Hello Roberta Buell,

Spring has sprung and my house is finally free of indoor puddles. When the sun came out at long last, I barely recognized it and the eclipse wasn't even happening. Anyway, lots of regulations have been distributed lately, so hold onto your coffee. As a matter of fact, the Inpatient Medicare Proposal (IPPS) for 2025 came out as I was writing this edition. If you want to preview it because you are glutton for punishment, go to this page. We are not going over that this month--but get ready for some ICD-10-CM jokes in our next issue.

This time, we are going over a few changes in Medicare Outpatient payment starting April 1, 2024, The Transmittal was not released in time for our last newsletter. For both hospital and offices, there were almost 100 HCPCS code changes for the quarter starting April 1. And, speaking of the April HCPCS chaos, there has been a re-alignment of the Methyprednisolone Acetate codes. To simplify it a bit, the J-codes J1020 (20 mg), J1030 (30 mg) and J1040 (80 mg) are now mushed together in J1010. Providers should note that the HCPCS dosage for J1010 is 1 mg. HCPCS billing units should be adjusted on your charge input accordingly. Many of the NDC codes previously aligned to J1020, J1030, and J1040 have been realigned to J1010--but double check with your distributor because some NDCs are in now in shortage. For more information regarding accurate NDC - HCPCS alignments for April 2024, please visit BuyandBill.com. Thanks to Ian Kaswan and company for the sage advice!

Ever wonder why a few of your patients are denied for pre-existing conditions or had a sudden limit on the coverage for drugs? Well, you have been hit by "Temporary" insurance plans not a Smooth Criminal. These plans, because they are allegedly temporary do not have to abide by the Affordable Care Act parameters. The Biden Administration has undone some of that in a recent Final Rule.

I have always wondered about the progression Parts C (Medicare Disadvantage) and D rules. There is the Call Letter, Rate Setting, and the Proposed/Final Rule. I always wondered exactly what the order is and why are these different from Parts A and B. However, Medicare Oxymoron (Part C) is now the choice of 51% of Medicare patients and Part D is coverage for a lot of Specialty Drugs, so it's about time to get smart about their regulations. And, there are a lot of them. I learned a bunch--hope you do too and are not too bored!!

Totally Eclipsed,

Da' Mistress

Sorry, this is a little late, but it was not ready for our last issue. But, here we are... These changes are in effect for hospital outpatient departments and hospital-owned clinic practices for encounters on or after April 1, 2024. These changes are documented in Transmittal 12552CP, if you want to know all other changes that are happening right this minute and there are many.

• These drugs received new HCPCS for OPPS and they also received pass-through status starting April 1, 2024:
• C9166 Injection, secukinumab, intravenous, 1 mg
• C9167 Injection, apadamtase alfa, 10 unit
• C9168 Injection, mirikizumab-mrkz, 1 m
• J2277 Injection, motixafortide, 0.25 mg
• J9248 Injection, melphalan (hepzato), 1 mg
• These are the HCPCS codes for certain drugs, biologicals, and radiopharmaceuticals in the outpatient setting that had their pass-through status end on or after April 1, 2024
• J0224 Injection, lumsiran, 0.5 mg
• J7212 Factor viia (antihemophilic factor, recombinant) jncw (sevenfact), 1 microgram
• Q5122 Injection, pegfilgrastim-apgf (nyvepria), biosimilar, 0.5 mg
• These HCPCS codes have been deleted effective on or after 4/1/2024:
• J0576 Injection, buprenorphine extended-release (brixadi), 1 mg
• J1020 Injection, methylprednisolone acetate, 20 mg
• J1030 Injection, methylprednisolone acetate, 40 mg
• J1040 Injection, methylprednisolone acetate, 80 mg
• J1840 Injection, kanamycin sulfate, up to 500 mg
• J1850 Injection, kanamycin sulfate, up to 75 mg
• J2920 Injection, methylprednisolone sodium succinate, up to 40 mg
• J2930 Injection, methylprednisolone sodium succinate, up to 125 mg
• J9070 Cyclophosphamide, 100 mg
• J9250 Methotrexate sodium, 5 mg
• Q4244 Procenta, per 200 mg
• This drug no longer has payable status as of April 1, 2024: J9019 Injection, asparaginase (erwinaze), 1000 IU

