The Centers for Medicare & Medicaid Services (CMS) has set a mid-January 2018 deadline for public comments regarding recently published proposed policy and technical changes to Medicare Advantage (MA) for Contract Year 2019 (CY19).  Beneficiary enrollment in MA plans has grown steadily over the last several years, up to 19 million this year.  According to the Kaiser Family Foundation, one-third of all Medicare beneficiaries now are enrolled in an MA plan.

CMS is proposing changes that will significantly impact both MA organizations and beneficiaries:

MLR calculation change.  Under the Medical Loss Ratio (MLR) rule, an MA organization must spend at least 85% of its revenue on healthcare services (including covered benefits and quality improvement activities), or face significant financial penalties.  CMS proposes to include two additional types of expenses in the numerator of the MLR calculation, thus making it easier for MA organizations to meet the 85% threshold: (1) costs associated with fraud prevention, detection, and recovery; and (2) Medication Therapy Management program expenses.

Reducing MLR reporting requirements.  Noting the burden placed on MA organizations by the current MLR data reporting requirements, CMS proposes to require only the bare minimum:  organization name, contract number, adjusted MLR, and remittance amount.  CMS estimates this will generate $1 million in savings to MA organizations and $500,000 in savings to the federal government.  CMS, however, is not ceding its authority to audit the data submitted, meaning MA organizations still will need to retain supporting documentation.

Updated marketing material definition.  Current regulations require MA organizations to receive CMS approval prior to sending any marketing materials to eligible beneficiaries.  CMS proposes to narrow the definition of marketing materials, thus reducing the number of materials that MA organizations must submit to the agency for review and approval.

New MA open enrollment period.  Under current law, a beneficiary may disenroll from an MA plan and return to traditional Medicare during the MA Disenrollment Period (MADP) which runs from January 1 to February 14 each year.  The 21st Century Cures Act, signed into law in late 2016, directs CMS to replace the MADP in 2019 with a three-month open enrollment period (January 1 to March 31), during which an MA-eligible beneficiary can make a one-time change to another MA plan, or elect traditional Medicare.  The proposed rule details how CMS plans to implement this change.

Elimination of Quality Improvement Projects (QIP).  CMS proposes to discontinue QIP requirements, noting the regulatory guidance has become overwhelmingly complex.  CMS sees more value in CCIPs—chronic care improvement projects—and expects MA organizations to remain focused on those requirements.

Updated Star Rating methodology.  This is always an important subject, as CMS payments to MA organizations vary based on these ratings.  CMS proposes to place a greater emphasis on data integrity by assigning lower star ratings, including scaled reductions, to plans that submit data that is incomplete, biased, or inaccurate.  CMS also proposes to apply a weighted-average Star Rating to consolidated contracts, replacing the current practice of applying the Star Rating of the surviving contract.

CMS will accept public comment on these and other proposed changes to the Medicare Advantage program for CY19 through January 16, 2018.  CMS is expected to release a Call Letter to Medicare Advantage Organizations (and other interested parties) around February 1, 2018, with planned changes to MA rates for CY19.  CMS will then open an additional 60-day comment period prior to releasing a final Call Letter for CY19 around April 1, 2018.