Federal Register, Volume 84 Issue 73 (Tuesday, April 16, 2019)

[Federal Register Volume 84, Number 73 (Tuesday, April 16, 2019)]
[Rules and Regulations]
[Pages 15680-15844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06822]

[[Page 15679]]

Vol. 84

Tuesday,

No. 73

April 16, 2019

Part II

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 422, 423, 438, et al.

Medicare and Medicaid Programs; Policy and Technical Changes to the
Medicare Advantage, Medicare Prescription Drug Benefit, Programs of
All-Inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service,
and Medicaid Managed Care Programs for Years 2020 and 2021; Final Rule

Federal Register / Vol. 84 , No. 73 / Tuesday, April 16, 2019 / Rules
and Regulations

[[Page 15680]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 422, 423, 438, and 498

[CMS-4185-F]
RIN 0938-AT59

Medicare and Medicaid Programs; Policy and Technical Changes to
the Medicare Advantage, Medicare Prescription Drug Benefit, Programs of
All-Inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service,
and Medicaid Managed Care Programs for Years 2020 and 2021

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule will revise the Medicare Advantage (MA)
program (Part C) regulations and Prescription Drug Benefit program
(Part D) regulations to implement certain provisions of the Bipartisan
Budget Act of 2018; improve quality and accessibility; clarify certain
program integrity policies for MA, Part D, and cost plans and PACE
organizations; reduce burden on providers, MA plans, and Part D
sponsors through providing additional policy clarification; and
implement other technical changes regarding quality improvement. This
final rule will also revise the appeals and grievances requirements for
certain Medicaid managed care and MA special needs plans for dual
eligible individuals to implement certain provisions of the Bipartisan
Budget Act of 2018.

DATES: Effective Dates: These regulations are effective on January 1,
2020, except for the amendments to Sec. Sec. 422.107(c)(9), (d),
(e)(2), 422.560(a)(4) and (b)(5), 422.566(a), 422.629 through 422.634,
422.752(d), 438.210, 438.400, and 438.402, which are effective January
1, 2021, and for the amendments to Sec. Sec. 422.222(a)(2),
423.120(c)(6)(iv), and 498.5(n)(1), which are effective June 17, 2019.

FOR FURTHER INFORMATION CONTACT: Theresa Wachter, (410) 786-1157, or
Cali Diehl, (410) 786-4053, MA/Part C Issues. Elizabeth Goldstein,
(410) 786-6665, Parts C and D Quality Ratings Issues. Kari Gaare, (410)
786-8612, Prescription Drug Plan Access to Parts A and B Data Issues.
Vanessa Duran, (410) 786-8697, D-SNP Issues. Frank Whelan, (410) 786-
1302, Preclusion List Issues.

SUPPLEMENTARY INFORMATION:

I. Executive Summary and Background

A. Executive Summary

1. Purpose
The primary purpose of this final rule is to revise the Medicare
Advantage (MA) program (Part C) and Prescription Drug Benefit Program
(Part D) regulations based on our continued experience in the
administration of the Part C and Part D programs and to implement
certain provisions of the Bipartisan Budget Act of 2018. The changes
are necessary to--
Implement the Bipartisan Budget Act of 2018 provisions;
Improve program quality and accessibility;
Clarify program integrity policies; and
Implement other changes.
This final rule will meet the Administration's priorities to reduce
burden across the Medicare program by reducing unnecessary regulatory
complexity, and improve the regulatory framework to facilitate
development of Part C and Part D products that better meet the
individual beneficiary's healthcare needs. Because the Bipartisan
Budget Act of 2018 requires the Secretary to establish procedures, to
the extent feasible, for integration and unification of the appeals and
grievance processes for dual eligible individuals who are enrolled in
Medicaid and in MA special needs plans for dual eligible individuals
(D-SNPs), this final rule also includes provisions to revise the
appeals and grievances requirements for Medicaid managed care and MA D-
SNPs. While the Part C and Part D programs have high satisfaction among
beneficiaries, we continually evaluate program policies and regulations
to remain responsive to current trends and newer technologies, and
provide increased flexibility to serve patients. Specifically, this
final rule meets the Secretary's priorities to: (1) Reform health
insurance by increasing access to personalized health care, (2)
transform our healthcare system to be value-based and innovative by
promoting health information technology, and (3) support boosting
transparency around price and quality. These changes being finalized
will promote more convenient, cost-effective access to care within Part
C and D plans, improve accountability and bolster program integrity,
allow plans to innovate in response to patients' needs, and promote
coordination within MA D-SNPs.
2. Summary of the Major Provisions
a. Requirements for Medicare Advantage Plans Offering Additional
Telehealth Benefits (Sec. Sec. 422.100, 422.135, 422.252, 422.254, and
422.264)
Section 50323 of the Bipartisan Budget Act of 2018 (Pub. L. 115-
123) created a new section 1852(m) of the Social Security Act (the
Act), which allows MA plans the ability to provide ``additional
telehealth benefits'' (referred to as ``MA additional telehealth
benefits'' in this rule) to enrollees starting in plan year 2020 and
treat them as basic benefits. The statute limits these authorized MA
additional telehealth benefits to services for which benefits are
available under Medicare Part B, but that are not payable under section
1834(m) of the Act and have been identified for the applicable year as
clinically appropriate to furnish through electronic information and
telecommunications technology (referred to as ``electronic exchange''
in this rule). Under this final rule, MA plans will be permitted to
offer--as part of the basic benefit package--MA additional telehealth
benefits beyond what is currently allowable under the original Medicare
telehealth benefit (referred to as ``Medicare telehealth services'' in
this rule). In addition, MA plans will continue to be able to offer MA
supplemental benefits (that is, benefits not covered by original
Medicare) via remote access technologies and/or telemonitoring
(referred to as ``MA supplemental telehealth benefits'' in this rule)
for those services that do not meet the requirements for coverage under
original Medicare or the requirements for MA additional telehealth
benefits.
Section 1852(m)(4) of the Act mandates that enrollee choice is a
priority. If an MA plan covers a Part B service as an MA additional
telehealth benefit, then the MA plan must also provide access to such
service through an in-person visit and not only through electronic
exchange. The enrollee must have the option whether to receive such
service through an in-person visit or, if offered by the MA plan,
through electronic exchange. In addition, section 1852(m)(2)(A)(ii) of
the Act excludes from MA additional telehealth benefits capital and
infrastructure costs and investments relating to such benefits. These
statutory provisions have guided our rule.
In this final rule, we establish regulatory requirements that will
allow MA plans to cover Part B benefits furnished through electronic
exchange but not payable under section 1834(m) of the Act as MA
additional telehealth

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benefits--and as part of the basic benefits defined in Sec. 422.101
instead of separate MA supplemental benefits. We believe MA additional
telehealth benefits will increase access to patient-centered care by
giving enrollees more control to determine when, where, and how they
access benefits. We solicited comments from stakeholders on various
aspects of our proposal, which informed how we are implementing the MA
additional telehealth benefits in this final rule.
b. Dual Eligible Special Needs Plans Provisions (Sec. Sec. 422.2,
422.60, 422.102, 422.107, 422.111, 422.560 Through 422.562, 422.566,
422.629 Through 422.634, 422.752, 438.210, 438.400, and 438.402)
Section 50311(b) of the Bipartisan Budget Act of 2018 amends
section 1859 of the Act to require integration of the Medicare and
Medicaid benefits provided to enrollees in Dual Eligible Special Needs
Plans (D-SNPs). In particular, the statute requires: (1) Development of
unified grievance and appeals processes for D-SNPs; and (2)
establishment of new standards for integration of Medicare and Medicaid
benefits for D-SNPs.
The statute specifies a number of key elements for unified D-SNP
grievance and appeals processes and grants the Secretary discretion to
determine the extent to which unification of these processes is
feasible. In particular, the unified processes must adopt the
provisions from section 1852(f) and (g) of the Act (MA grievances and
appeals) and sections 1902(a)(3) and (5), and 1932(b)(4) of the Act
(Medicaid grievances and appeals, including managed care) that are most
protective to the enrollee, take into account differences in state
Medicaid plans to the extent necessary, easily navigable by an
enrollee, include a single written notification of all applicable
grievance and appeal rights, provide a single pathway for resolution of
a grievance or appeal, provide clear notices, employ unified timeframes
for grievances and appeals, establish requirements for how the plan
must process, track, and resolve grievances and appeals, and with
respect to benefits covered under Medicare Parts A and B and Medicaid,
incorporate existing law that provides continuation of benefits pending
appeal for items and services covered under Medicare and Medicaid. The
statute requires the Secretary to establish unified grievance and
appeals procedures by April 1, 2020 and requires D-SNP contracts with
state Medicaid agencies to use the unified procedures for 2021 and
subsequent years.
Regarding the establishment of new standards for integration of
Medicare and Medicaid benefits, the statute requires that all D-SNPs
meet certain new minimum criteria for such integration for 2021 and
subsequent years, either by covering Medicaid benefits through a
capitated payment from a state Medicaid agency or meeting a minimum set
of requirements as determined by the Secretary. The law also stipulates
that for the years 2021 through 2025, if the Secretary determines that
a D-SNP failed to meet one of these integration standards, the
Secretary may impose an enrollment sanction, which would prevent the D-
SNP from enrolling new members. In describing the ``additional minimum
set of requirements'' established by the Secretary, the statute directs
the Federally Coordinated Health Care Office in CMS to base such
standards on input from stakeholders. We implement these new statutory
provisions and clarify definitions and operating requirements for D-
SNPs in this final rule.
c. Medicare Advantage and Part D Prescription Drug Plan Quality Rating
System (Sec. Sec. 422.162(a) and 423.182(a), Sec. Sec. 422.166(a) and
423.186(a), Sec. Sec. 422.164 and 423.184, and Sec. Sec. 422.166(i)
and 423.186(i))
In the Medicare Program; Contract Year 2019 Policy and Technical
Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-
for-Service, the Medicare Prescription Drug Benefit Programs, and the
PACE Program Final Rule (hereafter referred to as the April 2018 final
rule), CMS codified at Sec. Sec. 422.160, 422.162, 422.164, and
422.166 (83 FR 16725 through 16731) and Sec. Sec. 423.180, 423.182,
423.184, and 423.186 (83 FR 16743 through 16749) the methodology for
the Star Ratings system for the MA and Part D programs, respectively.
This was part of the Administration's effort to increase transparency
and advance notice regarding enhancements to the Part C and D Star
Ratings program.
At this time, we are finalizing enhancements to the cut point
methodology for non-Consumer Assessment of Healthcare Providers and
Systems (CAHPS) measures. We are also making substantive updates to the
specifications for a few measures for the 2022 and 2023 Star Ratings,
and finalizing rules for calculating Star Ratings in the case of
extreme and uncontrollable circumstances. Data would be collected and
performance measured using these final rules and regulations for the
2020 measurement period and the 2022 Star Ratings, except for the Plan
All-Cause Readmission measure where the applicability date is the 2021
measurement period as described in section II.B.1.d.(1).(c) of this
final rule.
d. Preclusion List Requirements for Prescribers in Part D and
Individuals and Entities in MA, Cost Plans, and PACE (Sec. Sec.
422.222 and 423.120(c)(6))
In the April 2018 final rule, CMS removed several requirements
pertaining to MA and Part D provider and prescriber enrollment that
were to become effective on January 1, 2019. We stated in that final
rule our belief that the best means of reducing the burden of the MA
and Part D provider and prescriber enrollment requirements without
compromising our payment safeguard objectives would be to focus on
providers and prescribers that pose an elevated risk to Medicare
beneficiaries and the Trust Funds. That is, rather than require the
enrollment of MA providers and Part D prescribers regardless of the
level of risk they might pose, we would prevent payment for MA items or
services and Part D drugs that are, as applicable, furnished or
prescribed by demonstrably problematic providers and prescribers. We
therefore established in the April 2018 final rule a policy under
which: (1) Such problematic parties would be placed on a ``preclusion
list''; and (2) payment for MA services and items and Part D drugs
furnished or prescribed by these individuals and entities would be
rejected or denied, as applicable. The MA and Part D enrollment
requirements, in short, were replaced with the payment-oriented
approach of the preclusion list.
This final rule will make several revisions and additions to the
preclusion list provisions we finalized in the April 2018 final rule.
We believe these changes will help clarify for stakeholders CMS'
expectations regarding the preclusion list.
3. Summary of Costs and Benefits

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Provision Description Impact
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Requirements for Medicare Consistent with section 50323 of the MA additional telehealth benefits are
Advantage Plans Offering Bipartisan Budget Act of 2018, MA expected to produce $557 million in
Additional Telehealth Benefits plans have the ability to provide savings for enrollees over 10 years
(Sec. Sec. 422.100, 422.135, ``additional telehealth benefits'' to from reduced travel time to and from
422.252, 422.254, and 422.264). enrollees starting in plan year 2020 providers. The impact of paying for
and treat them as basic benefits. MA additional telehealth benefits
out of the Medicare Trust Fund (as
basic benefits) versus out of the
rebates (as supplemental benefits)
results in a transfer of $80 million
from the Medicare Trust Fund to
enrollees over 10 years.
Integration Requirements for Dual Consistent with section 50311(b) of For the initial year of
Eligible Special Needs Plans the Bipartisan Budget Act of 2018, we implementation, we estimate a $3.4
(Sec. Sec. 422.2, 422.60, are establishing, effective 2021, million cost to MA plans and a $0.5
422.102, 422.107, 422.111, and Medicare and Medicaid integration million cost to state Medicaid
422.752). standards D-SNPs. Effective 2021 agencies, half of which is
through 2025, we will require the transferred to the federal
imposition of an intermediate government, in order to transition
sanction of prohibiting new to the new requirements. After that,
enrollment into a D-SNP if CMS we estimate that impact will be
determines that the D-SNP is failing negligible.
to comply with these integration
standards. Finally, we are creating
new and modifying existing regulatory
definitions that relate to D-SNPs.
Unified Grievances and Appeals Consistent with section 50311(b) of The provision gives rise to both
Procedures for Dual Eligible the Bipartisan Budget Act of 2018, we savings, from the increased
Special Needs Plans and Medicaid are unifying Medicare and Medicaid efficiency of a unified process, and
Managed Care Plans at the Plan grievance and appeals procedures for costs from the requirement to
Level (Sec. Sec. 422.560-562, certain D-SNPs that enroll provide benefits while appeals are
422.566, 422.629-422.634, individuals who receive Medicare and pending. Over 10 years there are
438.210, 438.400, and 438.402). Medicaid benefits from the D-SNP and three anticipated effects: (1) Plans
a Medicaid managed care organization will save $0.7 million from the
offered by the D-SNP's MA increased efficiency of unified
organization, the parent appeals and grievance processes;
organization, or subsidiary owned by this savings is passed to the
the parent organization. Medicare and Medicare Trust Fund; (2) the
Medicaid grievance and appeals Medicare Trust Fund will incur a
processes differ in several key ways, $4.2 million expense for providing
which in effect creates unnecessary benefits while appeals are pending;
administrative complexity for health and (3) enrollees will incur an
issuers participating across product extra $0.7 million in cost sharing
lines. This will allow enrollees to for benefits while appeals are
follow one resolution pathway at the pending.
plan level when filing a complaint or
contesting an adverse coverage
determination with their plan
regardless of whether the matter
involves a Medicare or Medicaid
covered service.
MA and Part D Prescription Drug We are finalizing several measure Negligible impact.
Plan Quality Rating System (Sec. specification updates, adjustments
Sec. 422.162(a) and due to extreme and uncontrollable
423.182(a), 422.166(a) and circumstances, and an enhanced cut
423.186(a), 422.164 and 423.184, point methodology. The measure
and 422.166(i)(1) and changes are routine and do not have a
423.186(i)(1)). significant impact on the ratings of
contracts. The policy for disasters
will hold contracts harmless from
decreases in ratings from the prior
year when there are extreme and
uncontrollable circumstances
affecting them. The methodology to
set Star Ratings cut points will help
increase the stability and
predictability of cut points from
year to year.
Preclusion List Requirements for We are making several revisions to the Negligible impact.
Prescribers in Part D and MA and Part D preclusion list
Individuals and Entities in MA, policies that we finalized in the
Cost Plans, and PACE (Sec. Sec. April 2018 final rule.
422.222 and 423.120(c)(6)).
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B. Background

We received approximately 180 timely pieces of correspondence
containing multiple comments on the proposed rule titled ``Medicare and
Medicaid Programs; Policy and Technical Changes to the Medicare
Advantage, Medicare Prescription Drug Benefit, Program of All-Inclusive
Care for the Elderly (PACE), Medicaid Fee-for-Service, and Medicaid
Managed Care Programs for Years 2020 and 2021'' which published
November 1, 2018, in the Federal Register (83 FR 54982). While we
intend to address the Risk Adjustment Data Validation (RADV) proposals
in subsequent rulemaking (due to an extended comment period for these
proposals until April 30, 2019, per 83 FR 66661), we are finalizing all
other provisions with changes varying from minor clarifications to more
significant modifications based on comments received. We also note that
some of the public comments received were outside of the scope of the
proposed rule. These

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out-of-scope public comments are not addressed in this final rule.
Summaries of the public comments that are within the scope of the
proposed rule and our responses to those public comments are set forth
in the various sections of this final rule under the appropriate
headings. However, we note that in this final rule we are not
addressing comments received with respect to the RADV provision of the
proposed rule that we are not finalizing at this time. Rather, we will
address these comments in subsequent rulemaking, as appropriate.

II. Provisions of the Proposed Rule and Analysis of and Responses to
Public Comments

A. Implementing the Bipartisan Budget Act of 2018 Provisions

1. Requirements for Medicare Advantage Plans Offering Additional
Telehealth Benefits (Sec. Sec. 422.100, 422.135, 422.252, 422.254, and
422.264)
Technologies that enable healthcare providers to deliver care to
patients in locations remote from the providers (hereinafter referred
to as ``telehealth'') are increasingly being used to complement face-
to-face patient-provider encounters. Telehealth visits among rural
Medicare beneficiaries participating in original Medicare have
increased more than 25 percent a year from 2004 to 2013.\1\ In Medicare
Advantage (MA), about 81 percent of MA plans offered supplemental
telehealth benefits in the form of remote access technologies in 2018,
an increase from 77 percent in 2017.\2\ This shows that the healthcare
industry has made significant advances in technology that enable
secure, reliable, real-time, interactive communication and data
transfer that were not possible in the past. Moreover, the use of
telehealth as a care delivery option for MA enrollees may improve
access to and timeliness of needed care, increase convenience for
patients, increase communication between providers and patients,
enhance care coordination, improve quality, and reduce costs related to
in-person care.\3\
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\1\ Mehrotra, A., Jena, A., Busch, A., Souza, J., Uscher-Pines,
L., Landon, B. (2016). ``Utilization of Telemedicine Among Rural
Medicare Beneficiaries.'' JAMA, 315(18): 2015-2016.
\2\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/index.html
\3\ Medicare Payment Advisory Commission (MedPAC), Report to the
Congress: Medicare Payment Policy, March 2018.
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MA basic benefits are structured and financed based on what is
covered under Medicare Parts A and B (paid through the capitation rate
by the government) with coverage of additional items and services and
more generous cost sharing provisions financed as MA supplemental
benefits (paid using rebate dollars or supplemental premiums paid by
enrollees). Traditionally, MA plans have been limited in how they may
deliver telehealth services outside of the original Medicare telehealth
benefit under section 1834(m) of the Act (hereinafter referred to as
``Medicare telehealth services'') because of this financing structure;
only services covered by original Medicare under Parts A and B, with
actuarially equivalent cost sharing, are in the basic benefit bid paid
by the capitation rate. Section 1834(m) of the Act and Sec. 410.78
generally limit payment for Medicare telehealth services by authorizing
payment only for specified services provided using an interactive audio
and video telecommunications system that permits real-time
communication between a Medicare beneficiary and either a physician or
specified other type of practitioner, and by specifying where the
beneficiary may receive telehealth services (eligible originating
sites). Eligible originating sites are limited as to the type of
geographic location (generally rural) and the type of care setting. The
statute grants the Secretary the authority to add to the list of
Medicare telehealth services based on an established annual process but
does not allow for exceptions to the restrictions on types of
practitioners that can furnish those services or on the eligible
originating sites. Because sections 1852(a), 1853, and 1854 of the Act
limit the basic benefits covered by the government's capitation payment
to only Parts A and B services covered under original Medicare with
actuarially equivalent cost sharing, telehealth benefits offered by MA
plans in addition to those covered by original Medicare are currently
offered as MA supplemental benefits and funded through the use of
rebate dollars or supplemental premiums paid by enrollees.
On February 9, 2018, President Trump signed the Bipartisan Budget
Act of 2018 (Pub. L. 115-123) into law. Section 50323 of the Bipartisan
Budget Act of 2018 created a new section 1852(m) of the Act, which
allows MA plans the ability to provide ``additional telehealth
benefits'' (hereinafter referred to as ``MA additional telehealth
benefits'') to enrollees starting in plan year 2020 and treat them as
basic benefits (also known as ``original Medicare benefits'' or
``benefits under the original Medicare fee-for-service program
option''). The statute limits these authorized MA additional telehealth
benefits to services for which benefits are available under Medicare
Part B but that are not payable under section 1834(m) of the Act and
have been identified for the applicable year as clinically appropriate
to furnish through electronic information and telecommunications
technology (hereinafter referred to as ``electronic exchange''). While
MA plans have always been able to offer more telehealth services than
are currently payable under original Medicare through MA supplemental
benefits, this change in how such MA additional telehealth benefits are
financed (that is, accounted for in the capitated payment) makes it
more likely that MA plans would offer them and that more enrollees
would use the benefit.
We are adding a new regulation at Sec. 422.135 to implement the
new section 1852(m) of the Act and amending existing regulations at
Sec. Sec. 422.100, 422.252, 422.254, and 422.264. Specifically, we are
codifying a new regulation at Sec. 422.135 to allow MA plans to offer
MA additional telehealth benefits, to establish definitions applicable
to this new classification of benefits, and to enact requirements and
limitations on them. Further, we are amending Sec. 422.100(a) and
(c)(1) to include MA additional telehealth benefits in the definition
of basic benefits and adding a cross-reference to new Sec. 422.135 to
reflect how these benefits may be provided as part of basic benefits.
Finally, we are amending the bidding regulations at Sec. Sec. 422.252,
422.254, and 422.264 to account for MA additional telehealth benefits
in the basic benefit bid.
We proposed that, beginning in contract year 2020, MA plans will be
permitted to offer--as part of the basic benefit package--MA additional
telehealth benefits beyond what is currently allowable under Medicare
telehealth services. Pursuant to section 1852 of the Act and the
regulation at Sec. 422.100(a), MA plans are able to offer Medicare
telehealth services including those described in existing authority at
section 1834(m) of the Act and Sec. Sec. 410.78 and 414.65 of the
regulations. We proposed that in addition to Medicare telehealth
services, MA plans will be able (but not required) to offer MA
additional telehealth benefits described in this final rule and at
section 1852(m) of the Act. In addition, we proposed to continue
authority for MA plans to offer MA supplemental benefits (that is,
benefits not covered by original Medicare) via remote access
technologies and telemonitoring (as

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currently named in the plan benefit package (PBP) software; hereinafter
referred to as ``MA supplemental telehealth benefits'') for those
services that do not meet the requirements for coverage under original
Medicare (for example, for Medicare telehealth services under section
1834(m)) or the requirements for MA additional telehealth benefits,
such as the requirement of being covered by Part B when provided in-
person. For instance, an MA plan may offer, as an MA supplemental
telehealth benefit, a videoconference dental visit to assess dental
needs because services primarily provided for the care, treatment,
removal, or replacement of teeth or structures directly supporting
teeth are not currently covered Part B benefits and thus would not be
allowable as MA additional telehealth benefits.
We proposed to establish regulatory requirements that will allow MA
plans to cover Part B benefits furnished through electronic exchange
but not payable under section 1834(m) of the Act as MA additional
telehealth benefits--and as part of the basic benefits defined in Sec.
422.101 instead of separate MA supplemental benefits. We believe MA
additional telehealth benefits will increase access to patient-centered
care by giving enrollees more control to determine when, where, and how
they access benefits.
Section 1852(m)(2)(A)(i) of the Act, as added by the Bipartisan
Budget Act of 2018, defines ``additional telehealth benefits'' as
services--(1) for which benefits are available under Part B, including
services for which payment is not made under section 1834(m) of the Act
due to the conditions for payment under such section; and (2) that are
identified for the applicable year as clinically appropriate to furnish
using electronic information and telecommunications technology (which
we refer to as ``through electronic exchange'') when a physician (as
defined in section 1861(r) of the Act) or practitioner (described in
section 1842(b)(18)(C) of the Act) providing the service is not at the
same location as the plan enrollee. In addition, section
1852(m)(2)(A)(ii) of the Act excludes from ``additional telehealth
benefits'' capital and infrastructure costs and investments relating to
such benefits. This statutory definition of ``additional telehealth
benefits'' guided our proposal.
We proposed a new regulation at Sec. 422.135 to authorize and
govern the provision of MA additional telehealth benefits by MA plans,
consistent with our interpretation of the new statutory provision.
First, we proposed definitions for the terms ``additional telehealth
benefits'' and ``electronic exchange'' in Sec. 422.135(a). We proposed
to define ``additional telehealth benefits'' as services that meet the
following: (1) Are furnished by an MA plan for which benefits are
available under Medicare Part B but which are not payable under section
1834(m) of the Act; and (2) have been identified by the MA plan for the
applicable year as clinically appropriate to furnish through electronic
exchange. For purposes of this specific regulation and addressing the
requirements and limitations on MA additional telehealth benefits, we
proposed to define ``electronic exchange'' as ``electronic information
and telecommunications technology'' as this is a concise term for the
statutory description of the means used to provide the MA additional
telehealth benefits. We did not propose specific regulation text that
defines or provides examples of electronic information and
telecommunications technology because the technology needed and used to
provide MA additional telehealth benefits would vary based on the
service being offered. Examples of electronic information and
telecommunications technology (or ``electronic exchange'') may include,
but are not limited to, the following: Secure messaging, store and
forward technologies, telephone, videoconferencing, other internet-
enabled technologies, and other evolving technologies as appropriate
for non-face-to-face communication. We believe this broad and
encompassing approach will allow for technological advances that may
develop in the future and avoid tying the authority in the regulation
to specific information formats or technologies that permit non-face-
to-face interactions for furnishing clinically appropriate services.
We did not propose specific regulation text defining ``clinically
appropriate;'' rather, we proposed to implement the statutory
requirement for MA additional telehealth benefits to be provided only
when ``clinically appropriate'' to align with our existing regulations
for contract provisions at Sec. 422.504(a)(3)(iii), which requires
each MA organization to agree to provide all benefits covered by
Medicare ``in a manner consistent with professionally recognized
standards of health care.'' We proposed to apply the same principle to
MA additional telehealth benefits, as MA additional telehealth benefits
must be treated as if they were benefits under original Medicare per
section 1852(m)(5) of the Act.
The statute limits MA additional telehealth benefits to those
services that are identified for the applicable year as clinically
appropriate to furnish through electronic exchange. The statute does
not specify who or what entity identifies the services for the year.
Therefore, we proposed to interpret this provision broadly by not
specifying the Part B services that an MA plan may offer as MA
additional telehealth benefits for the applicable year, but instead
allowing MA plans to independently determine each year which services
are clinically appropriate to furnish in this manner. Thus, our
definition of MA additional telehealth benefits at Sec. 422.135(a)
provides that it is the MA plan (not CMS) that identifies the
appropriate services for the applicable year. We believe that MA plans
are in the best position to identify each year whether MA additional
telehealth benefits are clinically appropriate to furnish through
electronic exchange. MA plans have a vested interest in and
responsibility for staying abreast of the current professionally
recognized standards of health care, as these standards are
continuously developing with new advancements in modern medicine. As
professionally recognized standards of health care change over time and
differ from practice area to practice area, our approach is flexible
enough to take those changes and differences into account.
Furthermore, Sec. 422.111(b)(2) requires the MA plan to annually
disclose the benefits offered under a plan, including applicable
conditions and limitations, premiums and cost sharing (such as
copayments, deductibles, and coinsurance) and any other conditions
associated with receipt or use of benefits. MA plans satisfy this
requirement through the Evidence of Coverage, or EOC, document provided
to all enrollees. This disclosure requirement would have to include
applicable MA additional telehealth benefit limitations. That is, any
MA plan offering MA additional telehealth benefits must identify the
services that can be covered as MA additional telehealth benefits when
provided through electronic exchange. We believe that it is through
this mechanism (the EOC) that the MA plan would identify each year
which services are clinically appropriate to furnish through electronic
exchange as MA additional telehealth benefits.
We solicited comment on this proposed implementation of the statute
and our reasoning. We noted in the proposed rule how we had considered
whether CMS should use the list of Medicare telehealth services payable
by original Medicare under section 1834(m) of the Act as the list of
services that are clinically appropriate to be

[[Page 15685]]

provided through electronic exchange for MA additional telehealth
benefits. In that circumstance, services on the list could be
considered as clinically appropriate to be provided through electronic
exchange for MA additional telehealth benefits without application of
the location limitations of section 1834(m) of the Act. However, we do
not believe that is the best means to take full advantage of the
flexibility that Congress has authorized for the MA program. The list
of Medicare telehealth services for which payment can be made under
section 1834(m) of the Act under the original Medicare program includes
services specifically identified by section 1834(m) of the Act as well
as other services added to the Medicare telehealth list using criteria
and an annual process established by CMS. We stated in the proposed
rule that we believe these limitations and criteria should not apply to
MA additional telehealth benefits under new section 1852(m) of the Act
for MA plans.
The statute requires the Secretary to solicit comment on what types
of items and services should be considered to be MA additional
telehealth benefits. Therefore, we also solicited comments on whether
we should place any limitations on what types of Part B items and
services (for example, primary care visits, routine and/or specialty
consultations, dermatological examinations, behavior health counseling,
etc.) can be MA additional telehealth benefits provided under this
authority.
An enrollee has the right to request MA additional telehealth
benefits through the organization determination process. If an enrollee
is dissatisfied with the organization determination, then the enrollee
has the right to appeal the decision. We believe these rights help
ensure access to medically necessary services, including MA additional
telehealth benefits offered by an MA plan as described in this rule. In
addition, CMS audits plan performance with respect to timeliness and
clinical appropriateness of organization determinations and appeals.
While the MA plan would make the ``clinically appropriate''
decision in terms of coverage of an MA additional telehealth benefit,
we note that each healthcare provider must also provide services that
are clinically appropriate. We acknowledge that not all Part B items
and services would be suitable for MA additional telehealth benefits
because a provider must be physically present in order to properly
deliver care in some cases (for example, hands-on examination,
administering certain medications). As stated earlier, we proposed that
MA plans would independently determine each year which services are
clinically appropriate to furnish in this manner. Behavioral health, in
particular, is a prime example of a service that could be provided
remotely through MA plans' offering of MA additional telehealth
benefits under this rule. The President's Commission on Combating Drug
Addiction and the Opioid Crisis recommends telehealth as useful in the
effort to combat the opioid crisis when clinically appropriate,
especially in geographically isolated regions and underserved areas
where people with opioid use disorders and other substance use
disorders may benefit from remote access to needed treatment.\4\
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\4\ Retrieved at: https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Meeting%20Draft%20of%20Final%20Report%20-%20November%201%2C%202017.pdf.
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We proposed in paragraph (b) the general rule to govern how an MA
plan may offer MA additional telehealth benefits. Specifically, we
proposed that if an MA plan chooses to furnish MA additional telehealth
benefits, the MA plan may treat these benefits as basic benefits
covered under the original Medicare fee-for-service program as long as
the requirements of proposed Sec. 422.135 are met. We also proposed in
Sec. 422.135(b) that if the MA plan fails to comply with the
requirements of Sec. 422.135, then the MA plan may not treat the
benefits provided through electronic exchange as MA additional
telehealth benefits, but may treat them as MA supplemental telehealth
benefits, subject to CMS approval of the MA supplemental telehealth
benefits. For example, a non-Medicare covered service provided through
electronic exchange cannot be offered as an MA additional telehealth
benefit because it does not comply with Sec. 422.135, which is limited
to furnishing through electronic exchange otherwise covered Part B
covered services, but it may be offered it as an MA supplemental
telehealth benefit.
Section 1852(m)(4) of the Act mandates that enrollee choice is a
priority. If an MA plan covers a Part B service as an MA additional
telehealth benefit, then the MA plan must also provide access to such
service through an in-person visit and not only through electronic
exchange. We proposed to codify this statutory mandate preserving
enrollee choice in regulation text at Sec. 422.135(c)(1), which
requires that the enrollee must have the option to receive a service
that the MA plan covers as an MA additional telehealth benefit either
through an in-person visit or through electronic exchange. Section
1852(m)(5) of the Act mandates that MA additional telehealth benefits
shall be treated as if they were benefits under the original Medicare
fee-for-service program option. In proposed regulation text at Sec.
422.135(f), we proposed to allow MA plans to maintain different cost
sharing for the specified Part B service(s) furnished through an in-
person visit and the specified Part B service(s) furnished through
electronic exchange.
We proposed Sec. 422.135(c)(2) to require MA plans to use their
EOC (at a minimum) to advise enrollees that they may receive the
specified Part B service(s) either through an in-person visit or
through electronic exchange. We proposed, at Sec. 422.135(c)(3), that
MA plans would have to use their provider directory to identify any
providers offering services for MA additional telehealth benefits and
in-person visits or offering services exclusively for MA additional
telehealth benefits. We stated in the proposed rule that these
notifications in the EOC and the provider directory are important to
ensure choice, transparency, and clarity for enrollees who might be
interested in taking advantage of MA additional telehealth benefits. We
requested comments on what impact, if any, MA additional telehealth
benefits should have on MA network adequacy policies. Specifically, we
were looking for the degree to which MA additional telehealth benefit
providers should be considered in the assessment of network adequacy
(including for certain provider types and/or services in areas with
access concerns) and any potential impact on rural MA plans, providers,
and/or enrollees.
Section 1852(m)(3) of the Act requires the Secretary to specify
limitations or additional requirements for the provision or furnishing
of MA additional telehealth benefits, including requirements with
respect to physician or practitioner qualifications, factors necessary
for the coordination of MA additional telehealth benefits with other
items and services (including those furnished in-person), and other
areas identified by the Secretary. We recognize the potential for MA
additional telehealth benefits to support coordinated health care and
increase access to care in both rural and urban areas. We stated in the
proposed rule how we expect MA plans would use these types of benefits
to support an effective, ongoing doctor-patient relationship and the
efficient delivery of needed care.
We proposed in regulation text at Sec. 422.135(c)(4) to require an
MA plan

[[Page 15686]]

offering MA additional telehealth benefits to comply with the provider
selection and credentialing requirements provided in Sec. 422.204. An
MA plan must have written policies and procedures for the selection and
evaluation of providers and must follow a documented process with
respect to providers and suppliers, as described in Sec. 422.204.
Further, we proposed that the MA plan, when providing MA additional
telehealth benefits, must ensure through its contract with the provider
that the provider meet and comply with applicable state licensing
requirements and other applicable laws for the state in which the
enrollee is located and receiving the service. We recognize, however,
that it is possible for a state to have specific provisions regarding
the practice of medicine using electronic exchange; our proposal
reflected our intent to ensure that MA network providers comply with
these laws and that MA plans ensure compliance with such laws and only
cover MA additional telehealth benefits provided in compliance with
such laws. We solicited comment on whether to impose additional
requirements for qualifications of providers of MA additional
telehealth benefits, and if so, what those requirements should be.
In order to monitor the impact of the MA additional telehealth
benefits on MA plans, providers, enrollees, and the MA program as a
whole, we also proposed to require MA plans to make information about
coverage of MA additional telehealth benefits available to CMS upon
request, per proposed Sec. 422.135(c)(5). We proposed that this
information may include, but is not limited to, statistics on use or
cost of MA additional telehealth benefits, manner(s) or method(s) of
electronic exchange, evaluations of effectiveness, and demonstration of
compliance with the requirements in Sec. 422.135. We explained in our
proposed rule that the purpose of requiring MA plans to make such
information available to CMS upon request would be to determine whether
CMS should make improvements to the regulation and/or guidance
regarding MA additional telehealth benefits.
In Sec. 422.135(d), we proposed to require that MA plans
furnishing MA additional telehealth benefits may only do so using
contracted (that is, network) providers. We believe limiting service
delivery of MA additional telehealth benefits to contracted providers
offers MA enrollees access to these covered services in a manner more
consistent with the statute because plans would have more control over
how and when such services are furnished. The regulation at Sec.
422.204 requires MA plans to have written policies and procedures for
the selection and evaluation of providers and that such policies
conform with MA specific credentialing requirements outlined in Sec.
422.204. We explained in the proposed rule that these policies would
also be a means to ensure additional oversight of providers'
performance, thereby increasing plans' ability to provide covered
services such as MA additional telehealth benefits. We also proposed to
specify that if an MA plan covers benefits furnished by a non-
contracted provider through electronic exchange, then those benefits
may only be covered as MA supplemental telehealth benefits. These
benefits are not MA additional telehealth or basic benefits if
furnished by a non-contracted provider through electronic exchange. We
requested comment on whether the contracted providers' restriction
should be placed on all MA plan types or limited only to certain plan
types, such as local/regional preferred provider organization (PPO)
plans, medical savings account (MSA) plans, and/or private fee-for-
service (PFFS) plans. Currently, pursuant to Sec. 422.4(a)(1)(v), PPO
plans must provide reimbursement for all plan-covered medically
necessary services received from non-contracted providers without prior
authorization requirements. We explained in the proposed rule our view
that without an opportunity to review the qualifications of the non-
contracted provider and to impose limits on how only clinically
appropriate services are provided as MA additional telehealth benefits,
PPO plans would not be able to meet the proposed requirements.
Therefore, we solicited comment on whether to require just PPOs (or MSA
plans, PFFS plans, etc.), instead of all MA plan types, to use only
contracted providers for MA additional telehealth benefits.
Per section 1852(m)(2)(A)(ii) of the Act, the term ``additional
telehealth benefits'' does not include capital and infrastructure costs
and investments relating to such benefits. We proposed to codify this
requirement in Sec. 422.254(b)(3)(i) as a restriction on how MA plans
include MA additional telehealth benefits in their bid submission. We
stated that we believe that the statutory limit is tied only to the
cost to the government, which is tied to how MA additional telehealth
benefits may be included in the bid as basic benefits. Therefore, our
proposal was to eliminate from the basic benefit bid those capital and
infrastructure costs and investments that are required or used to
enable the provision of MA additional telehealth benefits. We did not
propose specific definitions of capital and infrastructure costs or
investments related to such benefits because the costs and investments
needed and used to provide MA additional telehealth benefits would vary
based on the individual MA plan's approach to furnishing the benefits.
In the proposed rule, we provided some examples of capital and
infrastructure costs, including, but not limited to, high-speed
internet installation and service, communication platforms and
software, and video conferencing equipment. We also solicited comment
on what other types of capital and infrastructure costs and investments
should be excluded from the bid and how CMS should operationalize this
statutory requirement in the annual bid process. We proposed to provide
a more detailed list of examples in this final rule, based on feedback
received from stakeholders.
We explained in the proposed rule that our proposal at Sec.
422.254(b)(3)(i) meant that MA plans must exclude any capital and
infrastructure costs and investments specifically relating to MA
additional telehealth benefits from their bid submission for MA
additional telehealth services offered directly by the plan sponsor and
by a third party provider. Accordingly, we explained our proposal meant
that the projected expenditures in the MA bid for services provided via
MA additional telehealth benefits must not include the corresponding
capital and infrastructure costs and that any items provided to the
enrollee in the administration of MA additional telehealth benefits
must be directly related to the care and treatment of the enrollee for
the Part B benefit. In the proposed rule, we provided an example of
this provision, noting that MA plans would not be able to provide
enrollees with internet service or permanently install
telecommunication systems in an enrollee's home as part of
administration of MA additional telehealth benefits.
In addition to our proposal at Sec. 422.135, we also proposed to
amend paragraphs (a) and (c)(1) of Sec. 422.100 to explicitly address
how MA additional telehealth benefits may be offered by an MA plan.
Section 1852(a)(1)(A) of the Act requires that each MA plan shall
provide enrollees benefits under the original Medicare fee-for-service
program option. As amended by the Bipartisan Budget Act of 2018,
section 1852(a)(1)(B) of the Act defines ``benefits under the original
Medicare fee-for-service program option'' to mean--subject to
subsection (m) (regarding provision of MA additional

