CMS’ Notice of Proposed Rule-making with Medicare Advantage and Part D Plan Sponsors

Los Angeles Office
4607 Prospect Ave., L.A., CA 90027
Ph: (323)284-5326 / FAX: (323)686-5434

ATTN: CMS-4085-P
Centers for Medicare & Medicaid Services
Department of Health & Human Services
P.O. Box 8013
Baltimore, MD 21244-8013

Submitted Electronically:

RE: Notice of Proposed Rulemaking (Pub. Oct. 22, 2009)
42 CFR Parts 417, 422, 423 et al.

To Whom It May Concern:

California Health Advocates (CHA) submits the following comments to the Notice of Proposed Rulemaking (NPRM) published on Oct. 22, 2009. CHA is a non-profit organization dedicated to education and advocacy on behalf of California’s Medicare beneficiaries. We thank CMS for the opportunity to submit these comments.

Our comments are organized in accordance with the Table of Contents to the NPRM.


CMS should issue regulations and not subregulatory guidance:

CMS asks throughout the NPRM whether it should provide clarification on a number of issues through notice and comment rule-making or through subregulatory guidance. We believe that, as a general rule, all clarifications should be provided through regulations. Subregulatory guidance does not carry the same legal weight as do regulations, and such guidance is difficult to enforce. Furthermore, it has been our experience that many Part C organizations and Part D plan sponsors often do not pay much attention to subregulatory guidance.

CMS in this NPRM proposes to incorporate many beneficiary protections that currently exist in guidance documents into regulations. We believe this is the right approach and an approach that should be continued.

Beneficiaries and their advocates require complete access to CMS guidance materials:

In a number of places throughout the NPRM, CMS indicates that it will make information available through Health Plan Management System (HPMS) memoranda. For example, CMS indicates it could use HPMS to announce the methodology and amounts for acceptable out-of-pocket caps and cost-sharing, and to distribute standardized marketing materials.

We ask that such information be made available through the Call Letter and other public documents, and not through HPMS. Access to HPMS memoranda is restricted to plan sponsors. Information provided to plan sponsors through HPMS is not available immediately to beneficiaries and their advocates. When HPMS is used to communicate beneficiary-related information, advocates are denied the opportunity to respond to any requests for comments and are denied immediate access to information they need to assist beneficiaries.

CMS should issue regulations concerning language access:

We endorse the concerns raised by the National Senior Citizens Law Center in its comments to these proposed regulations over the absence of specific requirements with respect to either interpreter services or written translations of marketing documents and other plan communications with beneficiaries. We agree with their proposed regulatory language as well as their comments about the importance of CMS enforcement of Section 30.6 of the Medicare Marketing Guidelines.


II. A. Changes to Strengthen CMS Ability to Distinguish Applicants

  • Notice of Intent to Apply (Sections 422.501 and 423.502)

We support the proposed changes: 1) to require applicants to demonstrate that they meet all requirements outlined in the Medicare Advantage/Part D applications; and 2) to decline to consider materials submitted after the 10 day period following notice of intent to deny an application. The first proposed change protects Medicare beneficiaries by emphasizing the importance of following all Medicare rules, without an organization making its own determination that some rules are more important than others, or that some rules can be ignored.

The second proposed change ensures that an applicant organization is committed to the Medicare program and has the administrative capacity to provide additional information when requested. We encourage CMS to go further and to deny a contract to plans which do not provide the requested additional information.

  • Deny Applications Based on Past Contract Performance (Sections 422.502(b) and 423.503(b))

In order to ensure that only high-quality plans are participating in Part C and Part D, it is critical for CMS to take into consideration the past performance of plan sponsors and organizations, including their completion of a previous corrective action plan. Since the Medicare Advantage and Part D programs have been in existence, there have been some consistently poor performing plans that have been allowed to continue in the program. This provision protects beneficiaries by giving CMS greater authority to weed poor-performing plans out of the programs. We note, however, that although the commentary to the proposed rule change speaks broadly about a plan’s past performance history, proposed Section 422.502(b) and 423.503(b) limit the look-back period to the prior 14 months. While we recognize that old errors should be given lesser weight than more recent performance, we believe that a 14 month review is inadequate. A three year look-back would be a more appropriate timeframe for determining a plan’s track record and the extent to which a plan has been able to sustain a pattern of compliance.

