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April 24, 2017
Seema Verma
Administrator
Centers for Medicare & Medicaid Services
Department of Health & Human Services
Hubert H. Humphrey Building
200 Independence Ave., S.W.
Washington, D.C. 20201
RE: 2017 Transformation Ideas
Dear Administrator Verma:
America’s Health Insurance Plans (AHIP) appreciates the opportunity to comment on the
Centers for Medicare & Medicaid Services (CMS) Request for Information (RFI) from the Final
Announcement of Calendar Year (CY) 2018 Medicare Advantage Capitation Rates and
Medicare Advantage and Part D Payment Policies and Final Call Letter.
AHIP is the national association whose members provide coverage for health care and related
services. Our members offer coverage across the entire spectrum of private-sector and public
programs. We are committed to market-based solutions and believe that every American
deserves affordable coverage that provides them with access to high quality care.
We commend CMS for soliciting ideas for using “transparency, flexibility, program
simplification and innovation to transform the Medicare Advantage and Part D programs for
Medicare enrollees to have options that fit their individual health needs.” We firmly believe
such an approach by CMS to transform Medicare has significant potential to improve outcomes
and quality of life for beneficiaries and reduce costs by enhancing private sector innovation and
empowering beneficiaries (and the Medicare program) to obtain higher-quality, more cost-
effective care. We strongly encourage efforts by CMS to create policies, set goals and priorities,
and find innovative administrative and structural approaches to better manage and support the
Medicare Advantage (MA) and Part D programs, which continue to grow both in number of
enrollees and popularity.
Value of MA and Part D Programs
AHIP’s members are strongly committed to serving Medicare beneficiaries under the MA and
Part D programs and continuing to provide cost-effective, high quality, and accessible health
care. Plans are implementing patient-centered innovations that include:
April 24, 2017
Page 2
• integrating and coordinating care for beneficiaries;
• mitigating the harm of chronic diseases by focusing on prevention, early detection, and
care management;
• reducing beneficiary costs;
• addressing the needs of vulnerable individuals, including low-income beneficiaries; and
• applying clinical best practices to increase patient safety and to limit unnecessary
utilization of services.
Today more than 18.5 million Americans — about 32 percent of all Medicare beneficiaries —
have chosen to enroll in the MA program, and 16.6 million of them receive drug benefits through
their plan.1 An additional 25 million Americans receive drug coverage through a stand-alone
Prescription Drug Plan (PDP). Since 2010, MA enrollment has increased by 60 percent, and Part
D enrollment has increased from 24 million in 2007 to over 42 million today. While average
payment to MA plans is equivalent to fee-for-service (FFS) costs, MA bids are 10 percent below
FFS costs and MA plans often offer additional benefits to enrollees for no additional premium.
Ninety percent of beneficiaries can choose from at least five MA plans.
Moreover, MA plans have proven to be more efficient than FFS in delivering access to care in an
impactful manner. For example, in one study, post-acute care utilization in MA after hospital
discharge was lower than FFS.2 Readmission rates were also found to be about 13 percent to 20
percent lower than FFS.3 Another study found that MA plans had higher rates of annual
preventive care visits (53 percent vs. 33 percent in FFS).4 Part D coverage has also been shown
to reduce spending: one study found that enrollees with Part D coverage had 8 percent fewer
hospital admissions, incurred 7 percent lower Medicare expenditures, and used 12 percent fewer
total resources than beneficiaries without Part D coverage.5
The Need for a New Framework
Even with the demonstrated success of the MA and Part D programs, we believe fundamental
changes in CMS’s approach to management and oversight would further improve the programs
for beneficiaries. For example, CMS can adopt policies encouraging closer collaboration with
1 CMS monthly enrollment files, April 2017, available at: https://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/index.html?redirect=/mcradvpartdenroldata/. 2 Huckfeldt, Peter J., Escarce, Jose J., Rabideau, Brendan, Karaca-Mandic, Pinar, Sood, Neeraj. Less intense post-
acute care, better outcomes for enrollees in Medicare Advantage than those in fee-for-service. Health Affairs 36(1):
91-100. January 2017. 3 Lemieux, Jeff, Sennett, Cary, Wang, Ray, Mulligan, Teresa, Bumbaugh, Jon. Hospital readmission rates in
Medicare Advantage plans. American Journal of Managed Care 18(2): 96-104. February 2012. 4 Sukyung, Chung, Lesser, Lenard I., Lauderdale, Diane S. et al. Medicare annual preventive care visits: Use
increased among fee-for-service patients, but many do not participate. Health Affairs 34(1): 11-20. January 2015. 5 Kaestner, Robert et al. Effects of prescription drug insurance on hospitalization and mortality: Evidence from
Medicare Part D. National Bureau of Economic Research Working Paper 19948. February 2014. Available at:
http://www.nber.org/papers/w19948.