One other thing of note (and it's important to everybody), effective April 1, 2024, payment rates for many drugs and biologicals have changed from the values published in the CY 2024 OPPS/ASC final rule with comment period as a result of the new ASP calculations based on sales price submissions from third quarter of CY 2023. In cases where adjustments to payment rates are necessary, changes to the payment rates will be incorporated in the April 2024 Fiscal Intermediary Standard System (FISS) release. CMS is not publishing the updated payment rates in this Change Request implementing the April 2024 update of the OPPS. However, the updated payment rates effective April 1, 2024, can be found in the April 2024 update of the OPPS Addendum A and Addendum B on the CMS website at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient. Please check this out. If you are a hospital, you MAY be owed money. If you are work for a drug manufacturer, look carefully at this Addendum. There have been mistakes.

For more information (and there is a WHOLE LOT more), check out the full Transmittal.

On March 28, 2024, the Biden-Harris Administration released final rules intended to lower health care costs and protect consumers from being induced into purchasing so-called “junk insurance” policies. These policies were approved by the Trump Administration and have many odious features such as drug caps, annual caps, pre-existing conditions, and do not always include the 'essential benefits' of Obamacare. According to the press release, the Final Rules are intended to close loopholes that have permitted “junk insurance” issuers to dupe consumers into buying highly restricted plans. The Final Rules primarily realign federal definitions with intended scopes of coverage and increase transparency to allow consumers to make better and more informed choices about their health coverage.

What is Junk Insurance and How Did We Get Here?

“Junk insurance" refers to health insurance plans that offer limited coverage and often lack critical consumer protections. These plans typically provide minimal coverage for only a narrow range of medical services and frequently impose high-deductibles, copayments, and coinsurance, leaving patients with high out-of-pocket costs for necessary healthcare such as prescription drugs, preventative care, maternity care, mental health services, and emergency treatments. Unlike comprehensive employer or Exchange health insurance plans, “junk insurance” plans often are not subject to certain mandated protections that address pre-existing conditions limitations, waiting periods, excessive provider network restriction, or coverage take-backs.

One category of “junk insurance” is short-term, limited-duration insurance (“STLDI”). STLDI plans were originally intended to provide temporary coverage during transitions between comprehensive plans. STLDI plans fall outside the scope of “individual health insurance coverage,” and they do not fall under the purview of federal individual market consumer protections and the mandates for comprehensive coverage in the ACA. Despite such deficiencies, issuers have marketed these plans as long-term alternatives to ACA-compliant coverage. In other words, the marketers of health insurance lie. Imagine that!

Another category of “junk insurance” is fixed indemnity excepted benefits. Traditionally, hospital indemnity and other fixed indemnity insurance has been used as a form of income replacement upon the occurrence of a health-related event, under which policyholders receive fixed cash benefits that can be utilized at their discretion, covering out-of-pocket expenses not included in comprehensive coverage or non-medical expenses such as rent or debt payments. In group markets, payments are fixed amounts per fixed term, while in the individual market, payments can be made per hospitalization, illness, or service. When these insurance plans meet certain payment standards and regulatory criteria, they are exempt from federal requirements and consumer protections applicable to comprehensive coverage.

The Final Rule "Fix"

The Departments of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury (AKA, the “Departments”) issued the Final Rules, which revise the federal definition of “STLDI” to cap the initial contract term at a maximum of three months and restrict the total coverage period to no more than four months, inclusive of any renewals or extensions. Before this Final Rule, total coverage periods could be up to three years (so much for 'temporary'). The revised STLDI definition further clarifies that an STLDI renewal or extension includes STLDI sold by the same issuer, or any issuer that is a member of the same controlled group, to the same policyholder within a year--in other words, no plan "stacking" to extend the policy--apparently, this is common practice. The Departments also refined the federal notice standard, requiring issuers to prominently display a notice that uses clear and concise language that distinguishes STLDI (junk) policies from comprehensive plans on the first page of the policy, certificate, contract of insurance, and any marketing materials.

