April 3, 2020
Submitted via the Federal eRulemaking Portal: http://www.regulations.gov
Ms. Seema Verma
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Hubert H. Humphrey Building
200 Independence Avenue SW, Room 445-G
Washington, DC 20201
Re: Medicare and Medicaid Programs; Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly [CMS-4190-P]
Dear Administrator Verma:
America’s Physician Groups (APG) appreciates the opportunity to respond to the Centers for Medicare & Medicaid Services’ (CMS) proposals in the Contract Year 2021 and 2022 Policy and Technical Changes to the Medicare Advantage Program as published in the Federal Register on February 18, 2020 (Vol. 85, No. 32). Medicare Advantage (MA) is instrumental to the transformation of our nation’s health care system from volume to value. We know that MA provides better quality care for seniors and our members’ value-based payment arrangements in MA create incentives for: (1) a team-based approach that emphasizes primary care; (2) physician organizations to provide the right care at the right time in the most appropriate setting; and (3) a care team that addresses the patient’s total care needs, including mental health, behavioral health, and home environment.
About America’s Physician Groups
APG is a national professional association representing over 300 physician groups, approximately 195,000 physicians, and the nearly 45 million patients they care for. Our tagline, “Taking responsibility for America’s Health,” represents our members’ vision and efforts to move away from the antiquated fee-for-service (FFS) reimbursement system where clinicians are paid “per click” for each service rendered rather than on the outcomes of the care provided. Instead, our members are taking responsibility for improving the health of the patients and communities they serve by holding themselves accountable for the cost and quality of care through alternative payment models (APMs).
Our preferred model of capitated, delegated and coordinated care avoids incentives for the high utilization associated with FFS reimbursement. This model aligns incentives for physicians to provide the right care in the right setting, thus improving the health of entire populations, particularly chronically ill and fragile individuals.
Summary of APG’s Comments
- Medical Loss Ratio (MLR) – Regulatory Changes to Incurred Claims: APG broadly supports removing the specifications that incurred claims are direct claims that an MA organization pays to providers for covered services that also include payments under capitation contracts with physicians. However, we are requesting that the “four-factor test” remain in place and capitated payments not be subject to inclusion in the administrative portion of plans’ MLR percentages, in parity with similar classification under the fee-for-service payment model.
- Medicare Fee-for-Service (FFS) Coverage of Costs for Kidney Acquisitions and End Stage Renal Disease for Medicare Advantage (MA) Beneficiaries: APG is generally supportive of the policies in eliminating kidney acquisition costs but has concerns regarding implementation of the methodology in setting ESRD rates, as we believe that county benchmarks are more adequate representation of ESRD beneficiaries’ costs in an MA plan’s service area than state benchmarks. APG is also concerned the rates are too low and the potential negative downstream effects of these proposed rates – and their potential impact to limit patient choice as it pertains to dialysis center choice and treatment.
- Medicare Advantage (MA) and Part D Prescription Drug Program Quality Rating System: APG respectfully requests that CMS consider delaying implementing the proposal to further increase the weight of patient experience/complaints and access measures from a weight of 2 to 4 until the CAHPS methodology can be appropriately updated.
- Permitting a Second, ‘‘Preferred’’, Specialty Tier in Part D: APG applauds CMS for their continued efforts to lower drug prices, and strongly supports these proposals.
- Beneficiary Real Time Benefit Tool (RTBT): APG has concerns regarding the tool’s implementation within existing electronic prescribing systems and electronic health records, as well as the potential administrative burden for prescribers.
- Medicare Advantage (MA) and Cost Plan Network Adequacy: APG supports this proposal and believes that establishing a credit will incentivize MA plans to contract with providers that have adopted telehealth technology, but asks that CMS ensure that its telehealth expansion take into account care coordination.
- Out-of-Network Telehealth at Plan Option: APG strongly supports expanding the use of telehealth and appreciates the agency’s proposals.
- Supplemental Benefits, Including Reductions in Cost Sharing: While APG supports clarifying that reductions in cost sharing are allowable for both Part A & B benefits and non-basic benefit items & services, we are concerned about potential limits on these benefits and the idea that financial need must be proven in order to allow access.
- Coronavirus Potential Impact: APG believes that coronavirus will impact MAOs in a variety of areas and adjustments will need to be made. We would like to propose readjusting rates this year to reflect the impact of decreased risk adjustment capture in the 2021 payment year as well as potentially increased costs of beneficiaries.