April 24, 2017
Page 3
plans who are serving Medicare beneficiaries. As a purchaser of health care coverage for
millions of individuals, CMS should be developing regulatory and sub-regulatory policies,
operational elements, and implementation schedules based on meaningful dialogue that draws
upon the experience and expertise of plans that interact daily with beneficiaries. CMS should
also ensure that all guidance, including sub-regulatory guidance issued through Health Plan
Management System (HPMS) memoranda, provides plans with sufficient lead time to provide
meaningful feedback prior to implementation.
Furthermore, CMS should modify policies, including meaningful difference and total beneficiary
cost, that limit beneficiary choices. Whenever possible, the Agency’s policies should encourage
plan flexibility that allows beneficiaries to choose plans that are most responsive to their
individual needs. CMS should also prioritize and align the Agency’s and plans’ limited
resources through more proactive guidance, assistance, and direct communication with CMS
staff, rather than through retrospective activities like audits.
AHIP’s Proposed Framework
Our ideas in response to the RFI are designed to promote stability, innovation, and high quality
care for the beneficiaries served by the MA and Part D programs. Below we propose a new
framework composed of three broad categories for CMS to approach transforming these
programs:
1. Improved transparency and predictability. CMS and health plans share the same core
objective: ensuring the best possible coverage for beneficiaries delivered in the most cost-
effective way possible. CMS should actively and meaningfully collaborate with plan
policy and operational experts to achieve those goals, in the same way other purchasers
(e.g., employers) partner with plans. These changes would include: using Agency
resources to focus on proactively sharing information, soliciting input, and avoiding
issues before they result in potential penalties and sanctions; improving the guidance
process; and ensuring program changes are developed and implemented with aligned
strategic priorities. See Attachment 1 for specific recommendations.
2. Enhanced beneficiary experience and choice through increased plan flexibility.
Innovation is a key theme throughout our recommendations. Agency policies should
support innovation over standardization where appropriate; enhance beneficiary choice
and plan flexibility; promote the use of telehealth services; and ensure payment policies
are aligned with broader health policy goals. In addition, CMS should consider a range
of improvements for beneficiary communications and the enrollment process, including
improvements to Medicare Plan Finder. See Attachment 2 for specific recommendations.
3. Reduced program complexity and regulatory burden. AHIP and the Administration
agree that regulatory burdens need to be reduced. MA and Part D programs are already
April 24, 2017
Page 4
complex, with layers of sub-regulatory policy and operational guidance often provided on
top of regulatory standards. The additional costs and complexities often do not have a
clear benefit to the most important end user of the program: Medicare beneficiaries. We
recommend a moratorium on new regulatory or sub-regulatory requirements that would
introduce additional costs or complexities in the MA or Part D programs. Going forward,
economic impact analyses should be rigorously applied to any new guidance to move
toward a simpler, less costly program structure that encourages innovation and limits
unnecessary burdens. Similarly, various CMS data collection and reporting requirements
should be limited to those that provide clear program benefits that outweigh costs, and
audit reviews should be coordinated and minimized so that they focus on essential
oversight and minimize the risk of duplicative, overlapping, and unnecessarily
burdensome program costs. See Attachment 3 for specific recommendations.
Please note that our RFI response focuses on critical structural issues and certain key policies
and administrative practices. Where appropriate, we identify legal bases supporting CMS
authority to implement such changes. Our response is not intended to present the entire range of
policy and technical improvements we believe are needed in the MA and Part D programs. We
believe certain legislative and other changes would provide additional flexibility and ensure
parity among the MA and FFS programs. For example, allowing MA plans to be designated as
Advanced Alternative Payment Models under new rules pursuant to the Medicare Access and
CHIP Reauthorization Act of 2015 (MACRA) rules will allow network providers to be properly
incentivized to continue focusing on the delivery of high value care. In addition, addressing the
policy of capping county benchmark rates at the pre-Affordable Care Act (ACA) levels would
strengthen the fundamental goal of the Star Ratings program to encourage continued quality
improvement. Accordingly, AHIP and our members appreciate the opportunity to continue our
engagement with CMS on these issues, providing a comprehensive group of suggestions and
supporting data, and supporting CMS with additional information as we work together to
improve the health of the beneficiaries our members serve.
