CMS releases final Medicare audit protocol updates

The Centers for Medicare and Medicaid Services (CMS) has released the final protocols for 2017 audits of Medicare Parts C and D plans. This is the latest step in a process RegPulse has reported on during the initial release and as draft protocols underwent updates during the last year.

The audit protocol revisions affect the ways in which plan sponsors—such as Medicare Advantage Organizations (MAOs), Prescription Drug Plans (PDPs), and Medicare-Medicaid Plans (MMPs)—prepare and present information about their data universes to CMS. Sponsors that take part in these programs should review the changes and continue or update their programs assessments to identify the changes that affect them and plan appropriate responses.

Here is a summary of the relevant changes to the audit protocols in the final release, listed by program type:

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House approves bill to replace key provisions of the Affordable Care Act; All eyes turn to the Senate

The House of Representatives on May 4, 2017, narrowly voted 217-213 to pass the American Health Care Act (AHCA, H.R. 1628). No Democrat voted in favor of the bill and 20 Republicans voted against the bill. As many recall, the House on March 24, 2017, cancelled a planned vote on the AHCA due to a lack of support in the Republican conference.

In the ensuing weeks, three amendments to the AHCA were drafted by House members in an effort to win additional votes for the underlying bill. This ultimately paved the way toward passage in the House today on a slim majority vote. Following the vote, the House went into recess until May 16, 2017.

The AHCA now goes to the Senate for its consideration and likely modification in the coming weeks. Based on the next steps in the process, it may take well into the summer months before a final piece of legislation could be signed into law by President Trump.

The House bill seeks to repeal key provisions of the Affordable Care Act (ACA) and enact alternative health care policies that in general would:

  • Redesign advanceable, refundable tax credits for individuals who do not have access to employer-sponsored coverage
  • Restructure and cap federal Medicaid financing to the states
  • Repeal most taxes and fees enacted under the ACA; and
  • Provide $138 billion over 10 years in federal funding for state programs intended to help stabilize and reduce health insurance premiums in the non-group market.

Next week, Deloitte will produce a detailed summary of the AHCA as amended and passed by the House.

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Amidst ongoing debate over future of ACA Exchanges, CMS finalizes rule for 2018 and a timeline for submission of plans

The Centers for Medicare and Medicaid Services (CMS) last week released a final rule on the 2018 benefit year for Exchanges established under the Affordable Care Act (ACA), as well as a final timeline for health insurers to submit products for federally-facilitated Exchanges and other tools plans will need to submit products for ACA Exchanges for 2018. Notably, the final rule was published in the Federal Register on the same day that health insurers met with CMS Administrator Seema Verma and other Administration officials about the ACA Exchanges.

The final rule is intended to reduce volatility in the non-group and small group health insurance markets, and it finalizes with few changes policies included in a proposed rule published in the Federal Register on February 17, 2017. The final rule was published in the Federal Register on Tuesday, April 18, 2017, and its provisions take effect June 19, 2017. The policies in the final rule include changes requested by health insurers in previous years.

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CY 2018 changes and policy updates for Medicare health and drug plans

Summary of provisions and impacts

The Centers for Medicare and Medicaid Services (CMS) released its Advance Notice of Methodological Changes for Calendar Year (CY) 2018 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2018 Draft Call Letter on February 1, 2017.

The purpose of the Advance Notice and draft Call Letter was to notify Medicare Advantage Organizations (MAO) and Part D sponsors of proposed changes to the Part C and Part D programs for the following plan year, including but not limited to:

  • Planned changes in the MA capitation rate methodology and risk adjustment methodology applied under Part C for CY 2018
  • Proposed changes in the Part D payment methodology for CY 2018
  • Proposed changes to the quality rating system and information the MAOs and Part D sponsors should consider while preparing their 2018 bids

CMS received many submissions in response to the request for comments on the Advance Notice and released final updates to MA and Part D Prescription Drug Programs for 2018 on April 3, 2017.
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FRB finalizes public disclosure requirement for LCR

Introduction

On December 19, 2016, the Federal Reserve Board (FRB) finalized a rule requiring covered institutions to publicly disclose their Liquidity Coverage Ratio (LCR), including quantitative and qualitative information underlying the LCR.1 Relative to the proposal, the final rule did not revise the reporting frequency or quantitative data requirements.   However, it did amend the qualitative information requirements.

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The new fiduciary standard is set to begin on June 9. Are you ready?