  • Network Adequacy (§422.112) (p. 54644)

CMS proposes to compare a plan’s proposed network with the prevailing community patterns of health care delivery in the service area of the plan. We agree that community patterns of health care delivery provide a good general benchmark. We caution CMS to recognize that distinguishing between urban and rural settings may not be an accurate measure of adequacy, however. Vulnerable beneficiaries living in urban areas where the percentage of providers is higher may have just as much difficulty in accessing care as do rural beneficiaries, particularly if they do not have access to adequate transportation.

To address the needs of the most vulnerable beneficiaries, regardless of where they live, we ask CMS to include the following factors which are derived from access standards for Medicaid managed care plans (see 42 CFR 438.206):

  1. The mode of transportation regularly used by Medicare beneficiaries, particularly those who are dually eligible for Medicare and Medicaid and those who rely on transportation for older and disabled individuals. Beneficiaries who rely on public transportation have difficulty accessing providers that are not on public transportation routes. They may not be able to get to such providers even if the providers are located within the 30 minute/30 mile benchmark for people who travel by car. Additionally, even for providers who are accessible by public transportation, travel time by public transportation may be substantially longer than travel time by car, exceeding 30 minutes when car travel would be within the benchmark. Finally, some transportation programs for older and disabled individuals, particularly those offered by independent and assisted living facilities, have a more restrictive mileage limit than 30 miles. Beneficiaries who rely on this mode of transportation are not able to access providers within the current mileage benchmark.
  1. Whether the location provides physical access for enrollees with disabilities. By definition, the Medicare population includes a higher percentage of individuals with chronic conditions and functional limitations that may preclude them from accessing providers who otherwise meet the CMS access standards. Plans that service this population, particularly SNPs for people with chronic conditions, need to ensure that their provider network can accommodate people with disabilities.
  1. Delivery of services in a culturally competent manner. Plans should be required to ensure that their networks include sufficient providers who can deliver services in a culturally competent manner to all of the populations within the service area, including providers who offer specialized services utilized by relevant populations. Plans should have mechanisms in place to ensure that they and all of their network providers can offer services to enrollees with limited English proficiency.

We request that these additional factors be included in regulatory language, paralleling the Medicaid regulations.

  • Corrective Action Plans (§422.506(b)(3); 422.510(c)(1); 423.507(b)(3); 423.509(c)(1))

We agree that CMS should focus on the outcome of a corrective action plan (CAP), rather than the development of the plan. The proposed regulation would accord the MA organization at least 30 calendar days, instead of 45 days, in which to develop and implement a CAP. We believe the regulatory language needs to state more clearly that the corrective action should be completed within this same 30 day period.

II. B. Changes to Strengthen Beneficiary Protections

  • Broker and Agent Requirements under Parts C and D

In this section of the preamble, CMS requests comments on both the capacity of SHIPs to serve more Medicare beneficiaries as well as issues relating to broker and agent requirements. We first address general marketing issues, followed by comments on the current capacity of the SHIP network.

  • Marketing Issues

We appreciate CMS’ renewed attention to issues surrounding agents/brokers, marketing misconduct, and informed decision-making by beneficiaries. In response to the request for comments on “potential solutions to ensure that beneficiaries receive adequate assistance in understanding their choices and with enrollment” (p. 54655) we submit the following comments, also applicable to CMS’ request for comments earlier in the preamble on “enable[ing] Medicare beneficiaries to choose the plan that best suits their needs” (p. 54638). We agree that “more can be done to structure choices for seniors to aid them in making better plan choices” (Id.). We are aware that some of the following suggestions/comments would require legislative, as opposed to administrative, changes, but we include them here nonetheless. We also attempt to address specific issues for which CMS is seeking feedback. The following comments are organized into: 1) broad structural changes that we believe will both improve beneficiary decision-making and reduce instances of marketing abuse; 2) changes in regulatory agencies’ monitoring and enforcement that would improve oversight of the marketplace; and 3) agent/broker compensation and financial incentive issues.