Again, we commend CMS for soliciting ideas through the RFI to transform the MA and Part D
programs. We strongly support the Agency’s efforts to build upon the current success of MA
and Part D and look forward to working with you to improve these important programs to
provide better care, better outcomes, and lower costs for Medicare beneficiaries.
Sincerely,
Marilyn B. Tavenner
President and CEO
Attachment 1 – Improving Transparency and Predictability
5
Transformational
Goal Adopt a collaborative development process for critical payment issues
Current CMS
Approach(es)
Risk Adjustment Model – CMS uses a closed process for developing and updating the
risk adjustment model, with a limited comment opportunity that often occurs after
substantial resources have been devoted toward changes in the model.
Recommended
Action(s)
Organize a task force with plans that has regular discussions (e.g., on a monthly or
quarterly basis) on critical payment issues such as the risk adjustment model to enable
meaningful dialogue, which may include:
• Approach and methods for making clinical updates and potential improvements to
the existing model,
• Potential methodology for calibrating the risk adjustment model using encounter
data, and
• Implementation of the risk adjustment provisions in the 21st Century Cures Act.
Transformational
Goal Implement full transparency around payment methodologies
Current CMS
Approach(es)
Explanation of Payment Methodology – While the advance and final rate notices
provides certain information about the rate development process, key details about the
methodology – including the growth rate, repricing, and various other adjustments –
are missing from the notices, which limits the ability of plans to assess the
methodology. Additionally, the rate notices include reference to written guidance that
is often difficult to interpret. As another example, CMS developed a new payment
methodology for employer group plans without working with plans to identify
alternative approaches that would minimize the potential impact on retirees.
Recommended
Action(s)
• Include numerical examples and detailed methodologies, illustrated using step-by-
step calculations, in explanations in the advance and final rate notices and CMS
responses to plan questions on the methodology used to develop rates.
• Establish an ongoing dialogue with plans on methods to improve the clarity of CMS
distributed materials, guidance and regulations.
Current CMS
Approach(es)
Notice of Payment Changes – Changes in payment methodologies described in the
advance rate notice do not include an estimate of the impact on county benchmark
rates. Similarly, plans have not regularly been provided with impact analyses of risk
adjustment model changes as part of comment opportunities. This limits the ability of
plans to provide constructive comments and can create uncertainty during the annual
bidding process, potentially leading to higher bids.
Recommended
Action(s)
• Provide information on the potential impact of policy changes at the county level,
such as the Average Geographic Adjustment Factor, with the advance rate notice.
• Provide each plan with data on the potential impact of other significant payment
methodology changes, such as changes to the risk adjustment model, with the
advance rate notice.
• Release proposed changes before the advance rate notice so that plans have
adequate time to analyze the impacts (e.g., fall of 2017 for 2019 rates).
Attachment 1 – Improving Transparency and Predictability
6
Transformational
Goal Implement full transparency around payment methodologies (cont.)
Current CMS
Approach(es)
RADV Coding Guidelines – CMS has developed detailed coding guidelines for the
Risk Adjustment Data Validation (RADV) audit process. Though we understand that
these guidelines are used by CMS staff and contractors to evaluate whether beneficiary
medical records support diagnoses submitted for risk adjustment, CMS has not
provided the guidelines to plans. This limits the ability of plans to determine whether
coding practices used by their contracted network physicians comply with CMS
standards.
Recommended
Action(s)
Publicly release the coding guidelines used in RADV audits to evaluate enrollee
medical records for risk adjustment purposes.
Transformational
Goal Enhance CMS process for significant and persistent data issues
Current CMS
Approach(es)
Encounter Data Process & Substance – There are documented operational and
systems issues affecting the acceptance and processing of encounter data for risk
adjustment purposes. However, no intensive work group or other process to
collaborate on encounter data system problems has been implemented at this time.
This prevents plans from having clarity on the potential negative impacts of using
encounter data to determine risk scores and causes a high degree of uncertainty in the
bid development process as well as regular business and financial operations. Further,
CMS has implemented monthly user group calls on encounter data, but information
about system problems and fixes is not broadly shared through those calls or via other
means, and our understanding is the calls do not solicit feedback or dialogue from
plans. This prevents sponsors from learning about errors that may affect their
companies and/or leading to duplicative remediation activities.
