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March 6, 2015


Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016

Re:  Advance Notice of Methodological Changes for Calendar Year 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter

To Whom It May Concern:

The Center for Medicare Advocacy (Center) is pleased to provide the Centers for Medicare & Medicaid Services (CMS) comments on the draft 2016 Call Letter.  The Center, founded in 1986, is a national, non-partisan education and advocacy organization that works to ensure fair access to Medicare and to quality healthcare. At the Center, we educate older people and people with disabilities to help secure fair access to necessary health care services. We draw upon our direct experience with thousands of individuals to educate policy makers about how their decisions affect the lives of real people. Additionally, we provide legal representation to ensure that people receive the health care benefits to which they are legally entitled, and to the quality health care they need.


Attachments I & II: Preliminary Estimates of the National Per Capita Growth Percentage and the National Medicare Fee-For Service Growth Percentage for CY 2016 and Changes to Part C Payment Methodology for CY 2016


CMS acknowledges that the proposed Part C payment methodologies are consistent with applicable law. Prior to the Affordable Care Act (ACA), Medicare Advantage plans were significantly overpaid relative to the traditional Medicare program.   We continue to support policies enacted through the ACA that will gradually align MA reimbursements with traditional Medicare. These policies are critical to stabilizing the fiscal health of the Medicare program, and to ensuring efficient spending of taxpayer dollars. CMS’ proposed payment rates are reflective of these policies, and we support their implementation as such.


At the same time, the law requires that MA payment rates be revisited on an annual basis to account for estimated per beneficiary spending by traditional Medicare. The cost to provide the same benefits under the fee-for-service program is the legally required and appropriate starting point for calculating MA payment rates. Both Medicare cost growth and national health expenditures have grown at historically small rates over the last several years. It is appropriate that this slower growth is reflected in the MA payment methodology. These slowed rates translate into an improved financial outlook for the Medicare program as well as lower costs and stable premiums for beneficiaries. The 2016 MA payment rates proposed by CMS appropriately reflect this slower growth, and we do not believe that MA plans should be insulated from these encouraging trends.[1]


We urge CMS to continue to monitor the MA plan landscape to ensure that plans are optimally serving people with Medicare under the revised payment system.   Further, we believe it is in the best interest of today’s and future Medicare beneficiaries and American taxpayers to establish greater parity between MA plan reimbursements and Traditional Medicare costs. We urge CMS to stay the course and to make final its proposed MA payment rates.


Attachment VI: Draft Call Letter

            Section I – Parts C and D

Bid Submissions (pp. 70 – 74)

We strongly support CMS’ increased scrutiny of bid submissions. At the same time, we encourage CMS to more regularly and thoroughly review plan sponsors’ bids for compliance with minimum provider access standards, formulary adequacy and benefit parameters. Ensuring that plan sponsors meet these minimum standards—at the outset—is critical to ensuring that Medicare beneficiaries have access to appropriate and adequate coverage. Notably, we support the increased specificity with which CMS proposes to require plan sponsors’ submission of information about quantity limits.

We also support CMS’ reminders to plans about the limitations on and reporting obligations related to mid-year formulary changes. Yet, while we appreciate that current enrollees who are protected from certain mid-year formulary changes are not “affected” due to their grandfathered status, we are concerned about CMS reducing reporting requirements for this type of change. A beneficiary who is protected from a mid-year change may nonetheless be surprised by the changed status in the next plan year. We encourage CMS to require plans to notify individuals who took a medication and whose status changes mid-year, even if that change will not affect them during the current plan year.

As an option to achieve this end, we strongly encourage CMS to consider adding personalized content to the Annual Notice of Change (ANOC). At best this would be required of MA organizations and Part D plan sponsors. At a minimum, we encourage CMS to solicit and release best practices among MA and Part D plans on how to communicate this information in a specific and individualized manner to their enrollees through the ANOC.

With respect to oversight of plan formularies, we remain concerned about reduced coverage of drugs on the formularies of low-income subsidy (LIS) benchmark plans. We strongly urge CMS to analyze formularies to determine whether appropriate access is afforded to needed drugs and classes of drugs.

Good Cause Review (p. 74)

Beginning January 2016, CMS proposes to transfer the review of good cause reinstatement requests to MA and Part D plans. While current regulation allows for this, we believe the transfer of this responsibility from CMS to plans represents a significant change.  While we understand the rationale offered in the call letter—suggesting that beneficiaries frequently reach out to their plans, rather than Medicare, when disenrolled—we have some concerns about this transition.

For example, we have ongoing concerns about how some MA and Part D plans currently handle existing appeals systems (see, e.g., comments below under “Making the Exceptions and Appeals Processes More Accessible for Beneficiaries”).  Similarly, we also have concerns about designating independent contractors to complete the good cause process based upon our clients’ experiences with current Medicare contractors tasked with processing claims and appeals.  In short, Medicare beneficiaries often experience difficulty reaching or communicating with contractors, and initial denials by Medicare or MA or Part D plans are routinely rubber-stamped by such contractors, despite available evidence in support of a beneficiary’s given cause.

First, in order to ensure adequate consumer protections, it is essential that the 1-800-MEDICARE call center receives adequate training about this change, namely to ensure that beneficiaries are not mistakenly misdirected or delayed in seeking good-cause reinstatement. Second, CMS should ensure that plans handle these requests appropriately, not only by evaluating plan systems, but also by auditing plan performance in this arena. Finally, we are concerned that plan billing errors will not be adequately captured in the Complaint Tracking Module (CTM) if plans are responsible for investigating the error and effectuating the reinstatement.  We urge CMS to address this concern in the final 2016 Call Letter by requiring plans to report on the number of good cause reinstatements related to improper or incorrect plan billing practices. 