Broad structural changes

  • Health plan benefit packages should be standardized – similar to Medigaps – in order to allow consumers more opportunity to make meaningful comparisons between plans. In addition to CMS’ current efforts to improve the ability of beneficiaries to make informed choices, including requiring meaningful differences between plan offerings and eliminating plans with low enrollment, there need to be more efforts made to both reduce the overall number of plans and make them easier to compare. Similar problems with beneficiary confusion and marketing abuse were prevalent in the Medigap market prior to standardization of these plans pursuant to OBRA ’90. Consumers today cannot adequately compare an MA plan with another and are therefore forced to rely on agents and others to help them select appropriate coverage.
  • Make the Part D benefit available through the Original Medicare program, either on its own or in addition to private plan options. A Medicare-operated plan would not have the administrative cost of Part D and MA plans. Administrative savings could be passed on to beneficiaries and taxpayers, and the need for agents and brokers would be eliminated.
  • Since PFFS plans have been the subject of a significant portion of marketing misconduct, we suggest expanding §164 of MIPPA (effective 2011) requiring PFFS plans in “network areas” to establish contracting provider networks to PFFS plans offered in all areas, not just those offered in network areas to avoid continued beneficiary confusion and abusive marketing practices.
  • Expand the marketing requirements applicable to MA and Part D plans to the marketing and sale of Medigap plans (otherwise agents selling a range of plans can easily circumnavigate MA and Part D sales restrictions by, for example, making unsolicited contacts to sell Medigaps).
  • Scale back federal preemption of state laws and regulation over Medicare private plans; delegate more authority over sales and marketing of MA and Part D plans to state departments of insurance.

Monitoring/enforcement changes

  • Require any beneficiary’s change of Medicare-related plans (Part D, Medicare Advantage, Medigap) performed with the assistance of an agent/broker to be accompanied by a Replacement/Suitability Form to be completed by the agent. This would require the agent to articulate and document in writing why a proposed change in plans would purportedly benefit the Medicare beneficiary. Such forms, required in some states when Medigap policies are being changed, serve as an added layer of protection for beneficiaries (and accountability for agents); see Attachment 1 (PDF) to these comments for an example of such a form.
  • Implement the suggestions of advocacy organizations in comments to the 2010 Marketing Guidelines (see, e.g., Draft Medicare Marketing Guidelines Comment/Response Form), including to follow the mandates of MIPPA with respect to SNP notice requirements and scope of appointment rules. In those comments, consumer advocates argued that the updated Marketing Guidelines do not rescind, alter or improve upon CMS memoranda and guidance issued in the Fall of 2008 that created gaping loopholes and otherwise weakened consumer protections found in MIPPA. As stated in those comments, these groups urged CMS to conduct a thorough overhaul of the Marketing Guidelines and strengthen consumer protections and oversight of both plan sponsors and agents/brokers.
  • CMS should require all agents to use their National Insurance Producer Registry (NIPR) number on sales materials when selling Medicare products, and record their NIPR number on applications so that individual sales and replacement activity can be tracked more easily.
  • Require all educational events in which a plan and/or agent participates to be reported to CMS in addition to sales events, in order to subject such events to secret shopping and ensure that they do not cross the boundaries between educational and sales events.
  • Implement reporting requirements that enable plans and CMS to identify and prevent unsolicited door-to-door sales; all in-home enrollments should be flagged, and agents should be required to document how an invitation for an in-home presentation was secured. Further, since in-home sales are more prone to abusive sales practices, plans must be required to document how agents arrange for each in-home sale, and that information should be audited by CMS and, if appropriate, state regulators.

Agent Compensation and Financial Incentives – We agree with CMS’ concern that agents and brokers have inherent financial incentives when selling Medicare products. In addition to these financial incentives, which do not plague SHIPs, we believe that other factors limit the ability of many agents and brokers to provide unbiased, timely and accurate assistance to Medicare beneficiaries, including: many are not adequately informed or trained to counsel Medicare beneficiaries on the full range of all their options; agents and brokers may know the plans they sell, but not all plans or other options available to Medicare beneficiaries; agents and brokers may help a beneficiary compare the costs of different plans, but may not learn about the beneficiary’s preferences and needs to help find plans best suited to the beneficiary (e.g., would an agent or broker inform a beneficiary about utilization management restrictions, or about the difference between retail and mail-order pharmacies? What if an agent, when helping a beneficiary, uses the Medicare Options Compare tool, but the three lowest cost plans are not one sold by the agent?).

  • Agent commissions – require a uniform, standard commission for both MA and Part D plans (otherwise, there will remain the financial incentive to steer individuals towards MA plans even if that is not the best option for an individual). Further, based on significant changes in Part D and Medicare Advantage plans from year to year, commissions paid to agents/brokers should not vary from the first and subsequent years. A commission that is the same for all sales has the potential to discourage agents from replacing coverage for a higher commission. However, we continue to be skeptical of the use of independent agents to sell MA and Part D plans, and believe that companies need to be held responsible for the acts of their agents.
  • Limiting agent/broker activity to the AEP and OEP may not reduce the incidences of marketing misconduct, since it is during these periods when most misconduct appears to occur. Agents and brokers already target their efforts towards dual eligibles, others with SEP rights, and newly eligible Medicare beneficiaries during these two enrollment periods.

