[Federal Register Volume 63, Number 12 (Tuesday, January 20, 1998)]
[Proposed Rules]
[Pages 2920-2926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1381]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Chapter IV
[HCFA-1014-NC]
RIN 0938-AI45
Medicare Program: Request for Public Comments on Implementation
of the Medicare+Choice Program, and Notice of Timeframes for Submission
of Applications for Contracts
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice of intent to regulate; solicitation of comments.
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SUMMARY: The Balanced Budget Act of 1997 (BBA) establishes a new
Medicare+Choice program. Under this program, eligible individuals may
elect to receive Medicare benefits through enrollment in one of an
array of private health plans that contract with us.
The BBA directs the Secretary to publish by June 1, 1998,
regulations establishing standards for the Medicare+Choice program. We
have already received comments and inquiries from the public on a
number of issues associated with the Medicare+Choice program. This
document solicits further public comments on issues related to
implementation of the Medicare+Choice program. We intend to consider
these comments as we develop an interim
[[Page 2921]]
final rule to implement the Medicare+Choice program.
This document also includes preliminary information regarding
application procedures for organizations that intend to contract with
us to participate in the Medicare+Choice program.
This document also informs the public of a meeting to discuss the
Medicare+Choice program.
DATES: We request that comments be submitted on or before February 19,
1998.
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: HCFA-1014-NC, P.O. Box 26688,
Baltimore, MD 21207.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850
Comments may also be submitted electronically to the following e-
mail address: hcfa1014nc.hcfa.gov. E-mail comments must include the
full name and address of the sender and must be submitted to the
referenced address in order to be considered. All comments must be
incorporated in the e-mail message because we may not be able to access
attachments. Because of staffing and resource limitations, we cannot
accept comments by facsimile (FAX) transmission. In commenting, please
refer to file code HCFA-1014-NC. Comments received timely will be
available for public inspection as they are received, generally
beginning approximately 3 weeks after publication of a document, in
Room 309-G of the Department's offices at 200 Independence Avenue, SW.,
Washington, DC, on Monday through Friday of each week from 8:30 a.m. to
5 p.m. (phone: (202) 690-7890).
FOR FURTHER INFORMATION CONTACT: Medicare+Choice Regulation Team, (410)
786-7660.
SUPPLEMENTARY INFORMATION:
I. Background
A. General
Medicare historically has consisted of two primary parts: Hospital
insurance, also known as ``Part A,'' and supplementary medical
insurance, also known as ``Part B.'' Part A is generally provided
automatically to persons age 65 and over who are entitled to social
security or railroad retirement board benefits. Similarly, individuals
who have received either of these benefits based on their disability,
for a period of at least 24 months, are also entitled to Part A
benefits. Health care services covered under Part A include: inpatient
hospital care, skilled nursing facility care, home health agency care,
and hospice care.
Part B benefits are available to almost all resident citizens age
65 and over; certain aliens age 65 or over; and disabled beneficiaries
who are entitled to Part A. Part B coverage is optional and requires
payment of a monthly premium. Part B covers physician services (in both
hospital and nonhospital settings) and services furnished by certain
nonphysician practitioners. It also covers certain other services,
including: clinical laboratory tests, durable medical equipment, most
supplies, diagnostic tests, ambulance services, prescription drugs that
cannot be self-administered, certain self-administered anticancer
drugs, some other therapy services, certain other health services, and
blood not supplied by Part A.
B. The Balanced Budget Act of 1997
Subsequent to its initial enactment in 1965, the Medicare program
has been subject to numerous legislative and administrative changes.
However, one of the most significant changes results from the August 5,
1997 enactment of the Balanced Budget Act of 1997 (BBA), Public Law
105-33. Section 4001 of the BBA adds a new Part C to the Medicare
program, by establishing sections 1851 through 1859 of the Social
Security Act. The new Part C is known as ``Medicare+Choice.'' Section
4002 of the BBA establishes transitional rules for the current Medicare
health maintenance organization (HMO) program; and section 4006
establishes special rules for Medicare+Choice medical savings accounts.
