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CMS Proposes Significant Policy Changes for the 2015 Medicare Advantage and Prescription Drug Programs

Reg Pulse

On January 6, 2014, the Centers for Medicare and Medicaid Services (CMS) issued a 678-page proposed rule with numerous provisions that could have an extensive impact on how the Medicare Advantage (MA) and Medicare Part D programs operate. Although it’s likely that modifications will be made before the rule goes into effect, MA plans should still familiarize themselves with the proposed changes so they can understand the potential impact and determine what actions might be required to get ready. In some cases, plans might also want to take the opportunity to weigh in on the subject and help shape the new rule.

Here are just a few of the changes CMS is proposing:

  • Shifting responsibility for compliance audits. MA plans may be required to hire independent auditors (at their own expense) to perform program audits currently performed by CMS. This appears to be part of CMS’ broader effort to make smarter use of its limited resources by shifting more of the compliance oversight burden back to the health plans themselves.
  • Restricting the volume of plans offered. In the future, stand-alone Prescription Drug Plans (PDPs) might not be allowed to offer more than two Part D products in the same service area. Similarly, MA plans might be prohibited from offering new products that simply replace plans that CMS previously required to be terminated or consolidated due to low enrollment. Both of these provisions are part of an ongoing effort to reduce confusion and unnecessary complexity in the marketplace while still maintaining sufficient health plan choices for Medicare beneficiaries.
  • Streamlining the risk-adjusted data validation (RADV) process. In late 2013, CMS began to roll out its long-awaited plan to conduct RADV audits. The proposed rule would streamline things by combining error-rate calculation appeals and medical record review-determination appeals into a single integrated process.
  • Expanding Part D data sharing. The proposed rule also proposes to give researchers broader access to Prescription Drug Event (PDE) records — including unencrypted identifiers for prescribers, plans and pharmacies. This could expose sensitive details about how a plan operates, and might open the door to concerns about plans’ confidential information as well as member privacy.

Because many provisions of the proposed rule are likely to change, health plans should strike a balance between preparing themselves for the future and taking action too quickly. Of course, the only way to find the right balance point is to become familiar with the changes being proposed. There is a lot of information to wade through, and the new provisions could affect many different parts of the business — from costs and budgeting to operational processes and resource planning — so it makes sense to get started right away.

 

Kelly Sauders
Partner
Deloitte & Touche LLP

 

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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