Medicare Payment and Reimbursement

Proposal Calls for 1.84 Percent Rate Hike for 2019 Medicare Advantage Plans

February 6, 2018 11:35 am

High-profile MA policy changes include new opioid coverage restrictions and expanded supplemental benefits.

Feb. 5—Medicare Advantage (MA) plans would receive a 1.84 percent pay boost in 2019 under a recently issued proposed call letter.

The underlying coding trend also would increase risk scores by 3.1 percent, on average, according to the projections of the Centers for Medicare & Medicaid Services (CMS).

The proposed rate is significantly more than the 0.45 percent average revenue increase that MA plans received for 2018, as well as the 2.95 percent average increase in the risk adjustment coding trend.

Policy Changes

The proposed rate also came with a slew of policy changes for MA and Part D plans, including several changes that are aimed at addressing the opioid epidemic. Specifically, CMS would require plans to implement a hard formulary-level cumulative opioid safety edit at the point of sale at 90-morphine-milligram equivalents, with a seven-day supply allowance. CMS also would implement a supply limit for initial prescription fills of seven days.

The changes were needed due to the “urgency and scope of the continuing national prescription opioid epidemic,” according to a CMS fact sheet.

The Alliance of Community Health Plans (ACHP), which represents not-for-profit plans (including those of not-for-profit health systems) that cover 2.5 million Medicare beneficiaries, hailed the opioid-prescribing policy changes.

“ACHP is also encouraged by the inclusion of several new tools in the prescription drug program [Part D] to strengthen the ability of health plans to reduce opioid overutilization,” the association said in a statement to HFMA News.

Other insurer advocates, like the Blue Cross Blue Shield Association (BCBSA), had backed new opioid-prescribing limits that were part of MA and Part D drug plan policy changes proposed in December. Among those proposals were new rules to identify at-risk beneficiaries.

“Based on their clinical experience, plans believe that identifying at-risk beneficiaries based on four or more prescribers and dispensing pharmacies alone will continue to allow pharmacy and doctor ‘shopping’ that has contributed to the existing opioid crises,” BCBSA wrote to CMS.

An analysis by the Broom Law Group for BCBSA concluded that CMS had the authority to issue such opioid limits “as long as the limits comply with other preexisting requirements (e.g., are nondiscriminatory, reasonable, and appropriate).”

A recent report from the Office of the Inspector General of the U.S. Department of Health and Human Services found that in 2016 over 500,000 beneficiaries—excluding those who had cancer or were in hospice care—received high amounts of opioids through Part D, and almost 90,000 were at serious risk of opioid misuse or overdose.

The proposed changes in December followed the November release of 2019 proposed technical and policy updates for the MA and Part D programs, which marked the first time in several years that CMS issued such a regulation.

Other Provisions

Among the proposed policy changes included in the latest MA and Part D plan letter was a full phase-in of the Employer Group Waiver Plan (EGWP) payment formula—despite industry pushback. CMS proposed fully phasing in the Obama-era EGWP formula, which was initially implemented in 2016 but not proposed to be fully phased in until now.

CMS also would widen the scope of the supplemental benefit standard to expand the ability of plans to offer supplemental benefits to their beneficiaries. The change would eliminate a ban on benefits of which the primary purpose is “daily maintenance.” Benefits would be allowed that “compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization.”

“This expansion will effectively increase the number of allowable supplemental benefit options and provide patients with benefits and services that may improve their quality of life and health outcomes,” CMS wrote.

ACHP hailed the proposal because it “will allow health plans to better tailor benefits to patient needs and encourage high-quality, efficient care.”

CMS also proposed to begin publicly reporting civil money penalties on Medicare’s plan finder.  

Among good news for plans, CMS would allow plans to count a CMS program audit as fulfilling the annual program-audit compliance requirement for one year from the date of the audit.

The agency also proposed changes to the CMS-HCC (hierarchical condition category) risk adjustment model, which is used to pay for beneficiaries enrolled in MA plans. CMS proposed that plans receive payments that reflect the needs of the patients they serve.

“These proposals reflect changes to improve risk adjustment required by the 21st Century Cures Act, including an evaluation of adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model and making adjustments to take into account the number of conditions an individual beneficiary may have, as well as a variety of additional technical updates,” CMS stated.

The changes would be phased in from 2019 to 2022, initially with 75 percent of the calculation based on the risk adjustment model that was used for payment in 2017 and 2018 and 25 percent based on the proposed new risk adjustment model.

In addition, CMS is proposing to update the CMS-HCC ESRD and the Part D risk adjustment models for 2019. 

Also included was an adjustment to 2019 and 2020 star ratings to take into account the disaster-plagued 2017, specifically in affected areas such as Puerto Rico, the Virgin Islands, and parts of Texas, Florida, Idaho, and California.

Comments will be accepted through March 5 on the new notice and through March 2 on the December notice. CMS expects to publish the final notices on April 2. 

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare 


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