SHIP Capacity

CMS solicits comments on the capacity of SHIPs to serve additional beneficiaries. California Health Advocates works closely with the State Health Insurance Program (SHIP) in California, known in our state as the Health Insurance Counseling & Advocacy Program (HICAP). SHIPs are the local, community-based resource providing personal, unbiased assistance and counseling to the nation’s 45 million Medicare beneficiaries so that they can make informed health care decisions. Additionally, a variety of community stakeholders—including beneficiaries, caregivers, community-based organizations, and providers—view SHIPs as a credible and trusted source of accurate information and assistance. Therefore, we strongly believe that strengthening the infrastructure of the SHIP network would lead to increased capacity of SHIPs.

Without additional resources, though, it is unlikely that SHIP programs could serve significantly more beneficiaries. Compared to companies that offer services similar to SHIPs, SHIPs are shockingly under-funded. A recent article in The Wall Street Journal indicated that for-profit companies charge from $200 to $1,000 or more for the same services that SHIPs provide. (“Medicare Maze – Trying to figure out which coverage is right for you? These new services can help,” WSJ, November 14-15, 2009).

In order to grow capacity, SHIPs should be further strengthened by significantly greater funding and resources. Increased funding should not come with burdensome requirements, though, that will cause SHIPs to spend more time and effort collecting and reporting data instead of expanding their capacity to serve significantly more beneficiaries. Goals placed on SHIPs related to increased funding should be realistic, set with considerable input from SHIPs, and take into account local community patterns, demographics, and the culture of the communities they serve. We believe the SHIP network would need ample time to integrate and build their programs to be able to meet new demands.

In addition to funding, SHIPs need resources, such as better promotion and marketing of SHIPs in CMS publications and website, and plan materials. Since many SHIPs are known by a different name, the correct name and local contact information should be indicated where appropriate. SHIPs also need help with finding, establishing and maintaining collaborative relationships with organizations that currently serve Medicare beneficiaries, such as ethnic organizations, organizations that serve people with disabilities, pharmacies, pharmacy schools, clinics, dental offices, assisted living facilities, nursing homes, hospitals, etc.

As referenced above in our comments concerning marketing, we believe that Medicare private plans should be more limited in number and standardized among benefit packages. These changes would make it easier for SHIP counselors to explain the options that are available in their communities and would reduce the amount of time it takes to analyze options and find the best plan or combination of plans for each person. Each SHIP program would then be better able to serve more beneficiaries.

  • Beneficiary Communications Materials Under Parts C and D (§422.2260, §422.2262, §423.2260, and §423.2262)

CMS raises a concern that its current definition of marketing materials is too broad. It is our experience that the marketing regulations and guidelines are not broad enough, and allow entities not clearly identified as Part C or Part D providers to issue misleading and inaccurate marketing materials. For example, there was a recent advertisement in a Pennsylvania newspaper by an entity called “Senior Financial Solutions” that used scare targets to lure Medicare beneficiaries to call it and then steer them to a particular Medicare Advantage sponsor. Such activities should be precluded under the regulations.
We also question the CMS proposal to exclude materials about claims processing activities from the definition of marketing materials. We are fearful that this exclusion will be used by organizations and plan sponsors to justify the issuance of such materials as evidence of benefits statements, coverage determinations, and appeals notices that do not provide required information to beneficiaries. We already encounter problems with such notices and see the need for greater, not less, oversight in this area.

  • Required Use of Standardized Materials Under Parts C and D (§422.2262 and §423.2262)

Along with other consumer advocacy organizations, we have previously requested that CMS require plans to use standardized marketing material language and format when such materials have been developed by CMS. We believe such communication materials help beneficiaries understand how their current benefits and cost-sharing requirements will be changing and help them compare their current plan with other plan options.

We caution CMS that standardized materials should be sufficiently tailored to the intended recipients, particularly dual eligibles. For example, current materials about MA plan terminations are not tailored to dual eligibles enrolled in those plans and have created a great deal of fear and confusion.

Additionally, we request that beneficiary advocates have an opportunity to review and provide input into the development of standardized materials. We also ask that the materials be distributed through a system that is open and transparent to all interested parties, including advocates and state agencies.

  • Involuntary Disenrollment for Failure to Pay Plan Premiums Under Parts C and D (§422.74 and §423.44)

We support CMS’ proposal to increase the minimum grace period required prior to involuntary disenrollment for failure to pay plan premiums under Parts C and D from one month to two months. The proposed language says “at least” two months. We ask CMS to add language that says an organization or sponsor may offer a longer time period.