[[Page 15687]]

telehealth benefits)--those items and services (other than hospice care
or coverage for organ acquisitions for kidney transplants) for which
benefits are available under Parts A and B to individuals entitled to
benefits under Part A and enrolled under Part B. Since this definition
is subject to the statutory provision for MA additional telehealth
benefits, this means that all of the same coverage and access
requirements that apply with respect to basic benefits also apply to
any MA additional telehealth benefits an MA plan may choose to offer.
Therefore, we proposed to amend Sec. 422.100(c)(1) to include MA
additional telehealth benefits in the definition of basic benefits and
to cross-reference Sec. 422.135, which provides the rules governing MA
additional telehealth benefits. We proposed to further clarify the
regulation text in Sec. 422.100(c)(1) to track the statutory language
described earlier more closely in addressing both kidney acquisition
and hospice in the definition of basic benefits. Finally, we proposed
to make corresponding technical revisions to Sec. 422.100(a) to
reference the new paragraph (c)(1) for basic benefits (clarifying that
MA additional telehealth benefits are voluntary benefits for MA plans
to offer but are not required) and paragraph (c)(2) for MA supplemental
benefits (instead of Sec. 422.102 because MA supplemental benefits are
listed as a benefit type in (c)(2)). We also proposed a small technical
correction in the last sentence of Sec. 422.100(a) to replace the
reference to Sec. 422.100(g) with ``this section'' because there are a
number of provisions in Sec. 422.100--not just paragraph (g)--that are
applicable to the benefits CMS reviews.
Additionally, we proposed amendments to the bidding regulations at
Sec. Sec. 422.252, 422.254, and 422.264 to account for MA additional
telehealth benefits and to correct the inconsistent phrasing of
references to basic benefits (for example, these regulations variously
use the terms ``original Medicare benefits,'' ``benefits under the
original Medicare program,'' ``benefits under the original Medicare FFS
program option,'' etc.). In order to make the MA additional telehealth
benefits part of the basic benefit bid and included in the ``monthly
aggregate bid amount'' as part of the original Medicare benefits that
are the scope of the basic benefit bid, we proposed to update these
various phrases to consistently use the phrase ``basic benefits as
defined in Sec. 422.100(c)(1).'' We also proposed a few minor
technical corrections to the bidding regulations. Finally, we proposed
a paragraph (e) in new Sec. 422.135 to state that an MA plan that
fully complies with Sec. 422.135 may include MA additional telehealth
benefits in its bid for basic benefits in accordance with Sec.
422.254. This provision means that inclusion in the bid is subject to
the bidding regulations we proposed to amend.
In offering MA additional telehealth benefits, MA plans must comply
with existing MA rules, including, but not limited to: Access to
services at Sec. 422.112; recordkeeping requirements at Sec. 422.118
(for example, confidentiality, accuracy, timeliness); standards for
communications and marketing at Sec. 422.2268 (for example, inducement
prohibition); and non-discrimination at Sec. Sec. 422.100(f)(2) and
422.110(a). Further, in addition to Sec. Sec. 422.112, 422.118,
422.2268, 422.100(f)(2), and 422.110(a), MA plans must also ensure
compliance with other federal non-discrimination laws, such as Title VI
of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act
of 1973, and section 1557 of the Affordable Care Act. We did not
propose specific reference to these existing requirements in new Sec.
422.135 because we do not believe that to be necessary. Compliance with
these existing laws is already required; we merely note, as an aid to
MA plans, how provision of MA additional telehealth benefits must be
consistent with these regulations. We solicited comment on this policy
choice, specifically whether there were other existing regulations that
CMS should revise to address their application in the context of MA
additional telehealth benefits.
Finally, section 1852(m)(2)(B) of the Act instructed the Secretary
to solicit comments on the implementation of these MA additional
telehealth benefits by November 30, 2018; in addition to the proposed
regulations to implement section 1852(m) of the Act, we used the
proposed rule and the associated comment period to satisfy this
statutory requirement. We thank commenters for their input to help
inform CMS's next steps related to implementing the MA additional
telehealth benefits. We received the following comments on this
proposal, and our response follows:
Comment: Many commenters suggested that CMS's approach to MA
additional telehealth benefits align with CMS's existing approaches to
what is currently available via telehealth under original Medicare.
These commenters referenced the ``Medicare telehealth services''
definition in section 1834(m) of the Act, payment for remote patient
monitoring (RPM) services outside of section 1834(m) of the Act, as
well as the new communication technology-based services not subject to
section 1834(m) restrictions, described in the Medicare Program;
Revisions to Payment Policies Under the Physician Fee Schedule and
Other Revisions to Part B for CY 2019 (83 FR 59452, Nov. 23, 2018;
hereinafter referred to as the Calendar Year 2019 Physician Fee
Schedule final rule). Commenters also requested that CMS clarify the
distinction between MA additional telehealth benefits and the various
services in original Medicare that use communications technology
(including Medicare telehealth services under section 1834(m) of the
Act). Specifically, some commenters recommended that CMS state in the
final rule that MA additional telehealth benefits are subject to the
technological specifications for Medicare telehealth services furnished
under section 1834(m) of the Act, that is, two-way audio and visual
real-time and interactive services. Further, commenters requested that
CMS explicitly state that under current original Medicare rules, MA
plans may already include other clinically appropriate virtual services
that are not subject to the location limitations of section 1834(m) of
the Act--such as RPM technology--as part of basic benefits because such
services are payable under Part B for original Medicare.
Response: We understand commenters' concerns that differences
between telehealth services under original Medicare and MA additional
telehealth benefits be clearly distinguished and explained. We
appreciate the input offered by commenters and provide a thorough and
clear discussion here.
First, we must emphasize that the term ``additional telehealth
benefits'' is a term of art with a specific meaning in the MA program;
it is defined in section 1852(m)(A) of the Act and in the regulation we
finalize here at Sec. 422.135(a). We are finalizing the regulatory
definition with changes from the proposed rule to delete ``are
furnished by an MA plan'' and to include the statutory provisions that
MA additional telehealth benefits are services for which benefits are
available under Part B and are provided when specific healthcare
providers and enrollees are in different locations. As finalized, the
definition reads that additional telehealth benefits means services:
(1) For which benefits are available under Medicare Part B but
which are not payable under section 1834(m) of the Act; and

[[Page 15688]]

(2) That have been identified by the MA plan for the applicable
year as clinically appropriate to furnish through electronic exchange
when the physician (as defined in section 1861(r) of the Act) or
practitioner (described in section 1842(b)(18)(C) of the Act) providing
the service is not in the same location as the enrollee. We are focused
here on the first part of this definition.
Second, determining whether a service may be offered by an MA plan
as part of basic benefits requires addressing two questions: (1) Is the
service covered and payable under Part A or Part B?; and (2) if not, is
the reason it is not payable under Part B solely because of the limits
in section 1834(m) of the Act? If the answer to the first question is
yes, then the service is already a benefit under the original Medicare
fee-for-service program option and, unless it is hospice care or
coverage for organ acquisitions for kidney transplants, must be
provided under current law at section 1852(a) of the Act and the MA
regulations in 42 CFR part 422. If the answer to the second question is
yes, then provision of the service through electronic exchange may be
covered as an MA basic benefit under section 1852(m) of the Act, as
added by the Bipartisan Budget Act of 2018, and the regulations (at
Sec. Sec. 422.100, 422.135, 422.252, 422.254, and 422.264) we are
finalizing in this rule. We note that these regulations include other
conditions that must also be satisfied in order for the service to be
MA additional telehealth benefits that may be included as basic
benefits, but our focus for this specific discussion is on the
relationship to Part B coverage. We turn now to Part B coverage of
telehealth services.
Under original Medicare, Part B provides for coverage and payment
of services (and items, which are not relevant for purposes of this
discussion), including services furnished in an in-person encounter
between a physician or other practitioner, services furnished as
Medicare telehealth services as specified under section 1834(m) of the
Act, and certain other services that can be furnished in full without
the patient being present. ``Medicare telehealth services,'' as defined
in section 1834(m) of the Act and the implementing regulations at
Sec. Sec. 410.78 and 414.65 include professional consultations, office
visits, office psychiatry services, and other similar services that
must ordinarily be furnished in-person but instead may be furnished
using interactive, real-time telecommunication technology subject to
the restrictions on Medicare telehealth services specified under
section 1834(m) of the Act. Also under section 1834 of the Act,
synchronous ``store and forward'' telehealth services may be furnished
as part of federal telemedicine demonstration projects in Alaska and
Hawaii. Medicare telehealth services under section 1834(m) of the Act
are limited in that they must only be furnished by physicians and other
specified types of practitioners, and can be furnished and paid only
when the beneficiary is located at an eligible originating site.
As we explained in the Calendar Year 2019 Physician Fee Schedule
final rule, we have generally regarded the Medicare telehealth services
for which payment can be made under section 1834(m) of the Act as being
limited to services that must ordinarily be furnished in-person during
an encounter between a clinician and the patient, but are instead
furnished using telecommunication technology as a substitute for that
in-person encounter (83 FR 59482-59483). There are other services under
original Medicare that use telecommunication technology, but are not
considered Medicare telehealth services as defined under section
1834(m) of the Act, for example, RPM and remote interpretation of
diagnostic tests, chronic care management services, transitional care
management services (other than the included evaluation and management
service), and behavioral health integration services.
Additionally, as established in the Calendar Year 2019 Physician
Fee Schedule final rule, effective January 1, 2019, original Medicare
now makes separate payment for new ``communication technology-based
services.'' These services are not subject to the limitations of
section 1834(m) of the Act because they are not a substitute for an in-
person, face-to-face encounter between a clinician and a patient. As
such, these services are inherently non-face-to-face, are paid under
the Physician Fee Schedule like other physicians' services, and are not
subject to the restrictions on Medicare telehealth services specified
under section 1834(m) of the Act. The communication technology-based
services include brief communication technology-based service (virtual
check-in), remote evaluation of pre-recorded patient information, and
interprofessional internet consultation. These three services and their
corresponding Healthcare Common Procedure Coding System (HCPCS) codes
are described in detail in the Calendar Year 2019 Physician Fee
Schedule final rule at 83 FR 59482 through 59491. That rule also
finalized separate payment under the Physician Fee Schedule for chronic
care remote physiologic monitoring services.
In the Calendar Year 2019 Physician Fee Schedule final rule, CMS
also implemented sections 50302 and 50325 of the Bipartisan Budget Act
of 2018 to remove certain section 1834(m) limitations on geography and
originating site (patient setting) for certain services. Specifically,
the policies under section 50302 of the Bipartisan Budget Act of 2018
added renal dialysis facilities and the homes of beneficiaries as
allowable originating sites and removed the geographic restrictions for
hospital-based or critical access hospital-based renal dialysis
centers, renal dialysis facilities, and beneficiary homes, for purposes
of monthly ESRD-related clinical assessments for patients receiving
home dialysis. The policies under section 50325 of the Bipartisan
Budget Act of 2018 added mobile stroke units as allowable originating
sites and removed the originating site type and geographic
restrictions, for acute stroke-related telehealth services. Both are
effective January 1, 2019.
Additionally, CMS revised the Medicare telehealth regulations to
reflect the amendments made to section 1834(m) of the Act by section
2001(a) of the Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment for Patients and Communities Act (SUPPORT Act)
(Pub. L. 115-271) to remove the originating site geographic
requirements for all originating sites described in section
1834(m)(4)(C)(ii) of the Act, except for renal dialysis facilities that
are only permissible originating sites for purposes of monthly ESRD-
related clinical assessments for patients receiving home dialysis, and
to add the home of an individual as a permissible originating site,
with respect to telehealth services furnished for purposes of the
treatment of an individual with a substance use disorder diagnosis or
co-occurring mental health disorder, effective July 1, 2019 (83 FR
59494 through 59496).
All of the telehealth services and other non-face-to-face services
furnished via communication technology described earlier are covered
and paid under original Medicare. Therefore, MA plans must cover these
services because they are required basic benefits. Any services falling
outside the scope of these services that an MA plan wishes to offer may
potentially be covered as MA additional telehealth benefits, effective
January 1, 2020, assuming they meet the requirements under section
1852(m) of the Act. In other words, MA additional telehealth benefits
can

[[Page 15689]]

include an even broader range of telehealth services for enrollees in
an MA plan offering MA additional telehealth benefits, beyond original
Medicare benefits. An examination conducted using videoconferencing
and/or other telecommunications systems to relay information (such as
images and vital signs) may be covered as a primary care visit when the
physician (as defined in section 1861(r) of the Act) or practitioner
(described in section 1842(b)(18)(C) of the Act) and enrollee are in
different locations that do not meet the requirements under section
1834(m) of the Act. As a practical matter, we do not expect MA plans to
find implementation and compliance difficult because, if a service
provided by the physician or practitioner is a Part B covered service
for which payment could be made, but for the limitations in section
1834(m) of the Act, it may be an MA additional telehealth benefit if
the MA plan complies with Sec. 422.135 as finalized. If a service or
item provided by a physician or practitioner is covered under Part B by
the original Medicare program and payment is not prohibited based on
the limitations in section 1834(m) of the Act, then the service or item
is a basic benefit without consideration of whether Sec. 422.135 could
apply. Finally, if a service is not covered under Part B, even if the
limitations in section 1834(m) of the Act are taken into account, then
the service may only be covered by an MA plan as an MA supplemental
telehealth benefit, and not offered as an MA additional telehealth
benefit. In addition, we clarify in this final rule that if a service
is covered under Part B and provided through electronic exchange but
otherwise does not comply with Sec. 422.135 (for example, if it is
provided by an out-of-network healthcare provider), then the service
may be covered only as an MA supplemental telehealth benefit per Sec.
422.135(b). For example, a nursing hotline staffed by nurses, that are
not practitioners specified in section 1842(b)(18)(C) \5\ of the Act,
that provides assistance in identifying when to seek additional medical
help would not be covered under Part B even if the assistance were
provided in person. We discuss these issues in more detail in our
responses to comments below.
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\5\ Such practitioners include: (i) A physician assistant, nurse
practitioner, or clinical nurse specialist (as defined in section
1861(aa)(5)) of the Act; (ii) A certified registered nurse
anesthetist (as defined in section 1861(bb)(2)); (iii) A certified
nurse-midwife (as defined in section 1861(gg)(2)); (iv) A clinical
social worker (as defined in section 1861(hh)(1)); (v) A clinical
psychologist (as defined by the Secretary for purposes of section
1861(ii)) and (vi) A registered dietitian or nutrition professional.
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We thank commenters for their feedback on how to reconcile the
telehealth differences between MA and original Medicare, and we hope
our response provides adequate clarification and removes any
misinterpretation. Please note, CMS intends to release more detailed
sub-regulatory guidance relating to telehealth for both the original
Medicare and MA programs.
Comment: Several commenters supported CMS's explicit recognition
that MA plans may continue to offer other telehealth services through
MA supplemental telehealth benefits. A commenter questioned whether
non-contracted providers will be allowed to provide MA additional
telehealth benefits as supplemental benefits.
Response: We thank commenters for their support for continuing to
allow MA plans to offer MA supplemental telehealth benefits for those
services that do not meet the requirements for coverage under original
Medicare or as MA additional telehealth benefits. We are finalizing our
proposal, at Sec. 422.135(d), to require that MA additional telehealth
benefits only be furnished using contracted providers. As discussed in
the preamble of the proposed rule, an MA plan may still cover out-of-
network services that would be considered MA additional telehealth
benefits (and thus offered as MA basic benefits) when provided by a
contracted provider, but these out-of-network services may only be
covered as MA supplemental telehealth benefits because the MA plan has
not complied with Sec. 422.135(d). These services are not MA
additional telehealth benefits if furnished by a non-contracted
provider through electronic exchange.
Comment: Many commenters supported CMS's proposed definition for
the term ``electronic exchange'' in proposed regulation text at Sec.
422.135(a). The commenters stated that CMS's broad definition, which
defines electronic exchange as ``electronic information and
telecommunications technology,'' is reasonable as it allows MA plans to
use evolving technology to provide MA additional telehealth benefits.
Further, some commenters strongly urged CMS to rescind the electronic
exchange examples listed in the proposed rule preamble, but finalize as
proposed the definition of ``electronic exchange'' in the regulation
text at Sec. 422.135(a). Commenters stated CMS could not provide a
list of electronic exchange examples that adequately takes in to
account future technological innovation. Commenters also explained that
a limited list of electronic exchange examples would cause confusion in
the marketplace because plans and providers would be uncertain about
permissible forms of electronic exchange technology.
Response: We appreciate all of the comments received on the
proposed definition for the term ``electronic exchange.'' Our
definition is based on how section 1852(m)(2) of the Act uses the
phrase ``electronic information and telecommunications technology'' to
describe how the services are provided when the physician or
practitioner and the patient are not in the same location. In Sec.
422.135(a) as finalized, we define ``electronic exchange'' as
``electronic information and telecommunications technology.'' We agree
that this definition of ``electronic exchange'' allows MA plans the use
of various forms of technology to provide MA additional telehealth
benefits to enrollees. Our purpose in defining ``electronic exchange''
in this manner is to allow modernization in the MA program and the
provision of evidence-based, effective health care. As noted in the
proposed rule, we did not propose specific regulation text that defines
or provides examples of electronic information and telecommunications
technology. We stated that we believe this broad and encompassing
approach will allow for technological advances that may develop in the
future.
While our list of electronic exchange examples in the proposed rule
preamble was not intended to be a comprehensive list for purposes of
the final rule, we acknowledge that the list of electronic exchange
examples does not take into account future technological innovation,
and we seek to allow plans the flexibility to develop forms of
electronic exchange without unnecessary burden. We are finalizing as
proposed the definition of ``electronic exchange'' in the regulation
text at Sec. 422.135(a). We believe this more general approach allows
for MA plan flexibility and innovation, does not inadvertently restrict
MA plans to certain forms of electronic exchange, and avoids the
possibility of overlap with original Medicare telehealth coverage. We
explicitly clarify here that future technology that is within the scope
of the phrase ``electronic information and telecommunications
technology'' as used in the statute may be used for purposes of
providing MA additional telehealth benefits.
Comment: Many commenters supported CMS's decision not to propose
specific regulation text that defines or provides examples of
electronic information and telecommunications technology because

[[Page 15690]]

the technology needed and used to provide MA additional telehealth
benefits will vary based on the service being offered. A commenter
suggested there be a governing body to review and certify the
telehealth technology used and to ensure proper telehealth provider
training.
Response: We agree with commenters' position that specific
regulation text that defines or provides examples of electronic
information and telecommunications technology should not be included in
the final rule. We do not include this specific regulation text in the
final rule because technology will vary based on user and over time. As
discussed earlier, we believe this broad and encompassing approach will
allow for technological advances that may develop in the future and
avoid tying the authority in the new regulation to specific information
formats or technologies.
We appreciate the commenter's suggestion that there be a governing
body to review and certify the telehealth technology used and to ensure
proper telehealth provider training. We are not requiring a governing
body to conduct oversight of telehealth technology and providers at
this time, but we will use authority codified in this final rule at
Sec. 422.135(c)(4) to review information about coverage of MA
additional telehealth benefits, which may include, but is not limited
to, statistics on use or cost, manner(s) or method of electronic
exchange, evaluations of effectiveness, and demonstration of compliance
with the requirements of this final rule.
Comment: Many commenters supported CMS allowing MA plans to
independently determine each year which services are clinically
appropriate to furnish through electronic exchange as MA additional
telehealth benefits. These commenters stated that MA plans should have
authority to make these determinations because plans and healthcare
providers work directly with enrollees and are more aware of evolving
methods of delivering care. A few commenters recommended that CMS
authorize healthcare providers, rather than or in addition to MA plans,
to make the annual determination of which services are clinically
appropriate to furnish through MA additional telehealth benefits.
Response: We are finalizing our proposal that MA plans have the
discretion to determine which Part B services are clinically
appropriate to provide through electronic exchange and to make that
determination for each applicable plan year. Such services, when the
other requirements in Sec. 422.135 are met, would be permissible MA
additional telehealth benefits. As professionally recognized standards
of health care change over time, we believe MA plans have an interest
in working with providers to develop and use the methods of modern
medicine necessary to provide MA additional telehealth benefits to
enrollees who choose to have their health benefits delivered in this
manner. MA plans are required, per Sec. 422.202(b), to consult with
their contracted network providers regarding the MA plan's medical
policy; this would include any applicable MA additional telehealth
benefits policy, and we believe that is sufficient for establishing the
required involvement of healthcare providers. We encourage MA plans to
involve their contracted providers when making determinations about
which services are clinically appropriate to furnish through MA
additional telehealth benefits beyond the consultation required under
that regulation, but we are not adopting such a requirement in this
final rule.
Furthermore, we note that in accordance with Sec. 422.112(b)(3),
all MA coordinated care plans are required to coordinate MA benefits
with community and social services generally available in the plan
service area. Therefore, we expect MA coordinated care plans offering
MA additional telehealth benefits to coordinate care for enrollees
receiving the specified Part B service(s) through electronic exchange
in the same manner as for enrollees receiving the service in-person.
Comment: Many commenters opposed CMS placing limitations on the
types of Part B items and services that can be MA additional telehealth
benefits. Specifically, commenters urged CMS to use only the MA plan
annual determination and medical review to define the types of items
and services to be included as MA additional telehealth benefits. They
explained that any definition of items or services will lock CMS into
an approach supported by today's evidence, which will hinder CMS's
ability to update its policies for future evidence-based innovation.
Response: We agree with the commenters that adopting a specific
list of services that could be MA additional telehealth benefits when
provided through electronic exchange creates a risk of not being
sufficiently flexible in the future. We proposed and are finalizing
regulation text that allows MA plans flexibility to determine which
services are clinically appropriate to furnish through MA additional
telehealth benefits on an annual basis consistent with the limits in
the statute and Sec. 422.135.
Comment: Some commenters supported CMS's proposal to allow MA plans
offering MA additional telehealth benefits to maintain different cost
sharing for in-person visits and visits through electronic exchange,
while several commenters opposed differential cost sharing. Commenters
expressed concerns that low-income enrollees living in rural,
underserved areas without internet access may be disadvantaged because
they would have to choose the in-person option, which may have higher
cost sharing as compared to the alternative visit through electronic
exchange. A few commenters, including the Medicare Payment Advisory
Commission, recommended CMS ensure access to in-person services is not
made prohibitively expensive by differential cost sharing as it could
be discriminatory if undue financial burden is imposed on enrollees who
choose in-person services instead of accessing services through
electronic exchange. Further, commenters requested that CMS actively
monitor differential cost sharing amounts to ensure they fairly reflect
actual cost differentials and are not used to steer enrollees away from
preferred methods of care. Commenters stated that enrollees lacking
internet access should be able to get in-person services without facing
an increase in out-of-pocket costs. Some commenters also requested that
CMS clarify that a Qualified Medicare Beneficiary (QMB) would be
protected from billing for cost sharing for all Part A/B services
delivered via telehealth.
Response: As discussed in the proposed rule, section 1852(m)(5) of
the Act mandates that MA additional telehealth benefits shall be
treated as if they were benefits under the original Medicare fee-for-
service program option. We acknowledged in the proposed rule that CMS
has traditionally interpreted section 1852(a)(1)(B)(i) and (iii)-(v) of
the Act to mean that, subject to certain exceptions, MA plans must
cover basic benefits using cost sharing that is actuarially equivalent
to the Part A and B cost sharing from a plan-level (not enrollee-level)
perspective. MA plans are not required, in most cases, to have the
exact same cost sharing as in original Medicare. Subject to certain
beneficiary protections and limits on cost sharing for certain specific
services,\6\ MA plans have great flexibility in setting the cost
sharing for specific benefits. Further, for in-network services, CMS
has limited authority to set the payment structure, including the
payment amount, an MA

[[Page 15691]]

plan uses to pay its contracted providers; to some extent, the amount
the MA plan has negotiated to pay its contracted providers may
influence the cost sharing amount that the MA plan sets for the
associated services. In addition, MA plans must have uniform cost
sharing per Sec. 422.100(d)(2). CMS has taken a broad and flexible
approach to the uniformity requirement, including permitting MA plans
to set up ``preferred'' networks that carry lower cost sharing for
specific services.\7\ In response to comments on this topic, we are
clarifying the rationale for Sec. 422.135(f).
---------------------------------------------------------------------------

\6\ See 42 CFR 422.100(f), (j) and (k).
\7\ See Announcement of Calendar Year 2019 Medicare Advantage
Capitation Rates and Medicare Advantage and Part D Payment Policies
and Final Call Letter.
---------------------------------------------------------------------------

In the context of original Medicare Part B, services furnished in
an in-person encounter between a clinician and a patient are subject to
different rules than those delivered through electronic exchange; in
effect, the statutory provisions governing payment for original
Medicare telehealth services treat services furnished through
electronic exchange as different services than the in-person services,
rather than as the same services delivered through different
modalities. Section 1834(m) of the Act limits Part B payment for
services furnished through electronic exchange to only certain
healthcare services delivered through certain technology by specified
types of clinicians to beneficiaries located in originating sites that
meet specific conditions. Under the statutory scheme of section 1834(m)
of the Act, services furnished through electronic exchange, where the
physician or practitioner is not in the same location as the patient,
are distinct and different services from those furnished in-person and
in the same location.
We interpret the current law regulating the cost sharing in the MA
context to mean that MA plans must charge enrollees the same cost
sharing for the same item or service delivered by the same provider,
and we view a service delivered in-person versus a service delivered
via electronic exchange as different services because they are
delivered differently. In order words, delivering a Part B service via
electronic exchange is inherently different (for example, in modality
and required infrastructure) than delivering the Part B service in-
person under Medicare coverage rules; therefore, we consider these to
be sufficiently different services for purposes of the MA requirement
that cost sharing be uniform, and thus the services can be treated
differently from a cost sharing perspective. Further, the cost of
providing the service via electronic exchange might be lower, so having
lower cost sharing is acceptable. For example, an MA plan may offer a
dermatology exam using store-and-forward technology as an MA additional
telehealth benefit, and the cost of this electronic exchange would
likely be lower than the cost of an in-person dermatology exam. Thus,
differential cost sharing for the electronic exchange versus the in-
person visit would be appropriate in this scenario. This overall
reasoning is consistent with our traditional interpretation of the
Medicare statute and the applicable provisions in Part C, therefore we
are finalizing the regulation text at Sec. 422.135(f) as proposed.
We understand commenters' apprehensions about enrollee
discrimination and enrollee access to MA additional telehealth
benefits. The anti-discrimination requirements in current CMS
regulations at Sec. 422.100(f)(2) and Sec. 422.110(a) are
traditionally related to discrimination based on health status. Other
federal non-discrimination laws, such as Title VI of the Civil Rights
Act of 1964, focus on specific protected classes (such as race and
age). Economic status or geographic location (rural/urban) are not
protected classes under those laws, nor under current CMS regulations.
Consequently, we do not have clear authority to enforce anti-
discrimination rules based solely on an enrollee's economic status or
geographic location.
However, the statutory requirement (section 1852(m)(4) of the Act)
and our corresponding regulatory requirement in this final rule (Sec.
422.135(c)(1)) protecting the enrollee's choice to receive covered
services in-person control how an MA plan offers MA additional
telehealth benefits. An MA plan offering MA additional telehealth
benefits must preserve the enrollee's right to choose whether to access
the service in-person or, if offered by the MA plan, through electronic
exchange. MA plans may not circumvent or limit enrollee choice by using
differential cost sharing to steer beneficiaries or inhibit access to
services. We view such steering and inhibiting access as violations of
Sec. 422.100(f)(2) because of how those activities would inhibit an
enrollee from exercising his or her rights under section 1852(m)(4) of
the Act and Sec. 422.135(c). If an MA plan chooses to maintain
differential cost sharing for MA additional telehealth benefits, we
expect the primary purpose would be to parallel the actual cost of
administering the service and not to steer beneficiaries or inhibit
access. We will actively monitor complaints regarding differential cost
sharing for MA additional telehealth benefits. If we identify a problem
with enrollee access or steering, we may take compliance or enforcement
actions, as necessary, and we may modify our policy to address the
issue.
As discussed previously, MA plans have great flexibility in setting
cost sharing for specific benefits. We believe that restricting this
flexibility for certain plans that offer MA additional telehealth
benefits, for example in cases where an MA plan operates in a rural or
underserved area, could result in MA plans choosing not to offer MA
additional telehealth benefits in rural service areas. Given this, and
given the existing beneficiary cost sharing protections described
previously, we do not believe it is appropriate to limit MA plans'
existing flexibility to set cost sharing for MA additional telehealth
benefits. However, we encourage MA plans to take issues like this into
consideration in establishing cost sharing for MA additional telehealth
benefits.
Finally, we appreciate the comments regarding QMB cost sharing
protections. However, we believe that the current requirements at Sec.
422.504(g)(1)(iii) requiring MA plans to take steps to ensure that QMBs
are protected from providers billing cost sharing are adequate. This
regulation prohibits MA plans from imposing cost sharing on dual
eligible individuals when the state is responsible for paying for the
cost sharing and from imposing cost sharing on such enrollees that is
higher than the cost sharing permitted by the state Medicaid plan. For
more information on cost sharing protections provided under the Act for
QMBs and other dual eligible individuals, we refer readers to the CMS
website for the QMB program at: https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/QMB.html.
Comment: In accordance with section 1852(m)(4) of the Act, if an MA
plan covers a Part B service as an MA additional telehealth benefit,
then the MA plan must also provide access to such service through an
in-person visit and not only through electronic exchange. We proposed
Sec. 422.135(c)(2) to require MA plans to use their EOC (at a minimum)
to advise enrollees that they may receive the specified Part B
service(s) either through an in-person visit or through electronic
exchange. We also proposed, at Sec. 422.135(c)(3), that MA plans would
have to use their provider directory to identify any

[[Page 15692]]

providers offering services for MA additional telehealth benefits and
in-person visits or offering services exclusively for MA additional
telehealth benefits. While we received some support for our proposed
disclosure (that is, EOC and provider directory) requirements for MA
additional telehealth benefits, other commenters believed that these
requirements would be overly restrictive, burdensome, and/or time
consuming.
Several commenters recommended that CMS provide more flexibility in
how MA plans can disclose information about MA additional telehealth
benefits to enrollees. For example, commenters suggested that CMS allow
plans to use more general terminology instead of explicitly listing
each service in the EOC, and allow plans to describe in the EOC how
enrollees can obtain information on telehealth services. In terms of
the provider directory, a commenter believed CMS should let plans make
the determination regarding inclusion of telehealth providers in a way
the plan believes optimizes clarity for enrollees, especially since the
common industry approach is for telehealth vendors to contract with
licensed providers, and the list of providers is not static. Another
commenter requested that CMS require only an indication of which
providers are exclusively available via telehealth in directories, and
allow sufficient lead-time for plans to implement any new directory
requirements. A commenter suggested CMS work with plans on alternative
ways to responsibly share information on MA additional telehealth
benefits with enrollees. A few commenters requested clear guidance (for
example, model language) on the proposed disclosure requirements and
clarification, such as whether provider directory updates would need to
be made for all providers or only a specific subset.
Response: We appreciate commenters' concerns about the proposed
disclosure requirements being too restrictive and onerous on plans, and
we thank those who offered alternative solutions and ideas for more
flexibility. As discussed in the proposed rule, we believe that choice,
transparency, and clarity are vital when it comes to disclosing MA
additional telehealth benefits to enrollees. However, we also recognize
that there are various ways to effectively communicate with enrollees
consistent with the mandatory disclosure and information requirements
in Sec. 422.111. CMS has traditionally discussed specific required
elements for mandatory disclosures (for example, the provider directory
and EOC) and marketing materials in sub-regulatory guidance to explain
and interpret the applicable regulations as well as describe best
practices for MA plans and Part D sponsors.
We agree with commenters that more flexibility may be needed, and
sub-regulatory guidance provides an opportunity for flexibility in
applying the applicable regulations where possible and for regular
updates as necessary to account for changes in technology or evolving
methods of compliance. Therefore, we are not finalizing our proposed
regulation text for the provider directory requirement at proposed
Sec. 422.135(c)(3). Instead, we will address any provider directory
elements pertaining to plans offering MA additional telehealth benefits
in future sub-regulatory guidance. We note that the provider directory
requirements in Sec. 422.111 are not being amended and continue to
apply. Therefore, provider directories must be complete, accurate, and
updated timely to identify the healthcare providers currently under
contract with the MA plan to furnish covered services to enrollees. In
response to comments claiming that the common industry approach is for
telehealth vendors to contract with licensed providers and that the
list of providers is not static, we remind MA plans of the requirement
to issue provider directories and notify enrollees of network changes
per Sec. 422.111. As the providers of MA additional telehealth
services must be contracted providers, we expect that they will be
identified as contracted providers in provider directories.
We intend to be as clear as possible in our sub-regulatory guidance
to assist plans with their enrollee communications and to address how
the existing provider directory requirements apply in the context of MA
plan obligations in connection with furnishing MA additional telehealth
benefits. We note that, as discussed in more detail below, we are
finalizing our proposal that only contracted (that is, in-network)
providers may be used by an MA plan to furnish MA additional telehealth
benefits.
For similar reasons, we are also not finalizing our reference to
the EOC at proposed regulation text Sec. 422.135(c)(2). The regulation
at Sec. 422.111 establishing what information must be provided to
enrollees (and when) regarding benefits covered by the MA plan is
sufficient. We have historically used sub-regulatory guidance to
address the specific level of detail required by that regulation and
will issue guidance specific to how MA additional telehealth benefits
must be addressed in mandatory communication materials such as the EOC
and the Annual Notice of Change. None of our other regulations about
specific benefits require specific content in the EOC. We believe that
it is appropriate to follow that practice for addressing how
information about MA additional telehealth benefits must be disclosed
and provided to enrollees.
However, we are finalizing the remaining text at (c)(2), which
requires an MA plan furnishing MA additional telehealth benefits to
advise enrollees that they may receive the specified Part B service(s)
either through an in-person visit or through electronic exchange. We
have decided to maintain this general enrollee disclosure requirement
(without reference to the EOC) because of the statutory requirement at
section 1852(m)(4)(B) of the Act that the enrollee must have that
choice. We believe the MA plan must disclose this right of choice to
enrollees in a transparent manner in order to ensure that the right is
meaningfully provided. We plan to issue sub-regulatory guidance
specifically for Sec. 422.135(c)(2) regarding the requirement that an
MA plan advise enrollees that they may receive the specified Part B
service(s) through an in-person visit or through electronic exchange;
we will also issue guidance on disclosure requirements of MA plans,
including model language for both the EOC and the provider directory,
in the context of MA additional telehealth benefits.
Comment: In the proposed rule, we sought comment on what impact, if
any, MA additional telehealth benefits should have on MA network
adequacy policies, and the comments we received were mixed. Commenters
who were supportive of a change to network adequacy policies for MA
additional telehealth benefits stated that CMS should allow telehealth
providers to be considered in the network adequacy assessment, either
in the network criteria itself or through the exceptions process. Some
suggested CMS update the network criteria to account for how MA plans
may offer MA additional telehealth benefits (for example, allow
telehealth providers to count in the network review or comprise a
certain percentage of a plan's providers per specialty) or eliminate
the time and distance standard and maintain just the minimum number per
enrollee standard for telehealth providers. Others believed the current
exceptions process was sufficient, that is, commenters expressed that
through the current exceptions process, CMS could potentially allow
plans to substitute telehealth providers for in-person providers only
where there is a shortage

