AHLA's Speaking of Health Law
AHLA's Speaking of Health Law
Hot Topics in Medicare Advantage/Part C and D
In this follow up to their December 2022 podcast, Mandy Asgeirsson, Director, Berkeley Research Group, and Melissa Wong, Partner, Holland & Knight LLP, discuss some of the big trends and developments related to Medicare Advantage/Part C and D. They cover the marketing of Medicare Advantage plans, recent CMS rules on Risk Adjustment Data Validation and National/Local Coverage Determinations, False Claims Act settlements for Medicare Advantage plans, and the impact of the Inflation Reduction Act on Medicare Part D. From AHLA's Payers, Plans, and Managed Care Practice Group. Sponsored by BRG.
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Speaker 2:Hi everyone. Thank you for joining us today on a HLAs speaking of Health Law podcast. My name is Mandy Oon. I am a director at Berkeley Research Group, or B r g. I'm joined here by my colleague Melissa Wong, who I'll let introduce herself.
Speaker 3:Thanks, Mandy. It's great to be back with you. And on this a h l A podcast. Uh, my name is Melissa Wong. I'm based out here in Boston, and I am a partner in the healthcare and Life Sciences Practice Group of holiday Night.
Speaker 2:We are doing a update based on a podcast that we did in December where we spoke specifically about Medicare Advantage and Medicare Part D, and it really goes into the basics of Medicare Part C and Medicare Part D Today as an update, we'd like to just talk a little bit about the additional, um, some additional facts, some additional points, and new things going on in the world now that we're into 2023.
Speaker 3:Um, Mandy and I have had questions about Medicare Advantage and Part D over the last few months that we thought were important and that we wanted to share some, um, latest developments, some frequently asked questions, and just some practical tips on how to go about this from a regulatory compliance standard as well.
Speaker 2:Uh, so one thing that I did when I was thinking about what could we talk about today is I asked colleagues that I work with, uh, that work in the Medicare Advantage space. What are some of the trends that they have noticed? And it just, every person that I talked to, we asked about a different trend or a different idea so that I could really come up with what are the three main things I wanted to chat about today. Um, one thing that has come up a lot with parents and friends and, and other things is the popularity of the Medicare Advantage Program. We talked about this in our previous podcast, but, um, starting around this year, about 50% of the Medicare population, um, is enrolled in a Medicare Advantage plan. So the popularity of Medicare Advantage has been on the rise for many years, and I don't see a downturn coming anytime soon. Would that popularity obviously be, uh, comes increased, uh, regulation, increased scrutiny on the program itself? Uh, so one thing I wanted to talk about today was, was the marketing of Medicare Advantage plans and how we've seen a bit of a, maybe a, a crackdown is a bit of a harsh word, but a crackdown on marketing efforts on the plans. So, um, in August of 2020, the Senate Finance Committee launched an inquiry into deceptive or potentially deceptive marketing practices in the Medicare Advantage Program. Um, would that inquiry came a number of different recommendations, uh, based on survey and other information that they received from different states, um, regarding marketing practices. So there were a lot of, uh, complaints or citations about aggressive marketing practices, insurance agents calling, uh, Medicare eligible beneficiaries up to 20 times a day. Uh, third party marketing organizations reaching out, uh, maybe unnecessarily to potential enrollees. Uh, the report that the inquiry or the Senate Finance Committee launched also, uh, looked at false or misleading statements, and then the targeting of potentially at risk populations under the guise that they were official federal, they were on official federal business. Um, the inquiry also included information regarding the fact that MA plans were marketing to people who maybe they thought their physician was in network, but they ended up being out of network, or they thought that certain services were covered with a new plan that NEC were not necessarily covered anymore. Um, so I think where we're going to see some enforcement and some increased scrutiny is on these marketing efforts to ensure that the marketers and the plans are marketing properly to Medicare beneficiaries. Um, since we have now in addition to more popularity, we have some increased scrutiny on the marketing practices of the plans themselves. So that was just one interesting point that I found. Melissa, I don't know if you had anything to add on, on marketing?
