regulatory pills, cms call letter

Perspectives

Advance notice and draft call letter

Summary of provisions and impacts

The Centers for Medicare and Medicaid Services (CMS) released its advance notice of methodological changes for calendar year (CY) 2017 for Medicare Advantage (MA) capitation rates, Part C and Part D payment policies, and 2017 draft call letter on February 19, 2016. The purpose of the advance notice and draft call letter is to notify Medicare Advantage Organizations (MAO) and Part D sponsors of proposed changes to the Part C and Part D programs for the following plan year. The changes contained in the advance notice and draft 2017 call letter are to be effective for the 2017 contract year. The final version of the advance notice and call letter will be released on April 4, 2016.

Our perspective

As in previous years, CMS proposed a number of significant payment and policy changes in the advance notice and call letter.

Many of the proposed changes will have a direct impact on MAO reimbursement for 2017 and beyond. For instance, CMS published larger than expected Fee-For-Service (FFS) growth percentage and the CMS-HCC model will experience major changes as the model shifts to a new six-segment community model. Additionally, CMS intends to adjust the weights assigned to the risk scores from the Risk Adjustment Processing System (RAPS) and Encounter Data System (EDS) by weighting them each equally at 50 percent.

New adjustments to the Star Ratings program should increase the ratings for contracts with higher proportions of Low-Income Subsidy/Dual Eligible (LIS/DE) and disabled beneficiaries and eliminate the perceived penalty for sponsors with proportionally higher LIS/DE populations.

Significant emphasis continues to be placed on Part D sponsors’ failure to comply with CMS’ adjudication requirements for coverage determinations and redeterminations, which result in auto-forwards to the Independent Review Entity (IRE). Because the volume of cases auto-forwarded to the IRE remains significant and sustained, CMS proposes to increase the severity of enforcement actions in this area. Additionally, findings from the one-third financial audits will also now be subject to potential enforcement action.

CMS also continues to review and refine leading practices for provider directories, its overutilization monitoring programs, and Medication Therapy Management (MTM) program processes.

One noted exclusion from the notice was additional guidance on home visits for the purpose of risk adjustment. New guidance around home visits was expected by the industry and this noted absence means existing processes and policies remain unchanged for 2017. There were also no new proposed restrictions on the use of preferred cost sharing pharmacies.

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