Recommended
Action(s)
• CMS should work with plans to determine adjustments needed due to unresolved
operational issues.
• CMS should not impose new requirements affecting payment until CMS can certify
that critical operational issues have been fully resolved, consistent with
Government Accountability Office (GAO) recommendations on encounter data.
• During the implementation of significant new payment initiatives with operational
components, such as encounter data, CMS should work with plans to:
Create a CMS/plan “SWAT” team in response to reports of widespread
problems to prioritize issues and develop solutions, including creation of a list
of solution milestones that must be met before CMS proceeds.
Provide regular and accurate updates (e.g., on encounter data claim submissions
and analyses) to plans that are both timely and accurate with respect to key data
(e.g., risk scores under the encounter data program).
Disseminate broadly to plans all identified problems and appropriate fixes.
Modify the user group process so that it includes plan feedback on agenda
items, and provide timely responses during or after calls to plans on questions
and action items.
Attachment 1 – Improving Transparency and Predictability
7
Transformational
Goal
Develop with plans a long term strategic plan for adoption and
retirement of Star Ratings program measures
Current CMS
Approach(es)
Strategic Plan – On an annual basis, CMS proposes changes to Star Ratings measures
and other components of the program. In recent years, these proposals have often been
published with a short comment period in the Fall and are re-published in the draft Call
Letter. Such proposals are otherwise not published outside of the Call Letter process.
While CMS announces the adoption and retirement of particular measures in the Call
Letter, these changes are not reflected within a CMS strategic plan. Lack of clarity
around the criteria used to adopt and retire Star Rating measures leads to uncertainty
around programmatic goals; long-term strategy for adoption, removal, and maintenance
of measures; alignment of internal quality improvement efforts with those of CMS; and
assessments of programmatic needs and impacts.
Recommended
Action(s)
• Hold meetings with plans and other relevant stakeholders to discuss issues and
solutions around the Star Ratings program.
• Work alongside plans and other relevant stakeholders to develop a multiyear
strategic plan and framework for the Star Ratings program that provides a long-
term guide for:
Articulating the goals in a clear and concise statement;
Adopting, maintaining, and retiring measures in the Star Ratings program;
Determining which measures are most appropriate for quality;
Assessing the reporting and other burdens of individual and collective measures
on providers, plans and other stakeholders; and
Assessing the impact of frequent changes of measure composition,
specification, and thresholds on the ability of plans to design quality
improvement programs.
Current CMS
Approach(es)
Retrospective Changes to Star Measures – Changes to Star Ratings measures are
sometimes implemented retroactively. In other words, the initial measurement period
for collecting data pre-dates the change, preventing plans from working with providers
in a predictable and meaningful way.
Recommended
Action(s)
Only make prospective changes to the Star Ratings program well in advance of the
measurement period, and only after holding meaningful and timely discussions with
plans.
Current CMS
Approach(es)
Adjusting for SES – CMS has implemented the Categorical Adjustment Index (CAI),
but a long-term solution has yet to be created to address deficiencies of the Star Ratings
program for plans serving a high proportion of low-income or disabled beneficiaries.
Recommended
Action(s)
Create a task force to determine the approach and methods for permanently adjusting
Star Ratings measures for socioeconomic status.
Current CMS
Approach(es)
Alignment of Star Ratings with Overall HHS Efforts – Star Ratings program
measures appear to be developed solely within the context of the MA and Part D
programs without clear alignment with other CMS and Department of Health and
Human Services (HHS) efforts to develop core quality measures and to harmonize
these measures across programs.
Recommended
Action(s)
Develop an intra-agency process to ensure the strategic plan for the Star Ratings
Program, including its goals and framework, align with other CMS and HHS activities
on quality measurement and performance improvement.
Attachment 1 – Improving Transparency and Predictability
8
Transformational
Goal Adopt a more timely, consistent, and transparent guidance process
Current CMS
Approach(es)
Timing of Requirements & Guidance – CMS has imposed effective dates for new
requirements that require system development or other operational changes before
providing sponsors with the detailed information necessary to accurately estimate
implementation costs and timelines. This can have adverse impacts, including:
preventing plans from determining appropriate costs to include in annual bids;
requiring plans to delay critical IT upgrades and other changes for existing compliance
requirements; and creating pressure for implementation delays, which results in
inefficiencies.
