FOR IMMEDIATE RELEASE
February 14, 2023 

Action announces new models and supports access to $2 generic drugs

Today, the Centers for Medicare & Medicaid Services (CMS) announced that the Secretary of the Department of Health and Human Services (HHS) has selected three new models for testing by the CMS Innovation Center to help lower the high cost of drugs, promote accessibility to life-changing drug therapies, and improve quality of care. The Secretary released a report describing these three models to respond to President Biden’s Executive Order 14087, “Lowering Prescription Drug Costs for Americans,” which complements the historic provisions in the Inflation Reduction Act of 2022 (IRA) that will lower prescription drug costs.

“HHS is using every tool available to us to lower health care costs and increase access to high-quality, affordable health care,” said HHS Secretary Xavier Becerra. “We are full steam ahead in delivering the cost savings from the President’s Inflation Reduction Act of 2022, and people on Medicare are already feeling the benefits. But as President Biden has made clear, we must build on the new prescription drug law with further action, which is why HHS is implementing these new projects to bring down prescription drug costs.”

“Prescription drug prices in the United States are the highest in the developed world, resulting in affordability and access challenges,” said CMS Administrator Chiquita Brooks-LaSure. “The prescription drug law is making lifesaving prescription drugs more affordable for millions of people who have Medicare, and through the selected models, the Innovation Center will lower prescription drug costs and improve access for people with Medicare and Medicaid, ranging from $2 access to certain generic drugs to better deals for expensive new therapies.”

Tackling the high costs of prescription drugs and increasing access to novel therapies continue to be priorities of the Biden-Harris Administration. As part of the Inflation Reduction Act of 2022, for the first time in history, Medicare will be able to negotiate lower prescription drug prices for beneficiaries, and starting this year, drug companies that raise their prices faster than inflation will have to pay Medicare a rebate. But the Administration recognizes there is more work to do to lower prescription drug costs for more American families. That’s why on October 14, 2022, President Biden issued an executive order directing Secretary Becerra to consider additional actions to further drive down prescription drug costs. In particular, the executive order directs the Secretary to consider whether to select for testing, by the CMS Innovation Center, new health care payment and delivery models that would lower drug costs and promote access to innovative drug therapies for beneficiaries enrolled in the Medicare and Medicaid programs, including models that may lead to lower cost-sharing for commonly used drugs and support value-based payment that promotes high-quality care.

“These selected models will test strategies to make it easier for Medicare patients to afford and access needed prescriptions at $2 or less, help expand access to cutting-edge cell and gene therapies for people with Medicaid, and help ensure drugs already on the market are safe and effective,” said CMS Deputy Administrator and Director of the CMS Innovation Center Liz Fowler, PhD, JD. “We look forward to working on these models and helping to lower drug costs for Americans with Medicare and Medicaid.”

The three models selected by the Secretary for testing by the CMS Innovation Center and described in the report address the themes outlined in the executive order and meet the selection criteria thresholds of affordability, accessibility, and feasibility of implementation. The models are:

• The Medicare $2 Drug List: For chronic conditions like high blood pressure and high cholesterol, there are many relatively inexpensive generic medications that have significant clinical benefits, but cost-sharing can vary widely across insurance plans based on the specific formulation a doctor prescribes. This means patients may experience unexpected changes in their cost-sharing and may pay more than they have to. Under this model (the Medicare High-Value Drug List Model), Part D plans would be encouraged to offer a low, fixed co-payment across all cost-sharing phases of the Part D drug benefit for a standardized Medicare list of generic drugs that treat chronic conditions. Patients picking plans that participate in the Model will have more certainty that their out-of-pocket costs for these generic drugs will be capped at a maximum of $2 per month per drug.
• The Cell and Gene Therapy Access Model: Cell and Gene Therapies are an emerging area of new drug development that holds significant potential, but these therapies can cost upwards of $1 million. Under this model, state Medicaid agencies would assign CMS to coordinate and administer multi-state, outcomes-based agreements with manufacturers for certain cell and gene therapies. As new therapies come to market, this will help Medicaid beneficiaries gain access to potentially life-changing, high-cost specialty drugs for illnesses like sickle cell disease and cancer.
• The Accelerating Clinical Evidence Model: Some drugs are approved before they have established evidence of improvement in a clinical endpoint, which is called accelerated approval. CMS would develop payment methods for drugs approved under accelerated approval, in consultation with the Food and Drug Administration, to encourage timely confirmatory trial completion and improve access to post-market safety and efficacy data. This would reduce Medicare spending on drugs that have no confirmed clinical benefit.

