CMS Proposed Rule Addresses Multiple Aspects of Medicare Advantage Program for 2024, Including an Overpayment Rule Update

Firm Publication

On December 14, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that contemplates several changes to, and clarifications of, guidance for the Medicare Advantage (MA) program in coverage year 2024.

The proposals focus on increasing beneficiary protections, especially in plan marketing, access and health equity. In addition, the agency proposes to sync the Medicare 60-day Overpayment Rule’s standard for “identified overpayments” with the False Claims Act (FCA)’s “knowledge” standard, an important development as the MA industry awaits the final rule on Risk Adjustment Data Validation (RADV).

Overpayment Rule Proposals

The Overpayment Rule requires the reporting and returning of “overpayments” to CMS within 60 days of identification. The Overpayment Rule applies to Medicare Parts A – D. Currently, in the Part C context, an MA plan need not have “knowledge” of any overpayment for the rule to apply; rather, an MA plan has “identified” an overpayment (that must be returned to CMS) when it has determined or should have determined “through the exercise of reasonable diligence,” that it has received an overpayment.

The applicability of the Overpayment Rule to Part C was the subject of recent litigation in which UnitedHealth contended that the rule violates Medicare’s “actuarial equivalence” and the “same methodology requirements.” In September 2018, the D.C. District Court in UnitedHealthcare Ins. Co. v. Azar vacated the Medicare Part C Overpayment Rule finding it was “arbitrary and capricious” and “violate[d] the statutory mandate of ‘actuarial equivalence.'” In that decision, the court held that the “reasonable diligence” standard impermissibly created FCA liability for mere negligence.

In the highly anticipated decision UnitedHealthcare Ins. Co. v. Becerra, on August 13, 2021, the U.S. Court of Appeals for the District of Columbia Circuit reversed the district court and held that the Overpayment Rule does not violate the Medicare statute’s “actuarial equivalence” and “same methodology” requirements and is not arbitrary and capricious as an unexplained departure from CMS’s fee-for-service adjuster policy.  Noticeably, the government did not appeal the District Court’s holding that FCA liability requires more than negligence.

In an apparent response to the appellate court’s decision, CMS now proposes to replace the “reasonable diligence” standard with the “knowledge” standard used by the FCA. In other words, if the rule is finalized as proposed, an MA plan will have “identified” an overpayment if it has actual knowledge of the existence of an overpayment or acts in reckless disregard or deliberate ignorance of an overpayment. The proposed removal of the “reasonable diligence” standard and adoption of the FCA “knowledge” standard for overpayments would apply to Medicare Parts A, B and D in addition to Part C.

Medicare Advantage Proposals

The proposed rule further addresses numerous programmatic changes and clarifications, prioritizing the current administration’s focus on health equity and beneficiary protections. Key proposals focus on the following areas, described below.

Marketing and Communication

Marketing practices have been the subject of heightened scrutiny and enforcement.  In what appears to be a response, CMS proposes changes that, among other things, would require MA plans to:

  • Notify enrollees annually, in writing, of the ability to opt-out of phone calls regarding plan business.
  • Ensure MA plan agents explain the effect of an enrollee’s enrollment choice on their current coverage whenever enrollees make an enrollment decision.
  • Refrain from marketing savings that may be available based on comparing typical expenses borne by uninsured individuals.
  • Ensure third-party marketing organizations list or mention all MA plans they sell.
  • Create an oversight plan that monitors agent/broker activities and reports non-compliance to CMS.
  • Comply with discrete limits around the use of the Medicare name, logo, and Medicare card.
  • Refrain from using unsubstantiated superlatives.
Star Ratings

The Medicare Star Ratings system measures the plans’ performance based on various factors, including quality of care and customer service. It is intended to be a tool for consumers to evaluate and compare plans. CMS proposes several changes to the Part C Star Ratings program to bolster overall MA plan quality. For example, beginning with the 2027 Star Ratings, CMS proposes a health equity index reward, using measure data from the 2024 and 2025 measurement years, to encourage MA plans to improve care for enrollees with certain “social risk factors” (dual eligibility, low-income subsidies, and disability).