Prior to the BBA, Medicare beneficiaries could choose between receiving
their Medicare benefits on a fee-for service basis or enrolling in an
HMO with a Medicare contract. In the latter case, the beneficiary
selects a specific HMO or competitive medical plan (CMP) within a
service area for Medicare-covered health care services. This selected
plan coordinates all of the Medicare-covered health care services for
the beneficiary and receives a per-person payment from Medicare that is
predetermined. Under the new Medicare+Choice program, the
beneficiaries' options have been expanded to include provider-sponsored
organizations (PSOs), preferred provider organizations (PPOs), private
fee-for-service plans, and, for those who qualify, religious fraternal
benefit society plans. In addition, up to 390,000 beneficiaries
nationwide (and prior to the year 2003) may elect a new Medical Savings
Account (MSA) option. A Medicare+Choice MSA is a tax-exempt trust
created to pay the qualified medical expenses of the account holder. A
beneficiary who elects the MSA option will receive a catastrophic
health care policy paid by Medicare. Any difference between the MSA
plan insurance premium and the amount that Medicare would have paid if
the beneficiary had elected Medicare+Choice coverage under any of the
other options will be deposited into the beneficiary's MSA.
Under Medicare+Choice, plans with which we contract must have
quality programs that stress outcomes, create utilization protocols,
assess consumer satisfaction, and monitor high-risk and high-volume
services. In addition, all plans, other than non-network MSAs and
certain private fee-for-service plans, must provide for external
review. Each Medicare+Choice plan must provide Medicare members all
benefits (other than hospice care) that are available under Parts A and
B. In the case of an MSA plan, however, these benefits are not provided
until after a catastrophic deductible amount has been satisfied.
The law sets forth provisions relating to the following topics:
Eligibility, election, and enrollment.
Benefits and beneficiary protections.
Organizational relationships with participating providers.
Payments to Medicare+Choice organizations.
Premiums.
Organizational and financial requirements for
Medicare+Choice organizations.
Establishment of standards.
Contract requirements.
Additional information about the Medicare+Choice program is
available on our Internet site (http://www.hcfa.gov).
C. Issues and Questions To Be Resolved
As stated earlier, we are required to publish regulations
implementing the Medicare+Choice program by June 1, 1998. The statute
provides that these regulations may be issued as an interim final rule.
We intend to use this mechanism and will formally request comments on
our policies at that time.
We have already received comments and inquiries from the public on
a number of issues associated with the
[[Page 2922]]
Medicare+Choice program. However, to ensure that we receive the full
range of public opinion, we are using this notice as a vehicle to
request public suggestions on specific policy issues that are detailed
in the following sections. In addition, at this time, we encourage the
public to comment on any other relevant Medicare+Choice program policy
areas, with the exception of comments on Federal solvency standards for
PSOs. (A discussion of PSO solvency standard policy decisions and
implementation issues and a request for public comment were contained
in a notice published on September 23, 1997 (62 FR 49649).) We will
consider public comments that are received timely as we develop the
interim final rule, but we will not otherwise issue a separate set of
responses to those comments. We request that commenters provide a brief
summary of any detailed comments. Also, commenters should, whenever
possible, identify the relevant section or subsection of the BBA or of
the Social Security Act. Note that in the following sections, citations
to the law are to sections of the Social Security Act as established by
the BBA.
1. Information for Informed Choice
One of the objectives of the Medicare+Choice program is to expand
Medicare beneficiaries' options for health care. In order to ensure
that beneficiaries have the appropriate information necessary to choose
from the various Medicare+Choice options, section 1851(d) of the Act
requires that we collect and disseminate information on the coverage
options available. For example, the statute requires that, prior to
each open season, we provide a notice to Medicare-eligible individuals
that includes a list of the Medicare+Choice plans, a comparison of plan
options that includes information on benefits and premiums, a general
description of the benefits under the original Medicare fee-for-service
program, and other general information. The statute also requires, at
1851(e)(3)(D), that, during November 1998, we provide for an
educational and publicity campaign to inform Medicare+Choice eligible
individuals about the availability of Medicare+Choice plans and the
Medicare fee-for-service option. The statute further requires that we
maintain a toll-free number for inquiries regarding Medicare+Choice
options and an Internet site providing information on Medicare+Choice
options. As we begin the information collection process, and analyze
how best to provide information to beneficiaries, we ask that
interested parties respond to the following questions:
What are the most effective ways to communicate
Medicare+Choice information to beneficiaries, individuals, advocates,
ombudsmen, providers, and other groups that have need of and will use
this information?
How can we reduce confusion for beneficiaries who also
receive health care information from other sources, for example, from
employers who offer retiree coverage or Federal purchasers such as the
Federal Employees Health Benefit Plan, the Department of Defense, and
sellers of health care insurance products?