The Departments also revised the consumer notice standard applicable to fixed indemnity excepted benefits coverage in the individual market. Under the revised standards, issuers must prominently display a notice that clearly communicates in plain English limitations of the coverage and obviates the differences between fixed indemnity excepted benefits coverage and comprehensive coverage in all policies, certificates, contracts of insurance, and marketing materials.. 

For policies, certificates, or contracts of STLDI sold or issued before September 1, 2024 (including any subsequent renewals or extensions consistent with applicable law), coverage may continue to have an initial contract term of fewer than 12 months and a maximum duration of up to 36 months (taking into account any renewals or extensions), subject to any limits under applicable state law. 

For more information, check out the Fact Sheet.

Not to be confused with the FINAL Rule, on April 1, 2024, the US Centers for Medicare & Medicaid Services (CMS) released the Announcement of Calendar Year (CY) 2025 Medicare Advantage (MA) Capitation Rates and Part C and D Payment Policies (Rate Announcement). The Rate Announcement is released annually includes updates to the capitation and risk adjustment methodologies used to calculate MA plan payments, as well as other payment policies that impact Part D. The Rate Announcement largely finalizes the policies CMS previously proposed in its Advance Notice released on January 31, 2024. Why CMS just doesn't include this in Proposed and Final Rules like everything else is beyond me--I guess it is because these are capitated contractors.

Here is the skinny on the Rate Announcement most of which will go into effect for the Calendar Year 2025.

• MA Payment Changes/Growth Rates: The effective growth rate for 2025 MA non-end-stage renal disease (ESRD) rates is 2.33%. Accounting for the impact of the benchmark rate cap, MA rebate and other policies, the net impact on the Medicare trust funds for CY 2025 is expected to be $8.8 billion. Payments from the government to MA organizations (MAOs) will increase by 3.70% on average from 2024 to 2025, as finalized in the Rate Announcement. This small increase was not good news for plans in Parts C and D.

• Part C Risk Adjustment Model: For CY 2024, CMS implemented changes to the hierarchical condition category ("HCCs") risk adjustment model, including restructuring the condition categories using the ICD-10 classification system (finally), updating the underlying fee-for-service (FFS) data years, and revising the denominator year that is used in calculating the average per capita predicted expenditures to create relative factors in the HCCs. Risk scores are being phased in like they were 2024. For CY 2025, CMS will continue this phased-in approach, and will calculate CY 2025 risk scores using 33% of the risk score calculated with the 2020 model and 67% of the risk score calculated with the 2024 model. The CY 2025 impact on MA risk scores of the blended models (compared to the blend in CY 2024) will be -2.45%, representing $9.2 billion in estimated net savings to the Medicare trust fund in 2025. But, wait-- there is more. As in prior years,CMS will again apply the 5.9% statutory minimum coding intensity adjustment (CMS reduces Medicare Advantage risk scores by an annual percentage to bring Medicare Advantage coding in-line with FFS Medicare coding patterns) in 2025, rather than a higher and more effective rate. The net result is overpayments. Unchanged since 2018, this minimum amount is not keeping pace with coding intensity or the resulting excess plan payments. .The Medicare Rights Center estimates that 2024 coding intensity is expected to be 20% higher than Original Medicare, resulting in an $54 billion windfall for Medicare Advantage plans.

• Part D Benefit/Inflation Reduction Act of 2022 (IRA): The Rate Announcement evidences several updates the IRA made for 2025, including:

• Newly defined Part D benefit design composed of three phases: annual deductible, initial coverage and catastrophic coverage
• A lower out-of-pocket threshold of $2,000
• Buh-bye to the Coverage Gap Discount Program and establishment of the Manufacturer Discount Program. Beginning January 1, 2025, the Medicare Part D Manufacturer Discount Program requires participating manufacturers to provide “discounted prices” on their “applicable drugs” dispensed to “applicable beneficiaries.” Manufacturers must enter into agreements with CMS to participate in the program if they want their drugs to be eligible for coverage under Part D. This includes all drugs except those who have negotiated prices with Medicare under the IRA.
• Changes to the liability of enrollees, sponsors, manufacturers and CMS.
• As a result of the CMS finalized updates to the Part D risk adjustment model to reflect the Part D benefit design.

