In July, the Centers for Medicare & Medicaid Services (CMS) introduced two pivotal updates that health plan administrators need to be aware of to maintain compliance with the latest regulations.
This blog will cover the essential changes and updates for:
- Medicare Prescription Payment Plan (M3P): Final Part Two Guidance
- Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance
As you review these updates, it’s important to remember the significant impact that non-compliance can have on your organization, including financial and reputational risks.
M3P Final Part Two Guidance: Key Updates Health Plan Administrators Need to Know
As part of the ongoing implementation of the Inflation Reduction Act of 2022, CMS continues to refine the M3P program. This initiative, which marks a transformative shift in the Medicare Part D landscape, was designed to provide enrollees with more manageable prescription drug costs.
While M3P presents substantial benefits for Medicare beneficiaries, it also requires health plans to navigate a new set of operational challenges.
The Final Part Two Guidance, released on July 16, 2024, builds upon the Final Part One Guidance from earlier this year. It focuses on critical areas such as outreach and education, pharmacy processes, and additional operational requirements that will be vital for the successful rollout of M3P in 2025.
Below are the key updates that health plan administrators need to be aware of as they prepare for the program’s first year.
Section 10: $0 Due at Point of Prescription Pickup
Part D plans with $0 cost-sharing for all drugs are not required to offer the payment plan. This is due to the fact that the primary purpose of payment plans is to assist with managing significant out-of-pocket expenses. This adds additional pressure on health plans to modernize and replace outdated or legacy technologies to remain current.
If there are no costs to share, or all drugs are free under the plan, the need for healthcare billing compliance for a payment plan becomes redundant.
Section 30.1.1: No More Bundling of Member Materials Required
Part D sponsors can send election request forms separately from the membership ID card mailing. This update no longer requires Part D sponsors to bundle request forms with other materials.
It leads to greater administrative efficiency, an improved member experience, and avoiding delays or issues with membership ID cards and other materials by being able to send out election requests promptly and independently.
Section 30.2.2.2: More Flexibility in Attracting New Members
Sponsors can develop their own outreach strategies for identifying enrollees likely to benefit. This allows sponsors to customize their approaches to outreach based on their unique enrollee populations and plan characteristics.
It also helps plans make data-driven decisions that come from identifying patterns and trends among enrollees.
Section 30.3: Health Plans Must Hone Communications About Member Rights
Specific content requirements for communication materials regarding program participation and termination are required. This update mandates that health plans must provide enrollees with all the necessary information to better understand their rights, benefits, and any changes to their plan.
This enhanced transparency improves Medicare compliance guidelines and increases member understanding. Yet, it requires health plans to rethink the information they provide to their members and how it’s presented.
Section 50.1: Aligning Medicare and Medigap Payments
This update includes clarifications on handling supplemental coverage affecting patient pay amounts. This helps ensure that beneficiaries are not overcharged as it correctly coordinates payments between Medicare and Medigap supplemental insurers.
Section 50.3.1: Changes in How Pharmacies Interact with Billing Systems
Long-term care pharmacies must provide the benefit notice during the billing process instead of before dispensing medication.
Previous to these new regulatory changes, long-term care pharmacies were required to provide a benefit notice before dispensing medication. Now, they must provide notice during the billing process instead. While this is intended to streamline operations and reduce confusion, it may require a substantial retooling of pharmacies billing systems.
Critical Tech Focus: Core Admin System Modernization
For health plans managing M3P, technology modernization is a crucial area of focus. Upgrading core administrative processing systems (CAPS) is essential to handle the program’s complex billing and enrollment requirements effectively.
Key areas of modernization should include:
- Enhancements to claims adjudication processes
- Adjustments to billing systems for managing monthly installment payments
- Improved data exchanges with pharmacies to accurately track out-of-pocket expenses
By prioritizing these tech upgrades, health plans can ensure they meet M3P requirements efficiently, maintaining compliance and delivering a seamless experience for both the plan and its enrollees.
Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance: Key Updates Health Plan Administrators Need to Know
Medicare health plans, including Medicare Advantage (MA) plans such as HMOs, PPOs, Medical Savings Accounts, and others, operate under strict regulatory frameworks to ensure that enrollee grievances, organization determinations, and appeals are processed fairly and efficiently. These processes are governed by the MA regulations outlined in 42 CFR Part 422,Subpart M.