Utilization Management

In response to inquiries from the HHS Office of the Inspector General, CMS proposes changes impacting when and how MA plans develop and use coverage criteria and utilization management (UM) policies.  For example, CMS proposes to require MA plans to do the following:

  • Follow traditional Medicare coverage statutes and regulations, in addition to manuals and other instructions, when making medical necessity determinations (unless superseded by laws applicable to MA plans).
  • Provide a public summary of evidence considered during the development of the internal coverage criteria used to make medical necessity determinations.
  • Ensure that approvals granted through prior authorization (PA) processes remain valid for the duration of a prescribed course of treatment and afford enrollees who are currently undergoing treatment a minimum 90-day transition period when switching to a new MA plan, switching from traditional Medicare to an MA plan, or are new to Medicare.
  • Establish a committee, led by the plan’s Medical Director, that reviews UM and PA policies annually and keeps current of LCDs, NCDs, and other traditional Medicare coverage policies.

In addition to the above, new proposals would prohibit MA plans from denying coverage of Medicare-covered items or services based on internal, proprietary or external clinical criteria not found in traditional Medicare coverage policies.  In cases with no coverage criteria in Medicare authorities or guidance, MA plans would be allowed to use internal coverage criteria based on current evidence in widely used treatment guidelines or clinical literature, which the plan must make publicly available.

Health Equity

Consistent with the Biden administration’s focus on improving health disparities, the rule proposes to improve health equity in the MA space by doing the following:

  • Clarifying the broad application of CMS’s existing policy that MA services be provided in a “culturally competent” manner, i.e., including to persons with limited English proficiency; ethnic, cultural, racial or religious minorities; disabled persons; persons of diverse sexual orientations and gender identities; persons in rural areas or “other areas with high levels of deprivation;” and “otherwise adversely affected by persistent poverty or inequality.”
  • Requiring that each provider’s cultural and linguistic capabilities, handicap accessibility, and notations for certain providers are waived to treat patients with medications for opioid use disorders (MOUDs) and are included in all MA provider directories.
  • Requiring MA plans to develop and maintain procedures to identify and offer digital health education to enrollees with low digital health literacy to assist with accessing medically necessary telehealth benefits.
  • Requiring MA plans incorporate activities into their overall quality improvement program that reduce disparities in health and healthcare among their enrollees.
Translation Services

CMS proposes to require that MA plans provide materials to enrollees on a standing basis in any non-English language that is the primary language of at least 5% of the individuals in a service area and/or accessible formats using auxiliary aids and services upon request or learning of the enrollee’s preferred language and/or need for an accessible format.  This proposal is intended to ensure that enrollees need not make a separate translation request each time they require translation or auxiliary services.  The proposed rule would also require fully-integrated D-SNPs, highly-integrated D-SNPs and applicable integrated plans to translate both Medicare and Medicaid materials into any languages required by Medicare plus any additional languages required by their Medicaid capitated contracts.

Behavioral Health

CMS proposes to address network adequacy requirements for behavioral healthcare services in MA by, among other things:

  • Adding Clinical Psychology Licensed Clinical Social Workers (LCSWs) and MOUD prescribers as specialty types that will be evaluated using the time, distance and minimum provider standards in CMS’s network adequacy reviews.
  • Amending existing general access to service standards to include behavioral health services explicitly.
  • Applying minimum access wait time standards to behavioral health services.
  • Clarifying that certain behavioral health services may qualify as “emergency services,” which may be exempt from PA requirements.
  • Requiring plans establish behavioral healthcare coordination programs.
Enrollee Notification Requirements for Provider Contract Terminations

CMS proposes establishing specific enrollee notification requirements for no-cause and for-cause provider contract terminations.  The proposal would add specific and more stringent enrollee notification requirements when primary care and behavioral health provider contract terminations occur. CMS also proposes to specify notification content requirements for provider contract terminations.

Comments on the proposed rule are due by February 13, 2023.

