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CMS Issues Medicare Advantage and Part D Final Policies for Contract Year 2021

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule updating Medicare Advantage (MA) and Part D programs for contract year 2021. In addition to policy changes, the final rule codifies longstanding policies on the MA and Part D programs that have been previously adopted through sub-regulatory guidance, such as the annual Call Letter and other guidance documents. CMS notes that the final rule does not address all policies that had been included in the proposed rule. CMS intends to address the remaining policies – which will not apply for contract year 2021 – in a future final rule.

In the final rule, CMS finalized policies to limit Dual-Eligible Special Needs Plan (D-SNP) “look-alikes.” These look-alike plans have similar levels of dual-eligible enrollment as D-SNPs but avoid the federal regulatory and state contracting requirements applicable to D-SNPs. Specifically, beginning in 2022, CMS will not enter into a contract with a new MA plan that projects in its bid that 80% or more of the plan’s total enrollment will be entitled to Medicaid. Beginning in 2023, CMS will not renew contracts with an MA plan — other than a SNP — that has actual enrollment of 80% or more of enrollees who are entitled to Medicaid.

CMS also implements requirements of the 21st Century Cures Act to allow beneficiaries with end-stage renal disease to enroll in MA plans beginning in 2021; makes changes to the MA and Part D star rating systems to increase the weight of beneficiary experience, complaints, and access; revises the medical loss ratio methodology; changes network adequacy standards intended to incentivize MA plans to expand access to telehealth services; and provides plans additional flexibility to decide what chronic conditions qualify beneficiaries for special supplemental benefits.

A fact sheet on the final rule is available on the CMS website.

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