Print Friendly, PDF & Email

On December 13, 2016, President Obama signed into law the 21st Century Cures Act (Public Law No: 114-255, also known as “Cures”, H.R. 34[1]).  The bill, which passed with overwhelming bipartisan support, addresses a wide range of issues, including medical research, the drug approval process, and, added in the final days leading up to passage, a number of mental health and Medicare provisions.  

In this CMA Alert we discuss some of the provisions in the Cures Act that affect the Medicare program and Medicare beneficiaries.  While some provisions could help Medicare beneficiaries, including through additional education at the time of eligibility[2], it is unclear whether most of the Medicare-related provisions would help beneficiaries rather than improve compensation for (and reduce the “regulatory burden”) of Medicare providers.  Of most concern to the Center, though, are the following provisions that favor the Medicare Advantage (MA) program over traditional Medicare.[3]  

Delay in Authority to Terminate Contracts for MA Plans Failing to Achieve Minimum Quality Ratings

Medicare employs a 5-star quality rating system for MA and Part D plans, in part, in an effort to assist consumers in choosing plans based upon certain performance measures.[4]  Plans that receive 4 or 5 stars are eligible for bonus payments, whereas the Centers for Medicare & Medicaid Services (CMS) has the authority to terminate plans that achieve less than 3 stars for 3 consecutive years (often referred to as consistently poor performers).[5]

According to CMS data, overall MA quality ratings have increased over the last few years – in 2017, weighted by enrollment, over 90% of MA-PD enrollees will be in contracts with ratings of 3.5 or more stars.[6] Conversely, 12 MA-PD contracts (out of 364 in 2017) have a rating of 2.5 or fewer stars, accounting for less than 1% of MA enrollees, weighted by enrollment. Only 2 of these 12 plan contracts have been consistently poor performers between 2015 and 2017, subjecting the contracts to termination at the end of 2017 (under the law prior to the Cures Act).[7]     

The star ratings system has had critics in the insurance industry, although plan sponsors who receive bonus payments based upon their higher rating do not appear to be protesting as loudly as consistently poor performing plans that are subject to termination from Medicare. Some of these poor performing plans have complained that their low ratings are due to disproportionately high enrollment of individuals with lower socioeconomic status.[8]  In response, CMS is making an adjustment in how it calculates quality scores – an effort that advocates fear could mask real health disparities.[9]  In other words, as plans’ overall star rating performance is increasing, CMS is also taking steps to adjust measures in favor of plans based upon their arguments about the impact of socioeconomic status on plans’ quality ratings.

Nonetheless, under the guise of waiting for further study of “the effects of socioeconomic status and dual eligible populations” on plans’ star ratings, Section 17001 of the Cures Act delays CMS’ authority to terminate consistently poor performing plans (solely on the basis that plans have failed to achieve minimum quality ratings) through the end of plan year 2018. 

Entrusting the care of Medicare beneficiaries to private plans requires continual and aggressive oversight of such plans in order to ensure that the health and safety of enrollees is protected and Medicare funds are being used wisely.  The right of plan sponsors to maintain contracts with the Medicare program should not be prioritized over the needs of enrollees in plans that consistently fail to meet basic, minimum quality standards. 

Reinstatement of the Medicare Advantage Open Enrollment Period

Described in the bill as “Preservation of Medicare beneficiary choice under Medicare Advantage”, section 17005 reverses the Medicare enrollment period changes made by the Affordable Care Act.

Under current law, the Medicare Advantage Disenrollment Period (MADP) is a 45-day period (January 1 through February 14) during which an individual can disenroll from an MA plan and return to traditional Medicare and pick up a stand-alone Part D plan.  The MADP began in 2011 and, pursuant to the Cures bill, will end in 2018.

Effective 2019, for the first 3 months of the calendar year there will be a continuous open enrollment and disenrollment period relating to MA plans (previously called the Medicare Advantage Open Enrollment Period, or MA-OEP).  During this 3-month period an MA eligible beneficiary can make a one-time change to another MA plan, they can elect traditional Medicare, or they can elect coverage under Part D.  The statute specifically limits the enrollment period’s application to Part D coverage in that changes to prescription drug coverage can only be made during this period “in the case of an individual who, previous to such change in enrollment, is enrolled in a Medicare Advantage plan.”[10]  In other words, someone in traditional Medicare with a stand-alone Part D plan  may not use this enrollment period to switch from one Part D plan to another, whereas, if someone starts the year in an MA-PD, such person can switch to another MA-PD.[11]  The plain language of the reinstated enrollment period in the Cures Act seems to add limitations that did not exist in the previous OEP.[12]  

This policy change, which has been backed by insurance agents/brokers and the health insurance industry,[13] among others, favors MA enrollment over traditional Medicare by giving those in MA plans more flexibility to make changes to their coverage.  As the Center noted in 2011, when the previous MA-OEP was in effect, some beneficiaries were enticed to join an MA plan, not understanding the implications of this choice, simply to change drug coverage.  Others were the subject of marketing abuses by agents and plans that wanted to take advantage of the additional time period for enrolling in a Medicare Advantage plan but not in a stand-alone prescription drug plan (PDP).[14]

Failure to Strengthen Medigap Enrollment Rights while Expanding MA Enrollment to Individuals with ESRD

Section 17006 of the Cures Act removes the barrier for people with End-Stage Renal Disease (ESRD) to enroll in MA plans, beginning in 2021.  Current law prohibits people with ESRD from enrolling in MA plans except in limited situations.  On its own, this provision significantly improves coverage options for people with ESRD, however their options still remain limited.

