Life Science Compliance Update

April 11, 2018

CMS Proposes Changes to Part D and Medicare Advantage


Earlier this year, CMS proposed changes to the Medicare Advantage and Part D programs through the Advanced Notice and Draft Call Letter for 2019. This is important as Medicare Advantage enrollment grows each year. One-third of Medicare beneficiaries are now enrolled in Medicare Advantage Plans.

Proposed Policies

CMS notes that the proposed policies and updates for 2019 are intended to “remove barriers to innovation and foster greater transparency, flexibility, and program simplification.” CMS proposes an average rate increase of 1.84%, and factoring in plan coding practices CMS estimates a net payment increase of 4.94% for 2019. 

Some of the major changes include:

  • Health Related Supplemental Benefits– Medicare Advantage plans can offer beneficiaries supplemental benefits not otherwise covered by traditional Medicare. Previously, CMS has not allowed supplemental benefits when the primary purpose is daily maintenance.  CMS seeks to expand the scope of services or items that are primarily health related to include benefits that compensate for physical impairments, ameliorate the impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization. The agency believes this change will “allow MA plans more flexibility in offering supplemental benefits that can enhance beneficiaries’ quality of life and improve health outcomes.” CMS intends to provide detailed guidance in the future, which will be informed by earlier stakeholder feedback and comments received by the Advance Notice.
  • Uniformity Flexibility– CMS has determined that providing services or cost sharing related to health status or disease is consistent with the uniformity regulatory requirement. CMS caveats that similarly situated enrollees must be treated the same and have the same access to the targeted benefits. Benefits may not be designed to discriminate against beneficiaries. The Advance Notice includes the example of an Medicare Advantage plan using cost sharing or supplemental benefits for a large number of conditions while excluding high-cost conditions. 
  • Employer Group Waiver Plans (EGWP)– CMS proposes to fully transition to only using individual plan bids instead of blending EGWP and individual bids. This had been proposed for 2018, but then implementation was delayed.  Such a change is expected to reduce payments to EGWPs.
  • Publicly Identifying Imposition of Civil Monetary Penalties (CMPs) – CMS proposes to identify sponsoring organizations that have received CMPs by displaying an icon or other type of notice on Plan Finder. The agency believes this would be consistent with the requirement to provide information that enables beneficiaries to make informed decisions.
  • Audit of Compliance Program– CMS proposes to treat sponsoring organizations that have undergone a program audit to have met the annual compliance program audit requirement. Compliance with the requirement would be one year from the date of the CMS program audit. This proposal would align with the Trump administration’s overall goal of reducing regulatory burden and will be welcomed by sponsoring organizations undergoing a program audit.
  • Provider Directories– CMS indicates that Civil Money Penalties (CMPs) and other enforcement actions could be imposed against Medicare Advantage Organizations that receive compliance notices for uncorrected violations related to provider directories. The agency notes that CMPs would be calculated on a per determination basis.  This is a timely proposal because the most recent review of Medicare Advantage plans’ provider directories found that 52.2% of location information contained inaccurate information. CMS indicated that based on the results of the latest review, the agency issued 23 Notices of Non-Compliance, 19 Warning Letters, and 12 Warning Letters with a request for a Business Plan. CMS is in the process of conducting the third round of provider directory review.
  • Opioids– CMS reminds plan sponsors they should (1) retrospectively perform enhanced drug utilization review to identify over-utilizers and provide appropriate case management aimed at coordinated care, and (2) prospectively manage utilization with real-time safety alerts at the time of dispensing to ensure prescribers are aware that potentially high risk levels of prescription opioids will be dispensed. CMS will continue to use the Oversight Monitoring System (OMS) to identify beneficiaries at significant risk of opioid abuse. The agency requests feedback on several proposals, including: a formulary-level cumulative safety edit at the point of sale of 90 morphine milligram equivalents per day, with a 7-day supply allowance; implementing a day’s supply limit for initial fills of opioids for the treatment of acute pain with or without a daily dose maximum; and enhancing the OMS by adding flags for high risk beneficiaries using “potentiator” drugs (defined as a chemical, herb, or other drug that is used to increase the effects of a substance) and consequently, increasing both the substance and the “potentiators abuse potential” drugs in combination with prescription opioids.
  • Special Needs Plans (SNPs)– CMS acknowledges that Congress needs to reauthorize SNPs for contract year 2019. Without authorization CMS lacks the authority to allow SNPs to be offered.  In anticipation of congressional action, the agency will accept bids and may sign contracts for calendar year 2019 to ensure that SNPs may be offered without interruption.

