Response to Public_Comments

CMS Response to Public Comments Received for CMS-10142

The Centers for Medicare and Medicaid Services (CMS) received comments from a
single plan sponsor related to CMS-10142. This is the reconciliation of the comments.

Comment:
The Centers for Medicare and Medicaid Services (CMS) received comments from a plan
sponsor suggesting that more flexibility be offered around the corporate margin
requirement.
Response:
CMS appreciates the suggestion by the commenter. The corporate margin
requirement using the Non-Medicare margin basis, which refers to all health
insurance business that is not Medicare Advantage (MA) or Part D, ensures that
Medicare is not over-or under-subsidizing other lines of business. As noted in the
May 2, 2017 User Group Call Q&A file posted on the CMS website, the corporate
margin requirement can reflect a short-term or long-term expectation, as long as,
actual corporate margin is consistent with the corporate margin requirement used
for the MA pricing over the long term. In addition, plan sponsors have the option to
submit an aggregate-margin exception request for consideration by CMS. For
appropriate plan payments the required revenue in the bid pricing tool must reflect
the pre-sequestration required revenue. Therefore, we are unable to make the
requested changes with respect to sequestration.

Comment:
The Centers for Medicare and Medicaid Services (CMS) received a comment from a plan
sponsor suggesting CMS add to the bid instructions the criteria that are used to flag plans
for margin changes and high margin. The commenter has also suggested that CMS
consider credibility as a business justification when reviewing plans with high margin.
Response:
CMS appreciates the suggestion by the commenter. CMS intends to add
clarification to the bid instructions indicating at what margin level supporting
documentation will be required for high margin plans to support benefit value in
relation to margin level. Pending stakeholder feedback, CMS intends to incorporate
these clarifications into the CY2020 bid instructions.
Regarding the request to consider credibility when reviewing high margin plans,
CMS takes into consideration all circumstances detailed in supporting

documentation when making determinations on margin level in relation to benefit
value.
Comment:
The Centers for Medicare and Medicaid Services (CMS) received a comment from a plan
sponsor suggesting that as CMS reevaluates and revises the ESRD risk adjustment model
under Medicare Advantage, the impact of any changes on benchmarks, the current
bidding structure, benefit plan, and eligibility status all be seriously considered. This
comment was made in response to passage of Section 17006 of the 21st Century Cures
Act (Act) allowing for Medicare beneficiaries with ESRD to choose to enroll in an MA
Plan beginning in 2021. The commenter also suggests that CMS should adjust the
benchmark to reflect the fact that as a result of the enrollment of more ESRD members,
more members in total will reach the out-of-pocket maximum and requests CMS consider
stakeholder feedback and engagement.
Response:
CMS appreciates the suggestions by the commenter. No changes are being proposed
for CY2020. We will take these suggestions into consideration when drafting
payment and biding policies for CY2021.

Comment:
The Centers for Medicare and Medicaid Services (CMS) received a comment from a plan
sponsor requesting clarification on the purpose of supporting documentation
requirements around a plan sponsor’s estimate of the Low Income Premium Subsidy
Amount (LIPSA).
Response:
CMS appreciates the suggestions by the commenter. All actuarial assumptions must
be supported in order for CMS to determine if they have been developed
appropriately. We have made this supporting documentation requirement
“available upon request” to reduce burden for plan sponsors.
Comment:
The Centers for Medicare and Medicaid Services (CMS) received a comment from a plan
sponsor suggesting that CMS allow plans to choose among additional comparison
methods for reporting Related Parties when the MA plan cannot use the market
comparison method.
Response:

CMS appreciates the suggestions by the commenter. CMS believes that the options
provided in the bid instructions for entering costs associated with related-party
arrangements in the bid pricing tool provide adequate flexibility for plan sponsors.
Additionally, plan sponsors are allowed to adjust their gain/loss margin in the bid to
include the gain/loss margin of the related party, provided all gain/loss margin
requirements are still met.
Comment:
The Centers for Medicare and Medicaid Services (CMS) received comments from a plan
sponsor suggesting that CMS allow MA plans to offer additional benefits and include the
costs in their Medicare A/B bids when the additional benefit is offered primarily to lower
other Medicare A/B costs.

Response:
CMS appreciates the suggestions by the commenter. The bid pricing tool (BPT)
reflects the pricing of the benefits as classified in the plan benefit package (PBP) and
defined by policy. CMS does not have broad authority to reclassify additional
benefits as Medicare covered for pricing purposes.

Comment:
The Centers for Medicare and Medicaid Services (CMS) received comments from a plan
sponsor requesting clarification of the supporting documentation upload requirements in
the bid instructions and bidders training regarding the final bid, and consistent application
of such requirements to all Part D sponsors and MAOs.

Response:
CMS appreciates the suggestions by the commenter. CMS intends to provide
clarification in the CY2020 bid instructions regarding the upload to the CMS
Health Plan Management System (HPMS) of supporting documentation.
Comment:
The Centers for Medicare and Medicaid Services (CMS) received comments from a plan
sponsor requesting changes to the Part D Bid Pricing Tool to calculate average cost
sharing on post-deductible dollars. The plan sponsor requests that deductible sections
added to WS6 of the Part D 2020 BPT so that the value of the deductible and cost sharing
can directly feed from those exhibits for WS4 (cell E43) and WS5 (cells F39:G40 and
F46:G46).

Response:
CMS appreciates the suggestion by the commenter and released a mockup of
changes to the Part D bid pricing tools consistent with this request on November 28,
2018. CMS is currently requesting stakeholder feedback on these proposed changes
and intends to move forward with these changes for CY2021 pending industry
feedback.