Medical Loss Ratio (MLR) – Regulatory Changes to Incurred Claims
For MA medical savings account (MSA) contracts, the three components of the MLR numerator are (1) incurred claims; (2) expenditures under the contract for activities that improve health care quality; and (3) the amount of the deposit into the Medicare savings account for MSA enrollees. CMS is proposing to revise the regulation text regarding the incurred claims portion of the numerator.
In order to ensure that the MLR numerator includes amounts MA organizations spend on supplemental benefits that are ‘‘primarily health related’’ and on non-primarily health related special supplemental benefits for the chronically ill, CMS is proposing to remove the specification that incurred claims are direct claims that an MA organization pays to providers for covered services provided to all enrollees under the contract. CMS is also proposing to remove the specification that incurred claims include payments under capitation contracts with physicians. Finally, the agency proposes replacing the phrase ‘‘direct claims,’’ which customarily refers to billing invoices providers submit to payers for reimbursement, with the general term ‘‘amounts.’’
As amended, the new regulatory requirements would include in incurred claims all amounts that an MA organization pays (including under capitation contracts) for covered services, regardless of whether the recipient of the payment is a provider.1 Including in incurred claims amounts spent on these expanded supplemental benefits, as proposed, avoids creating uncertainty over whether payments for such services could otherwise be included in the MLR numerator (for example, as QIA-related expenditures), and it is consistent with the agency’s prior determination2 that incurred claims should reflect the benefit design under the contract.
APG broadly supports these proposals, however, greater clarification is needed regarding the original CCIO Technical Guidance3 as released on February 12, 2012. The guidance document states: “Payments to a clinical risk-bearing entity are considered incurred claims if the following four factors are met […]. If the entity satisfies this four-part test, payments for clinical services for which the entity takes on the financial risk for utilization as provided in prong two above will be considered incurred claims.” One of the four factors included in this test reads “Functions other than clinical services that are included in the payment must be reasonably related or incident to the clinical services and must be performed on behalf of the entity or the entity’s providers.”
We are concerned that all capitated payments to providers would need to be divided between medical services and delegated administrative services, and then aggregated up to the plan for inclusion in the administrative portion of their MLR percentage, if the above-mentioned four factors do not remain in place. Providers who use fee-for-service payments to pay overhead expenses are still permitted to include those payments in their numerator. Administrative services are integral to the operation of organization and are part and parcel in ensuring that quality care is available for patients. CMS should account for administrative costs as being part of providing medical services equally across all payment models. We strongly urge the agency to extend the same considerations for those providers who receive capitated payment to have them included in the MLR numerator, irrespective of how those payments are utilized in service of their organizations.
Medicare Fee-for-Service (FFS) Coverage of Costs for Kidney Acquisitions for Medicare Advantage (MA) Beneficiaries and Plan Options for End-Stage Renal Disease
CMS is implementing changes per the 21st Century Cures Act4, which expanded enrollment options for individuals with end stage renal disease (ESRD), and is proposing to codify these associated payment and coverage changes to the MA and original fee-for-service (FFS) Medicare programs. The Cures Act5 included provisions which allow all Medicare-eligible individuals with (ESRD) to enroll in MA plans beginning January 1, 2021. To estimate the impact of these changes, CMS used a pre-statute baseline. The agency’s analysis shows that FFS coverage of kidney acquisition costs for MA beneficiaries results in net costs to the Medicare Trust Funds ranging from $212 million in 2021 to $981 million in 2030. APG is generally supportive of these changes.
Additionally, effective January 1, 2021, MA organizations will no longer be responsible for organ acquisition costs for kidney transplants for MA beneficiaries, and such costs will be excluded from MA benchmarks and capitation rates – and covered under the FFS program instead. To estimate the impact of these changes, CMS used a pre-statute baseline. The agency’s analysis shows that excluding kidney acquisition costs from MA benchmarks results in net savings estimated to range from $594 million in 2021 to $1,346 million in 2030. CMS is proposing to make changes to existing regulations6 to align with these new statutory requirements. While APG is generally supportive of the policies in eliminating kidney acquisition costs, however we have concerns regarding the agency’s implementation of the methodology in setting ESRD rates.
