Under the guidance, the plans are authorized, but not required to waive out-of-pocket costs for testing, treatment and other services related to the coronavirus.

The rules come on the heels of many of the country’s largest insurance companies announcing that they would be treating at least COVID-19 testing as covered benefits and would waive cost-sharing for tests.

The CMS made the announcement in light of the fact that COVID-19, which is caused by the coronavirus, has the most severe effects on the elderly population, as well as people with pre-existing health conditions like heart disease, cancer, diabetes and compromised immune systems.

“Medicare beneficiaries are at the greatest risk of serious illness due to COVID-19 and CMS will continue doing everything in our power to protect them,” CMS Administrator Seema Verma said in a prepared statement. She added that the new guidance was aimed removing “barriers that could prevent or delay beneficiaries from receiving care.”

In the new COVID-19 guidance Medicare Advantage and Part D plans can:

• Waive cost-sharing for testing.
• Waive treatment cost-sharing, including primary care, emergency department, and telehealth services.
• Eliminate prior authorizations for treatment.
• Eliminate prescription refill restrictions.
• Decrease limitations around home or mail prescription delivery.
• Increase patient access to telehealth care.

These waivers are aimed at breaking down barriers to accessing care and allow plans to work with pharmacies and providers to treat patients.

Medicare Advantage rule changes

Under the new guidance, if a state of emergency is declared in your state, Medicare Advantage insurers are required to:

• Cover Medicare Parts A and B services and supplemental Part C plan benefits furnished at non-contracted facilities, as long as they have participation agreements with Medicare.
• Provide the same cost-sharing for enrollees at non-plan facilities as if the service or benefit had been furnished at a plan-contracted facility.
• Make changes that benefit the enrollee effective immediately without the typical 30-day notification requirement (such as changes like reductions in cost-sharing and waiving prior authorizations).

The CMS said it would continue to exercise its enforcement discretion regarding the administration of Medicare Advantage plans’ benefit packages in light of the new emergency guidance.

Part D changes

Under the new rules:

• Part D insurers may relax their “refill-too-soon” rules if circumstances are reasonably expected to result in a disruption in access to drugs. The rules may vary, as long as they provide access to Part D drugs at the point of sale. Part D sponsors may also allow an affected enrollee to obtain the maximum extended day supply available under their plan, if requested and available.
• Part D insurers must ensure enrollees have adequate access to covered Part D drugs if they have to get their prescription filled at an out-of-network pharmacy in cases when those enrollees cannot reasonably be expected to obtain covered Part D drugs at a network pharmacy.
  Plan cost-sharing levels would still apply and enrollees could be responsible for additional charges (i.e., the out-of-network pharmacy’s usual and customary charge), if any, that exceed the plan allowance.
• If enrollees are prohibited by a mandatory quarantine from going to a pharmacy to pick up their medications, Part D insurers can relax any plan-imposed rules that may discourage mail or home delivery, for retail pharmacies that choose to offer these delivery services in these instances.
• Part D insurers may choose to waive prior authorization requirements at any time that they otherwise would apply to Part D drugs used to treat or prevent COVID-19, if or when such drugs are identified. Any such waiver must be uniformly provided to similarly situated enrollees who are affected by the disaster or emergency.

The takeaway

With these new rules and guidelines in place, if you are a Medicare recipient, this news should give you comfort as it should mean reduced costs and access to care and medicine as the outbreak continues.

If you are concerned about coverage, you can contact your Medicare Advantage plan to confirm that it has made the necessary changes to ease the burden on policyholders during the coronavirus crisis.

The change is also in response to the increasing burden that’s been placed on workers in employer-sponsored health plans after a seismic shift over the last decade to high-deductible health plans. HDHPs – also known as consumer-directed plans – were also expected to put more responsibility on employees to shop around for the most cost-effective medical services, but those expectations have not materialized.

This year, 39% of large, corporate employers surveyed by the National Business Group on Health offer HDHPs as their workers’ only choice. For 2019, only 30% of employers surveyed said they would solely offer HDHPs.

Pundits also say that some companies are boosting other options because of the continued postponement of the “Cadillac tax” on pricey health plans as it looks more and more likely that the tax will be scrapped and never take effect.