[[Page 15693]]

of specialty providers. A commenter suggested CMS consider telehealth
exceptions for network adequacy when a plan can demonstrate that access
to certain specialties would otherwise be problematic without
permitting the MA plan to use telehealth providers to meet the network
adequacy requirements; the commenter believed such policy would allow
for more competition and more attractive MA plan options. Some
commenters indicated that incorporating telehealth into network
adequacy would improve enrollee choice and access in MA, particularly
in rural/underserved areas, for certain specialties like behavioral
health, and through an increase in after-hours and weekend care. A few
commenters further encouraged CMS to provide flexibility regarding time
and distance standards and allow telehealth to fill in network gaps,
which might in turn streamline the network review process.
Other commenters asserted that a telehealth provider should not
carry the same weight as an in-person provider and should only be used
as a supplement, not a replacement, for in-person services. A few
commenters suggested CMS continue basing network adequacy only on in-
person services given the disparity in internet access.
Still others suggested CMS do a complete study to assess data in
light of increased telehealth utilization, which could inform future
changes to network adequacy policies and measurement options. A
commenter recommended that, minimally, CMS should wait to reevaluate
network criteria until there is a higher market saturation of
telehealth providers for Part B services. Another commenter believed
CMS should collect specific feedback on current plan-provider
telehealth arrangements and current enrollee experience and
satisfaction with telehealth providers, both within and outside MA.
Response: We thank the commenters for their feedback on MA
additional telehealth benefits' potential impact on network adequacy.
We will consider these comments as we perform further research on the
issue and update sub-regulatory guidance to reflect any applicable
changes in policy. We are not using this final rule to announce or
adopt changes in current policies for evaluating MA network adequacy
under Sec. 422.112 because CMS interprets the requirements at Sec.
422.112 through the MA network adequacy criteria, which have
traditionally been addressed in sub-regulatory guidance.
Comment: Many commenters supported CMS's proposal to require MA
plans to ensure through their provider contracts that providers meet
and comply with applicable state licensing requirements and other
applicable laws for the state in which the enrollee is located and
receiving the service. Specifically, the commenters suggested CMS allow
plan providers to utilize state-based credentialing standards for
telehealth services as opposed to federal standards for MA provider
participants authorized in Sec. 422.204(b). A commenter believed that
plans should be allowed to apply additional provider requirements.
Response: We support requiring the MA plan to ensure through its
contract with the provider that the provider meet and comply with
applicable state licensing requirements and other applicable laws for
the state in which the enrollee is located and receiving the service.
This standard is codified in the final rule at Sec. 422.135(c)(3). We
believe creating additional provider licensing requirements is
unnecessary, but we acknowledge that states may have specific
provisions regarding the practice of medicine using electronic
exchange. We remind readers and MA plans that existing provider
credentialing and network participation requirements, specifically in
Sec. Sec. 422.200 through 422.224, continue to apply. As this final
rule requires MA plans to use only contracted (that is, in-network)
physicians and practitioners to furnish MA additional telehealth
benefits, those existing regulations will apply.
Comment: Several commenters expressed an openness to CMS
occasionally collecting data on MA additional telehealth benefits, per
the proposal to require MA plans to make information about coverage of
MA additional telehealth benefits available to CMS upon request.
However, these commenters were leery of the potential for
administrative burden on MA plans. Some voiced concern about CMS
collecting confidential or sensitive information and specifically
requested that CMS exclude information that could be held under
contractual consideration. For example, a commenter stated that
specific information on use or cost of MA additional telehealth
benefits is proprietary and commercially sensitive, and revealing
contract-specific details would be anti-competitive. Another commenter
concurred with CMS collecting data on the costs and benefits of MA
plans' MA additional telehealth benefits as long as it was not overly
onerous on plans.
Response: We understand commenters' concerns about burden and
confidentiality when it comes to CMS data collection. However, we note
that the regulation text at proposed Sec. 422.135(c)(5)--finalized at
Sec. 422.135(c)(4)--includes the language ``upon request,'' which
implies that CMS does not intend to establish uniform data collection
at this time, but instead reserves the right to ask for this
information from MA plans. We encourage readers to refer to section
III.B.1. of this final rule, which provides additional detail and
explicitly states that the information collection provision at Sec.
422.135(c)(4) is exempt from the requirements of the Paperwork
Reduction Act (PRA) since we estimate fewer than 10 respondents. Thus,
we do not anticipate a significant increase in plan burden due to Sec.
422.135(c)(4). We also remind readers that any uniform request to more
than nine MA plans would require further review and would be subject to
public comment under the PRA requirements.
Comment: A few commenters questioned whether CMS will allow MA
plans (including PPO plans) to use only contracted providers for MA
additional telehealth benefits. Some commenters believed that the
contracted providers' restriction should apply to all MA plan types.
Some commenters rejected CMS's proposal that all plan types be required
to use only contracted providers. A few commenters recommended CMS
limit this requirement to HMOs, thus allowing PPOs to use both
contracted and non-contracted providers for MA additional telehealth
benefits. Other commenters recommended that CMS extend the allowable
providers beyond just contracted, in-network providers, stating that
the issue of no oversight of out-of-network providers exists whether or
not telehealth is involved.
Response: We are finalizing the proposal at Sec. 422.135(d) to
require that all MA plan types, including PPO plans, use only
contracted providers to provide MA additional telehealth benefits. We
are clarifying that if a PPO plan furnishes MA additional telehealth
benefits consistent with the requirements at Sec. 422.135, then the
PPO plan requirement at Sec. 422.4(a)(1)(v) (that the PPO must furnish
all services both in-network and out-of-network) will not apply to the
MA additional telehealth benefits; all other benefits covered by the
PPO must be covered on both an in-network and out-of-network basis. In
other words, a PPO plan is not required to furnish its MA additional
telehealth benefits out-of-network, as is the case for all other plan-
covered services. However, if a PPO plan would like to cover a service
delivered through electronic exchange on an out-of-network basis, then
the PPO plan has that option but may only cover the service as an MA
supplemental

[[Page 15694]]

telehealth benefit, consistent with the regulation text at Sec.
422.135(d).
In response to comments that recommended CMS extend the allowable
providers beyond contracted providers because the issue of no oversight
for non-contracted providers exists whether or not telehealth is
involved, we note that MA plans must be able to review and pre-certify
the qualifications and compliance of contracted providers to ensure
that telehealth services are furnished consistent with clinically
appropriate standards of care for the MA additional telehealth benefits
offered by the MA plan and that all state licensure and credentialing
requirements are met. We are therefore finalizing the proposed
regulation text at paragraph (d), that an MA plan must furnish MA
additional telehealth benefits only using contracted providers.
Therefore the regulation will require that all MA plans, including PPOs
that cover benefits provided by non-contracted providers, use only
contracted providers for MA additional telehealth benefits.
Comment: Commenters recommended that CMS remain flexible in the
ultimate determination of what will be considered capital and
infrastructure costs and investments to be excluded from their bid
submissions relative to MA additional telehealth benefits. Some
commenters offered ideas to operationalize the exclusions. One
suggestion was for CMS to stipulate a percentage that represents the
industry average of allowed fees as representative of the capital and
infrastructure costs, which could be trended over time. Another
commenter suggested that CMS align the definition of capital and
infrastructure costs and investments with a traditional understanding,
such that those items that would add permanent or depreciable value to
the plan or enrollee would be excluded, thus allowing the cost of
necessary support items or services for telehealth delivery. A few
commenters mentioned the 15 percent used in the Regulatory Impact
Analysis of the proposed rule as a proxy for these costs. A commenter
stated that the percentage was too high while another stressed that it
was too low.
Commenters also raised concerns about the difficulty of identifying
with specificity (for bid purposes) the capital and infrastructure
components of MA additional telehealth benefits for services offered
directly by the plan or through downstream entities such as providers
and third party vendors. Specifically, a few commenters were concerned
with the difficulty in excluding these costs from their claims capture
and data reporting and in obtaining this information from contracted
providers and vendors absent an additional contractual provision.
Commenters also stated that capital and infrastructure costs would vary
significantly from provider to provider. These commenters pointed out
that currently there is no incentive for providers or vendors to
accurately identify these costs, and plans would not be able to verify
if the costs were reasonably stated. Consequently, commenters
expressed, this lack of standardization and reliability could lead to
challenges of plans' actuarial attestations and potential inequitable
reporting in the bid. Another commenter also opposed the exclusion of
capital and infrastructure costs from MA plans' basic benefit bid.
Response: We appreciate the comments concerning the exclusion of
capital and infrastructure costs relating to MA additional telehealth
benefits from the basic benefit bid submission. Section
1852(m)(2)(A)(ii) of the Act excludes from MA additional telehealth
benefits capital and infrastructure costs and investments related to MA
additional telehealth benefits. We are codifying this requirement in
Sec. 422.254(b)(3)(i) as a restriction on how MA plans include MA
additional telehealth benefits in their bid submission. We believe the
statutory limit is tied only to the cost to the government, which is
tied to how MA additional telehealth benefits may be included in the
bid as basic benefits. Therefore, our proposal was to eliminate from
the basic benefit bid those capital and infrastructure costs and
investments that are required or used to enable the provision of MA
additional telehealth benefits.
We appreciate the concerns raised by commenters about broad
interpretations of the statutory exclusion of capital and
infrastructure costs and investments. In recognition of these
challenges, we are clarifying in regulation text that the exclusion
from the bid of capital and infrastructure costs and investments
relating to MA additional telehealth benefits, codified at Sec.
422.254(b)(3)(i), applies to capital and infrastructure costs and
investments ``directly incurred or paid by the MA plan.'' The bid for
basic benefits submitted by an MA plan cannot include such capital and
infrastructure costs or investments for MA additional telehealth
benefits.
We do not propose a specific definition of capital and
infrastructure costs or investments related to such benefits here
because the costs and investments needed and used to provide MA
additional telehealth benefits would vary based on the individual MA
plan's approach to furnishing the benefits.
We also thank the commenters for providing lists of capital and
infrastructure examples. Although we stated in the proposed rule that
we would provide a more detailed list of examples in this final rule
based on stakeholder feedback, after further consideration we have
chosen not to do so. We made this decision in acknowledgment of the
variety of potential capital and infrastructure models, for which a
given MA plan could incur or pay costs, related to MA additional
telehealth benefits.
Comment: Many commenters requested clarification on how the annual
bid submission process will work for MA additional telehealth benefits.
Specifically, commenters questioned how plans will be expected to file
MA additional telehealth benefits in the PBP.
Response: We appreciate this request for greater clarity concerning
how the annual bid submission process will be impacted by MA additional
telehealth benefits. We will take these comments into consideration
when developing the annual bid guidance, which we consider to be a more
appropriate place to provide instruction for completing the bid.
Comment: Several commenters supported CMS's proposal to allow MA
plans to provide MA additional telehealth benefits because the proposal
does not include geographic and originating site limitations. A few
commenters believed CMS should extend authority for MA additional
telehealth benefits to original Medicare, specifically to eliminate
geographic and originating site limitations applicable in original
Medicare. Some commenters requested that CMS make efforts to ensure
parity for original Medicare beneficiaries, claiming they would be
disadvantaged since they cannot access MA additional telehealth
benefits as MA enrollees can. Some commenters urged CMS to reference
and ensure alignment with the Part B definition of telecommunications
systems and note that the section 1834(m) originating site and
geographic restrictions do not apply to MA additional telehealth
benefits.
Response: This final rule will allow MA plans the ability to
offer--as part of the basic benefit package--MA additional telehealth
benefits beyond what is currently allowable under Medicare telehealth
services; this is authorized by section 1852(m) of the Act, which was
added by section 50323 of the Bipartisan Budget Act of 2018. Neither
the statute nor this final rule includes geographic or originating site

[[Page 15695]]

limitations as part of defining or authorizing MA additional telehealth
benefits. With regard to comments regarding coverage and payment under
the original Medicare program, we note that we are constrained by the
statutory requirements and that the original Medicare program is not
within the scope of this final rule.
Comment: A commenter requested that CMS provide permissible MA
additional telehealth benefit designs to ensure MA plan compliance with
CMS's final rule.
Response: We appreciate the commenter's request for permissible MA
additional telehealth benefit designs. However, we do not provide any
specific MA additional telehealth benefit designs in the final rule in
order to provide MA plans with the discretion to develop their plan
benefit offerings.
Comment: A commenter requested information regarding whether MA
additional telehealth benefits can be used to furnish the Medicare
Diabetes Prevention Program (MDPP) services. A few commenters
referenced CMS previously declining to test online MDPP diabetes self-
management training.
Response: As discussed above, we are finalizing this rule to define
``additional telehealth benefits'' as services that: (1) Are furnished
by an MA plan for which benefits are available under Medicare Part B
but which are not payable under section 1834(m) of the Act; and (2)
have been identified by the MA plan for the applicable year as
clinically appropriate to furnish through electronic exchange when the
physician (as defined in section 1861(r) of the Act) or practitioner
(described in section 1842(b)(18)(C) of the Act) providing the service
is not in the same location as the enrollee. Because this definition
requires MA additional telehealth benefits to be services provided by a
physician or practitioner, and MDPP services, pursuant to Sec. 410.79,
must be provided by an MDPP supplier, MDPP services cannot be offered
as MA additional telehealth benefits. Existing guidance about how MDPP
services may be provided on a virtual basis or through electronic
exchange still applies and can be covered as a supplemental benefit.
Comment: Some commenters requested that CMS include in the
definition of a telehealth provider specific specialty types such as
pharmacists, audiologists, speech-language pathologists, home health
care aides, and telerehabilitation providers.
Response: We appreciate comments requesting additional specificity
in identifying permissible telehealth provider types. However, we did
not define a telehealth provider in the proposed rule and will not
finalize such a definition here. Section 1852(m)(2)(A)(i)(2) uses the
term ``physician'' as defined in section 1861(r) of the Act and the
term ``practitioner'' described in section 1842(b)(18)(C) of the Act.
We have codified these statutory requirements in our final definition
of ``additional telehealth benefits'' at Sec. 422.135(a)(2), described
previously. Both the statute and this final rule limit MA additional
telehealth benefits to services furnished by physicians and
practitioners as so defined. Further, the statute and regulation
require that the service be clinically appropriate to furnish through
electronic exchange, which in some cases may prohibit certain services
from being covered as MA additional telehealth benefits. Finally, in
Sec. 422.135(d), we are codifying the requirement that MA plans
furnishing MA additional telehealth benefits only do so using
contracted providers.
Comment: A few commenters questioned how MA additional telehealth
benefits will interact with encounter data and risk adjustment. For
example, commenters recommended CMS establish rules or clarify the
criteria under which diagnoses obtained through telehealth encounters
can be considered and submitted for risk adjustment purposes. A
commenter specifically requested that CMS allow telehealth encounters
to be included for MA risk adjustment, while other requestors requested
future guidance on telehealth encounter data submissions.
Response: We appreciate commenters raising this particular issue.
This regulation does not change the existing obligation to submit
encounters. Consistent with the requirements under Sec. 422.310, MA
plans must submit risk adjustment data that characterize the context
and purpose of each item and service provided to an MA enrollee, and
must also conform to CMS's requirements for submitting these data. We
will be releasing guidance regarding MA additional telehealth benefits
and encounter data and risk adjustment in the future.
Summary of Regulatory Changes
We received a range of comments pertaining to this proposal, the
majority of which reflected support for the regulations. After careful
consideration of all comments received, and for the reasons set forth
in the proposed rule and in our responses to the related comments
summarized earlier, we are finalizing the proposed changes to
Sec. Sec. 422.100, 422.252, 422.254, and 422.264 and new regulation at
Sec. 422.135, with the following modifications:
In proposed regulation text Sec. 422.135(a), we are
removing the phrase ``that meet the following.'' Thus, we are revising
Sec. 422.135(a) to read as follows: ``Definitions. For purposes of
this section, the following definitions apply: Additional telehealth
benefits means services:''
In proposed regulation text Sec. 422.135(a)(1), we are
removing the phrase ``are furnished by an MA plan'' but finalizing the
remaining text in (a)(1). Thus, we are revising (a)(1) to read as
follows: ``For which benefits are available under Medicare Part B but
which are not payable under section 1834(m) of the Act; and''
In proposed regulation text Sec. 422.135(a)(2), we are
adding the word ``That'' and adding the phrase ``when the physician (as
defined in section 1861(r) of the Act) or practitioner (described in
section 1842(b)(18)(C)) of the Act) providing the service is not in the
same location as the enrollee.'' Thus, we are revising (a)(2) to read
as follows: ``That have been identified by the MA plan for the
applicable year as clinically appropriate to furnish through electronic
exchange when the physician (as defined in section 1861(r) of the Act)
or practitioner (described in section 1842(b)(18)(C)) of the Act)
providing the service is not in the same location as the enrollee.''
In proposed regulation text Sec. 422.135(c)(2), we are
removing the phrase ``at a minimum in the MA plan's Evidence of
Coverage required at Sec. 422.111(b)'' but finalizing the remaining
text in (c)(2). Thus, we are revising (c)(2) to read as follows:
``Advise each enrollee that the enrollee may receive the specified Part
B service(s) through an in-person visit or through electronic
exchange.''
We are not finalizing our proposed regulation text for the
provider directory requirement at proposed Sec. 422.135(c)(3). Thus,
we are removing proposed (c)(3) in its entirety, redesignating proposed
(c)(4) as (c)(3), and redesignating proposed (c)(5) as (c)(4).
In proposed regulation text Sec. 422.254(b)(3)(i), we are
adding the phrases ``directly incurred or paid by the MA plan'' and
``for the unadjusted MA statutory non-drug monthly bid amount.'' Thus,
we are revising (b)(3)(i) to read as follows: ``MA plans offering
additional telehealth benefits as defined in Sec. 422.135(a) must
exclude any capital and infrastructure costs and investments directly
incurred or paid by the MA plan relating to such benefits from their
bid submission for the unadjusted MA

[[Page 15696]]

statutory non-drug monthly bid amount.''
2. Dual Eligible Special Needs Plans
Special needs plans (SNPs) are MA plans created by the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L.
108-173) that are specifically designed to provide targeted care and
limit enrollment to special needs individuals. Under the law, SNPs are
able to restrict enrollment to: (1) Institutionalized individuals, who
are defined in Sec. 422.2 as those residing or expecting to reside for
90 days or longer in a long term care facility; (2) individuals
entitled to medical assistance under a state plan under Title XIX; or
(3) other individuals with certain severe or disabling chronic
conditions who would benefit from enrollment in a SNP. As of June 2018,
the CMS website listed 297 SNP contracts with 641 SNP plans that have
at least 11 members.\8\ These figures included 190 Dual Eligible SNP
contracts (D-SNPs) with 412 D-SNP plans with at least 11 members, 49
Institutional SNP contracts (I-SNPs) with 97 I-SNP plans with at least
11 members, and 58 Chronic or Disabling Condition SNP contracts (C-
SNPs) with 132 C-SNP plans with at least 11 members. This final rule
implements the provisions of the Bipartisan Budget Act of 2018 that
establish new requirements for D-SNPs for the integration of Medicare
and Medicaid benefits and unification of Medicare and Medicaid
grievance and appeals procedures that are effective in 2021. This final
rule also clarifies definitions and operating requirements for D-SNPs
that will be applicable to D-SNPs starting January 1, 2020, as
specified earlier in this final rule.
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\8\ Centers for Medicare & Medicaid Services (2018, June). SNP
Comprehensive Report. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.
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a. Integration Requirements for Dual Eligible Special Needs Plans
(Sec. Sec. 422.2, 422.60, 422.102, 422.107, 422.111, and 422.752)
Beneficiaries who are dually eligible for both Medicare and
Medicaid can face significant challenges in navigating the two
programs, which include separate or overlapping benefits and
administrative processes. Fragmentation between the two programs can
result in a lack of coordination for care delivery, potentially
resulting in: (1) Missed opportunities to provide appropriate, high-
quality care and improve health outcomes, and (2) ineffective care,
such as avoidable hospitalizations and a poor beneficiary experience of
care. Advancing policies and programs that integrate care for dual
eligible individuals is one way in which we seek to address such
fragmentation. Under plans that offer integrated care, dual eligible
individuals can receive the full array of Medicaid and Medicare
benefits through a single delivery system, thereby improving care
coordination, quality of care, beneficiary satisfaction, and reducing
administrative burden. Some studies have shown that highly integrated
managed care programs perform well on quality of care indicators and
enrollee satisfaction.\9\
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\9\ See: Kim, H., Charlesworth, C.J., McConnell, K.J.,
Valentine, J.B., and Grabowski, D.C. (2017, November 15). Comparing
Care for Dual-Eligibles Across Coverage Models: Empirical Evidence
From Oregon. Retrieved from http://journals.sagepub.com/doi/abs/10.1177/1077558717740206; Anderson, W.L., Feng, Z., & Long, S.K.
(2016, March 31). Minnesota Managed Care Longitudinal Data Analysis,
prepared for the U.S. Department of Health and Human Services
Assistant Secretary for Planning and Evaluation (ASPE). Retrieved
from https://aspe.hhs.gov/report/minnesota-managed-care-longitudinal-data-analysis; Health Management Associates (2015, July
21). Value Assessment of the Senior Care Options (SCO) Program.
Retrieved from http://www.mahp.com/wp-content/uploads/2017/04/SCO-White-Paper-HMA-2015_07_20-Final.pdf; and Medicare Payment Advisory
Committee (2012, June 16). ``Care coordination programs for dual-
eligible beneficiaries.'' In June 2012 Report to Congress: Medicare
and Health Care Delivery System. Retrieved from http://www.medpac.gov/docs/default-source/reports/chapter-3-appendixes-care-coordination-programs-for-dual-eligible-beneficiaries-june-2012-report-.pdf?sfvrsn=0.
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D-SNPs are a type of MA plan that is intended to integrate or
coordinate care for this population more effectively than standard MA
plans or original Medicare by focusing enrollment and care management
on dual eligible individuals. As of June 2018, approximately 2.3
million dual eligible individuals (1 out of every 6 dual eligible
individuals) were enrolled in 412 D-SNPs. About 170,000 dual eligible
individuals are enrolled in fully integrated dual eligible special
needs plans, or FIDE SNPs (that is, where the same organization
receives capitation to cover both Medicare and Medicaid services).\10\
A number of states, including Arizona, Idaho, Hawaii, Massachusetts,
Minnesota, New Jersey, New Mexico, New York, Pennsylvania, Tennessee,
Texas, Virginia, and Wisconsin, operate Medicaid managed care programs
for dual eligible individuals in which the state requires that the
Medicaid managed care organizations serving dual eligible individuals
offer a companion D-SNP product.
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\10\ Centers for Medicare & Medicaid Services (2018, June). SNP
Comprehensive Report. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.
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As summarized in our proposed rule, since the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA) first authorized
D-SNPs' creation, subsequent legislation has been enacted that has
extended their authority to operate and set forth additional
programmatic requirements, including sections 164 and 165 of the
Medicare Improvements for Patients and Providers Act (MIPPA) (Pub. L.
110-275), which amended sections 1859(f) and 1852(a) of the Act, and
section 3205 of the Patient Protection and Affordable Care Act (Pub. L.
111-148), which revised section 1853(a)(1)(B) of the Act. Regulations
promulgated following the enactment of these laws implemented these
statutory provisions.
Using the contract that D-SNPs are required to have with states
under section 1859(f)(3)(D) of the Act, implemented in the regulation
at Sec. 422.107, state Medicaid agencies are able to establish
requirements that surpass the minimum standards set in federal
regulations for D-SNPs with regard to integration and coordination of
Medicare and Medicaid benefits. To that end, we have seen states
leverage their contracts with D-SNPs to limit D-SNP enrollment to
individuals who also receive Medicaid benefits through the same
organization, collect certain data from the D-SNP, and integrate
beneficiary communication materials and care management processes to
provide D-SNP enrollees a more seamless, coordinated experience of
care.\11\ CMS supports states that have an interest in pursuing
integrated care models for dual eligible individuals, including through
the use of their contracts with MA organizations offering D-SNPs, and
provides technical assistance to states seeking to develop solutions
tailored to their local market conditions, beneficiary characteristics,
and policy environment.
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\11\ Verdier, J, Kruse, A., Sweetland Lester, R., Philip, A.M.,
& Chelminsky, D. (2016, November). ``State Contracting with Medicare
Advantage Dual Eligible Special Needs Plans: Issues and Options.''
Retrieved from http://www.integratedcareresourcecenter.com/PDFs/ICRC_DSNP_Issues__Options.pdf.
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Through this final rule, we are adopting new requirements in
accordance with section 50311(b) of the Bipartisan Budget Act of 2018,
which amended section 1859 of the Act to require that all D-SNPs meet
certain new minimum criteria for Medicare and Medicaid integration for
2021 and subsequent years. Beyond the newly enacted amendments to the
Act, we are

[[Page 15697]]

also using this final rule to add requirements and clarifications to
existing regulations to codify guidance and policy since D-SNPs were
established nearly 15 years ago and to update certain aspects of the
regulations. Under the newly enacted section 1859(f)(8)(D)(i) of the
Act, the statute calls for D-SNPs, for 2021 and subsequent years, to
meet one or more of three specified requirements, to the extent
permitted under state law, for integration of benefits:
A D-SNP must, in addition to meeting the existing
requirement of contracting with the state Medicaid agency under section
1859(f)(3)(D) of the Act, coordinate long-term services and supports
(LTSS), behavioral health services, or both, by meeting an additional
minimum set of requirements for integration established by the
Secretary based on input from stakeholders. Such requirements for
integration could include: (1) Notifying the state in a timely manner
of hospitalizations, emergency room visits, and hospital or nursing
home discharges of enrollees; (2) assigning one primary care provider
for each enrollee; or (3) data sharing that benefits the coordination
of items and services under Medicare and Medicaid.
A D-SNP must either: (1) Meet the requirements of a fully
integrated dual eligible special needs plan described in section
1853(a)(1)(B)(iv)(II) of the Act (other than the requirement that the
plan have similar average levels of frailty as the PACE program); or
(2) enter into a capitated contract with the state Medicaid agency to
provide LTSS, behavioral health services, or both.
The parent organization of a D-SNP that is also the parent
organization of a Medicaid managed care organization providing LTSS or
behavioral services must assume ``clinical and financial
responsibility'' for benefits provided to beneficiaries enrolled in
both the D-SNP and Medicaid managed care organization.
Section 50311(b) of the Bipartisan Budget Act of 2018 also
authorizes the Secretary, in section 1859(f)(8)(D)(ii) of the Act, to
impose an enrollment sanction on an MA organization offering a D-SNP
that has failed to meet at least one of these integration standards in
plan years 2021 through 2025. In the event that the Secretary imposes
such a sanction, the MA organization must submit to the Secretary a
plan describing how it will come into compliance with the integration
standards.
We received a number of comments on our proposals to implement
these new integration requirements, both in general and with regard to
specific proposals. We summarize and respond to the comments below.
Comment: We received numerous comments in support of our
integration proposal, with many commenters citing the proposal's
fulfillment of statutory intent and expressing appreciation for the
flexibility afforded to states to define what integrated care looks
like in their state. For example, some of these commenters noted the
diversity of state policies, which impact what the D-SNP market looks
like in each state, and cautioned against any proposal that upon
implementation would disrupt existing integrated care models and
beneficiaries' coverage. A subset of commenters, while supportive of
our proposal, also encouraged CMS to raise the bar of integration even
further. One commenter encouraged CMS to help states move toward
integration and not penalize plans and states that are not yet able to
integrate further, advising that focus should also remain on minimizing
administrative burden and reducing complexity for beneficiaries. The
Medicare Payment Advisory Commission (MedPAC) stated its belief that
the proposed rule will do little to promote greater integration, citing
in particular the first of the proposed new standards for integration--
requiring D-SNPs to share information on inpatient and SNF admissions--
as having a very limited impact on improving care coordination, as
discussed in more detail in the comments we received on proposed Sec.
422.107(d). Another commenter objected to our integration proposal and
recommended that CMS leave all decision-making to the states, including
granting them the ability to opt out of any of the D-SNP integration
requirements.
Response: We appreciate the widespread support we received for our
proposal. We believe that the requirements we are finalizing in this
rule strike an appropriate balance between increasing integrated care
in D-SNPs for dual eligible individuals and preserving state
flexibility, within the framework established by the amendments to
section 1859(f)(8) of the Act made by section 50311(b) of the
Bipartisan Budget Act of 2018. While our aim is to support states that
are operating successful programs and assist those seeking to establish
more integrated programs, we also recognize that our proposal must
account for the current state of integrated care and the need to meet
states where they are by setting reasonable and achievable integration
benchmarks. As the D-SNP landscape evolves, we will continue to
consider ways to advance integrated care, including further rulemaking.
Finally, we note that the statute does not authorize CMS or states to
disregard a D-SNP's obligation to meet one or more of the integration
requirements, and imposes consequences for non-compliance, as discussed
in response to comments on proposed Sec. 422.752(d).
Comment: One commenter expressed concern about D-SNPs' ability to
meet the integration requirements by 2021 due to the potential for
delayed decision-making on the part of states. Another commenter
requested a one-year delay in the effective date in consideration of
the time required to negotiate and execute contracts between states and
D-SNPs and to develop new processes, which will vary depending on each
state's capabilities. Conversely, another commenter stated that 2021 is
an achievable date for meeting one of the three integration
requirements.
Response: The statute requires that D-SNPs comply with the
integration requirements by 2021. As discussed throughout this
preamble, the Medicare-Medicaid Coordination Office provides technical
assistance to states on integration issues, and we expect to continue
to engage states, plans, and other stakeholders as we implement the
requirements in this final rule.
Comment: One commenter observed that CMS does not make any
additional funding available for the coordination activities that D-
SNPs perform today and that adding to these requirements could create
burdens on plans and CMS or cause D-SNPs to exit the market. Another
commenter urged CMS to establish nationwide standards to ensure plans
can scale best practices and that beneficiaries receive the same high
quality service no matter where they live.
Response: While we believe that states are well positioned to drive
innovation in care delivery for dual eligible individuals, we also
recognize that the Bipartisan Budget Act of 2018 set forth a minimum
level of integration for all D-SNPs to meet. We believe that the
proposal we set forth is a reasonable one that preserves state
flexibility while fulfilling our statutory obligation. While we
recognize the desirability of having national standards, particularly
for MA organizations that operate D-SNPs in multiple markets across the
country, we have to balance this desire with the differences that exist
in states' capabilities, ranging from states where some or all dual
eligible individuals may be precluded from enrolling in any capitated
plan for their Medicaid services to states with highly integrated D-SNP
models. Notwithstanding our reluctance to mandate the use of

[[Page 15698]]

national standards, we are committed to cataloguing and disseminating
best practice information as part of the final rule's implementation
and our ongoing administrative alignment efforts, discussed later in
the preamble to this final rule.
Comment: Several commenters supported our D-SNP integration
proposals but considered them only a starting point for ensuring better
alignment and encouraged CMS to build upon these requirements in the
future. Several commenters also recommended that CMS provide strong
oversight to ensure that integration requirements are being met and
that dual eligible individuals enrolled in D-SNPs are actually
benefiting from increased integration. One commenter urged CMS to go
further in recognizing states' authority and options to implement even
more robustly integrated programs.
Response: We appreciate these commenters' perspectives on our
proposal. We acknowledge the importance of working in close partnership
with states to advance integration within each state-specific context.
CMS will monitor the implementation of these provisions to determine
market and beneficiary impacts and assess the need for additional
rulemaking to modify or expand upon the integration standards we are
finalizing in this rule.
Comment: One commenter recommended that CMS conduct a comprehensive
review of basic operational processes to determine where Medicare and
Medicaid could be further aligned to enhance care delivery and quality
and to reduce burdens on plans, providers, and beneficiaries and to
facilitate plans' moving along the integration continuum toward a FIDE
SNP or HIDE SNP status. This commenter further suggested that CMS
advance integration using all available statutory authorities,
including seeking clarification from Congress regarding its intent in
enacting provisions in the Bipartisan Budget Act of 2018 related to the
Medicare-Medicaid Coordination Office.
Several commenters recommended that CMS extend to D-SNPs processes
and flexibilities developed under the Financial Alignment Initiative
for MMPs and under the Minnesota Demonstration to Align Administrative
Functions for Improvements in Medicare-Medicaid Beneficiary Experience,
including use of the contract management team structure for joint
oversight of plans, integrated beneficiary communications materials,
joint CMS-state marketing reviews, coordinated enrollment processes and
timelines, integrated MOCs, dual eligible-specific network adequacy
requirements, and streamlined and plan-level reporting processes.
Several commenters suggested other areas in which CMS could create
additional administrative and policy incentives to reward states for
moving toward further Medicare-Medicaid alignment, including year-round
marketing to dual eligible individuals; expansion of current passive
enrollment and default enrollment authorities; establishment of a
Special Election Period for enrollment in integrated plans; plan
payment reforms, including changes to the frailty adjustment for FIDE
SNPs; an increase of the enhanced Medicaid match for care coordination
and IT activities; and alignment of state and federal contracting
cycles. A commenter recommended that CMS improve its messaging about D-
SNPs in its beneficiary-centered materials and tools.
Response: We thank commenters for their robust feedback about
additional alignment opportunities for D-SNPs. Since 2013, the
Financial Alignment Initiative and Minnesota demonstration have
provided us with opportunities to test a number of programmatic and
administrative flexibilities for MMPs and some D-SNPs, and many of
these flexibilities have been positively received by beneficiaries,
states, and health plans. We will continue to consider additional ways
to promote better outcomes and experiences for dual eligible
individuals.
As we have indicated in the CY 2016 Draft and Final Call Letters,
the CY 2019 Draft and Final Call Letters, and the CY 2020 Draft Call
Letter,\12\ CMS remains committed to providing administrative
flexibility that facilitates efforts by state Medicaid agencies and MA
organizations to use D-SNPs to integrate coverage of Medicare and
Medicaid benefits, including in the areas of integrated beneficiary
communications, D-SNP models of care, and enrollment processes. That
commitment is also evidenced by our recent CY 2019 final rule (CMS-
4182-F, Policy and Technical Changes to the Medicare Advantage,
Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription
Drug Benefit Programs, and the PACE Program) codifying our authority to
permit default enrollment of newly Medicare-eligible individuals into
integrated D-SNPs at Sec. 422.66(c)(2) and, at Sec.
422.60(g)(1)(iii), to allow passive enrollment to preserve continuity
of care and integrated care related to D-SNP non-renewals or state
Medicaid managed care organization procurements. We have also worked
with states and integrated D-SNPs to develop integrated beneficiary
communications materials, integrate model of care requirements and
reviews with states, and provide state Medicaid agencies with technical
assistance and information on plan performance and audit results of
their contracted D-SNPs so that the quality of Medicare services
delivered by those D-SNPs can inform state contracting strategies. We
look forward to continuing our work in this area with additional states
and plans.
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\12\ https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2020Part2.pdf.
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Comment: A number of commenters recommended CMS consideration of
additional regulatory and operational policies on a number of issues
related to dual eligible individuals that were not related to the D-SNP
integration requirements in the proposed rule. One commenter urged CMS
to make funds available for ombudsman programs to serve dual eligible
individuals in integrated D-SNPs. Several commenters recommended that
CMS continue to work with plans on identifying a long-term solution
impacting dual eligibility status and socioeconomic factors in Medicare
Advantage Star Ratings. One commenter reiterated the need for CMS to
develop a risk adjustment model that adequately accounts for the costs
of serving beneficiaries with functional limitations. Another commenter
urged CMS to consider how D-SNPs should be designed to minimize cost-
sharing obligations that are ultimately unpaid and to consider a more
holistic approach to coverage for dual eligible individuals that does
not simply transfer cost-sharing liability to providers. Another
commenter noted the critical importance of home and community-based
service (HCBS) eligibility barriers when determining how the D-SNP-to-
Medicaid transition should occur and recommended that the federal
government ease this transition through reform of the Medicaid HCBS
eligibility requirements. One commenter requested that CMS consider
recognizing Part B premium buy-downs in Puerto Rico D-SNPs as part of
plans' bids to provide Parts A and B benefits, rather than requiring
plans to use rebate dollars to buy down the Part B premium as a
supplemental benefit. Another commenter recommended cost-sharing
integration processes for dual eligible individuals at the pharmacy
counter or, in the shorter-term, implementation of real time
beneficiary eligibility solutions for use within the NCPDP
Telecommunication standard.
Response: These recommendations are not within the scope of our
final rule

[[Page 15699]]

provisions establishing integration criteria for D-SNPs effective in
2021, and some of them are beyond our programmatic authority. We do,
however, appreciate the many comments and suggestions related to
programmatic improvements for dual eligible individuals, including
those enrolled in D-SNPs.
Comment: A range of commenters, including the Medicaid and CHIP
Payment and Access Commission (MACPAC), expressed concern that the
market entry of non-D-SNP MA plans designed and marketed exclusively to
dual eligible individuals--so-called ``D-SNP look-alike plans''--
threatens to undermine efforts by CMS, states, and D-SNPs to increase
integration and coordination of Medicare and Medicaid services. Some of
these commenters recommended that CMS address this issue including by
requiring MA plans with a minimum percentage of dual eligible members
to meet all D-SNP requirements, including the obligation to contract
with the states in which the plans operate.
Response: Although the issue of D-SNP look-alike plans is beyond
the scope of this rule, we share the commenters' concern with the
impact of such plans on our efforts to increase Medicare-Medicaid
integration. We call attention to the CY 2020 Draft Call Letter \13\ in
which we sought comment on the impact of D-SNP look-alike plans in
order to inform future policy development.
---------------------------------------------------------------------------

\13\ https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2020Part2.pdf.
---------------------------------------------------------------------------