ESRD beneficiaries are high cost with an average cost of about $67,000 in 2016 based on Medicare Payment Advisory Commission (MedPAC) findings.7 However, an Avalere study found that CMS payments for ESRD beneficiaries may not be sufficient for their incurred costs even at Medicare FFS rates8 . This was due to statewide developed ESRD benchmark rates rather than county level developed benchmark rates (like non-ESRD beneficiaries). Often, provider contracting is at a more granular level and most MA plan service areas are not statewide. Therefore, a statewide benchmark may not be good representation of ESRD beneficiaries’ costs in a MA plan’s service area. Further, the ESRD benchmark is not adjusted for quality bonus payments or the applicable percentage, as it is with non-ESRD beneficiaries.
Our member organizations are concerned about the proposed changes to ESRD payment policies because dialysis centers’ negotiating power has allowed them to typically contract payments beyond Medicare allowable rates. In addition, some plans do not contract with certain dialysis centers for MA patients. Providers are largely concerned with the potential negative downstream effects of these proposed changes and the potential impact to patient choice as it pertains to dialysis center choice and treatment. While insufficient revenue may not be an issue if the number of ESRD beneficiaries for any given plan is small, allowing ESRD beneficiaries to enroll in MA plans results in the low revenue becoming a concern that must be accounted for and addressed.
CMS may need to consider alternate revenue models such as a fee schedule cap for dialysis centers or empower MA risk bearers to redesign ESRD care in a non-traditional manner in future rulemaking. We would also encourage the agency to continue to explore reforms surrounding ESRD in order to address the ongoing higher costs that providers are forced to pay to provide care for kidney disease due to the existing duopoly.
Medicare Advantage (MA) and Part D Prescription Drug Program Quality Rating System
In prior rulemaking9, CMS codified the methodology for the Star Ratings system for the MA and Part D programs. CMS is proposing to directly remove outliers prior to calculating the cut points to further increase the predictability and stability of the Star Ratings system. APG agrees with CMS that it is important to hear the voice of patients when evaluating the quality of care provided. Further, we appreciate that CMS has pledged to empower patients to work with their providers to make health care decisions that are best for them. In addition to routine measure updates and technical clarifications, CMS is proposing to further increase the weight of patient experience/complaints and access measures from a weight of 2 to 4. The measures include the patient experience of care measures collected through the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, Members Choosing to Leave the Plan, Appeals, Call Center, and Complaints measures. CMS notes that most of the measures impacted by the proposed weight change are the CAHPS measures that focus on critical aspects of care from the perspective of patients such as access and care coordination issues.
APG has significant concerns regarding the proposal to increase the weight of patient experience/complaints and access measures from a weight of 2 to 4. The survey measurement tool and CAHPS methodology is nearly a decade old and our members believe that is needs updating in order to accurately capture beneficiaries’ perspectives. CMS notes that most of the measures impacted by the proposed weight change are the CAHPS measures that focus on critical aspects of care from the perspective of patients such as access and care coordination issues. Given that these are critical aspects of care, they should be carefully considered. APG respectfully requests that CMS delay implementing the weighting increase until the methodology can be appropriately updated.
Finally, CMS is also proposing to clarify some of the current rules around assigning Quality Bonus Payment (QBP) ratings and to codify existing policy for assigning QBP ratings for new contracts under existing parent organizations. Unless otherwise stated, data would be collected, and performance measured using these proposed rules and regulations for the 2021 measurement period and the 2023 Star Ratings. APG respectfully requests that these changes are simultaneously delayed until the CAHPS methodology is updated. Reforming payments for both preventive and interventional care as well as organ procurement rules would immensely relieve the financial pressures that providers face in this area of care.
Permitting a Second, ‘‘Preferred’’, Specialty Tier in Part D
CMS is proposing to allow Part D sponsors to establish up to two specialty tiers and design an exceptions process that exempts drugs on these tiers from tiering exceptions to non-specialty tiers. Additionally, the agency is proposing that Part D sponsors would have the flexibility to determine which Part D drugs are placed on either specialty tier, subject to the ingredient cost threshold established according to the methodology that is also being proposed, and the requirements of the CMS formulary review and approval process under current regulations10.
APG applauds CMS for these and the subsequent proposals and offers our strong support. We believe they are an important step in the battle against rising drug prices and will lower out-of-pocket costs for patients and increase access to needed medications. Furthermore, providers would have greater access to drug and pharmaceutical options for their patients, allowing them to exercise clinical judgment and an increased ability to select cost-effective treatments.