Enrollment Eligibility for Individuals Not Lawfully Present in the U.S. (p. 76)

As noted in the recently issued final C & D rule for 2016, because of notice provided to individuals as part of “existing processes” at the Social Security Administration (SSA) regarding potential changes to lawful presence status, CMS will not require any additional notice from the plans at the time of disenrollment.  We are disappointed that CMS is only encouraging, rather than requiring, plans to notify individuals who are involuntarily disenrolled for this reason.  We do, though, support CMS’ intent, noted in the final rule, to establish a special enrollment period (SEP) to be outlined in sub-regulatory guidance in order to accommodate individuals who regain lawful presence status, and therefore eligibility for Parts C and/or D. 

Making the Exceptions and Appeals Processes More Accessible for Beneficiaries        (p. 77)

We applaud CMS for its commitment to improving the Medicare Advantage (MA) and Part D appeals processes for Medicare beneficiaries, family caregivers and health care providers. Like CMS, we are deeply concerned by the findings of the agency’s recent audits of plan sponsors, which revealed significant challenges related to organization/coverage determinations, appeals and grievances as well as formulary and benefits administration.[2]

We are also deeply troubled by the high incidence of CMS sanctions involving plan sponsors’ failure to comply with MA and Part D requirements concerning organization/coverage determinations, appeals and grievances. In 2013, CMS notes that nearly all enforcement actions (89%) stemmed from non-compliance resulting in “…inappropriate delays or denials of access to health services and medications for enrollees.”[3]

Similarly, we continue to be alarmed by CMS’ annual data on Part D reconsiderations—the third level of decision and the first level of review conducted by an Independent Review Entity (IRE). Among reconsiderations, CMS found that an IRE reversed 32% of plan-level decisions in 2013. Importantly, IRE reversal rates for cases involving utilization management controls are also unreasonably high—47% in 2013. [4] These reversal rates, in concert with CMS’ audit findings, underscore the need to strengthen the Part D appeals process. It is essential to ensure that accurate decisions are made at the earliest possible stage to eliminate unnecessary delays in access to needed medications. 

CMS’ findings are generally reflective of what we continue to observe among Medicare beneficiaries who are denied access to a medication or for whom a specific medication’s cost- sharing proves overly burdensome.  Beneficiaries struggle to navigate an overly onerous Part D appeals process—resulting in delays in access to needed prescription drugs, abandonment of prescribed medications, reduced adherence to treatment protocols and higher than appropriate out-of-pocket health care costs for older adults, people with disabilities and their families.[5]

Along these same lines, upon review of the available qualitative and quantitative research on Part D appeals, the Medicare Payment Advisory Commission (MedPAC) recently determined that, “…these findings suggest a need for increased transparency and streamlining of the processes involved so that beneficiaries and physicians are not discouraged from seeking exceptions for medications.”[6] We concur with MedPAC’s conclusions, and we support CMS’ interest in pursuing multiple avenues to achieve this end.

In keeping with CMS’ stated goals in the draft 2016 Call Letter, we urge CMS to establish a multi-stakeholder workgroup (including, but not limited to, Part D plan enrollees, Medicare beneficiary advocates, pharmacists, plan sponsors, pharmacy benefit managers and pharmaceutical manufacturers) to work on developing a streamlined Part D appeals process that is initiated when a request for coverage of a prescription drug is denied in whole (or in part) at the pharmacy counter. We also encourage CMS to engage in a similar dialogue with multiple stakeholders on potential improvements to the MA appeals process.

We strongly encourage CMS to engage in these discussions as quickly as possible to ensure that the future improvements named by CMS in the draft 2016 Call Letter can be adequately assessed by all affected stakeholders. We appreciate that there are important technical considerations that must be weighed in order to implement some of the suggested improvements, and we believe a multi-stakeholder dialogue would be best suited to engage on these issues. Again, we applaud the agency’s willingness to consider reforms to the MA and Part D appeals system with the aim of improving the accessibility of these processes for beneficiaries. Below we provide more detailed comments on the provisions included in the draft 2016 Call Letter. 

Coverage Denial Notices and Requests for Clinical Documentation

            Denial Notices: We strongly support and appreciate CMS’ reminder to MA organizations and Part D plan sponsors about the information required in denial notices, specifically involving the reason for the denial, the applicable Medicare or plan coverage policy and any specific coverage requirements that must be met to obtain coverage. The exact rationale for denials is critical to the ability of Medicare beneficiaries and health care providers to understand their situation, decide next steps and advocate effectively. We urge CMS to include this language in the final 2016 Call Letter. 

As CMS looks as ways to strengthen appeal notices, we ask that the agency also consider imposing translation requirements on coverage determination notices.  Because these notices directly affect meaningful access to services, they qualify as “vital documents” that should be subject to translation requirements.  See 68 Fed. Reg. 47311 (Aug. 8, 2003).  Currently CMS rules around translation requirements are limited to certain marketing documents and do not cover any documents related to denial of services.

            Requesting Clinical Documentation: We strongly support the requirements set forth in the draft 2016 Call Letter clarifying MA organization and Part D plan sponsor obligations to seek out clinical information when needed to process a coverage request. We also support CMS’ requirement that plans adequately document attempts made to secure needed clinical information. Presently, Medicare beneficiaries must serve as a de-facto intermediary between their MA or Part D plan and their health care provider, even though many people with Medicare lack the aptitude to perform this role. The resulting breakdown in information-sharing likely contributes to fewer appeals and higher rates of denials, delays and other inefficiencies. In the interest of efficiency and fairness, we urge CMS to finalize these requirements for MA and Part D plan sponsors in the final 2016 draft Call Letter.

            Future Improvements: We strongly support CMS’ suggested improvements to the Part D denial notice (Form CMS-10146) as well as CMS’ strong encouragement that Part D plan sponsors begin implementing these improvements as quickly as possible. We expect that these enhancements to the Part D denial notices—namely the requirement that the denial reason cite to the CMS-approved plan formulary or other Medicare rule as a basis for the decision—will significantly ease the burden on beneficiaries and health care providers to provide adequate, actionable information when a beneficiary appeal is warranted. Additionally, we strongly encourage CMS to move forward with the agency’s plans to include these same notice changes for MA denial notices.