How can the information programs best recognize the
special needs of certain populations, such as beneficiaries with
disabilities?
2. Enrollment/Disenrollment Process
Under section 1851(e) of the Act, we are charged with establishing
a process, including the format and procedures, through which
Medicare+Choice elections are made. According to section 1851(e), a
beneficiary's enrollment in a Medicare+Choice option is initially made
at the time the individual becomes entitled to Part A and enrolled in
Part B. Beneficiaries may change their Medicare+Choice plan election
during continuous open enrollment periods through the year 2001. After
2001, beneficiaries are locked in to their Medicare+Choice election for
defined time periods, except for special election periods under certain
circumstances. The process must permit a beneficiary to make enrollment
and disenrollment elections by filing a form with the Medicare+Choice
organization. The statute also permits, at section 1851(g), that a
Medicare+Choice organization may terminate an individual's election
with respect to a Medicare+Choice plan that it offers if (1) required
premiums are not paid on a timely basis, (2) the individual has engaged
in disruptive behavior, or (3) the plan is terminated with respect to
all individuals residing in the area in which the individual resides.
We request comments related to the election and enrollment procedures
in general, and the Medicare+Choice organization's ability to disenroll
a beneficiary. For example--
Should our standards be specific with regard to each of
the factors; for example, timeframes for timely payment of premiums or
a definition for ``disruptive''? Should we require a mechanism for
appealing termination of a beneficiary's enrollment ``for cause''?
3. Medicare+Choice Enrollment Demonstrations
Section 4018 of the BBA requires that we conduct a 3-year
demonstration project to evaluate the use of a third-party contractor
to conduct the Medicare+Choice plan enrollment and disenrollment
functions. We are soliciting comments on how this demonstration could
be designed. For example--
What constitutes an enrollment or disenrollment
``function''? Is it distributing applications, collecting applications,
processing applications, providing benefits counseling, ascertaining
reasons for disenrollment, or other activities?
What functions should the contractor perform?
What exactly are the tasks involved in enrollment/
disenrollment?
What would be the most desirable/efficacious processes for
enrollment/disenrollment from the perspective of the beneficiaries and
plans?
What is a demonstration ``area''?
Should all Medicare+Choice plans in the demonstration area
be involved in the demonstration? If not, which ones should be exempt?
What requirements under Medicare Part C, if any, is the
Secretary likely to have to waive in order for the demonstration to
work?
Should a single, standard form be used for enrollment?
What standards should be used to monitor the performance
of the contractor, given that enrollment in Medicare+Choice plans is
voluntary and that disenrollment may be due to various causes? Should
any of these standards be tied to contractor payment?
What would constitute ``substantial compliance'' with the
performance standards?
What criteria should we use to select the third-party
contractor?
4. Post-Stabilization Coverage
Section 1852(d)(2) of the Act authorizes us to develop policies to
ensure coordination of care and appropriate payment between
Medicare+Choice organizations and out-of-plan providers after the
beneficiary's medical condition is determined to be stable. We are
particularly interested in comments about the following issues:
Should we specify which provider is responsible for
developing a plan of care to appropriately maintain the beneficiary's
health, or should this be negotiated between the emergency providers
and the plan providers?
Should we establish a requirement that the Medicare+Choice
plan respond
[[Page 2923]]
to an emergency service provider's request for approval/authorization
within a certain period of time? If so, what should that time period
be?
Should we require that Medicare+Choice plans make
available a central contact for emergency providers to call for
authorization and medical history data?
Finally, with regard to post-stabilization benefits and
coverage, our primary objective is to ensure that Medicare enrollees
are held harmless in payment disputes between the Medicare+Choice plans
and the non-network service provider. What are the most appropriate
standards to accomplish this goal?
5. Grievances, Organization Determinations and Reconsiderations
Appropriate and meaningful appeals and grievance procedures for the
resolution of individual enrollee complaints about their health care
are among the most important beneficiary protections in the
Medicare+Choice program. Section 1852(g) requires that all
Medicare+Choice organizations have procedures for making determinations
regarding whether an enrollee is entitled to receive specific health
services. The organization must provide for reconsideration of adverse
coverage determinations at the request of the enrollee within a time
period specified by us, but not later than 60 days after the date of
the receipt of the request for reconsideration. However, the
Medicare+Choice organization must have in place procedures for
expedited reconsiderations under certain circumstances.
