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CMS Clarifies and Updates Guidance to Medicare Advantage Organizations

By Jan Elezian, Michael Kotch, & Kristine Tomzik


CMS has clarified, added effective dates, and provided additional guidance to Medicare Advantage Organizations (MAOs), Part D Sponsors and Medicare-Medicaid Plans in ways to implement and clarify provisions of the Families First Coronavirus Response Act and CARE Act. This updated guidance supersedes and replaces their March 10 Memo which notified MAO’s of a number of flexibilities they may implement during the COVID-19 public health emergency. See SunHawk’s initial article for additional background information.

Summary of information from the updated CMS Guidance memo is provided below.

Medicare Advantage Organizations

Under the current Presidential declaration of a state of emergency, MAOs must:

  • Allow Part A and Part B and supplemental Part C benefit plan benefits to be furnished at specified non-contracted facilities;

  • Waive in full, requirements for gatekeeper referrals where applicable;

  • Temporarily reduce plan-approved out-of-network cost-sharing to in-network cost-sharing amounts; and

  • Waive the 30-day notification requirement to enrollees as long as all the changes (such as reduction of cost-sharing and waiving authorization) benefit the enrollee.

CMS reiterated that under section 6003 of the Families First Coronavirus Response Act and Section 3713 of the CARES Act, MAOs must not charge cost sharing, including deductibles, copayments, and coinsurance for clinical laboratory tests and administration of the tests for the diagnosis of COVID-19, specified COVID-19 testing related services, or COVID-19 vaccines and administration of such vaccines. This applies to services furnished on or after March 18, 2020 and is over when the emergency declaration period has ended.

Cost sharing flexibility is limited to when a waiver or reduction in cost sharing can be tied to the COVID-19 outbreak.

CMS clarified that vaccines and their administration for COVID-19 will be covered under Medicare Part B, not Part D.

In order to facilitate social distancing, MAOs may add mid-year benefit enhancements, for example meal delivery, medical transportation services, etc.

MAO’s may expand telehealth services, beyond those previously approved by CMS in the plan’s benefit packages, to include access in any geographic area from a variety of places including the enrollee’s home until it is no longer necessary in conjunction with the COVID-19 outbreak.

In order to facilitate social distancing, MAOs with Special Needs Plans (SNP) may include in their flexibility not to fulfill the in person or face-to-face requirements, such as at home nurse visit interviews.

When plans experience delays in recertification of SNP eligibility due to the public health emergency, CMS will adopt a temporary policy of relaxed enforcement when a MAO chooses to delay to a later date the involuntary disenrollment of enrollees who are losing special needs status due to inability to re-certify due such things as worker shortages caused by the COVID-19 national emergency.

When an enrollee is temporarily absent from the service area for greater than 6 month period and when that absence is due to the COVID-19 national emergency, CMS will not enforce the requirement to involuntarily disenroll the enrollee. MAO’s will be allowed to extend the period of time members may stay enrolled through the end of the year, or the end of the public health emergency, whichever is later.

MAOs may choose to waive or relax plan’s prior authorization requirements at any time to facilitate access to services with less burden on beneficiaries, plans, and providers. Any such relaxation or waiver must be uniformly provided to similarly situated enrollees who are affected by the public health emergency.

Medicare Advantage Organizations and Part D Sponsors

Business continuity plans are required under 42 CFR § 422.504 (o) and §423.505 (p) to ensure restoration of business operations following disruptions, including emergencies. CMS recommends that current business continuity plans include necessary planning for business operations disruption due to a pandemic public health emergency.

CMS will allow flexible policies for MAO members who are unable to pay plan premiums.

It was made clear that the rules governing CMS’s payment to MAOs and Part D Sponsors have not changed.

Part D Sponsors

Due to the urgent need to ensure enrollee and employee safety during the pandemic, CMS is adopting a temporary policy of relaxed enforcement in connection with:

  • Waiving Part D medication delivery documentation and signature log requirements;

  • Relaxing to the greatest extent possible prior authorization requirements;

  • Suspending plan-coordinated pharmacy audits.

Part D sponsors must permit enrollees to obtain the total days’ supply prescribed for a covered Part D drug up to a 90-day supply in one fill or one refill if:

  • Requested by the enrollee;

  • Prior Authorization (PA) or Specialty Tier (ST) requirements have been satisfied; and

  • No safety edits otherwise limit the quantity or days’ supply.

Part D flexibility applies to fills and re-fills on or after March 27, 2020

Medicare-Medicaid Plans

The guidance also applies for all Medicare benefits covered by Medicare-Medicaid Plans (MMP’s) operating under three-way contracts as part of the Financial Alignment Initiative’s capitated model demonstrations. MMP’s should also receive guidance from their contract management teams.

Unlike a Medicare Advantage Dual Eligible Special Needs Plan (D-SNP), MMPs only serve full benefit dual eligible (Medicare/Medicaid) beneficiaries and some additional limitations may apply (such as state-specific requirements).

Medicare Administrative Contractors

Under the section 1135 waiver authority, CMS may authorize Durable Medical Equipment (DME) and Parts A and B Medicare Administrative Contractors (MACs) to pay for Medicare Advantage (Part C) covered services furnished to enrollees and seek reimbursement from MAOs for those service retrospectively. At present, MACs have not been instructed by CMS to pay for Part C covered services furnished to beneficiaries enrolled in Medicare Advantage plans and retrospectively seek reimbursement from MAO’s for those health care services.



[1] https://www.cms.gov/outreach-education/partner-resources/coronavirus-covid-19-partner-toolkit [2] https://www.medicare.gov/medicare-coronavirus



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Our skilled leaders and professionals at SunHawk are experts at managing complex and time sensitive projects in a virtual on-line world.  In these disruptive times, we can jump in to help your organization with regulatory and compliance management needs including:

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Do you have work that needs to be done? Do you not have the immediate bandwidth or resources to see such projects to fruition given other priorities? We can help, please reach out to Jim Rough or James Rose for assistance:

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SunHawk Consulting is a team of highly skilled and experienced subject matter experts in the Healthcare, Life Sciences, and Insurance Industries who understand that the client’s needs and budgets come first. SunHawk provides Crisis Management Response, Compliance Consulting, Disputes & Investigations, and Staff Augmentation services for Boards of Directors, internal/external legal counsel, company management and employees, special committees, bankruptcy trustees and receivers, and government agencies.



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