The Biden administration recently proposed a rule to simplify Medicare Advantage (MA) and Part D plan prior authorization and increase health equity requirements in star ratings. The Centers for Medicare & Medicaid Services (CMS) released a proposed rule for the 2024 coverage year, which includes provisions governing prior authorization, utilization management, and medical necessity determinations. The rule also limits MAOs' discretion to require the use of alternate services or settings and regulates the use of prior authorization. Additionally, CMS seeks to establish a utilization management committee and require relevant expertise for coverage determinations. The proposals are in response to concerns raised by the Office of Inspector General and Congress regarding prior authorization and aim to address the administrative burden for doctors while cracking down on misleading marketing. Overall, the proposed rule strives to improve healthcare access and quality for Medicare beneficiaries.
The proposed rule also includes a provision to add health equity requirements to the MA and Part D star ratings. CMS proposes to add a new measure to the star ratings that assesses whether a plan has taken steps to reduce disparities in healthcare outcomes and experiences among enrollees based on race, ethnicity, and other socio-economic factors. The proposed measure would be used in the calculation of the overall star rating and would incentivize plans to prioritize health equity in their operations and strategies.
In addition, the proposed rule implements several drug price provisions of the Inflation Reduction Act, including requiring drug manufacturers to provide rebates to Part D plans for price increases that exceed inflation and capping the amount that beneficiaries pay for insulin at $35 per month. This is expected to save Medicare beneficiaries significantly.
Overall, the proposed rule seeks to address some of the key challenges faced by Medicare Advantage and Part D plans, including prior authorization and health equity, while also implementing provisions to reduce drug prices and improve access to care for beneficiaries. The proposal is open for public comment until February 14, 2023, and CMS is expected to release a final rule later in the year.