While we support this proposed change, we also believe that plans should be restricted as to when they are able to collect unpaid premiums. We have heard numerous anecdotes from beneficiaries who received bills that combined numerous owed payments into one large bill. Many of these situations involved beneficiaries who had never received a bill throughout a plan year, received a combined bill a year later, and were unable to pay. We believe that it is unfair for plans to have the freedom to collect underpayments from beneficiaries who have not paid owed premiums through no fault of their own. If a private insurance plan fails to collect premiums in a timely manner, the beneficiary should not have to pay.

  • Maximum Allowable Out-of-Pocket Cost Amounts (§422.100)

CMS proposes to improve beneficiary protections by requiring that all local MA plans have an out-of-pocket (OOP) maximum for services covered by Medicare Parts A and B, and the maximum would have to meet an annual limit set by CMS.

We support CMS’s proposal to require all MA plans to establish a maximum out-of-pocket limit for all A and B services at, or below, a threshold level determined annually by CMS. It is impossible for beneficiaries in poor health to predict what combination of services or products—hospitalization, outpatient hospital care, treatment with Part B drugs, radiation therapy or durable medical equipment—they may require during the course of a plan year. The best protection against potentially bankrupting medical expenses is a comprehensive out-of-pocket limit, and beneficiary counselors often advise their clients to look for such a limit when selecting an MA plan. As a result, plans without such a limit are less likely to receive enrollment from beneficiaries with above-average need for services when consumers are aware of the important protection provided by an out-of-pocket limit. When consumers are not alerted to look for the presence and level of an out-of-pocket limit, those in poor health or those who experience a major health crisis may face out-of-pocket costs that threaten their financial security and jeopardize their access to care.

A regulatory requirement to provide an out-of-pocket limit is necessary because CMS’ efforts to use the annual Call Letter and the benefit review process to encourage provision of an out-of-pocket cap have not been fully successful. While the terms of the 2010 Call Letter did result in additional plans establishing an out-of-pocket limit at the CMS-recommended threshold, there remain many plans that do not include such a limit in their benefits (and leave enrollees liable for high out-of-pocket costs for coinsurance), establish a limit well above the CMS-recommended level or exclude some A and B services from their out-of-pocket caps. These benefit designs discourage enrollment by beneficiaries with high health care needs, particularly when there are alternative plans with out-of-pocket caps at, or below, the CMS-established threshold.

Plans that advertise an out-of-pocket cap, but exclude important services, are particularly confusing to consumers. Section 422.100 should be clarified to ensure that all Part A and Part B services are included in the OOP cap. Advocates often encounter beneficiaries with large medical expenses who were unaware that the services they require are excluded from the OOP maximum advertised by the plan.

We note that, in the 2010 Call Letter, CMS established an OOP threshold that represented the 85th percentile of projected beneficiary spending in 2010. While it is important that CMS establish a threshold that provides a cap benefiting a significant percentage of Medicare beneficiaries, consideration should also be given to establishing a threshold that ensures access to care remains affordable to low- and moderate income beneficiaries. Almost half of all Medicare beneficiaries have incomes at or below 200% of the federal poverty level.

  • Maximum Cost-Sharing Amounts (§422.100; 423.104)

The proposed regulations provide that MA plans would be precluded from imposing cost-sharing for A and B services that is higher than levels CMS determined annually to be discriminatory. In addition, MA-PDs and PDPs would be precluded from establishing tiered cost-sharing for prescription drugs that exceeded levels annually determined by CMS to be discriminatory. We are pleased that CMS is proposing these regulations. These requirements would prevent plans from using discriminatory benefit designs that disadvantage and discourage enrollment by individuals in poor health with higher than average use of health care services. These benefit parameters, when combined with CMS-prescribed out-of-pocket limits, would also bring some level of standardization to MA plans and PDPs, making it easier for beneficiaries to compare their potential out-of-pocket liability under different plan options.

We support CMS’ proposals to establish maximum allowable cost-sharing amounts for Parts A and B services and for prescription drugs.

We urge CMS to clarify that the authority made explicit in 422.100 will continue to be used in the annual Call Letter to prohibit MA plans from imposing cost-sharing greater than Original Medicare for specific services, including dialysis, chemotherapy and other Part B drugs and skilled nursing facilities. An assessment of whether a benefit design is discriminatory must be made both between MA plans and Original Medicare and among MA plans.