While nearly 40% of large employers offered only HDHPs in 2018, just 29% of U.S. workers are in HDHP job-based plans this year, the same level as in 2017, according to the Kaiser Family Foundation. That’s the highest level ever since the plans were introduced about 13 years ago.

The plans have allowed employers to shift more of the cost burden to their employees by requiring them to have more “skin in the game” in terms of their health care expenditures. But that notion failed because most health care is unplanned and requires fairly quick treatment, which makes it more difficult to shop for the provider that charges the least.

Over the years, the up-front premium cost employees pay has risen, but so have deductibles in these plans and deductible levels have increased faster than wages. In fact, 25% of workers have a single-person deductible of $2,000 or more, according to the Kaiser Family Foundation.

The average total health insurance cost is nearing $15,000 per employee, and the average worker pays $5,547 of that every year.

Other ways employers seek to lower costs

As costs increase, more employers are trying to find other ways to shave costs instead of shifting more deductibles and premium costs to their workers. Some of the ways the National Business Group survey found employers are trying to tackle costs include:

• Managing expenses for the most expensive diseases – This can include cancer, terrible accidents, prematurely born babies and other diseases. Treatment for many of these afflictions can cost $1 million or more. This is being done through accountable care organizations and “centers of excellence” that the insurer contracts with to focus on specific treatments.
• Using more technology – This can include workers using nurse video-chat services and other types of telemedicine.
• Using primary care clinics – Some insurers and self-insured employers are contracting with primary care clinics nearby their offices so that employees can get common ailments treated quickly.
• Tackling pharmaceutical costs – Nearly all of the employers surveyed said the prescription drug system needs to be overhauled, drug contracts should be more transparent and the rebate system needs fixing.

Some companies are working with a select few pharmacy benefit managers that can move rebates forward to the point of sale so that employees benefit from the rebate. Thirty-one percent of employers said they are considering implementing point of sale rebates in the next few years.

The draft legislation is the first serious attempt at addressing the drivers behind costs in a system that is starting to see double-digit inflation again.

Surprise bills

Unusually, the draft puts forward three options for tackling surprise medical bills:

Option 1: This would require hospitals to make a guarantee to patients that all of its physicians are in-network. The option gives doctors the choice to either contract with the hospital’s insurers or stay out of network and subject their own charges through the hospital. That way, the insurer would get just one bill and the fees would be charged at in-network rates.

Option 2: Insurers, hospitals or doctors could opt for arbitration to resolve any disputed charges that are more than $750. The mediator would research median insurer-negotiated rates for the same procedures and in the same geographical area before deciding on a settlement amount.

Option 3: An insurer would pay the surprise bill at the median contracted rate for that region to the hospital or doctor in question.

Tackling transparency

The bill also has a number of other provisions, including:

• Requiring air ambulances to itemize medical charges apart from transportation costs in their bills to health plans and patients.
• Requiring that patients receive their full bill within 30 business days of treatment. If it’s later than that, the patient would not have to pay the bill.
• Hospitals, doctors and health insurers would be required to provide, upon request by a patient, a “good faith” estimate of their out-of-pocket costs for a procedure within 48 hours of the request.
• Plans would be required to keep their provider directories up to date. If patients can prove that their plan’s directory steered them to an out-of-network physician or hospital, they would not be required to pay out-of-network rates and instead pay the negotiated rates of their plan.
• Banning gag clauses that some hospitals include in their insurer contracts. This means that patients must be allowed to see a hospital’s cost and quality data.
• Barring “all-or-nothing” clauses, through which hospitals force insurers to contract with all of their facilities or none.
• Pharmacy benefit managers (PBMs) would have to send quarterly reports on the costs, fees and rebates to the employer plans they contract with.
• PBMs would be barred from charging higher prices for drugs than what they pay drug-makers, and they would be required to pass along 100% of manufacturer rebates to plan sponsors.

• Setting caps on how much hospitals and service providers can charge, or
• Requiring hospitals and service providers to turn to the insurance company (and not the patient) when they are seeking additional reimbursement.
• Requiring the insurer to share more of the cost burden for the out-of-network services.

Pharmaceutical costs, transparency

Other costs