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Medicare Program; Revisions to the Medicare Advantage and prescription Drug Benefit Programs; Proposed Rule

Proposed Rule

Score: 19 / 60

RULE SUMMARY

This proposed rule would make revisions to the Medicare Advantage (MA) program (Part C) and prescription drug benefit program (Part D). The regulation contains new regulatory provisions regarding special needs plans, medical savings accounts (MSA) plans, and cost-sharing for dual eligible enrollees in the MA program, the prescription drug payment and novation processes in the Part D program, and the enrollment, appeals, and marketing processes for both programs. We are proposing these changes based on lessons learned since 2006, the initial year of the prescription drug program and the revised MA program.
 

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

CriterionScore

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
A link to proposed rule containing the RIA is five clicks from the home page. Click on "regulations" (intuitive). The rest is unintuitive: click on "other regulations," expand the "detail" list, click on "CMS regulations," and then click on "quarterly provider updates— regulations" and select the update list from the period covering the date of the regulation. It can also be found on regulations.gov using the RIN.
4/5
2. How verifiable are the data used in the analysis?
Wage rates are sourced to BLS, but no other data sources are provided.
1/5
3. How verifiable are the models and assumptions used in the analysis?
It is impossible to verify models/assumptions. Calculations must be based on something, but most figures are just presented as results with no explanation or justification.
1/5
4. Was the analysis comprehensible to an informed layperson?
The final results are fairly clear, although it is not clear how they arrived at results due to lack of sources for data. The rest of the rule/RIA is filled with jargon and lots of involved processes.
2/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
1/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The analysis states that the changes could lead to greater efficiency and compliance, but does not explain how these affect citizens' quality of life.
1/5
Does the analysis identify how these outcomes are to be measured?
The analysis states that overall efficiency and compliance benefits cannot be estimated. Some discussion of monetary savings due to some of the regulatory changes.
1/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The effects are assumed.
1/5
Does the analysis present credible empirical support for the theory?
The analysis does not address this topic.
0/5
Does the analysis adequately assess uncertainty about the outcomes?
The analysis does not address this topic.
0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
2/5
Does the analysis identify a market failure or other systemic problem?
The analysis states that regulations are being issued to address various ambiguities that have come up: "Many of these revisions clarify existing policies or codify current guidance for both programs. We believe that these changes would help plans understand and comply with our policies for both programs and aid MA organizations and Part D plan sponsors in implementing their health care and prescription drug benefit plans" (p. 28557).
2/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
It asserts various problems of interpretation were caused by previous version of regulations.
1/5
Does the analysis present credible empirical support for the theory?
In some cases, the RIA asserts that current regulations led to complaints from the health care industry or questions about what certain terms actually meant. It is not clear if these are isolated instances or systematic problems. In a few cases, survey data are cited to suggest the problem is significant.
3/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
No acknowledgement of uncertainty.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
2/5
Does the analysis enumerate other alternatives to address the problem?
In most cases, only two alternatives are discussed: the current rule and proposed changes. The proposed approach clarifies or codifies existing policies and changes some definitions.
2/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
Current rule and proposed changes are the principal alternatives discussed.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
Since the analysis does not measure ultimate outcomes, it does no do this. In a few cases, cost changes are calculated.
1/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
Baseline assumed to be current regulation; how HHS calculated baseline and change is unclear.
2/5
8. How well does the analysis assess costs and benefits?
1/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
All costs are change vs. current regulation, so they are incremental. But the costs are federal budget costs, not all costs.
3/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
It identifies federal expenditures and firm expenditures on compliance, but no others. The accounting statement includes only the federal budget costs and savings.
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
There are few statements (usually in the rule) about how regulations may affect prices, but either this does not affect the analysis or it is not clear how it does.
1/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
The only costs are federal expenditures and firm expenditures on compliance. If behavioral changes were assumed when calculating these, it isn’t clear. There is some discussion of how regulations affect various participating parties, e.g. pharmacies and reporting requirements.
1/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
The analysis does not address this topic.
0/5
Does the analysis identify the alternative that maximizes net benefits?
Not really, because analysis states that there is no basis for measuring economic benefits: "With respect to economic benefits, we have no reliable basis for estimating the effects of these proposals;" "With one possible exception, we determined that the cost to plans and sponsors to clarify and codify our policies would be minimal and outweighed the minimal costs to implement these provisions."
1/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Benefits are not calculated.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
A table explains who pays and who receives the transfers that are calculated. Costs are borne by MAOs/Part D Sponsors, federal government; "spread more or less evenly across participating plans"; determined not to have significant effect on small businesses.
2/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Economic benefits are not measured. There is some discussion of parties affected and the various benefits, despite the benefits never being quantified.
1/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
HHS claims it considered cost/benefit of rule requiring MSAs to provide cost and health information, but concludes costs would be negligible since MSAs have an incentive to do this anyway. The NPRM sought comment on some cost/benefit issues.
3/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
The analysis makes assertions in regard to MSAs but nowhere else.
1/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
No measures goals are established. Since the rule does not estimate outcomes, there is no basis for developing goals and measures.
0/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
The analysis discusses costs to the federal government, and presumably these expenditures could be monitored in the future.
1/5
 
Total19 / 60

Additional details

Agency
Department of Health and Human Services
Regulatory Identification Number
0938-AP24
Agency Name
Department of Health and Human Services
Rule Publication Date
05/16/2008