Comment: A commenter recommended that CMS continue and expand
efforts to help states adopt policies and incentives that assist D-SNPs
in moving toward higher levels of integration (including FIDE SNP or
HIDE SNP status with better aligned enrollments) for dual eligible
individuals.
Response: States and CMS both play important roles in implementing
more integrated care delivery systems for dual eligible individuals.
The Medicare-Medicaid Coordination Office facilitates this technical
assistance and dialogue with states, including through its Integrated
Care Resource Center (see https://www.integratedcareresourcecenter.com/
). We are committed to continuing our work with states based on their
specific policy priorities following the implementation of this final
rule.
Comment: One commenter reaffirmed their support for Medicare-
Medicaid Plans (MMPs) offered under the Financial Alignment Initiative
and urged CMS to make them permanent. The same commenter urged CMS to
develop a common statutory and regulatory framework for all forms of
integrated plans, including MMPs, PACE organizations, and FIDE SNPs,
that would include uniform rules on marketing, enrollment processes,
claims reporting, rate-setting, and risk adjustment.
Response: We appreciate the commenter's support for our work with
states and MMPs in the Financial Alignment Initiative. CMS will
continue to explore ways within our programmatic authority to improve
the current regulatory framework for integrated care as we gain
experience and gather data about the impacts of the FAI capitated model
and other demonstrations, our administrative alignment efforts,
streamlining of the PACE program, and the implementation of new D-SNP
integration requirements finalized in this rule.
Comment: We received comments from one organization expressing
concerns about CMS' sole reliance on the D-SNP delivery model and
urging us to consider other plan types (including Institutional SNPs
(I-SNPs) and fee-for-service Medicare) that can help achieve integrated
care goals. This commenter expressed concern that sole reliance on D-
SNPs would result in unnecessary disruptions to care.
Response: We support beneficiary choice in selecting the health
care delivery system that best meets each individual's needs. The final
rule focuses on the specific requirements added to section 1859(f) of
the Act for D-SNPs by section 50311 of the Bipartisan Budget Act.
Comments related to fee-for-service Medicare and I-SNPs are therefore
outside the scope of this final rule.
Comment: A few commenters requested that CMS consider providing
guidance on how the integration requirements will affect the operations
of MMPs.
Response: We clarify that there is no direct impact on MMPs as a
result of this final rule. The D-SNP requirements in this final rule
are not applicable to MMPs, and MMP policy and operations will continue
to be established in three-way contract agreements among CMS, health
plans, and states.
(1) Definitions of a ``Dual Eligible Special Needs Plan'', ``Fully
Integrated Dual Eligible Special Needs Plan'', ``Highly Integrated Dual
Eligible Special Needs Plan'', and ``Aligned Enrollment'' (Sec. 422.2)
D-SNPs are described in various sections of 42 CFR part 422,
including provisions governing the definition of specialized MA plans
for special needs individuals in Sec. 422.2, the supplemental benefit
authority for D-SNPs that meet a high standard of integration and
minimum performance and quality-based standards in Sec. 422.102(e),
state Medicaid agency contracting requirements in Sec. 422.107, and
specific benefit disclosure requirements in Sec. 422.111(b)(2)(iii).
In the proposed rule, we proposed to consolidate statutory and
regulatory references to D-SNPs; we also proposed to establish a
definition for such a plan in Sec. 422.2. In addition to proposing a
new definition for the term ``dual eligible special needs plan,'' we
also proposed a revised definition of the term ``fully integrated dual
eligible special needs plan,'' and new definitions of the terms
``highly integrated dual eligible special needs plan'' and ``aligned
enrollment,'' for purposes of part 422 (that is, the rules applicable
to the MA program) and the proposed rule.
In our proposed definition at Sec. 422.2, we described a dual
eligible special needs plan as a type of specialized MA plan for
individuals who are eligible for Medicaid under Title XIX of the Act
that provides, as applicable, and coordinates the delivery of Medicare
and Medicaid services, including LTSS and behavioral health services,
for individuals who are eligible for such services; has a contract with
the state Medicaid agency consistent with Sec. 422.107 that meets the
minimum requirements in paragraph (c) of such section; and satisfies at
least one of following integration requirements:
It meets the additional state Medicaid agency contracting
requirement we proposed at Sec. 422.107(d) (described in section
II.A.2.a.(2) of the proposed rule) that surpasses the minimum
requirements in current regulations at Sec. 422.107(c);
It is a highly integrated dual eligible special needs plan
(HIDE SNP), as described in further detail later in this section; or
It is FIDE SNP.
In addition, we proposed additional performance requirements for D-
SNPs that we did not incorporate into the definition; for example, a D-
SNP would provide assistance to individuals filing a grievance or
appeal for a Medicaid services in accordance with proposed

[[Page 15700]]

Sec. 422.562(a)(5) (described in section II.A.2.b.(1) of the proposed
rule). As discussed in the proposed rule, we believed this proposed
definition identified the minimum requirements for an MA plan to be a
D-SNP under section 1859 of the Act as amended by the Bipartisan Budget
Act of 2018. We also explained that the proposed definition would
clarify the applicability of the separate regulatory provisions that
establish the minimum standards for D-SNPs. We solicited comment on
whether our proposed definition met these goals or should be revised to
include other regulatory provisions that establish requirements for D-
SNPs.
We discussed in the proposed rule and reiterate here that it is
important to clarify through this final rule the meaning of the
requirement in section 1859(f)(3)(D) of the Act, which is currently
codified at Sec. 422.107(b), that the MA organization have
responsibility under the contract for providing benefits or arranging
for benefits to be provided for individuals entitled to Medicaid. Prior
to our proposed rule, we had not adopted a specific interpretation of
this statutory language, ``arranging for benefits,'' in previous
rulemaking or in subregulatory guidance. We proposed to interpret
``arranging for benefits'' as requiring a D-SNP, at a minimum, to
coordinate the delivery of Medicare and Medicaid benefits. We proposed
to relocate this requirement to our proposed D-SNP definition. As
stated in the proposed rule, while our interpretation is consistent
with the new statutory integration standards, the proposed
clarification was based on requirements for D-SNPs that existed prior
to the enactment of the Bipartisan Budget Act of 2018 that we believe
should be strengthened. We believe coordination would encompass a wide
range of activities that a D-SNP may engage in for their dual eligible
members and provided some examples of such coordination in the preamble
to the proposed rule. If a D-SNP identifies through an enrollee's
health risk assessment and/or individualized care plan, as required by
Sec. 422.101(f), functional limitations or mental health needs, the D-
SNP could: (1) Verify the enrollee's eligibility for LTSS and/or
behavioral health services under Medicaid; (2) determine how the
enrollee receives such services (through FFS Medicaid or through
another Medicaid managed care product); or (3) make arrangements with
the applicable Medicaid program (state Medicaid agency or managed care
plan) for the provision of such services by the appropriate payer or
provider. We solicited comment on whether our proposed definition
should be more prescriptive in identifying which plan activities
constitute coordination or whether it should remain broadly defined as
proposed.
We proposed revising the definition of fully integrated dual
eligible special needs plan (FIDE SNP) at Sec. 422.2 to align with the
proposed definition of a D-SNP and to codify current policy.
Specifically, we proposed the following:
Striking the reference to a ``CMS approved MA-PD'' plan in
the current FIDE SNP definition and paragraph (1), which refers to the
individuals eligible for enrollment in a FIDE SNP, because those
provisions duplicate elements of the new proposed definition of a D-SNP
at Sec. 422.2;
Replacing the reference to ``dual eligible beneficiaries''
with ``dual eligible individuals'' in newly redesignated paragraph (1)
to align with the terminology used in section 1935(c) of the Act;
Adding to newly redesignated paragraph (2) that a FIDE
SNP's capitated contract with a state Medicaid agency may include
specified behavioral health services, as well as replacing the term
``long-term care'' benefits with ``long-term services and supports'' to
better describe the range of such services FIDE SNPs cover in capitated
contracts with states. We also proposed codifying in paragraph (2) the
current policy that the FIDE SNP's capitated contract with the state
provide coverage of nursing facility services for at least 180 days
during the plan year; \14\
---------------------------------------------------------------------------

\14\ Following the April 2, 2012 issuance of the ``Announcement
of Calendar Year (CY) 2013 Medicare Advantage Capitation Rates and
Medicare Advantage and Part D Payment Policies and Final Call
Letter,'' Chapter 16b of the Medicare Managed Care Manual was
revised to include this policy.
---------------------------------------------------------------------------

Striking references to coordination of covered Medicare
and Medicaid ``health and long-term care'' and referring more broadly
to Medicare and Medicaid services in in newly redesignated paragraph
(3); and
Replacing the reference to ``member'' materials with
``beneficiary communication materials,'' consistent with the definition
of ``communication materials'' at Sec. 422.2260.
We proposed to codify a definition of highly integrated dual
eligible special needs plan (HIDE SNP) at Sec. 422.2. Under the
proposed definition, a HIDE SNP would be a type of D-SNP offered by an
MA organization that has--or whose parent organization or another
entity that is owned and controlled by its parent organization has--a
capitated contract with the Medicaid agency in the state in which the
D-SNP operates that includes coverage of LTSS, behavioral health
services, or both, consistent with state policy. We solicited comment
on this proposed definition, including on whether additional
requirements for HIDE SNPs should be addressed in the definition.
We also proposed to establish at Sec. 422.2 a definition for the
term aligned enrollment, as many of the other D-SNP proposals in the
proposed rule were based on this concept. Under our proposal, aligned
enrollment is when a full-benefit dual eligible individual is a member
of a D-SNP and receives coverage of Medicaid benefits from the D-SNP or
from a Medicaid managed care organization, as defined in section
1903(m) of the Act, that is: (1) The same organization as the MA
organization offering the D-SNP; (2) its parent organization; or (3)
another entity that is owned and controlled by the D-SNP's parent
organization. Aligned enrollment, as we proposed to define it, would
not arise where the MA organization or its parent organization solely
has a contract with the applicable state to offer a prepaid inpatient
health plan (PIHP) or prepaid ambulatory health plan (PAHP) in the
state's Medicaid program. Unlike a Medicaid MCO, these other Medicaid
managed care plans cover only a specific and non-comprehensive set of
services. In the event that it is the policy of the state Medicaid
agency to limit a D-SNP's membership to individuals with aligned
enrollment, we proposed describing this practice as ``exclusively
aligned enrollment,'' which was embedded in the proposed definition of
``aligned enrollment.'' As noted in the proposed rule, some states
limit D-SNP enrollment to full-benefit dual eligible individuals who
also choose to receive Medicaid benefits through the D-SNP or a
Medicaid MCO operated by the same entity (that is, by the MA
organization) or by the MA organization's parent organization. Such a
limitation would be included in the state Medicaid agency contract with
the D-SNP. Exclusively aligned enrollment is relevant to how we
proposed to apply the integrated grievance and appeals requirements
described in section II.A.2.b. of the proposed rule. We solicited
comment on our proposed definition of aligned enrollment given its
relevance to the category of D-SNPs to which the integrated grievance
and appeals procedures apply. We also solicited comment on whether we
should consider other types of Medicaid managed care arrangements
beyond companion Medicaid MCOs, as defined

[[Page 15701]]

in section 1903(m) of the Act and codified at Sec. 438.2, operated by
a HIDE SNP's parent organization.
Finally, we proposed in our definition of a D-SNP at Sec. 422.2 to
codify that an MA organization seeking to offer a D-SNP must satisfy
any one (or more) of the three integration requirements in section
1859(f)(3)(D)(i) of the Act. We noted that the statutory language
requires that plans meet one or more statutorily identified integration
requirements to the extent permitted under state law. We explained in
the proposed rule how we interpreted the integration standard in
section 1859(f)(8)(D)(i)(II) of the Act (that the D-SNP be a FIDE SNP
or have a capitated contract with the state Medicaid agency to provide
LTSS or behavioral health services, or both) to mean that the D-SNP is
a FIDE SNP or HIDE SNP; we also explained how we interpreted the
integration standard in section 1859(f)(8)(D)(i)(III) of the Act (that
clinical and financial responsibility for Medicare and Medicaid
benefits for enrollees of the D-SNP be borne by an entity that is both
the parent organization of the D-SNP and of the Medicaid managed care
organization providing LTSS or behavioral health services under a
contract under section 1903(m) of the Act) means that the D-SNP is a
HIDE SNP or FIDE SNP with exclusively aligned enrollment. We
interpreted the phrase ``to the extent permitted under state law'' as
acknowledging and respecting the flexibility provided to states under
the Medicaid program while imposing on D-SNPs integration requirements
that Congress has deemed necessary. Given this flexibility, we proposed
to interpret this statutory provision in a way that provides multiple
avenues for a MA plan to qualify as a D-SNP. However, we considered
other interpretations of this particular provision. For example, we
considered whether ``to the extent permitted under state law'' should
mean that in states that have Medicaid managed care programs for dual
eligible individuals, all MA organizations seeking to offer a D-SNP
could do so only if they were under contract with the state to offer a
companion Medicaid managed care plan in that state, on the grounds that
such an opportunity is permitted under state law. We solicited comments
on our proposed interpretation as well as alternatives. We also
requested comment on whether and how our proposed definition could or
should be revised consistent with our statutory interpretation.
As discussed in the proposed rule, our intent was for the proposed
definitions to describe different types of D-SNPs based on the degree
to which they integrate Medicaid benefits at the plan level. Under
section 1859(f)(8)(D)(i) of the Act, those D-SNPs that are neither FIDE
SNPs nor HIDE SNPs must meet an additional state Medicaid contracting
requirement beginning in 2021. Our proposed definition of a D-SNP
addressed this in paragraph (1), cross-referencing the new requirement
proposed to be codified in paragraph (d) of Sec. 422.107. This
proposed new requirement, which involves the provision of notice when
an individual who belongs to a group of high-risk dual eligible
individuals has a hospital and skilled nursing facility admission, is
discussed in section II.A.2.a.(2) of this final rule in greater detail.
We solicited comments on this proposal and, in particular, on
alternative approaches to classifying D-SNPs consistent with
requirements of section 1859(f)(8)(D)(i) of the Act.
We received the following comments on these proposed definitions
and respond to them below:
Comment: Many commenters expressed support for CMS' proposed
regulatory framework for defining D-SNPs, whereby a D-SNP could satisfy
any one or more of three integration requirements: (1) As a D-SNP
subject to the hospital and skilled nursing facility admission
notification requirement in proposed Sec. 422.107(d); (2) as a HIDE
SNP; or (3) as a FIDE SNP. In justifying their support, several of
these commenters cited one or more of the following:
The benefits that accrue to beneficiaries and taxpayers
when there is a market that permits an array of D-SNPs to compete with
each other, rather than one that limits the types of D-SNPs that can
compete in that market;
The need for state flexibility in promoting integration in
a manner that is incremental and minimizes market disruption;
The importance of preserving a pathway for D-SNPs that do
not hold a Medicaid managed care contract in the state or operate in
states where no such Medicaid managed care market exists; or
The opportunity for D-SNPs to make the transition on a
gradual basis to greater, and eventually full, integration. Another
commenter indicated that this proposal would create a spectrum of
integration and give states and plans clear starting points from which
to better define their goals and objectives.
Response: We appreciate the commenters' support of our proposal to
create multiple pathways for an MA plan to qualify as a D-SNP, which--
as discussed later in this preamble--we are finalizing in this final
rule.
Comment: Several commenters raised objections to the alternative we
discussed in the proposed rule to require, in states that have Medicaid
managed care programs for dual eligible individuals, all MA
organizations seeking to offer a D-SNP to be under contract as a
Medicaid managed care plan. One commenter did not believe that the
statute granted CMS authority to implement this restriction, while
others noted that it would constrain state decision-making on
integration, unnecessarily limit plan choice and reduce competition,
lead D-SNPs to cease operating, or create a disincentive for D-SNPs to
invest in care models and infrastructure. Another commenter advised
that CMS should recognize that integration is contingent on state
decision-making and incent the states to move state Medicaid policy
toward more integrated models. Conversely, other commenters supported
this alternative interpretation and encouraged CMS to reconsider its
rejection of it. According to one commenter, without a policy that
requires the parent organization of a D-SNP to contract with the state
Medicaid agency, a beneficiary in a non-aligned D-SNP has no option
other than enrolling in a Medicaid managed care plan operated by
another sponsor (or, if permitted, receiving fee-for-service Medicaid
services); where there is no alignment of Medicare and Medicaid
coverage, the opportunity for effective care coordination is reduced.
Commenters also noted the potential of such a policy to promote aligned
enrollment and coordinate the full spectrum of needs for this
population as well as the greater familiarity with Medicaid of
organizations that operate in both Medicare and Medicaid markets in
states, which is helpful in assisting beneficiaries.
Response: We appreciate the feedback on this alternative on which
we requested comment and acknowledge that without such a policy there
may be a missed opportunity to support the integration of Medicare and
Medicaid services in states that adopt managed care delivery systems
for their dual eligible population. We also recognize the concerns
raised by commenters relative to the potential for adverse impacts on
beneficiaries. We will take all of these comments into consideration
should we decide to address this issue in future rulemaking. However,
we are not moving forward with the alternative in this final rule.
Comment: We received significant comment on our proposed D-SNP,
HIDE

[[Page 15702]]

SNP, and FIDE SNP definitions. Several commenters expressed
appreciation for CMS' effort to create regulatory definitions for the
different types of D-SNPs that exist in the marketplace today. A
commenter supported our proposal under the HIDE SNP definition to
permit arrangements in which the MA organization offering the D-SNP or
its parent organization has a contract to offer a PIHP or PAHP in the
state's Medicaid program. Many commenters expressed appreciation for
the ability of D-SNPs to be defined as HIDE SNPs. One commenter noted
that the proposed modifications provide far greater clarity for states
and D-SNPs and offer the appropriate amount of detail to inform
agreements between MAOs and state Medicaid agencies. Another commenter
noted that the proposed D-SNP definition is a good first step but that
it alone is insufficient, as truly meaningful integration for dual
eligible individuals whose enrollment is not aligned requires a whole
host of additional requirements and activities in key areas, including,
but not limited to, integrated administrative, information technology,
communications, reporting, and financial systems; integrated assessment
and care coordination processes and data sharing; and integrated
transition activities.
Response: We appreciate the support of our proposal, which, as we
explained earlier in this preamble, reflects our desire to create a
framework in which we are able to distinguish among the types of D-SNPs
based on the way they integrate Medicaid services and, as applicable,
align enrollment across Medicare and Medicaid, while also accounting
for variation in how states cover these Medicaid services.
Comment: Several commenters supported our proposal to interpret the
meaning of the statutory language in section 1859(f)(3)(D) of the Act,
``arranging for benefits,'' as requiring a D-SNP to coordinate the
delivery of Medicare and Medicaid benefits and to relocate this
requirement within our proposed D-SNP definition. One commenter
commended CMS for the example of coordination included in the preamble
to the proposed rule that interpreted such activities to include
verifying dual eligible individuals' eligibility for LTSS or behavioral
health services, determining how the individual receives such services,
and making arrangements with the LTSS or behavioral health payer for
the provision of services. A few commenters supported CMS' example of
D-SNPs playing an active role in helping beneficiaries access Medicaid
services as necessary.
Response: We thank the commenters for their support of our proposed
interpretation and coordination examples.
Comment: One commenter opposed any requirement that D-SNPs
extensively coordinate Medicaid benefits, citing the lack of additional
compensation or clear expectations, and recommended that CMS instead
work with states to address barriers to accessing Medicaid benefits.
This commenter opposed any requirement that D-SNPs assist enrollees
with such activities as completing paperwork or securing financial,
medical, or other documentation needed to access Medicaid benefits or
any other benefits not covered by the plan (housing, food stamps,
utility assistance), instead recommending that plans undertake these
activities at their discretion.
Response: While we agree that reducing barriers to access in
Medicaid is important, we believe that for all enrollees who are
eligible for Medicaid services, the D-SNP must fulfill its statutory
responsibility to arrange for the provision of Medicaid benefits by
facilitating a beneficiary's meaningful access to such benefits. As we
discussed in the proposed rule, we believe it would be insufficient for
a D-SNP to limit its coordination activity simply to telling a
beneficiary to call or write their Medicaid managed care plan or state
agency without giving specific contact information, giving specific
coaching on the roles of the Medicaid program (that is, the state
agency or Medicaid managed care plan versus the D-SNP), and offering
additional support if needed. As discussed in section II.A.2.b.(1) of
this final rule, we believe that an important aspect of D-SNPs'
statutory responsibilities includes providing assistance to dual
eligible individuals with Medicaid-related coverage issues and
grievances. We also note that our proposed coordination requirement in
the definition of a D-SNP is specific to Medicaid benefits and did not
extend to some of the services and programs referenced by this
commenter.
Comment: One commenter expressed overall support for our inclusion
of a coordination requirement in the definition of a D-SNP, but noted
that states, unaffiliated Medicaid managed care organizations, and non-
contracted providers may present barriers to information-sharing that
is necessary to make such coordination work. A few commenters endorsed
the development of a system or process for collecting information about
D-SNP enrollee Medicaid coverage and enrollment (when enrollment is not
aligned) in order to meaningfully implement this provision. One of
these commenters recommended that CMS establish a process by which
states must provide individual-level data on the D-SNP's enrollees,
including the enrollee's Medicaid coverage and plan name (if
applicable) and specific contacts within each organization (names,
phone numbers, emails, leadership contact information), in order to
facilitate this coordination across Medicare and Medicaid.
Response: We appreciate the commenters' concern about access to
information about their enrollees' Medicaid coverage. Establishing a
standardized system or process such as the one suggested by these
commenters is an option for states and CMS to consider. However, as
discussed in section II.A.2.b.(1) of this final rule, there are other
ways in which plans can endeavor to obtain information or connect
enrollees with the appropriate resources to facilitate coordination of
their Medicare and Medicaid benefits.
Comment: Several commenters supported the proposed rule's approach
of broadly requiring D-SNPs to coordinate the delivery of Medicare and
Medicaid benefits without specifying particular types of coordination
activities in the regulatory definition of a D-SNP, citing the need for
flexibility to accommodate differences in plans and state policies. One
commenter appreciated the broad requirement as a way of ensuring that
D-SNPs have ownership in coordinating the points where the D-SNP's
services end and those provided under Medicaid begin and are not simply
acting as an additional layer in the process. However, more commenters
requested that CMS be more specific in identifying specific plan
activities that constitute coordination, including several commenters
who requested additional specificity within the regulation text. One
commenter suggested that, without additional specificity in the
definition about the types of activities that constitute coordination,
plans might misinterpret or misunderstand the requirements. Another
commenter anticipated that plans could face barriers in arranging
Medicaid benefits for enrollees, especially if such benefits are
managed by other health plans, and cited Tennessee's requirements that
D-SNPs use the TennCare Online System to coordinate benefits for
enrollees who are eligible for Medicaid.
A few commenters requested that CMS incorporate elements of person-
centered care as part of the D-SNP care coordination requirements. One
of these commenters stated that D-SNPs should

[[Page 15703]]

be held accountable for actively coordinating benefits and linking plan
members to services (including those services that are not provided by
the D-SNP). The other commenter encouraged CMS to emphasize that
coordination for D-SNPs with aligned members that require LTSS or
behavioral health services includes assessment and care planning
processes that are: (1) At a minimum, compliant with the person-
centered requirements of sections 1915(c), 1915(i), and 1915(k) of the
Act, which were added in two January 16, 2014 final rules (CMS-2249-F
and CMS-2296-F),\15\ and (2) incorporate the provision of needed LTSS
and/or behavioral health either directly or in close coordination with
the entity owned or controlled by the D-SNP's parent organization that
has contractual responsibility for LTSS and behavioral health benefits.
Another commenter stated that in order for coordination to be
effective, D-SNP personnel must have sufficient training related to the
suite of services available under Medicaid and through the D-SNP and a
thorough understanding of how to assist a beneficiary in navigating the
delivery system to access services. One commenter recommended that CMS
include in the D-SNP definition the following activities: Staffing
plans with care coordinators who meet specific criteria; providing
comprehensive information about Medicare, Medicaid, and plan benefits
through plan materials, customer service, and care coordinators;
ensuring that members have a primary care physician and that their
providers are actively communicating through models such as
interdisciplinary care teams; sharing information about claims, service
authorizations, and care plans with the state, providers,
beneficiaries, and beneficiaries' appointed representatives; and
providing assistance with filing grievances and appeals and
comprehensive explanations of the appeals process. Another commenter
suggested that further clarification would be helpful around the role
of the D-SNP related to transitions of care, the responsibilities of
the D-SNP regarding arrangements for follow up care, and coordination
with the discharging entity. Another commenter encouraged CMS to work
with plans and states to ensure that provisions related to improved
care transitions are effective and consequential for individuals with
dementia.
---------------------------------------------------------------------------

\15\ Medicaid Program; State Plan Home and Community-Based
Services, 5-Year Period for Waivers, Provider Payment Reassignment,
and Home and Community-Based Setting Requirements for Community
First Choice and Home and Community-Based Services (HCBS) Waivers
(79 FR 3029, January 16, 2014). Accessible at: https://www.govinfo.gov/content/pkg/FR-2014-01-16/pdf/2014-00487.pdf.
---------------------------------------------------------------------------

Response: We appreciate the comments about additional activities
CMS should consider to be essential for D-SNPs in coordinating their
members' Medicare and Medicaid benefits. We do not agree at this time
with the commenters who recommended including additional detail
regarding those coordination activities in our regulatory definition of
a D-SNP. Wide variation in the level of integration of Medicaid
benefits across D-SNPs, local market conditions, and state initiatives
to integrate care for dual eligible individuals leads us to believe
that it is not prudent to add specific coordination responsibilities
and requirements in this regulatory definition at this time. Further,
some of the specific recommendations raise issues related to compliance
with privacy rules protecting beneficiary information or other
regulations governing D-SNPs (such as mandatory disclosure
requirements), which are more appropriately addressed in other
regulations. Our goal in this final rule is to establish an explicit
requirement of coordination in regulation for the first time since D-
SNPs were established in 2006 and to implement a flexible approach to
coordination that allows plans to test approaches that best work for
them and in their specific state context. We are therefore finalizing a
coordination requirement in the definition of a D-SNP.
Comment: A number of commenters requested additional clarification
of the role of D-SNPs in coordinating Medicare and Medicaid benefits,
including in subregulatory guidance, guiding principles, and additional
examples, to inform states and their contracted D-SNPs as they
collaborate to identify specific plan activities that might differ by
program or type of service. One commenter specifically requested that
any list of coordination activities promulgated by CMS be considered a
set of minimum requirements. Another commenter suggested that CMS
provide a set of standardized approaches or acceptable frameworks that
would assist states and plans in developing aligned approaches to this
requirement, including best practices for data transfers and tips on
overcoming administrative hurdles. Another commenter urged CMS to
provide more clarity, citing concerns about burden on providers.
Response: We appreciate the commenters' request for clarification
and anticipate issuing subregulatory guidance to further clarify the
requirement that D-SNPs coordinate Medicare and Medicaid benefits for
the dual eligible individuals enrolled in their plans.
Comment: A commenter suggested that CMS provide ongoing support to
states in the implementation of our coordination requirements. Another
commenter suggested that CMS consider whether further guidance
regarding D-SNP coordination could serve as a means of persuading
states to standardize their approaches to the alignment of their
Medicaid programs with the MA program. This commenter suggested that
CMS could, for example, issue further guidance on how states can work
to establish viable health information exchanges as a means of
facilitating communication and data exchange between plans and state
Medicaid agencies, as such actions could qualify as ``coordinating the
delivery of'' these services.
Response: CMS supports states that have an interest in pursuing
integrated care models for dual eligible individuals, including through
the use of their contracts with MA organizations offering D-SNPs, and
provides technical assistance to states seeking to develop solutions
tailored to their local market conditions, beneficiary characteristics,
and policy environment. We are committed to continuing our work with
states based on their specific policy priorities following the
implementation of this final rule.
Comment: A few commenters stated that D-SNPs should be held
accountable for actively coordinating benefits and linking plan members
with services, both when those services are provided by the D-SNP or
its affiliate and when they are provided by an unaffiliated third
party. One of these commenters suggested that CMS look into the extent
to which D-SNPs without Medicaid contracts may primarily serve partial-
benefit dual eligible individuals \16\ for whom there is no need or
opportunity to coordinate Medicaid benefits.
---------------------------------------------------------------------------

\16\ Partial-benefit dual eligible programs are commonly
referred to collectively as the ``Medicare Savings Program'' (MSP).
The MSP includes 4 eligibility groups: Qualified Medicare
Beneficiary Program without other Medicaid (QMB Only) for whom
Medicaid pays their Medicare Part A premiums, if any, Medicare Part
B premiums, and to the extent consistent with the Medicaid State
plan, Medicare Part A and B deductibles, coinsurance and copays for
Medicare services provided by Medicare providers; Specified Low-
Income Medicare Beneficiary Program without other Medicaid (SLMB
Only) and Qualifying Individual (QI) Program for whom Medicaid pays
the Part B premiums; Qualified Disabled and Working Individual
(QDWI) Program for whom Medicaid pays the Part A premiums.

---------------------------------------------------------------------------

[[Page 15704]]

Response: As we stated in the preamble to the proposed rule, we
recognize that not all D-SNP membership will be eligible for the full
complement of Medicaid services, particularly those who are partial-
benefit dual eligible individuals whose Medicaid eligibility is limited
to payment of their Medicare premiums, and, if applicable, deductibles
and cost-sharing. Coordination approaches for partial-benefit dual
eligible individuals will, of necessity, be different than those for
members will full Medicaid benefits. However, for all enrollees who are
eligible for Medicaid services, the D-SNP must fulfill its statutory
responsibility to arrange for the provision of Medicaid benefits by
facilitating a beneficiary's meaningful access to such benefits,
regardless of their source or scope of Medicaid coverage. We discuss
the issue of D-SNPs assisting their members with Medicaid benefit
issues in more detail in section II.a.2.b.(1) of this final rule.
Comment: Several commenters emphasized the need for CMS to monitor
D-SNPs' efforts at coordination and gauge their effectiveness.
Response: We agree that CMS oversight and monitoring of D-SNPs'
coordination responsibilities are important. As we implement the
provisions of this final rule, we will identify ways in which we can
leverage current tools, including audits, model of care requirements,
and reporting requirements, to ensure that D-SNPs assist dual eligible
individuals in connecting with the Medicaid benefits to which they are
entitled.
Comment: A few commenters expressed concern about the construction
of the proposed D-SNP definition insofar that it could be misread or
misinterpreted to require all D-SNPs to provide LTSS and behavioral
health services.
Response: We did not intend our proposed definition to impose a new
obligation on D-SNPs to provide coverage of Medicaid services.
Therefore, we are finalizing the proposed definition of a D-SNP with
modifications to the text to clarify this point and otherwise make
grammatical and organizational changes to improve the regulation text.
Specifically, a D-SNP is a plan offered by an MA organization for dual
eligible individuals that, as provided in new paragraph (1),
coordinates the delivery of Medicare and Medicaid services for
individuals eligible for such Medicaid services; as provided in new
paragraph (2), may provide coverage of Medicaid services, including
LTSS and behavioral health services (for individuals eligible for such
services); as provided in new paragraph (3), has a contract with the
state Medicaid agency consistent with the requirements of Sec. 422.107
that meets the minimum requirements detailed in Sec. 422.107(c); and
(4) beginning January 1, 2021, satisfies one of the three criteria for
integration of Medicare and Medicaid benefits detailed in the proposed
rule (and now designated as paragraphs (4)(i) through (iii)). We intend
through these revisions to clarify that, regardless of whether a D-SNP
provides coverage of Medicaid services under a capitated or other
arrangement with the state Medicaid agency, it at minimum must
coordinate the enrollee's Medicare and Medicaid services.
As discussed in section II.A.2.a.(2) of this final rule, to better
align with our proposed definition of a D-SNP, we proposed a change to
Sec. 422.107(c)(1) to specify that the contract between a state
Medicaid agency and a D-SNP must document the MA organization's
responsibility to provide, as applicable, and coordinate the delivery
of Medicaid benefits, including LTSS and behavioral health services,
for individuals who are eligible for such services. In response to the
concerns raised by these commenters, we are finalizing Sec.
422.107(c)(1) with minor changes that express our intent more clearly
and parallel the revisions we are finalizing in the D-SNP definition
described earlier. Specifically, we are restructuring paragraph (c)(1)
to avoid any misinterpretation that D-SNPs must cover LTSS and
behavioral health services. We clarify in paragraph (c)(1)(i) that the
D-SNP must document its responsibility to coordinate the delivery of
Medicaid services for individuals who are eligible for such services,
and in paragraph (c)(1)(ii) that, to the extent a D-SNP provides
coverage of Medicaid benefits--including LTSS and behavioral health
services (for individuals eligible for such services)--it must also
document in the state Medicaid agency contract its responsibility to do
so. We believe this revision clarifies that, in some cases, the D-SNP
may cover (that is, provide directly or pay health care providers for
providing) Medicaid benefits under a capitated contract with the state
Medicaid agency; however in all cases it must coordinate the delivery
of Medicaid benefits.
Comment: A few commenters were concerned about the introduction of
a new term, HIDE SNP, which did not exist in regulations previously.
Two of these commenters noted that it is already difficult for
consumers and advocates to determine which plans are D-SNPs and what
type of D-SNP they are. They noted that clear, consistent regulatory
definitions can make important differences between the plan types and
beneficiary options more understandable.
Response: While we sympathize with commenters' reluctance to create
another regulatory definition, we believe that the definition of HIDE
SNP is meaningful, as it correlates directly with our interpretation of
the D-SNP integration standard that appears in section
1859(f)(8)(D)(i)(II) of the Act (D-SNPs that enter into a capitated
contract with the state Medicaid agency to provide LTSS or behavioral
health services, or both). We agree with the commenters that making
these terms understandable to stakeholders, especially beneficiaries,
is an important aim.
Comment: A commenter recommended that the proposed definition of
HIDE SNP be redrafted to allow for risk-sharing arrangements other than
capitation. This commenter noted that the state or D-SNP may wish to
contract initially on a shared savings/shared risk or performance-based
model as opposed to a full capitation model. Another commenter
recommended that CMS consider creating another regulatory standard of
integration other than a HIDE SNP that would describe D-SNPs that are
at risk for a set of Medicaid services other than LTSS or behavioral
health services, which can serve as stepping stones to further
alignment.
Response: We appreciate that there are varying levels of
integration, including, for example, arrangements in which a state
Medicaid agency may capitate payment for Medicaid cost-sharing or a
subset of services. However, the statute is clear that D-SNPs seeking
to meet the integration standard at section 1859(f)(8)(D)(i)(II) of the
Act must either be a FIDE SNP or enter into a capitated contract with
the state Medicaid agency for the provision of LTSS, behavioral health
services, or both. We proposed the definition of HIDE SNP to align with
this statutory standard of integration, and therefore we are not making
revisions to the HIDE SNP definition based on these specific
recommendations. As discussed in the proposed rule (83 FR 54994), a D-
SNP could satisfy the requirements of a HIDE SNP if its parent
organization offered a companion Medicaid product that covered only
LTSS, behavioral health services, or both, under a capitated contract.
We believe that this definition is appropriate for purposes of
addressing and aligning with the statutory integration standards and
for

[[Page 15705]]

establishing which D-SNPs are eligible, pursuant to Sec. Sec.
422.60(g)(2)(i) and 422.102(e), to receive passive enrollments or offer
supplemental benefits, respectively.
We may consider for future rulemaking the merits of having a more
detailed classification system that identifies variations of D-SNPs
other than FIDE SNPs and HIDE SNPs relative to the extent to which they
coordinate Medicare and Medicaid benefits. We note that technical
assistance resources are available through the Integrated Care Resource
Center that provide information about the varied approaches states have
taken to coordinate with D-SNPs operating in their states.
Comment: A commenter suggested that CMS consider a HIDE SNP as a
temporary model that could be utilized as part of a state's longer term
strategy toward integration of Medicaid benefits in which all HIDE SNPs
transition to a FIDE SNP model once full integration is achieved.
Response: We are supportive of states and plans that wish to pursue
a FIDE SNP model; however, as stated earlier in this preamble, section
1859(f)(8)(D)(i) of the Act recognizes a level of integration that does
not meet the requirements of a FIDE SNP with respect to the breadth of
services provided under a Medicaid capitated contract with the state
(that is, D-SNPs that cover LTSS, behavioral health services, or both,
under a capitated contract) as meeting one of the three required
integration standards. We therefore believe it is useful to codify a
term that encompasses this statutory standard.
Comment: A commenter requested that CMS clarify that enrollment in
a HIDE SNP be open to all dual eligible individuals, including those
not yet eligible for LTSS and/or behavioral health services, on the
grounds that their needs may change over the course a year such that
they attain eligibility for these services. According to the commenter,
a plan can play a role in helping the individual navigate their
options.
Response: The proposed HIDE SNP definition stated that the MA
organization offering the D-SNP, or the MA organization's parent
organization or another entity that is owned or controlled by its
parent organization, must have a capitated contract with the Medicaid
agency that includes coverage of LTSS, behavioral health services, or
both, consistent with state policy. The HIDE SNP definition, as
proposed and finalized in this rule, does not itself require that the
plan limit its MA enrollment to dual eligible individuals who qualify
for LTSS, behavioral health services, or both. However, it is important
to note that these plans are financially responsible under a capitated
contract for covering these services for individuals who are eligible
for them, and a state Medicaid agency may elect to impose enrollment
restrictions on the D-SNP consistent with its contracting authority in
Sec. 422.107.
Comment: A commenter observed that the proposed definition of HIDE
SNP appears to exclude a plan offered by an organization that
subcontracts on a capitated basis with an organization or county agency
to which the state Medicaid agency has ``delegated Medicaid financial
and administrative responsibility.'' According to the commenter, this
type of arrangement is common in California where counties use
different Medicaid managed care models and recommended that CMS amend
the HIDE SNP definition to encompass such an arrangement. The commenter
further noted that while the organization that does not have a direct,
capitated contract with the state, even though it is providing LTSS,
behavioral health services, or both, under the Medicaid program, it can
provide highly integrated benefits and should be considered a HIDE SNP.
Relatedly, this commenter recommended that the definition of aligned
enrollment be expanded to accommodate this arrangement, noting that
aligned enrollment could occur for D-SNP enrollees who receive their
Medicaid benefits from the D-SNP's parent organization via this
subcontract.
Response: We believe that the commenter is referring to situations
where the county or another entity has a contract with the state
Medicaid agency to furnish Medicaid benefits to eligible individuals on
a risk basis; we disagree that such a contract amounts to a delegation
of financial or administrative responsibility for the Medicaid program.
A county or entity with a managed care contract with the state Medicaid
agency may subsequently subcontract certain aspects of the managed care
contract to another entity under Sec. 438.230. In such situations
where that subcontractor also is a D-SNP, we recognize that there may
be a level of integration for enrollees that is greater than that of a
D-SNP that has no contract--directly or indirectly--with a state to
provide LTSS, behavioral health services, or both. However, we do not
believe that the subcontractor in that situation should be treated as a
HIDE SNP. Our proposed definition of a HIDE SNP at Sec. 422.2 requires
a contract between the state and the D-SNP, its parent organization, or
another subsidiary of its parent organization and is more consistent
with the statutory language at section 1859(f)(8)(D)(i)(II) of the Act,
which requires that a D-SNP enter into a capitated contract with a
state to provide LTSS, behavioral health services, or both. The
relationship between a D-SNP and its parent organization (or another
plan owned and operated by the same parent organization) is one where
we believe it is appropriate to attribute those other contract
arrangements to the D-SNP itself for purposes of evaluating integration
in the management, provision, and coordination of benefits for
enrollees. That statutory provision is the basis for our codification
of this definition. We therefore decline the commenter's
recommendations that the definitions of a HIDE SNP and aligned
enrollment be modified to accommodate this particular contracting
arrangement.
Comment: A commenter requested more information about the
eligibility for each type of D-SNP for passive enrollment, seamless
conversion, and the frailty adjuster. Several commenters inquired about
how CMS would designate each type of D-SNP.
Response: We intend to release guidance prior to the effective date
of these provisions that explains how D-SNPs will be designated as FIDE
SNPs and HIDE SNPs consistent with the terms of this final rule. As
noted later in this final rule, we are amending Sec. 422.60(g)(2)(i)
to clarify that HIDE SNPs are eligible to receive passive enrollments;
this is not a change in policy, per se, but a technical update to use
the newly defined term where we previously used different language.
Chapter 2 of the Medicare Managed Care Manual provides additional
information for MA organizations about passive and default
enrollment.\17\ Eligibility for the frailty adjustment is governed by
section 1853(a)(1)(B)(iv) of the Act and Sec. 422.308(c)(4), which
limit the payment adjustment to FIDE SNPs that have a similar average
level of frailty, as determined by the Secretary, as the PACE program;
the eligibility of plans for the frailty adjustment is not impacted by
this rulemaking.
---------------------------------------------------------------------------