Still, we believe these requirements would be further strengthened by a CMS review of the “enrollee-friendly” or “free text” portion of the Part D denial notice. We continue to observe that this “free text” section, largely intended for Medicare beneficiaries, causes significant confusion. In some cases, the content proves to be incomprehensible to the beneficiary. On this point, it is important to note that most Medicare beneficiaries may not be familiar with technical or legal language describing a plan denial.

To further build on the improvements recommended by CMS, we encourage the agency to make available best practices on communicating plain language reasons to explain denials (i.e., off-formulary, prior authorization, step therapy, quantity limits, etc.) in the “free text” section of the Part D denial notice. Given that the “free text” portion is directed to older adults and people with disabilities, it is critically important that this language is both accurate—meaning it matches the plan formulary, coverage rules and the more detailed section described above—and easy to understand—meaning it is written in line with the education and health literacy levels of most beneficiaries.

Improved Information at the Point of Sale

First, we commend CMS’ willingness to explore improvements to the pharmacy counter notice (Form CMS-10147), and we urge the agency to explore this possibility as quickly as possible in consultation with multiple stakeholders. Medicare beneficiaries refused access to a medication at the pharmacy counter experience this “turning away” as a denial, and many struggle to understand why a formal request for coverage must be made to the plan with the support of the prescribing physician.

We strongly believe that access to information about the reason for a plan denial, provided at the pharmacy counter, will both eliminate significant beneficiary confusion and limit delays in accessing needed medications. Armed with information about why a prescription drug was refused at the point of sale, Part D enrollees and their health care providers will be better equipped to determine the best course of action for the beneficiary’s health—whether that involves securing a different prescription, waiting the appropriate time period for a refill or filing an exception request with the health plan.

We appreciate that pursuing this option will involve working in collaboration with the National Council of Prescription Drug Programs (NCPDP). We encourage CMS to assess the potential of advancing this change for specific types of denials or other pharmacy edits, such as the application of any number of utilization management tools. We strongly encourage CMS to engage in a multi-stakeholder conversation on pursuing improvements to the current pharmacy counter notice.

Additionally, we encourage CMS to carefully explore a concern not addressed in the 2016 draft Call Letter related to the pharmacy counter notice. Specifically, we urge CMS to assess how frequently and consistently the pharmacy counter notice is delivered to Medicare beneficiaries denied access to prescription drugs as well as those who express concern with the coinsurance or copayment for a given medication. Only in recent years has the delivery of this notice been required by CMS of plan sponsors, and in turn required of plan sponsors’ network pharmacies.

We continue to hear from Medicare beneficiaries who claim they have not received this notice, meaning these individuals lack critical information about how to pursue a coverage determination and their appeal rights. Monitoring the delivery of the pharmacy counter notice is important, both to ensure beneficiary access to needed medicines and sponsor compliance with CMS rules.

Second, we applaud CMS’ willingness to explore allowing the presentation of a prescription to serve as the request for a coverage determination. As noted above, it is conceptually very difficult for a beneficiary to parse the difference between a health plan’s refusal at the pharmacy counter and a formal denial resulting from a request for a coverage determination. Allowing the pharmacy counter refusal to serve as the coverage determination serves the dual purpose of removing a burdensome step for beneficiaries and their doctors, first by explicitly stating why the drug is not covered and, second, by expediting the appeals process for those who need it. As such, we continue to believe this course of action is in the best interest of beneficiaries, their families and their health care providers.

Again, we appreciate that potentially implementing this process, either for some or all claims not paid at the pharmacy, will involve technical considerations that should be explored among multiple parties. We ask CMS to fully explore how to implement this proposal for each reason that a prescription drug may be refused payment at the point of sale (i.e., non-formulary, prior authorization, step therapy, quantity limits, refill too soon, inadequate information from a prescriber, potential adverse interaction, etc.). As noted above, we strongly encourage CMS to engage in an open and ongoing dialogue with all stakeholders about this option and others that might be pursued to streamline and simplify the Part D appeals process for Medicare beneficiaries, caregivers and providers.

Although not directly addressed in the draft 2016 Call Letter, in addition to solutions related to payment refusals at the point of sale and denials of coverage, we encourage CMS to explore policy changes specific to beneficiary requests for tiering exceptions. We regularly hear from older adults and people with disabilities desperate to reduce the cost of medications who are altogether unaware of their right to request a tiering exception. We fear only those Medicare beneficiaries who are particularly savvy or who have the assistance of a trained counselor are positioned to successfully request a tiering exception. Increased beneficiary and health care provider education about when tiering exceptions are available and appropriate is sorely needed. At a minimum, we encourage CMS to require plan sponsors to provide such training to network providers, including pharmacists, physicians and other prescribers.

Expanded Data Collection for Part D Appeals: We strongly support CMS’ openness to developing a more rigorous Part D appeals tracking system. Like CMS, we are concerned that the available data on Part D coverage determinations, redeterminations and reconsiderations does not adequately reflect the full range of beneficiary experiences with the process. We strongly supported CMS’ August 2014 release of plan-reported data on MA and Part D coverage determinations, appeals and grievances through a public use file.[7] Yet, like CMS, we agree that this information is insufficient. In 2014, MedPAC also expressed concern about the transparency of plan-level decisions and the availability of concrete data on the Part D appeals process.[8]

We share CMS’ alarm with the high reversal rates of plan decisions at the redetermination level (80%) in CY2013, coupled with an extremely low rate of beneficiary appeals (17%).[9] And, as noted above, we are equally concerned with the high rate of reversals of plan decisions by the IRE, at the reconsideration level. As described above, Medicare beneficiaries who leave the pharmacy counter empty-handed may never access the formal appeals process. This can result in a beneficiary paying for the full cost of the prescribed medication, purchasing one or two pills at a time to get by, seeking drug samples from the prescribing physician—which may or may not be readily available—or simply going without a prescribed medication altogether. Given this experience, we are very supportive of enhanced data collection on all steps of the Part D appeals process.

