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New Plan Flexibility for Medicare Advantage Brings Opportunities for Supplemental Benefits and Part D Drug Coverage in 2020

The Centers of Medicare & Medicaid Services (CMS) recently issued its final Medicare Advantage (MA) and Part D plan payment policies and Final Call Letter for the 2020 plan year. This final notice continues the Trump Administration’s efforts to introduce significant program changes with new plan option initiatives for the Medicare program.

In the payment notice, 2020 MA plan revenues, on average, are expected to increase by 2.53% in 2020, up from the 1.59% estimated in the CMS advance payment notice issued in February.

New Flexibility in MA Plan Designs

CMS finalized its framework to permit MA plans to vary supplemental benefit offerings based on the medical conditions and needs of chronically ill enrollees, as required in the Bipartisan Budget Act of 2018. This additional benefit flexibility allows plans to enhance MA coverage for members with chronic conditions by offering standard MA enrollees some of the enhanced benefits that Dual Eligibles qualify for under Medicaid. For example, CMS will permit plans to offer items and services that include capital or structural home improvements (bathroom access or entry ramps) so long as those items and services have a “reasonable expectation” of improving or maintaining overall function. These additional flexibilities and benefits present opportunities for plans and non-traditional service providers to pursue partnerships for innovative coverage.

CMS is also expanding its Value Based Insurance Design (VBID) model, which it has been testing in 7 states among 10 plans, making it now available throughout the U.S.  VBID allows plans to reduce member cost-sharing or enhance benefits to encourage enrollees to utilize services that benefit them most, in order to reduce expenditures, enhance quality of care and improve health service delivery. Starting in 2020, all Medicare Advantage plans can offer VBID benefit options, such as:

  • Reduced member cost sharing for those with Congestive Heart Failure, COPD or Diabetes if they participate in disease management programs
  • Reduced member cost sharing or expanded benefits for members who used high value providers.
  • Reduced or no drug copays for those with Hypertension who use lower tier prescription drugs.
  • Copay rebates for Diabetics who complete the 4 annual preventive screenings.

VBID plan design applications are due to CMS by June 7th.

Changes in Medicare Part D Drug Coverage

CMS is requiring MA plans to cover opioid use disorder treatment services furnished by Opioid Treatment Programs (OTPs) as a Medicare Part B benefit in 2020. Plans must also offer supplemental benefits that provide coverage of non-opioid pain management treatments, and also offer at least one opioid-reversal agents, such as naloxone, as a generic drug.

CMS also finalized its changes to the Part D drug auto-ship policy, which permits drug plans to offer members an auto-ship option for drug refills after the initial fill. Plans will need to send two shipping reminders allowing members to opt-out of having their drugs mailed, prior to sending the first auto-ship refill. Enrollees will no longer be required to use a drug for four continuous months in order to qualify for auto-ship, and will no longer need to consent annually for shipment of their drugs.

Health plan bids for contract year 2020 are due to CMS on or before Monday June 3, 2019.

The final 2020 Rate Announcement and Call Letter can be viewed at:

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