\17\ Chapter 2 of the Medicare Managed Care Manual can be
accessed here: https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/index.html.
---------------------------------------------------------------------------

Comment: Commenters were generally supportive of our proposal to
account for differences in how states cover Medicaid services,
including states' decisions to carve out particular Medicaid services
and deliver them through a separate arrangement. However, a number of
these

[[Page 15706]]

commenters also urged us to clarify our use of the phrase ``consistent
with State policy,'' which appears in the proposed definitions of HIDE
SNP and FIDE SNP. In particular, they wanted to understand how this
phrase impacts D-SNPs that are seeking to be defined as a HIDE SNP or
FIDE SNP and how HIDE SNPs were different from FIDE SNPs in relation to
carve-outs. A commenter questioned whether a state's carve-out of LTSS
services from its Medicaid managed care program would that mean that no
D-SNP in that state can qualify as a FIDE SNP, since FIDE SNPs must
cover some element of LTSS. A commenter requested clarification about
the obligation of FIDE SNPs to provide comprehensive Medicaid services
and whether that same obligation applied to HIDE SNPs, while other
commenters requested clarification about whether a D-SNP would still be
considered a HIDE SNP if the state were to carve out behavioral health
services or offered a limited scope of behavioral health services for
dual eligible individuals, assuming all other HIDE SNP requirements
were met. Yet another commenter cited its experience using Medicaid
benefit carve-outs and the potential for the misalignment of
incentives, which may result in inappropriate utilization or gaps in
care.
Response: We proposed to interpret the phrase ``consistent with
State policy'' as allowing CMS to permit certain carve-outs where
consistent with or necessary to accommodate state policy, except for
where specifically prohibited (such as the minimum of 180 days of
coverage of nursing facility services during the plan year in the FIDE
SNP definition). For A FIDE SNP, a carve-out by the state of a minimal
scope of services is permissible so long as the applicable services, as
described in the FIDE SNP definition, are covered under a Medicaid
managed care organization contract under section 1903(m)(2) of the Act.
This means that if a state opted to carve out LTSS entirely from
capitation, in that state no D-SNP could qualify as a FIDE SNP.
Similarly for a HIDE SNP, a carve-out by the state of a minimal scope
of services is permissible so long as the applicable services, as
described in the HIDE SNP definition, are covered under a capitated
Medicaid contract with the D-SNP or the affiliated Medicaid managed
care plan. For example, if a state were to carve out certain targeted
case management services for full-benefit dual eligible individuals
receiving behavioral health services, a D-SNP could still satisfy the
FIDE SNP or HIDE SNP definition, provided that: (1) LTSS were covered
under the capitated contract; or (2) behavioral health services, other
than the carved-out case management, were covered under the capitated
contract.
Our intent is to apply the phrase ``consistent with State policy,''
to HIDE SNPs as we have done historically for D-SNPs seeking FIDE SNP
status. In the case of FIDE SNPs, our policy for determining whether a
D-SNP meets the FIDE SNP definition at 42 CFR 422.2 was first addressed
in the April 2, 2012, ``Announcement of Calendar Year (CY) 2013
Medicare Advantage Capitation Rates and Medicare Advantage and Part D
Payment Policies and Final Call Letter'' and later memorialized in
section 20.2.5 of Chapter 16b of the Medicare Managed Care Manual.\18\
Under this policy, CMS permits long-term care benefit carve-outs or
exclusions only if the plan can demonstrate that it--
---------------------------------------------------------------------------

\18\ See https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2020Part2.pdf and
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c16b.pdf.
---------------------------------------------------------------------------

Is At risk for substantially all of the services under the
capitated rate;
Is at risk for nursing facility services for at least six
months (180 days) of the plan year;
Does not disenroll an individual from the plan as a result
of exhausting the service covered under the capitated rate; and
Remains responsible for managing all benefits including
any carved-out service benefits, notwithstanding the method of payment
(for example, fee-for-service, separate capitated rate) received by the
plan (we note that we interpret ``managing all benefits'' to be
equivalent to coordinating the delivery of Medicare and Medicaid
services, consistent with changes made elsewhere in this final rule,
including in the definition of a D-SNP).
Also under this policy, FIDE SNPs are not required to cover
behavioral health services in cases where the state decides to carve
out or exclude behavioral health services from the capitated rate. We
believe that the phrase ``consistent with State policy'' in the FIDE
SNP and HIDE SNP definitions serves as an important acknowledgement of
variation in how states elect to cover Medicaid services under their
capitated contracts with D-SNPs and Medicaid managed care plans. As
such, among the states that have capitated contracts with D-SNPs or the
D-SNPs' parent organizations, CMS has the ability to determine that D-
SNPs operating in such states meet the FIDE SNP or HIDE SNP definition
notwithstanding this variation. However, in consideration of the
request for clarification, we are making a minor modification to the
HIDE SNP and FIDE SNP definitions in Sec. 422.2 to change the
placement of the phrase ``consistent with State policy,'' so that it
appears prior to the categories of services to which it applies, as
opposed to placement after them.
Comment: A commenter recommended that CMS clarify that HIDE SNPs
are not required to cover under a capitated contract both LTSS and
behavioral health services. Another commenter recommended that CMS
remove the requirement that the contract with the state Medicaid agency
include coverage of LTSS, behavioral health services, or both, and
consider instead the existence of a contract with the Medicaid agency
to cover an overlapping or potentially overlapping Medicaid population
as the D-SNP, on the basis that such a plan already understands the
Medicaid market in which it operates and is well situated to serve as a
platform as states move to advance integrated care models for dual
eligible individuals.
Response: HIDE SNPs are not required to cover both LTSS and
behavioral health services but must cover at least one of those
categories of services. We are finalizing the HIDE SNP definition at
Sec. 422.2 to require that a HIDE SNP cover LTSS, behavioral health
services, or both, consistent with state policy. While we recognize
that there is a variety of ways in which D-SNPs coordinate with
Medicaid agencies, including coverage of Medicare cost-sharing and
Medicaid services other than LTSS or behavioral health, we disagree
with the comment that HIDE SNP status should be met without coverage of
either LTSS or behavioral health services. Our intent in establishing a
definition for HIDE SNPs is to describe one of the two types of D-SNPs
that satisfies the integration requirement at section
1859(f)(8)(D)(i)(II) of the Act. Under this provision, the integration
requirement is satisfied if the D-SNP meets the requirements of a FIDE
SNP (other than the requirement that it has a similar level of frailty
as the PACE program) or enters into a capitated contract with the state
Medicaid agency to provide LTSS or behavioral health services, or both.
We note that we are electing to make a non-material change to how we
refer to the coverage of LTSS, behavioral health services, or both, in
our HIDE SNP definition. We are finalizing the regulation with the
phrase ``provides coverage'' instead of ``includes coverage.''

[[Page 15707]]

Comment: A commenter urged CMS to work with states that have carve-
outs to ensure that states are committed to coordinating carved-out
services with D-SNPs. This commenter believed that state carve-outs,
although conceptually a barrier to integration, are in some cases well-
established and provide quality services. Though longer term
integration is a goal, a hurried dismantling of those systems would be
unwise and could cause beneficiary harm.
Response: We agree that it is an essential element of any D-SNP to
coordinate the delivery of all Medicaid services, irrespective of how
they are covered by the state Medicaid agency. Therefore, as discussed
elsewhere in this final rule, we have made such coordination a
requirement in Sec. 422.2 for any plan that operates as a D-SNP.
Comment: A few commenters requested that CMS clarify the
differences between HIDE SNPs and FIDE SNPs, and raised questions about
any notable differences in types of contracting arrangements that are
permitted (or not) and categories of services that the plan must cover,
including the requirement that FIDE SNPs cover behavioral health
services.
Response: Conceptually, we proposed to distinguish D-SNPs based on
the degree to which they integrate Medicaid benefits at the plan level.
FIDE SNPs that limit enrollment to full-benefit dual eligible
individuals and require (or have) exclusively aligned enrollment across
Medicare and Medicaid constitute the most extensive level of
integration, with the greatest potential for holistic and person-
centered care coordination, integrated appeals and grievances,
comprehensive beneficiary communication materials, and quality
improvement. HIDE SNPs with exclusively aligned enrollment are plans
that share much of this potential but may integrate a narrower set of
Medicaid benefits than FIDE SNPs. FIDE SNPs and HIDE SNPs where aligned
enrollment is possible--but not required--under the state contract with
the D-SNP and the state's administration of its Medicaid managed care
program would constitute another form of integration, albeit to a
lesser degree. The table below highlights some of the key differences
between HIDE SNPs and FIDE SNPs. First, from a contracting perspective,
a FIDE SNP's Medicare and Medicaid benefits are covered under a single
legal entity that contracts (1) with CMS to operate as an MA plan; and
(2) with the state to operate as a Medicaid MCO. This latter
requirement means that the FIDE SNP has a contract under section
1903(m) of the Act to provide a comprehensive set of services. In the
case of a HIDE SNP, however, there is no stipulation that a single
legal entity must hold the Medicare and Medicaid contracts, only that
the parties to the capitated contract are the state Medicaid agency (or
state Medicaid agency's contractor) and one of the following: (1) The
MA organization itself; (2) the MA organization's parent organization;
or (3) another entity that is owned and controlled by the MA
organization's parent organization. Additionally, with respect to a
HIDE SNP, the entity or entities holding the MA contract and the
Medicaid contract may provide coverage of Medicaid services as a PIHP,
PAHP, or Medicaid MCO. Second, as noted in an earlier response to a
comment, the breadth of coverage provided by FIDE SNPs and HIDE SNPs is
different. For example, FIDE SNPs must provide at least 180 days of
nursing facility coverage; as reflected in the definitions of the terms
in Sec. 438.2, PIHPs and PAHPs cover less comprehensive sets of
services than MCOs and are distinguished from each other based on
whether inpatient or ambulatory services are covered.

Table 1--Attributes of FIDE SNPs and HIDE SNPs
----------------------------------------------------------------------------------------------------------------
FIDE SNP HIDE SNP
----------------------------------------------------------------------------------------------------------------
Must have a contract with the state Yes............................. No.
Medicaid agency that meets the
requirements of a managed care
organization as defined in section
1903(m) of the Social Security Act.
May provide coverage of Medicaid No.............................. Yes.
services via a PIHP or a PAHP.
Must provide coverage of applicable Yes............................. No. The state Medicaid contract may
Medicaid benefits through the same be with: (1) The MA organization
entity that contracts with CMS to offering the D-SNP; (2) the MA
operate as an MA plan. organization's parent organization;
or (3) another entity owned and
controlled by the MA organization's
parent organization.
Must have a capitated contract with the Yes............................. No, if it otherwise covers
state Medicaid agency to provide behavioral health services.
coverage of long-term services and
supports (LTSS), consistent with state
policy.
Must have a capitated contract with the No. Complete carve-out of No, if it otherwise covers LTSS.
state Medicaid agency to provide behavioral health coverage by
coverage of behavioral health services, the state Medicaid agency is
consistent with state policy. permitted.
Must have a capitated contract with the Yes............................. No.
state Medicaid agency to provide
coverage of a minimum of 180 days of
nursing facility services during the
plan year.
----------------------------------------------------------------------------------------------------------------

In consideration of these comments, we are electing to make one
additional change to our FIDE SNP definition to mirror language that
appears in the HIDE SNP definition. Specifically, in paragraph (2) of
the FIDE SNP definition, we are finalizing the regulation with the
phrase ``provides coverage'' instead of ``includes coverage,'' which
will make references to the provision of coverage consistent between
the HIDE SNP and FIDE SNP definition.
Comment: A commenter recommended that CMS replace in its definition
of FIDE SNP ``aligned'' care management processes with ``fully
integrated'' care management processes, with the expectation that
either a single person is responsible for coordination of the full
continuum of Medicare and Medicaid benefits, or the health plan uses an
integrated team approach, with clear lines of communication and

[[Page 15708]]

accountability, and with integrated care management data systems that
facilitate timely access to information needed to facilitate integrated
care management processes.
Response: While we support the approaches to care identified by
this commenter, we do not believe that such a change to the FIDE SNP
definition is necessary. Our use of the phrase ``aligned care
management processes'' in paragraph (3) of the FIDE SNP definition at
Sec. 422.2 is intended to encompass the variety of ways in which FIDE
SNPs seek to coordinate care for full-benefit dual eligible
individuals.
Comment: We received several comments concerning the requirement
that FIDE SNPs cover nursing facility services for at least 180 days
during the plan year and whether this signified a change in existing
FIDE SNP coverage policy or an expansion of the Medicare skilled
nursing facility benefit.
Response: As noted in a prior response to a comment, it has been
longstanding CMS policy for a FIDE SNP to be at risk for providing
coverage of at least 180 days of nursing facility services, and this
rulemaking codifies rather than revises or reinterprets this policy. If
a state were to carve out institutionally-based LTSS from its capitated
contract, it would not be possible for an MA plan to operate as a FIDE
SNP in that state, although it may be possible to qualify as a HIDE
SNP, assuming all applicable requirements were met. Similarly, if a
state were to carve out community-based LTSS from its contract because
the state opted to provide coverage of these services under a separate
arrangement, it would not be possible for such a plan to qualify as a
FIDE SNP because section 1853(a)(1)(B)(iv) of the Act establishes that
FIDE SNPs must cover long-term care under a capitated contract with the
state for Medicaid benefits. Community-based LTSS are long-term care
services and essential to the coverage model offered by a FIDE SNP.
Comment: A few commenters supported our proposed definition of
aligned enrollment and its applicability to particular types of plans.
MedPAC and another commenter agreed with our proposal to limit the
definition of aligned enrollment to Medicaid coverage provided by a
comprehensive Medicaid MCO instead of including plans that provide more
limited Medicaid services as PIHPs or PAHPs. A few commenters agreed
with our proposal to account for not only D-SNPs whose Medicaid
benefits are covered by the plan directly but also by a Medicaid MCO
operated by the same organization, its parent organization, or another
entity that is owned and controlled by its parent organization. One
commenter recommended that we explicitly incorporate in the definition
the concept from the statute that such plans have clinical and
financial responsibility for any individual enrolled in both programs
and expressed concern that a parent company could sponsor Medicaid
plans and D-SNP products that might be operated quite separately with
little or no coordination while still accepting ``clinical and
financial responsibility with respect to any individual enrollee.''
Response: We thank commenters for their support of how we defined
aligned enrollment. We disagree, however, with the commenter about the
necessity of including the phrase ``clinical and financial
responsibility for any individual enrolled in both programs'' in the
definition of aligned enrollment.
Under our proposed definition, we stated that aligned enrollment
refers to full-benefit dual eligible D-SNP enrollees whose Medicaid
benefits are covered by that D-SNP or by a Medicaid MCO that is the
same organization, its parent organization, or another entity that is
owned and controlled by its parent organization. When a full-benefit
dual eligible individual is enrolled in aligned plans, one entity (or
entities that share a parent organization) provides coverage of
Medicare benefits and Medicaid benefits such as LTSS, behavioral health
services, or both. By virtue of the provision of coverage under these
types of contractual relationships, the relevant entity intrinsically
has clinical and financial responsibility for the covered Medicare and
Medicaid services provided to enrollees. We believe that explicitly
using the phrase ``clinical and financial responsibility for benefits''
in the definition of aligned enrollment might imply otherwise and
suggest that a contractual obligation to cover benefits does not mean
financial and clinical responsibility for those benefits.
We are finalizing the proposed definition of the term ``aligned
enrollment'' with some modifications to clarify this relationship.
Rather than referring to the enrollee's Medicaid benefits as being
covered by the D-SNP or by a Medicaid MCO, the final regulation text
refers to the enrollee's Medicaid benefits as being covered by the D-
SNP under a Medicaid MCO contract between the state and: (1) The MA
organization offering the D-SNP; (2) the D-SNP's parent organization;
or (3) another entity that is owned and controlled by the D-SNP's
parent organization. We believe this regulation text change clarifies
the meaning and adequately addresses that financial and clinical
responsibility for the enrollees is held by the MA organization or its
parent organization.
Comment: One commenter, while supportive of how we intended to
incorporate exclusively aligned enrollment relative to unifying
Medicare and Medicaid grievance and appeal procedures, encouraged us to
consider developing additional incentives and tools for states and
plans to move toward increased alignment. This commenter expressed
interest in the creation of a combination of rewards, incentives, new
tools, and pathways to facilitate improvement in enrollment alignment,
which is not a pervasive practice among states.
Response: The commenter's point is well taken. We intend to
exercise the administrative authority we have under current law to
support states that wish to pursue this particular integrated care
strategy and will consider the necessity of future rulemaking
consistent with our programmatic authority. We will also continue to
make technical assistance resources available to states through the
Integrated Care Resource Center.
Comment: A commenter expressed concern that the definition of
exclusively aligned enrollment may limit state flexibility insofar that
it would be difficult for one-hundred percent of a D-SNP's membership
to be aligned. According to the commenter, a D-SNP that failed to meet
this threshold wouldn't be able to benefit from unified appeals and
grievance processes. This commenter would be opposed to a policy of
having to disenroll members anytime misalignment occurred. Another
commenter requested that CMS confirm that HIDE SNPs and exclusively
aligned HIDE SNPs are different types of plans.
Response: We clarify that through this rulemaking, the concept of
exclusively aligned enrollment is only relevant to how we define an
applicable integrated plan, which must unify its Medicare and Medicaid
grievance and appeals procedures consistent with rules described in
Sec. Sec. 422.629 through 422.634. Unifying grievance and appeals
procedures is most feasible when everyone in the plan is receiving
Medicare and Medicaid services from the same organization (or through a
companion product offered by the parent organization or through a
common ownership relationship with the parent organization). In the
absence of aligned enrollment, D-SNP enrollees may be enrolled in and
receiving coverage from two or more plans simultaneously, complicating

[[Page 15709]]

coordination of care and the beneficiary experience. For FIDE SNPs and
HIDE SNPs, this situation of receiving coverage from two or more plans
may be true for only some enrollees. Even if this lack of alignment
exists for some and not all of the D-SNP's enrollees, there would be at
least two (if not more) sets of grievance and appeals rules applying to
the D-SNP's members. State Medicaid agencies have the ability to take
other steps to integrate grievance and appeals procedures through their
contracts with D-SNPs. We welcome the opportunity to partner with
states in developing and implementing these strategies.
Comment: MedPAC advised that aligned enrollment should be a
requirement for D-SNPs that provide significant Medicaid services and
meet both the second and third integration standards at sections
1859(f)(8)(D)(i)(II) and (III) of the Act, respectively, where our
proposal only contemplated applying a requirement of exclusively
aligned enrollment to the third integration standard (where the parent
organization of the enrollee's D-SNP is also the parent organization of
the enrollee's Medicaid MCO). MedPAC further stated that the second
integration standard in the statute should apply to plans where states
have capitated Medicaid contracts directly with D-SNPs and the D-SNPs
provide Medicaid services, and the third standard should apply to
situations where states have capitated Medicaid contracts with another
legal entity (a Medicaid managed care plan) that is part of the same
parent organization as the D-SNP.
Response: We agree with MedPAC insofar that alignment of Medicare
and Medicaid coverage, which occurs when a full-benefit dual eligible
individual is receiving Medicare and all or substantially all Medicaid
services from one organization, constitutes the most extensive level of
integration. As we noted in the preamble of the proposed rule, this
arrangement offers the greatest potential for holistic and person-
centered care coordination, integrated appeals and grievances,
comprehensive beneficiary communication materials, and quality
improvement. However, we remain concerned about imposing such a
requirement at this time, as states that have contracts with Medicaid
MCOs and D-SNPs currently have the authority to require aligned
enrollment but for policy or other reasons, do not impose one. Finally,
we believe that the most salient differentiator between the second and
third integration standards at sections 1859(f)(8)(D)(i)(II) and (III)
of the Act is exclusively enrolled alignment, rather than whether the
state contract is with the D-SNP directly or a related entity. We are
therefore not adopting this recommendation.
Comment: A commenter recommended that CMS codify the third
integration requirement, which appears in section 1859(f)(8)(D)(i)(III)
of the Act, and stipulates that a D-SNP's parent organization assumes
clinical and financial responsibility for the provision of Medicare and
Medicaid benefits. While this commenter was supportive of our
interpretation that such clinical and financial responsibility was only
possible in FIDE SNPs and HIDE SNPs where there was exclusively aligned
enrollment, the commenter was concerned that our interpretation only
existed in preamble and not the regulation text itself.
Response: As noted by the commenter, in the proposed rule, we did
not explicitly cite or summarize the integration requirement at section
1859(f)(8)(D)(i)(III) of the Act in our definition of a D-SNP. Instead,
we interpreted the statutory language on assuming clinical and
financial responsibility for benefits to mean that an entity can only
truly hold ``clinical and financial responsibility'' for the provision
of Medicare and Medicaid benefits, as described at section
1859(f)(8)(D)(i)(III) of the Act, in the scenarios of exclusively
aligned enrollment. Therefore, the D-SNPs that meet this integration
standard would be FIDE SNPs and HIDE SNPs that have exclusively aligned
enrollment. As implemented in our definitions, section
1859(f)(8)(D)(i)(II) of the Act also establishes being a FIDE SNP or a
HIDE SNP as a means to satisfy the new, minimum integration
requirements for D-SNPs. We believe that our proposed definitions and
requirements are clearer without adding the statutory terminology from
section 1859(f)(8)(D)(i)(III) of the Act. As we interpreted the statute
and proposed the new rules, any plan that meets the requirement for
clinical and financial responsibility for the provision of Medicare and
Medicaid benefits would already meet the second integration requirement
because it would be a FIDE SNP or HIDE SNP. As discussed in section
II.A.2.b.(2) of this final rule, the combination of terms that we
proposed is relevant to how we define an applicable integrated plan
that must unify grievance and appeals procedures for Medicare and
Medicaid services. Therefore, we believe that adding the statutory
terminology would complicate the definitions and requirements relative
to any benefits.
After considering the comments we received, we are finalizing the
provisions related to D-SNP definitions as proposed with the following
modifications:
In the definition of aligned enrollment at Sec. 422.2, we
are finalizing the regulatory text with some modifications to clarify
our intended meaning regarding financial and clinical responsibility
for enrollees. The final regulation text refers to the enrollee's
Medicaid benefits as being covered by the D-SNP under a Medicaid MCO
contract between the state and: (1) The MA organization offering the D-
SNP; (2) the D-SNP's parent organization or (3) another entity that is
owned and controlled by the D-SNP's parent organization.
In the definition of a D-SNP at Sec. 422.2, we are
finalizing the substance of our proposed definition with modifications
that are primarily organizational. In the final regulation text, we are
inserting ``title'' prior to ``XIX of the Act,'' which was
inadvertently excluded in the proposed rule. We are also using a new
paragraph (1) to clarify that a D-SNP coordinates the delivery of
Medicare and Medicaid services for individuals eligible for such
Medicaid services, and a new paragraph (2) to clarify that a D-SNP may
provide coverage of Medicaid services, including LTSS and behavioral
health services. The requirement that a D-SNP have a contract with the
state Medicaid agency consistent with the requirements of Sec. 422.107
and that meets the minimum requirements detailed in Sec. 422.107(c) is
now contained in new paragraph (3), and the requirement that the D-SNP
satisfy, beginning January 1, 2021, one of the three criteria for
integration of Medicare and Medicaid benefits detailed in the proposed
rule is now contained in new paragraph (4), with the specific
integration requirements redesignated as paragraphs (4)(i) through
(iii)).
In paragraph (2) of the definition of a FIDE SNP at Sec.
422.2, we are finalizing the definition with a change in the placement
of the phrase ``consistent with State policy'' so that it modifies the
verb phrase ``provides coverage'' and appears prior to the categories
of services to which it applies. Also in paragraph (2), we are using
``provides'' in place of ``includes'' prior to the phrase ``coverage,
consistent with State policy.''
In the definition of a HIDE SNP at Sec. 422.2, we are
finalizing the proposal with non-substantive modifications. First, we
are changing the placement of the phrase ``consistent with State
policy'' so that it modifies the verb

[[Page 15710]]

phrase ``provides coverage'' and appears prior to the categories of
services to which it applies. Second, we are reorganizing the text to
use new paragraphs (1) and (2) to identify the options for the
capitated contract to provide Medicaid services. A HIDE SNP's capitated
contract to cover LTSS, behavioral services, or both, must be between:
(1) The MA organization and the Medicaid agency; or (2) the MA
organization's parent organization (or another entity that is owned and
controlled by its parent organization) and the Medicaid agency. Third,
we are using ``provides'' in place of ``includes'' prior to the phrase,
``consistent with State policy, of long-term services and supports,
behavioral health services, or both. . .''
(2) Dual Eligible Special Needs Plans and Contracts With States (Sec.
422.107)
We proposed changes in Sec. 422.107 to more clearly articulate the
requirements of the contract between the D-SNP and the state Medicaid
agency, while also incorporating the changes required by the Bipartisan
Budget Act of 2018. In summary, we proposed to make the following
specific changes:
Delete language in paragraph (b) that is extraneous and
duplicative of the proposed definition of a D-SNP in Sec. 422.2;
Make clarifying edits in paragraphs (c)(1) through (c)(3),
which govern the minimum requirements of the contract between the D-SNP
and the state Medicaid agency;
Redesignate paragraph (d) as paragraph (e), which relates
to compliance dates; and
Establish a revised paragraph (d) that describes the new
minimum contracting requirement under the Bipartisan Budget Act of 2018
that the newly designated paragraph (e)(2) would make effective January
1, 2021.
Section 50311(b) of the Bipartisan Budget Act of 2018 amended
section 1859(f) of the Act by creating a new paragraph (8)(D)(i)(I) to
require that the Secretary establish additional requirements for D-
SNPs' contracts with state Medicaid agencies. In the proposed rule
preamble, we discussed how this provision requires a D-SNP to have a
state Medicaid agency contract that includes additional coordination
requirements (subsection (f)(8)(D)(i)(I) of the Act); be a FIDE SNP or
HIDE SNP (subsection (f)(8)(D)(i)(II) of the Act); or have exclusively
aligned enrollment and have its parent organization accept full
clinical and financial responsibility for all Medicare and Medicaid
covered services (subsection (f)(8)(D)(i)(III) of the Act), depending
on the state's election.
We proposed to implement subsection (f)(8)(D)(i)(I) of the Act by
establishing at Sec. 422.107(d) that any D-SNP that is not a FIDE SNP
or HIDE SNP is subject to an additional contracting requirement. Under
this proposed new contract requirement, the D-SNP would be required to
notify the state Medicaid agency, or individuals or entities designated
by the state Medicaid agency, of hospital and skilled nursing facility
(SNF) admissions for at least one group of high-risk full-benefit dual
eligible individuals, as determined by the state Medicaid agency. We
clarified in the proposed rule that this proposal would also permit the
D-SNP to authorize another entity or entities (such as a D-SNP's
network providers) to notify the state Medicaid agency and/or
individuals or entities designated by the state Medicaid agency on its
behalf, with the understanding that the D-SNP ultimately would retain
responsibility for complying with this requirement. We direct readers
to the proposed rule, 83 FR 54996, for a more detailed explanation of
our intent and rationale for this approach.
As discussed in the proposed rule, we believe that our proposal to
establish a notification requirement for D-SNPs for high-risk
individuals' hospital and SNF admissions is consistent with the
criteria we used to evaluate various options for the minimum
contracting requirements. We considered whether a proposal would:
Meaningfully improve care coordination and care
transitions, thereby improving health outcomes for dual eligible
individuals;
Minimize burden on plans and states relative to the
improvements in care coordination and transitions;
Provide flexibility to state Medicaid agencies;
Enable CMS to assess compliance with minimal burden on
CMS, plans, and providers; and
Be consistent with the statutory amendments made by the
Bipartisan Budget Act of 2018.
We solicited comment on whether our proposal satisfied these
criteria to a greater extent than the more prescriptive or alternative
proposals we described in the proposed rule; \19\ whether our reasoning
for why our proposal was preferable to the more prescriptive or
alternative proposals was sound; whether there were other minimum
contacting requirements that we did not consider that were superior to
our proposal; and whether our proposal provided sufficient incentives
for plans and states to pursue greater levels of integration.
Specifically, we considered and sought comment on the following
alternatives:
---------------------------------------------------------------------------

\19\ We direct readers to the proposed rule, 83 FR 54997-98, for
a more detailed discussion of these alternatives.
---------------------------------------------------------------------------

Proposing that notice requirements apply for all full-
benefit dual eligible individuals' hospital and SNF admissions.
Proposing a minimum size for the state-selected high-risk
population.
Requiring a notification for every emergency department
visit, as mentioned in section 1859(f)(8)(D)(i)(I) of the Act.
Proposing that the notification occur not later than 48
hours after the D-SNP learns of the admission or discharge.
Requiring each D-SNP to take affirmative steps to schedule
its individual health risk assessments at the same time as similar
outreach is conducted by the Medicaid managed care plan, to use a
combined or aligned assessment instrument, or take other steps that
would minimize the burden on enrollees or providers. As we noted in the
proposed rule, we continue to hear of scenarios where a D-SNP enrollee
is assessed separately by the D-SNP and then again by their Medicaid
MCO, even though there may be a high degree of overlap in what each
organization is assessing and ultimately what each organization is
requesting of the enrollee. We solicited comment on how pervasive this
issue is and the extent of overlap in the assessment instruments and
degree of burden on providers and beneficiaries, including a specific
request for feedback on the extent to which the requirements that we
proposed do not accomplish enough or should be modified to address this
issue.
Requiring D-SNPs to identify any enrollees who are in need
of LTSS and behavioral health services and transmitting such
information to the state Medicaid agency.
Requiring D-SNPs to train plan staff and their network
providers on the availability of LTSS and behavioral health services
covered by Medicaid.
Requiring D-SNPs to solicit state input on the plan's
model of care (which is currently required and submitted to CMS
pursuant to Sec. 422.101(f)), health risk assessment instrument, and
beneficiary communication materials. We sought comment regarding state
burden and on compelling reasons why additional contracting
requirements in this area may be necessary.
The merits of requiring D-SNPs to share data with state
Medicaid agencies or entities designated by state Medicaid

[[Page 15711]]

agencies that would benefit the coordination of Medicare and Medicaid
items and services, as described in section 1859(f)(8)(D)(i)(I) of the
Act as an example for implementing that provision. We solicited comment
on whether there should be additional regulatory requirements around
data sharing.
We requested feedback on our notification proposal at Sec.
422.107(d), including the ways that state Medicaid agencies and plans
would fulfill this requirement, and the additional contracting
requirements we considered in the proposed rule preamble.
In addition to the new requirement for contracts between the state
and MA organization at proposed Sec. 422.107(d) for D-SNPs that are
not FIDE SNPs or HIDE SNPs, we proposed to include additional
specifications in the regulations governing D-SNP contracts with state
Medicaid agencies at Sec. 422.107 by amending paragraph (b) and
several provisions in paragraph (c). As stated in the preamble to the
proposed rule, we do not believe that these specifications materially
alter these agreements; however, we proposed them in response to
questions raised since the state Medicaid agency contracting
requirements were promulgated in the September 2008 interim final rule
(73 FR 54226). We also believed that these changes aligned with the
integration requirements for D-SNPs in the Bipartisan Budget Act of
2018.
We proposed modifying the general rule for contracts with D-SNPs at
Sec. 422.107(b) to strike ``The MA organization retains responsibility
under the contract for providing benefits, or arranging for benefits to
be provided, for individuals entitled to receive medical assistance
under Title XIX. Such benefits may include long-term care services
consistent with State policy, . . .'' As discussed in the proposed
rule, we believed this proposed change would be consistent with the
coordination requirements in our proposed definition at Sec. 422.2 of
``D-SNP.''
We proposed to revise the contracting requirement at Sec.
422.107(c)(1), which currently requires the contract to document the MA
organization's responsibility, including financial obligations, to
provide or arrange for Medicaid benefits, to specify instead that the
contract must document the MA organization's responsibility to provide,
as applicable, and coordinate the delivery of Medicaid benefits,
including LTSS and behavioral health services, for individuals who are
eligible for such services. We solicited comment on whether our
proposed amendments to this section fully communicated what we intend
to require of D-SNPs or whether there were additional revisions we
ought to consider to express our intent more clearly for D-SNPs, state
Medicaid agencies, and other stakeholders.
In Sec. 422.107(c)(2), we proposed to revise the current
requirement that the contract between the D-SNP and the state Medicaid
agency document the categories of dual eligible individuals who are
eligible to enroll in the D-SNP. We proposed to revise this requirement
to specify not only the categories of eligibility but also any
additional criteria of eligibility to account for such conditions of
eligibility under Medicaid as nursing home level of care and age. We
clarified that these criteria could also include a requirement for D-
SNP enrollees to enroll in a companion Medicaid plan to receive their
Medicaid services.
Finally, at Sec. 422.107(c)(3), we proposed that the contract
between the D-SNP and the state Medicaid agency document the Medicaid
services the D-SNP is responsible for covering in accordance with a
capitated contract with the D-SNP directly or through a risk contract,
defined at Sec. 438.2, with the companion Medicaid managed care
organization operated by the D-SNP's parent organization. As discussed
in the proposed rule, we believe this proposed change would reduce
burden on D-SNPs and would enable us to identify the particular
Medicaid services that are covered under a capitated contract for FIDE
SNPs and HIDE SNPs but would not limit or contravene other requirements
for D-SNPs to approach their obligations to coordinate the delivery of
all Medicare and Medicaid benefits. We sought comment on whether the
regulatory change fully communicates what we wish to require.
We received the following comments on these proposed definitions:
Comment: We received a number of comments in support of our
proposal to establish a notification requirement for any D-SNP that is
not a FIDE SNP or HIDE SNP. One commenter believed the proposed
requirement is consistent with the intent and language of the
Bipartisan Budget Act of 2018. Several commenters supported the
flexibility to allow state Medicaid agencies to build on notification
processes already in place. A commenter noted that minimum contract
requirements are more practical to implement than more prescriptive
requirements due to variation in state capabilities and current data-
sharing methods. Another commenter appreciated the flexibility states
have to implement the requirement based on their needs and readiness.
Another commenter believed that the notification requirement will
facilitate care transitions for dual eligible individuals in instances
where they are not enrolled in an aligned D-SNP and provides a
framework upon which states can advance Medicare and Medicaid benefit
integration in the future.
Response: We thank commenters for their support of our proposed
notification requirement. We agree that the requirement is consistent
with the statutory amendments made by the Bipartisan Budget Act of
2018. We intend for this notification requirement to be a catalyst for
increasing care coordination during transitions of care, while
minimizing plan and state burden and preserving state flexibility to
develop solutions that build upon current integration efforts.
Comment: Several commenters supported our proposed notification
requirement but believed that it represents a transitional step and
that our integration efforts should be scaled up over time, with one
commenter requesting that CMS establish timelines and benchmarks for
states and plans. One commenter believed that the new statutory
amendments to the Act made by the Bipartisan Budget Act of 2018 not
only permit, but require, the notification requirement to be scaled up
over time. A few commenters recommended that the notification
requirement be broadened to include more enrollees.
Response: As we discussed in the proposed rule, our intent in
establishing this notification requirement is for states and D-SNPs to
begin on the path toward greater integration on a smaller scale. Not
every state is similarly positioned to move towards greater
integration. We note that, as processes and infrastructure mature, a
state Medicaid agency may choose through its contracts with D-SNPs to
scale up this notification to include additional subpopulations of
full-benefit dual eligible individuals. As we gain experience with
implementing the integration requirements in this final rule, we will
evaluate whether further rulemaking is necessary to build on the
notification requirement.
Comment: Some commenters expressed concern that CMS's proposed
notification requirement will not meet the goal of promoting greater
integration of Medicare and Medicaid benefits, creates unnecessary
burden, or may not be the most appropriate requirement in all states.
MedPAC noted that states are currently able to require D-SNPs to
provide this information through their state Medicaid agency contracts,
but