Beneficiary Real Time Benefit Tool (RTBT)
CMS is proposing to require that Part D plan sponsors implement, no later than January 1, 2022, a beneficiary “real-time benefit tool (RTBT).” CMS asserts that this tool would allow enrollees to view a plan-defined subset of the information included in the prescriber RTBT system, “which will include accurate, timely, and clinically appropriate patient-specific real-time formulary and benefit information (including cost, formulary alternatives and utilization management requirements).”
CMS is also proposing that plans would be permitted to use existing secure patient portals to fulfill this requirement, to develop a new portal, or use a computer application. Plans would be required to make this information available to enrollees who call the plans’ customer service call center. Further, in order to encourage enrollees to use the beneficiary RTBT, CMS is proposing to allow plans to offer rewards and incentives (RI) to their enrollees who log onto the beneficiary RTBT or seek to access this information via the plan’s customer service call center.
APG has significant concerns regarding the beneficiary RTBT’s potential administrative burden for providers and how effective the tool can be. As currently proposed, the RTBT must be capable of integrating with a prescriber’s chosen electronic prescribing system (eRx) or electronic health records (EHR). Despite this requirement, no industry standard for the RTBT itself has been set which may hinder the ability of certain EHRs or eRx to successfully integrate the tool. This limitation has the potential to substantially limit how effective the RTBT can be upon implementation. In addition to this structural flaw within the tool, the proposed rule requires that prescribers include “accurate, timely, and clinically appropriate patient-specific real-time formulary and benefit information.” This requirement would represent an administrative burden for healthcare professionals that would decrease the amount of time spent in direct service for patients and increase the amount of time spent in front of computers entering data and completing electronic forms.
Medicare Advantage (MA) and Cost Plan Network Adequacy
CMS is proposing to allow MA plans to receive a 10 percent credit towards the percentage of beneficiaries residing within published time and distance standards when they contract with telehealth providers in the following provider specialty types: dermatology, psychiatry, cardiology, otolaryngology and neurology. CMS is also seeking comment regarding whether the agency should expand this credit to other specialty provider types, such as nephrology for home dialysis and if this percentage ‘‘credit’’ should vary by county type.
APG supports this proposal and believes that establishing a credit will incentivize MA plans to contract with providers that have adopted telehealth technology. We appreciate the inclusion of different types of telehealth providers – which are key specialty providers. However, our members are concerned that there is a potential for plans to default toward using separate telehealth companies, which may not integrate with their existing networks. While it is important to continue expanding access to specialty providers – without ensuring specialist inclusion in a larger clinically integrated network, there is potential for a breakdown in care coordination. Many patients with multiple chronic conditions require primary care oversight and management. We would appreciate if CMS would consider policies that move away from telehealth expansion that functions in a fragmented network model. One potential access solution to consider – which would benefit MA enrollees – would be to include clinically integrated networks that possess eConsult access between their primary care and specialty providers, and thus full telehealth connectivity offered to the patient and their primary and specialty care providers. We encourage CMS to develop policies to incent existing networks to develop eConsult capabilities, initially – while working towards the goal of full telehealth capabilities.
Enhancements to the Part C and D Programs
Out-of-Network Telehealth at Plan Option
Last year, CMS finalized requirements for MA plans offering additional telehealth benefits (ATBs)11. Previously, the agency believed that limited MA ATBs to contracted providers would ensure additional oversight of providers’ performance; however, CMS is now considering whether limiting MA ATBs to contracted providers “may unnecessarily limit the ability of MA plans to furnish ATBs.” CMS is considering revising existing regulations12 to permit ATBs to be provided by non-contracted providers in cases where the non-contracted providers satisfy ATB requirements set forth in prior rulemaking.8 APG members strongly support the proposal to allow all MA plan types, including preferred provider organizations (PPOs), to offer ATBs through non-contracted providers and treat them as basic benefits under the MA program. Further, we agree with the agency that requiring non-contracted and contracted providers to meet the same ATB requirements will ensure ATBs are delivered in a manner consistent with the statute and plans will have necessary control over how and when services are furnished. If CMS finalizes changes to existing regulations in order to allow all plan types to offer ATBs through non-contracted providers, the agency will then leverage existing oversight programs, which include monitoring beneficiary complaints, organization determinations, and appeals related to MA ATBs. APG supports these proposals, which will continue to increase patient access to care, and the use of existing oversight programs.