Speaker 3:No, I think that's gotten a lot of attention and probably well deserved to be honest, just because as the popularity grows, they're going to be more aggressive in, in pushing for Medicare Advantage enrollment. So everything you said, totally agree with. Um, a couple of things that have come up in, um, kind of the what do we do about this kind of thing. Um, one thing that might be helpful in terms of best practice or advice is to look at some of the US uh, Senate Finance Committees materials. Um, one thing that I actually looked at that you might not think about offhand, um, there was an August 18th, 2022 letter that was sent out from this committee to 15 different state insurance departments, and it, um, asks them, what are the types of complaints that you're getting from Medicare Advantage beneficiaries? Now, as we all know, state departments of insurance don't really even get involved in Medicare Advantage. So to know that there, there are Medicare beneficiaries complaining to these state departments is significant. They don't know the difference. They don't know where else to go, but they wanted to compile a good picture of what's been happening. Um, this letter is worth a read, and you can almost use it as a starting point to assess the risk in what you're doing from a sales and marketing perspective. So, have you also seen an increase in complaints? Um, are you doing the right agent and broker training, third party marketing organization training? Do the complaints that you're, you tend to get, are they focused on certain channels? So mailers versus website versus TV advertising versus online? Um, and are there different pitches or different marketing techniques that are going to be more problematic? Um, you know, are you talking about cost sharing in premiums? Are you being careful in how you characterize that? Um, are you talking about dental services and are you making sure to classify the benefit in the right way? Um, and then of course, like, are these complaints coming from your direct marketing activities or are they coming from some of your downstream entities? Are they comprising a disproportionate share of the complaints? So something to think about and triage where you could go to address some of these pain points in your portfolio. Um, another thing, it's not directly ma plan related, but it affects a lot of the MA providers. So, um, a lot of providers wanna do their own marketing and, you know, kind of their activities in the healthcare setting. Um, the Medicare marketing guidelines, um, address this in great detail about what you can and can't do, but it's a little bit of a gray area. Um, the marketing guidelines are specific to plans and what plans can or can't do. There are some sections in the guidelines that address what providers are allowed to do, whether in conjunction with the plan or, um, independently. There's also acknowledgement that providers have this professional relationship with their patients and that they have a right to discuss the plan at the request of the patient. So there is kind of a deference to that to some extent. Um, my advice is always to abide by the guidelines as if you were a plan. Um, I don't think there's a compelling reason to say, well, you know, it doesn't really technically apply to us, so it's okay. I think it's a best practice. I think plans would appreciate it. Um, and you are their network contracted provider, so there could be some, um, provider manual guidelines requirements there. Um, and also from a legal perspective, you wanna think about the beneficiary inducement statute and the C M P, the A K S. Um, I get all kinds of questions, oh, we wanna do a raffle. Well, the beneficiary inducement, um, statute and the accompanying preamble talk about raffles. You know, if you're auctioning off or doing a raffle for an iPad and it costs$300, um, you, you wanna make sure that your chance to win that iPad is commensurate with the di minimus limits of$15 and 75 per year. So if you're raffling an iPad and there's three people in that raffle probably exceeding, um, kind of those limits. So again, all different kinds of considerations, not strictly related to plan work, but, um, thinking about the bigger picture.
