Medicare comment letter 2 (Oct. 4, 2004)

October 4, 2004 Centers for Medicare & Medicaid Services Department of Health and Human SeAttention: CMS-4069-P Room 445-G, Hubert H. Humphrey Building 200 Independence Avenue, SW Washington, DC 20201 Dear Sir or Madame: 1This letter presents the comments of the American Academy of Actuaries’ Medicare Steering Committee regarding the Centers for Medicare and Medicaid Services’ (CMS’s) proposed regulations on the Medicare Advantage (MA) program (CMS-4069-P). In particular, this letter discusses issues related to the calculation of monthly savings—a step in determining beneficiary rebate amounts (as defined in section 422.266) for MA plans—and payment adjustments based on the variation in costs among different areas including input prices, utilization, and practice patterns. The proposed rule requires Part D plan sponsors, Medicare Advantage plans, and employers to make a number of certifications and attestations based on prospective actuarial estimates of future prescription drug costs and utilization. As with any other actuarial projection, it is inevitable that actual experience will deviate from projected results—regardless of how carefully they are performed. Such deviations do not, of themselves, indicate that the projections were inappropriate or invalidate attestations based on the projections. The Academy strongly recommends that the standard of reasonableness for prospective actuarial estimates required under the rule be ...