• Part C and D Star Ratings: The Rate Announcement includes the list of measures that will be used to calculate the 2025 Star Ratings, as well as a list of the emergency areas that were affected by emergency declarations in 2023 for purposes of making adjustments under the extreme and uncontrollable circumstances policy.

For more information regarding the Rate Setting, see the Announcement.

On April 4, 2024, the Centers for Medicare & Medicaid Services (CMS) released its Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024–Remaining Provisions (Not Rate-Setting)and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly (PACE) (CMS-4201-F3 and CMS-4205-F) 

The policies finalized in this new rule include:

• Part D Plans Will Have More Flexibility in Biosimilar Substitution--Under current policy, Part D plans must obtain explicit approval prior to substituting with biosimilar biological products other than interchangeable biological products. These substitutions apply only to enrollees who begin therapy after the effective date of the change. CMS finalizes its proposal to treat formulary substitutions of all biosimilars for their reference products as “maintenance changes,” which are generally expected to pose a minimal risk of disrupting drug therapy or are warranted to address safety concerns or administrative needs. Treating these substitutions as maintenance changes means that any substitutions will apply to all enrollees following 30 days’ notice. CMS finalizes its proposal to permit Part D sponsors to immediately substitute:
• (1) A new interchangeable biological product for its reference product,
• (2) A new unbranded biological product for its brand name biological product (The term “unbranded biologic” or “unbranded biological product” generally describes an approved brand name biological product that is marketed under its approved BLA without its brand name--proprietary name-- on its label), and
• (3) A new authorized generic for its brand name equivalent.
• Shore Up Guardrails for Brokers Selling MA Plans--Due to concerns with the highly consolidated MA marketplace and the very heavy impact of current compensation for broker and agents on beneficiary MA plan choice, CMS finalizes policies to:
• Redefine and revise the scope of “compensation” to set a fixed amount for all agents and brokers paid regardless of the plan the beneficiary enrolls in.
• Generally prohibit contract terms between MA organizations and third-party marketing organizations, agents, brokers, or gangsters that may interfere with an agent’s or broker’s objectivity, and
• Eliminate the regulatory framework that currently permits additional separate administrative payments to brokers and agents.
• Distribution of Patient Data Will Be Limited to Third Party Marketing Organizations ("TPMOs")-- TPMOs are selling and reselling personal beneficiary data associated with use of aggressive marketing tactics by Medicare Advantage and Part D plans, CMS will require that personal beneficiary data collected by a TPMO for marketing or enrolling the individual into a Medicare Advantage or Part D plan may only be shared with another TPMO when prior express written consent is given by the individual. The TPMO must obtain this written consent through a transparent, and prominently placed, disclosure from the individual to share the information and be contacted for marketing or enrollment purposes. What? Aren't these folks subject to HIPAA?
• CMS Enhances MA Plans for Behavioral Health--CMS finalizes updates to network adequacy standards to enhance access to behavioral health care for Medicare Advantage (MA) plan members.To ensure MA plan members have access to these providers, CMS establishes a new facility-specialty category, “Outpatient Behavioral Health,” encompassing various behavioral health providers. To ensure the quality of care and to prevent the formation of “ghost networks,” specific criteria are set for including nurse practitioners (NPs), physician assistants (PAs), and Clinical Nurse Specialists (CNSs) in the network adequacy standard for this category. Medicare Advantage plans must verify providers’ service provision to at least 20 patients within 12 months using reliable data sources such as claims records or electronic health records. CMS also extends a 10% credit toward meeting time and distance standards for networks including Outpatient Behavioral Health facilities. MA plans are required to include one or more telehealth providers in this specialty to provide additional benefits.
