On February 1, 2017, CMS released the CY 2018 draft Call Letter for Medicare Advantage (MA) and Medicare Part D plans. The Call Letter includes requirements and benefit parameters for plan year 2018.

CMS announced a proposal to delay two different proposals that would lead to payment cuts for Employer Group Waiver Plans (EQWP), as well as a change to methodology using encounter data, both of which were well received by health plans. The agency also continued to express concern over the rising cost of Part D drugs; however, few solutions were suggested as ways to combat the issue. For 2018, maximum copayments and cost-sharing amounts will remain flat, while standard benefit parameters will increase modestly.

CMS is accepting comments on the draft Call Letter through Friday, March 3; expect the final Call Letter on Monday, April 3. If you have questions about how the proposals may impact you or your business, or would like assistance in drafting comments, contact us at 202-558-5272 or melissa@appliedpolicy.com.

Payment Cuts to Employer Plans Delayed, Risk Adjustment Calculation Maintained

• Overall, CMS is predicting an average increase of 0.25% in MA plan payments.
• In response to feedback from plans, CMS will postpone a planned payment cut to Employer Group Waiver Plans (EGWP), which was announced last year, and will instead maintain the current methodology used to calculate plan payments.
• CMS will also use encounter data to calculate 25% of a plan’s risk score, which is consistent with current policy, instead of increasing the percentage to 50%, as the agency had proposed in last year’s Call Letter.
• MA enrollment continues at an all-time high, with over 17 million beneficiaries (32%) enrolled in a MA plan in 2016.

CMS Maintains Increased Specialty Cost Threshold, But Concern Over Number of High-Cost Drugs Remains

• CMS is proposing to maintain the specialty cost threshold at $670 per month for 2018.
• Concerned that almost 20% of drugs on formulary are priced above the specialty threshold (even though those drugs account for ~1% of all prescription drug claims), the agency will continue to review data and may consider another increase in the threshold for 2019.

Part D Plans on Notice for Tiering Exception Requests

• Current law requires Part D plan sponsors to allow beneficiaries to request “tiering” exceptions when a drug on a higher cost-sharing tier is medically necessary, or alternative drugs on lower cost-sharing tiers are inappropriate.
• In the Call Letter, CMS expresses concern that plan sponsors are being too restricting in approving tiering exception requests, especially now that program rules allow plans to place higher percentages of brand-name drugs on “generic” tiers and vice-versa.
• Therefore, CMS is clarifying the following requirements:
  • Plan sponsors cannot use a tier’s label (e.g. “brand” or “generic”), but rather whether the tier has a lower cost-sharing requirements when considering exception requests (e.g. if a beneficiary submits an exception for a generic on Tier 3, and there is an alternative brand on Tier 2, the plan must use the lower cost-sharing amount, not tier label, when considering the request);
  • In situations in which the requested drug has alternatives on multiple lower tiers (e.g. there are therapeutic alternatives to a Tier 4 product on both Tier 2 and Tier 3), plan sponsors must use the cost-sharing of the lowest-tiered alternative when approving an exception request, even if that alternative product is not necessarily the alternative product included in the prescriber’s supporting statement.
• Additionally, CMS is requesting feedback and comments from stakeholders relating to experiences with the tiering exceptions process generally.

Modifications to Opioid Overutilization Monitoring Suggested, Pharmacy Edits Expected to Continue

• Since 2014, plans have been required to retrospectively identify patients meeting the following criteria:
  • Use of opioids with cumulative daily morphine equivalent dosing (MED) exceeding 120 mg for at least 90 consecutive days with 3 or more prescribers and more than 3 pharmacies, during the most recent 12 months, excluding beneficiaries with cancer diagnoses and beneficiaries in hospice.
• Based on feedback, as well as new CDC guidelines on opioid prescribing, CMS is proposing the following changes:
  • Shorten the measurement period from 12 months to 6 months;
  • Use average daily MED of 90 mg, instead of cumulative daily MED exceeding 120 mg;
  • Use average MED rather than a count of 90 consecutive days;
  • Group providers by practice to reduce false positives from beneficiaries managed in a group practice setting.
• Additionally, CMS is expecting all plan sponsors to continue to use soft and hard edits at the point-of-sale (POS) for opioids:
  • Soft edits (which can be overridden at the pharmacy level) when a beneficiary exceeds a daily cumulative MED between 90 mg and 120 mg.
  • Hard edits (which require prior authorization or coverage determinations) for daily cumulative MED of 200 mg or higher.
  • Plans may establish a provider count if they wish.
• Beneficiaries with certain conditions, such as cancer, or those in hospice, would be exempted from the edits.

Measures Removed from Star Ratings – Medication Related

• Asthma Measures (Medicare Advantage): Stakeholders have expressed concern that asthma and COPD might be difficult to detect among those aged 65 or older; removed from 2018 display page
• Chronic Use of Atypical Antipsychotics by Elderly Beneficiaries in Nursing Homes (Part D): replace with updated measure

New/Revised Display Measures – Medication Related

• Antipsychotics Use in Persons with Dementia (Part D) [NEW: measures percentage of Medicare Part D beneficiaries 65 years or older with dementia who received prescription fills for antipsychotics without evidence of a psychiatric disorder or related condition, 2018 display measure
• Use of Opioids from Multiple Providers and/or at High Dosage in Persons without Cancer [NEW, 2019 display measure]
• Formulary Administration Analysis [NEW: a measure to gauge whether Part D sponsors are appropriately adjudicating Part D claims consistent with program requirements and plan benefits, 2018 display measure]
• Hospitalizations for Potentially Preventable Complications (Medicare Advantage) [REVISED: NCQA added measure to HEDIS 2016, but has since raised concerns about the measure; display measure in 2018, Star Ratings measure in 2019]
• Statin Therapy for Patients with Cardiovascular Disease (Medicare Advantage) [REVISED: NCQA added measure to HEDIS 2016 with overlap of measures developed by PQA; display measure 2018, Star Ratings measure 2019]
• Drug-Drug Interaction (Part D) [REVISED: new drug list developed by PQA; display measure 2019]

New/Revised Star Measures – Medication Related

• Medication Reconciliation Post Discharge (Medicare Advantage): Move from display to 2018 Star Ratings;
• Improving Bladder Control (Medicare Advantage): Move from display to 2018 Star Ratings;
• Special Needs Plan (SNP) (Medicare Advantage) and Medication Therapy Management (MTM) Program Completion Rate for Comprehensive Medication Reviews (Part D): Move from display to 2018 Star Ratings;
• Medication Pricing File Price Accuracy (Part D): Methodology changes to modify the claims used in the measure and account for the frequency and magnitude of the difference between the claim and MPF prices;
• High Risk Medication (Part D): Move from Star Ratings to display

Part D Benefit Parameters: Standard Benefit

*When a beneficiary’s true out-of-pocket (TrOOP) costs reach the Out-of-Pocket Threshold (OOPT), the beneficiary enters catastrophic coverage. The total drug costs at the point when the beneficiary hits the OOPT (and enters catastrophic coverage) will vary for each beneficiary. The numbers presented here represent estimates calculated by CMS of the total drug costs (including OOP costs, manufacturer rebates, and plan-covered costs) the average beneficiary will spend before qualifying for the catastrophic coverage portion of the benefit.

Part D Benefit Parameters – Non-Standard Benefit

Coverage Gap Cost Sharing: Beneficiaries to See Some Relief in 2018