On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) released a final rule containing policies for Medicare Advantage (MA) and Medicare Part D plans in contract year 2022. The rule finalizes policies initially proposed in February 2020. Some policies in that February proposed rule were finalized in previous rulemaking while the remainder are included in this new final rule. Finalized policies will go into effect for the 2022 plan year, unless otherwise specified.
The policies finalized in this new rule include: creation of a second specialty tier; implementation of a beneficiary real-time benefit tool (RTBT) beginning January 1, 2023; implementation of mandatory drug management programs in Part D plans; and changes to the quality measurement policies
Plans to be Allowed to Create Second Specialty Tier in Part D Benefit; CMS Sets Maximum Allowable Cost Sharing Amounts for These Tiers
CMS is finalizing a policy that will allow Part D plan sponsors to create a second specialty tier. Creating a second specialty tier will be an option for Part D plans, not a requirement. The goal of this policy would be to give plans additional flexibility in negotiating rebates with manufacturers of specialty drugs in order to secure placement on a lower cost-sharing preferred tier. The agency also believes costs for beneficiaries would also be reduced through lower cost-sharing. CMS notes that creating a second specialty tier has previously been suggested by public commenters. In addition, in 2016, the Medicare Payment Advisory Commission (MedPAC) suggested that allowing a second specialty tier with differential cost sharing could potentially encourage the use of biosimilars and encourage competition among existing Part D specialty drugs.
CMS has chosen not to assign specific guidelines to the composition of the second specialty tier, although the rule notes that a few commenters suggested creating a lower cost specialty tier limited only to generic drugs and biosimilars. The agency declined to do so, saying that they wish to provide maximum flexibility for plan sponsors. CMS goes on to say that most commenters were opposed to an alternative policy of limiting the preferred specialty tier to only generics and biosimilars while permitting all drugs (generic, biosimilar, and brand) on the higher cost-sharing specialty tier.
CMS is setting a maximum allowable cost sharing for the higher cost-sharing tier of the two specialty tiers. This maximum will be between 25 and 33 percent, depending on whether the plan has a deductible. Plans with the standard deductible will set cost sharing at 25% while plans with no deductible will have cost sharing of 33%. For plans with a deductible between $0 and the standard deductible, the cost sharing will be up to 33% depending on the amount of the deductible. The maximum allowable cost sharing also applies to plans with one specialty tier.
If a plan utilizes two specialty tiers, one of these must be a preferred tier with lower cost sharing than the maximum allowable cost sharing of the higher cost-sharing specialty tier. To allow for flexibility, CMS did not prescribe a minimum difference between cost-sharing levels.
Consistent with current Part D policy, plan sponsors may exempt drugs on either specialty tier from tiering exceptions between the specialty and non-specialty tiers. However, plans will have to allow tiering exception requests for drugs on the higher cost-sharing specialty tier to the lower cost-sharing specialty tier.
CMS is also finalizing a methodology to determine the specialty tier cost threshold for each plan year. This threshold will be based on a 30-day equivalent supply and on the ingredient cost reported on the prescription drug event (PDE). Currently, CMS uses the negotiated price on the PDE. The specialty tier cost threshold will apply to both specialty tiers. Beginning in 2022, this threshold will be adjusted to reflect Part D drugs with monthly ingredient costs in the top one percent of all monthly ingredient cost. If adjustment is necessary, this will be in an increment not less than 10 percent and will be rounded to the nearest $10.
Beneficiary Real-Time Benefit Tool To Be Implemented by 2023
Part D plans sponsors will be required to implement a beneficiary real-time benefit tool (RTBT) by January 1, 2023. CMS delayed implementation to 2023 in response to public comments. This beneficiary RTBT will be expected to allow enrollees to view “accurate, timely, and clinically appropriate” information specific to the patient. Plans will be allowed to use existing patient portals or develop a new portal to meet this requirement.
The information included in the beneficiary RTBT will be similar to what is required for the prescriber RTBT that plans were required to have implemented beginning January 1, 2021. This includes cost, formulary status of clinically appropriate alternatives, and utilization managements requirements, such as step therapy, quantity limits, and prior authorization. This information, which is beneficiary-specific, must also be available to patients who call the plan’s customer service call center. While not a requirement, CMS does encourage plans to include the negotiated price of drugs or other similar information in the beneficiary RTBT.