If you have any questions about the proposed rule or need assistance drafting comments to the proposed rule, please contact the authors.

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Related Services
Firm Publication

On December 14, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that contemplates several changes to, and clarifications of, guidance for the Medicare Advantage (MA) program in coverage year 2024.

The proposals focus on increasing beneficiary protections, especially in plan marketing, access and health equity. In addition, the agency proposes to sync the Medicare 60-day Overpayment Rule’s standard for “identified overpayments” with the False Claims Act (FCA)’s “knowledge” standard, an important development as the MA industry awaits the final rule on Risk Adjustment Data Validation (RADV).

Overpayment Rule Proposals

The Overpayment Rule requires the reporting and returning of “overpayments” to CMS within 60 days of identification. The Overpayment Rule applies to Medicare Parts A – D. Currently, in the Part C context, an MA plan need not have “knowledge” of any overpayment for the rule to apply; rather, an MA plan has “identified” an overpayment (that must be returned to CMS) when it has determined or should have determined “through the exercise of reasonable diligence,” that it has received an overpayment.

The applicability of the Overpayment Rule to Part C was the subject of recent litigation in which UnitedHealth contended that the rule violates Medicare’s “actuarial equivalence” and the “same methodology requirements.” In September 2018, the D.C. District Court in UnitedHealthcare Ins. Co. v. Azar vacated the Medicare Part C Overpayment Rule finding it was “arbitrary and capricious” and “violate[d] the statutory mandate of ‘actuarial equivalence.'” In that decision, the court held that the “reasonable diligence” standard impermissibly created FCA liability for mere negligence.

In the highly anticipated decision UnitedHealthcare Ins. Co. v. Becerra, on August 13, 2021, the U.S. Court of Appeals for the District of Columbia Circuit reversed the district court and held that the Overpayment Rule does not violate the Medicare statute’s “actuarial equivalence” and “same methodology” requirements and is not arbitrary and capricious as an unexplained departure from CMS’s fee-for-service adjuster policy.  Noticeably, the government did not appeal the District Court’s holding that FCA liability requires more than negligence.

In an apparent response to the appellate court’s decision, CMS now proposes to replace the “reasonable diligence” standard with the “knowledge” standard used by the FCA. In other words, if the rule is finalized as proposed, an MA plan will have “identified” an overpayment if it has actual knowledge of the existence of an overpayment or acts in reckless disregard or deliberate ignorance of an overpayment. The proposed removal of the “reasonable diligence” standard and adoption of the FCA “knowledge” standard for overpayments would apply to Medicare Parts A, B and D in addition to Part C.

Medicare Advantage Proposals

The proposed rule further addresses numerous programmatic changes and clarifications, prioritizing the current administration’s focus on health equity and beneficiary protections. Key proposals focus on the following areas, described below.

Marketing and Communication

Marketing practices have been the subject of heightened scrutiny and enforcement.  In what appears to be a response, CMS proposes changes that, among other things, would require MA plans to:

  • Notify enrollees annually, in writing, of the ability to opt-out of phone calls regarding plan business.
  • Ensure MA plan agents explain the effect of an enrollee’s enrollment choice on their current coverage whenever enrollees make an enrollment decision.
  • Refrain from marketing savings that may be available based on comparing typical expenses borne by uninsured individuals.
  • Ensure third-party marketing organizations list or mention all MA plans they sell.
  • Create an oversight plan that monitors agent/broker activities and reports non-compliance to CMS.
  • Comply with discrete limits around the use of the Medicare name, logo, and Medicare card.
  • Refrain from using unsubstantiated superlatives.
Star Ratings

The Medicare Star Ratings system measures the plans’ performance based on various factors, including quality of care and customer service. It is intended to be a tool for consumers to evaluate and compare plans. CMS proposes several changes to the Part C Star Ratings program to bolster overall MA plan quality. For example, beginning with the 2027 Star Ratings, CMS proposes a health equity index reward, using measure data from the 2024 and 2025 measurement years, to encourage MA plans to improve care for enrollees with certain “social risk factors” (dual eligibility, low-income subsidies, and disability).

