Overview of CMS 4144-F: Contract Year 2012 Parts C and Part D Final Rule Vanessa Duran Director, Division of Policy, An

1. Overview of CMS�4144-F: Contract Year 2012 Parts C and Part D Final RuleVanessa DuranDirector, Division of Policy, Analysis, and PlanningMedicare Drug & Health Plan Contract Administration Group

2. Overview Second annual Parts C and D regulation Includes changes to implement the Affordable Care Act of 2010 (ACA) and include other changes to reflect our experience in administrating the Medicare Parts C and D programs Issued on April 5, 2011 Changes effective June 6, 2011. Most changes are applicable for the 2012 contract year 2

3. Overview (cont.) This final rule includes provisions to� Implement the provisions of the Affordable Care Act (ACA) Clarify various sponsor program participation requirements Strengthen beneficiary protections Strengthen our ability to identify stronger applicants for Part C and D program participation, and remove consistently poor performers Implement corrections and technical changes 3

4. Implementing the Provisions of the ACA 4

5. Implementing Provisions of the ACA Limits cost-sharing under MA and Section 1876 cost plans for specified services to Original Medicare (OM) levels: Administration of chemotherapy services Renal dialysis services Skilled nursing care Prohibits MA and Section 1876 cost Plans from charging cost-sharing for in-network preventive services, for which there is no OM cost-sharing 5

6. Implementing Provisions of the ACA Clarifies that the Secretary: Is not required to accept all Part C and D bids May deny bids that propose significant increases in cost-sharing or decreases in benefits Codifies the new beneficiary election periods, including the new Annual Election Period (AEP) New AEP is October 15 to December 7 New Medicare Annual Disenrollment Period (MADP) occurs annually from January 1 through February 14, where an MA enrollee may drop the MA coverage and have Original Medicare for their health coverage 6

7. Implementing Provisions of the ACA Codifies the voluntary de minimis policy for subsidy-eligible individuals enrolled in MA-PD Plans and stand alone PDPs Codifies the new requirement that higher income Part D beneficiaries pay an income related monthly adjustment amount Codifies changes to close the Part D coverage gap Eliminates Part D cost-sharing for Medicare beneficiaries eligible for full Medicaid benefits and who are receiving home and community-based services instead of being institutionalized 7

8. Implementing Provisions of the ACA Describes the methodology for using quality ratings to determine MA bonus payments Establishes an administrative review process for quality bonus payment and rebate retention determinations Codifies changes to the MA benchmark calculation and rebate amounts Implements policies to reduce wasteful dispensing of Part D drugs for beneficiaries in long-term care facilities Establishes policies to implement the ACA�s requirement for a more uniform Part D exceptions and appeals process, including providing enrollees with instant access to these processes via Plan websites 8

9. Implementing Provisions of the ACA Special Needs Plan (SNP) provisions: Extends the authority for SNPs to operate through 2013 Defines fully integrated, dual-eligible SNP Extends to December 31, 2012 the deadline by which dual SNPs, not seeking to expand their service areas, can operate without a contract with the State Requires that the National Committee for Quality Assurance (NCQA) approve all SNPs using standards established by CMS 9

10. Clarifying Program Participation Requirements 10

11. Clarifying Program Participation Requirements Prohibits Part C and D program participation by MA organizations and Part D sponsors, whose owners or directors served in a similar capacity with another organization that terminated its Medicare contract within the previous two years Clarifies payment rules for non-contract providers Requires timely transfer of data and files when CMS terminates a contract with a Part D sponsor 11

12. Clarifying Program Participation Requirements Requires that Part C and D organizations: Utilize physicians or other appropriate health care professionals with sufficient medical and other expertise, including knowledge of Medicare coverage rules, to review adverse organization and coverage determinations involving medical necessity; and Employ a Medical Director who is responsible for ensuring the clinical accuracy of all medical necessity decisions 12

13. Strengthening Beneficiary Protections 13

14. Strengthening Beneficiary Protections Requires that MA organizations and Part D sponsors provide interpreters in their customer call centers for non-English speaking and limited English proficient callers Establishes new authority for CMS to require Plans to periodically mail enrollees an explanation of their health care usage and out-of-pocket costs. CMS will implement a pilot program in 2012 Extends the mandatory maximum out-of-pocket limit requirements to Regional Preferred Provider Organizations (RPPOs) 14

15. Strengthening Beneficiary Protections Requires pharmacies to provide a printed notice at the point-of-sale to an enrollee explaining how to contact the Plan to request a coverage determination if the prescription can�t be filled as written Requires MA organizations� and Part D sponsors� agents and brokers to receive training and testing, via a CMS-endorsed or approved training program Clarifies requirements for translating key marketing materials in service areas with a large percentage of limited-English-proficient individuals Permits reinstatement of enrollment in an MA or Part D Plan when the individual was involuntarily disenrolled for failure to pay plan premiums, but subsequently demonstrated good cause for failing to submit the premium payment timely 15

16. Strengthening CMS� Ability to Identify Stronger Applicants and Remove Consistently Poor Performers 16

17. Identify Stronger Applicants & Remove Consistently Poor Performers Establishes fiscal solvency requirements Permits CMS to deny a new application or service area expansion request in the absence of 14 months of performance history 17

18. Clarifications and Technical Changes 18

19. Clarifications and Technical Changes Clarifies Cost Plan enrollment mechanisms� Clarifies Part D transition requirements Modifies the definition of dispensing fees 19

20. Resources The final regulation is available on the CMS website at http://www.cms.gov/HealthPlansGenInfo/ 20

21. Resources General Questions About the Regulation: Christopher McClintick � 410-786-4682 Part C Questions: Heather Rudo � 410-786-7627 Christopher McClintick � 410-786-4682 Part D Questions: Christian Bauer � 410-786-6043 Deb Larwood � 410-786-9500 Payment Questions: Deondra Moseley � 410-786-4577 Enrollment and Appeals Questions: Kristy Nishimoto � 410-786-8517 21

22. Questions? 22