New Rule Proposed by CMS Addresses Accuracy and Accountability in Medicare Part C and Part D

Last week, the Centers for Medicare & Medicaid Services (CMS) released a proposal to improve payment accuracy for Medicare Advantage (Part C) and Medicare prescription drug (Part D) plans in 2014. Since 2010, Medicare Advantage premiums have fallen by 10 percent, and costs of the defined standard Part D plan will be lower in 2014 than they are in 2013. According to the 2014 Advance Notice and draft Call Letter, the standard Part D deductible will decrease to $310 in 2014 (from $325 in 2013), and cost-sharing amounts will also decrease. At the same time, Medicare beneficiaries in the Part D prescription drug coverage gap, also known as the “doughnut hole,” will continue to receive increased benefits in 2014. As a result of the Affordable Care Act (ACA), Medicare beneficiaries who have fallen into the doughnut hole will receive drug coverage and discounts of 52.5 percent on covered brand-name drugs and 28 percent on covered generic drugs.

CMS also announced a proposed rule to implement the ACA’s medical loss ratio (MLR) requirements for Part C and Part D plans to promote greater accountability and transparency. The proposed rule limits how much plans can spend on marketing, overhead and profit. Under the rule, plans would be required to spend at least 85 percent of their revenue on clinical services, prescription drugs, quality improvements and/or direct benefits to beneficiaries in the form of reduced Medicare premiums.

Read the CMS press release.