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CMS Finalizes Changes for Medicare Advantage and Part D Programs for CY2016

On February 6, 2015, the Centers for Medicare & Medicaid Services (CMS) released a final rule revising certain requirements for the Medicare Advantage and Part D programs. The changes will be effective for Contract Year 2016. The final rule implements statutory requirements to improve program efficiencies, strengthen beneficiary protections, clarify program requirements, and improve payment accuracy. The final rule addresses changes that were initially proposed in January of 2014. CMS received more than 7,000 comments on that initial proposal.

Among the changes, the final rule revises certain requirements related to efficient dispensing of drugs to Part D enrollees in long-term care facilities. The final rule also prohibits payment arrangements that penalize the offering and adoption of more efficient dispensing techniques by prorating dispensing fees based on days’ supply or quantity dispensed and also adds a requirement that any difference in payment methodology incentivize more efficient dispensing techniques.

Additionally, the final rule requires Medicare Advantage Prescription Drug plans to establish and maintain a process with network pharmacies to ensure timely and accurate point-of-sale transactions. The final rule also finalizes changes to audit and inspection authority. Although CMS has increased its auditing of Part C and Part D regulations, which have led to several fines over the past few years, CMS may now require Medicare Advantage organizations and Part D plan sponsors to hire an independent auditor to validate corrective action plans resulting from CMS audit findings. CMS, however, is not finalizing its proposed language that would have required plan sponsors to hire an independent auditor to conduct full or partial program audits.

CMS also did not finalize several other major provisions from the proposed rule. Specifically, the final rule did not adopt:

  • The lifting of protected class designation on antidepressants, antipsychotics, and immunosuppressants for transplant rejection;
  • The proposed requirement that Medicare Part D sponsors include any pharmacy willing to accept the terms and conditions in narrower pharmacy networks that offer preferred cost sharing;
  • The proposed reduction in the number of Part D plans a sponsor may offer; and
  • Codifying CMS interpretation of the Part D non-interference provision.

Even though this is only the beginning of Contract Year 2015 CMS is already looking forward to 2016. Plan should be working to ensure that they are ready for these new program changes. As the year continues we will surely receive more information and clarification on these changes and the proposed rules.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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