A recent example is the attempted implementation of prescriber enrollment
requirements in Part D, the deadline for which has had to be delayed multiple times
due to the absence of comprehensive policy and operational guidance from CMS that
would enable systems development and other changes to take place. Another example
is the Social Security Number Removal Initiative (SSNRI), which has an approaching
effective date and plans are in need of guidance.
Recommended
Action(s)
Adopt policy such that the effective date for any new requirement with significant
operational components would be no less than 12 to 18 months after all forms,
documents, templates, and other information is provided to plans. This would allow
plans to accurately estimate the costs and establish systems requirements and process
changes without potential adverse impacts on other aspects of the program.
Current CMS
Approach(es)
Updates of CMS Manual Chapters – In certain instances, CMS has released updated
manual chapters without highlighting changes, making it difficult for plans to ensure
they have identified all new requirements and creating the risk of inadvertent
compliance violations.
Recommended
Action(s)
Update manual chapters on the same cycle, clearly identify any changes, and provide
an opportunity for plans to comment.
Current CMS
Approach(es)
Release of Guidance – CMS guidance is not released in a uniform manner. In certain
instances, CMS and its contractors provide guidance on various topics, such as
submitting and processing encounter data, in multiple locations. Because there is not
one central document or resource, it can be difficult to find and track guidance, and this
causes confusion on a wide range of policy and operational issues. There are also
instances when new policies and requirements are released via HPMS memos and slide
decks. In some instances, it appears CMS’s contractors have released policy guidance
to plans and it is treated as official guidance.
Recommended
Action(s)
• Clearly indicate which documents of record contain guidance and supersede prior
guidance found in other documents.
• Consolidate guidance, particularly on major initiatives with substantial operational
components like the encounter data system, in one, easily accessible, online
location to prevent duplication and confusion.
• Establish clear and limited sources of new policy and operational requirements.
• Ensure that all policy guidance is released by CMS and not its contractors.
Attachment 1 – Improving Transparency and Predictability
9
Transformational
Goal
Adopt a more timely, consistent, and transparent guidance process
(cont.)
Current CMS
Approach(es)
Appeals and Grievances Guidance and Process – CMS has comprehensive manual
chapters that establish rules relating to organization determinations, grievances, and
appeals. However, the application of these rules is not always clear. For example,
plans must determine whether an enrollee complaint triggers appeals procedures,
grievance procedures, or both. Deciding how to categorize a particular complaint can
often be unclear based on the facts. This can lead to disputes (e.g., in subsequent
audits) about whether a plan resolved a complaint or dispute through the appropriate
procedure.
Separate state and CMS reporting and process requirements continue to exist for
appeals and grievances within otherwise integrated programs. These redundancies
create confusion for beneficiaries and caregivers, and result in decreased efficiency and
increased administrative burden for plans such as dual eligible Special Needs Plans (D-
SNPs).
Recommended
Action(s)
• Create a collaborative process for CMS to receive input from plans and address
guidance requirements that are overly complex and/or unclear. We recommend that
CMS begin with appeals and grievance requirements.
• Continue and expand CMS efforts to align Medicare and Medicaid processes and
timeframes for appeals and grievances across the two programs.
Current CMS
Approach(es)
Email Mailboxes & Staff Contact – CMS requires responses to questions for a number
of matters, including those relating to the risk adjustment model and encounter data
systems, be submitted by email to a general mailbox. Questions are not always
answered in a timely fashion which can discourage use of the mailbox and lead to
considerable uncertainty about policy and operational issues.
Recommended
Action(s)
• Replace the current system of using a mailbox to address technical questions on
important issues like the risk adjustment model with CMS staff names and contact
information of who would be responsible for these inquiries.
• Implement a tracking and monitoring system to ensure timely and complete
responses to questions.
Attachment 2 – Enhancing Beneficiary Choices and Experience
10
Transformational
Goal
Significantly improve the process for beneficiaries to choose program
options
Current CMS
Approach(es)
Medicare Enrollment – When first enrolling in Medicare, individuals are not required
to make an active choice between FFS Medicare and MA. Beneficiaries who do not
make an active choice are auto-enrolled in FFS Medicare.
Recommended
Action(s)
Require individuals to make an active selection into MA or FFS when first enrolling in
Medicare.