As such, we strongly encourage CMS to expand the scope of its proposed tracking system. For Medicare beneficiaries who experience difficulty securing a needed prescription drug, the process ultimately begins at the pharmacy counter—not with the request for a coverage determination. CMS currently requires plan sponsors to report on pharmacy transactions, including claims paid and rejected, and requires data collection on various utilization management tools and other reasons for nonpayment.[10] We strongly encourage CMS to develop tracking that begins with the refusal at the pharmacy counter and ends with the Administrative Law Judge (ALJ) or Medicare Appeals Council (MAC). We believe that tracking on this level would allow CMS to gauge how often beneficiaries are able to secure prescription drugs through informal mechanisms, such as through the assistance of a prescriber, as opposed to through the formal appeals process.

Contracting Organizations with Ratings of Less Than Three Stars in Three Consecutive Years – Timeline for Application of Termination Authority (p. 81)

We support CMS in the use of its authority to terminate contracts of consistently low-performing plans.  Plans’ consistent poor performance is likely indicative of systemic problems within such plans and allowing them continued participation in the Medicare program could have negative consequences for consumers. 

While we appreciate CMS’ proposal to issue notices to affected beneficiaries in March 2016 concerning plan terminations that will occur at the end of the year, we strongly encourage additional notices to be issued closer to the Annual Coordinated Election Period (ACEP), when plan enrollees must make choices about their coverage for the following year.  These notices should be particularized, including information about access to any applicable Special Enrollment Period (SEP) and Medigap enrollment rights.

Enhancements to the 2016 Star Ratings and Beyond (p. 81)


CMS has selected 7 measures (6 in part C and 1 in Part D for PDPs) to weigh differently in the Star Rating program. CMS has determined that differences in outcome exist for dual beneficiaries for these measures, which include certain cancer screenings. CMS is currently conducting analyses to determine the cause of these differential outcomes.  The Call Letter proposes reducing the weights of these measures by half when calculating a plan's Star Rating. This will be applied across all plans.

While we support CMS in researching this issue and striving to improve care for the dual eligible population, we are concerned about the approach outlined in the Call Letter. Decreasing the weight of measures that CMS has found to disproportionately impact dual eligible beneficiaries will in essence increase the Star Ratings for plans, without actually improving care for dual eligible beneficiaries in these areas. For example, because the measure for breast cancer screenings will receive less weight in the Star Rating determination, plans could see improvements in their Star Rating without actually increasing breast cancer screenings among dual eligible beneficiaries. Reducing the weight of these measures also has the effect of penalizing plans that are high performers on the seven measures for the LIS/duals population. 

Furthermore, we strongly urge CMS to reconsider its proposal due to the potential impact on beneficiary outcomes and quality of care. Multiple measures included in CMS’ list are outcomes-based measures, including the Diabetes Care – Blood Sugar Controlled measure and the Medication Adherence for Hypertension (RAS antagonists) measure. These measures are essential to improving the population health of dual eligibles and LIS beneficiaries, many of whom suffer from multiple chronic conditions like diabetes and high blood pressure. By implementing this proposal, CMS risks that patients will receive lower quality care and may ultimately have worse outcomes.

We are also concerned that these measures generally relate to preventive services. Preventive services like screenings and fall prevention are essential services that improve long term patient outcomes and patient quality of life. Additionally, there are increased costs associated with treating advanced conditions when compared to cost-effective screenings.

For example, falls prevention is essential for seniors. In 2011, $36.4 billion in direct medical costs was spent treating older adults for the effects of falls, with 78% of these costs reimbursed by Medicare. Medicare costs in the first year after a fall averaged between $12,150 and $18,009. If we cannot stem the rate of increase in falls, it is projected that the cost in 2020 would be $61.6 billion, including Medicare costs estimated at about $48 billion.

Most fractures among older adults are caused by falls. They are the most common and most costly type of nonfatal injuries, accounting for 61% of the cost of nonfatal fall injuries, or $17 billion. The average cost of a fall related hip fracture injury in 2006 was $37,000. In 2010, there were 258,000 hip fractures and the rate for women was almost three times the rate for men. One in four of those suffering a hip fracture will need to stay in a nursing home for at least a year, with most of these significant costs typically paid by Medicaid. Evidence-based fall prevention programs offer promising directions for simple, cost-effective interventions through eliminating known risk factors, offering treatments that promote behavior change, and leveraging community networks to link clinical treatment and social services. We are concerned that down weighting the proposed measures will disincentivize plans serving significant dual populations to develop programs and methods to encourage these essential preventive services.

The modified weights outlined in the CMS proposal would not be incorporated into the measure weight used for improvement measures. We agree that the modified weights should not be included in improvement measures. We recommend that CMS explore weighing improvement measures more heavily, rather than decreasing weights of measures, as a means to incentivize plans to provide better care to disadvantaged populations.

We are concerned that changes to weighting in areas that disproportionately impact dual eligible beneficiaries will disincentivize healthcare units from making the changes that could equalize care, thereby making quality analysis and quality ratings useless. The root of the disparities in care is not likely to be addressed if the differences are concealed through the automatic and inaccurate inflation of performance scores, and will only perpetuate these real differences in care.

As the research suggests, disadvantaged patients disproportionately receive poor care. However, the data do not indicate that disadvantaged patients cause poor quality ratings. As there is little publically available data demonstrating a causal link between SES/SDS factors and lower quality measure scores for MA and Part D plans, suggestions that dual enrollment in a plan causes low performance are anecdotal and do not reflect conclusions based on supporting data. Without these data it is premature to make changes to the Star Ratings program. Even CMS mentions in the Call Letter that more research is necessary to demonstrate a causal link. Additionally, data collection for SES/SDS is quite limited, even the variables used in collecting data have yet to be determined and standardized.

The data that will result from the implementation of the IMPACT Act will be essential for CMS in making determinations regarding quality assessment. We continue to urge CMS to review the results of the data that are collected and compiled as a result of this Act, prior to making changes to the Star Ratings program for the proposed measures, and any additional measures in the future.