March 09, 2018

CMS Posts CY 2019 Notice and Call Letter


The Centers for Medicare and Medicaid Services (CMS) has posted the calendar year (CY) 2019 Advance Notice and Call Letter explaining proposed methodological and payment changes for Medicare Advantage (MA) plans, as well as key policies under Part D. The proposal includes opioid prescribing limits in Medicare Part D and changes to MA utilization of encounter data. It also expands MA supplemental benefits and reducing payments to Employer Group Waiver Plans.

Net Payment Impact

For MA plans, CMS estimates a +1.84 percent net increase on average relative to CY 2018 because of Advance Notice policies. Specifically, the proposed changes leading to the increase are as follows: the effective growth rate is listed at 4.35 percent; rebasing and repricing is yet to be determined (CMS notes this is “dependent on finalization of average geographic adjustment index and will be available with the publication of the 2019 Rate Announcement”); changes to the Star ratings is -.2 percent; MA coding intensity adjustment is -.01 percent; risk model revision is positive .28 percent; and normalization is -2.26 percent.

Proposal Highlights


In the Advance Notice and Call Letter, CMS is proposing that Part D plans place new restrictions on opioid prescribing in 2019. Plan sponsors will be asked to prevent prescribing more than a seven-day supply of opioids for acute pain. Plans will have the option of setting a maximum daily dose for this seven-day supply. For non-acute pain, plans will need to have a formulary limit of 90 morphine milligram equivalents of opioids per day with a seven-day supply limit; plan sponsors will be allowed to override this request.

Insurance companies will also need to create safeguards to prevent patients from receiving multiple prescriptions of long-acting opioids; pharmacists will have the ability to override this restriction. CMS is also enhancing its overutilization monitoring system (OMS) so that it identifies high-risk beneficiaries who use drugs that can be dangerous in combination with opioids such as gabapentin and pregabalin — the monitoring system already flags concurrent benzodiazepine use with opioids.

Finally, CMS is seeking feedback on whether it should add a new pharmacy quality alliance measure — measures used to evaluate Part D plans’ progress in combating the opioid crisis — to track the percentage of individuals 18 and older with concurrent use of opioids and benzodiazepine.

Encounter Data

Historically, CMS has used diagnoses submitted into CMS’ Risk Adjustment Processing System (RAPS) by Medicare Advantage organizations. In recent years, CMS began collecting encounter data from Medicare Advantage organizations, which also includes diagnostic information. In 2016, CMS began using diagnoses from encounter data to calculate risk scores, by blending 10 percent of the encounter data-based risk scores with 90 percent of the RAPS-based risk scores.

For 2017 and 2018, CMS continued to use a blend to calculate risk scores, by calculating risk scores with 25 percent encounter data and 75 percent RAPS in 2017, and 15 percent encounter data and 85 percent RAPS in 2018. For 2019, CMS proposes to calculate risk scores by adding 25 percent of the risk score calculated using diagnoses from encounter data and FFS diagnoses with 75 percent of the risk score calculated with diagnoses from RAPS and FFS diagnoses.

Risk Adjustment 

CMS is proposing changes to the CMS-HCC Risk Adjustment model that is used to pay for beneficiaries enrolled in MA plans. These proposals reflect changes to improve risk adjustment required by the 21st Century Cures Act, including an evaluation of adding mental health, substance use disorder, and chronic kidney disease conditions to the risk adjustment model and making adjustments to take into account the number of conditions an individual beneficiary may have, as well as a variety of additional technical updates.