To incentivize the use of the beneficiary RTBT, CMS is allowing plans to offer rewards and incentives to enrollees that log onto the RTBT or access the information via the plan call center. Plans will be permitted to use gift cards as a reward, if they are not cash equivalents and do not encourage enrollees to further patronize the plan or any of the plan’s corporate affiliates. CMS will defer to plans as to what is a reasonable amount to offer to enrollees as an incentive.
Part D Sponsors to Be Required to Implement Drug Management Programs, Provide Information on Risks of Opioids
In this final rule, CMS is requiring Part D plan sponsors to implement drug management programs (DMPs). This is a requirement of the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) that Part D plan sponsors to implement drug management programs (DMPs). Beneficiaries with a history of opioid-related overdose will be included as potential at-risk beneficiaries (PARBs) in DMPs. Effective January 1, 2022, Part D plans without a Pharmacy and Therapeutic (P&T) committees, such as Programs of All-Inclusive Care for the Elderly (PACE) organizations, must have written DMP policies and procedures approved by a Part D sponsors medical director to comply. In addition, CMS finalizes an amendment to the clinical guidelines used to identify individuals with a history of drug abuse or misuse as potential at-risk beneficiaries (PARBs) to include Part D eligible individuals with a diagnosis of opioid-related overdose and a recent Part D opioid prescription.
In addition, Part D plan sponsors and MA-PD will be required to provide information on the risk of opioids and alternative therapies to all Part B beneficiaries starting on January 1, 2022. This information is to be disclosed at the time of enrollment and at least annually thereafter.
CMS Finalizes Requirements for Quality Measurement and Star Ratings
This final rule:
- Requires Part D plans to disclose pharmacy performance measures beginning in 2022;
- Adds two new Part C measures:
- Transitions of Care, and
- Follow-up After Emergency Department Visit for People with Multiple High-Risk Chronic Conditions;
- Clarifies that the enrollment figures used in the weighted QDP rating calculations are from the November enrollment the year the Star Ratings are release; and
- Removes a low Star Rating from the list of reasons for an application denial, and
- Adds a two-year grace period for parent organizations that acquire poor performing contract.
CMS Announces Standard Part D Benefit for 2022
On January 15, 2021, CMS also released the Announcement of Calendar Year (CY) 2022 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. This Announcement includes the standard benefit parameters for the Part D benefit for the 2022 plan year. Previously, the Announcement was accompanied by the Part D Call Letter, but CMS has shifted to using formal rulemaking instead.
This release is approximately three months earlier than previous announcements. In the past, CMS typically made the final rate Announcement in early April. The Part D benefit parameters for 2022 are in the table below.
| Standard Benefit | 2021 | 2022 |
| Deductible
Beneficiary is responsible for 100% of drug costs. |
$445 | $480 |
| Initial Coverage Limit
Beneficiary is responsible for 25% of drug costs and the plan sponsor is responsible for 75% of drug costs, until total drug costs reach $4,020. |
$4,130 | $4,430 |
| Out-of-Pocket Threshold
Beneficiary is in coverage gap until out-of-pocket spending (including the value of any manufacturer rebates) reaches this threshold. During this time, beneficiary is responsible for 25% of drug costs. Brand manufacturers are responsible for 70% of drug costs for branded products, via rebate. Plan sponsors are responsible for 5% of drug costs for branded products and 75% of drug costs for generics. |
$6,550 | $7,050 |
| Catastrophic Coverage
Once a beneficiary reaches the out-of-pocket threshold (including the value of manufacturer rebates paid on the beneficiary’s behalf), beneficiaries face the greater of 5% of drug costs or the following cost-sharing for the remainder of the plan year:
|
$3.70 $9.20 |
$3.95 $9.85 |
| Maximum Copayments for Non-Institutionalized Dual Eligibles | ||
Up to 100% of federal poverty level (FPL)
|
$1.30 $4.00 |
$1.35 $4.00 |
Over 100% of FPL
|
$3.70 $9.20 |
$3.95 $9.85 |
Partial Subsidy
|
$92.00 15%
$3.70 $9.20 |
$99.00 15%
$3.95 $9.85 |