Federal law provides for certain protections concerning Medicare beneficiaries’ rights to purchase Medicare supplemental insurance policies (Medigaps).  These rights under federal law, however, do not extend to individuals under 65, including those with ESRD.  States can add to federal law by expanding Medigap open enrollment and guarantee issue rights. Currently, 31 states grant some degree of protection to disabled and ESRD Medicare beneficiaries.[15]

Instead of promoting free choice regarding how people wish to obtain their health coverage, and endorsing equal opportunity for all Medicare beneficiaries, regardless of age or health status, Congress failed to extend Medigap rights to people with ESRD at the same time it removed prohibitions on enrollment in MA.  Conversely, Congress is working to erode Medigap coverage more broadly.  In 2015, Congress passed a bill that will prohibit people eligible for Medicare on or after January 1, 2020 from purchasing a Medigap policy that covers the Part B deductible (sometimes referred to as policies that offer “first dollar coverage”).[16]


While efforts to turn Medicare into a premium support or voucher program present the clearest threat to the traditional Medicare program, those who wish to preserve traditional Medicare must remain vigilant about smaller, but consequential, changes to Medicare that continue to favor enrollment in Medicare Advantage.

December 28, 2016 – D. Lipschutz

[1] Bill text available at:
[2] E.g., Section 17003 addresses improvements to the Welcome to Medicare package.
[3] In addition to the provisions discussed below, also of note is Section 17002 which increases data reporting requirements to Congress re: MA, Part D and traditional Medicare enrollment.  On its face, this provision enhances programmatic transparency and provides lawmakers with information upon which they can rely when contemplating policy changes.  Rather than report such information based up county, which is often the geographical boundary of MA plans, though, this provision calls for the reporting of data based upon Congressional district and state.   It is not a leap of faith to surmise that the insurance industry will use this targeted data to their advantage when trying to advance their agenda on Capitol Hill.
[4] See, e.g., Medicare data re: 2017 star ratings at:
[5] 42 C.F.R. §422.510(a)(4)(xi).
[6] Medicare data re: 2017 star ratings at:
[7] Medicare data re: 2017 star ratings at:  See Table 1 and Figure 6, respectively.
[8] See, e.g., “Blog: Bailout for low-quality Medicare Advantage contracts slipped into bipartisan bill” by Bob Herman, Modern Healthcare (May 23, 2016), available at:

[9] See, e.g., the Center’s comments to CMS’ Draft 2017 Call Letter (March 4, 2016), available at:; also see “In wake of industry compromises, are Medicare’s star ratings useless?” by Trudy Lieberman,  Center for Health Journalism (June 9, 2016), available at:
[10]  21st Century Cures Act, Section 17005, G, III.
[11] Note that according to an analysis by law firm McDermott, Will & Emery, “One important distinction between this provision and the open enrollment period as it existed prior to the ACA is that this provision does not restrict changing enrollment between Medicare Advantage plans that include drug coverage and those that do not.”
[12] The language of Section 17005 amends Section 1851(e)(2), in part, by adding a new subparagraph (G); (G)(i)(I) states that this enrollment period is applicable “in the case of an MA eligible individual who is enrolled in an MA plan, at any time during the first 3 months of a year (beginning with 2019)” [emphasis added].   The plain reading of the statute suggests, then, that someone can only make a change during this enrollment period if they are in an MA plan (as opposed to, say, moving from traditional Medicare into an MA plan).   This plan reading is in conflict with the apparent intent of the statute to reinstate the options available under the previous MA-OEP; see, e.g., this side-by-side summary from the House of Representatives:  In addition, also note that one part of this provision indicates an effective date of 2016 whereas other parts reference a 2019 effective date.
[13] See, e.g., National Association of Health Underwriters (NAHU) endorsing HR 2581 (at: and America’s Health Insurance Plans (AHIP) endorsing H.R. 2488 (at:; both bills would have made similar changes by reinstating the MA-OEP.
[14] Center for Medicare Advocacy Weekly Alert “45 Day Disenrollment Period for Medicare Advantage Members” (January 6, 2011), available at:
[15] For more information, see the Center’s Weekly Alert “Barriers to Medigap Coverage for Beneficiaries Under Age 65” (October 26, 2016), available at:
[16] See, e.g., a discussion of MACRA, including Medigap provisions, in the Center’s Weekly Alert “Congress Passes ‘Doc Fix’ – Senate Unable to Improve the Bill for Medicare Beneficiaries” (April 16, 2015), available at:

Comments are closed.