[[Page 15712]]

since few states do, states were unlikely to use this information to
improve care coordination. Several commenters believed that many states
may lack the capability to implement the contracting requirement and
use the data in a meaningful way. Several commenters expressed concern
that the requirement was too burdensome for states and would discourage
states from pursuing or continuing to contract with D-SNPs. A few
commenters noted that notifications of hospital or SNF admissions may
not be the most useful or best way to incentivize coordinated
transitions of care in every state and emphasized that states are in
the best position to determine what requirements best fit their
delivery system. One commenter noted that limiting the notification
requirement to only one group of high-risk full-benefit dual eligible
individuals would not meaningfully advance coordination efforts.
Another commenter believed that the proposed requirement does not
ensure both the state and D-SNP will be engaged in discharge planning
in a way that ensures timely access to the most appropriate and cost
effective benefits. One commenter expressed a belief that this
requirement puts the state in the middle of communication between the
D-SNP and enrollee's care team. Another commenter questioned whether
states would utilize the information provided in the notifications.
Several commenters also questioned what would happen to D-SNPs if a
state was not interested in participating in the notification
requirement.
Response: These commenters raise important points about our
proposed notification requirement. However, we believe the requirement
strikes an appropriate balance among incentivizing further integration
for states and D-SNPs, limiting the administrative burdens for states
and MA organizations, and ensuring flexibility in implementation to fit
the needs of each state's policy environment. In addition to the
notification requirement, we note that--as discussed in sections
II.A.2.a.(1) and II.A.2.b.(1) of this final rule--we are also
establishing through this rulemaking an explicit requirement at Sec.
422.2 that D-SNPs coordinate dual eligible individuals' Medicare and
Medicaid benefits, as well as a requirement that D-SNPs provide
assistance with Medicaid appeals and grievances at Sec. 422.562(a)(5).
In implementing the statute by establishing the notification
requirement, we incentivize not only D-SNPs, but also the states with
which they must contract, to make incremental progress in coordinating
care for dual eligible individuals. By design, the notification
requirement gives the state Medicaid agency broad latitude to establish
notification procedures and protocols that are within the state's
capacity and consistent with the state's needs and integration goals.
We believe this requirement is scalable for D-SNPs and states where no
coordination activity is currently taking place. We also point to the
flexibility within the notification requirement for the state to
designate another individual or entity to receive the notification,
therefore allowing for the timeliest action following a care transition
or other significant event.
Comment: Several commenters supported the flexibility in the
proposed notification requirement for the state to designate other
individuals or entities to receive notification of an admission. These
commenters believed that collection of this information at the state
level may not be the most appropriate or useful approach. One commenter
noted that Tennessee's approach, which requires D-SNPs to notify a
Medicaid provider of hospitalizations and emergency department visits,
better achieves the goal of improved coordination of services than a
notification to the state. Another commenter requested that CMS modify
the notification proposal by requiring that the beneficiary's unaligned
Medicaid MCO also be notified of any admissions for beneficiaries that
receive LTSS or behavioral health services.
Response: We appreciate the commenters' support for the flexibility
afforded to states to designate other individuals or entities to
receive notification of an admission in our proposal. We agree that in
some markets, providers and other entities, such as a Medicaid MCO, may
be better able to use admissions information to timely coordinate care
for a beneficiary. We do not agree that CMS should finalize the
regulation to require D-SNPs to notify MCOs specifically of inpatient
admissions, however, but note that such delegation is already
permissible under Sec. 422.107(d). We defer to states to establish
when and to whom the notification is appropriate to best achieve
integration and improve outcomes for dual eligible individuals, based
on how the state operates its Medicaid program.
Comment: Several commenters expressed concern that our proposed
language allowing a D-SNP to authorize another entity or entities, such
as the D-SNP's network providers, to notify the state Medicaid agency
of inpatient admissions would create significant burden for providers.
However, one commenter also acknowledged that notifications would be
timelier if originated by providers. One commenter recommended removing
this language from the regulatory text, while a few other commenters
recommended that CMS provide guidance and provider education about the
requirement. Another commenter noted that states and D-SNPs are
dependent on prompt and complete claims submissions from hospitals and
SNFs to achieve better care coordination and emphasized the importance
of provider education about these requirements to ensure the flow of
this information.
Response: In our proposed notification requirement, we provided
flexibility to allow for transmission of information about hospital and
SNF admissions in multiple ways because we believe the most efficient
and effective processes may vary by state and evolve over time. In some
cases, this might include reporting by providers and providing
information to specific providers to aid in care coordination. However,
our proposed requirement places the ultimate responsibility on D-SNPs
and does not directly require actions by providers. When developing
notification processes to meet our regulatory requirements, we expect
that states and D-SNPs will consider any potential impacts on
providers.
Comment: Several commenters requested that CMS provide states with
technical assistance and disseminate best practices related to the
notification requirement both to facilitate the contracting process and
to ensure that a sufficient degree of coordination is achieved to
promote successful transitions of care. These commenters' requests
particularly focused on the need to develop data exchange technology,
systems, and processes to achieve successful transitions of care. One
commenter recommended CMS provide states with parameters for
implementing the state contracting requirements to mitigate operational
burden on D-SNPs while supporting implementation. Another commenter
recommended CMS seek assistance from a group of plan and state
stakeholders in developing this guidance and best practice models.
Response: We agree with these commenters that support for states
will improve the implementation of the requirements of this final rule.
As stated earlier in this final rule, the Medicare-Medicaid
Coordination Office provides technical assistance to states on
integration issues, including through the Integrated Care Resource
Center (see

[[Page 15713]]

https://www.integratedcareresourcecenter.com/). We are committed to
continuing our work with states to gather and disseminate best practice
information and to engage stakeholders to ensure a successful
implementation.
Comment: Several commenters requested that CMS establish clear
guidelines and standardized formats for the proposed notification
requirement, including methods, content, and timeframes for
notification. One commenter requested clarification with respect to how
high-risk populations should be defined. Another commenter recommended
requiring that states include functional ability in their definitions
of high-risk populations. A few commenters expressed concern that
variation in how this requirement is implemented across states will be
costly and time consuming, leading to potential problems in
implementing the requirement effectively. Some commenters expressed
interest in uniform requirements in order to reduce administrative
burden for plans that operate in multiple states. One commenter noted
that standardization of data exchange will contribute to the value of
the data for benchmarking and quality improvement activities.
Response: As discussed earlier in this preamble, we intend that the
proposed notification requirement provide states with discretion to
develop solutions consistent with their particular policy and
operational environments. We believe that a more prescriptive
notification requirement would ultimately be counterproductive for both
states and D-SNPs by limiting the development of solutions appropriate
to each market. Regardless of the approach a state chooses to take
under this final rule, our aim is to have actionable information that
enables providers and payers to facilitate seamless care transitions
for high-risk populations, that is, those full-benefit dual eligible
individuals who are most likely to benefit from effective interventions
(such as through the provision of LTSS and behavioral health services)
that enable them to live independently in the setting of their choice
and in a way that values their own needs and preferences. As we gain
more experience with the implementation of the notification requirement
in this final rule, we will share best practices and continue to
provide technical assistance and guidance to states and D-SNPs.
Comment: Several commenters requested that CMS do more to establish
a data-sharing system to facilitate the proposed notification
requirement, citing limited ability for some states to implement data
sharing mechanisms. Some commenters noted that a unified system to
share data should be used by states, D-SNPs, providers, and
beneficiaries. One commenter expressed support for the proposed
notification requirement serving as a starting point for a robust two-
way health information exchange system between D-SNPs and states to
share data on dual eligible individuals' utilization of Medicare and
Medicaid services. Another commenter recommended that CMS encourage
states to build on current data collection and sharing efforts, such as
health information exchanges (HIEs). Some commenters recommended
specific data exchange solutions, such as building on the Blue Button
2.0 Framework or modifying the Transformed Medicaid Statistical
Information System (T-MSIS).
Response: We believe it is most appropriate at this time to defer
to state Medicaid agencies on the manner in which notification occurs
and how data be exchanged. For example, in markets where there is
existing infrastructure to leverage, such as a state HIE, a state may
elect an approach that requires data sharing across a common platform
using industry standards, including those adopted by the Office of the
National Coordinator for Health IT in accordance with 45 CFR part 170,
subpart B. Regardless of process, we expect that notifications occur
timely in order to ensure prompt care coordination and effective care
transitions. To that end, we encourage states and D-SNPs to use the
most efficient notification mechanisms available, which may include the
state's HIE. However, we appreciate that not every state is similarly
positioned, and, therefore, if a state elected to implement this
requirement on a smaller scale, targeting a small subset of high-risk
beneficiaries, a solution that does not initially require automation
may be more appropriate and pragmatic. We reiterate that the
notification requirement we are finalizing in this rule is a first step
towards improved data exchange and integration. As health information
technology advances and industry standards for data exchange are
established, it may be feasible to establish or leverage a standardized
data-sharing system.
Comment: One commenter requested direction on how to implement the
proposed notification requirement in states like Washington where high-
risk dual eligible individuals are enrolled in a health home under
demonstration authority.
Response: As noted previously, our final requirement at Sec.
422.107(d) provides broad latitude to each state to determine the
subset of high-risk D-SNP enrollees subject to the notification
requirement. The regulation, as proposed and finalized, requires that
the enrollees for which the notification must be made must be at least
one group of full-benefit dual eligible and high-risk. The state is not
required to specify all high-risk dual eligible individuals for this
group so long as the identification of the group is consistent with the
regulation's requirements.
Comment: Several commenters questioned the impact the proposed
notification requirement will have on notification systems and the
robust reporting requirements already in place in several states. One
commenter noted that the proposed requirement would duplicate the
software program currently used by Washington in which hospitals enter
admissions and emergency department visit information for other
providers and case managers to view. Another commenter expressed
concern that the language requiring a D-SNP to notify or authorize
another entity to notify a state agency may not accommodate the current
Oregon Health Information Technology System, which creates a
notification of admission without the D-SNP's action. This commenter
recommended changing our proposed regulatory language to ensure this
type of notification system meets our notification requirement such
that D-SNPs would not be required to repeat a duplicate notification.
Response: We appreciate that states have different and evolving
infrastructure and policies, including mandatory data sharing
requirements. The notification requirement we are finalizing in this
rule is not intended to impact such existing requirements, and states
may continue to require additional notifications or other data sharing
consistent with their state Medicaid agency contracts. We thank the
commenters that raised specific operational scenarios where HIEs or
other notification systems are currently in place and could be
leveraged for purposes of satisfying our notification requirement. In
this final rule, we are modifying the verbs used to describe the D-
SNP's obligations in Sec. 422.107(d) to clarify those
responsibilities; as finalized, the D-SNP notifies or arranges for
another entity to notify (instead of ``will notify or authorize another
entity'' as proposed) the state Medicaid agency of hospital and SNF
admissions for at least one group of high-risk full-benefit dual
eligible individuals, as identified by the state Medicaid agency. We
believe the phrase ``arrange for'' provides more flexibility to
encompass arrangements such as those described by

[[Page 15714]]

the commenters. Thus, for example, a D-SNP could meet the notification
requirement by arranging for another entity--for example, a hospital--
to notify the state Medicaid agency or its designee when the various
parties participate in an HIE or other notification system.
Comment: Several commenters raised concerns about D-SNPs' ability
to fully comply with our proposed revision to Sec. 422.107(c)(1),
which codifies a requirement for D-SNPs to document their
responsibility to coordinate the delivery of Medicaid benefits for
their enrollees, as well as our proposed notification requirement at
422.107(d), citing potential barriers imposed by the Health Insurance
Portability and Accountability Act of 1996 and 42 CFR part 2, with
respect to sharing information that would allow D-SNPs to effectively
coordinate and share information about behavioral health services. One
commenter cited 42 CFR part 2 as preventing covered entities from
effectively coordinating behavioral health services when the need for
such services involves substance abuse treatment and the D-SNP cannot
obtain member consent, and urged CMS to consider ways to address this
issue and allow for coordinating and sharing of data without the need
for written consent. Another commenter suggested that CMS work with the
Office for Civil Rights and the Substance Abuse and Mental Health
Services Administration on this issue.
Response: These commenters have raised important issues with
respect to care coordination for individuals with substance use
disorder. This final rule does not change or eliminate current
requirements for D-SNPs to comply with HIPAA and 42 CFR part 2. We
clarify that the requirements finalized in this rule, including the
requirement codified at Sec. 422.2 that a D-SNP coordinate Medicare
and Medicaid benefits and the requirement at Sec. 422.107(d) requiring
notification of high-risk enrollee inpatient and SNF admissions, must
be implemented in a way that complies with all applicable laws. As a
result, we acknowledge there are limitations to D-SNPs' ability to
notify states of certain inpatient admissions for high-risk enrollees
with substance use disorder, as well as to their ability to coordinate
these individuals' care, absent member consent for the disclosure of
such information. When establishing the notification requirement in the
state Medicaid agency contract, we encourage states to collaborate with
D-SNPs to identify and address concerns regarding compliance with other
statutes and regulations, including HIPAA and 42 CFR part 2.
Comment: Some commenters requested additional requirements for
state Medicaid agency contracts between states and D-SNPs. One
commenter stated that the proposed contracting requirements at Sec.
422.107 would better meet CMS's stated goals if they were more
prescriptive. Several commenters recommended additional contracting
requirements to those in the proposed rule, while one commenter
requested that CMS refrain from adding more contract requirements until
after the implementation of the notification requirement finalized in
this rulemaking. Some commenters recommended that CMS require states
and D-SNPs to develop a process for coordinating Medicaid-funded
services, such as LTSS and behavioral health services. One commenter
recommended requiring D-SNPs to annually submit a plan for coordinating
Medicaid LTSS and behavioral health services for approval by the state.
A few commenters suggested requiring improved information sharing
regarding Medicaid provider participation and enrollees' Medicaid and
Medicare eligibility. One commenter noted that additional contracting
requirements may ease administrative burdens and promote further
integration and recommended that CMS clearly define minimum
coordination requirements and establish uniform language and
definitions.
Response: We appreciate the suggestions for modifications or
additions to the state Medicaid agency contract requirements for D-SNPs
currently codified at Sec. 422.107. We are not finalizing any
additional substantive changes to Sec. 422.107 in this final rule
beyond those discussed in our proposed rule. However, we will continue
to evaluate D-SNPs' progress toward achieving a minimum level of
integration as intended under the Bipartisan Budget Act of 2018 to
determine whether additional contracting requirements might be
necessary in the future. As discussed in various places in this final
rule, states retain the ability to add more stringent contracting
requirements in their state Medicaid agency contracts with D-SNPs in
order to best achieve their specific policy goals and meet the needs of
their population of dual eligible individuals.
Comments: Several commenters recommended that CMS consider new
incentives that would enhance integration, such as an increase to the
Federal Medical Assistance Percentage (FMAP) rate for activities
related to Medicare-Medicaid integration, including for investments in
state data-sharing systems and infrastructure. One commenter noted that
requiring or incentivizing states to assist D-SNPs in the development
of such administrative processes to assist with integration efforts
would prevent states from shifting this responsibility to D-SNPs.
Response: We agree that state investments in additional data-
sharing or other administrative processes may facilitate D-SNP efforts
to implement the notification requirement, but also more broadly to
better coordinate Medicare and Medicaid coverage. As discussed in the
Collection of Information section of this final rule, we estimate that
half of the cost of developing infrastructure and processes to
implement the proposed notification requirement would be offset by
federal financial participation for Medicaid administrative activities.
However, increases to FMAP rates are beyond the scope of this
rulemaking.
Comment: A few commenters supported the alternative we noted for
consideration that would apply the notification requirement to all
full-benefit dual eligible individuals enrolled in the D-SNP, and not
just a subgroup of high-risk individuals. These commenters cited
improved access to Medicaid benefits that promote care in the least
restrictive environment as the reason to support the broader
requirement. Another commenter requested that we establish a minimum
size for the state-selected high-risk population, another alternative
CMS noted for consideration in the proposed rule. This commenter noted
that factors such as minimum population size impact the feasibility of
implementation of this provision and would mitigate operational burden
for health plans.
Response: We appreciate the commenters' requests for a broader
notification requirement, but we believe that limiting the notification
requirement to high-risk individuals in this final rule is preferable.
Research suggests that targeting high-risk individuals is critically
important to cost-effective interventions.\20\ In addition, all states
have some care management infrastructure for high-risk individuals in
their Medicaid programs, such as through Medicaid 1915(c) HCBS
waivers.\21\ The notification provision at

[[Page 15715]]

Sec. 422.107(d) gives state Medicaid agencies the discretion to decide
which group of beneficiaries is at high risk and how large or small the
group(s) may be. Providing states with such flexibility to define their
population of high-risk individuals will allow them to tailor the D-SNP
notification requirement to align with existing infrastructure for
coordinating and managing care for high-risk individuals. Such
targeting will not only limit notifications to those which are most
meaningful and actionable for the state, but will also reduce
administrative burden and implementation costs.
---------------------------------------------------------------------------

\20\ Brown, R.S., Peikes, D., Peterson, G., Schore, J. &
Razafindrakoto, C.M., (2012). ``Six Features of Medicare Coordinated
Care Demonstration Programs That Cut Hospital Admissions of High-
risk Patients.'' Health Affairs, 31(6).
\21\ See: https://www.medicaid.gov/medicaid/ltss/health-homes/index.html; https://www.medicaid.gov/medicaid/section-1115-demo/demonstration-and-waiver-list/index.html; and Care Coordination in
Managed Long-Term Services and Supports (2015, July), prepared for
AARP by Truven Health Analytics. Retrieved from: https://www.aarp.org/content/dam/aarp/ppi/2015/care-coordination-in-managed-long-term-services-and-supports-report.pdf.
---------------------------------------------------------------------------

Comment: One commenter encouraged CMS to require D-SNPs to provide
notification of emergency department visits for unaligned D-SNP
enrollees receiving LTSS and behavioral health services from fee-for-
service Medicaid or an MCO.
Response: We acknowledge the potential benefits of a real-time
notification of emergency department visits, but we decline to finalize
a broader requirement including notification of emergency department
visits at this time. We believe the greatest opportunity to target
interventions and improve outcomes is after a hospital or SNF admission
where there is more time to initiate discharge planning. However, as
noted in the proposed rule, so long as the requirements of Sec.
422.107(d) are met, a state Medicaid agency could choose to require a
notification for full-benefit dual eligible individuals enrolled in a
D-SNP who are high utilizers of emergency departments, where there may
be opportunities to address barriers to accessing primary care and
unmet health care needs.
Comment: One commenter recommended that CMS improve person-centered
decision making during care transitions by using protocols for
communication and coordination similar to interdisciplinary team models
or California's guidance for MMPs on hospital discharge planning.
Response: We appreciate the commenter's suggestion and will
consider this input as we develop technical assistance and identify
best practices following the implementation of this final rule.
Comment: One commenter expressed support for state flexibility in
determining the timeline for the notification, while several commenters
expressed concerns about the lack of a specific timeliness requirement.
Several commenters requested that CMS require a specific timeframe for
reporting. A few commenters believed that the 48-hour requirement
discussed in our proposed rule preamble as an alternative for
consideration was reasonable and synchronized well with requirements
for discharge notices. One commenter suggested that CMS ensure that any
timeframes imposed by states begin after the health plan has received
the admissions data. A few commenters expressed concern that the
notifications would not be timely and therefore would not be helpful in
care coordination. One commenter requested that CMS clarify its intent
for requiring states to collect this admissions information.
Response: We appreciate comments on the timing and timeliness of
the notification requirement. We believe that states may choose to use
the notification for a variety of purposes, including coordination of
care at the point of hospital or SNF discharge. When establishing a
timeframe, we encourage the states to consider the current process for
how D-SNPs in their markets receive admissions information to reduce
burden on D-SNPs and their provider networks. Because these processes
vary by state, we are not inclined to specify timing requirements for
these notifications at this time. However, we may consider a timeliness
standard in future rulemaking based on our experience implementing the
provisions of this final rule.
Comment: Several commenters expressed support for the alternative
we noted for consideration in the proposed rule that would establish
requirements for coordination of individual health needs or risk
assessments between D-SNPs and Medicaid MCOs. These commenters
generally recommended that CMS encourage, but not require, D-SNPs to
make every effort to coordinate the assessment due to concerns about
feasibility. A few commenters noted that coordination could result in
delays in administering the assessment. One commenter noted that
guidelines for the coordination of assessments would be more
appropriate in subregulatory guidance or state contracts, rather than
as a regulatory requirement. Another commenter requested that CMS
consider requiring D-SNPs to share assessment findings with
coordinating plans. One commenter noted this could be an area for
future integrated requirements for exclusively aligned plans.
Response: We agree with commenters' concerns regarding the
feasibility of coordinating individual health needs or risk
assessments. We believe the pervasiveness of this issue and the extent
of overlap in assessment instruments varies across state lines and
requires further study. We are therefore declining to add this
requirement to D-SNP state Medicaid agency contract requirements at
Sec. 422.107 at this time.
Comment: One commenter supported requiring that D-SNPs identify and
notify states of enrollees in need of LTSS or behavioral health
services to promote care coordination and improve outcomes.
Response: We thank the commenter. Although we considered this
alternative in the proposed rule, we note that D-SNPs are already
required, at Sec. 422.101(f), to develop individualized care plans and
perform health risk assessments that identify the physical,
psychosocial, and functional needs of each SNP enrollee. Additionally,
D-SNPs have the responsibility to coordinate the delivery of Medicare
and Medicaid services consistent with the D-SNP definition at Sec.
422.2 finalized in this rule. We do not believe the burden associated
with an additional requirement to proactively identify for the state
enrollees in need of LTSS or behavioral health services is advisable
given the potential overlap with these existing requirements. We are
therefore not modifying our proposed notification requirement to
include notification of enrollees in need of LTSS or behavioral health
services.
Comment: A few commenters supported the alternative CMS considered
in the proposed rule that states provide input on the plan's model of
care, health risk assessment instrument, and beneficiary communication
materials. One commenter noted this requirement would ensure that
states stay active in their role as health insurance regulators and
that beneficiary materials have correct state-specific information.
Response: We thank commenters for their input, but we remain
disinclined to impose such a requirement on D-SNPs that do not have
exclusively aligned enrollment. We believe this requirement would
create additional burden for states without capitated arrangements with
D-SNPs for the provision of Medicaid services, as Medicaid agencies may
not see a role for themselves in reviewing such documents. We note that
state Medicaid agencies can choose to require that a D-SNP provide such
documents for state input through their contracts with D-SNPs, and
that--as discussed earlier in this preamble--CMS has worked with
several states with integrated D-SNPs to develop more streamlined and

[[Page 15716]]

integrated beneficiary communications materials.
Comment: A few commenters supported additional or alternative data-
sharing requirements for D-SNPs to comply with the statutory
requirements for integration. One commenter requested that CMS provide
any existing analysis on whether the notification of an admission to a
hospital or SNF is more beneficial than sharing other information, such
as enrollment information and care coordination contacts.
Response: While there may be additional or different requirements
that would facilitate D-SNPs' integration of Medicare and Medicaid
benefits, we are choosing to initially focus on a notification
requirement for hospital and SNF admissions, which we believe will lead
to more immediate improvements in the care transition process, while
preserving state and plan flexibility and minimizing burden. After we
gain sufficient experience in implementing the notification requirement
we are finalizing in this rule, we will assess whether changes are
necessary to achieve additional integration.
Comment: A few commenters supported inclusion of a requirement,
consistent with the example included in section 1859(f)(8)(D)(i)(I) of
the Act that a D-SNP demonstrate its integration of Medicare and
Medicaid benefits by assigning one primary care provider for each
enrollee. One commenter requested clarification as to why this specific
requirement was not included in the proposed rule, noting that the
primary care provider is the coordinator of the beneficiary's entire
spectrum of care and a critical liaison between the beneficiary and the
plan.
Response: We agree with the commenter's statement about the
importance of a primary care provider, but we decline to require D-SNPs
to assign a primary care provider for each enrollee as a minimum
standard for integration. We considered the value of such a requirement
but were unable to determine how meaningfully it would advance
integration. We also note that, consistent with Sec. 422.112(a)(2),
all MA organizations offering an MA coordinated care plan, including
those offering D-SNPs, must establish a panel from which an enrollee
may select a primary care provider and are permitted to assign a
primary care provider in limited circumstances. We are concerned that
establishing a primary care provider assignment requirement may
conflict with enrollee choice provisions at Sec. 422.112(a)(2).
Comment: One commenter supported a requirement that D-SNPs submit
to the state Medicaid agency the name and contact information for their
designated care coordinators.
Response: We appreciate this suggestion but decline to make this
change to our regulatory requirements at this time due to the burden on
D-SNPs provide and update this information and on states to
meaningfully use this information. We will consider this suggestion for
future rulemaking.
Comment: One commenter recommend that CMS establish data reporting
requirements that address integrated care and incorporate LTSS, such as
requiring reporting of quarterly care coordination and LTSS referral
data.
Response: We thank the commenter and will consider this suggestion
for future rulemaking.
Comment: One commenter requested clarification on whether CMS
intended for the notification requirement to include discharges as well
as admissions.
Response: We chose to focus on notification of admissions to allow
states to initiate care coordination activities prior to discharge. Our
proposal deliberately did not address discharges due to concerns that
care coordination activities would not be timely if they begin after a
discharge takes place. However, we note that states are not precluded
from adding a notification requirement for discharges through the state
Medicaid agency contracts with D-SNPs under Sec. 422.107.
Comment: One commenter recommended that CMS stop new enrollment
into D-SNPs that are not contracted by the state to provide Medicaid
benefits, and that CMS also require these D-SNPs to establish
meaningful and timely data exchange and coordination processes with the
state or MCOs for existing beneficiaries to ensure timely access to
Medicaid benefits.
Response: We believe that the commenter's recommendation goes
beyond section 1859(f)(8)(D)(i)(I) of the Act, which envisions a
pathway for D-SNPs to remain an option in states that do not pursue a
selective contracting model, subject to additional integration
requirements established by CMS in this final rule. We will, however,
continue to assess opportunities to promote greater levels of aligned
enrollment. We note that states may establish additional requirements
for data exchange and coordination in their state Medicaid agency
contracts with D-SNPs.
Comment: A few commenters requested exceptions to the notification
requirement. One commenter requested clarifications on possible
exemptions for some non-integrated D-SNPs. Another commenter
recommended that D-SNPs providing some Medicaid services, but not
providing LTSS or behavioral health services, be recognized as more
integrated than plans that do not provide any Medicaid services and
therefore be allowed additional flexibility on the data elements D-SNPs
are required to share with the state.
Response: Section 1859(f)(8)(D)(i)(I) of the Act is clear that D-
SNPs that do not (i) meet the requirements of a FIDE SNP nor (ii) enter
into a capitated contract with the state Medicaid agency to provide
LTSS, behavioral health services, or both, must meet additional
criteria for integration; CMS is establishing those criteria in this
final rule. We are therefore unable to exempt D-SNPs that do not meet
the definitions of either a FIDE SNP or a HIDE SNP established in this
final rule from the notification requirement. We will consider the
utility of establishing additional granularity with respect to D-SNP
integration levels but note that such additional granularity is not
relevant to D-SNPs' compliance with the statutory provisions regarding
D-SNP integration.
Comment: One commenter requested that CMS extend the proposed D-SNP
notification requirements to FIDE SNPs and HIDE SNPs when the affected
member is not receiving all Medicaid services through the SNP.
Response: We appreciate the commenter's suggestion to hold FIDE
SNPs and HIDE SNPs to the same standard as other D-SNPs required to
comply with the notification requirement for their unaligned members.
However, we believe that most FIDE SNPs and HIDE SNPs already
demonstrate a level of Medicare-Medicaid integration through the
provision of Medicaid benefits through a capitated arrangement with the
state Medicaid agency, such that exchanging admission data about
specified high-risk dual eligible enrollees would have less impact
relative to the costs of compliance. We decline to accept the
commenter's recommendation, as we believe it would be burdensome for
plans that already provide a higher level of integration than plans
that provide few or no Medicaid benefits to their enrollees. As
discussed in section II.A.2.a.(1) of this preamble, we note that FIDE
SNPs and HIDE SNPs are also required to coordinate their coverage with
their members' Medicaid benefits.
Comment: Several commenters supported our proposal at Sec.
422.107(c)(2) that the contract between

[[Page 15717]]

the D-SNP and the state Medicaid agency document not only the
categories of dual eligible individuals who may enroll in the D-SNP but
also any additional criteria of eligibility.
Response: We appreciate the commenters' support and are finalizing
this provision without modification.
Comment: Several commenters supported our proposed change to Sec.
422.107(c)(3) that would require the contract between the D-SNP and the
state Medicaid agency to document the Medicaid services the D-SNP is
responsible for covering in accordance with a capitated contract with
the D-SNP either directly or through a companion Medicaid managed care
organization operated by the D-SNP's parent organization. One of these
commenters specifically noted that the revised contract requirement may
help CMS achieve greater consistency in determining whether a D-SNP is
a FIDE SNP or a HIDE SNP. A few commenters recommended that the D-SNP's
state Medicaid agency contract also include a list of all Medicaid
covered services, but specifically identify those covered by the D-SNP.
One commenter recommended that in cases where the state Medicaid agency
contract encompasses all the requirements in Sec. 422.107 as amended
and already clearly distinguishes between plan covered and non-covered
Medicaid benefits, a separate document duplicating this information
should not be required. Another commenter requested clarification
regarding the intent of this provision, citing concerns that CMS'
intent could be misconstrued as requiring D-SNPs to offer Medicaid
benefits under a capitated contract with the state.
Response: We thank commenters for their support of this revised
contracting requirement for D-SNPs. We decline to accept the
recommendation that the state Medicaid agency contract also include a
list of all Medicaid-covered services, including those not covered by
the D-SNP or an affiliated MCO. We believe this change to the current
contracting requirement will reduce burden on D-SNPs to identify and
document in the contract every Medicaid-covered service. D-SNPs often
submit to CMS a list of all Medicaid services in their state Medicaid
agency contracts, even those for which the D-SNP is not under a
capitated contract and for which the D-SNP bears no risk. We clarify
that our modified requirement does not impact current processes for
state Medicaid agency contract submission and approval. We also clarify
that this provision in no way precludes a D-SNP that does not provide
any Medicaid services--and otherwise meets all relevant regulatory
requirements--from continuing to contract with CMS to operate as a D-
SNP. We are also simplifying the language at Sec. 422.107(c)(3) to
ensure all potential variations of D-SNP contracting arrangements to
cover Medicaid services are documented in the state Medicaid agency
contract. Specifically, we are revising the requirement such that the
D-SNP must document any Medicaid benefits covered by the MA
organization offering the D-SNP, whether under a capitated contract
with the state Medicaid agency, by the D-SNP's parent organization, or
by another entity that is owned and controlled by its parent
organization.
After consideration of the comments we received, we are finalizing
our proposed amendments to Sec. 422.107(b) as proposed. We are
finalizing our proposed amendments to Sec. 422.107(c)(1), (c)(2),
(c)(3), (d) and (e)(2) substantively as proposed but with some minor
modifications from the proposal.
We are making a technical, non-substantive change to
replace the term ``dual-eligible'' with the term ``dual eligible'' in
paragraph (a), which is consistent with the revision to the section
heading for Sec. 422.107 in the proposed and final rules.
As discussed in section II.A.2.a.(1) of this final rule,
to better align with our final definition of a D-SNP, we are finalizing
the regulation with a new paragraph (c)(1)(i) to clarify that the D-SNP
must document its responsibility to coordinate the delivery of Medicaid
benefits for individuals who are eligible for such services, and a new
paragraph (c)(1)(ii) to clarify that, to the extent a D-SNP provides
coverage of Medicaid benefits--including LTSS and behavioral health
services--for individuals eligible for such services, it must also
document in the state Medicaid agency contract its responsibility to do
so.
As proposed with minor grammatical corrections, we are
finalizing paragraph (c)(2) to require the contract to document the
categories and criteria for eligibility for dual eligible individuals
to be enrolled under the SNP, including as described in sections
1902(a), 1902(f), 1902(p) and 1905 of the Act.
We are finalizing paragraph (c)(3) with revisions to
clarify the requirement of the contract such that the D-SNP must
document any Medicaid benefits covered under a capitated contract
between the state Medicaid agency and either: (1) The MA organization
offering the D-SNP; (2) the D-SNP's parent organization; or (3) the
another entity that is owned and controlled by the D-SNP's parent
organization.
In addition, as discussed in section II.A.2.b.(2) of this final
rule, we are finalizing new text in a new paragraph (c)(9) to address
the requirement under section 1859(f)(8)(C) of the Act that contracts
between D-SNPs that are applicable integrated plans, defined in Sec.
422.561, and the state Medicaid agency require the use of unified
grievance and appeals procedures.
We are finalizing paragraph (d) with modifications to the
regulatory text clarifying the responsibility of a D-SNP with the
phrase ``the SNP notifies or arranges for another entity or entities to
notify . . .'' in place of the proposed text ``the SNP will notify or
authorize for another entity or entities to notify . . .'' and making
edits to clarify that states can require D-SNPs to send notification of
an admission to the state, individuals or entities designated by the
state, or both.
Lastly, we are finalizing paragraph (e)(2) as proposed and
with a citation to paragraph (c)(9) as well as paragraph (d) to clarify
that this state Medicaid agency contracting requirement is applicable
beginning January 1, 2021.
(3) Conforming and Technical Changes (Sec. Sec. 422.60(g), 422.102(e),
422.107(b), and 422.111(b)(2)(iii))
In the proposed rule, we also proposed to make the following
conforming changes to several sections of Part 422 that address D-SNPs
by adopting consistent terminology with respect to dual eligible
individuals and creating cross-references to the newly proposed
definitions.
First, at Sec. 422.60(g), which addresses CMS authority
to implement passive enrollment, we proposed to use the term ``highly
integrated dual eligible special needs plan'' in place of text
referring to D-SNPs that meet a high level of integration, consistent
with our proposed definition in Sec. 422.2. As discussed in the
proposed rule, this technical change would not materially change the
plan types that are eligible for passive enrollment; the existing rule
simply refers to them as D-SNPs that meet a high standard of
integration under the supplemental benefits authority at Sec.
422.102(e).
Second, we proposed clarifying at Sec. 422.102(e) that
not only HIDE SNPs meeting minimum quality and performance standards
are eligible to offer supplemental benefits, but FIDE SNPs that
similarly meet minimum quality and performance standards may do so as
well.