Current CMS
Approach(es)
Medicare Plan Finder – The Medicare Plan Finder (MPF) allows Medicare
beneficiaries to compare MA and Part D options where they reside, but the site still
remains difficult for beneficiaries and family members to navigate.
Recommended
Action(s)
Create a task force comprised of CMS staff, plans, beneficiary advocates, providers,
and other stakeholders to consider ways to improve the MPF or develop alternatives.
Current CMS
Approach(es)
‘Welcome to Medicare’ Materials – The package of information CMS sends to
individuals at the beginning of their initial enrollment period, including a Welcome to
Medicare letter and booklet, may not be easily understandable or provide clear
information about the program and beneficiary choices.
Recommended
Action(s)
Convene a task force to review and implement changes to these materials to make it
easier for enrollees to understand their options.
Current CMS
Approach(es)
FFS Quality – The Star Ratings program only applies to MA plans which makes it
difficult for beneficiaries to compare MA plans with FFS.
Recommended
Action(s)
Develop a comparable quality metrics system for Medicare FFS that will enable
beneficiaries to compare MA plans with the FFS option.
Attachment 2 – Enhancing Beneficiary Choices and Experience
11
Transformational
Goal Expand plan benefit flexibility
Current CMS
Approach(es)
Definition of Supplemental Benefits – Current definition limits supplemental benefits
coverage to items or services that CMS considers to be ‘health related.’
Recommended
Action(s)
Expand the scope of ‘health related’ services to include a range of assistive devices,
items and services that can help beneficiaries compensate for physical impairments,
diminish the impacts of an illness or injury, and enhance quality of life and/or reduce
other costs.
Current CMS
Approach(es)
Uniform Benefit Structure – CMS has interpreted Section 1852(d)(1)(A) and Section
1860D–2(a) (and applicable regulations) to require plans to offer benefits uniformly to
all enrollees residing in the service area of the plan. This interpretation is restrictive
and prevents plans from offering additional benefits tailored to meet the care and needs
of enrollees based on health status or other enrollee characteristics.
Recommended
Action(s)
Adopt an interpretation that is more expansive and allow plans to structure enrollee
cost-sharing and other services to encourage enrollees with particular clinical
conditions to consume high-value clinical services, as long as each person who meets
the criteria has access to the same benefit. We believe this is a reasonable and
appropriate application of the uniformity requirement.
Current CMS
Approach(es)
Telehealth – In general, MA plans include the costs of providing basic Medicare
benefits in their bids. Costs for supplemental benefits are separately identified and are
financed through rebates and/or beneficiary premiums. CMS has interpreted the
provisions of Section 1852(a)(1) to include in the basic benefit costs associated with
telehealth services only to the extent they would be covered under the FFS program.
Because coverage of telehealth services is extremely limited in FFS, this interpretation
has limited the ability of many plans to adopt innovative telehealth services.
Recommended
Action(s)
• Adopt an interpretation of basic benefits that is more expansive in the case of
telehealth services. The statutory scope of Part B benefits under Section 1832 and
the statutory definitions of covered services under Section 1861 do not specify
limits on the use of telehealth for MA. Also, existing regulations at 42 C.F.R.
§422.101(b) give CMS specific authority to issue regulations or instructions for MA
that supersede general coverage guidelines for FFS. Accordingly, CMS should
permit the use of telehealth as a mode of delivering basic health care benefits.
• Allow diagnoses from telehealth encounters to be counted for risk adjustment
purposes, which would further reflect the evolution in delivery of health care.
Current CMS
Approach(es)
Meaningful Difference – CMS applies a meaningful difference test for determining
whether a sponsor can offer an additional option in a given service area. The test is
exclusively a CMS requirement; it is not mandated by statute. It limits the number of
plan offerings and beneficiary choices. It also does not recognize provider networks
and premiums as elements constituting meaningful differences, yet these are extremely
important factors for beneficiaries in making enrollment decisions.
Recommended
Action(s)
Eliminate the meaningful difference requirement to allow market competition to
determine the appropriate number and types of plan options. Alternatively, if the
meaningful difference standard is retained, revise it to allow plans to be treated as
meaningfully different based on provider network and/or premiums differences.
