On Monday, April 3, 2017, the Centers for Medicare and Medicaid Services (CMS) issued the final Call Letter for the 2018 Medicare Advantage and Medicare Part D Prescription Drug Benefit plan year. The Call Letter establishes requirements for Medicare Advantage (MA) and Medicare Part D plan sponsors for the 2018 benefit year. The draft call letter was released in early February 2017.

This year’s iteration of the Call Letter was notable for the few changes proposed. However, CMS opened the final Call Letter with a request for information from stakeholders on ways to improve “transparency, flexibility, program simplification, and innovation” within the MA and Part D programs. Feedback will be accepted through April 24, 2017, and may be submitted to PartCDComments@cms.hhs.gov.

Other highlights are summarized below:

Plans Can Expect a Modest Increase in Pay for 2018, Trump Administration Continues Pre-ACA Rate Cap and Quality Bonus Payment Policy

• Overall, CMS is predicting that the average plan will see a modest increase in payments of +0.45%; this is higher than the estimated +0.25% increase that was included in the draft call letter.
• CMS is also continuing to maintain that the agency needs Congressional approval to make a change to the payment formula to ensure that all plans receive their full quality bonus payment. Some plans consider this a “glitch” and have been requesting CMS to address the issue for several years. The Obama Administration maintained that the agency did not have authority to change the payment formula. The Trump Administration, at least for 2018, is in agreement: “We have not identified discretion under section 1853(n)(4) of the Act to eliminate application of the pre-ACA rate cap or exclude the bonus payment from cap calculation.”

Policy on Tiering Exceptions Clarified, Authorized Generics Officially “Generic”

• 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 draft Call Letter, CMS expressed concern that plan sponsors were being too restrictive 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.
• In response, the agency is issuing the following clarifications:
  • Plan sponsors must rely on the cost-sharing level associated with a tier, not the tier’s label, when considering tiering exception requests. Plan sponsors should base eligibility for a tiering exception request on whether the alternative drug is on a lower cost-sharing tier than the requested drug. For example, if a generic drug is placed on a non-preferred brand tier, and the alternative brand drug is placed on a preferred generic (or preferred brand) tier, then the plan must consider the request, even though the requested drug is a generic.
  • 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.
• In response to comments, CMS will revise their interpretation of “generic drugs” to include authorized generic drugs, which will allow plans to include authorized generics on tiers “dedicated to generic drugs.”
• The draft Call Letter included a request for general comments and feedback on the tiering exception process generally, and CMS hinted at possible future rulemaking on the issue.

CMS Maintains Increased Specialty Cost Threshold

• CMS will  maintain the specialty cost threshold at $670 per month for 2018.

Modifications to Opioid Overutilization Monitoring Finalized

• Since 2013, 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.
• For 2018, the criteria for the Opioid Overutilization Monitoring System will be finalized as follows:
  • During the most recent six months, the beneficiary has:
    • Use of opioids with an average daily morphine-equivalent dose (MED) greater than 90 mg for any duration; and
    • Received opioids from more than 3 prescribers and more than 3 pharmacies OR from more than 5 prescribers regardless of the number of pharmacies.
  • In response to comments, CMS increased the number of prescribers (regardless of the number of pharmacies) from 4 to 5.
  • Beneficiaries with cancer diagnoses and beneficiaries in hospice will continue to be excluded, and prescribers associated with the same single TIN are counted as the same prescriber.
• Additionally, CMS will not require plans to implement a hard opioid safety edit based on cumulative MED at the pharmacy, as initially proposed. Instead, the agency will expect plans to implement a soft and/or hard edit but only as a safety edit. Plans will be expected to rely on prescriber attestation that a higher MED is medically necessary to approve coverage and not require additional clinical criteria.

Star Ratings Measure Changes Finalized as Proposed

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) Care Management (Medicare Advantage) and Medication Therapy Management (MTM) Program Completion Rate for Comprehensive Medication Reviews (CMR) (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

New/Revised Display Measures

• 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

Measures Removed

• Chronic Use of Atypical Antipsychotics by Elderly Beneficiaries in Nursing Homes (Part D): replace with updated measure
• 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

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