[[Page 15718]]

Third, in the general rule at Sec. 422.107(b), we
proposed to substitute a ``special needs plan serving beneficiaries
eligible for both Medicare and Medicaid (dual-eligible)'' with ``dual
eligible special needs plan.''
Finally, at Sec. 422.111(b)(2)(iii), which requires D-
SNPs to provide written information to dual eligible enrollees about
their eligibility for cost-sharing protections and Medicaid benefits,
we proposed to use the term ``dual eligible special needs plan''
consistent with the proposed definition.
We received the following comments and our responses follow.
Comment: One commenter noted their appreciation of our proposed
clarification at Sec. 422.102(e) that both FIDE SNPs and HIDE SNPs
meeting minimum quality and performance standards are eligible to offer
supplemental benefits. Another commenter requested that we clarify that
current flexibilities with respect to supplemental benefits will
continue for all FIDE SNPs and HIDE SNPs. Several commenters requested
that CMS provide additional guidance about the supplemental benefits
HIDE SNPs and FIDE SNPs may offer, noting recent regulatory changes
that provide flexibility in the Medicare Advantage uniformity
requirements and expand the definition of ``primarily health related''
benefits, as well as new requirements in the Bipartisan Budget Act of
2018 that provide additional benefit flexibility for chronically ill
enrollees.
Response: We appreciate the commenters' support for the technical
change we proposed at Sec. 422.102(e), and we clarify that this
conforming change does not impact current policy related to
supplemental benefits for HIDE SNPs and FIDE SNPs. While we appreciate
the complexities of recent legislative and regulatory changes related
to permissible Medicare Advantage supplemental benefits and the need
for clear guidance that several commenters raised, those comments are
outside the scope of this regulation. For more information regarding
newly expanded supplemental benefit offerings and flexibilities for all
MA plan types, please refer to the CY 2019 and CY 2020 Call
Letters.\22\ We are therefore finalizing our changes to Sec.
422.102(e) as proposed.
---------------------------------------------------------------------------

\22\ See https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html.
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After consideration of the comments we received, we are finalizing
Sec. 422.102(e) without modification. We received no comments on our
proposed conforming changes to Sec. 422.60(g), the general rule at
Sec. 422.107(b), and Sec. 422.111(b)(2)(iii) and are also finalizing
those provisions without modification.
(4) Eligibility of Partial-Benefit Dual Eligible Individuals for Dual
Eligible Special Needs Plans
The preamble to our proposed rule included discussion about an
alternative we considered to propose limits on the enrollment of
partial-benefit dual eligible individuals in D-SNPs, since there are no
Medicaid services that the D-SNP is integrating or coordinating on
their behalf. While we ultimately decided against proposing any such
limits on enrollment in the proposed rule, we invited comments on this
topic. We received the following comments, and our responses follow.
Comment: Several commenters suggested that CMS establish
prohibitions on the enrollment of partial-benefit dual eligible
individuals in D-SNPs. A few commenters suggested establishing separate
D-SNPs exclusively for partial-benefit dual eligible individuals whose
primary focus would not be on integrating Medicare and Medicaid
benefits but rather on caring for a more complex population than a
traditional MA plan.
MedPAC opined that D-SNPs can do little to promote greater
integration for partial-benefit dual eligible individuals and noted
that, based on their analysis of person-level quality data from HEDIS,
D-SNPs perform about the same as regular MA plans for this population.
MedPAC noted the greater likelihood of D-SNPs offering supplemental
benefits attractive to partial-benefit dual eligible individuals than
other MA plans. Consistent with its June 2018 report to the Congress
and at its November 2018 meeting, the Commission described two
potential ways of pursuing greater levels of integration: (1) Limiting
enrollment in D-SNPs to dual eligible individuals who qualify for full
Medicaid benefits or (2) requiring MA plan sponsors to have separate D-
SNPs (distinct plan benefit packages) for full-benefit and partial-
benefit dual eligible individuals.
A number of commenters opposed any limits on the enrollment of
partial-benefit dual eligible individuals in D-SNPs, however. These
commenters cited various rationales for the value of these
beneficiaries' enrollment in D-SNPs, including the relative medical
complexity of partial-benefit dual eligible individuals compared to
non-dual eligible individuals; the value of the D-SNP care model,
including additional care coordination, Medicare benefits, navigation
assistance, individual health risk assessments, care plans, and
interdisciplinary care teams; the propensity for churn between various
dual eligibility categories and the value of D-SNPs in facilitating
movement to full benefit dual eligibility status; and the potential for
additional value for this population through new supplemental benefits
flexibilities implemented by CMS that might prevent the need for
medical spend-down to full benefit dual eligibility status. Several
commenters recommended that CMS defer to states on defining eligibility
requirements for D-SNPs. Another commenter noted that Congress did not
explicitly instruct CMS to prevent partial-benefit dual eligible
individuals from accessing D-SNPs. One commenter noted the variance in
eligibility requirements for partial-benefit dual eligibility across
states. One commenter recommended that CMS consider administrative
changes to resolve the complexities related to integration presented by
this population--for example for member materials and appeals and
grievances.
A few commenters requested that, to the extent CMS continues to
permit the enrollment of partial-benefit dual eligible individuals in
D-SNPs, D-SNPs should be required to show how they will meet the needs
of these enrollees a way that is distinct from the benefits that a non-
D-SNP MA plan would offer, and that CMS measure and evaluate these
additional benefits. These commenters also recommended that CMS place
marketing restrictions on D-SNPs so they cannot primarily target
partial-benefit dual eligible individuals, who may have lower acuity
and less significant health care needs than full-benefit dual eligible
individuals, and to carefully monitor enrollment patterns.
Response: We thank the commenters for the feedback on this issue.
As we stated in the proposed rule, we continue to question the benefit
that partial-benefit dual eligible individuals derive from their
enrollment in a D-SNP relative to the challenges associated with
allowing such enrollment. Although we did not propose, and therefore
are not finalizing, any changes to how partial-benefit dual eligible
individuals may enroll in D-SNPs, we share many of the concerns
articulated by some comments, including those of MedPAC. CMS may
consider future rulemaking in this area.
Comment: A commenter pointed to the definition of a D-SNP in the
statute as limiting enrollment to only those ``special needs
individuals who are entitled to medical assistance under a State plan
under XIX of the Act'' and requested confirmation from CMS that we
discontinue enrollment of partial-

[[Page 15719]]

benefit dual eligible individuals in D-SNPs when there is no Medicaid
benefit they can coordinate for those enrollees.
Response: We note that neither the MA statute nor current MA
regulations prohibit the enrollment of partial-benefit dual eligible
individuals in D-SNPs, although states may choose to do so through
their contracts with D-SNPs. We are not finalizing any change in that
policy in this final rule.
Comment: A commenter recommended that CMS consider granting
eligibility for Qualified Medicare Beneficiaries to enroll in MA-only
D-SNPs and requested that reimbursement rates for such enrollees be
structured to accurately reflect the resources needed to adequately
provide care to such complex populations.
Response: We note that these comments are somewhat outside the
scope of our proposed rule. Further, D-SNPs must provide Part D
prescription drug coverage, pursuant to Sec. 422.2, as part of a
comprehensive Medicare benefit package; therefore, D-SNPs may not offer
MA-only coverage. In response to concerns about the accuracy of the
CMS-Hierarchical Condition Category (HCC) risk adjustment model for
predicting costs of dual eligible individuals, CMS analyzed how well
the model performs for various types of beneficiaries. As a result of
this analysis, CMS implemented significant changes to the HCC model in
CY 2017.
(5) Suspension of Enrollment for Non-Compliance with D-SNP Integration
Standards (Sec. 422.752)
Section 50311(b) of the Bipartisan Budget Act of 2018 amended
section 1859(f) of the Act by creating a new paragraph (8)(D)(ii) to
permit the Secretary, for plan years 2021 through 2025, to impose an
intermediate sanction of stopping all new enrollment into a D-SNP if
the Secretary determines that the D-SNP is failing to comply with the
integration requirements set forth in section 1859(f)(8)(D)(i) of the
Act. We proposed to amend Sec. 422.752 by adding a new paragraph (d)
to require CMS to impose an enrollment suspension when CMS finds that
the plan is non-compliant with the integration requirements during plan
years 2021 through 2025, rather than initiating outright termination.
We stressed in the proposed rule that we interpreted this proposal as
leaving discretion for CMS, if the D-SNP does not submit an acceptable
corrective action plan or fails to abide by the correction action plan,
to determine that contract termination or other enforcement action or
sanction could also be imposed. In addition, in the event that any harm
to enrollees is imminent, we explained how we would retain authority to
immediately terminate the contract. We also proposed in Sec.
422.752(d) that the suspension of enrollment would continue in effect
until CMS is satisfied that the deficiencies that are the basis for the
sanction determination have been corrected and are not likely to recur.
We stated that the procedures, remedies, and appeal rights available to
plans subject to intermediate sanctions provided in Sec. 422.756 apply
to D-SNPs that are sanctioned under this new authority.
Comment: Several commenters supported CMS' interpretation of the
statute to impose an intermediate sanction to suspend enrollment
instead of an immediate contract termination for D-SNPs that fail to
meet the integration standards by contract year 2021. A few commenters
requested that CMS consider not penalizing D-SNPs when state decisions
impede integration or the state does not have the interest and capacity
to facilitate D-SNP compliance with the integration requirements. Some
commenters recommended that CMS evaluate the implementation of these
sanctions in order to make recommendations on how CMS should sanction
D-SNPs that do not meet the integration standards beyond 2025. Another
commenter provided recommendations, summarized elsewhere in final rule,
on how CMS can support and incentivize states to move toward
integration.
One commenter agreed with CMS' position that non-compliance with
the integration standards should not lead directly to contract
termination but noted that the enrollment sanction is at the discretion
of CMS. The commenter recommended that CMS not immediately impose an
enrollment sanction for minor compliance issues around the integration
requirements and, rather, only impose an enrollment sanction for non-
compliance that is a serious threat to the health and safety of
Medicare beneficiaries and let lesser violations be handled through
other compliance actions (notices of non-compliance, corrective action
plans, and civil monetary penalties).
Response: We appreciate the overall support for our proposal to
require CMS to impose an enrollment suspension when we find a D-SNP to
be out of compliance with the integration requirements in the final
rule during plan years 2021 through 2025. We disagree with the
commenter urging us adopt a standard for imposing an intermediate
sanction based only on whether a D-SNP's integration approach is a
serious threat to the health and safety of its enrollees. As we
discussed in the preamble to the proposed rule, by establishing
statutory requirements that established a minimum level of integration
of D-SNPs in section 50311 of the Bipartisan Budget Act of 2018, we
believe the goal was for beneficiaries enrolled in D-SNPs to receive a
greater level of integration of Medicare and Medicaid benefits than is
the case under current regulations. Because the Bipartisan Budget Act
of 2018 limited the applicability of the Secretary's authority to
impose an intermediate sanction on plans that do not comply with the
integration requirements to plan years 2021 through 2025, we believe
that the intent of this provision is to offer an alternative to
outright contract or plan termination for D-SNPs that fail to meet the
new integration requirements during the period of 2021 through 2025.
With respect to commenters' concerns about penalizing plans, we note
that since the authority to impose the intermediate sanction is
specific to a D-SNP's non-compliance with the Medicare and Medicaid
integration standards finalized in this rule, we intend to consider
whether imposition of intermediate sanctions would be most appropriate
at the plan, rather than contract, level for each affected Medicare
Advantage organization. We expect such determinations to be tied to the
facts of each specific situation.
In addition to authorizing this lesser sanction, the statute
requires a corrective action plan, which we believe strengthens our
interpretation, as it illustrates a preference for ultimate compliance
by D-SNPs with the integration requirements. The statute authorizes
this lesser sanction but does not require that it be used, leaving it
to our discretion whether an enrollment sanction combined with a
corrective action plan is sufficient to achieve the goals of the
statute. We believe that imposing an intermediate sanction to suspend
enrollment establishes predictability for states, beneficiaries, and MA
organizations by requiring its imposition for non-compliant plans in
lieu of termination or other actions. CMS retains discretion--for
example, if the D-SNP does not submit an acceptable corrective action
plan or fails to abide by the corrective action plan--to determine that
contract termination or other enforcement action or sanction is still
possible. In addition, in the event circumstances warrant--for example,
when any harm to beneficiaries is imminent--we retain authority to
immediately terminate the contract. We

[[Page 15720]]

are therefore finalizing our proposal on intermediate sanctions without
modification.
As discussed elsewhere in this final rule, CMS is committed to
working with stakeholders and providing technical assistance and
additional guidance to states and D-SNPs to facilitate compliance with
the integration requirements in this final rule. We will evaluate
application of our sanction authority and consider any additional
changes or clarifications, including with respect to sanctions for
those D-SNPs that fail to meet the integration requirements for plan
years after 2025.
Comment: One commenter recommended that CMS' imposition of
sanctions be delayed until 2023 to accommodate necessary contracting
and systems changes. This commenter also recommended that CMS impose
sanctions only in states where the state Medicaid agency has
successfully integrated with other D-SNPs using the specific
integration standards the state has selected. Another commenter urged
CMS to consider the integration standards to be met, and an enrollment
sanction not required, if the notification language requirement
discussed in section II.A.2.a.(2) of this final rule is in the state
Medicaid agency contract in 2021, even if not implemented until 2022.
Response: The Bipartisan Budget Act of 2018 specifically allows for
the imposition of any enrollment sanctions related to non-compliance
with the D-SNP integration standards established in this final rule be
applied with respect to plan years 2021 through 2025. In addition, we
note that the Bipartisan Budget Act of 2018 requires all D-SNP
integration criteria established by CMS to be effective starting for
the 2021 plan year. The timing for the publication of the provisions
set forth in this final rule in the allows D-SNPs ample opportunity to
negotiate with states and address issues requiring changes in the state
Medicaid agency contracts prior to the start of the 2021 plan year.
Therefore, solely including the notification requirement language in a
D-SNP's state Medicaid agency contract without implementing the process
as required by that state would render a D-SNP out of compliance with
Sec. 422.107(d).
After consideration of the comments we received, we are finalizing
our proposal regarding CMS' imposition of intermediate sanctions for
non-compliance with D-SNP integration standards without modification.
b. Unified Grievance and Appeals Procedures for Dual Eligible Special
Needs Plans and Medicaid Managed Care Plans at the Plan Level
(Sec. Sec. 422.560-562, 422.566, 422.629-634, 438.210, 438.400, and
438.402)
Section 1859(f)(8)(B) of the Act, as added by the Bipartisan Budget
Act of 2018, directs the Secretary to establish new procedures that
unify, to the extent feasible, Medicare and Medicaid grievance and
appeals procedures for D-SNPs. This new authority provides an important
opportunity to address an area of longstanding misalignment between the
Medicare and Medicaid programs. Medicare and Medicaid grievance and
appeal processes have developed independently and operate entirely
separately. Medicare's fee-for-service appeals processes (authorized
primarily under section 1869 of the Act for Part A and B claims
appeals), and MA's processes (authorized under sections 1852(f) and
1852(g) of the Act for grievance and appeal processes) are subject only
to federal regulation and oversight as part of the federally-
administered Medicare program. Medicaid grievances and appeals are
authorized under sections 1902(a)(3) and 1902(a)(5) of the Act for
Medicaid programs more generally and section 1932(b)(4) of the Act for
Medicaid managed care plans. Unlike Medicare and MA, Medicaid appeals
and grievance procedures are subject to both federal and state
regulation and are primarily subject to state oversight and
administration as part of a joint federal-state financed program.
Medicare Part D grievances and appeals are authorized under sections
1860D-4(f) and (g) of the Act and are outside the scope of our
authority to unify grievances and appeals under new section
1859(f)(8)(B) of the Act; we note, however, that D-SNPs are all
required to provide Part D prescription drug coverage pursuant to Sec.
422.2 (in the definition of a specialized MA plan for special needs
individuals), and are therefore subject to the Part D appeals
requirements in connection with Part D benefits.
Both the Medicare and Medicaid grievance and appeals systems
include regulations establishing procedures for the fee-for-service
programs as well as regulations governing managed care plans, including
processes at the plan and post-plan levels for adjudicating appeals.
Medicare rules are found at 42 CFR part 405 subpart I (general) and
part 422 subpart M (Medicare Advantage); Medicaid rules are at 42 CFR
part 431 subpart E (general) and part 438 subpart F (managed care).
Regulations for the Medicare and Medicaid programs take broadly similar
approaches to managed care appeals in that both programs establish a
process for resolving a dispute at the plan level initially, followed
by an opportunity for post-plan review. However, these appeals systems
operate independently with sometimes subtle but important differences
related to notices, adjudication timeframes, availability of benefits
continuing while the appeal is pending, and levels of review.
Similarly, regulations for the Medicare and Medicaid programs take
different approaches with respect to some processes for grievances,
including filing and adjudication timeframes and the availability of an
expedited grievance process.
Although comparatively few beneficiaries file grievances or
appeals,\23\ these processes are vital safeguards to ensure that
beneficiaries' concerns and needs are met promptly. Because of Medicare
and Medicaid's misalignments in this area, beneficiaries who are dually
eligible for Medicare and Medicaid can face a confusing array of
choices when they seek to file a grievance or appeal. They may not know
whether their complaint is tied to Medicare or Medicaid, and thus may
not know where to direct their grievance. They may be uncertain if the
item or service they seek is covered by Medicare, by Medicaid, or
potentially by both programs, and thus may not know when or where to
file an appeal following the denial of a service. The issue is
particularly complicated for items and services such as home health and
certain durable medical equipment that are sometimes covered by both
programs but under different circumstances.
---------------------------------------------------------------------------

\23\ For example, in 2016, Medicare Part C plans reported 2.93
complaints (grievances) per 1,000 enrollees per month and 19.3
reconsideration requests (appeals) per 1,000 enrollees per month.
See Analysis of Calendar Year 2016 Medicare Part C Reporting
Requirements Data, available at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/PartCDDataValidation.html.
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This confusion for beneficiaries and for those assisting them can
result in costly and inefficient duplication of effort, as
beneficiaries may file grievances and appeals under both programs when
only one was necessary. Health plans and federal and state agencies may
incur additional burdens and costs from having to administer parallel
appeals systems. Finally, these misalignments may lead to unintended
harms in the form of delayed or denied access to needed services as
beneficiaries expend time and energy pursuing ultimately fruitless
appeals in

[[Page 15721]]

one program when they should have been pursuing them in the other.
As summarized in our proposed rule, we have made previous efforts
to better align Medicare and Medicaid grievances and appeals for dual
eligible individuals, including the integrated initial level of appeal
in the Programs of All-inclusive Care for the Elderly (PACE). The
operation of Medicare-Medicaid Plans (MMPs) in the CMS' Financial
Alignment Initiative capitated model demonstrations has provided us
with the most extensive experience integrating grievances and appeals
for dual eligible individuals in the managed care setting. Our
experience with MMPs suggests that, although implementing a new system
can be challenging, once in operation, integrated grievance and appeals
systems can be simpler for beneficiaries to navigate than separate
systems for Medicare and Medicaid.
Under the newly enacted amendments to section 1859(f)(8)(B) of the
Act, the Secretary is required to establish, not later than April 2020
and for inclusion in contracts for D-SNPs for 2021 and subsequent
years, procedures unifying grievances and appeals procedures consistent
with several principles:
Under paragraph (8)(B)(ii), the new unified procedures
must include provisions that are most protective for the enrollee and,
to the extent feasible as determined by the Secretary, are compatible
with unified timeframes and consolidated access to external review. The
statute requires that the procedures take into account differences
under state Medicaid plans, and be easily navigable by enrollees.
Additionally, under paragraph (8)(B)(iii), the integrated
processes implemented are required to include a single written notice
that includes all relevant grievance and appeal rights; a single
pathway for resolution of covered items and services; notices written
in plain English and available in languages and formats that are
accessible to enrollees (including in non-English languages that are
prevalent in the service area of the specialized MA plan); unified
timelines for processes such as filing, acknowledging, and resolving
the appeal or grievance; and requirements for plans to process, track,
and resolve the grievances and appeals to ensure enrollees are notified
timely of decisions and can track the status of their grievance or
appeal.
Finally, under paragraph (8)(B)(iv), new grievance and
appeals procedures must, with respect to all benefits under Medicare
Parts A and B and Medicaid subject to appeal under such procedures,
incorporate provisions under current law and implementing regulations
that provide continuation of benefits pending appeal under Title XVIII
and Title XIX. We address this statutory provision in section
II.A.2.b.(7).
Using this statutory framework, we developed the following goals to
guide development of the unified grievance and appeals provisions:
Adopt provisions that are most protective of the enrollee;
Reduce burden on beneficiaries (and those assisting them),
plans, states, and providers; and
Maintain state flexibility and minimize disruption by
building on existing rules and policies.
These policy goals also reflect our belief that timely, efficient,
accessible, and well-functioning grievance and appeals systems are
critical to ensuring that beneficiaries have access to needed items and
services. Such systems are especially vital for dual eligible
individuals who typically lack financial resources that might enable
other beneficiaries to pay out-of-pocket for needed items or services
while a dispute is pending. We requested comments regarding these
policy goals and the extent to which the proposed regulations are
consistent with them.
Our policy goal of minimizing disruption was also informed by
statutory language directing the Secretary to establish unified
provisions to the extent feasible (section 1859(f)(8)(B)(i) of the
Act). Consistent with this statutory standard, we primarily proposed
incremental changes that are currently feasible, conform to other
current law, and build upon existing systems.
Our proposals under the notice of proposed rulemaking were divided
into three substantively different types:
First, we proposed to establish requirements for all D-
SNPs, relative to the role they play in assisting full-benefit dual
eligible individuals, to assist with Medicaid-related coverage issues
and grievances (Sec. 422.562(a)).
Second, we proposed new requirements in accordance with
section 1859(f)(8)(B) of the Act to create integrated grievance and
appeals systems for a limited subset of D-SNPs (``applicable integrated
plans''), identified using terms and concepts we propose to define in
amendments to Sec. 422.561, with the integrated processes established
by proposed new regulations (Sec. Sec. 422.629-422.634).
Finally, we proposed a number of changes of a technical
and conforming nature to existing provisions in parts 422 and 438
(Sec. Sec. 422.560, 422.562, 422.566, 438.210, 438.400, and 438.402).
Section 1859(f)(8)(B)(i) of the Act requires the Secretary to
establish unified grievance and appeals procedures for D-SNPs not later
than April 2020, and section 1859(f)(8)(C) of the Act requires the use
of these unified procedures in D-SNP contracts for 2021 and subsequent
years. The statute does not, however, explicitly rule out the
possibility of implementing such unified processes prior to 2021. As
discussed in the proposed rule, we interpret the statute as permitting
a state to adopt unified grievance and appeals processes for integrated
D-SNPs and Medicaid plans in that state consistent with our final
regulations on this topic starting as soon as the regulations
establishing such procedures are final. Such a state could require
establishment of unified appeals and grievance procedures consistent
with CMS' regulations in its Medicaid agency contract required under
Sec. 422.107. We solicited comments on this interpretation of the
statutory implementation date requirements and our proposal to make
unified procedures available to states in this way before 2021.
In this final rule preamble, we summarize at a high level our
specific proposals for the unified appeals and grievance processes; we
direct readers to the proposed rule, 83 FR 55003 through 55013, for
more detailed discussion of the proposals and our rationale for them.
We received a number of comments on our proposals to implement these
unified appeals and grievance procedures, both in general and with
regard to specific proposals, and summarize the general comments as
follows:
Comment: We received numerous comments in support of our proposal
for unified plan-level appeals and grievance processes. Many commenters
supported our stated policy goals and agreed that the proposed
regulations were consistent with those goals. Several commenters
expressed support for our policy principle of choosing the most
beneficiary-friendly appeals processes and protections where there is a
discrepancy between Medicare and Medicaid rules. Many commenters noted
the current misalignment of administrative and operational process for
beneficiaries and plans in the Medicare and Medicaid appeals processes,
which confuses enrollees and reduces access to benefits, and
appreciated that our proposed appeals and grievance processes begin to
address some of these misalignments through a unified system that is
clearer

[[Page 15722]]

and easier to navigate for enrollees. One commenter expressed concern
that requiring D-SNPs, which typically also offer other non-D-SNP MA-PD
plans, to administer two separate grievance and appeal procedures is
overly burdensome. One commenter noted that it may not be possible to
implement the unified appeals and grievance processes in states with
consent decrees that limit plan-level appeals.
Response: We appreciate the broad support both for unified appeals
and grievance processes and for the policy goals underlying our
proposed process. We agree with those commenters who stated that the
unified processes will be clearer and easier to navigate for enrollees.
We expect the unified processes to apply to a relatively small subset
of D-SNPs and states. We note that, with respect to the concern about
the burden of D-SNPs administering separate grievance and appeals
processes, D-SNPs that contract to provide Medicaid benefits, including
applicable integrated plans that must comply with the unified appeal
processes addressed in this rule, currently administer two separate
processes--one for Medicare and one for Medicaid--in addition to
complying with specific appeal requirements for Part D benefits. Under
the unified approach we are finalizing, integrated applicable plans
will only administer one process for all non-Part D benefits. Thus,
while we understand that there may be some administrative burden in
setting up the new system, we believe that once the system is set up,
it should be more efficient for applicable integrated plans to
administer than the current system. We note that drugs covered by
Medicare Part D will continue to be processed under the separate Part D
appeals system in 42 CFR part 423. Appeals related to non-Part D drugs
covered by Medicaid for dual eligible individuals will go through the
unified appeals process as outlined in this final rule for applicable
integrated plans, described later in this final rule. We therefore do
not believe there will be additional burden for applicable integrated
plans. We also note that we will accommodate state circumstances, as
needed and possible, including where a state currently operates under a
consent decree.
Comment: A number of commenters noted the need for CMS to work
closely with states and other stakeholders where these unified
processes will be implemented to ensure a smooth implementation and
transition for enrollees and set clear expectations for applicable
integrated plans. Some commenters also noted the need for CMS to
release additional guidance prior to the implementation date and to
communicate the process clearly to enrollees. Several commenters
requested that we issue subregulatory guidance specifically addressing
the following topics: Allowing enrollees to raise secondary impact on
health based on the financial hardship of paying for services that were
not initially covered in post-service payment cases, repeat grievances,
and processing prescription drug appeals in the unified processes. A
commenter requested additional information on state regulations that
may need to change in order for the unified processes to be
implemented. Several commenters also recommended that CMS review best
practices and lessons learned in the Financial Alignment Initiative to
inform implementation of unified processes for D-SNPs. One commenter
questioned how states will react to implementing these requirements.
Another commenter noted that any new process will produce new confusion
among beneficiaries.
Response: We appreciate the commenters' concerns and anticipate
issuing subregulatory guidance to further clarify the unified
processes. As discussed throughout this preamble, we expect to continue
to engage states, plans, and other stakeholders as we implement the
requirements in this final rule, including providing technical
assistance to states, disseminating best practices (including from MMPs
participating in the Financial Alignment Initiative), and issuing
additional subregulatory guidance and model enrollee communications to
ensure a smooth implementation and to reduce any potential enrollee
confusion. We also note that, for most states that will be implementing
this new unified process, this final rule allows CMS 18 months prior to
the January 1, 2021, implementation date to work with states, plans,
and other stakeholders to ensure a smooth implementation.
Comment: One comment noted the importance of provider-neutral
language in the proposed rule, which is consistent with the statutory
language and recognizes the important variety of providers that serve
enrollees in Medicare and Medicaid.
Response: We appreciate the commenter's support of our use of the
term ``provider'' in the proposed rule and note that we are maintaining
the use of this term in the final rule.
Comment: One commenter observed that there is no mention of the
grievance and appeals processes for network providers, noting the lack
of a process for network providers under existing contract terms with
managed care plans and expressing concerns about potential retaliation
from managed care plans for filing appeals or complaints. The commenter
urged us to develop a process for network providers to file appeals and
grievances and ensure that network provider concerns are heard by
states and CMS.
Response: The unified process addressed in this final rule is for
coverage decisions made by the D-SNPs and the affiliated Medicaid
managed care plans with exclusively aligned enrollment. As is the case
under MA rules, disputes between network providers and the applicable
integrated plans are governed by their contracts with plans. Some
states do provide external processes for Medicaid network providers,
and these processes will remain available for Medicaid-related plan-
provider disputes. In addition, providers can file complaints with CMS
through the Complaint Tracking Module to raise issues and concerns to
CMS' attention.
Comment: One commenter requested that we include supplemental
benefits and long-term services and supports (LTSS) in the unified
grievance and appeals processes, similar to the current process in the
Cal MediConnect Financial Alignment Initiative demonstration.
Response: We clarify that any LTSS or supplemental benefits covered
by applicable integrated plans will subject to the unified grievance
and appeals processes we are finalizing in this rule, with the
exception that MA supplemental benefits are not subject to the
continuation of benefits pending appeal process finalized at Sec.
422.632 in this rule. Continuation of benefits pending appeal under
Sec. 422.632(b) is available only for ``benefits under Parts A and B
of title XVIII and title XIX.'' Please see section II.A.2.b.(7) of the
proposed and final rules for more discussion of this issue.
Comment: Several commenters requested clarification on the impact
of the unified grievance and appeals processes on applicable integrated
plans' Star Ratings. A commenter recommended a grace period to mitigate
this impact, and another recommended that we move the measures to the
display page during the transition to the new processes. Another
commenter requested more information on appeals and grievance reporting
processes. One commenter requested that we make timely plan-specific
grievance and appeals data available to the public.
Response: These comments are not strictly within the scope of our
final rule provisions establishing unified

[[Page 15723]]

grievances and appeals processes. We note, however, that we do not
expect Star Ratings to be negatively impacted by the unified grievance
and appeals processes. The Star Ratings measures focus on how timely
the MA plan sends the case to the IRE when the plan upholds its initial
adverse organization determination and whether the plan's decision was
upheld at the IRE. Under Sec. Sec. 422.590(d)(4) and 422.592, if, upon
reconsideration, an MA plan upholds its initial adverse organization
determination, it must submit the case file and its decision to the IRE
for automatic review. Under the unified appeals process, rules
governing submission of case files to the IRE when a plan upholds its
initial adverse organization determination are unchanged (see Sec.
422.634(b)). We expect that an applicable integrated plan could in fact
see a reduction in cases where the IRE reverses the applicable
integrated plan's integrated reconsideration determination for cases
where Medicare and Medicaid benefits overlap, since the applicable
integrated plan may approve the service or item under Medicaid coverage
and not have to issue a denial under Medicare. The applicable
integrated plans should then have fewer cases to auto-forward to the
IRE, and thus fewer cases that that the IRE could overturn and
negatively impact the plan's Star Ratings.
Comment: One commenter urged CMS to reconcile and align
requirements across multiple proposals aimed at reducing administrative
burdens on plans and beneficiaries, including those that appeared in
the proposed rule and in other proposals related to MA and step therapy
for Part B drugs.
Response: We appreciate this feedback and agree that internal
consistency is an important consideration in reducing administrative
burden and has been a priority throughout this rulemaking process.
Comment: A commenter recommended that we extend our enrollee
communications requirements to integrate all member-facing materials.
Response: We appreciate the suggestion. However, the requirements
of section 1859(f)(8)(B)(iii) of the Act apply only to notices required
under the unified appeals and grievance processes. We are therefore not
implementing requirements for other notices in this final rule.
However, as discussed elsewhere in this final rule, the Medicare-
Medicaid Coordination Office is working to improve and consumer test a
variety of beneficiary communications materials geared toward D-SNP and
MMP enrollees.
(1) Assisting With Medicaid Coverage Issues and Grievances (Sec.
422.562(a)(5))
As an incremental step towards improving all D-SNP enrollees'
experiences with accessing Medicaid benefits, and pursuing grievances
and appeals, we proposed new regulation text to require all D-SNPs to
assist beneficiaries with Medicaid coverage issues and grievances,
including authorizations for or appeals related to Medicaid-related
services at Sec. 422.562 by adding a new paragraph (a)(5). As
discussed in the proposed rule, these new requirements are consistent
with our existing guidance and expectations for D-SNPs, but we proposed
regulations to define their scope and set mandatory standards to which
we can hold D-SNPs accountable. We believe that all D-SNPs should
assist enrollees with resolving Medicaid coverage problems, including
assistance with filing grievances, requesting coverage, and requesting
appeals. Such assistance is consistent with the standard we proposed as
part of the definition of a D-SNP at Sec. 422.2. As noted in section
II.A.2.a.(1) of the proposed rule and this final rule, we are codifying
the statutory requirement at section 1859(f)(3)(D) of the Act that D-
SNPs arrange for their enrollee's Medicaid benefits as an explicit
requirement that D-SNPs coordinate the delivery of Medicare and
Medicaid services for individuals who are eligible for such services,
whether or not the D-SNP itself contracts with the state to provide
Medicaid services. We clarified in the proposed rule that the
requirements at Sec. 422.562(a)(5) were additional requirements for D-
SNPs, specifically related to assisting with access to benefits,
appeals, and grievances. At Sec. 422.562(a)(5), we proposed to
supplement the obligation to provide, as applicable, and coordinate
Medicaid benefits by adding a requirement that when a D-SNP receives an
enrollee's request for services, appeal, or grievance related to
Medicaid-covered services (regardless of whether such coverage is in
Medicaid fee-for-service or a Medicaid managed care plan, such as a
Medicaid MCO, PIHP, or PAHP as defined in Sec. 438.2), the D-SNP must
provide a certain level of assistance to the enrollee.
In new paragraph (a)(5)(i), we proposed to describe the types of
assistance we would require all D-SNPs to provide to their enrollees
regarding Medicaid-related coverage issues and grievances, including
authorization of services and appeals. We proposed in paragraph
(a)(5)(i) to include assistance for all D-SNP enrollees, regardless of
the type of Medicaid coverage in which they are enrolled.
Our proposed regulation at Sec. 422.562(a)(5)(i) included a list
of illustrative examples, at paragraphs (5)(i)(A) through (5)(i)(C),
which we did not intend to be an exhaustive list of how a D-SNP would
be required to comply with the assistance obligation in Sec.
422.562(a)(5)(i).
In paragraph (a)(5)(i)(A), we addressed explaining to a D-
SNP enrollee how to request Medicaid authorization and file an appeal.
Our proposed regulation text included examples of the type of
assistance we expect D-SNPs to provide to their enrollees when the
enrollees need information and explanations about obtaining Medicaid
services. We proposed, in paragraphs (5)(i)(A)(1) through (5)(i)(A)(3),
examples of the types of assistance that a D-SNP must offer, and upon
acceptance or request, provide its enrollees, such as specific
instructions on how to contact the entity that may cover the service
(for example, the Medicaid managed care plan or a contact in the fee-
for-service system), and assistance in obtaining and filling out forms
necessary for the next steps in the process.
In paragraph (a)(5)(i)(B), we proposed that D-SNPs provide
assistance in the actual filing of grievances and appeals. We requested
comments regarding this proposal; in particular, we requested comments
regarding how D-SNPs that do not have aligned enrollment would comply
with this requirement when such entities might have financial and
clinical responsibility for the disputed services, potentially
presenting a conflict of interest.
In paragraph (a)(5)(i)(C), we proposed that the D-SNP
assist the enrollee in obtaining documentation in support of a request
for authorization or appeal.
We explained how the examples listed in proposed paragraphs
(a)(5)(i)(A) through (C) were not intended to be an exhaustive list,
but rather were meant to provide some leading examples of the
assistance we believe any D-SNP should provide. We invited comments on
this proposal, specifically whether the regulation text was clear
enough that the examples are not an exhaustive list of methods of
assistance that the D-SNP must offer its enrollees, as well as
suggestions for other examples of assistance that we should include in
regulation or address in subsequent subregulatory guidance. We also
solicited suggestions for additional examples of assistance, as

[[Page 15724]]

well as comments on challenges D-SNPs and others envision in
implementing the provisions of proposed paragraph (a)(5). In addition,
we acknowledged potential challenges D-SNPs may face because Medicaid
systems vary by state.
We also proposed language related to enrollees accepting the offer
of assistance in proposed paragraph (a)(5)(i). In our proposal, the
only obligation on D-SNPs is to offer assistance and, when a request is
made or an offer of assistance is accepted, to provide it. We requested
comments on whether the regulation text, as we proposed it, was the
best way to achieve this goal.
In paragraph (a)(5)(ii), we proposed to specify that the D-SNP's
obligation to offer assistance arises whenever the D-SNP becomes aware
of an enrollee's need for a Medicaid-covered service. Our proposal
included text explicitly clarifying that enrollees do not need to make
a specific request to their D-SNP for assistance. As we stated in the
preamble to the proposed rule, if the issue comes to the attention of
the D-SNP, we would expect the plan to offer to assist the enrollee in
resolving the coverage issue(s) or grievance given the D-SNP's
responsibility, consistent with our proposed definition of a D-SNP at
Sec. 422.2, that such a D-SNP provide, as applicable, and coordinate
the delivery of Medicare and Medicaid services for its enrollees. We
requested comments on whether we should include such explicit direction
to D-SNPs in the regulation to identify issues that an enrollee is
having, or whether our proposed regulation text was sufficiently clear
that D-SNPs will understand and meet our goal of providing assistance
to an enrollee such that the enrollee can access benefits regardless of
whether the benefit is covered by Medicare or Medicaid. We clarified
that we were not proposing any new requirements related to assistance
with Medicare covered services or services for partial-benefit dual
eligible enrollees. We requested comments regarding the provisions at
proposed Sec. 422.562(a)(5)(ii) and the need for any further
clarification limiting the scope of Sec. 422.562(a)(5) to full-benefit
dual eligible individuals.
In paragraph (a)(5)(iii), we proposed to provide further detail on
the methods of assistance required by proposed paragraph (a)(5)(i). The
methods we proposed in the regulation were intended to be examples of
what a D-SNP will be required to offer and provide to enrollees and
will depend, to some extent, on the needs and preferences of the
enrollee. Specifically, we proposed:
In paragraph (a)(5)(iii)(A), that a D-SNP may provide
coaching to the enrollee to promote self-advocacy. We requested
comments on the methods of assistance and whether further detail is
needed.
In paragraph (a)(5)(iii)(B), an explicit requirement that
a D-SNP provide whatever reasonable assistance an enrollee needs in
navigating the Medicaid grievance and appeals systems, such as
assistance completing forms. As discussed in the proposed rule
preamble, existing MA and Medicaid managed care regulations (for
example, Sec. Sec. 422.111(h)(1)(iii) and 438.406(a)) address the
provision of interpretation services and auxiliary aids and services
for enrollees who have limited English proficiency or disabilities that
require accommodation. We opted not to specify the preferred technical
forms of assistance that would be required under this proposal, as the
evolution of technology and the increases in integration over time may
change the analysis of what methods of assistance are reasonable for a
D-SNP to be required to provide to its enrollees. However, because D-
SNPs are already required to provide similar assistance to their
enrollees in other circumstances, we stated in the proposed rule that
we did not anticipate that compliance with this provision should be
burdensome to plans. We requested comments on this matter, including
whether and how our goals might be met with more specific regulation
text.
In paragraph (a)(5)(iv), we proposed to require that a D-
SNP provide documentation to CMS upon request that demonstrates how the
D-SNP is providing the assistance proposed under paragraph (a)(5)(i).
In paragraph (a)(5)(v), we proposed to clarify that D-SNPs
are not required to represent enrollees in Medicaid appeals. We
requested comments regarding whether any further clarification was
needed on this issue.
We received the following comments, and our responses follow.
Comment: We received a significant number of comments in support of
the proposed requirement in Sec. 422.562(a)(5) to require all D-SNPs
to provide assistance to D-SNP enrollees with Medicaid coverage issues
and grievances. Many commenters were supportive of our efforts to
improve D-SNP enrollees' experience and require all D-SNPs to provide a
minimum level of assistance to their enrollees while granting D-SNPs
flexibility in complying with the proposed requirements. A subset of
commenters, while supportive of our proposal, recommended that CMS
provide more specificity regarding what D-SNP assistance looks like and
additional guidance on how plans can work with Medicaid agencies to
obtain information on the Medicaid coverage of their enrollees.
Response: We appreciate the support we received for our proposed
requirement that D-SNPs provide assistance to enrollees with Medicaid
coverage issues and grievances. We believe these requirements
constitute an incremental, but important, step in improving all D-SNP
enrollees' access to the benefits under the Medicare and Medicaid
programs. We address commenters' specific requests for clarification
and guidance in subsequent responses in this section.
Comment: Several commenters expressed concerns that D-SNPs do not
always have sufficient insight into whether certain Medicaid benefits
are covered under the state's Medicaid program if the D-SNP does not
provide those benefits directly. Many commenters noted that data
sharing with states is essential for D-SNPs to access information
regarding enrollees' Medicaid enrollment status--for example, whether
they are enrolled in Medicaid fee-for-service or a Medicaid managed
care organization (MCO), and the specific MCO they are enrolled in-- in
order to be fully informed about enrollees' coverage. A number of
commenters recommended CMS consider issuing additional guidance to
facilitate state sharing of Medicaid provider and enrollment
information. One commenter suggested that CMS should create a
centralized enrollment database that D-SNPs can query for Medicaid plan
information regarding unaligned D-SNP enrollees. Another commenter
suggested that in order to streamline the process and facilitate its
implementation, CMS consider partnering with states to develop
standardized resource lists with critical information on key Medicaid
contacts that can be shared with enrollees and D-SNPs to streamline the
navigation process and mitigate operational burden.
Response: We agree with commenters that information on how D-SNP
enrollees receive their Medicaid coverage is essential for effectively
fulfilling both the requirement to assist with Medicaid coverage and
grievance issues and the requirement we finalized in the definition of
a D-SNP at Sec. 422.2 to coordinate Medicare and Medicaid coverage
that these plans do not provide directly. We also recognize that,
especially for states that do not contract

