CY 2027 CMS proposed rule: what agents need to know

Another year, another proposed rule change from CMS. The most pressing, agent-altering marketing changes were covered in a previous insight. But of course, we are here to tell you the rest of the story, too. What are the rest of the proposed rule changes, and how might they affect your business and clients?

Star ratings

There are a few different proposed changes to the contract rating system this in 2027. CMS proposes to not use the “Excellent Health Outcomes for All” reward system. This reward would have essentially given bonus points to a plan’s star rating if it scored particularly high with enrollees living with certain social risk factors. Not to be confused with the historical reward, which will stay. That one gave contracts bonus points if they kept a high star rating over time.

In general, 12 measurements will be dropped or streamlined for Part C or Part D star ratings (or both). These measurements focused on behind the scenes processes that don’t help beneficiaries understand the different performance levels between plans.

Agents might wonder how contract’s scores might be affected by these changes, but there truly won’t be many. High level, 62% will see no change in rating, 13% would see a half star increase, 25% would see a half star decrease, and one contract would see a full star drop off.

This way, CMS figures, Star Ratings will be more focused on a true representation of how well a plan serves the beneficiary and how much variety is between each plan, as opposed to getting boosted/dragged for how it functions administratively.

CMS expressed a concern about having too few measurements if all those aforementioned were removed. Would this lead to plans work only to improve the items within the star rating system? They ask for comments on this issue.

And to top it all off, a depression screening and follow-up care measure will be added for 2029.

Special Enrollment Period changes

CMS proposes a new Special Enrollment Period, named “SEP for Provider Terminations”. If a provider leaves an enrollee’s network, an SEP would be triggered. Unlike in the past, this would happen regardless of how “significant” CMS or the MA organization thought the network change was. It would begin the month the individual is notified of their eligibility (the month they are told their provider is exiting) and last for two months after. The process for a provider leaving a network would not change, except the enrollee would get a notice for the start of the SEP in addition to the notice that their provider left the network. Beneficiaries could also enroll in PDPs during this SEP if they disenrolled from a Medicare Advantage plan.

Some hyper niche SEPs would require prior CMS approval: SEPs for individuals who disenroll in connection with CMS sanction, SEPs for individuals who were not adequately informed of a loss of creditable prescription drug coverage, and SEPs for other exceptional circumstances. Those who use these SEPs would have to get actual approval from CMS and not rely on other organizations to determine eligibility for this SEP.

CMS also proposes that SEPs should only be able to be changed through the rulemaking process.

Changes for Special Needs Plans

Special Needs Plans, or SNPs, can change their Models of Care (MOCs) throughout the entire year as they need to. To alleviate some of the burden of processing those changes, CMS asks SNPs to limit their MOC change submissions to two time periods: either January 1-March 31 or October 1-December 31.

Due to the nature of the plans, those enrolled in a SNP often need to transfer plans or networks more often than other beneficiaries. When a beneficiary in a DSNP needs to enroll in a new plan off cycle, passive enrollment is allowed. But, the beneficiary must be enrolled in a plan with a “substantially similar network.” As this becomes increasingly more difficult, CMS proposes that SNPs should instead offer a 120 day continuation of care for incoming enrollees.

A SNP plan must also have the necessary staff to properly onboard a new SNP enrollee and perform basic tasks like health risk assessments and coordination of care plans.

I-SNP and C-SNP

CMS is taking note of the increase in the availability and enrollment of C-SNPs and I-SNPs. A positive note, of course, as more beneficiaries are getting the coverage they need. But as they, particularly C-SNPs, get more popular, CMS wonders if more regulation is needed surrounding these plans. They have a few options on the table:

1. Should these plans have similar requirements for State Medicaid Agency Contracts (SMACs) to D-SNPs? CMS proposes that plans who enroll 60% or more dual eligible beneficiaries could choose to coordinate in the same way that D-SNPs do, and be expected to adhere to similar Federal and State requirements.
2. Should the states determine the parameters of the coordination? CMS proposes simply that. Those enrolled in C or I SNPs and are also dual eligible would have their care plans and coordination managed by the state.
3. Should C-SNPs have “look alike” limitations similar to those applying to D-SNPs?