Attachment 2 – Enhancing Beneficiary Choices and Experience
12
Transformational
Goal Increased beneficiary choices
Current CMS
Approach(es)
Total Beneficiary Cost (TBC) – Section 1854(a)(5)(C)(ii) allows, but does not require,
CMS to deny a bid based on the increase in cost-sharing or decrease in benefits from
one plan year to the next. CMS has developed the Total Beneficiary Cost (TBC)
metric as a means of determining whether to deny a bid based on a change in cost-
sharing or benefits.
The TBC restricts innovation and does not allow for needed flexibility on plan
offerings, which would increase choice for consumers.
Recommended
Action(s)
Eliminate the TBC requirement to allow market competition to determine the number
and types of plan options.
Current CMS
Approach(es)
Margin Requirement – CMS has developed a bid requirement that the margin for a
plan be within 1.5 percentage points of margins from other lines of business (e.g.,
commercial). This requirement, which is not imposed by statute, inhibits plans’ ability
to innovate and interferes with allowing market competition to determine bids. In
addition, the Medical Loss Ratio requirement ensures that margin requirements will not
be unnecessarily large.
Recommended
Action(s) Eliminate the margin requirement or provide more flexibility to promote choice.
Current CMS
Approach(es)
Benchmark Cap – There is broad agreement that the pre-ACA benchmark cap prevents
high performing plans from receiving incentives to enhance benefits for enrollees.
However, CMS indicated in the final rate notice that it has not identified any authority
under which it can exclude quality bonus payments from the application of the
benchmark cap.
Recommended
Action(s)
Borrow from practices used by innovative private sector companies by actively
soliciting proposals for legal analyses of the statute that will permit such interpretation.
Current CMS
Approach(es)
Network Adequacy – CMS requires that each plan meet network adequacy
requirements based on time and distance standards. While CMS permits certain
exceptions, the Agency does not allow plans to demonstrate an exception that will
encourage the use of higher value providers and CMS relies upon provider data that
may not be current. Plans are also not permitted to comply with network adequacy
standards using telehealth services even if such services are commonly used or present
a significant innovation that can improve beneficiary access or health and/or reduce
premium costs. This approach is limiting the ability of beneficiaries to have choices of
finding plans that fit their individual needs.
Recommended
Action(s)
• Update network adequacy exception criteria to include considerations around the
use of high-value networks and telehealth, so that market competition can allow
innovation and expanded options for beneficiaries.
• Allow D-SNPs to meet network adequacy requirements with respect to the numbers
and residence locations of dual eligible beneficiaries in the proposed service area.
Attachment 2 – Enhancing Beneficiary Choices and Experience
13
Transformational
Goal Improve beneficiary communications
Current CMS
Approach(es)
ANOC and EOC – Plan experience and feedback from members indicate that the
Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) model documents
are too long (over 200 pages), difficult to understand, and not easily searchable.
Recommended
Action(s)
• Create a task force comprised of CMS staff, representatives from the plans, and
beneficiary and provider advocacy groups to develop ideas to improve the
document readability and length and to create electronic versions that are easily
searchable and prioritize the information that beneficiaries desire.
• Provide plans with flexibility in how they make the ANOC/EOC available to
enrollees. For example, allow plans to ask members via a separate notice if they
would like to receive their ANOC/EOC via mail or electronically only (similar to
the process for disseminating provider directories).
Transformational
Goal Encourage continuity of care
Current CMS
Approach(es)
Duals Special Enrollment Provision – CMS rules under 42 CFR § 422.62 provide that
dual eligible enrollees are exempt from the Medicare annual election period and have
an ongoing special election period, enabling them to change Medicare plans or move
between MA and FFS programs at the beginning of each month. This prevents plans,
especially integrated plans, from engaging with new dual eligible enrollees to develop
positive relationships with their assigned care manager, conduct enrollee needs
assessments, implement plans of care and services covered by Medicare and Medicaid,
and address immediate health and service needs.
Recommended
Action(s)
Modify the monthly special enrollment provision for dual eligible beneficiaries to
require at least a three-month enrollment period.
Attachment 3 – Reducing Regulatory Burden
14
Transformational
Goal
Rigorously apply cost/benefit analyses to simplify the programs and
reduce unnecessary costs
Current CMS
Approach(es)
Burden Estimates – CMS develops economic impact analyses for regulatory changes
and burden estimates for new or revised sub-regulatory data collection requirements
pursuant to the Paperwork Reduction Act (PRA). However, the plan experience is that
actual costs are typically much higher than estimated. This prevents decision makers
from assessing the full impact of policy changes and may impose significant new
complexities and costs that ultimately would affect beneficiaries through premiums and
benefits. CMS should also ensure that sensitive competitive information is not publicly
released.
