§1395w–27a Special Rules for Ma Regional Plans

Summary

Creates rules for Medicare Advantage plans that cover whole regions instead of small areas. The Secretary must set up the “MA regions” by January 1, 2005, and can change them later after reviews. There must be between 10 and 50 regions. Regions must help make regional plans available to all eligible people, especially in rural places. A regional plan’s service area is the whole region, and a regional plan can be sold in more than one region. Regional plans must use a single deductible (not separate hospital and Part B deductibles), can set different deductibles for in-network care, and can waive the deductible for preventive services. Regional plans must also have a catastrophic out‑of‑pocket limit for in‑network benefits and may have a limit that covers all benefits. Plans offered in 2006 or 2007 must report next year their total costs for the Medicare fee‑for‑service benefits and for certain non‑drug supplemental benefits that are tied to Medicare benefits, and show how much of those costs are administrative. “Allowable costs” means those reported costs minus the administrative parts. If allowable costs are 97%–103% of the plan’s target amount, payments don’t change. If costs are above 103% up to 108%, monthly payments are increased by 50% of the excess over 103%; if above 108%, payments rise by 2.5% of the target plus 80% of the excess over 108%. If costs are below 97% down to 92%, payments are cut by 50% of the shortfall from 97%; if below 92%, payments are cut by 2.5% of the target plus 80% of the shortfall below 92%. Contracts must let the Secretary get the needed cost information and audit records, and the information may only be used to administer these rules. Defined terms in one line each: “MA region” — a part of the 50 States and DC set by the Secretary for regional plans; “allowable costs” — plan costs minus certain admin expenses; “rebatable integrated benefits” — certain non‑drug extra benefits tied to Medicare that get rebates; “target amount” — the plan’s expected payment base made of Medicare‑related payments, basic premiums, and rebates, less some admin costs; “statutory region‑specific non‑drug amount” — a weighted local‑area benchmark used to build region benchmarks; “reference month” — the month used to count enrollments and market share. The Secretary will compute a region benchmark each year before the annual enrollment period. The organization offering a regional plan may choose one local coverage rule to apply across the whole region. If an insurer cannot reach a deal with a necessary (essential) hospital, the Secretary may pay that hospital under strict conditions, with $25,000,000 available in 2006 and later years increased by the annual market basket percentage.