But they also express the desire to hear about any other options out there.

CMS also is concerned about the lack of mental health plans out there for beneficiaries. C-SNPs for drug and alcohol addiction do exist, but only in two states and service less than three thousand beneficiaries. CMS would like comments on why those are not being developed/utilized more.

Medicaid MCOs

CMS understands that in states like Michigan where carriers can offer a Medicaid Managed Care Organization (MCO) and a D-SNP at the same time, it can get a bit confusing if beneficiaries have to coordinate not only two different plans, but two different carriers. Or not, if the beneficiary decides to not use a MCO, and instead uses Fee for Service Medicaid (FFS), which is not tied to a carrier.

To reduce the confusion, CMS wanted to gradually eliminate the option to enroll in a SNP with one carrier and an MCO for another, and require beneficiaries, if they choose to enroll in an MCO, to choose the same carrier for both the MCO and the SNP.

Due to CMS’s phase-in approach to these rules, this potentially caused an accidental effect of carriers choosing to stop offering fully integrated DSNP plans, since they could instead just offer non-integrated plans. Or, carriers could be stuck in a situation where they have to eventually disenroll some of their beneficiaries because they aren’t enrolled in their MCOs, while other carriers can scoop them up simply because they only offer a less integrated option. This works against the spirit of the rule, which was to narrow down the amount of coordination that has to occur between carriers.

CMS proposes that coordination-only DSNPs that enroll FFS Medicaid beneficiaries should only be allowed to continue to enroll FFS Medicaid beneficiaries. In tandem, CMS proposes that HIDE SNPs should be allowed to offer additional DSNPs in the same service area, which prevents them from essentially being forced to shut down their more integrated products in favor of welcoming the FFS Medicaid enrollees. To even the playing field even further, CMS also proposes that if a carrier does enroll an FFS Medicaid beneficiary, they must aid that beneficiary in getting their Medicaid services with coordinated care assistance. This ensures that all benefits are received regardless of integration status.

All this to essentially say that CMS wants as many beneficiaries as possible to be enrolled in as few carriers as possible. And if a beneficiary won’t or can’t enroll in a fully integrated plan, the responsibility of managing Medicaid for the beneficiary is on the carrier.

Inflation Reduction Act is here to stay

CMS wants to codify items already in place from the Inflation Reduction Act of 2022, eliminating:

• The coverage gap
• Cost sharing in the catastrophic phase

And make permanent:

• The calculation method of the reduced out of pocket max
• The changes to the discount program
• TrOOP cost calculation methods
• Specialty drug tier rules
• The reinsurance payment processes
• The Select Drug Subsidy

CMS’s goal here is to keep costs low for beneficiaries and make Part D sustainable for years to come.

HRAs/ICHRAs

Medicare is not usually the place to discuss group health coverage items like HRAs and ICRHAs, but when it comes to determining creditable drug coverage, they are causing an issue. CMS proposes that account-based plans should not be required to make creditable coverage disclosures to their Medicare-eligible employees.

More exemptions for SSBCI

Because cannabis is federally illegal, CMS proposes deeming it unallowed as a Supplemental Benefit for the Chronically Ill. This would properly align SSBCI benefits to federal law.

Mid-Year supplemental benefit notice

CMS wondered a few years back if reminding beneficiaries of their supplemental benefits halfway through the year would help tackle the underutilization of those benefits. The burden of this reminder now outweighs the benefit according to CMS, and is redundant. CMS proposes to nix it for 2027.

Bits and bobs to reduce costs

In an effort to save money, time, and energy, CMS lays these ideas out for comment:

• Stop requiring MA plans to include health-disparity reductions activities in their quality improvement plans
• Remove requirements for Notices of Availability of language services that overlap with Medicaid requirements
• Streamline some of the Part D Prescription Drug Event appeals process

What’s in store for the future?

It looks like CMS is investing a lot of effort into Special Needs Plans, and wants to expand their use where they can, and make sure that is done in a responsible way. They want to make it easier for a beneficiary to adjust if their provider leaves them high and dry, which will be a particular boon to those who live in rural areas. And, they want star ratings to be more of a reflection of the user experience. If you are interested in commenting on any of these proposed rules, you can do so here.