Speaker 2:Great. Thanks Melissa. Um, so one other topic that we, I think would be remiss to not talk about are policy changes both in the Medicare advantage space as well as in the Part D space. So on the Medicare Advantage front, I think one of the biggest things to come out of this year, just a, a week or two ago, uh, in the end of January, was the final rule. Um, so for those that are not well versed in the final rule, um, we have been waiting for many years, I think it's almost three years, um, on a final ruling for Medicare Advantage plans related to the RAD V program. So RAD V stands for risk adjustment data validation, uh, and so we'll refer to it as RAD V, but there were two things that really came out in this final rule. Um, first for rad, for those that don't really know what RAD V is, the purpose, uh, of the RAD V program is for CMS to be able to identify potentially improper risk adjustment payments made to the Medicare Advantage plans. Um, and so this is done based on a chart review of a sample. So if you remember from the last discussion that we had, Medicare Advantage plans are paid based on the conditions that each of their members or their enrollees has. Um, and those conditions impact the payment amount that comes from the federal government to the Medicare Advantage plan. So the RAD V program, what it does is they, uh, CMS audits, uh, each of the plans, uh, they, they're different methodologies for choosing which plans and which contracts to be reviewing. Um, but the plans are audited and a sample is pulled. Uh, once that sample is pulled, the medical records are, are pulled and reviewed by a, um, individual who is well versed in medical coding. And, uh, what they do is they determine whether or not each of the diagnosis codes that ultimately went to cms, um, they determine whether those codes were validated and there was support for them in the record. Um, then that information was often used, or typically the purpose was to, to create what's called an error rate to say if we reviewed a hundred diagnosis codes, for example, we would calculate what the difference would be in payment based on those diagnosis codes that were found to be not valid in the record. And then there was discussion about extrapolating this information to the entire universe. So, um, when the final rule came out in late January, one of the main, uh, changes is that the Medicare Advantage or the RAD V program will no longer be extrapolating for the years of 2011 for payment years 2011 through 2017, um, which means extrapolation will not occur until payment year 2018. This was a pretty big development. It's something that was up for debate for a while, and I think some could say they knew what they thought, they knew, at least people thought they knew what the answer would be in terms of where the final rule would fall. Um, but this lack of extrapolation has been something that's been discussed for a long time. So the other thing, uh, that came out of the final rule, uh, is that, so on the RAD V front is that CMS determines that they would not be adopting any specific sampling or extrapolation methodologies. Instead, they'll just be relying on any statistically valid method for sampling intra in extrapolation. Um, so again, the extrapolation won't happen until payment year 2018, but what CMS has done is they have not lost themselves into just one methodology for selecting the sample and for extrapolating from that sample. Rather, they have just indicated that they'll be using a statistically valid sample and a statistically valid extrapolation methodology. Um, this has been a, historically, a normal part of the audit process within cms, and so they'll be continuing that in 2018 and just extrapolating, starting in payment year 2018. Uh, the other, and I would say maybe more complex change that happened with this final rule, uh, is the elimination of what's called the fee for service adjuster. So if you remember from our previous podcast where we talked about the basics of Medicare Advantage, um, one thing that we talked about was the difference between Medicare Advantage and Medicare fee for service or traditional Medicare. Um, essentially what that is, is we're talking about Medicare Advantage, where a commercial insurance company is covering these Medicare beneficiaries and their insurance coverage. The fee for service side is where the federal government is taking on that risk for those beneficiaries. Um, and one of the rules of Medicare Advantage is that the, the offerings of Medicare Advantage should at least cover what traditional Medicare would cover for Medicare beneficiaries. So when we're thinking about the comparison between Medicare Advantage and Medicare fee for service, there are certain rules and requirements about what Medicare Advantage plans need to do. Um, and so the fee for service adjuster was a way to look at the comparison between Medicare Fee for service and Medicare Advantage. Um, and essentially what happened is that the previously, the fee for service adjuster was planning to be applied for these RAD V audits. Um, and the audit results were going to be adjusted to reduce the extrapolation amount to account for the fact that there are different, um, standards in terms of documentation for Medicare Advantage plans versus fee for service plans. Um, and that difference in documentation regarding the diagnosis codes and the requirements in terms of the level of, um, you could call it perfection in the records, is different between Medicare Advantage and fee service. Um, and so ultimately what CMS has decided is that during these audits and in this extrapolation process, the fee service adjuster will not be applied, um, to the audits. And so that was something that, um, sounds like it, it was, it, it's relatively complicated and it sounds maybe slightly confusing, but I think this was something that was thought for a while was going to happen. Um, and so the final rule kind of just put that into, in, into the rules to say, we are no longer going to be using this fee for service adjuster for RAD audits. Those are kind of the hot, hot policy topics, I would say on the Medicare Advantage front. Melissa, I don't know if you have anything to add or you wanna talk a little bit about the other big policy changes happening in Medicare Part D?