We are concerned that CMS cites “immediate relief to plans with significant Duals/LIS enrollment” as a result of the reduced weights for these measures, while acknowledging that there is “uncertainty” regarding the cause of lower star ratings for plans with dual eligible populations. If CMS is uncertain of the cause and the relationship between this population and plan performance, than CMS should delay making any changes to the program, particularly as a means of providing “relief” for plans.

We support CMS’ efforts to collect data and review this issue. If CMS definitively finds, through extensive data collection and analysis, that the current Star Ratings program, without risk adjustment for SES/SDS, is causing harm to disadvantaged patients, then we look forward to working with CMS to make appropriate alterations to the system that will improve care for disadvantaged patients. It is clear from the Call Letter, however, that CMS does not have sufficient data at this point to make this determination.

We hope that in the interim, CMS will delay implementing even a temporary change in weighting for quality measurement, as prematurely making changes to the program may lead to harm for already disadvantaged patients. In this discussion, it is essential to underscore that the purpose of the Star Ratings program is to improve the quality of care for all patients.

Program & Compliance Plan Audit Performance (p. 100)

Like CMS, we have been disappointed and concerned about the often abysmal plan performance reflected in audit findings.  We ask that CMS consider expanding this section to highlight some of the most common and important deficiencies found in audits.

We also were disappointed that CMS, as announced earlier, has decided not to require plans to hire outside auditors except in limited cases.  We hope that CMS will revisit that determination if there is not significant improvement in audit results. 

Integrated Dual-Eligible Special Needs Plans (p. 110)

CMS expresses its ongoing commitment to promoting integrated care for beneficiaries who are enrolled in both Medicare and Medicaid, and describes both existing and planned tools for plan sponsors and States to improve coverage and care for this population. Highlighting the three-way contracts that CMS has entered into as part of the Medicare and Medicaid Coordination Office (MMCO)’s dual demonstration projects, CMS indicates a desire to grant increased flexibility and other benefits to Dual-Special Needs Plans (D-SNPs) with high levels of integration outside of the demonstration projects. 

CMS outlines existing administrative avenues for flexibility and seeks comment about possible additional flexibilities including: specific notices that describe the integrated benefit, coordinated oversight with State Medicaid offices and integration of Medicaid care priorities. We are supportive of CMS’ inquiry into mechanisms that will allow high-performing D-SNPs to better serve the dual population. That said, we have concerns about the proposed and existing mechanisms related to D-SNP administrative flexibility.

Seamless Conversion Enrollment Option (p. 111)

We ask that CMS consider carefully whether the seamless enrollment option for D-SNPs is an appropriate way to address beneficiary needs and protect beneficiary rights.  We urge extreme caution in expanding this option. 

As CMS has noted in its February 10 memorandum to Medicare-Medicaid plans, section 70.6 of the Medicare Marketing Guidelines allows sponsoring organization to contact current Medicaid managed care members to promote Medicare products from the same sponsors.  This provision gives sponsors of Medicaid managed care plans an open opportunity to contact their members to discuss the benefits of transitioning into its D-SNP.  We recognize that such a transition would be a reasonable choice for many.  The leeway given plans in section 70.6 gives plan sponsors more than ample opportunity to make their case to any particular Medicaid beneficiary transitioning into Medicare.

We have serious concerns about the next step, “seamless”—which translates into “passive”—enrollment into a D-SNP operated by the same plan sponsor.  Automatic enrollment into a D-SNP may not be the best or preferred choice for a significant number of beneficiaries. Beneficiaries may need access to providers outside of the plan network or the D-SNP’s formulary may not meet the needs of the beneficiary.

Passive enrollment compromises the protections of Medicare beneficiaries guaranteeing freedom of choice. It is a particular concern when passive enrollment is imposed specifically on people with low incomes, while most other Medicare beneficiaries never encounter the issue.  Further, the experience of the dual eligible demonstrations to date has shown that passive enrollment notices are, by their very nature, confusing to beneficiaries and that passive enrollment engenders distrust among beneficiaries leading to high opt-out rates.

We know firsthand that the transition to Medicare from existing insurance coverage causes confusion and creates challenges for many newly eligible Medicare beneficiaries. Yet, this transition also represents an essential decision point, during which individuals must be adequately educated about all available coverage options.[11]  Under the law, Medicare enrollees are guaranteed freedom of choice with regard to MA and Part D enrollment.[12] We strongly believe that CMS has an obligation to protect this right.  We understand that various seamless conversion programs are permissible under the current manual language, but given our concerns, encourage CMS to publically report on the frequency with which these schemes are approved, and to carefully review mailings and other materials to ensure that enrollees are aware of their right to opt out. 

As such, we urge CMS to stringently evaluate and closely monitor all seamless conversion applications and programs to ensure that beneficiaries are made fully aware of their rights and options with respect to these plans. This is particularly important in states that lack additional Medigap protections. In these states, automatic enrollment into an MA/D-SNP plan may put some individuals at a serious disadvantage at a later date. 

Similarly, we urge increased oversight and monitoring of the enhanced benefits that highly integrated, high-performing D-SNPs are permitted to offer enrollees. We are particularly concerned about plans that supposedly “offer” enhanced benefits to dually eligible beneficiaries where accessing these benefits proves difficult or impossible. In addition to reviewing the offered benefits, we strongly suggest that CMS track the rate at which these services are actually provided to plan enrollees.

If, despite our concerns, CMS continues with seamless enrollment into D-SNPs, we ask that CMS carefully review letters sent to beneficiaries to determine that they spell out options clearly, including the benefits of Original Medicare.  Further there should be a clear encouragement for the beneficiary to contact the state SHIP agency for assistance.