Utilization Management

In response to inquiries from the HHS Office of the Inspector General, CMS proposes changes impacting when and how MA plans develop and use coverage criteria and utilization management (UM) policies.  For example, CMS proposes to require MA plans to do the following:

  • Follow traditional Medicare coverage statutes and regulations, in addition to manuals and other instructions, when making medical necessity determinations (unless superseded by laws applicable to MA plans).
  • Provide a public summary of evidence considered during the development of the internal coverage criteria used to make medical necessity determinations.
  • Ensure that approvals granted through prior authorization (PA) processes remain valid for the duration of a prescribed course of treatment and afford enrollees who are currently undergoing treatment a minimum 90-day transition period when switching to a new MA plan, switching from traditional Medicare to an MA plan, or are new to Medicare.
  • Establish a committee, led by the plan’s Medical Director, that reviews UM and PA policies annually and keeps current of LCDs, NCDs, and other traditional Medicare coverage policies.

In addition to the above, new proposals would prohibit MA plans from denying coverage of Medicare-covered items or services based on internal, proprietary or external clinical criteria not found in traditional Medicare coverage policies.  In cases with no coverage criteria in Medicare authorities or guidance, MA plans would be allowed to use internal coverage criteria based on current evidence in widely used treatment guidelines or clinical literature, which the plan must make publicly available.

Health Equity

Consistent with the Biden administration’s focus on improving health disparities, the rule proposes to improve health equity in the MA space by doing the following:

  • Clarifying the broad application of CMS’s existing policy that MA services be provided in a “culturally competent” manner, i.e., including to persons with limited English proficiency; ethnic, cultural, racial or religious minorities; disabled persons; persons of diverse sexual orientations and gender identities; persons in rural areas or “other areas with high levels of deprivation;” and “otherwise adversely affected by persistent poverty or inequality.”
  • Requiring that each provider’s cultural and linguistic capabilities, handicap accessibility, and notations for certain providers are waived to treat patients with medications for opioid use disorders (MOUDs) and are included in all MA provider directories.
  • Requiring MA plans to develop and maintain procedures to identify and offer digital health education to enrollees with low digital health literacy to assist with accessing medically necessary telehealth benefits.
  • Requiring MA plans incorporate activities into their overall quality improvement program that reduce disparities in health and healthcare among their enrollees.
Translation Services

CMS proposes to require that MA plans provide materials to enrollees on a standing basis in any non-English language that is the primary language of at least 5% of the individuals in a service area and/or accessible formats using auxiliary aids and services upon request or learning of the enrollee’s preferred language and/or need for an accessible format.  This proposal is intended to ensure that enrollees need not make a separate translation request each time they require translation or auxiliary services.  The proposed rule would also require fully-integrated D-SNPs, highly-integrated D-SNPs and applicable integrated plans to translate both Medicare and Medicaid materials into any languages required by Medicare plus any additional languages required by their Medicaid capitated contracts.

Behavioral Health

CMS proposes to address network adequacy requirements for behavioral healthcare services in MA by, among other things:

  • Adding Clinical Psychology Licensed Clinical Social Workers (LCSWs) and MOUD prescribers as specialty types that will be evaluated using the time, distance and minimum provider standards in CMS’s network adequacy reviews.
  • Amending existing general access to service standards to include behavioral health services explicitly.
  • Applying minimum access wait time standards to behavioral health services.
  • Clarifying that certain behavioral health services may qualify as “emergency services,” which may be exempt from PA requirements.
  • Requiring plans establish behavioral healthcare coordination programs.
Enrollee Notification Requirements for Provider Contract Terminations

CMS proposes establishing specific enrollee notification requirements for no-cause and for-cause provider contract terminations.  The proposal would add specific and more stringent enrollee notification requirements when primary care and behavioral health provider contract terminations occur. CMS also proposes to specify notification content requirements for provider contract terminations.

Comments on the proposed rule are due by February 13, 2023.

If you have any questions about the proposed rule or need assistance drafting comments to the proposed rule, please contact the authors.

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