Speaker 3:Sure. Let me, um, kind of take the theme that you just mentioned and, and run with it in a different context. So as you said, and which is completely true, um, the experience for a beneficiary under Medicare Advantage should be the same, if not better than for, um, fee for service. So that's, um, codified, that's in regulation, that it's a kind of a, a tenant of Medicare Advantage. You can treat your patients better through supplemental benefits. You can offer benefits at fee for service beneficiaries don't get, but you can't treat them worse. You need to give them an equivalent experience. Now, there's been a lot of attention on the prior authorization front. Uh, the OIG put out a report, I think in April of last year about concerns with how prior authorization is happening, things in public press. Um, I read, uh, I think in the Washington Post or New York Times, um, a columnist writing about her experience with prior authorization, and this is on the commercial side, but getting access to, uh, kind of arthritis medication for her son that's very expensive, and that has to go through lots of different processes and evaluation to get that particular drug versus another drug or to undergo step therapy, all the different fundamental aspects of utilization review in this real world situation. And of course, there's so many cases like that. Uh, I think CMS is trying to, to look at this and be proactive. So December's proposed rule opines on this in great detail with the implementation of NCDs and LCDs and specifically stating that Medicare Advantage plans need to abide by this. They can't institute their own internal coverage criteria that directly contradicts this guidance in place. Um, and things about prior authorization as well, um, making sure that there is transition periods, um, what you can ask for within the prior authorization request, um, having a UN committee look at, um, policies to ensure consistency with NCDs and LCDs and using the right people to make these clinical determinations. So I think all of this will go through. I don't think it's necessarily controversial. I think it's a best practice and something that, um, you know, we always think is something that should be in place today that you look at the NCDs and LCDs, that you have a committee review these policies. I think all of that will, uh, go through and it's probably something that's good, um, to have in place. It'll be interesting to see the comments come back. Uh, I think it's going to be any week now, at least when the comment period ends, but I think there's going to be some questions. Um, what if the NCD or L C D generally talks about a certain therapeutic class or, um, category, but it doesn't specifically opine on a situation that, uh, an MA plan in practice will be facing in trying to decide whether to cover a treatment, uh, or drug or anything for a beneficiary? Um, can you say that because it's not specific to the particular item that you can implement your own criteria? Um, are you not allowed to touch it at all because there is something related to the condition? I mean, that's just one example of so many that I think will come up as questions at C M S hasn't really addressed in the proposed rule. Where did we draw the line? It's great to have this overarching theme that you should have the same experience as an MA beneficiary versus a fee for service beneficiary, but I think the devil is gonna be in the details, and it'll be interesting to see what comes out of it.
Speaker 2:I think the last thing that I wanted to talk through was some, some things that I've been reading about and things that I, I've been looking into, which is regarding False Claims Act settlements for Medicare Advantage plans. Um, so there have been over the, over the course of the Medicare Advantage program, obviously False Claims Act settlements have existed for Medicare Advantage plans. And in looking at some articles that the DOJ published recently regarding, um, the federal fiscal year of 2022, it sounds like there will still be a continued effort to focus on Medicare Advantage plans and Medicare Advantage plans, fraud and investigations. Um, so one thing that I know is a, is a focus for the DOJ is regarding, uh, overpayments to Medicare Advantage plans. So we talked a little bit first about the audit process of Medicare Advantage plans, but there's also the investigation process to say, are there instances where Medicare Advantage plans are potentially submitting diagnosis codes that are unsupported to the government that then result in payment? And if so, are we making sure that that is not happening? Um, and so as you, as I read through what the DOJ seems to be focusing on and what we're seeing based on what we're seeing in the news, um, I, the DOJ seems to still be very much focused on, um, potentially high risk codes, uh, and certain billing and coding issues. Um, we know that the, the government is using data analytics to have an understanding of are there certain types of codes that are at issues, are there certain plans that are at issue, um, and are there certain risk areas so that they can then use that data and use that information to inform their investigations? Um, and that is something that we are still seeing going on, uh, in terms of investigations to Medicare Advantage plans. So, um, still a big area of focus, at least in my understanding for Medicare Advantage plans to ensure that they are, um, properly documenting the diagnosis codes that are ultimately being submitted to the government.
