Medicare Prescription Drug Benefit Programs
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CMS Proposes to Prohibit Overrides in Medicare Advantage

On November 6, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for the Medicare Advantage and Part D programs. Among other proposals, CMS proposed significant changes to longstanding rules on permissible payment structures for agents and brokers. Specifically, CMS proposes to prohibit “overrides” or administrative fees paid to agents and brokers outside of the fair market value enrollment compensation limits established by CMS. This could have a significant impact on MA and Part D plan arrangements with agents and brokers.

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CMS Issues Broad-Ranging Medicare Advantage and Part D Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule regarding Contract Year 2024 Policy and Technical Changes to the Medicare Advantage (MA) and Medicare Prescription Drug Benefit Programs. This proposed rule includes a range of proposals addressing popular topics, including marketing and prior authorization, along with other significant changes to utilization management, Quality Star Ratings and the Programs of All-Inclusive Care for the Elderly (PACE).

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Proposed Rule on MA and Part D Would Reinstate Historical Requirements, Make Changes to Prescription Drug Payment Structure

On January 6, 2022, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule regarding Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs, marking the Biden administration’s first proposed rule on these topics. The proposed rule includes proposed changes to the manner in which pharmacy price concessions are accounted for in the Part D benefit, the timing of network adequacy reviews for Medicare Advantage Organization (MAO) applicants, and new rules regarding oversight of third-party marketing organizations. The proposed rule also reverses course on some policy changes that were initiated under the prior administration, including changes related to medical loss ratio (MLR) reporting and past performance evaluations. The proposed rule includes proposed policy updates for Dual Eligible Special Needs Plans (D-SNPs) and a few provisions related to the ongoing COVID-19 public health emergency (PHE).

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