On July 19, 2024, CMS released an HPMS memo detailing significant updates to the Parts C & D Enrollee Grievance, Organization/Coverage Determination, and Appeals Guidance. These updates, which include revisions to terminology and align with existing regulations under 42 CFR § 422.566(d), are crucial for health plans to implement immediately to remain compliant. Below are the key updates that health plan administrators need to understand and integrate into their operations.
These Key Updates Are Effective Immediately
Physician Review
One of the major updates requires that all denials of coverage that’s based on a medical necessity must be reviewed by a healthcare professional with relevant expertise. This ensures decisions made are clinically sound and adds another layer of protection for enrollees, ensuring that their access to care isn’t restricted by administrative or non-expert reviews. This means health plans must have qualified professionals available to review these denials, and might require the additional training or hiring of specialists which could ultimately increase operational costs.
Representation
CMS has new clarifications on who can act as a representative for enrollees. Part of their focus on greater transparency and quality delivery of care, enrollee representatives must now ensure that enrollees are fully aware of their rights to appoint someone to represent them and the processes involved in doing so. This is designed to help eliminate misunderstandings and give enrollees the support they need, particularly in complex claims such as appeals or grievances. Health plans may need to revise their training materials for customer service representativesand update their documentation to meet this new regulatory requirement.
Terminology Changes To Grievance and Appeal Processes
Terminology related to the filing and handling of grievances, particularly those that concern quality of care, are designed to streamline processes and maintain consistency across the Medicare provider industry. Standardizing the language and procedures will make the grievance process more accessible and understandable for enrollees. This necessitates revisions to internal procedures, training the staff on new terminologies to use and an updating of all materials provided to enrollees.
Prior Authorization
Clarified processes and enrollee rights regarding plan approval requests are now mandatory, ensuring that enrollees are fully informed of their right to appeal a prior authorization denial and the timelines within which they must do so.
Like this change, much of the new regulatory requirements are designed to improve transparency and timeliness to avoid delays in necessary care. Health plans must refine their prior authorization processes, update systems to track authorizations more effectively, and provide clear communication to enrollees about their rights and options.
Notifications
CMS has further specified who can request initial determinations and notification requirements, including whether a service is covered, and how they are required to notify enrollees of these decisions. This requires health plans to ensure that their notification processes are robust and compliant with these new regulations, which could require better automation of certain notifications.
Dismissal of Requests
Conditions for dismissing initial determination or appeal requests have been redefined in order to prevent the unnecessary processing of invalid or incomplete requests which will help streamline the appeals process. Health plans will likely need to update their internal review procedures and provide further staff training to better identify cases were a dismissal is Appropriate.
Critical Operational Focus: Medical Necessity Denial Reviews
One operational area that health plans should closely examine to ensure compliance with the July 2024 updates is the review and processing of denials based on medical necessity.
Specifically, health plans need to ensure that their procedures for denial reviews involve a
relevant healthcare professional as mandated by the updated guidance.
- Risk of Non-Compliance: Failure to have denials reviewed by an appropriate healthcare professional could lead to non-compliance, resulting in potential penalties and challenges in appeals.
- Process Alignment: Health plans should assess and possibly enhance their current workflows to ensure that every denial of coverage based on medical necessity is properly reviewed by a qualified healthcare provider, as per the updated CMS guidelines.
- Training and Documentation: Staff should be adequately trained on these new requirements, and health plans must document these processes to provide evidence of compliance during audits or when grievances and appeals arise.
By prioritizing the operational process around medical necessity denials, health plans can mitigate the risk of non-compliance and ensure smoother handling of grievances and appeals under the updated guidance. For those seeking immediate expert guidance to navigate these changes, tapping into consulting support can be a crucial step in ensuring your organization is set up for success.
The Only Constant in Medicare Compliance is Change
The recent CMS updates underscore the dynamic nature of the Medicare landscape. Health plans must stay informed and adapt their operations to ensure ongoing compliance. These changes, particularly those related to M3P and grievance handling, require careful attention and strategic planning.
HealthAxis understands the challenges health plans face in navigating this complex regulatory environment. With our deep expertise in Medicare compliance and a proven track record of success, we offer comprehensive solutions to help you thrive.
Let us help you navigate these changes confidently. Contact us today to learn more about how HealthAxis can support your organization.
Author:
Kelly Thao
Sr. Compliance Analyst
HealthAxis
