Insights,

by Brenna Raines, MHA

ADVI Instant: CMS Releases 2024 Medicare Advantage and Part D Advance Notice

Get in Touch
On February 1, 2023, the Centers for Medicare and Medicaid Services (CMS) released the Advance Notice of Methodological Changes for Calendar Year (CY) 2024 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (link) and an accompanying fact sheet (link).

CMS will accept comments on the CY 2024 Advance Notice through Friday March 3, 2023, before publishing the final Rate Announcement by April 3, 2023.

  • Medicare Advantage Plan Payments
    • The annual Advance Notice includes proposed annual payment rates for Medicare Advantage plans. The CY2024 Advance Notice projects that if finalized, Medicare Advantage plans will see an average increase of 1.03% for 2024 (compared to a nearly 8% increase in 2023). The smaller increase is partially due to a reconfigured risk adjustment model and changes in star ratings.
  • Part D Standard Benefit Parameters for 2024    
    • Deductible: $545 ($40 increase over 2023)
    • Initial Coverage Limit: $5,030 ($370 increase over 2023)
    • Out-of-Pocket Threshold: $8,000 ($600 increase over 2023)
  • Inflation Reduction Act (IRA) of 2022 Part D Benefit Design Changes
    • The IRA made several changes to the standard Part D drug benefit. CMS notes the Part D benefit-related IRA updates that will be in place for CY 2024.
    • CMS notes that changes for 2025 and beyond will be covered in future years’ Advance Notices. Changes specific to CY 2023 were already released in guidance specific to 2023.
    • IRA Policies in Place for 2024:
      • Cost sharing for covered Part D drugs will be eliminated for beneficiaries in the catastrophic phase
      • Low-income subsidy program (LIS) is increasing income limits for the full LIS benefit from 135% FPL to 150% FPL.
      • The deductible continues to not apply to any Part D covered insulin product. Cost sharing may not exceed $35 for a month’s supply in the initial coverage phase and the coverage gap phase.
      • The deductible continues not to apply to any adult vaccine recommended by the ACIP and requires these vaccines to be exempt from cost sharing at any point in the benefit.
      • Beginning in 2024, the base beneficiary premium (BBP) growth will be held to no more than 6 percent by statute. The BBP for Part D is the lesser of a 6 percent annual increase or the amount that would otherwise apply under the prior methodology if the IRA were not enacted.
  • MA/MAPD Star Ratings
    • CMS is soliciting feedback on the following changes to existing Star Ratings Measures for the 2023 measurement year and beyond.
      • Creating a “Universal Foundation” of quality measures which would be a core set of measures that are aligned across CMS programs. All programs would include these measures but could add additional program-specific measures as needed. The preliminary set of Adult Universal Foundation Measures includes the following.
        • Colorectal Cancer Screening (HEDIS)
        • Breast Cancer Screening (HEDIS)
        • Controlling High Blood Pressure (HEDIS)
        • Diabetes: Hemoglobin A1c Poor Control (>9%) (HEDIS)
        • Plan all-cause readmissions or Hospital all-cause readmissions (HEDIS)
        • Consumer Assessment of Healthcare Providers and Systems (CAHPS): Overall Rating Measures (CAHPS)
        • Initiation and Engagement of Substance Use Disorder Treatment (HEDIS)
        • Screening for Social Drivers of Health / Social Need Screening and Intervention (HEDIS)
        • Adult Immunization Status (HEDIS)
        • Screening for Depression and Follow Up Plan (HEDIS)
      • Depending on NCQA action, retiring the Care for Older Adults (COA) Pain Assessment indicator from the HEDIS measurement set. NCQA may create a new Chronic Pain Assessment and Follow-up measure as a replacement that would be applicable to a wider population of MA beneficiaries.
      • Including new NCQA measures under development for Functional Status Assessment and Medication Review that would eventually replace these indicators of the COA measure and would be reported for a wider MA population.
      • Applying potential NCQA changes to the approach used to determine if an enrollee has diabetes and reporting methods for the Diabetes Care – Eye Exam and the Diabetes Care – Blood Sugar Controlled measures.
      • Applying potential NCQA revisions to the eligible population for the Breast Cancer Screening measure to include a broader population.
      • Adding the following measures to the Star Ratings display page for consideration in future rulemaking:
        • HEDIS Depression Screening and Follow-up for Adolescents and Adults
        • Initiation and Engagement of Substance Use Disorder (SUD) Treatment
        • Timely Follow-up After Acute Exacerbations of Chronic Conditions
        • Adult Immunization Status
      • In addition to non-substantive changes to certain measures, CMS plans to implement the Pharmacy Quality Alliance’s (PQA) changes to the “Antipsychotic Use in Persons with Dementia, Overall (APD)” and “Antipsychotic Use in Persons with Dementia, in Long-Term Nursing Home Residents (APD-LTNH)” measure (Part D) for the 2023 measurement year.
        • Modify the measure description by replacing “without evidence of a psychotic disorder” with “without evidence of an appropriation indication for antipsychotic use.”
        • Update the definition of appropriate indication for antipsychotic use.
        • Add refractory depression as an exclusion to the numerator.