• To Ensure Beneficial Awareness of the Supplemental MA Benefits (Gym Membership, etc.), CMS Orders Mid-Year Accounting of Remaining Benefits--Nearly all MA plans offer supplemental benefits, with over 99 percent of plans offering at least one supplemental benefit in 2022. The most frequently offered supplemental benefits (sometimes called patient bait) in 2022 were vision, hearing, fitness, and dental. Supplemental benefits may also address social determinants of health needs such as food insecurity or inadequate transportation access. Despite widespread offering, plans have reported enrollee utilization of many supplemental benefits is quite low, and it is unclear to CMS whether plans actively encourage (???) beneficiaries to utilize these benefits. To make sure beneficiaries are aware of these benefits and that supplemental benefits may be a marketing tactic (!!!), CMS finalizes its proposal to require plans issue a “Mid-Year Enrollee Notification of Unused Supplemental Benefits.” This notification will be issued annually no sooner than June 30 and not later than July 31 each year, personalized to each enrollee, and include a list of any supplemental benefits not accessed during the first half of the year. The notification will also provide information on the scope of the benefit, cost-sharing, directions for accessing the benefit, and any network application information.
• CMS Finalizes New Supplemental Benefits for the Chronically Ill--Special supplemental benefits for the chronically ill (SSBCI) are benefits for eligible chronically ill enrollees, where MA plans have the option to design and implement benefits to address an enrollee’s specific conditions and needs. An item or service covered as an SSCBI must have a reasonable expectation of maintaining or improving the beneficiary’s health or overall function. The number of plans offering these benefits has significantly increased. As such, CMS is finalizing policies to update its processes for reviewing and approving SSCBI and ensuring compliance with statutory requirements. To increase efficiency in establishing whether the “reasonable expectation” standard has been met for an SSCBCI, CMS is shifting responsibility from itself to plans to make this determination. This Final rule establishes that there must be objective clinical evidence for both supplemental benefits offered and evidence must underlie those beneficiaries that are denied. CMS also finalizes a number of changes to prevent 'misleading' marketing of SSBCI benefits
• MA Plans Need to Assess their Gatekeeping Techniques Annually With Attention to Social Determinants of Healthcare--This DOES NOT INCLUDE DRUGS--Each plan has a Utilization Management Committee that examines UM policies annually. From 2025 on, these Committees need to examine how UM devices such as prior authorization and reauthorization impact patients with social issues. Notably for many of you out there, CMS finalized additional language to exclude drugs from the scope of the new reporting and health equity analysis metrics, aligned with performance metrics for reporting under §422.122(c), as adopted in the 2024 Interoperability Final Rule. CMS also believes that excluding drugs will reduce concerns about burden. As such, Medicare Part B and Part D drugs will not be included in the analysis--just like they are from the Prior Auth rules. CMS does not expect these policies will have an economic impact on the Medicare Trust fund.
• Enhance Enrollees’ Rights to Appeal a Medicare Advantage Plan’s Decision to Terminate Coverage--Currently, enrollees in a Medicare Advantage plan do not have the same access to Quality Improvement Organization (QIO) review of a fast-track appeal as individuals in Traditional Medicare. CMS is revising regulations to (1) require the QIO, instead of the Medicare Advantage plan, to review untimely fast-track appeals of a Medicare Advantage plan’s decision to terminate services in a skilled nursing facility, comprehensive outpatient rehabilitation facility or by a home health agency; and (2) fully eliminate the provision requiring forfeiture of an enrollee’s right to appeal a termination of services from these providers when they leave the facility. These changes will bring Medicare Advantage plan regulations in line with the parallel reviews available to individuals Traditional Medicare and expand the rights of Medicare Advantage plan enrollees to access the fast-track appeals process
• CMS Standardizes Risk Adjustment Appeal Process--To ensure that Medicare Advantage Organizations (MAOs) are not up-coding their diagnoses to receive increased payments via risk scoring adjustments, CMS conducts Risk Adjustment Data Validation (RADV) audits of MAO diagnosis data to check that this data matches beneficiaries medical records. Currently, MA Plans have 60 days from receiving a RADV audit report to file a written appeal request. MA plans can appeal RADV medical record review determinations and/or the MA RADV payment error calculations. There are three levels to the appeal: reconsideration, hearing, and CMS Administrator review which are similar to provider levels. Following this final rule, MA plans will have to go through all three levels of appeal for medical record review determinations before appealing payment error calculations, as the payment error calculations are based on the outcomes of the medical record review determinations. If a MA plan has no issues with the medical record review determinations, it can exclusively appeal the payment error calculations. Recalculated payment error calculations will not be issued at each level of appeal but rather when the appeal is final. In addition, if the Administrator does not decline or elect to review a decision within 90 days of the MA plan or CMS’s timely request for review, the decision made in the hearing officer review (second stage of appeal) will become final.
