CMS Issues Draft 2010 Call Letter for MA and Part D Plans

15 January 2009 Publication

American Health Lawyers Association Alert

On January 8, 2009, the Centers for Medicare & Medicaid Services (CMS) released the 2010 draft Call Letter to Medicare Advantage (MA) and Part D plans. The draft Call Letter contains information for plans on preparing bids for the benefit year that will begin on January 1, 2010.

Comments on the draft Call Letter must be submitted to CMS by January 30, and CMS expects to release the final 2010 Call Letter on March 30. The draft Call Letter advises that CMS will begin accepting calendar year 2010 bids from all MA and Part D plans beginning May 15, and all bids must be submitted by no later than June 1. However, Part D plans will be required to submit Calendar Year 2010 drug formularies by no later than April 20.

Some of the highlights in the draft Call Letter include:

Beginning in 2010, CMS plans to conduct "more targeted, data-driven and risk-based audits," instead of focusing on routine plan audits. To conduct these more focused audits, CMS plans to use existing data to create "performance profiles" of plan sponsors and to identify poorly performing plans. The audits will also focus on what CMS considers the highest risk areas for beneficiary harm.

As part of its new audit strategy, CMS said that it may require MA and Part D plan sponsors to perform self-audits and report the results back to CMS. In addition, plans will be required in 2010 to audit the data that they are required to report to CMS, using audit technical specifications that CMS plans to publish in late 2009.

Part D Guidance
In its guidance specific to Part D plans, the draft Call Letter warns plan sponsors against sending "substantially inaccurate" submissions to meet application and bid deadlines. CMS said that in the first four years of the Part D program, plan sponsors had made submissions "so lacking in required information or correct detail as to fail to constitute a valid timely submission." Beginning with the 2010 contracting cycle, CMS will consider incomplete and inaccurate submissions as having missed the deadline.

Another change for the 2010 benefit year is the elimination of "reference-based pricing." This is where enrollees are required to pay additional cost sharing for certain drugs, typically calculated as the difference between the cost of a brand-name drug and its generic equivalent. Although CMS said that reference-based pricing is a "legitimate utilization management tool," it is too complex for beneficiaries to accurately determine expected out-of-pocket costs.

Utilization Management
For utilization management, CMS will now require plans to post all utilization management criteria on their website by November 15, 2009, when the 2010 open enrollment period begins. This will require plans to disclose to existing and potential enrollees their step therapy and prior authorization requirements. The draft Call Letter also says that CMS will continue to review plans' utilization management strategies as part of their formulary submissions.

In addition, for 2010, Part D plans will be required to satisfy specific medication therapy management (MTM) program standards. These new requirements, which include more specific enrollment, targeting, intervention, and reporting, are intended to "promote greater consistency and raise the level of the MTM interventions offered to positively impact medication use."

MA Guidance
For MA plans, the draft Call Letter discusses new requirements for Special Needs Plans (SNPs) under the Medicare Improvements for Patients and Providers Act of 2008. By 2010, SNPs must have developed evidence-based models of care and adequate networks for providers and specialists for covered services. The draft Call Letter also defines what CMS considers to be specific attributes for chronic condition SNPs (C-SNPs), including specially designed benefit packages that provide levels of care beyond the basic care Medicare Part A and Part B provide. These requirements are effective January 1, 2010.

The draft Call Letter is available on the CMS website.

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