Benefit Flexibility for Highly Integrated, High Performing Plans (p. 112)

We endorse careful experimentation in this area.  We do have concerns, however, that the definition of a “high performing plan” in section 40.4.4 of Chapter 16b of the Medicare Managed Care Manual is a plan in a contract with at least three stars.  We do not believe that a three-star plan, which is merely adequate, should be treated as high performing.  We also ask that, for plans given flexibility to offer supplemental services, CMS carefully monitor how often such services are actually delivered, which services are delivered and under what circumstances.  We also ask that CMS make data publicly available about the delivery of supplemental services.  

We would also like to recommend several areas in which CMS could improve notices sent to D-SNP beneficiaries:

  • Language access: A particular concern is communications in languages other than English.  Many D-SNP beneficiaries receive a wide range of notices in their preferred language for their Medicaid benefit because the state Medicaid agency requires it.  Yet on the Medicare side, these same individuals often receive notices in English without even a multi-lingual insert because Medicare rules are much more limited.   To the extent that administrative flexibility is needed to allow more translated materials, we fully support such flexibility.  Moreover, we believe that D-SNP plans should be required to comply with Medicare or Medicaid language access rules, whichever are more favorable to the beneficiary, so that beneficiaries receive consistent notifications in one language.
  • Tailored notices:  We strongly support more tailored notices and flexibility to allow plans to deviate from the standard Medicare form notices.  Tailored notices can be clearer about the integrated benefit and can eliminate portions of the standard notices that are irrelevant to dual eligibles and can better reflect the Medicare/Medicaid relationship within a particular state.
  • Consumer testing: Plans should be allowed and encouraged to consumer test notices.  We also have seen that notices developed with stakeholder participation are much stronger. 

Section II – Part C

Value Based Contracting (p. 113)

CMS expresses its intent to begin a dialogue with MA organizations and health care providers with respect to incentive payments (e.g. payments based on care quality, patient satisfaction, etc.), innovative payment designs and value-based contracting. We share CMS’ interest in promoting a high-value health care system, both within Traditional Medicare and through health plan innovations. As such, we support CMS’ intent to evaluate ongoing demonstration projects in Traditional Medicare and experiences in other markets to support payment reforms that reward the delivery of value-based, as opposed to volume-based, care.

We commend the careful process reflected in the draft 2016 Call Letter, focused on transparent information gathering and the involvement of multiple stakeholders. Yet, we believe a critical component is missing from this discussion. In addition to involving health plans and health care providers, we urge CMS to include beneficiaries and consumer advocates in these conversations, specifically to assess needed messaging, education and tools to help beneficiaries maximize a continuously evolving Medicare delivery system.

Meaningful Difference (Substantially Duplicative Plan Offerings) (p. 116)

Starting in 2017, CMS proposes to evaluate meaningful differences between various plans offered by a legal entity/parent company. We support this proposal. We find that beneficiaries are better able to evaluate plan choices and determine their best match when they are able to clearly discern differences between plan offerings. Allowing multiple plans to be offered by the same parent company that do not meaningfully differ in terms of costs or benefits simply adds noise to the market, increases confusion, and potentially allows companies to improperly steer certain types of beneficiaries to one or another of their otherwise identical products.

Tiered Cost-Sharing of Medical Benefits (p. 128)

We have strong reservations about tiered cost-sharing for medical benefits and ask CMS to monitor closely both plan performance and beneficiary experience in plans that employ this approach.  CMS notes that MA organizations are allowed to use tiered cost-sharing designs for contracted, network health care providers,, “…as an incentive to encourage enrollees to seek care from providers the plan identifies based on efficiency and quality data,” and describes mechanisms to allow plans to more clearly define this tiering during the bid submission process. The network design described in the draft 2016 Call Letter appears to adopt Value-Based Insurance Design (VBID) principles, which were the subject of a Center for Medicare and Medicaid Innovation (CMMI) Request for Information (RFI) in late 2014.

CMMI sought comment on a potential demonstration program to grant added flexibility to MA organizations to implement tiered cost sharing for health care services, prescription drugs and health care providers. We encourage CMS to review our comments to the RFI, which detail specific questions and concerns about potential program design and beneficiary education.

One concern is whether and how CMS can effectively monitor whether plans are designating a provider as preferred based on “efficiency and quality data” and not just based on lowest price.  We also are concerned about how preferred and not preferred suppliers are presented in provider directories and on the Medicare plan finder.  Based on our experience with preferred- and non-preferred pharmacy networks in Medicare Part D, we know that people with Medicare often find it difficult to grasp the concept of networks within networks. In the absence of strict oversight, clear and transparent criteria for determining value and robust beneficiary education, we would be hesitant to support attempts by CMS to further encourage tiered provider network designs among MA organizations.  

We do not frequently hear from beneficiaries navigating tiered cost-sharing for medical services, but given the demonstrated problems with access to preferred pharmacies reflected in the Call Letter, we find this possibility troubling, and urge CMS to carefully evaluate “preferred” networks for size, availability, and designs that discriminate or discourage enrollment by individuals with certain conditions, who live in certain geographic areas of the plan’s coverage area. 

We are also concerned that providers who treat primarily lower-income or non-native English speakers will be categorized as non-preferred. Geographic availability of preferred providers, particularly in rural areas is another concern.   More generally, plan design with both preferred providers and preferred pharmacies creates layers of complexity that make reasoned consumer choice increasingly difficult.  The complexity similarly hinders the ability of a beneficiary to navigate plan benefits once enrolled.

We also want to highlight here another emerging issue in plan design that, like preferred providers, raises concerns about whether beneficiaries can have full access to a plan provider network.  The issue is delegation by plans of responsibility– and sometimes risk– to provider groups, care coordination entities and other entities.  This can lead to situations where the delegated entity, either in practice or outright, limits an enrollee’s choice of network providers to those providers within the delegatee’s sub network.  We are seeing significant delegation in dual eligible demonstrations and understand that it may be a technique used by other Medicare Advantage plans.  We ask CMS to carefully monitor plan delegation and its effect on network access.  We also ask for specific direction telling plans that they may not use delegation to in any way limit beneficiary access to all network providers. 

