Proposed CMS Rule Would Increase Oversight of Medicare Advantage Plans, Permit Coverage of Weight-Loss Drugs

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule in December that would increase oversight of Medicare Advantage (MA) and Part D drug plans and require coverage of weight-loss drugs for the treatment of obesity. Below are a few highlights among the principal reforms included in the proposed rule.

Prior Authorization and Utilization Review Under Medicare Advantage Plans

Data reported to CMS indicate that MA plans overturn 80% of their decisions to deny claims when those decisions are appealed by patients, yet fewer than 4% of denied claims are actually appealed. The new rule proposes to enhance the prior authorization and utilization review practices. MA plans would be required to define the meaning of “internal coverage criteria,” provide transparency to the public about internal coverage policies, raise awareness of beneficiary appeal rights, and address “after-the-fact” coverage reversals that have disproportionately impacted rural hospitals and critical access facilities.

Upon prior authorization approval, MA plans would be required to allow that approval to remain valid throughout the entire course of treatment. Our Medicare Advantage explainer details how these plans work, describes their growing presence in Arkansas, and summarizes challenges that providers and patients face with these plans.

Requirements on the Use of Artificial Intelligence in Health Care

Artificial intelligence (AI) is increasingly being used by healthcare organizations and this proposed rule would establish requirements for the use of AI by MA plans. This includes requiring the plans to ensure that AI systems are not discriminatory and are used in a way that provides equitable access to services. MA plans would be required to disclose the use of AI tools to their provider network and beneficiaries.

Increased Transparency for Medicare Beneficiaries

The proposed rule would increase transparency by incorporating provider information directly into the Medicare Plan Finder, an online tool where current and prospective Medicare beneficiaries can compare and shop for MA and Part D plans. Currently, plans are only required to include PDF or web-based copies of their provider directory. Under the proposed rule, plans will be required to make their provider directory data available to CMS to include in the Medicare Plan Finder tool. MA plans would be required to attest to the accuracy of the provider data and update the data no later than 30 days after being notified of a change in provider information.

Coverage of Weight-Loss Drugs Under Medicare and Medicaid Programs

The proposed rule includes a “reinterpretation” of a longstanding, statutory coverage exclusion of weight-loss drugs when used for the treatment of obesity. Currently, these drugs are only covered by Medicare when they are being used to treat another medically accepted condition like type 2 diabetes.

Recognizing the growing medical consensus of obesity as a disease, the reinterpretation of the Medicare Part D law would permit coverage of these drugs when they are indicated to reduce excess body weight and maintain weight reduction for those with obesity. Medicaid programs would also be required to cover these medications when treating obesity.

We previously blogged about the increasing number of state Medicaid programs covering these drugs for the treatment of obesity. Our series on weight-loss drugs explores their history, how they work, their cost and cost-effectiveness, what they mean for children with obesity, and other key considerations.

Public comments on the proposed rule are due by January 27, 2025.