CMS Publishes Final Rules Implementing Part C And Part D Program Changes - Healthcare

26 April 2024

by Tara E. Dwyer and Bridgette Keller

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On April 23, 2024, the Centers for Medicare & MedicaidServices (CMS) published final rules setting forth Changes to the Medicare Advantage and theMedicare Prescription Drug Benefit Program for Contract Year2024--Remaining Provisions and Contract Year 2025 Policy andTechnical Changes to the Medicare Advantage Program...etal. These sweeping final rules finalized manychanges that were introduced in the Proposed 2025 Rules and other changes thatwere proposed in the Proposed 2024 Rules. The rules will implementchanges related to many areas, including, for example, StarRatings, marketing and communications standards and requirements,agent/broker compensation, health equity, dual eligible specialneeds plans (D-SNPs), Part D formularies, utilization management,and the Medicare Advantage and Part D application process.

Although many of the rules are closely aligned with existingsub-regulatory guidance, others, especially those relating tomarketing and communications standards and compensation signal ashift in historic CMS guidance. The final rules aim to"strengthen protections and guardrails, promote healthycompetition, and ensure Medicare Advantage and Part D plans bestmeet the needs of enrollees. In addition, these policies promoteaccess to behavioral health care providers, promote equity incoverage, and improve supplemental benefits." While the ruleshave varying operational effective dates, the earliest impact thebid process for 2025, which is ending in less than 6 weeks from thedate of publication of the final rules; the rules universallyimpact program offerings for Contract Year 2025.

We plan to analyze the final rules in a series of blog postsover the next two weeks, beginning with today's highlight ofchanges to the risk adjustment data validation (RADV) appealsprocess, an update on the Overpayment Rule, and a new category ofproviders to be included in CMS's network adequacyevaluation.

A New, Standardized, RADV Appeals Process

CMS finalized changes that will standardize the RADV appealsprocess by requiring Medicare Advantage Organizations (MAOs) toexhaust all three levels of appeal for medical record review beforethe payment error calculation appeals process can begin. CMS statedthat it believed this clarification was necessary "becauseRADV payment error calculations are directly based upon theoutcomes of medical record review determinations."

There are currently three levels of appeal under the RADV auditprocesses: (1) reconsideration, (2) Hearing Officer review, and (3)CMS Administrator review. Under the current policies, MAOs canappeal both medical record review determinations and payment errorcalculations at the same time. The fact that these processes canrun concurrently could result in inconsistencies at the variouslevels of appeal, which would ultimately impact the finalcalculations of the payment error. The final rule standardizes theRADV appeals process by requiring MAOs to exhaust all three levelsof appeal for a medical record review determination beforebeginning an appeal of a payment error calculation. Ideally, thischange will reduce the burden on MAOs who may have historicallysubmitted appeals of error calculation that were later renderedmoot by medical record appeals decisions.

Of note, in response to the proposed changes, CMS received anumber of comments outside the scope of the proposals and relatedto the risk adjustment program methodology and the RADV process,generally. CMS thanked commenters but focused solely on theproposal and final rules.

Overpayment Rule Remains Open

Also, related to the risk adjustment area and identification ofpayment errors, CMS noted that it received a number of inquiriesinto the status of its December 2022 proposal to update thedefinition of "identified" in the "2014 OverpaymentRule" regulations (See 42 C.F.R. 422.326(c), whichwas invalidated by the District Court for the District ofColumbia's finding that the regulation was impermissible underthe statute. UnitedHealthcare Ins. Co. v. Azar, 330 F.Supp. 3d 173, 191 (D.D.C. 2018), rev'd in part on other groundssub nom. UnitedHealthcare Ins. Co. v. Becerra, 16 F.4th867 (D.C. Cir. 2021), cert. denied, 142 S. Ct. 2851 (U.S. June 21,2022) (No. 21-1140)).

CMS stated that this change remains under consideration and theagency intends to issue a final rule that will revise thedefinition of "identified" in the overpayment rules assoon as is reasonably possible. Noting of course, however, thatMAOs are still obligated to report and return all overpaymentsidentified under 42 U.S.C. 1320a-7k(d)(2)(A).

New Behavioral Health Providers to be Evaluated DuringNetwork Adequacy Review

CMS finalized its proposal to include a new facility type onMedicare Advantage health services delivery (HSD) tables,"Outpatient Behavioral Health." Under the rule, MAOs areable to include individual providers, group practices, andfacilities that provide the applicable behavioral healthservices.

This change coincides with changes adopted in the ConsolidatedAppropriations Act, 2023 (P.L. 117-328) that amended the SocialSecurity Act to allow Medicare Part B to pay for services providedby additional behavioral health providers, specifically includingMarriage and Family Therapists (MFT) and Mental Health Counselors(MHC). Previously, these types of providers often provided servicesto private paying individuals, individuals in commercial plans andMedicare Advantage beneficiaries who were enrolled in MA plans thatincluded their services as a supplemental benefit. Because MFTs andMHCs are now recognized by original Medicare as behavioral healthproviders, MAOs can include such providers in their HSD tables whenseeking to satisfy network adequacy for Outpatient BehavioralHealth. CMS is also allowing MAOs to include nurse practitioners,physician assistances, and clinical nurse specialists, so long asthe MAO can demonstrate that such provider as or will providebehavioral health services to at least twenty individuals withintwelve months. Additionally, because such a large volume ofbehavioral health services are provided through telehealth, MAOswill be allowed to use the 10 percentage point credit for theseprovider types if the MAO's plan benefit package offersadditional telehealth benefits and its network includes one or morebehavioral telehealth providers.

While CMS has made a variety of changes to network adequacyrequirements over the years, this change is noteworthy because itdemonstrates significant changes in the Medicare program'spromotion of behavioral health and continued recognition oftelehealth.

Stay tuned for additional posts analyzing other key elements ofthe final rules.

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CMS Publishes Final Rules Implementing Part C And Part D Program Changes - Healthcare - United States (2024)