Part C Emergency/Urgently Needed Services Deductible Guidance (p. 128)

CMS proposes to eliminate the requirement that any cost-sharing for Emergency/Urgently Needed Services apply toward an MA plan’s deductible. We oppose this proposal. Beneficiaries who pay cost-sharing for any covered service have the expectation that this cost-sharing will accrue towards their plan deductible. Most Medicare beneficiaries live on low and fixed incomes, and they are reliant, in part, on the plan deductible to gauge their expected annual health care costs. Exempting certain cost-sharing from the deductible would harm beneficiaries and increase—not alleviate—confusion.

Guidance to Verify that Networks are Adequate and Provider Directories are Current      (p. 134)

While the requirements outlined in this section are ones that plan sponsors should already be meeting, we strongly support CMS’ proposed effort to provide additional guidance on regulatory requirements and the proposal to enhance oversight of MAO provider directories, specifically, a requirement to “establish and maintain a proactive, structured process that enables them to assess, on a timely basis, the true availability of contracted providers which includes, as needed, an analysis to verify continued compliance with applicable network access requirements.”

We support regular communications/contact with providers to ascertain their availability, but suggest more frequently than quarterly.  We support CMS’ proposed three-pronged approach to monitor compliance with the regulations, particularly the audit protocol to assess whether the lack of availability and accessibility of providers may impact a plan’s ability to meet provider network adequacy standards.  Given the increase in widespread, mid-year network provider terminations (discussed further below), we strongly encourage CMS to engage in a continuous process of assessing plan’s network adequacy standards.

In addition, we strongly support CMS’ proposal to institute a requirement for MAOs to provide, and regularly update, network information in a standardized, electronic format for eventual inclusion in a nationwide provider database.  We applaud CMS’ goal to “make provider network data readily available to beneficiaries, stakeholders, and the public and in a uniform format”. We agree that such an approach will “enhance the transparency of provider networks, and enable beneficiaries to make informed decisions about their health care coverage.”  For example, making MA provider network directories accessible through the Plan Finder would greatly enhance beneficiaries’ ability to choose plans based upon criteria most important to them.

            Note: Failure to Otherwise Address Provider Network Terminations

While we strongly support CMS’ proposal concerning MAO provider network directories, we are deeply disappointed that CMS has taken no further action, either in the Draft Call Letter or in the recently released final C & D rule for 2016, to strengthen consumer protections surrounding MAO mid-year provider network terminations. The most effective way to protect consumers from being trapped in their plans after their own doctors are involuntarily terminated is to prohibit MAOs from terminating network providers mid-year without cause.  Not only did CMS retreat from this option in the final 2015 Call Letter, but there has been no attempt to extend the current 30-day advance notice to affected beneficiaries, as also suggested in last year’s Draft Call Letter.  Further, CMS has failed to strengthen or otherwise expand the limited special enrollment period (SEP) right available only to beneficiaries affected by “significant” network terminations.  More accurate provider directories, while a welcome improvement in consumer information, is not a cure for this disease.

Standardizing the Health Risk Assessment (HRA) (p. 138)

We support CMS’ move towards greater consistency in components of the HRA, which would improve consistency of data collection. 

Guidance for in-Home Enrollee Risk Assessments (p. 139)

We support CMS’ effort to look more carefully at in-home risk assessments to ensure that the services provided to beneficiaries through these visits are meaningful and effective, not simply a means for collecting risk adjustment diagnoses without ensuring that meaningful follow-up care is delivered.  We note that we supported CMS’ initial proposal to exclude, for payment purposes, diagnoses from in-home risk assessments that were not confirmed by a subsequent clinical encounter, but CMS did not finalize these proposals. For 2016, CMS is instead recommending that plans adopt “best practices” related to the performance of in-home assessments. CMS also plans to continue tracking and analyzing the care provided by MA plans following in-home visits.

We understand that CMS is attempting to discourage abuse of in-home assessments, primarily intended to inflate payments, while not eliminating the utility that legitimate assessments in the home setting may uniquely provide. We are concerned, though, that voluntary best practices will not achieve CMS’ goal of linking heightened risk scores to care that addresses beneficiaries health needs. Use of such best practices should be only an interim step while CMS works to develop a strong evidence-based in-home assessment tool. We believe that any such tool must include an assessment of the availability of family caregivers and their ability to provide such care.

We again urge CMS to exclude, for payment purposes, diagnoses identified during a home visit that are not confirmed by a subsequent clinical encounter. Simply enhancing a risk profile without benefiting enrollees serves no useful purpose to the Medicare program or its beneficiaries.

Section III- Part D

Drug utilization review (p. 142)

CMS requests feedback on the potential implementation of a point of sale edit threshold regarding overlapping opioid prescriptions of 200 mg MED from two or more prescribers, and seeks comment about whether to expand the overutilization policy to other prescription drugs or classes of drugs and clinical treatment issues. We appreciate CMS’ efforts to address the challenge of opioid misuse in a responsible and restrained way, including requirements related to the involvement of treating physicians and common-sense exceptions to ensure limited impact on beneficiaries with a medical necessity for specific medications. We encourage CMS to continue to approach this issue carefully and to ensure adequate beneficiary protections are implemented as part of any expansion in the use of additional pharmacy edits.  

Before CMS considers expanding current policy to additional categories, we urge CMS to further study the experience with opioids. We believe that additional beneficiary protections must be put in place to ensure that Medicare beneficiaries are not unduly prevented from receiving necessary care.  We continue to be concerned with the implementation of any additional point-of-sale edits or restrictions, as our experience and CMS’ own audit results show that these restrictions are routinely mismanaged by plans and pharmacy benefit managers.  We appreciate the careful balance CMS has brought to bear on addressing the problem of misuse thus far, and encourage CMS to continue to work with all stakeholders, including physicians who specialize in treating addiction, to develop effective and targeted strategies.   