One important protection would be to preclude plans from requiring “up-front” cost-sharing. For example, a plan currently may charge a daily co-payment for the first 20 days of skilled nursing facility care (where traditional Medicare charges no co-payment), and less than traditional Medicare charges for days 21-100. Because most people do not receive 100 days of Medicare SNF coverage, the beneficiary may pay more in the Medicare Advantage plan than in traditional Medicare, even with an OOP limit.

CMS also asks for comments on the approach it intends to take to determine maximum levels of cost-sharing. The process to be used needs more clarity. We are particularly interested in understanding how CMS would evaluate the prior year’s experience. Cost-sharing on its face may not seem discriminatory, and may be offered by a large number of sponsors, but may have a discriminatory effect. The above example concerning how MA plans assess cost-sharing for skilled nursing facility care is a good example. On its face the cost-sharing under a plan that assesses a co-payment for the first 100 days of SNF care may not seem to exceed cost-sharing for 100 days of SNF care under traditional Medicare. But when claims data for SNF benefits under the plan are analyzed, they may show that the overwhelming majority of beneficiaries only receive 20 days of SNF care, for which they would have had no cost-sharing under traditional Medicare.

Similarly, MA plans that impose a per-day charge for inpatient hospitals stays should be evaluated to determine whether the total in per-day charges is significantly higher than the deductible under Original Medicare or than per-day charges under other MA plans for beneficiaries requiring lengthier hospital stays.

For drug co-pays, § 423.104 should be clarified to ensure that all tiers, including specialty tiers, may not exceed the levels determined by CMS to be discriminatory. In particular, cost-sharing under the non-preferred tier can be discriminatory when its copays or coinsurance exceed the standard coinsurance rate of 25 percent and the tier includes drugs or biologics for which there is no therapeutic equivalent on a preferred or generic tier. We have particular concern about plans that use the non-preferred tier when coverage of non-formulary drugs is secured on appeal. In some cases, cost-sharing under the non-preferred tier can approximate, or even exceed, the negotiated price of the drug. That means that, after clearing the substantial hurdles required to secure a drug on appeal, the beneficiary pays nearly the same, or exactly the same amount, as she would if she paid the full price for a non-formulary drug. We recommend that CMS require plans to use the standard coinsurance rate, for example on the specialty tier, for non-formulary drugs covered on appeal.

We also urge CMS to consider changing entirely its current policy of exempting specialty tiers from the tiering exceptions process. The policy magnifies the potential discriminatory impact of specialty tier placement and is inconsistent with both the letter and the spirit of the coverage determination provisions of the MMA. See 42 U.S.C. §1395w-104(g)(2).

Finally, we ask that information about the methodology and amounts for acceptable OOP caps, cost-sharing, and specialty tiers be made available through the Call Letter or other public document and not through Health Plan Management System (HPMS) memoranda. Access to HPMS memoranda is restricted to plan sponsors. Information provided to plan sponsors through HPMS is not available to beneficiaries and their advocates, so they would not be made aware of OOP thresholds or have the opportunity to respond to any requests for comments.

  • Prohibition on prior notification by PPO, PFFS and MSA Plans (§422.2, 422.4, 422.105(b))

We thank CMS for proposing to prohibit PPO, PFFS, and MSA plans from providing for lower cost-sharing where prior notification rules have been satisfied. We agree with CMS that this requirement is confusing and misleading. We have found several plans that charge exorbitant cost-sharing requirements (up to 75%) for expensive items such as durable medical equipment when requirements have not been met, essentially denying coverage for medically necessary, Medicare-covered items and services.

  • Requirements for LIS Eligibility Under Part D (§ 423.773)

We agree that the proposed change will help streamline the deeming/redeeming process. It will assist in the continuity of LIS-eligibility for affected individuals.

CMS also requests further input on auto-enrollment procedures. While there have been improvements over the last three years (including the new LI NET program which we hope will represent an improvement), we remain concerned about the impact that the random auto-enrollment and reassignment processes have on low-income Medicare beneficiaries – particularly dual eligibles. We endorse and incorporate by reference the comments of the Center for Medicare Advocacy and the National Senior Citizens Law Center with respect to concerns that may not be addressed by the new LI NET program.

  • Special Enrollment Periods Under Part D (§423.380)

We thank CMS for expanding the special enrollment period for dual eligibles to all LIS-eligible individuals.

  • Transition Process Under Part D (§423.120(b)(3))

We are pleased that CMS is proposing to include specific transition requirements in its proposed regulations. The availability of transition supplies of drugs is critical for care continuity for beneficiaries who change plans or whose plans change formularies. We support the proposal but suggest two changes to strengthen the proposed regulations.

