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April 12, 2024

Washington Roundup

  • American Hospital News tells us,
    • “The Centers for Medicare & Medicaid Services April 1 finalized proposed changes to Medicare Advantage plan capitation rates and Part C and Part D payment policies for calendar year 2025, which the agency estimates will increase MA plan revenues by an average 3.7% from 2024 to 2025. 
    • “The notice implements expected changes to the Part C risk adjustment model that were finalized in the CY 2024 final rule and are being phased-in over three years, such as transitioning the model to reflect ICD-10 condition categories and using more recent data available for fee-for-service diagnoses and expenditures, in addition to providing technical updates to the methodology for CY 2025.
    • “It also finalizes technical updates to the Part C and D star ratings; includes certain adjustments to provide stability for the MA program in Puerto Rico; and implements changes to the standard Part D drug benefit required by the Inflation Reduction Act of 2022, including capping annual out-of-pocket costs for people with Medicare Part D at $2,000 in 2025.” 
  • Here are links to CMS press release and CMS fact sheets concerning the 2024 Medicare Advantage and Part D rate announcement and Part D redesign in 2025 due to the Inflation Reduction Act.
  • It’s worth pointing out to health plan counsel this April 1, 2024, Centers for Medicare and Medicaid Services (CMS) Part D instruction which should calm the FEHBlog’s nerves about the 2025 notice of creditable coverage:
  • “Creditable Coverage
    • “Consistent with IRA changes, we are revising the regulatory definition of creditable coverage at § 423.56(b) to reflect that discounts paid under the Manufacturer Discount Program are not taken into account when determining actuarial value. Given various concerns raised by commenters and the significant changes to the Part D benefit for CY 2025 as a result of the redesign, CMS will continue to permit use of the creditable coverage simplified determination methodology, without modification to the existing parameters, for CY 2025 for non-EGWP group health plan sponsors not applying for the retiree drug subsidy under section 1860D-22(a) of the Act. The Final Program Instructions also specify that CMS will re-evaluate the continued use of the existing simplified determination methodology or establish a revised one for CY 2026 in future guidance.”
  • “On April 2, the Biden-Harris Administration, through the U.S. Department of Health and Human Services (HHS)’s Centers for Medicare & Medicaid Services (CMS), announced policies for the Affordable Care Act Marketplaces that make it easier for low-income people to enroll in coverage, provides states the ability to increase access to routine adult dental services, and sets network adequacy standards for the time and distance people travel for appointments with in-network providers. Finally, the rule will standardize certain operations across the Marketplaces to increase reliability and consistency for consumers. The 2025 [ACA] Notice of Benefit and Payment Parameters final rule builds on the Administration’s previous work expanding access to quality, affordable health care and raising standards for Marketplace plans nationwide.”
  • With respect to the 2025 Notice of Benefit and Payment Parameters, here is a link to the CMS fact sheet and a related ACA FAQ 66
    • “FAQ 66 puts large group market plans (all FEHB plans are large market plans) and self funded ERISA plans on notice that the regulators will be subjecting these plans and the small group and individual market plans to a new rule applying the prohibition against lifetime and annual dollar limits to prescription drugs classified as essential health benefits.  
    • “Under the law, large group market and self funded ERISA plans must select a state benchmark to apply this limit to essential health benefits other than prescription drugs. For 2025, the EHB prescription drugs also must be considered.” 
  • On April 4, Fierce Healthcare tells us,
  • “Centers for Medicare & Medicaid Services finalized a host of actions ranging from broker compensation, health equity, mental health, supplemental benefits and biosimiliars, in the Contract Year 2025 Medicare Advantage and Part D final rule Thursday night.
  • “Technical experts and industry execs warned the changes will be consequential for MA plans.
  • “Yesterday’s 2025 Final Rule was one of the more impactful that I can recall in my two-plus decades in the industry,” said Sean Libby, president at BeneLynk. “It is clear that MA plans need a roadmap for health related social needs and health equity.”
  • “It is difficult to put words to the extent and impact of changes codified today,” said Melissa Newton Smith, senior advisor for Oliver Wyman. “Every MA leadership team needs to be thoughtfully redesigning your stars and quality approach in order to earn quality bonus payments in 2025.”

On April 10, Fierce Healthcare informs us,

  • “The Biden administration is proposing a 2.6% increase for inpatient hospitals’ payments for the coming fiscal year, a $3.3 billion increase over the current year’s payout, as well as other policy adjustments intended to shore up surgical care coordination, drug supply, emergency preparedness monitoring, maternal health and care for the underserved.
  • “The potential updates came under Centers for Medicare & Medicaid Services (CMS)’s proposed Inpatient Prospective Payment Systems (IPPS) rule and the Long-Term Care Hospital pay rule, which were unveiledWednesday afternoon.
  • “Hospitals that participate in the IPPS Quality Reporting Program and meaningfully use electronic records are projected to get a 2.6% increase to payments for fiscal year 2025, which begins in October. The pay raise is based on a projected hospital market basket update of 3%, which is reduced by a projected 0.4 percentage point productivity adjustment, according to a release on the rule.
  • “Long-term care hospitals are looking at a proposed 2.8% pay increase, which is a 1.6% or $41 million bump over the current year. This is “primarily due to the proposed update to the rate partially offset by a projected decrease in high-cost outlier payments in FY 2025 compared to FY 2024,” CMS wrote in a release.”