Supplemental Benefits, Including Reductions in Cost Sharing
CMS previously established13 that an MA plan could reduce cost sharing below the actuarial value specified in current statute14 only as a mandatory supplemental benefit. CMS is proposing to further clarify the different circumstances under which an MA plan may reduce cost sharing for covered items and services as a mandatory supplemental benefit and to specifically authorize certain flexibility in the mechanisms by which an MA plan may make reductions in cost sharing available. CMS is proposing to codify regulation text to clarify that reductions in cost sharing for 1) Part A and B benefits and 2) covered items and services that are not basic benefits are allowable supplemental benefits but may only be offered as mandatory supplemental benefits. Further, this proposed flexibility is only for items and services that are identified in the MA plan’s bid and marketing and communication materials as covered benefits, which is why the proposed regulation text uses the terms ‘‘covered benefits’’ and ‘‘coverage of items and services.’’ APG supports this proposal because as plans and providers develop more experience in identifying novel items to contribute to enhanced health, allowing health care stakeholders additional flexibility allows for greater creativity within the private sector which should be strongly encouraged.
APG does not support limits on these benefits nor the idea that financial need must be proven in order to allow access. This appears to be undue burden on both plans and providers in the implementation of these benefits and will limit the use of them in the long run. We do not support placing arbitrary limits upon the benefits and or a determination of financial need.
Coronavirus Potential Impact
With the arrival of coronavirus in the United States, the impact on the MA program will be seen in a variety of areas. Other programs like the Medicare Shared Savings Program have policies available to readjust payment rates to address impact of extreme and uncontrollable circumstances. We believe a similar policy should be developed for Medicare Advantage Organizations.
Risk adjustment calculations depend on an annual face-to-face visit of MA patients to capture diagnoses present in the patient. Given the current concerns of COVID-19, especially in the senior population, this program has unprecedented significant risk to the stability of the MA population this year. Bringing in healthy seniors for an annual assessment, into the clinics where there may be risk of community infection, would not serve in the best interests of community health at this time. Further, these comprehensive assessment visits can be lengthy and impact physician time significantly.
In anticipation of growing impact to the clinics, due to COVID-19, we would like to propose readjusting rates this year to supplement the impact of decreased risk adjustment capture in the 2021 payment year as well as potentially increased costs. We also recommend allowing telehealth visits to be utilized for risk adjustment assessments in the 2021 payment year (PY) for risk score accuracy. Even if COVID-19 is contained and does not impact our communities, due to health precautions, it is likely there will be less senior assessment visits through June 30th, 2020, of which payments in the first half of PY 2021 will be affected. This will still impact our operations significantly and decrease the stability of the MA program.
Thank you for your attention to the above comments. Again, we reiterate our robust support for MA. It is important that CMS continues to work with stakeholders to encourage value in MA. We look forward to a final rate notice that strengthens and improves the MA program for current and future beneficiaries. Please feel free to contact Valinda Rutledge, Senior Vice President, Federal Affairs, (firstname.lastname@example.org) if you have any questions or if America’s Physician Groups can provide any assistance as you consider these issues.
Donald H. Crane
President and CEO
America’s Physician Groups
Please click here to download a copy of the letter.
1 As defined in § 422.2
2 May 2013 Medicare MLR final rule (78 FR 31289)
3 CCIIO Technical Guidance (CCIIO 2012—001): Questions and Answers Regarding the Medical Loss Ratio Interim Final Rule. February 12, 2012.
4 21st Century Cures Act (Pub. L. 114-255, December 2016). Subsections 1851, 2852 & 1853.
5 Pub. L. 114-255. December 2016.
6 §§ 422.258(d) and 422.306
9 Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for- Service, the Medicare
Prescription Drug Benefit Programs, and the PACE Program Final Rule. 83 FR 16440.
10 § 423.120(b)(2)
11 Medicare and Medicaid Programs; Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Programs of AllInclusive Care for the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020 and 2021. Retrieved at: https://www.federalregister.gov/documents/2019/ 04/16/2019-06822/medicare-and-medicaidprograms-policy-and-technical-changes-to-themedicareadvantage-medicare.
12 § 422.135(d)
13 Medicare Program; Establishment of the Medicare Advantage Program Final Rule. January 28, 2005. 70 FR 4588, 4617.
14 Section 1854(e)(4)(B) of the Act & § 422.102(a)(4).