First, we urge that CMS strengthen the current proposed Section 423.120(b)(3) by providing the same transition protections to individuals requiring long-term care in community-based settings as are provided to those living in institutions. Whether in an institution or in the community, these individuals have high needs and are medically vulnerable. They cannot change drug regimens quickly or easily and any adjustments to their prescription drugs must be undertaken with great care. Moreover, a consistent policy of regulatory neutrality in treatment of individuals who receive long term care services, whether in an institution or in the community, is essential to meeting CMS’s broader goal of rebalancing long-term care and facilitating home and community based options. We propose changing Section 423.120(b)(3)(iii)(A) to say:

“In the outpatient setting, except as described in (B) below, . .” and changing Section 423.120(b)(3)(iii)(B) to say “for enrollees receiving long-term care, whether in an institution or in the community . . ”

Second, we urge that CMS require plans to send out notices to individuals who receive transition supplies within three calendar days, rather than three business days. CMS has, throughout its guidance on Part D notifications, including most specifically on notifications about exceptions and appeals, moved away from setting deadlines in business days and set calendar day deadlines instead. We urge CMS to be consistent with that direction here as well. A calendar day requirement is clearer and easier to enforce. Moreover, beneficiaries use pharmacies 24 hours a day, seven days a week and plans need to be set up to handle transition notifications on the same schedule. Particularly during holiday periods, giving plans 3 business days to mail a notice, combined with the normal delays in the mails can severely cut into the time a beneficiary needs to try a different drug and/or request a formulary exception. For these reasons, we propose changing Section 423.120(b)(3)(iv) to read “”Ensure written notice is provided to each affected enrollee within 3 calendar days of the temporary fill.”

  • Absence from Service Area for More Than 12 Months Under Part D (§423.44)

We agree with the proposed change.

  • Non-renwal Beneficiary Notification Requirement Under Parts C and D (§422.506; 423.507)

We appreciate the return to the 90 day notification requirement. We also ask that notification requirements mandate different personalized notices to different populations, particularly dual eligibles. As stated earlier, the notices sent to duals this year did not address information specific to duals. They contained incorrect information about continued Part D coverage and eligibility to purchase a Medigap policy, for example.

  • Notice of alternative Medicare plans available to replace non-renewing plans (§422.506(a)(2)(ii); 423.506(a)(2)(ii))

We strenuously object to the proposed change that would allow plan sponsors and organizations to place outbound calls to enrollees in plans that they are terminating to tell them who to call to learn about enrollment options. This provision creates a major marketing loophole, and allows plans to steer enrollees to other plans offered by the same sponsors and organizations, regardless of whether those plans are best for them.

Beneficiaries need to be provided with information about all options, including returning to traditional Medicare. That information should be provided by CMS or by a neutral, trained counselor. In addition, once plans have been told that their contracts will not be renewed, there is no incentive for the plans to act appropriately and according to Medicare marketing guidelines when interacting with beneficiaries. This only exacerbates the potential for marketing abuses.

  • Provisions related to Part C and D Appeals (II.B.19 -22)

We endorse and incorporate by reference the comments of the Center for Medicare Advocacy with respect to both specific regulatory changes proposed in this NPRM and their comments on “Additional suggestions for amendments to Part C and Part D appeals regulations concerning notice of appeal rights.”

  • Disclosure Requirements Under Parts C and D (§422.111(g) and §423.128(f))

We believe that disclosure about a sponsoring organization’s performance and contract compliance deficiencies serves two purposes. First, it acts as deterrence to plans to ensure that they comply with rules and contract requirements. Second, it provides plan enrollees with information they need to assess the quality of care they are receiving from a sponsor. Therefore, we believe that disclosure should not be limited to only those opportunities when a beneficiary would be afforded the opportunity to act on the information.

II. C. Changes to Provide Plan Offerings With Meaningful Differences

As referenced in our comments above concerning plan marketing, agent/broker issues, and improving beneficiary decision-making, we urge CMS to work towards simplifying choices for people with Medicare by standardizing Parts C and D plans so that Medicare beneficiaries are able to comprehend marketing materials easily, and make an informed choice about their Medicare Part C and D coverage. This will make the private Medicare markets work better and will save money for both consumers and taxpayers while assuring more appropriate competition among the plan sponsors.

Currently, notwithstanding the sub-regulatory Call Letter guidance regarding the need for sponsors to distinguish among their plan offerings and the MIPPA rule requiring the type of plan to be included within each plan’s name, sponsors continue to bid for multiple plans with little, if any, difference among them. The abundance of similar plans with similar names makes it increasingly difficult for beneficiaries to decipher any meaningful difference and make educated enrollment decisions.

