavioral health and the IRA
The final rule also includes stipulations meant to cut back on deceptive and misleading marketing for MA plans. Beneficiary complaints of inappropriate MA marketing more than doubled from 2020 to 2021, leading the Senate Finance Committee to launch an inquiry last summer.
Starting in September, MA ads are required to include the name of a specific plan, and aren’t allowed to use the Medicare name, CMS logo or any government products, like the Medicare card, in a misleading way. The final rule also requires MA plans to create an oversight plan that monitors agent activities and reports noncompliance to the CMS.
The CMS says this will strengthen accountability for plans to stay on top of agent and broker activity, something that’s historically been difficult to enforce.
The agency didn’t finalize a proposal prohibiting brokers and agents from distributing beneficiary information to other entities, but said it might in future rulemaking.
The CMS relaxed star ratings quality assessments for MA plans during the COVID-19 pandemic, resulting in a record number of MA plans earning high scores in 2022. Without that bump, some of the biggest health insurers are set to lose out on valuable Medicare revenue from bonuses tied to the stars in 2024.
The new final rule finalizes a health equity index reward beginning with the 2027 star ratings, to try and encourage MA plans to improve care for enrollees with social risk factors. The CMS also reduced the weight of patient experience and complaints on quality scores.
The CMS estimates the star ratings changes will save $6.4 billion over 10 years.
Regulators also strengthened behavioral health network adequacy in MA, adding clinical psychologists and licensed clinical social workers to the list of evaluated specialties. The regulation also finalizes wait time standards for behavioral health and primary care services, and requires more specific notices from plans to patients when these providers are dropped from networks.
The CMS also on Wednesday implemented a provision of the Inflation Reduction Act that expands eligibility for Part D subsidies to more low-income individuals.
The rule is the latest from the Biden administration modifying the increasingly popular MA program, which is soon expected to cover more than half of all Medicare beneficiaries.
In January, the CMS finalized a rule to recoup improper payments made to MA plans. And last week, regulators finalized their MA rate notice for 2024, a rule which included friendlier payment policies for health plans than the original proposal.