We are soliciting comments with regard to these protections. For
example--
Should guidelines for a grievance process be established?
What is an appropriate timeframe for a reconsideration of
a nonexpedited determination?
Should plans be able to subcontract organization
determinations and reconsiderations to subcontractors?
Should Medicare+Choice plans be required to continue
coverage during the reconsideration process?
Should reductions in care be subject to the
reconsideration process?
6. Provider Rights in Medicare+Choice Plans
Section 1852(b)(2) provides that a Medicare+Choice organization may
not discriminate with respect to participation, reimbursement, or
indemnification as to any provider that is acting within the scope of
the provider's license or certification under applicable State law,
solely on the basis of the license or certification. The statute
provides, however, that this prohibition is not to be construed to
prohibit a plan from including providers only to the extent necessary
to meet the needs of the plan's enrollees or from establishing any
measure designed to maintain quality and control costs consistent with
the responsibilities of the plan.
In addition, provider rights set forth in section 1852(j) include
the right of health care professionals to advise Medicare beneficiaries
of possible medical procedures, treatments, or care, regardless of
whether benefits for the treatment or care are provided under the plan.
Section 1852(j) also establishes certain provider protections,
including the physician's right to written notice of a Medicare+Choice
plan's decision to exclude him or her from participation in the plan
and provides that a process for appealing such a decision be
established. We would like to obtain general comments about the scope
of the various provider protection requirements. In addition, we would
like comments regarding the following:
What procedures should Medicare+Choice plans be required
to put in place to ensure that providers are notified of adverse
participation decisions?
In a case where multiple types of providers or
practitioners can provide a specific service, how should we interpret
the anti-discrimination provision at section 1852(b)?
7. Encounter Data Collection
The payment standards and methodology contained in the new Part C
anticipate an eventual transition from a payment based on Medicare fee-
for-service utilization and cost, to a payment adjusted for the
individual medical conditions of the enrolled population--a process
known as risk adjustment. In response to the requirement that inpatient
hospital encounter data be collected from health plans for services on
or after July 1, 1997, we have developed instructions concerning
collection of inpatient hospital encounter data for hospitals, plans,
and contractors. Many questions, however, remain about non-inpatient
encounter data. For example--
What information systems issues do organizations face when
asked to submit non-inpatient hospital encounter data?
What are appropriate transmission mechanisms for
collection of non-inpatient hospital encounter data? Should they vary
by type of plan, by size of plan, or by type of data collected?
What issues do organizations face relating to the
transmission of non-inpatient hospital encounter data, especially
regarding the frequency and the methodology of transmission? Under what
circumstances and for what purposes are such data currently being
generated? How could we coordinate our data collection efforts with
ongoing activities?
In addition to a January 28, 1998 general meeting (discussed in
section II. of this notice), we are considering holding a public
meeting specifically regarding the collection of hospital encounter
data that will be used for the implementation of risk adjustment for
payment of health plans. Individuals and organizations interested in
attending such a meeting should write to Cynthia Tudor, HCFA Center for
Health Plans and Providers, Room C3-15-06, 7500 Security Blvd.,
Baltimore, MD 21244, or by Internet at ``C[email protected]'' (please
specify ``Encounter Data Meeting'' in the Subject line).
8. Private Fee-for-Service Plans
One of the new Medicare+Choice health care options for
beneficiaries is the ``private fee-for-service (PFFS)'' plan. These
plans are defined at 1859(b)(2). Private fee-for-service plans must
meet most of the same requirements as other Medicare+Choice plans and
will be capitated on a full risk basis in exchange for providing
enrollees with the full package of Medicare benefits. Unlike
coordinated care Medicare+Choice plan options however, PFFS plans are
expressly prohibited from placing the provider at financial risk or
from varying payment based on utilization experience. PFFS plans must
pay all service providers (regardless of contracting status) on a fee-
for-service basis. We request public comments expressing opinions on
the most effective implementation of the unique PFFS plan program
requirements, including, but not limited to the following topics:
Section 1852(j) states that a provider furnishing covered services
to PFFS plan enrollees must be treated as if the provider had a direct
contract with the PFFS if, before furnishing the services, the provider
is informed of or given a reasonable opportunity to obtain information
about the terms and conditions of payment for these services. We are
soliciting comments on appropriate standards to determine when a
provider has an implied contract under section 1852(j). For example--
What notification requirements, if any, must be met by the
PFFS plan or
[[Page 2924]]
the provider in order to establish a de facto contracting arrangement?