On Tuesday, April 4, 2017, the Department of Labor finalized a delay to the applicability date of the Fiduciary Rule until June 9, 2017

Introduction

Following President Trump’s February 3, 2017 memorandum (the “Presidential Memorandum”)1 directing the Department of Labor (DOL) to prepare an “updated economic and legal analysis concerning the likely impact” of its “Conflict of Interest Rule” on fiduciary investment advice (the “Rule”) and related prohibited transaction exemptions (PTEs), the DOL finalized a delay to the initial applicability date of the Rule until June 9, 2017.2

The DOL also delayed the initial applicability date of the Best Interest Contract (BIC) Exemption, the Class Exemption for Principal Transactions, and amendments to other previously granted exemptions until June 9, 2017.  The applicability date of the Impartial Conduct Standards in these exemptions is extended until June 9, 2017, while compliance with other conditions for transactions covered by these exemptions (e.g., specific disclosures and representations of fiduciary compliance in written communications with investors) is not required until January 1, 2018.3

In addition, the DOL delayed the initial applicability of amendments to PTE 84-24 for certain insurance companies and agents until January 1, 2018 (other than the Impartial Conduct Standards, which will be applicable on June 9, 2017).

The DOL argued that these extensions are necessary to enable it to examine whether the Rule may adversely affect the ability of Americans to gain access to retirement information and financial advice, and to prepare the updated economic and legal analysis pursuant to the Presidential Memorandum.  The extensions will also allow the DOL to “consider possible changes with respect to the Rule and PTEs based on new evidence or analysis developed pursuant to the examination.”4

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FRB, FDIC issue resolution planning guidance, one-year extension to four FBOs; Issue evaluation of 16 US BHC resolution plans

On March 24, 2017, the Federal Reserve Board (FRB) and Federal Deposit Insurance Corporation (FDIC)1 (collectively, the “agencies”) issued guidance to four foreign banking organizations (FBOs) for their next resolution planning submissions (the “2018 Guidance”) and announced credibility determinations for 16 resolution plans submitted by US bank holding companies (BHCs) in 2015.2

Notably, the agencies extended—from July 1, 2017 to July 1, 2018—the date by which the FBOs must submit their next resolution plans, but did not release credibility determinations for the FBOs’ 2015 resolution plans.

The agencies did not identify deficiencies in any of the plans submitted by the 16 US BHCs, but did identify shortcomings in one of the plans.

For a more detailed analysis of the credibility determinations for the resolution plans submitted by the 16 US BHCs, please click here.

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RegTech: Evolution or revolution?

Digital technology is having a big impact on risk management and regulatory compliance in financial services. And it’s not just hype. By harnessing the power of risk & regulatory technologies (RegTech)—which includes innovations such as artificial intelligence, advanced analytics, and robotic process automation—financial services firms are boosting their risk management and compliance capabilities and quality while dramatically reducing the required time, cost, and effort.

RegTech might not sound particularly new or revolutionary – after all, financial services firms have been using technology to automate their processes for decades, right? However, the level of sophistication that is possible today—as well as the resulting impact and benefits—is much greater than in the past.

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How can medical device makers assess the FDA implications of 3D printing?

Adhering to FDA regulations on the manufacture of medical devices might be simpler when it’s more complicated.

That is to say: When manufacturers work in the traditional mode of large-scale, industrial production, they know the rules and are prepared to work under them. But what about when the manufacturing process becomes simpler – as in the case of 3D printing? How do the rules apply to that new frontier?

3D printing, or additive manufacturing (AM), offers device makers a range of potential advantages. They can be more innovative in design, address needs in a more customized way, and deliver products directly at the point of use. AM opens the door to offerings that would previously have been cost-inefficient because of scale.

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President Trump signs executive order on reorganizing the executive branch

Considerations regarding the reorganization of the financial regulatory agencies

Introduction

On March 13, 2017, President Trump issued an executive order1 intended to “improve the efficiency, effectiveness, and accountability” of the executive branch by directing Mick Mulvaney, Director of the Office of Management and Budget (OMB), to propose a plan to “reorganize governmental functions and eliminate unnecessary agencies, components of agencies, and agency programs.”

Specifically, the order directs the head of each agency to submit to the OMB, within six months of the order, a plan to reorganize the agency, if appropriate.  In addition, it directs the OMB to seek public comment on a proposed plan and, within six months after the end of the comment deadline, submit the plan to President Trump for review.

Notably, the order uses the definition of “agency” under 5 U.S.C. 551 (i.e., the definition under the Administrative Procedure Act), which covers independent agencies, including the Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Consumer Financial Protection Bureau (CFPB).  Accordingly, it appears that these agencies will be subject to the order.

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