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What to Watch for in this Week’s Call Letter and Proposed MA-PD Rule

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CMS is set to release its annual proposed changes to Medicare Advantage (MA) this week. Some of the topics that may be addressed include End-Stage Renal Disease (ESRD), network adequacy requirements, payment to MA plans that offer the hospice benefit, and the MA quality bonus program.

This week, CMS is expected to release the 2021 Advance Notice and Draft Call Letter as well as the MA and Part D proposed rule for 2021. Both documents will outline key changes that impact MA plans, Medicare beneficiaries, and other stakeholders for the 2021 plan year. The CMS will receive public comment on both documents and will look to finalize any policy changes later this spring.

Of the MA issues that may be addressed by CMS, Avalere is paying special attention to the following 4 areas:

  1. Updates to the ESRD payment methodology that take into account greater availability of MA: Starting in plan year 2021, all beneficiaries with ESRD will have the ability to enroll in a MA plan. An Avalere analysis found that payment to MA plans for ESRD beneficiaries may be inadequate. Specifically, Avalere found that in 10 of the top 15 metropolitan statistical areas with the most ESRD patients, payment to MA plans would be less than the fee-for-service spending on ESRD patients. This year’s rate notice could provide CMS the opportunity to make changes to plan payment that take into account a larger share of ESRD patients enrolling in MA.
  2. Flexibility around network adequacy requirements called for under the President’s executive order released last October: The President’s executive order called for Health & Human Services to issue a regulation that would adjust network adequacy requirements for MA plans to account for “the competitiveness of the health market in the states in which plans operate” and “telehealth services or other innovative technologies.” Congress has already provided greater flexibility to MA plans to use telehealth services, and CMS may build on this flexibility through the proposed rule as it implements the President’s executive order.
  3. Specifics on hospice-related payments to plans electing to participate in CMMI’s VBID model: In December, the Center for Medicare and Medicaid Innovation (CMMI) announced that, starting in 2021 as part of its ongoing Value-Based Insurance Design (VBID) model, participating MA plans could elect to include hospice services as part of the MA benefit. The CMMI released a request for applications (RFA), giving interested plans until March 16 to submit an application. This RFA stated that “additional information about the hospice capitation rate” would be released in February—potentially signaling CMS would provide this information as part of the rate notice. Understanding how plans will be paid under the demonstration is essential when considering whether to participate in the VBID model.
  4. Changes to star rating measures and the MA QBP: MedPAC has been critical of the current MA Quality Bonus Program (QBP) and during its January meeting discussed policy options that would make significant changes to the QBP and plan payment. The CMS in recent years has made major changes to the QBP through the proposed rule rather than the Call Letter, and this year may be no different. While much of what MedPAC is contemplating would require Congressional action, the CMS does have discretion through regulatory action to change the number and type of measures included in the QBP, the thresholds established to assign ratings, and the ability to take into account social determinants of health that may impact a plan’s overall rating.

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