With regard to ``fee-for-service payment'' as specified in the
statute--
Could the definition of these payments include bundled
provider fees, or global fees?
What should be the enrollee's responsibility for payment
of claims?
As with other Medicare+Choice options, should providers in
PFFS plans be prohibited from billing beneficiaries in most cases?
PFFS plans must meet substantially different requirements than
other Medicare+Choice plans with regard to utilization review
requirements and enrollee premiums. We are interested in the public's
perception of the most effective ways to implement statutory
requirements that apply certain utilization review standards to these
entities. For example--
How should utilization protocols based on standards of
medical practice be defined?
Should PFFS plans that use utilization review to determine
medical necessity be required to include limitation on liability as a
mechanism to protect PFFS plan enrollees against liability for full
payment when they did not know or have reason to know that the PFFS
would deny the services as being not medically necessary?
How can these entities be able to comply with the access
standards in section 1852? That is, to what extent are Medicare+Choice
program access requirements met by establishment of a health service
delivery network?
9. Medical Savings Accounts
As part of the Medicare+Choice program implementation, we are
establishing procedures for a maximum of 390,000 beneficiaries to
enroll under an MSA option in accordance with section 1851. Under the
MSA option, a beneficiary's Medicare capitated payment rate will be
used to purchase a MSA high deductible health insurance plan meeting
certain standards. An MSA plan must pay for at least all Medicare-
covered items and services after the enrollee meets the annual
deductible, which for 1999 cannot exceed $6,000. The difference between
the individual's capitated payment rate and the insurance premium will
be placed in an MSA designated by the enrollee. These funds can then be
used by the individual to meet medical expenses under the insurance
deductible, they can be allowed to accrue from year to year, or they
can be withdrawn for nonmedical expenses subject to applicable tax and
penalty rules.
We are requesting input from the public regarding the appropriate
standards for MSA insurers and account managers. For example--
What types of information should potential MSA insurers be
required to submit to us as part of the application process?
What other standards and requirements should approved MSA
entities meet for monitoring and evaluation purposes?
10. Other Issues
We are also interested in receiving responses to the following
questions:
A Medicare+Choice contract may include more than one plan.
We view this as permitting an entity to offer more than one
Medicare+Choice product (for example, an HMO and an PPO) as well as
allowing a national contract. How can these contracts be structured to
facilitate the application and approval process, including the need for
multiple State licenses?
What standards for out-of-area dialysis should apply?
How should accrediting bodies be treated for purposes of
deeming that a plan meets standards for internal quality review,
external quality review, and confidentiality of records?
Under what circumstances should we waive independent
external review for plans with an excellent record of quality and other
performance?
How should State agreements to monitor and enforce
Medicare+Choice requirements be structured?
What procedures or requirements for a hearing for the
organization prior to termination of its contract should we establish?
How should Medicaid-only plans be treated for
Medicare+Choice purposes? For example, how should we define ``licensed
under State law as a risk-bearing entity eligible to offer health
insurance or health benefits coverage in [a] State'' (section
1855(a)(1))?
II. Timelines and Procedures for Participation in the
Medicare+Choice Program
The following discussion applies to Medicare+Choice applications
and to Medicare risk contract applications submitted in calendar year
1998 for contracts with an effective date of on or before January 1,
1999. We will discuss application requirements for subsequent
contracting periods in subsequent HCFA policy notices.
It should also be noted that we will submit, as required, the three
applications and related information collection requirements, that is,
the adjusted community rate (ACR) proposal and the Medicare+Choice and
PSO applications, referenced in this notice to the Office of Management
and Budget (OMB) for emergency Paperwork Reduction Act (PRA) approval,
prior to implementation. A Federal Register notice will be published
soliciting public comment on each of the proposed information
collections submitted for emergency PRA approval. Although the notices
will allow the public only an abbreviated public comment period, the
maximum approval period of an emergency approval is 6 months. Once, we
have obtained the required OMB approval, we will resubmit the approved
information collections to OMB for reapproval under the routine PRA
approval process. As part of the routine process, we will publish two
consecutive Federal Register notices, soliciting public comment for a
total of 90 days, on the reapproval of the collections.
We plan to apply the following procedures to organizations that
submit applications for new risk contracts under section 1876. In
accordance with the BBA, we may not enter into any new risk contracts
under section 1876 after publication of the interim final rule.
