President Barack Obama signs PPACA. (AP Photo/J. Scott Applewhite, File)

Officials at the federal Centers for Medicare & Medicaid Services (CMS) want the authority to terminate Medicare Advantage and Medicare Part D drug plan sponsors that have received low performance ratings for 3 years in a row.

CMS has included a plan termination provision in a proposed Medicare program rule that is set to appear in the Federal Register Oct. 11.

In the 298 pages of proposed regulations, officials would be implementing provisions of the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA) as well as the Patient Protection and Affordable Care Act of 2010 (PPACA).

The proposed rule includes many different provisions, such as a provision that would let a physician help a patient appeal a plan prescription denial without getting a signed authorized representative form the plan.

Another provision would add benzodiazepines and, for some conditions, barbiturates, to the list of drugs a Medicare Part D plan must cover.

The section on “Excluding Poor Performers” calls CMS to get explicit authority to terminate health care prepayment plans whose administration does not meet specified financial, reporting and provider access requirements.

If plan fails to provide adequate access to providers, or to document access, it should face the possibility of program termination, officials said.

CMS also wants to use the plan rating system it developed to give beneficiaries information about the quality and performance of health and drug plans to winnow out plans with consistently poor ratings.

If CMS and its parent, the U.S. Department of Health and Human Services, adopt the star-rating-based system, a plan would have to get at least one rating of 3 stars on a 5-star scale or higher every 3 years to stay in the Medicare program.

“It is our view that the star rating system not only provides beneficiaries/consumers with easy-to-understand information critical for making choices among sponsors, but provides a powerful tracking tool that enables us to continue to administer the Part C and D programs with the best interests of the beneficiaries in mind,” officials said.

“A summary rating of less than 3 stars can be achieved only when a sponsor demonstrates poor performance across a range of measures,” officials said. “Therefore, we believe that sponsors that consistently achieve poor plan ratings have demonstrated a substantial failure to comply with the terms of their Medicare contracts.”

CMS would not begin calculating the 3-year period until after organizations had received notice through the rulemaking process of the new basis for contract termination.

CMS could issue a final rule in the spring of 2012, officials said.

Another proposal would give CMS the authority to deny applications submitted by Medicare Advantage plans and Medicare drug program sponsors that have performed poorly in the past.

“We anticipate that this proposal would directly enable us to protect beneficiaries from poor care,” officials said in the preamble to the proposed regulations. “Both these provisions, in our opinion, would give entities that want to administer benefits to Medicare beneficiaries a strong incentive to pay attention to the star rating criteria and provide for better quality health care if they wish to stay in or join the program.”