To help identify model options, the CMS Innovation Center solicited input from a variety of sources, including beneficiary advocates, health care providers, prescription drug manufacturers, and more. The CMS Innovation Center looks forward to additional input as these models are further developed.

In addition to the three selected models, the Secretary has identified additional areas for research with the potential to lower prescription drug costs. The CMS Innovation Center looks forward to feedback on these ideas and will continue research into the design and feasibility of these ideas.

For more information on the selected models and the additional areas of research that address the executive order, a Fact Sheet is available at https://innovation.cms.gov/data-and-reports/2023/eo-rx-drug-cost-response-report-summary.

Frequently Asked Questions are available at https://innovation.cms.gov/data-and-reports/2023/eo-rx-drug-cost-response-report-faqs.

View the report at https://innovation.cms.gov/data-and-reports/2023/eo-rx-drug-cost-response-report.

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SUBJECT: Model Individual Enrollment Request Form to Enroll in a Medicare Advantage Plan (MA) or a Medicare Prescription Drug Plan (Part D), and Advance Announcement of January 2023 Software Release – Addition of Race and Ethnicity Data Fields on Enrollment Transactions

The Centers for Medicare & Medicaid Services (CMS) implements software changes to the enrollment and payment systems that support Medicare Advantage Prescription Drug (MAPD) programs. The purpose of this memorandum is to announce the addition of race and ethnicity data fields on the model Individual Enrollment Request Form to enroll in an MA or Part D plan, OMB No. 0938-1378 and provide high level advance notification of the associated system changes scheduled for release in January 2023. These new fields are required to be included on the enrollment form; however, applicant response to these questions is optional. When provided by an applicant, MA and Part D plans will submit these data to CMS as part of the enrollment transaction. If a plan receives a rejected transaction reply code (TRC) 394 or informational TRC 396 (see attachment C), the plan must send a subsequent corrected transaction code (TC) 92 to rectify. CMS expects plans to submit the beneficiary response to the race and ethnicity field, including confirming if the beneficiary did not provide the optional data. Until all race and ethnicity data are accepted by CMS, including annotating that the beneficiary did not answer the question, the field is not considered complete.

READ FULL PRESS RELEASE 

By  Amy Lotven / September 21, 2022 at 11:22 AM

Sourced from Inside Health Policy

CMS confirms it has no plans to delay implementation of the 2023 Medicare Advantage and Part D final rule that cracks down on aggressive MA marketing tactics, despite calls to do so from health insurance agents and brokers who object to being included in the definition of a third-party marketing organization (TPMO).

As TPMOs, the brokers and insurance agents would be required to record – and retain – their enrollment calls if the proposed rule is finalized as written.

The National Association of Heath Underwriters (NAHU) have repeatedly asked CMS to either delay the rule or to carve agents from the definition of a TPMO.

From a public policy perspective, it makes no sense to discourage legitimate agents from participating in Medicare Advantage by sweeping them into an effort to curb bad actors, says NAHU Executive Director Janet Trautwein.

NAHU has warned that if CMS doesn’t delay or revise the rule, fewer agents and brokers would participate in Medicare’s forthcoming Annual Enrollment Period (AEP), which the group says would only worsen marketing problems.

Still CMS recently told NAHU that it would not make the changes to the rule that the lobby requested, Trautwein says.  A CMS spokesperson also told IHP that “CMS does not plan to delay implementation of the CY 2023 Medicare Advantage and Part D Final Rule (CMS-4192-F).”

At issue are the allegedly aggressive marketing tactics used by TPMOs who make unsolicited sales calls to seniors to push Medicare Advantage plans. Trautwein explains that in contrast to agents and brokers who take time to discuss which plan is best for a Medicare beneficiary based on lifestyle, networks and formularies, TPMOs will often push products that might not be appropriate. The marketers also allegedly mislead consumers by telling them they’re calling from Medicare – or a well-known insurer – or use other tactics to lure seniors to enroll in coverage regardless of whether it’s a good fit.

The proliferation of those calls is a huge problem for licensed, certified agents and brokers, Trautwein recently told a panel of health insurance commissioners who have been looking into improper marketing of health plans.

NAHU members tell their clients to ask marketers for their license numbers, but the challenge has become almost insurmountable as many seniors fail to understand that the calls are not legitimate, she says.

CMS stepped up oversight of third-party marketing organizations in its proposed 2023 MA and Part D rule, noting that a significant amount of the 40,000 complaints received in 2021 were about TPMOs. As part of the rule, which was finalized in April, the agency tweaked the definition of a TPMO to include agents and brokers, meaning that NAHU members will also be required to adhere to the new requirements, including the proposed mandate to record all enrollment calls with clients.