Therefore, all applications for risk contracts under section 1876 that
are not approved prior to the publication of the interim final rule
(regardless of when submitted) will automatically be reviewed under the
Medicare+Choice contracting standards, and organizations will need to
submit a supplemental application as discussed below.
Adjusted Community Rate Proposals
Section 1854(a) requires that Medicare+Choice organizations submit
ACR proposals for Medicare+Choice plans by May 1st of the calendar year
prior to the benefit year in question. This statutory requirement does
not apply, however, to entities that have not yet been certified as
Medicare+Choice organizations under the interim final rule to be
published by June 1. The June 1 regulation will establish ACR deadlines
that apply when the statutory May 1 deadline does not apply. In 1999
and thereafter, organizations that apply for new contracts will be
required to submit their ACR proposals by May 1st. Risk contractors
that have contracts in effect prior to May 1, 1998 should submit ACRs
by May 1, 1998 in order to ensure timely processing.
Applicants for risk contracts whose applications are not approved
before the publication of the interim final rule will be reviewed as
applicants for Medicare+Choice contracts. Because we
[[Page 2925]]
will publish payment rates for 1999 on March 1, 1998, these applicants
must resubmit their ACR proposals to cover the proposed contract
period. The contract period must cover all of calendar year 1999 and
may include a period of time involving 1998. However, persons are not
required to comply with the information collection requirements
associated with the ACR proposal until OMB, PRA emergency approval has
been obtained.
Application Process for Medicare+Choice Plans
We encourage organizations that wish to participate in the
Medicare+Choice program to submit their applications as soon as
possible and no later than August 1, 1998. Although our goal is to
process applications in a timely manner, we cannot guarantee that
complete applications submitted by August 1, 1998 will be approved for
an effective date of January 1, 1999; let alone for those applications
submitted after August 1. We may experience delays in processing
applications, as current resources are reassigned to respond to the
requirements of the Medicare+Choice program.
This section applies to State-licensed organizations. The
procedures for PSOs that seek Federal waiver of the State licensure
requirement are discussed in a subsequent section. Upon receipt of a
State-licensed candidate's application for a Medicare+Choice contract,
we will immediately review the application to determine whether the
responses and documentation are complete. If we identify incomplete
responses, we will allow only 60 days for the applicant to submit the
necessary information. We will consider an application that, for any
reason, is not complete after the 60-day period to be nonresponsive,
and we will return it to the applicant. Once we determine that an
application is complete, we will initiate an extensive review of the
data, including a site visit for most plans. We will provide applicants
a 15-day time period in which to provide any information required as a
result of the site visit.
Note that an approved organization must be ready to enroll and
serve beneficiaries on the first day that the contract becomes
effective. To ensure that new applicants are approved in time for the
contract to be implemented by January 1, 1999, we plan to establish a
two-step process whereby new contractors may submit a core application
at any time prior to publication of the final interim rule and then
submit a supplemental application after the interim final rule is
published. The core application will be similar to the current
application for a risk contract. At present, we expect that it will
contain the following information:
Medicare+Choice option (HMO, State-licensed PSO, MSA,
etc.).
General information: description of plan, brief history,
banking information, board of directors, management staff, geographic
region, and other pertinent data for the Medicare product.
Organization and contract information: type of legal
entity, State authority to operate, organizational charts, and
management contracts.
Health services delivery network: detailed description of
delivery system, Medicare subscriber agreements, evidence of coverage,
membership information, and quality assurance systems.
Financial information: certified audits, financial
projections, and all information necessary to demonstrate a fiscally-
sound operation.
Marketing information: marketing plans, projections, and
enrollment assumptions.
Any additional information to support the Medicare+Choice
application.
The core application package will be available on our Internet web
site (http://www.hcfa.gov) on or about February 1, 1998. Additional
information regarding the core application process can be obtained by
writing to us at--HPPAG, Field Liaison Staff, Health Care Financing
Administration, Center for Health Plans and Providers, Health Plan
Purchasing and Administration Group, 7500 Security Blvd., 03-18-13
South Building, Baltimore, MD 21244-1850. Alternatively, you may call
the Health Plan Purchasing and Administration Group (HPPAG) at 410-786-
7623.
ACR instructions will also be available beginning February 1, 1998
on the Internet or from the above address. However, persons are not
required to comply with the information collection requirements
associated with the core Medicare+Choice application and ACR proposal
until OMB, PRA emergency approval has been obtained.