In addition, CMS has released a significant number of new requirements through sub-
regulatory guidance that do not have economic impact analyses or burden estimates.
Recommended
Action(s)
• Impose a moratorium on any new regulatory or sub-regulatory requirements that
would impose additional burdens or complexities on the MA or Part D programs.
• Create a task force with CMS and plan stakeholders to improve economic impact
analyses and other burden estimates.
• Develop and provide an opportunity for notice and comment on economic impact
analyses for guidance, particularly when the economic impacts may be substantial.
Guidance with substantial economic impacts must be approved in advance by the
Office of Management and Budget (OMB).
• Reconsider publicly releasing data that is competitive and limits plans’ negotiation
abilities (e.g., bid data).
Current CMS
Approach(es)
Prescriber & Provider Enrollment – CMS has issued regulations that require
prescriber enrollment in Medicare for Part D and provider enrollment requirements for
Part C, to be effective January 1, 2019. However, an analysis of the benefit of such
requirements compared to their costs, including implementing edits at point of sale in
Part D, or the potential impacts on network adequacy in Part C, has not been provided.
Recommended
Action(s)
Eliminate the prescriber enrollment requirement for Part D and the provider enrollment
requirement for Part C, including CMS efforts to implement a “phased-in” plan as part
of the provider enrollment delay.
Current CMS
Approach(es)
Reporting Requirements – In some instances, CMS has imposed Part C and D
reporting requirements without a clear explanation of how and why the data are
needed, and whether the benefits of such collection outweigh additional costs which
can result in increased bids, reduced benefits, and higher premiums for enrollees.
Recommended
Action(s)
Eliminate reporting requirements (and do not add any additional reporting
requirements) except to the extent:
• CMS explains the intended uses and benefits of such data collection for the MA or
Part D programs;
• For existing requirements, CMS annually publishes information on how the data
collection is being used;
• CMS certifies the benefits outweigh program costs for the data collection, including
plan costs in compiling and submitting the data; and
• CMS further certifies it has no other source for the requested data (such as
encounter data reports or prescription drug event reports).
Attachment 3 – Reducing Regulatory Burden
15
Transformational
Goal Implement a more coordinated and cost effective monitoring process
Current CMS
Approach(es)
Volume of Audits – Plans report that the volume and types of audits have increased
significantly in recent years. For example, last year CMS announced the creation of
new targeted audits relating to provider directories and appeals timeliness audits.
These audits will be conducted in addition to existing audits covering a range of
compliance topics, as well as audits relating to bidding, risk adjustment validation, etc.
Moreover, plans have already experienced multiple audits taking place simultaneously,
resulting in a significant drain on plan personnel and added costs that can adversely
affect plan operations.
Recommended
Action(s)
• Do not subject an MA or PDP contract to more than one compliance audit within a
reasonable time period of a prior compliance audit.
• Do not add any additional audits outside this timeline except for a targeted audit
that is based on credible evidence of the potential substantial beneficiary harm.
• Coordinate all audits of plans across CMS divisions to ensure that contracts are not
undergoing simultaneous or back-to-back audits, and that the same information is
not collected multiple times.
• Work collaboratively with plans and providers to better educate and incentivize
providers to update provider directory data on a timely basis.
Current CMS
Approach(es)
Impact Analyses of Audits – CMS has developed new audit/monitoring initiatives
without publishing economic impact analyses comparing the potential costs and
benefits of the initiatives and alternative monitoring approaches.
Recommended
Action(s)
Develop, and provide an opportunity for notice and comment on, economic impact
analyses for audit initiatives. Such analyses should include clear explanations of the
purposes for each audit, along with the costs, benefits and rationale for each audit and
alternative approaches.
Current CMS
Approach(es)
Lead time of Oversight – In some instances, CMS announces new routine audits
without sufficient lead time, causing potentially significant resource and cost impacts
on plan sponsors. Also, audit protocols are not finalized with sufficient lead time to
allow plans to implement any changes to their systems and programming. CMS may
ask for information outside the audit process and provide short response times.
Recommended
Action(s)
• Proactively inform plans what audits it intends to conduct well in advance, e.g., at
the beginning of the year.
• Provide any changes to audit protocols for public comment and finalize well in
advance of the audit year.
• Make other information requests within reasonable timelines.