        • Remove the “>60 cumulative days supply” language from the denominator.
      • CMS is soliciting feedback on potential new measurement concepts and methodological enhancements including the following:
        • Creating several health equity focused provisions, including a HEDIS measure focused on Screening and Referral to Services for Social Needs and a health equity index reward. CMS is also soliciting feedback on additional measures or methodological enhancements to the Star Ratings that would continue to advance health equity.
        • Including an NCQA measure in development for measurement year 2025 that would assess chronic pain and follow-up in Medicare enrollees aged 65 and older.
        • Implementing NCQA updates to applicable HEDIS measure specifications where eligible populations are currently defined with gendered language to ensure inclusive and gender-affirming approaches aligned with measure intent.
        • Implementing potential NCQA changes to how beneficiaries with chronic conditions are identified (e.g., diabetes, bipolar disorder, advanced illness) with the goal of updating the claims-based approach that is currently used across HEDIS measures to identify conditions by incorporating clinical data.
        • Including an NCQA measure in development that would assess blood pressure control that utilizes the capabilities of digital quality measures and leverage standardized electronic clinical data.
        • Using new NCQA measure concepts for kidney health management related to person-centered outcomes, shared decision making, and preparedness for kidney failure for measurement year 2025 and beyond.
        • Including an NCQA measure in development for measurement year 2024 that would assess the percentage of members aged 65 and older who were screened at least once during the measurement period for social isolation, loneliness, or inadequate social support and received a corresponding intervention if they screened positive.
        • Broadening the mental health conditions assessed by the Health Outcomes Survey (HOS) to measure a broader array of mental health conditions and to assess whether enrollees with social risk factors such as low-income status are experiencing more issues with poor mental health.
        • Creating a mental health care access measure. CMS specifically requests feedback on the range of care services that might be useful to include, what barriers to care should be considered, and whether there might be unintended consequences from asking these types of questions on the HOS.
        • Developing an additional measure that would complement the Social Need Screening and Intervention measure to assess whether beneficiaries are receiving assistance.
        • Making several changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys, including a potential unfair treatment measure and modifications to the Care Coordination measure.
  • Part C Risk Adjustment 
    • CMS proposes to implement a revised version of the CMS-HCC risk adjustment model. The proposed model (V28) has the same structure as the 2020 CMS-HCC risk adjustment model (V24) currently used for payment.
    • The updated model incorporates technical updates: updated data years used for model calibration, updated denominator year used in determining the average per capita predicted expenditures to create relative factors in the model, and a clinical reclassification of the hierarchical condition categories (HCCs) using the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) codes.
    • The proposed model includes additional constraints and removal of several HCCs in order to reduce the impact on risk scores of MA coding variation from FFS.
      • The proposed model includes 115 payment HCCs; the current model has 86.
      • The proposed model constrained all Diabetes HCCs, meaning the following proposed HCCs carry the same weight in the risk score:
        • HCC36 – Diabetes with Severe Acute Complications
        • HCC37 – Diabetes with Chronic Complications
        • HCC38 – Diabetes with Glycemic, Unspecified, or No Complications
      • The proposed model constrained all Congestive Heart Failure HCCs, meaning the following proposed HCCs carry the same weight in the risk score:
        • HCC224 – Acute on Chronic Heart Failure
        • HCC225 – Acute Heart Failure (Excludes Acute on Chronic)
        • HCC226 – Heart Failure, Except End Stage and Acute
      • CMS proposes to use this revised CMS-HCC model in Part C payment for aged/disabled beneficiaries enrolled in MA plans beginning with payment year 2024
  • Other topics addressed in the Advance Rate Notice include:
    • 2024 End Stage Renal Disease (ESRD) Risk Adjustment (the 2024 ESRD Risk Adjustment Model will be the same as the 2023 ESRD Risk Adjustment model)
    • Program of All-Inclusive Care for the Elderly (PACE) Risk Adjustment
    • Medicare Advantage Coding Pattern Adjustment
    • Medicare Advantage Normalization Factor
    • 2024 Part D Risk Adjustment
    • Adjustments for Medicare Shared Savings Program and Innovation Center Models and Demonstrations, and Advanced Alternative Payment Models
    • Puerto Rico MA rates

This is a delayed release. ADVI Instant content is distributed in real time for retainer clients. Get in touch to learn more about how we can support your commercialization, market access, and policy needs.

Get in Touch

Interested in getting in touch with Brenna?

Brenna Raines, MHA

Senior Director