From Medicare Advantage News

CMS Memo May Lower Bar for Which MA Provider-Network Changes Trigger SEP

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September 3, 2015Volume 21Issue 17

CMS on Aug. 27 released a memo that observers say suggests the agency is significantly lowering the bar for which Medicare Advantage provider-network changes could trigger a midyear Special Election Period (SEP) for MA plan members. Coupled with other recent steps the agency is taking, including pilot network-adequacy audits starting this summer using what CMS called “a more robust version” of its automated evaluation tool (MAN 5/21/15, p. 1) and the prominent mentions of network-directory updating and distribution in the revised MA marketing guidelines (MAN 7/16/15, p. 1), the memo shows the agency intends to become much more activist on the network-adequacy issue.

The two-page memo, titled “Enrollment Opportunities for Individuals Affected by a Significant Provider Network Change,” was sent to MA plans via CMS’s online Health Plan Management System (HPMS). Its senders are Arrah Tabe-Bedward, director of CMS’s Medicare Enrollment & Appeals Group, and Kathryn Coleman, director of the agency’s Medicare Drug & Health Plan Contract Administration Group.

As the memo indicates, the basic MA provider-network standards have been in effect for a while. It is in the interpretation of those standards, and in what would trigger an SEP, that the Aug. 27 memo appears to plow new ground.

Memo May Lead to More MA SEPs

The basic standards require MA organizations (MAOs) “to notify CMS no less than 90 days prior to the effective date of a significant no-cause mid-year network change,” the memo points out. CMS then, the memo continues, will review the information furnished and determine whether the change will have substantial-enough effect “or potential effect” on enrollees to merit eligibility for an SEP.

“CMS views the SEP as an important beneficiary protection and not as a punitive measure triggered by the MAO’s decision to effectuate a significant no-cause mid-year network change,” the memo asserts. The agency says it will determine which enrollees are eligible based on a member’s “current or recent use of services from a provider being terminated without cause from the MAO’s network. In all instances, the SEP will be effective immediately upon notification to the enrollees of his or her eligibility for the SEP and will continue for an additional two full calendar months.”

The memo adds that MAOs must notify — at the same time they give the required 30-day advance notice to all members — the enrollees identified by CMS “as substantially affected” by a significant provider-network change of their chance to change plans. The notice from the plans must direct enrollees to call 1-800-MEDICARE for more information or to request enrollment in a different plan.

Looking at the whole new CMS memo, Michael Adelberg, senior director at FaegreBD Consulting and a former top CMS MA regulatory official, says it is significant in several ways. For example, “CMS has long had the right to do this, but, to date, they’ve been very cautious about acting on it,” he tells MAN. He recalls that “the only time CMS has created large-scale SEPs related to network disruption was as part of a larger concern regarding a health plan’s viability,” such as when providers left a plan because it no longer was paying claims promptly and was headed for state supervision.

The new memo, along with the pilot network-adequacy audits and new provider-directory oversight, “strongly suggest that CMS is lowering the bar for the circumstances that might trigger a midyear provider network change SEP,” according to Adelberg. Advocates have been urging CMS to take such action, he notes, but the agency didn’t put out any document on it until now.

“I take the memo as a clear signal that CMS will, at some point soon, start letting beneficiaries switch plans midyear when a health plan network loses a flagship provider group or hospital system during the plan year,” he adds. “Maybe it will be just one or two sentinel prosecutions, or maybe it will be program-wide when this sort of thing happens.”

Method CMS Chose Could Shorten Process

It also is very significant, Adelberg contends, that “CMS brands this SEP as something other than a compliance action.” He explains that by taking the procedure “outside of the noncompliance/enforcement track, the agency escapes the lengthy process and plan protections that, by reg, must accompany an enforcement action.”

CMS spokesperson Ray Thorn, asked why the agency is putting out this memo now, tells MAN, “One of CMS’ top priorities is to ensure that beneficiaries have timely access to the care they need. CMS’ role is to ensure that a plan’s provider network remains adequate.” The Aug. 27 memo, he says, is “operational guidance” on what was described in the spring Call Letter, adding that the “triggering event” for an SEP remains “the determination that a provider network change is significant.”

The MA network-adequacy issue began becoming prominent in 2013 when industry market-share leader UnitedHealth Group and some other insurers made large-scale, no-cause midyear terminations of physicians in efforts to create narrower networks that could help cope with MA payment-rate cuts (MAN 11/21/13, p. 1). And in the aftermath of the 2015 MA and Part D Annual Election Period, CMS granted affected enrollees of Aetna Inc. an SEP because the insurer erroneously listed nearly 6,000 retail pharmacies as in network for its Part D plans when they weren’t.

The CMS memo can be viewed by visiting the Sept. 3 From the Editor entry at MAN's subscriber-only Web page:

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