  • Medicare Options Compare Improvements

We endorse the comments of the Health Assistance Partnership and the National Senior Citizens Law Center concerning improvements to the Medicare Options compare pages of the web.

  • Bid Submissions – Ensuring Significant Differences (§423.252, § 423.265)

We agree with CMS that there is a need to ensure meaningful differences among plan offerings by the same plan sponsor. Beneficiary interests are not served by multiple offerings by one sponsor that are neither easily distinguishable nor significantly different. We are, however, concerned about the extent to which CMS emphasized differences in formularies and in utilization management as ways to distinguish among sponsor offerings. Despite CMS’ statement that “all submitted formularies must be sufficiently robust to pass our rigorous formulary reviews,” we worry that using such measures as percent of unique generics offered or percent of utilization management requirements would necessarily encourage sponsors to offer a barebones, highly restrictive formulary as a baseline against which other offerings could be compared. This approach particularly penalizes LIS beneficiaries who can only afford benchmark plans and who are least able to navigate such barriers as utilization management controls.

We also ask CMS to revisit the issue of MA plan nomenclature. MIPPA requires Part C and Part D plan sponsors to include the type of plan in the plan name. Nevertheless, we continue to find plan sponsors using the same name for all of their plans of a particular type, ex. “Gold HMO” or “Silver PPO.” Beneficiaries who are offered four Gold HMOs have difficulty distinguishing among the plans, may unknowingly enroll in the incorrect Gold HMO, and cannot identify in which HMO they have enrolled should questions arise. Beneficiaries would be better served if sponsors were required to give each individual plan a different name, such as Gold HMO 1, Gold HMO 2, etc.

  • Bid Review Process

We agree that a bid should only be approved if its plan benefit package is substantially different from the plan benefit packages in the sponsor’s other submitted bids.

  • Non-Renewing Low Enrollment Plans (§422.506(b)(1)(iv), §423.507(b)(1)(ii))

Consumer advocates have consistently stated that the number of plans offered to beneficiaries makes meaningful choice of a high-quality option difficult. The elimination of consistently low-enrollment plans will help achieve the goal of improving beneficiary choice. We ask CMS to ensure that the guidelines used for determining when a plan is a low-enrollment plan, and when low-enrollment should not be used as a criterion for rejecting a bid application, are transparent and available to the public.

II. E. Changes to Improve Data Collection for Oversight and Quality Assurance

We support the decision by CMS to take a more active, regulatory approach to oversight and enforcement. The proposed regulatory changes will increase data collection, provide beneficiaries with additional information with which to make plan comparisons, and overall improve quality of plans.

II. F. Changes to Implement New Policy

  • Protected Classes of Concern Under Part D (§423.120(b)(2)(v))

We endorse and incorporate by reference the comments of Mental Health America and the Center for Medicare Advocacy with regard to this issue. We oppose taking the exception process into consideration in determining which drugs will fall within the protected classes of concern.

The criteria should be defined by considering the potential health outcome if access to the drug is denied rather than delayed. We also disagree with the decision to allow the extension of utilization management techniques, such as prior authorization, to protected classes of concern. Many plans require an enrollee to seek prior authorization with each prescription renewal, a process that is even more burdensome than an exception which, once granted, remains in effect for the entire plan year.

Finally, we believe that formal rulemaking with full transparency and adequate opportunity for consumer participation is critical for this process.

II. G. Changes to Clarify Various Program Participation Requirements

  • Standard Timeframe and Notice Requirements for Coverage Determinations Under Part D (§423.568)

We are appreciative that CMS is proposing to revise and add language to strengthen beneficiary appeal rights. We adopt and incorporate by reference the comments of the Center for Medicare Advocacy proposing several changes and additions with respect to appeals regulations, and the additional comments of the National Senior Citizens Law Center. In addition, we endorse the comments of the Medicare Rights Center and the National Senior Citizens Law Center with respect to beneficiaries’ access to compendia listings when seeking coverage for off-label uses for prescription drugs.

  • Extending MA Marketing Requirements to Cost Program Plans (§417.428)

We support the extension of MA marketing requirements to cost plans. We request that CMS apply the same scrutiny to marketing activities of these plans as it applies to MA plans and PDPs.


We appreciate that many of the proposed changes in this NPRM will provide additional, needed protections for Medicare beneficiaries. Thank you for the opportunity to submit these comments, and we look forward to working with CMS to further strengthen the Medicare program for those it serves.


David Lipschutz
Staff Attorney

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.