CMS Finalizes Medicare Advantage, PACE, and Part D Policy Regulations
On April 5, 2023, the Centers for Medicare and Medicaid Services (CMS) finalized the first phase of its proposed Medicare Advantage (MA), Part D, and Program of All-Inclusive Care for the Elderly (PACE program) regulations. The final regulations, which take effect June 5, 2023 and generally affect plan actions beginning in calendar year (CY) 2024, include provisions governing MA marketing, Star Ratings, provider directories, utilization management and prior authorization (PA), and network adequacy to ensure behavioral health access. For PACE programs, they include new provisions governing civil monetary penalties (CMPs), contracted specialists, oral service determination request extensions, and maintenance of records. The CMS Fact Sheet is available here.
The final rule codifies and clarifies clinical criteria to be used in utilization management to ensure that MA plans are not more restrictive than Traditional Medicare in their coverage decisions. Specifically, MA plans must comply with national coverage determinations (NCD), local coverage determinations (LCD), and general coverage and benefit conditions included in Traditional Medicare regulations. When coverage criteria are not fully established, MA organizations may create internal coverage criteria based on widely used treatment guidelines or clinical literature made publicly available to CMS, enrollees, and providers. The rule preserves the plans’ ability to cover post-hospital skilled nursing facility (SNF) care in the absence of a prior qualifying three-day hospital stay. The rule also limits the circumstances in which plans can use algorithms for purposes of utilization management.
CMS also streamlines PA processes, promotes continuity of care when the enrollee changes plans, and clarifies the duration for which PAs must apply. Under the final rule, PAs:
- can only be used for confirming patient diagnosis or other medical criteria and/or medical necessity of the services or item.
- are valid for a “course of treatment,” which means “as long as medically reasonable and necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history and the treating provider’s recommendation.” The course of treatment definition includes SNF and home health benefits.
The final rule promotes continuity of care by requiring a minimum 90-day transition period when an enrollee currently undergoing treatment switches to a new MA plan, during which the new MA plan may not require PA for the active course of treatment. The rule also requires all MA plans to establish a Utilization Management Committee to review policies annually and ensure consistency with Traditional Medicare’s national and local coverage decisions and guidelines.
The final rule incorporates efforts to promote health equity through MA and Part D plan Star Ratings and provider directory requirements. It includes a health equity index (HEI) reward, beginning with the 2027 Star Ratings, to encourage MA and Part D plans to improve care for enrollees with certain social risk factors. Under the final rule, MA plan provider directories will be required to include providers’ cultural and linguistic capabilities. Finally, CMS is requiring that MA plans’ quality improvement programs include efforts to reduce disparities.
In addition, the final rule includes new provisions to promote access to behavioral health services. Under the new regulations, CMS is adding: (1) network standards for Clinical Psychologists and Licensed Clinical Social Workers, and making these specialties eligible for the 10-percentage-point telehealth credit; (2) general access to services standards that explicitly include behavioral health services; (3) codified standards for appointment wait times for primary care and behavioral health services; (4) a clarification that emergency behavioral health services must not be subject to PA; (5) notification requirements when the enrollee’s behavioral health or primary care provider(s) are dropped mid-year from networks; and (6) care coordination program requirements, including "coordination of community, social, and behavioral health services to help move towards parity between behavioral health and physical health services and advance whole-person care."
The final rule also finalizes several proposals for PACE programs with few amendments. It extends the initial contract year (§ 460.6) to 19 to 30 months (instead of 12 to 23 months), but in any event by Dec. 31st, for purposes of promoting the feasibility of annual comprehensive reviews during the trial period. It also strengthens CMS's ability to impose CMPs and suspend enrollment and payment in response to PACE program deficiencies. CMS and state survey agencies are no longer required to allow PACE programs to submit corrective action plans prior to the imposition of these sanctions. The rule adds various requirements for contracted specialists, including a list of 25 medical specialties for which PACE organizations must have written contracts in place prior to enrolling participants. In addition, the rule allows oral or written notices of service determination request extensions (§ 460.121). Finally, it revises medical record requirements to allow PACE organizations the operational flexibility to maintain certain sensitive communications outside of the medical record, as long as they are accurately summarized in the medical record (§§ 460.200 and 460.210).
The rule is effective June 5, 2023, with most provisions affecting MA plan practices in CY 2024 and beyond.
Contact: Karen Lipson, email@example.com