Further, the 21st Century Cures Act requires that CMS fully phase in the required changes to the risk adjustment model by 2022. CMS is proposing to begin the phase in of this new model in 2019, starting with a blend of 75 percent of the risk adjustment model used for payment in 2017 and 2018 and 25 percent of the new risk adjustment model proposed.

Employer Group Waiver Plans (EGWPs) 

CMS proposes to complete the transition to administratively setting EGWP rates in CY 2019, using only individual market plan bids to calculate the bid-to-benchmark ratios to set EGWP payments. The completion of this transition was initially contemplated for implementation in 2018, but was ultimately delayed.

Star Ratings

CMS proposes to continue to apply its analytical adjustment, the categorical adjustment index (CAI), to CY 2018 Star ratings to account for the impact of dual-eligible and low-income subsidy (LIS) status and disability status. CMS says the overall methodology would “remain unchanged.” CMS is also proposing adding new quality measures relating to statin use among patients with diabetes or cardiovascular disease, and removing the Beneficiary Access and Performance Problems Measure.

MA Supplemental Benefits

Historically, services that include daily maintenance have not been eligible as supplemental benefits. However, CMS discusses expanding the scope of the primarily health-related supplemental benefit standard. CMS would allow supplemental benefits if they compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization. This could include such services as non-skilled respite home care, portable wheelchair ramps, and other devices to assist disabled beneficiaries.

March 08, 2018

CMS Updates Physician Compare to Include 2016 Data and Star Ratings


CMS announced that it has updated its Physician Compare website to include 2016 data and new star ratings related to clinical quality. The first quality measures were added to Physician Compare in February 2014. Since then, CMS has continued a phased approach to public reporting.

2016 Performance Information on Physician Compare

Beginning in December of 2017, CMS started to publicly report certain 2016 performance information on Physician Compare. The information was designated as available for public reporting in the 2016 Physician Fee Schedule final rule. According to CMS, the primary audience for profile pages is patients and caregivers. On the profile pages, groups may have the following measures reported: a subset of 2016 Physician Quality Reporting System (PQRS) measures reported as star ratings; Consumer Assessment of Healthcare Providers and Systems (CAHPS) for PQRS summary survey measures; and/or non-PQRS Qualified Clinical Data Registry (QCDR) measures.

The measures now included on Physician Compare profile pages represent a variety of types of clinical care by groups representing many different specialties. The 2016 PQRS performance information is divided into eight different categories, ranging from general care to more specialized care.

The categories include:

  • Preventive care: General health
  • Preventive care: Cancer screening
  • Patient safety
  • Care planning
  • Diabetes
  • Heart disease
  • Respiratory diseases
  • Behavioral health

In addition to the measures being reported for groups and individual clinicians, 2016 data for the Shared Savings Program, Pioneer, and Next Generation Accountable Care Organizations (ACOs) are now also publicly reported on Physician Compare.

Star Ratings on Physician Compare

When public reporting performance information began in 2014, CMS started with a small subset of group-level Web Interface measures. Now with the use of star ratings, CMS is restarting its phased approach for the use of star ratings with just a small subset of group-level measures. For the first time this year as part of the continued phased approach to public reporting, CMS has publicly reported a small subset of 2016 PQRS group-level measures on group profile pages as star ratings.

How the Star Rating is Constructed

After extensive research and outreach, and hearing what stakeholders wanted to see in a benchmark and understanding the concerns and cautions raised, CMS proposed an item-level (or measure-level) benchmark using the Achievable Benchmark of Care (ABC) methodology. This benchmark was finalized in the CY 2016 Physician Fee Schedule final rule. The ABC benchmark is the “5-star rate,” serving as the anchor for the star rating methodology.

More Information

Clinicians can visit the CMS Physician Compare Initiative page for information on keeping their general information current and troubleshooting problems, and to learn more about public reporting. For questions about public reporting and keeping information current, the Physician Compare support team can be reached at


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