On April 2, 2018, CMS released the Contract Year 2019 Final Rules for Medicare Advantage (MA) and Part D (the MA Final Rule), incorporating changes that support CMS’ stated commitment to supporting flexibility and efficiency throughout the MA and Part D Programs.

The MA Final Rule incorporates broad changes to several aspects of the MA program, including changes to the marketing rules, the star rating process and benefit uniformity requirements, among others. Of note to providers, and the subject of today’s post, the MA Final Rule has also eliminated the requirement that providers and suppliers contracting with MA Plans, and prescribers prescribing drugs covered by Part D programs, be enrolled in Medicare. Instead, CMS will rely upon a “Preclusion List,” as described below, to eliminate prescribers, providers, and suppliers who are ineligible to provide items or services under these programs.

New Rule Eliminates Medicare Enrollment Requirement

In May of 2014, CMS implemented a rule that required that prescriptions for covered Part D drugs be prescribed by prescribers enrolled in Medicare. Later, in November of 2016, CMS implemented a rule that required providers and suppliers that furnished health care items or services to MA plan members to be enrolled in Medicare by 2019. Under the MA Final Rule, CMS is eliminating this requirement. The text of the new regulations, to take effect January 1, 2019, will instead (i) prohibit MA Plans from paying for services provided by providers and suppliers who are included in a “Preclusion List” and (ii) require pharmacy benefit managers to reject a pharmacy claim for a Part D drug if the individual who prescribed the drug is included on the preclusion list. The “Preclusion List” will be compiled by CMS and will include providers and suppliers (i) that are currently revoked from Medicare or who have engaged in behavior for which CMS could have revoked the provider or supplier to the extent applicable if they had been enrolled in Medicare, and (ii) whose underlying conduct CMS determines is detrimental to the best interests of the Medicare program. The Preclusion List will be separate and distinct from the OIG Exclusion List.

CMS will make the Preclusion List available to MA plans and Part D plan sponsors, who will be required to deny payment for claims submitted by, or associated with prescriptions written by, prescribers and providers on the list.

Impact of the New Rule on Providers and Suppliers

This new requirement allows flexibility to prescribers, providers and suppliers who have not enrolled in Medicare to provide services to MA plan members, easing the burden of enrollment, and allowing providers who have opted out of providing services under traditional Medicare to provide services to beneficiaries under Medicare part C or prescribe Part D covered drugs.