NAHU says the requirements will be burdensome to some agents and brokers. Many NAHU members are small, one-person shops and cannot afford the HIPAA-compliant recording equipment needed to record and retain calls, she says. Some agents and brokers might choose not to participate in open enrollment due to the new requirements.

NAHU raised its concerns in comments on the proposed rule, in a separate letter to CMS in July and again in its response to CMS’ request for information on improving MA. 

AHIP also talked about the rule’s potential impact on brokers in its response to the RFI.

“While we appreciate CMS’ goals in protecting against confusing and potentially misleading activities, we have heard questions about the scope of the TPMO requirements and concerns that without further clarifications or modifications, those rules could expand costs and inhibit access to certain agents and brokers,” AHIP says. “We ask CMS to engage with stakeholders to discuss and address concerns related to the TPMO requirements and ensure beneficiaries are protected from inappropriate marketing activities.”

Other stakeholders asked CMS to strengthen oversight over aggressive marketers.

Trautwein says NAHU and CMS have had several discussions about the brokers’ worries, but the agency has refused to bend. 

In addition to declining the delay and the carve out, the agency said it would not offer enforcement relief to parties that attempt to follow the rule in good faith, Trautwein says.

NAHU had asked for guidance on several outstanding questions, including what a broker should do if a client does not want to be recorded. CMS says a broker or agent must terminate the call in those situations, according to Trautwein.

Another source tracking the issue also says some agents and brokers might not participate in MA due to the new rules, but suggests those who bow out might not sell many plans in the first place. The source also says there are reasonably priced options for the phone equipment needed to record and retain calls.

Trautwein also says that some marketing organizations are offering recording solutions to their member agents and brokers, but not all will have access. Brokers and agents also can ask clients to enroll in-person so the requirement would not apply.

She declined to speculate on how many agents and brokers might bow out of the AEP because of the rule, but she says NAHU will survey members once the enrollment period is over to get a better sense of how many agents/brokers opted out.

She says NAHU is still lobbying to get the rule delayed or agents carved out, and adds the group has sent thousands of messages to Capitol Hill about its concerns, but so far there’s been no legislative action.

NAIC

Trautwein also brought her concerns about the proliferation of aggressive MA marketing, as well as what she views as the problems with CMS’ rule, to the National Association of Insurance Commissioners’ summer meeting in August. During a session of the NAIC’s recently established Improper Marketing Working Group, which was created to address the growing amount of misleading marketing in the individual market, Trautwein explained how agents and brokers selling MA plans have been overwhelmed by the marketing calls. She also raised concerns that CMS’ solution could drive legitimate players out of MA.

State insurance commissioners do not regulate MA marketing, but they are well aware of the problems since they often hear about it from residents or other enrollment assisters.

Congress gave authority over MA marketing to CMS as part of the Medicare Modernization Act. But in May, NAIC asked key lawmakers to consider returning jurisdiction to the states, which it says are better equipped to handle the oversight.

Meanwhile, Senate Finance Chair Ron Wyden (D-OR) in mid-August asked commissioners from 15 states to send information on annual changes in MA marketing complaints from 2019 through 2022, and examples of allegedly false or misleading marketing materials. Wyden asked the states if the marketers are targeting any particular populations like dual-eligible, Black or lower-income beneficiaries.

Responses were due on Friday (Sept. 16), but it’s unclear if they have been received. – Amy Lotven (alotven@iwpnews.com)

CMS has released the 2023 Agent Broker Compensation Guidelines that govern the maximum allowable first year and renewal compensation for agent level MA and PDP commissions. There is a significant increase in compensation for 2023.

These new rates reflect, roughly, a 4.9% increase in both initial and renewal compensation for MA and Cost Plans. Puerto Rico and the US Virgin Islands have an increase closer to 4.3%.  For PDPs, there is a 5.7% bump on initial and 4.5% bump on renewal commissions.  CMS also reaffirmed the standard referral fee limitations for MA/PDP plans at $100/$25, respectively.

Plan sponsors were reminded that compensation schedules must be submitted by 11:59 pm ET, July 20, 2022.

CMS also reminded plan sponsors of their obligation to ensure agents and brokers selling Medicare products are trained annually on Medicare A, B, C, and D, as well as on plan-specific information.  CMS annually publishes the testing and training requirements, including a sample test each year for guidance.

If you have questions about what these compensation changes mean for you, please reach out to your team at Cornerstone Senior Marketing.