Speaker 3:Well, we can end, uh, today's podcast with a little bit of a teaser on Part D, um, which is my favorite topics. I'm always happy to end on that note. Um, inflation Reduction Act, I mean, you've probably been, um, kind of made aware of this legislation that went through last year. It will be the biggest change to Part D I think in many years. So it will be really interesting to see how that rolls out. Um, we've had our first taste of that with the, um, advanced notice that came out from cms, I think on February 1st, and it's effectuating or starting to effectuate some of the changes in the program that were brought about by the, um, inflation Reduction Act. So again, just as a recap, so everybody's on the same page. The Inflation Reduction Act was signed in August of last year with the intent to lower prescription drug costs and reduce spending in Medicare. It was pretty popular, bipartisan support. Um, for the first time, the government is going to be able to, and I think, required to actually negotiate prices for Part D drugs. Traditionally, one of the fundamental elements of the Part D program is this theory of non interference. It's a, within the statute that C M S H H S can't interfere with negotiations between drug manufacturers, pharmacies, and sponsors. Um, you can't require a particular price structure or formulary. Um, this is changed and it's, um, significant change, um, that it is now amended so that the government can start negotiating for a small number of brand name drugs where it doesn't have a generic or biosimilar, um, equivalent or competitors. Um, and starting in 2026, so not for a while, um, and starting with tend drugs. Then in 2027, it'll be 15 drugs, all representative of the highest total part D spending, um, or at least called from a list of the 50 top, um, highest cost drugs, um, for part B and part D, although we'll focus on Part D, um, this year is when the, the drugs will start to be selected for review and negotiation. Again, the, the benefits of the, um, maximum fair prices won't be made available until until 2026, but, um, that is something that's going to start happening now. And I think from a practical standpoint, this will change a lot of, you know, pricing considerations, market access. Will manufacturers be a little bit more, um, I don't know if gre aggressive is the right word, but will they think more about these market conditions when they go out and try to sell or market or talk to payers about drugs? Um, there are certain classes of drugs that are going to be extremely susceptible if they're high cost a day, if you have curative therapies that, um, you know, you, they come with a high price tag upfront, but then saves costs later down the line because they're curative in nature. So all this stuff, it's gonna start percolating and I think there will be significant shifts in how the different stakeholders and the part system will go about this. Um, also we are going to start seeing some, um, tracking of, um, drug prices, any increases. 2023 is the year where they're going to start looking at these price increases, comparing them against the rate of inflation, and then rebates as required under the inflation reduction act. We'll start taking effect next year. Um, otherwise the part, um, the elements of the role that came out on February 1st, um, track to some of the other items in the I R A, um, kind of looking to effectuate changes with how out-of-pocket spend is gonna be capped, um, next year for catastrophic coverage, limiting cost sharing for beneficiaries with diabetes, where with respect to insulin copays eliminating, um, vaccine cost sharing, um, part D L I S subsidies and, um, opening up, uh, slightly the number of beneficiaries who are eligible for, um, participation in that kind of mini program. So all things that I think will come to light and continue to develop over time. So with that, we hope that these, um, items that we talked about may have answered some questions that were kind of in your mind. Um, and again, lots of really important, fascinating things happening in the MA and part D space. So thanks for letting Mandy and myself kind of clue in on some of these latest developments. And, um, thank you.
Speaker 2:Thank you very much, Melissa. Thank you for listening in to speaking of Health Law podcast from a l a, and we hope to hear from you all soon.
Speaker 4:Thank you for listening. If you enjoy this episode, be sure to subscribe to a H L A speaking of health law wherever you get your podcasts. To learn more about a H L A and the educational resources available to the health law community, visit American health law.org.