Tier Labeling and Composition (p. 151)

Starting in 2016, CMS proposes to alter labeling for generic tiers by merging the generic and non-preferred generic tiers into one “Generic” tier, largely in response to concerns expressed by multiple stakeholders. Should plans wish to have a lower cost-sharing tier for certain generic drugs, the tier would be labeled the “Preferred Generic” tier. In addition, CMS expresses concern over “a growing trend of generic drug products being shifted to non-preferred brand tiers, a shift that results in substantial increases in beneficiary cost-sharing. We share CMS’ concerns with respect to generic medications, and we support CMS’ proposed nomenclature change. In addition, we strongly support the increased scrutiny of formulary design reflected in the draft 2016 Call Letter. In particular, we encourage CMS to review plan placement of first-line, clinically-preferred generics on higher tiers. 

We are also concerned about the growing frequency with which plans utilize co-insurance percentage, rather than copay amounts.  A recent data analysis by Avalere Health found that 66 percent of PDPs in 2015 apply coinsurance to more than one tier. In 2014, only 32 percent of PDPs did the same.  In total, enrollment in PDPs with more than one coinsurance tier increased from 6.4 million in 2014 to approximately 11.1 million in 2015.  Because non-specialty tiers can employ coinsurance rates as high as 50 percent, this can represent a significant increase in cost-sharing to beneficiaries and less predictability about annual medication costs. 

We are concerned that formulary robustness and affordability are declining — according to a recent Health Affairs study, the affordability of prescription drugs has actually declined for some Part D enrollees. Specifically, the study found that elderly beneficiaries with four or more chronic conditions observed an increase in the prevalence of cost-related non-adherence from 2009 to 2011, reversing previous downward trends. 

We request that CMS review Part D formulary designs to determine ways to lessen the burden of cost-sharing on Part D beneficiaries. Specifically we urge CMS to closely examine the types of medications most commonly placed on plan’s non-preferred brand and specialty tiers. We urge CMS to consider ways that formulary design, such as through value-based insurance principles, could be employed to increase the affordability for first-line, clinically-preferred medications. While we do not expect that formulary design modifications will alleviate cost-sharing concerns for all high-cost medications, we believe it may offer targeted relief to select beneficiaries. We believe that increased CMS monitoring is required to ensure that the Part D benefit remains an affordable choice for comprehensive prescription drug coverage.

Specialty Tiers (p. 154)

CMS retains the $600 threshold for specialty tier medications in the draft 2016 Call Letter, now the ninth year that the threshold has been unchanged. Last year’s release of the threshold methodology provided valuable insight concerning how CMS calculates the threshold, the percentage of Medicare beneficiaries who need medicines on the specialty tier (including both LIS and non-LIS enrollees), and how often prescription drugs that meet CMS’ cost threshold are in fact placed on the specialty tier. As such, we commend CMS for its commitment to again releasing this methodology. 

We remain, however, concerned by the growing number of medications subject to extremely high coinsurance on non-preferred prescription brand tiers. With respect to specialty tier medications, our concerns are two-fold. First, we continue to urge that CMS allow tiering exceptions for prescription drugs placed on the specialty tier, both as a matter of fairness and to promote affordable access to high-cost, highly effective medications. We urge CMS to allow tiering exceptions for all specialty medications, or to consider limited cases where these exceptions would benefit a significant share of Medicare beneficiaries. Second, we remain concerned that beneficiaries living on low, fixed incomes not low enough to quality for Extra Help are going without needed prescriptions due to high cost-sharing on the specialty tier, as well as the non-preferred brand tier.

We appreciate CMS’ clarification to plan sponsors concerning the treatment of deductibles for specialty tier medications.


We appreciate the opportunity to submit these comments. For additional information, please contact David Lipschutz, Senior Policy Attorney,, and Kata Kertesz, Policy Attorney,, both at 202-293-5760.

David A. Lipschutz                                                    Kata Kertesz
Senior Policy Attorney                                               Policy Attorney


[1] We do take issue, however, with factoring into MA payment CMS’ assumption that Congress will act to prevent the reduction in physician payment due to the sustainable growth rate (SGR).  We are concerned with the precedent set by using such assumptions regarding expected, rather than actual, changes to current law.
[2] CMS, “Common Conditions, Improvement Strategies, and Best Practices based on 2013 Program Audit Reviews,” (Memo from G. Mulcahy to All Medicare Advantage Organizations and Prescription Drug Plans; August 27, 2014), available at:  
[3] CMS, “The 2013 Part C and Part D Program Annual Audit and Enforcement Report,” (Issued by the Medicare Parts C & D Oversight and Enforcement Group; October 16, 2014), available at:
[4] CMS, “Fact Sheet: Part D Reconsideration Appeals Data – 2013” (2013), available at:; These data points exclude cases that were dismissed, withdrawn or remanded as well as cases involving non-Part D drugs. In 2013, IRE reversals rates for non-Part D drugs amounted to 24%. Coverage determinations for non-Part D drugs are based on bright-line coverage rules. As such, we would expect plan-level coverage determinations to be fairly straightforward, leading to an IRE reversal rate nearer to zero than is currently reflected in the data. Appeals cases involving non-Part D drugs also warrant additional scrutiny.
[5] Letter to MedPAC from 30+ consumer advocates and health care providers (October 10, 2014), available at:; Letter to MedPAC from the Medicare Rights Center (September 20, 2013), available at:
[6] MedPAC, “Report to the Congress: Medicare Payment Policy” (March 2014; pgs. 368-369), available at:  
[7] CMS, “Part C and Part D Data Validation,” (July 2014), available at:
[8] MedPAC, “Report to the Congress: Medicare Payment Policy” (March 2014; pgs. 368-369), available at:
[9] CMS, “Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter,” (February 20, 2015; pg. 80), available at:
[10] CMS, “Medicare Part D Reporting Requirements,” (Effective January 1, 2014), available at:
[11]Medicare Rights Center, “Medicare Part B Enrollment: Pitfalls Problems and Penalties” (November 2014), available at
[12] Social Security Act, 42 U.S.C. §1802 & §1902(a)(23).


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