• Medication Therapy Management Program to Expand Access---CMS finalizes several new requirements for Part D sponsors related to Medication Therapy Management (MTM) programs. Currently, all Part D sponsors are required to have an MTM program designed to make sure that covered Part D drugs are appropriately used to optimize medication use, and to reduce the risk of adverse events, including adverse drug interactions. Part D sponsors are also required to target those Part D enrollees who have multiple chronic diseases, are taking multiple Part D drugs, and are likely to meet a cost threshold for covered Part D drugs established by the Secretary. CMS codified the MTM targeting criteria at § 423.153(d)(2). CMS changes the current MTM targeting criteria to expand access to MTM services. Specifically, CMS finalizes the following changes proposed in this Final Rule:
• Require Part D sponsors to include all core chronic diseases[4] in their targeting criteria, codify the current 9 core chronic diseases in regulation, and add HIV/AIDS for a total of 10 core chronic disease for a total of 10 core chronic diseases. The 10 core chronic diseases are: (1) Alzheimer’s disease; (2) Bone disease-arthritis (including osteoporosis, osteoarthritis, and rheumatoid arthritis); (3) Chronic congestive heart failure (CHF); (4)Diabetes; (5) Dyslipidemia; (6) End-stage renal disease (ESRD); (7) Human immunodeficiency virus/ acquired immunodeficiency syndrome (HIV/AIDS); (8) Hypertension; (9) Mental health (including depression, schizophrenia, bipolar disorder, and other chronic/disabling mental health conditions); and (10) Respiratory disease (including asthma, chronic obstructive pulmonary disease (COPD), and other chronic lung disorders). Cancer is not in there, folks.
• Require plan sponsors to include all Part D maintenance drugs and expressly state that Part D sponsors retain the flexibility to include all Part D drugs in their targeting criteria (NOTE: sponsors will not be permitted to limit the Part D maintenance drugs included in MTM targeting criteria to specific Part D maintenance drugs or drug classes), and
• Require that, for the purpose of identifying Part D maintenance drugs, plans must rely on information in a widely accepted, commercially or publicly available drug information database.
• Revise the methodology for calculating the MTM cost threshold to be commensurate with the average annual cost of eight generic drugs (set at $1,623 for CY 2025).
• Codify longstanding guidance that a beneficiary must be cognitively unable to accept the offer to participate in the Comprehensive Medication Reviews (CMR) due to cognitive impairment and clarify that the CMR must include an interactive consultation that is conducted in person or via telehealth, provided Medicare telehealth as we now know it now will survive.
• CMS will reduce eligibility gaps identified in their analyses so that more Part D enrollees with complex drug regimens would be eligible for MTM services and so that criteria would better address statutory goals to reduce medication errors and optimize therapeutic outcomes for beneficiaries with multiple chronic conditions and taking multiple Part D drugs, while maintaining a reasonable cost criteria.
• CMS estimates that MTM changes would increase the number and percentage of Part D enrollees eligible for MTM services from 3.6 million (7 percent) to 7.1 million (13 percent), resulting in costs of approximately $192.7 million annually for required MTM services. CMS was not able to definitively score this provision largely due to challenges with estimating Part A/B preventive savings.

If you want to know more about dual eligibles and stuff we did not include here, go read The Final Rule, the Fact Sheet, and/or the Press Release. You will never have insomnia again.

This newsletter is a brief interpretation of information. It may be subject to typos, misinterpretation, and misapplication. This company and its parent assume no liability for the content herein. Moreover, this is not consultative or legal advice. Billing of claims and payment thereof is individual to payers and circumstance. Providers should check with each payer prior to billing. This information is time-sensitive and may change at any time. Please ensure that you constantly check for new information. CPT is a trademark of the American Medical Association, All Rights Reserved.