On February 5th, CMS released the Advance Notice of Methodological Changes for Calendar Year 2021 for Medicare Advantage Capitation Rates and Parts C and D Payment Policies. Last year CMS announced it would publish Star Ratings and other policy changes through the administrative rule-making process rather than the sub-regulatory process. New rules, which propose changes to MA and Part D, were published on February 5th. These proposed changes continue to demonstrate and reinforce CMS’ commitment to addressing pharmacy costs and driving improvements through member focused care and policy.

CMS held a stakeholder call on February 7th and the following were key areas discussed:

  1. CMS proposed rules requiring plan sponsors to implement a Beneficiary Real Time Benefits Tool.
  2. To continue its efforts to lower drug prescribed, CMS is proposing to implement a second preferred specialty tier.
  3. Creating changes to promote choice and competition, CMS is providing the ability for MA beneficiaries to access additional telehealth services not available to Medicare FFS.
  4. There are new proposed policies to increase access in rural areas.
  5. CMS is looking for comments on additional changes that can improve access in all areas including increase access to dialysis services.
  6. There are additional changes giving American seniors more choice for dealing with kidney disease.
  7. Additional changes could increase access to MA medical savings accounts.
  8. CMS is proposing to implement provisions that support educating beneficiaries on opioid risks, alternative treatments, and safe disposal.

This news alert provides a more detailed description of some of the key proposed changes in both the Advance Notice and Proposed Rules, including an impact assessment of measurement weighting changes.

Advance Notice

The Notice lists a number of measures that will be included in the display page indicating future opportunity for Star Rating inclusion. New measures and measures with substantive specification changes must remain on the display page for at least two years prior to becoming a Star Ratings measure.

Controlling High Blood Pressure

This measure has been an area of focus in previous CMS announcements. In the 2020 Final Call Letter, CMS removed the Controlling High Blood Pressure measure from the 2020 and 2021 Star Ratings due to substantive treatment guideline changes from the American College of Cardiology and American Heart Association.

Subsequently, in the 2021 Advance Notice, CMS proposed changing those included in the measurement (denominator) to patients who had at least two outpatient encounters with a diagnosis of hypertension (HTN) during the first six months of the measurement year or the prior year. The numerator remains the same—assessing the most recent blood pressure reading on or after the date of the second encounter.

Proposed regulations note that telehealth services may be included as an encounter for purposes of this measure, reinforcing CMS’ commitment to telehealth. In addition, remote monitoring devices can be used towards the numerator measurement. This change limits the population covered by the measure. Regulations state that the measure will be added back to the 2022 Star Ratings with a weight of 1 for the first year and 3 thereafter.

CMS is also seeking feedback on utilizing patient-used device data for inclusion in HEDIS measures. While CMS proposed limiting this change to a discrete set of CPT codes, this continues CMS’ trend in encouraging and driving the use of new technology and innovation.

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Changes in pharmacy and price transparency continue to be driven through Star Ratings, with medication adherence being a critical component. Recognizing the differences in impact with sociodemographic and socioeconomic characteristics, CMS recommended 3 changes to medication adherence measures:

  1. Medication adherence for hypertension, diabetes medication, and cholesterol should be risk adjusted for the differences in economic and demographics across populations.
  2. The measure should be risk adjusted for age, gender, dual-eligibility, and disability.
  3. The measures should be stratified by the sociodemographic and economic status for health plans to identify disparities and how these characteristics impact the rate.

Consistent with the national discussions on pharmacy costs, CMS plans to develop measures that encourage generic and biosimilar distribution and utilization. For generics, CMS is targeting measures involving the Generic Substitution Rate, Generic Therapeutic-Alternative Opportunity Rate, and Biosimilar Utilization Rate. These measures can help reduce Part D costs and missed opportunities for more cost-effective alternatives.

Prior Authorization

Attempting to reduce the barriers and access to care constraints associated with prior authorizations, CMS is seeking feedback to develop a measure that helps improve the processes around prior authorizations. While recognizing the role it plays in helping to control costs, CMS is concerned that prior authorization may hinder access to needed care. Feedback is requested on new quality measures that measure prior authorization (including electronic) performance.

ADL Changes

Patient Reported Outcome Measures (PROMs) are critical in understanding outcomes to care. These outcome measures provide longitudinal feedback to plans on a member’s care. Considering the importance and focus on Activities of Daily Living (ADS), CMS is proposing to add to HOS the Physical Functioning ADL change as a display measure for 2021 and 2022. This tracks changes in 6 ADLs, over a 2-year period, creating a baseline and follow-up score.

Net Promoter Score

A new concept for Star Ratings, CMS is soliciting feedback on adding a Net Promoter Score measure as a proxy for assessing member loyalty. This will likely be a controversial area with CMS and expect to see comments and feedback. There is concern around the reliability of such a measure considering the complexity of healthcare. We will summarize the responses to this and other proposals when the final capitation rate and payment policy announcement is released, and when proposed rules are finalized.

Proposed Rule

New Proposed Measures and Changes

CMS is proposing adding several Part C HEDIS Measures:

  • Transitions of Care (TRC)—Percentage of discharges that had each of the following:
    1. Notification of admission and discharge
    2. Receipt of discharge information
    3. Patient engagement
    4. Medication reconciliation
    5. Weight: 1
  • Follow-up after ED Visit for Patients with Multiple Chronic Conditions—Percentage of emergency department (ED) visits for members who have multiple high-risk chronic conditions who had a follow-up service within 7 days of the ED visit. Weight: 1.

