Key Regulations and Policies That Will Impact Payers in 2024

December 26, 2023 - As healthcare stakeholders and the federal government work to make healthcare more accessible and affordable for consumers, CMS and HHS are frequently introducing and finalizing new rules and regulations.

There were a couple of key policies finalized in 2023 that will impact payers and their operations, some of which will take effect in 2024. Below, HealthPayerIntelligence explores the regulations payers must start complying with in the new year.

2024 Medicare Advantage & Part D Final Rule

The 2024 Medicare Advantage and Part D Final Rule included a slew of policy updates, most of which go into effect on January 1, 2024. The rule addressed Medicare Advantage marketing, prior authorization, network adequacy, and more.

Marketing requirements

Misleading marketing in the Medicare Advantage program was a hot topic in 2023.

The Commonwealth Fund released a report highlighting experiences with false advertising during the 2023 open enrollment period. Adults reported seeing, reading, or receiving advertisements that made them believe something about a plan they later found was untrue.

In an effort to curb deceptive marketing practices, CMS included marketing provisions in the final rule. The agency prohibits television advertisements that do not mention a specific plan name and those that use content, language, or Medicare logos that are misleading, confusing, or misrepresentative of the plan.

CMS reinstated policies that prevent predatory behavior and finalized changes that give plans more authority to monitor agent and broker activity—the source of much deceptive marketing. The rule also finalized provisions that ensure Medicare beneficiaries know how to access and receive accurate information on Medicare coverage.

Prior authorization

The final rule includes policies that streamline prior authorization requirements to reduce care delays and restrictions for Medicare Advantage beneficiaries. Prior authorization policies can only be used to confirm the presence of diagnoses or other medical criteria and to ensure that an item or service is medically necessary.

Plans must provide at least a 90-day period where prior authorization is not required for current treatment when a beneficiary switches to a new plan. Additionally, the rule states that prior authorization approval for a treatment must be valid for as long as medically necessary.

The rule will also require all Medicare Advantage plans to establish a committee dedicated to reviewing prior authorization policies annually to ensure they are consistent with coverage guidelines in traditional Medicare.

Behavioral healthcare network adequacy

To help improve access to behavioral healthcare for Medicare Advantage beneficiaries, the rule included new network adequacy requirements. The agency will add clinical psychologists and licensed clinical social workers to the list of evaluated specialties and codify standards for appointment wait times for primary care and behavioral healthcare services.

In addition, the rule requires Medicare Advantage plans to notify beneficiaries when payers drop beneficiaries’ providers from their networks. Plans must also establish care coordination programs prioritizing community, social, and behavioral healthcare services.

Part D low-income subsidy

The final rule implemented the Inflation Reduction Act provision that expands the Part D low-income subsidy benefit to beneficiaries with incomes up to 150 percent of the federal poverty level.

This will allow people currently eligible for the partial subsidy to receive the full low-income subsidy. These beneficiaries will have no deductible, no premiums, and fixed lower copayments for certain Part D drugs. The expansion will boost access to prescription drug coverage for 300,000 low-income beneficiaries, CMS said.

Transparency in Coverage Final Rule

Most phases of the Transparency in Coverage policy have already taken effect, but the final phase goes into effect on January 1, 2024.

The Transparency in Coverage rule requires health plans to disclose cost-sharing data to consumers. As of July 1, 2022, health plans must publicly post three machine-readable files with pricing data for covered items and services provided by in-network providers, allowed amounts for and billed charges from out-of-network providers, and in-network negotiated rates for covered prescription drugs.

The second phase took effect on January 1, 2023, and requires payers to provide an online price comparison tool for consumers to estimate cost-sharing for 500 shoppable services. The third and final phase mandates payers to provide cost-sharing estimates on the online tool for all covered items and services from different providers starting January 1, 2024.

2024 Medicare Premiums & Deductibles

While they are not legislation or policies payers must comply with, the new Medicare premiums for 2024 will shape beneficiaries’ healthcare experiences.

Medicare Part B premiums are based on beneficiaries’ incomes, but most will pay $174.70 per month in 2024. The annual deductible will be $240, up from $226 in 2023.

The majority of Medicare beneficiaries do not pay a Part A premium as they have at least 40 quarters of Medicare-covered employment. However, those who are 65 and older with fewer than 40 quarters of coverage and people with disabilities have monthly premiums.

In 2024, beneficiaries with at least 30 quarters of coverage will pay $278 per month, while those with less than 30 quarters and those with disabilities will pay $505 per month.

The Part A deductible, which covers costs for the first 60 days of Medicare-covered inpatient hospital care, is $1,632 for 2024. After 60 days, beneficiaries will pay a coinsurance of $408 per day.

The average Medicare Advantage monthly premium is projected to be $18.50 in 2024, rising by just $0.64 from 2023. The average monthly Part D premium is estimated to be $55.50, consisting of $34.50 for the basic Part D premium and a $21.00 supplemental Part D premium.

Medicare Drug Price Negotiation Program

Another key provision of the Inflation Reduction Act saw progress in 2023. HHS released the first ten drugs eligible for Medicare price negotiation. Despite some initial pushback, all ten drug manufacturers agreed to participate in the negotiation process, stretching into 2024.

CMS will release the new negotiated drug prices on September 1, 2024, with the prices taking effect on January 1, 2026.

Additionally, 48 Part B drugs may be eligible for rebates because their manufacturers raised prices faster than inflation. As a result, beneficiaries taking these drugs will have lower coinsurance and save between $1 and $2,786 per average dose starting January 1, 2024.