Supplemental Medicare+Choice Application Process
Our plans are that Medicare+Choice applicants that submit a core
application must complete the application process by submitting a
supplemental application. The supplemental application will cover
provisions that are specific to the Medicare+Choice program as
specified by the interim final rule, including the fiscal solvency
standards for PSOs, which are scheduled to be published on April 1,
1998. The supplemental application will also solicit plan specific
information relevant to each of the different types of Medicare+Choice
program options (for example, PSO, PFFS, MSA). The supplemental
applications will be available beginning June 1, 1998, when the interim
final rule is published. The application will be available from our
Internet web site or from HPPAG at the above address. Persons are not
required to comply with the information collection requirements
associated with the Medicare+Choice supplemental application until OMB,
PRA emergency approval has been obtained.
Federal Waiver of State Licensure Requirement for PSOs
Consistent with current policy, only applications that have
obtained State licenses will be approved for Medicare+Choice contracts.
The only exception to this requirement are PSOs, which are allowed to
request waivers of the State licensure requirement as specified by BBA.
In accordance with section 1855(a)(2), PSO applicants may request
waivers of the State licensure requirement under any of the following
circumstances:
The State failed to act on a timely basis, that is, within
90 days of its receipt of a substantially complete application.
The denial of the application was based on discriminatory
treatment. The ground for approval of such a waiver on the basis of
discriminatory treatment is that the State has denied a licensing
application and (1) the standards or review process imposed by the
State as a condition of approval of the license imposes any material
requirements, procedures, or standards (other than solvency
requirements) to such organizations that are not generally applicable
to other entities engaged in a substantially similar business, or (2)
the State requires the organization, as a condition of licensure, to
offer any product or plan other than a Medicare+Choice plan.
The denial was based on application of solvency
requirements. With respect to waiver applications filed on or after the
date of publication of solvency standards under section 1856(a), the
ground for approval of the waiver application on this basis is that the
State denied the licensing application based (in whole or in part) on
the organization's failure to meet applicable solvency requirements and
(1) the requirements are not the same as the solvency standards
established under section 1856(a), or (2) the State has imposed a
condition of approval of the license documentation or
[[Page 2926]]
information requirements relating to solvency or other material
requirements, procedures, or standards relating to solvency that are
different from the requirements, procedures, and standards applied by
us under section 1856(d)(2).
Once a prospective Medicare+Choice contractor submits documentation
that one or more of the above conditions has been met, we have 60 days
to grant or deny the waiver application. A separate application for
PSOs seeking a waiver from State licensure will be available on or
about February 15, 1998, on our Internet web site or from HPPAG at the
address given above. This application will include the waiver forms as
well as the contract application and all definitions. In addition,
solvency standards for PSOs seeking a waiver will be available on April
1, 1998. PSOs requesting a waiver that submitted an application prior
to April 1 will be required to submit a supplemental application
showing how they meet the solvency standards. However, persons are not
required to comply with the information collection requirements
associated with the PSO application until OMB, PRA emergency approval
has been obtained.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Information Campaign
To assist Medicare beneficiaries' decision-making process relative
to new Medicare+Choice health care options, we will incorporate
information on newly-approved plans into our plan comparison database.
This database will contain information on all existing and new plans,
except for MSAs. Plan comparison information will be posted on the
Internet and will be updated at least quarterly. Thus, newly-approved
plans will be entered into the plan comparison database at the next
update cycle.
February 4, 1998 Public Meeting
In addition to seeking written comments from the public, we will
hold a public meeting on Wednesday, February 4, 1998 from 9 a.m. to 3
p.m. in our auditorium at 7500 Security Boulevard, Baltimore, Maryland.
The purpose of this meeting will be to discuss issues and concerns from
plans, providers, beneficiaries, and other interested parties on the
requirements and implementation of the Medicare+Choice program. The
agenda for this meeting will be posted on our Internet web site.
Further information can be obtained from Rondalyn Kane at (202) 690-
7874.
(Secs. 1851 through 1857, 1859, 1876, and 1877 of the Social
Security Act (Secs. 4001, 4002, and 4006 of Pub.L. 105-33, 42 U.S.C.
1395l and 1395mm))
Dated: December 23, 1997.
Nancy-Ann Min DeParle,
Adminstrator, Health Care Financing Administration.
[FR Doc. 98-1381 Filed 1-16-98; 8:45 am]
BILLING CODE 4120-01-P