Medicare Parts C and D
Introduction
Following its Feb. 15, 2013 draft announcement, the Centers for Medicare and Medicaid Services (CMS) has released the calendar year (CY) 2014 payment polices for Medicare Parts C and D. The final Advance Notice of Methodological Changes for Calendar Year (CY) 2014 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2014 Call Letter incorporates public comments made in response to the draft announcement.
CMS notes that because Medicare spending per beneficiary has been slowing, having risen only 0.4 percent in 2012, the deductible and out-of-pocket limits for the Part D defined standard prescription drug plan will actually be lower in 2014. Despite a 25 percent increase in MA plan enrollment since 2010, these premiums are decreasing as well.
Part D Deductible and Cost Sharing
CMS reports that the following decreases in Part D cost sharing amounts will directly benefit Medicare enrollees:
- The deductible will drop from $325 to $310;
- The initial coverage limit will drop from $2,970 to $2,850;
- The out-of-pocket threshold will drop from $4,750 to $4,550;
- The total covered Part D spending at the out-of-pocket threshold for beneficiaries ineligible for the coverage gap discount program will drop from $6,733.75 to $6,455;
- The estimated total covered Part D spending at the out-of-pocket threshold for beneficiaries eligible for the coverage gap discount program will drop from $6,954.52 to $6,690.77; and
- The minimum cost-sharing in the catastrophic coverage portion of the Part D benefit will drop from $2.65 to $2.55 for a covered generic drug and from $6.60 to $6.35 for a covered brand name drug.
The Donut Hole
CMS anticipates that out-of-pocket costs will also decrease for Medicare enrollees who reach the prescription drug coverage gap or “donut hole.” As this benefit continues to expand in 2014, enrollees in the donut hole will receive coverage and discounts amounting to 52.5 percent on covered brand name drugs and 28 percent on covered generic drugs. This is part of the Affordable Care Act, which seeks to gradually reduce the donut hole cost sharing to zero by 2020.
Beneficiary Protections
To protect enrollees in MA plans from significant increases in costs or cuts in benefits, the amount of any effective increase to total beneficiary costs will be limited to $34 per member per month for 2014. This is down from a permissible increase of $36 per member per month in previous years. In addition, to avoid unnecessary prescription drugs being delivered and charged to Part D enrollees due to “auto-ship” services, Part D plans in 2014 must require their network pharmacies to obtain enrollee consent prior to each delivery, unless the enrollee personally requests the refill.
CMS also plans to continue the phased-in alignment of MA benchmarks with Medicare FFS costs, and to adjust for diagnostic coding differences between MA plans and Medicare FFS providers.
Quality-based Payments
In 2014, CMS plans to continue implementing MA plan payment based on quality. According to CMS, the number of four and five star plans in MA has increased to 127 for 2013, 21 more than for 2012.
MA Risk Adjustments
CMS plans to transition to their updated and clinically revised risk adjustment model in 2014, designed to reduce the occurrence of MA plans being paid more due to improved coding. During the transition process, the risk scores for 2014 will be a blend of those calculated under the 2014 and 2013 models.
Anti-hypertensive Medications
In coordination with the Million Hearts Initiative, 2014 MA and PDP plans are encouraged to improve access to anti-hypertensive medications by expanding their target enrollee populations for medication therapy management (MTM). Individuals who receive MTM may experience better blood pressure control, increased adherence to these vital medications, and better self-management of their medications and health condition.
Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827