CMS is proposing updates to the following areas:

  • Improving or Maintaining Physical Health (PCS) measure and Improving or Maintaining Mental Health (MCS) measure.
  • Statin Use in Persons with Diabetes (SUPD) modification from an intermediate outcome classification to a process measure, starting with the 2023 Star Ratings.

Pharmacy Transparency

As part of the rule, CMS is proposing that Part D plan sponsors (by January 1, 2022) implement a Beneficiary Real Time Benefits Tool (RTBT). This tool allows enrollees to view accurate, timely, and clinically appropriate patient-specific, real-time formulary and benefit information. As part of this, CMS proposes to allow plans to offer rewards and incentives (RI) to their enrollees who log onto or seek to access this information.

Recognizing that all beneficiaries do not have access to computers or smartphones, the RTBT must also make information available via a customer support center. The ultimate goal is for the beneficiary to use the RTBT tool to get information before the expenses are incurred and enable beneficiaries and prescribers to have meaningful conversations about medications prior to prescribing or before choosing a more appropriate medication.

CMS also highlighted the need for more transparency for measures used in evaluating pharmacy performance since the rules can be “arbitrary, unattainable, and/or lack transparency.” Standard measures could encourage a less arbitrary process in evaluating pharmacy performance. As a result, CMS is proposing a Star Rating that incentivizes the use of a standard set of measures for plans to evaluate pharmacy performance. In addition, the proposed rule also requires plans to share with CMS the measures used to assess pharmacies to allow tracking and public transparency in how plans are measuring pharmacies.

Measure Weight Changes

A notable change involves the weight associated with patient experience/complaints and access measures. CMS proposed to increase the weight of patient experience/complaints and access measures from a weight of 2 to 4. The measures include the patient experience of care measures collected through the CAHPS survey, Members Choosing to Leave the Plan, Appeals, Call Center, and Complaints measures. The change in weight does not impact Stars at the measure level, rather the overall and summary ratings calculation, and will not impact the distribution of Stars which varies for each of these measures.

25% of the Star Measures are patient experience and complaint measures. Shifting the weight from 2 to 4 dramatically increases the importance of these measures and reinforces the need for plans to focus on patient satisfaction and respond quickly to consumer needs and complaints.

Outlier Changes

CMS is using the Tukey outlier detection method, which is a standard statistical methodology for removing outliers, to increase the stability and predictability of the non-CAHPS measure cut points. We expect this will make 2 and 3 Star Ratings more difficult to achieve for several of the metrics and we expect to see very little movement on the 4 and 5 Star cut points with the impact being, at best, tenuous. CMS acknowledges that many of these changes are being done as cost savings measures and to preserve the Medicare Trust Fund.

The biggest concern for plans relates to C28, C31, and C33 as these will be the measures with the largest cut point swings. In addition, C09, C11, C14, C15, C20, and C32 will experience minimal change, and the remainder will experience no change. No CAHPS measures are included in the outlier detection.

This proposed change may have unintended consequences. Since this may increase the difficulty for lower-rated plans to achieve even modest rating increases, plans may forego investing in improvements knowing the increased difficulty in improving ratings. In addition, this may encourage continued plan consolidation with poorer performing plans being acquired and, through the CMS rules, assuming the acquiring plans higher rating. This would undermine and negate the goals driving outlier detection.

Moving forward with the proposed Tukey outlier detection and increase in weight in patient experience/complaints and access measures, would generate net savings of $368.1 million for 2024, increasing to $999.4 million for 2030. CMS provided that the costs associated with increasing the patient experience and compliant measure weights would be offset by the Tukey outlier detection.

More on Supplemental Benefits

For the last two years, CMS has expanded a plan’s ability to offer supplemental benefits. This includes extending benefits to areas not previously covered such as transportation, food, and housing. To support this expansion and reinforce prior guidance, CMS is proposing changes to the medical loss ratio (MLR) as it relates to supplemental benefits.

One of the areas plans include in the MLR numerator is “incurred claims,” which includes those paid to “providers” for covered services furnished to all enrollees. “Provider” is defined as “any individual or entity that is engaged in the delivery of healthcare services in a State and is licensed or certified by the State to engage in that activity in the state, or to deliver those services if such licensing or certification is required by State law and regulation.”

The proposed changes allow plans to include in the MLR as “incurred claims” all amounts a plan pays for covered services, including those spent on supplemental benefits.

Telehealth Enablement

Lastly, CMS is incentivizing plans to give beneficiaries a greater ability to use telehealth providers in certain specialty areas like psychiatry, neurology, or cardiology. This incentive is in the form of a 10% credit towards network adequacy standards. The goal is to foster a greater use of telehealth services and to increase beneficiary choice.


These changes continue to reinforce CMS’ member-centric framework while controlling and reducing costs to the system. Many of these require motivation and engagement in a personalized way for the member to capitalize on and reinforce the changes, and for the system to realize improvements. It’s important for plans to continue to create programs that measure member satisfaction to creatively and nimbly drive engagement in the programs launched from the policy changes. Stay tuned for a Icario News Alert when the CMS changes are finalized.