[[Page 15725]]

with D-SNPs to deliver Medicaid benefits, providing such information
may be an operational challenge that is not among these states'
priorities. We agree that it would be useful to provide states with
technical assistance that would facilitate the exchange of information
and help D-SNPs effectively coordinate their enrollees' Medicaid
coverage.
At the same time, we do not believe that the absence of such
information sharing relieves D-SNPs of their responsibility to
coordinate Medicaid benefits they do not directly provide, nor prevents
them from providing the types of assistance with Medicaid coverage
issues and grievances that we outlined in the proposed rule. While we
do not intend to penalize D-SNPs for not having in place a real-time
data exchange with states on D-SNP enrollees' Medicaid coverage, we
emphasize that the obligation for Medicaid coordination rests on the D-
SNPs, and it is therefore incumbent on D-SNPs to develop mechanisms to
coordinate Medicaid coverage and assist with Medicaid appeals and
grievance issues. There are other methods that D-SNP staff can use to
obtain information to better assist their members with Medicaid
coverage issues, appeals, and grievances. For example, many states have
data systems that providers use to obtain information on patients'
Medicaid coverage; D-SNP personnel may be able to similarly access
information in order to better assist enrollees. In some circumstances,
a plan can assist a member simply by questioning the enrollee about
their Medicaid coverage, or by jointly calling Medicaid customer
service to obtain coverage information. As D-SNPs implement these
provisions, we will gather and share best practices to help ensure
robust implementation of these requirements.
Comment: A commenter indicated that, in certain circumstances, the
state Medicaid agency is the only source that can clarify or have up-
to-date information for the member. The commenter stated that D-SNPs
should have the ability to direct members to state Medicaid agencies as
needed.
Response: We wish to clarify that our proposal would not prevent D-
SNPs from directing enrollees to state Medicaid agencies. Instead, our
proposal requires that the D-SNP provide reasonable assistance in
identifying the specific contacts within the state Medicaid agency, and
helping the enrollee find the correct contact information, when
referral of an enrollee to Medicaid resources is appropriate.
Comment: A few commenters recommended that CMS modify its proposal
so that D-SNPs would be responsible for assisting members with appeals
and grievances and other matters related only to services available
through the D-SNP and that are clearly within the purview of the plan.
Response: We disagree with these commenters. Despite the valid
data-sharing challenges, we believe it is reasonable to require that D-
SNPs, as plans focused on serving dual eligible individuals, take steps
to assist enrollees with obtaining Medicaid covered services and
resolving Medicaid grievances, consistent with the requirement codified
in this final rule in Sec. 422.2 that D-SNPs coordinate the delivery
of Medicare and Medicaid services for individuals eligible for such
services. This would necessarily mean that the D-SNP take steps to gain
access to information about the Medicaid benefits available to the D-
SNP's enrollees. Moreover, providing such assistance is often in a D-
SNP's financial interest, such as when an enrollee's access to
Medicaid-covered services like personal care services and other home
and community based services (HCBS) could prevent a hospitalization or
address an enrollee's condition before it escalates into a need for
medical services.
Comment: Several commenters requested clarification of whether the
proposed regulation would require a FIDE SNP to offer to assist a dual
eligible individual in appealing its own reduction of Medicaid LTSS
services. The commenter believed this would be burdensome and could
present a conflict for the plan.
Response: We clarify that a FIDE SNP that covers the Medicaid
service through a capitated contract with a state also has an
obligation to assist a dual eligible individual in appealing its own
reduction or denial of Medicaid services, including LTSS, under its
Medicaid MCO contract. The definition at Sec. 422.2 finalized
elsewhere in this rule requires that FIDE SNPs have Medicaid MCO
contracts. As a Medicaid MCO, the FIDE SNP has an obligation under
Sec. 438.406(a) to provide reasonable assistance to its members in
completing forms and taking other procedural steps related to a
grievance or appeal. Therefore, FIDE SNPs already have an obligation to
assist with Medicaid appeals. We do not agree that there is any undue
burden or conflict under either the D-SNP or Medicaid MCO requirements
to assist with appeals when that assistance results in a FIDE SNP
providing coverage upon adjudication of the appeal. These requirements
are, in the first instance, a component of the Medicaid MCO
requirements to implement an appeals process, and, in the second
instance, consistent with the requirement codified elsewhere in this
final rule that D-SNPs coordinate Medicaid benefits. The new
requirements we are finalizing at Sec. 422.562(a)(5) of this final
rule are applicable to all D-SNPs and to all D-SNP enrollees, whether
or not they are enrolled in the Medicaid MCO offered by the D-SNP, and
thereby effectively extend and complement the existing MCO requirements
under Sec. 438.406(a). Further, we note that Sec. 422.562(a)(5)(v)
expressly provides that the D-SNP does not have any obligation to
represent an enrollee in a Medicaid appeal.
Comment: Several commenters emphasized that other entities have an
important role in providing enrollees assistance with Medicaid coverage
issues and grievances. Several of the commenters stressed the important
role of the state ombudsman. One commenter proposed that CMS add
language to the regulation text stating that the D-SNP must make
available to their enrollees specific contact information for
organizations providing free legal services and for any applicable
ombudsman programs. Another commenter suggested that D-SNPs be required
to make a written referral for the enrollee to the state's Medicaid
managed care ombudsman, particularly when the D-SNP has a financial
and/or clinical responsibility for the disputed services. One commenter
highlighted the fact that the ombudsman offices are specifically funded
to assist beneficiaries in filing grievances and appeals, and
frequently coordinate with State Health Insurance Assistance Programs
(SHIPs). The same commenter stated that many community-based
organizations already receive federal funding to provide coaching to
promote self-advocacy, and D-SNPs should not duplicate these services.
Response: We agree with commenters that ombudsman programs, SHIPs,
legal services organizations, and other community organizations have an
important role in providing assistance with Medicaid coverage and
grievances and believe that referrals to such organizations can be an
appropriate method for D-SNPs to provide the required assistance in
certain circumstances. We recognize that such organizations often have
limited capacity and encourage D-SNP partnerships with such
organizations to help ensure the referrals are to organizations with
the capacity to help.
Comment: Several commenters proposed requiring D-SNPs to provide

[[Page 15726]]

assistance in a language and format needed to effectively assist
enrollees and in compliance with all language and disability access
provisions.
Response: The language suggested by the commenter is very similar
to obligations already required of Medicaid managed care organizations
at Sec. 438.406(a), which includes obligations to provide interpreter
services and auxiliary aids to assist enrollees with grievances and
appeals. MA plans also have existing obligations under Title VI of the
Civil Rights Act of 1964 to take reasonable steps to ensure meaningful
access by individuals with limited English proficiency and under
section 504 of the Rehabilitation Act of 1973 to take appropriate steps
to ensure effective communication with individuals with disabilities,
including the provision of auxiliary aids and services. Section 1557 of
the Affordable Care Act places similar civil rights obligations on
covered entities.
Comment: Several commenters requested that CMS be mindful of dual
eligible individuals' choices and recommended that CMS not penalize
plans for not providing assistance when enrollees decline such
assistance.
Response: If an enrollee does not want the D-SNP's help in
resolving an issue, then the D-SNP would not be obligated under our
proposal to provide assistance.
Comment: A few commenters recommended expanding the proposal to
include providing assistance with Medicaid eligibility, and one
commenter noted that case managers are in a good position to help
enrollees with these issues. One commenter suggested CMS should
explicitly require assistance in resolving issues related to Medicaid
eligibility as a fourth requirement at Sec. 422.562(a)(5)(i).
Response: We believe this recommendation is beyond the scope of our
proposed requirement, which focuses on assistance with grievance and
coverage appeals and not Medicaid eligibility. However, states may
choose to require assistance with eligibility issues in their state
Medicaid agency contracts with D-SNPs.
Comment: Several commenters recommended that CMS provide states and
D-SNPs with technical assistance on implementing these provisions. One
commenter stated that CMS should consider establishing a technical
expert panel to make recommendations to CMS on appropriate practices
and then develop guidance that establishes guiding principles for
enrollee assistance, provides examples, and identifies related issues
for states and Medicaid plans to consider. Another commenter suggested
that CMS consult with states and D-SNPs in developing additional
guidance to help evaluate recommended pathways for specific situations.
Another commenter recommended states provide clear guidance to D-SNPs
operating in the state to define the level of assistance they should
provide, including applicable examples.
Response: We are committed to providing technical assistance to
states and to sharing best practices with D-SNPs to implement these
requirements based on consultations with stakeholders and evolving
practice in this area. We expect that the best approaches will be
specific to the Medicaid coverage in specific states and how these
states use D-SNPs to integrate coverage.
Comment: Several commenters were supportive of our proposal at
Sec. 422.562(a)(5)(i)(A) that D-SNPs provide reasonable assistance to
an enrollee and explain to an enrollee how to make a request and how to
file an appeal following an adverse benefit determination. Several
commenters also appreciated that the D-SNP's only obligation would be
to offer assistance with filing an appeal and, upon acceptance of the
request, provide its enrollees such assistance in obtaining and filling
out forms as necessary for the next steps in the process. Many
commenters appreciated that the proposed rule recognizes that some
enrollees will wish to self-advocate and can receive support from the
plan for their efforts. A few commenters believed plans must empower
their staff to act in the best interests of the enrollee and that D-
SNPs should establish appropriate staff training and procedures to
ensure that those staff provide the same reasonable assistance that the
dual eligible individual might receive from a similarly charged
independent assister (which enrollees could continue to work with
should they choose).
Response: We appreciate the commenters' support of CMS's approach
to broadly requiring D-SNPs to provide assistance to dual eligible
individuals with Medicaid grievances and appeals. D-SNPs can provide
assistance in many ways, including advising enrollees to call providers
and the questions to ask, assisting enrollees with medical
documentation requests, identifying necessary forms to file, and
referring enrollees to an organization with more expertise (such as a
state ombudsman and other relevant assistance programs). We do not seek
to be overly prescriptive in the types of assistance a D-SNP must
provide, and our examples are not intended to be exhaustive. Further,
we note that the regulation, as proposed and as finalized in this rule
at Sec. 422.560(a)(5)(v), does not require the D-SNP to represent its
enrollees in Medicaid matters.
Comment: Many commenters recommended that CMS clarify what
constitutes ``reasonable assistance.'' A few commenters requested
additional guidance on ``coaching the enrollee to promote self-
advocacy.'' Some commenters noted that it is ultimately the enrollee's
responsibility to ensure that they take all procedural steps and
provide and submit documentation as part of the appeals process. Other
commenters requested more guidance on the expectations and extent of
assistance D-SNPs must offer and give their enrollees.
Response: We emphasize that our requirements describe the D-SNP's
responsibility to provide assistance and do not include a requirement
to resolve the coverage issue or to represent the enrollee. Not all
enrollees would need significant assistance; for many enrollees, simply
receiving information under paragraph (a)(5)(i) would be sufficient.
Some dual eligible individuals are highly adept at advocating for
themselves, and may require only modest assistance--for example, a
phone number or direction to an appropriate website--or help with
technical terms in explaining why they need a specific piece of
equipment. Other enrollees may need encouragement and coaching to
advocate for themselves, such as talking through the steps the enrollee
will take to seek resolution of the issue, or role playing to practice
how to talk to a representative of the Medicaid agency or a Medicaid
managed care plan. We encourage D-SNPs to provide such coaching to
empower dual eligible individuals to advocate for themselves when
appropriate. When a D-SNP enrollee needs a higher level of assistance
with the act of filing a Medicaid grievance or appeal, the D-SNP should
provide that help. However, the D-SNP is not obligated to represent the
enrollee in Medicaid appeals nor advocate for coverage, as stated in
paragraph (a)(5)(v). Plans can provide specific contact information,
explain to enrollees the roles of the Medicaid program, and generally
offer different levels of assistance based on the individual's needs.
Comment: Another comment sought an explanation of the phrase,
``becomes aware of an enrollee's need for a Medicaid-covered service.''
Response: There are a number of ways in which a D-SNP could become
aware of the need for assistance. A non-

[[Page 15727]]

exhaustive list includes: During a health risk assessment when an
enrollee shows a need for more LTSS than she currently receives through
Medicaid; during a request for coverage of a Medicaid-covered service
made to the D-SNP; and during a call to the D-SNP's customer service
line. As the above list illustrates, the offer of assistance from the
D-SNP is not dependent on an enrollee's specific request for
assistance.
Comment: Many commenters agreed with the proposed provision at
Sec. 422.562(a)(5)(i)(C) requiring plans to assist an enrollee in
obtaining documentation to support a request for authorization of
Medicaid services or a Medicaid appeal, such as medical records. One
commenter requested additional clarification from CMS on the extent of
responsibility that D-SNPs will assume when obtaining documentation,
including the specific types of documentation that D-SNPs might be able
to provide. Several commenters questioned whether CMS was imposing a
requirement on D-SNPs that duplicates the existing regulations that
require Medicaid MCOs to assist enrollees with grievances and appeals.
Response: CMS believes the assistance requirement for D-SNPs is
commensurate with the assistance a Medicaid MCO is required to provide
for appeals and grievances at Sec. 438.406(a), which includes
reasonable assistance in completing forms and taking other procedural
steps related to a grievance or appeal; however, while there may be
some areas of overlap, the new MA requirement at Sec. 422.562(a)(5) is
not inappropriately duplicative. Not all D-SNPs are Medicaid MCOs,
PIHPs, or PAHPs subject to the requirements under Sec. 438.406(a).
Even some D-SNPs, such as FIDE SNPs, that are also Medicaid MCOs may
have some members who are not also enrolled in the Medicaid MCO, or
there may be Medicaid services that are carved out of the Medicaid
MCO's benefits and delivered through Medicaid FFS or a separate
Medicaid plan. The assistance requirement for D-SNPs that we are
finalizing here is an implementation of the overriding requirement on
D-SNPs under section 1859(f)(3)(D) of the Act to coordinate Medicaid
benefits. To the extent the assistance in grievances actually provided
by a Medicaid MCO obviates the need for any additional assistance by
the D-SNP in a grievance or appeal, such assistance would no longer be
required to be provided by the D-SNP. To the extent the D-SNP enrollee
requires additional advice or assistance with completing forms, or
seeking documentation from relevant providers, the D-SNP should offer
to provide such assistance and provide it when the enrollee agrees.
Comment: Several commenters were concerned with how D-SNPs should
document and report to CMS that assistance was offered and whether or
not an offer of assistance was accepted. A few commenters requested
additional information on the documentation and reporting requirements
that CMS will establish and whether such documentation will be reviewed
as part of the audit protocols for D-SNPs. One commenter requested CMS
remove the requirement at Sec. 422.562(a)(5)(iv) that requires a D-SNP
to provide documentation to CMS that demonstrates how the D-SNP is
providing the assistance, citing concerns with administrative burden on
plans.
Response: We agree that documentation of the assistance D-SNPs
provide their enrollees with Medicaid coverage and grievances should
not be overly burdensome to plans. The documentation requirement
(including any potential reporting to CMS) in Sec. 422.562(a)(5)(iv)
does not prescribe certain types of assistance in all cases.
Particularly in the initial years of implementation, when plans are
developing processes to best implement these requirements, our goal is
to provide plans with flexibility on the type of assistance they
provide in individual cases and to monitor compliance with this
requirement at a high level. We would not, for example, require proof
that a beneficiary had declined an offer of assistance. We plan to
detail the scope and content of the documentation requirements in
subregulatory guidance, and it is likely that the subregulatory
guidance will be made available for stakeholder comment before it is
finalized.
Comment: Several commenters suggested that CMS take steps to ensure
that D-SNPs that provide assistance with Medicaid coverage issues are
not penalized in CMS audits or in the MA Star Ratings measure that is
based on beneficiary complaints (``Complaints About the Health Plan'')
when the final result--the coverage decision made by a party other than
the D-SNP--is not to the beneficiary's satisfaction. Another commenter
recommended that CMS protect D-SNPs from ``liability'' for providing
assistance with Medicaid coverage and grievances.
Response: In general, we do not believe that D-SNPs providing their
enrollees with assistance navigating their Medicaid coverage will
trigger an increase in beneficiary complaints. Rather, we expect D-SNP
enrollees will appreciate the assistance that their D-SNP provides.
Nonetheless, we will review our criteria to ensure we are capturing
complaints appropriately and will consider any future changes to these
criteria that may be necessary. Outside of these areas, we are unclear
how providing such assistance would increase D-SNPs' ``liability.''
After considering the comments we received and for the reasons
provided in the proposed rule and our responses to those comments, we
are finalizing the text proposed for codification at Sec.
422.562(a)(5) with one technical modification. At paragraph
(5)(iii)(B), we are modifying the regulatory text to clarify that the
requirement that D-SNPs provide reasonable assistance in completing
forms and procedural steps applies specifically to Medicaid appeals and
grievances. We believe the additional clarification provided by our
responses to the comments in this final rule should give D-SNPs a
clearer understanding of the scope of their responsibilities under the
regulation and the various methods and resources D-SNPs can use to
fulfill the requirements. We recognize that there will be a joint
learning process with states, MA organizations, dual eligible
individuals, and their advocates on the processes that can facilitate
effective implementation of these requirements. We expect to provide
technical assistance to states and D-SNPs to help with implementation.
In addition we plan to provide subregulatory guidance as necessary,
including regarding CMS oversight of D-SNP performance in this area. We
note that, unlike the remainder of the appeals and grievances
provisions finalized in section II.A.2.b of this final rule, the
requirements at Sec. 422.562(a)(5) will be applicable to all D-SNPs
and will be applicable beginning January 1, 2020.
(2) Statutory Basis and Scope for Unifying Grievances and Appeals
(Sec. 422.560)
In Sec. 422.560, we proposed to add new paragraphs (a)(4) and
(b)(5) to address the statutory basis and scope of our proposal to
establish unified grievance and appeals processes for a subset of D-
SNPs. Specifically, we proposed a new paragraph (a)(4) to cite section
1859(f)(8) of the Act and provide that the procedures under that
section apply in place of otherwise applicable grievance and appeals
procedures with respect to items and services provided by certain D-
SNPs. We also proposed to add new paragraph (b)(5) to identify the
scope of the new proposed regulations--that is, requirements for
applicable integrated plans with regard to unified appeals and
grievance procedures. The substance of these proposals is addressed in
sections

[[Page 15728]]

II.A.2.b.(3) through (11) of the proposed and final rules.
We received no comments on our proposed changes to Sec. 422.560
and are finalizing the regulation text at paragraph (b)(5) as proposed.
However, we are making a non-substantive technical change to paragraph
(a)(4) to clarify that the unified appeals and grievance procedures
finalized in this rule are applicable beginning January 1, 2021. We are
also making a technical change to correct an inadvertent omission in
the proposed rule. Section 1859(f)(8)(C) of the Act states that,
effective in 2021, contracts between D-SNPs and state Medicaid agencies
must require the use of the unified grievance and appeals process. In
order to reflect this requirement in regulation, as noted in section
II.A.2.a.(2) of this final rule, we are finalizing a new paragraph at
Sec. 422.107(c)(9) that requires that contracts between D-SNPs that
are applicable integrated plans, defined in Sec. 422.561, and the
state Medicaid agency require the use of unified grievance and appeals
procedures.
(3) Definitions of ``Applicable Integrated Plan'', ``Integrated
Appeal'', ``Integrated Grievance'', ``Integrated Organization
Determination'', and ``Integrated Reconsideration,'' and General
Requirements for Applicable Integrated Plans (Sec. Sec. 422.561 and
422.629(a)-(k))
A central challenge to implementing unified grievance and appeals
systems for D-SNPs and the Medicaid managed care organization operated
by such plan's parent organization is the variety of enrollment
scenarios across states. There are only a limited number of D-SNPs in
which aligned enrollment, as defined in Sec. 422.2 of this final rule,
is possible--that is, a situation when a full-benefit dual eligible
individual is enrolled in a D-SNP and receives coverage of Medicaid
benefits from the D-SNP's MA organization or from a Medicaid managed
care organization, as defined in section 1903(m) of the Act, operated
by the D-SNP's parent organization or by another entity that is owned
and controlled by the D-SNP's parent organization. Even fewer D-SNPs
operate in states where that state Medicaid agency mandates such
aligned enrollment. With exclusively aligned enrollment, all of the
enrollees of the D-SNP also receive Medicaid services through the D-SNP
or an affiliated Medicaid managed care organization operated by the D-
SNP's parent organization.
The bulk of D-SNP enrollment, however, is not exclusively aligned.
In most states, the majority of D-SNP enrollees have Medicaid coverage
either through a different organization's Medicaid MCO, in a prepaid
ambulatory or inpatient health plan (PAHP or PIHP), or through a
state's Medicaid fee-for-service system. In these circumstances, the D-
SNP has no control over the Medicaid grievance and appeals processes.
Even a D-SNP that has a Medicaid managed care organization operated by
such plan's parent organization available to its enrollees, but whose
members may instead enroll in other Medicaid plans, can only unify the
procedures for Medicaid appeals and grievances of those enrollees who
are also simultaneously enrolled in the Medicaid managed care
organization operated by such plan's parent organization.
We proposed to add definitions for new terms to govern the
integrated grievance and appeals processes. In Sec. 422.561 we
proposed a new definition for ``applicable integrated plan,'' which is
the specific type of D-SNP and affiliated Medicaid plan that would be
governed by the new integrated grievance and appeals regulations. In
our definition of applicable integrated plan, we proposed to include
only a subset of D-SNPs, that is, only FIDE SNPs and HIDE SNPs with
exclusively aligned enrollment, terms that were also proposed (see
section II.A.2.a.(1) of the proposed rule) and are finalized with
limited modifications elsewhere in this rule (see section II.A.2.a.(1)
of this final rule). We proposed that the affiliated Medicaid plan be a
Medicaid managed care organization, as defined in section 1903(m) of
the Act, that is offered by: (1) The D-SNP with exclusively aligned
enrollment; (2) the parent organization of such D-SNP; or (3) another
entity that is owned and controlled by the parent organization of such
D-SNP. Thus, as we stated in the proposed rule, our proposed unified
grievance and appeals procedures would apply only to the enrollees of
the subset of D-SNPs that are FIDE SNPs or HIDE SNPs with exclusively
aligned enrollment and the affiliated Medicaid managed care
organizations through which such enrollees receive their Medicaid
services. As we noted in our discussion of the proposed definition of
aligned enrollment in section II.A.2.a.(1) of the proposed rule, we
would not consider a D-SNP's companion Medicaid plan to be an
applicable integrated plan where it is a PIHP or PAHP in the state's
Medicaid program. We solicited comments on our proposed definition of
an applicable integrated plan and how it reflects which plans and
entities would have to use the proposed unified grievance and appeals
procedures. We sought comment on whether limiting our proposed policies
to MCOs, rather than including PIHPs and PAHPs, was appropriate in
light of the statute and our policy goals. We also clarified which
proposed appeal and grievance procedure requirements for D-SNPs would
not apply to applicable integrated plans; D-SNPs that are not
applicable integrated plans would continue to establish and administer
appeal and grievance systems that comply with the existing requirements
for MA plans.
For the purpose of differentiating the terminology and procedures
within this framework, we proposed to establish definitions for
``integrated organization determination,'' ``integrated appeal,''
``integrated reconsideration,'' and ``integrated grievance'' and apply
them exclusively to applicable integrated plans and the unified appeal
and grievance procedures.
Under our proposal, integrated organization determinations would
encompass both Medicare organization determinations, as described in
Sec. 422.566, and adverse benefit determinations, as defined in Sec.
438.400(b); however, these determinations would be made by applicable
integrated plans and would therefore be subject to the integrated
organization determination procedures in proposed Sec. Sec. 422.629,
422.631, and 422.634. These would be the first decisions made by the
applicable integrated plan regarding coverage, approval, or payment for
a covered service.
Similarly, we proposed that integrated reconsiderations would be
the appeal of the applicable integrated plan's adverse integrated
organization determination with respect to the health care services the
enrollee believes he or she is entitled to receive. Under our proposal,
an integrated reconsideration would be the same as an MA plan's
reconsideration (in Sec. 422.580) of an organization determination
(defined in Sec. 422.566) and the appeal (defined in Sec. 438.400(b))
of an adverse benefit determination made by a Medicaid managed care
plan. Integrated reconsiderations would encompass both Medicare
reconsiderations, as described in Sec. Sec. 422.578, 422.580, 422.582,
and 422.584, and appeals, as defined for the Medicaid managed care
context in Sec. 438.400(b). However, these determinations would be
made by applicable integrated plans and therefore subject to the
integrated reconsideration procedures in proposed Sec. 422.629 and
Sec. Sec. 422.632 through 422.634.

[[Page 15729]]

We proposed defining integrated appeals to encompass integrated
reconsiderations and any additional post-plan level unified appeal
processes that may be implemented in the future.
Additionally, we proposed to define an integrated grievance as a
dispute or complaint that would be defined and covered, for grievances
filed by an enrollee in non-applicable integrated plans, under Sec.
422.564 or Sec. Sec. 438.400 through 438.416. Integrated grievances
would not include appeals procedures or QIO complaints, as described in
Sec. 422.564(b) and (c), respectively. An integrated grievance made by
an enrollee in an applicable integrated plan would be subject to the
integrated grievance procedures in Sec. Sec. 422.629 and 422.630.
Our proposed definitions for integrated grievance, integrated
organization determination, and integrated reconsideration were
intended to replicate the scope and meaning of the parallel terms in
parts 422 subpart M and part 438 subpart E regarding the appeals and
grievance procedures required of, respectively, MA organizations and
Medicaid managed care plans because we were proposing that these
regulations and procedures would take the place of those part 422 and
part 438 procedures for applicable integrated plans. We solicited
comment on whether our proposal adequately accomplished this.
We proposed at Sec. 422.629 to establish general requirements for
applicable integrated plans, as defined in Sec. 422.561. In the
proposed rule, we generally explained how we balanced existing Medicare
and Medicaid requirements, including existing state Medicaid
flexibilities. In paragraphs (a) and (b), we proposed language that
sets forth the scope of the requirements and general process that
applicable integrated plans must implement. In paragraph (a)(1), we
proposed to specify that the proposed rules apply in lieu of the
general requirements for MA organizations at Sec. Sec. 422.564,
422.566(c) and (d), and 422.568 through 422.596, and Medicaid managed
care plans at Sec. Sec. 438.404-438.424, and encompass integrated
grievances, integrated organization determinations, and integrated
reconsiderations. In paragraph (b), we set forth the general
requirement that applicable integrated plans create integrated
processes to administer these grievance and appeals requirements.
In proposed paragraph (c), we addressed an overarching question
about whether a state may establish requirements that are different for
the applicable integrated plan(s) using the state Medicaid agency
contract with the D-SNP required under Sec. 422.107. Specifically, we
proposed to apply the flexibility offered to states under Medicaid
regulations, which establish a floor for enrollee protections while
offering states flexibility to impose more stringent requirements for
timeframes and notices so long as they are more protective of
beneficiaries. By preserving state flexibility in adopting more
stringent, beneficiary-protective requirements, we believe that we were
adhering to the direction set forth in sections 1859(f)(8)(B)(ii)(I)
and (II) of the Act for us to take into account differences in state
plans under Title XIX. Finally, in paragraph (c), we proposed to codify
the opportunity for states to establish standards that differ from the
standards set forth in these regulations in its state Medicaid agency
contract, per Sec. 422.107, with the applicable integrated plans. We
solicited comments on our proposed approach, and specifically how we
proposed to allow state flexibilities to be incorporated into the
unified procedures for an applicable integrated plan.
In paragraph (d), we proposed that the applicable integrated plan
provide the enrollee who is requesting the integrated reconsideration a
reasonable opportunity, in writing and in person, to present evidence
and testimony and make legal and factual arguments in support of their
appeal. We also proposed to require that applicable integrated plans
inform enrollees of the limited time available for these opportunities
in cases were the timeframe is expedited, similar to Sec. 422.586 and
Sec. 438.406(b)(4).
In paragraph (e), we proposed to require applicable integrated
plans to provide reasonable assistance to the enrollee with respect to
completing and submitting their integrated appeals and integrated
grievances, as well as on navigating this process. This proposal would
impose on applicable integrated plans a similar standard as applies to
Medicaid managed care plans pursuant to Sec. 438.406(a).
We proposed at paragraph (f) a general rule, using cross-references
to the requirements in Sec. Sec. 422.560, 422.561, 422.562, 422.566,
and 422.592 through 422.626, to specify the regulations that apply to
the applicable integrated plan for grievance and appeals processes
unless otherwise noted.
We proposed at paragraph (g) to require applicable integrated plans
to send the enrollee an acknowledgement of receipt in writing for all
integrated grievances and integrated reconsiderations. We proposed to
adopt the standard currently in Sec. 438.406(b) for applicable
integrated plans and to clarify that the acknowledgement should be in
written form.
In paragraph (h), we proposed to adopt Medicaid's grievance and
appeals recordkeeping requirements, as required for Medicaid managed
care plans at Sec. 438.416, to require applicable integrated plans to
maintain records of integrated appeals and grievances and review them
as part of their ongoing monitoring procedures.
We proposed in paragraphs (i) and (j) to incorporate similar
provisions as are imposed on Medicaid managed care plans pursuant to
Sec. Sec. 438.410(b) and 438.414 regarding relationships between the
plan and its contracted network providers. Specifically, in paragraph
(i), we proposed to prohibit an applicable integrated plan from taking
any punitive action against a provider for requesting an integrated
organization determination or integrated reconsideration, similar to
the provisions in Sec. Sec. 422.570(f) and 438.410(b). We also
proposed requiring, in paragraph (j), such a plan to disclose
information about its appeals and grievances procedures at the time it
enters into a contract with a provider or subcontractor. We proposed to
include specific topics which must be covered in this information to
providers, and these specific topics are the same as in existing
Medicaid regulations (see Sec. 438.414, which cites to Sec.
438.10(g)(2)(xi) for this purpose).
In paragraph (k), we proposed regulatory standards controlling who
must review an integrated organization determination. In developing our
proposal, we sought to combine the MA and Medicaid managed care
requirements for who must review an organization determination. In
paragraph (k)(1), we proposed to include the requirement from Medicaid
(Sec. 438.406(2)(iii)) that any individual who reviews an integrated
appeal or grievance must consider all information submitted by the
enrollee, regardless of whether the information was previously made
available to the plan. In paragraph (k)(2), we proposed to include the
requirements for reviews of Medicaid grievances (from Sec.
438.406(b)(2)) for who can review a grievance to integrated grievances.
In paragraph (k)(3), we proposed to include the existing
requirements from MA (Sec. 422.566) for who can review an organization
determination. We also proposed language that, in accordance with
current MA regulations (Sec. 422.566(d)), requires that physicians or
other health care professionals who review integrated organization

[[Page 15730]]

determinations have an unrestricted license and be acting within the
scope of that license.
In paragraph (k)(4) we proposed to combine existing MA and Medicaid
requirements for who can review a reconsideration or adverse benefit
determination since both sets of existing regulations have relevant
requirements.
We explained in the proposed rule (83 FR 55003 through 55006) how
we applied the direction in section 1859(f)(8)(B)(ii)(I) of the Act to
adopt the existing procedures that were more protective of enrollees
and explained the rationale for our specific proposals in paragraphs
(a) through (k) of proposed Sec. 422.629. Where MA and Medicaid
managed care rules are similar, our proposals tracked closely to
existing MA and Medicaid managed care rules. Where MA and Medicaid
managed care rules differ, we considered which rule was more protective
of enrollees and proposed rules that would follow the more protective
approach.
We summarize the comments we received on proposed Sec. 422.629(a)
through (k) and respond to them as follows:
Comment: Many commenters agreed with our approach to limit the
unified appeals and grievance processes to applicable integrated plans.
A subset of commenters, while supportive of our proposal, encouraged
CMS to extend the unified processes to all D-SNPs, or at least to all
FIDE SNPs and HIDE SNPs that are not exclusively aligned, to cover more
dual eligible individuals. Several of these commenters recommended
that, if CMS is unable to extend the unified process beyond what was
proposed, we should continue to review lessons learned and best
practices from our implementation of the unified processes and
potentially extend the processes in the future as overall integration
efforts advance. A commenter recommended that, if we are not able to
extend the unified processes beyond applicable integrated plans at this
time, we encourage states to facilitate cooperation between D-SNPs and
other entities covering benefits for the D-SNPs enrollees. A commenter
suggested that, if we did not extend the unified processes to
additional plans, we at least make it optional for states and plans
other than applicable integrated plans. Another commenter recommended
that we restrict the unified processes to exclude HIDE SNP enrollees,
due to lower level of benefits integration. A few commenters requested
that CMS clarify the impact of this unified process on MMPs in the
Financial Alignment Initiative demonstrations.
Response: We appreciate the broad support for the unified appeals
and grievance processes we proposed. While we appreciate the support
for extending these requirements to additional D-SNPs and dual eligible
individuals, we do not believe it is feasible at this time to implement
fully unified grievance and appeals systems for D-SNPs and Medicaid
managed care plans that do not have the same enrollees or where the
organizations offering the D-SNPs and Medicaid plans are unaffiliated
or even competitors. We note that states may include additional
integration requirements in their state Medicaid agency contracts with
D-SNPs. We disagree with the commenter that suggests excluding HIDE
SNPs with exclusively aligned enrollment from the definition of an
applicable integrated plan, because when a HIDE SNP meets the
definition of exclusively aligned enrollment, as defined in Sec.
422.2, the plan covers Medicare and Medicaid benefits (including at
least some LTSS or behavioral health services) for their dual eligible
enrollees. We also clarify that this rule will not impact the appeals
or grievance processes for MMPs, which will continue to be governed by
the demonstration three-way contracts and demonstration-specific
guidance. MMPs will continue to operate within existing waivers of part
422, as outlined in the memoranda of understanding for each
demonstration.
Comment: A commenter requested that CMS clarify the relationship
between the terms ``aligned enrollment,'' ``exclusively aligned
enrollment,'' and ``applicable integrated plan,'' specifically, the
relationship between the plan-specific nature of ``aligned
enrollment,'' the state policy-specific nature of ``exclusively aligned
enrollment,'' and whether it is actually CMS' intent that the term
``applicable integrated plans'' be a function of state policy and not
of individual plan structure. The commenter further requested
clarification as to whether it is CMS' intent to use this concept of
``exclusively aligned enrollment'' as a policy benchmark for states to
meet, and, if so, whether CMS intends to somehow influence states
toward that goal. A commenter also recommended that CMS clarify whether
a HIDE SNP or FIDE SNP operating in a state without exclusively aligned
enrollment cannot or should not unify their appeals and grievances in
the fashion outlined in this section.
Response: We acknowledge that exclusively aligned enrollment is
directly related to state policy choices to require such alignment.
Exclusively aligned enrollment, as defined in Sec. 422.2 in this final
rule, occurs when the state requires a D-SNP operating in the state to
enroll only dual eligible individuals who are also enrolled in an MCO
(that has an MCO contract under section 1903(m)(2) of the Act) that is
offered by the D-SNP's MA organization, the D-SNP's parent
organization, or by another entity that is owned and controlled by the
D-SNP's parent organization. In effect, exclusively aligned enrollment
means that Medicare benefits, MA supplemental benefits, and
comprehensive Medicaid benefits (which are the benefits that an MCO
contract covers) are provided by one entity (the D-SNP) or closely
affiliated entities that share a parent organization for all members.
Applicable integrated plans are the D-SNP and MCO in this exclusively
aligned enrollment arrangement. Aligned enrollment--in contrast to
exclusively aligned enrollment--occurs when some, but not all, of the
D-SNP's enrollees are covered under this arrangement.
While CMS intends to continue to provide technical assistance to
states on the value of integration and exclusively aligned enrollment,
we believe that it is most feasible at this time to impose the unified
processes only on those plans that have the ability to unify such
processes for all of their members. Therefore, only applicable
integrated plans are required to comply with the regulations we
proposed and are finalizing, with some modifications, in this final
rule. D-SNPs, including HIDE SNPs and FIDE SNPs, that do not meet the
definition of an applicable integrated plan must comply with the MA
appeal and grievance system requirements in Sec. Sec. 422.560 through
422.626. We also note that a state may establish additional integration
requirements through its state Medicaid agency contract with D-SNPs.
Comment: We received several comments supporting our proposed
definitions at Sec. 422.561, as well as a few requests for additional
clarification, including whether the definition of an integrated
organization determination includes prior authorizations. One commenter
expressed concern that, if integrated organization determinations do
include prior authorizations, the 72-hour resolution timeframes for an
expedited integrated organization determination may not be a fast
enough resolution timeframe in all cases.
Response: Integrated organization determinations include prior
authorizations because prior

[[Page 15731]]

authorizations are included in the definitions of organization
determinations under Sec. 422.566, adverse benefit determinations
under Sec. 438.400(b), and actions in Sec. 431.201. We also note
that, for resolution of an expedited integrated organization
determination, the timeframe requirement is that resolution must be as
expeditiously as the enrollee's health condition requires, but not to
exceed 72 hours; thus, 72 hours is only a maximum timeframe, and an
applicable integrated plan must take each enrollee's unique
circumstances into consideration in processing and deciding an
integrated organization determination. This is consistent with the
requirement timeframes under both MA and Medicaid (see Sec. Sec.
422.572(b) and 438.210(d)(2)).
Comment: We received a number of comments on our proposed
requirement at Sec. 422.629(c) allowing states flexibility in
implementing standards for timeframes or notice requirements that are
more protective for the enrollee. A number of commenters supported our
proposal as a way to extend enrollee protections currently available
under Medicaid in some states. Some commenters opposed or expressed
concerns related to allowing state flexibility. One commenter requested
clarification on whether the proposed procedures would supersede or
override any conflicting current Medicaid state law or rules and
federal statutes and rules related to D-SNPs and under what process any
of those potential conflicts could be addressed. A few commenters noted
that allowing states to shorten timeframes for resolving appeals can be
detrimental to a plan's ability to collect necessary information and
make fully informed decisions. A few commenters expressed concern about
the burden and complexity associated with requiring applicable
integrated plans to implement different timeframes for entities that
operate in many states. A commenter questioned how CMS would make
decisions about which state flexibilities to allow and which not to
allow. One commenter expressed concern that states would not be able to
implement the intent of Congress and CMS without additional guidance,
or that CMS would not be able to accommodate state variations without
impacting or delaying the intent of the overall process to provide
simplification and clarity for beneficiaries. A few commenters
encouraged CMS to work with states and stakeholders, including through
a stakeholder panel, to implement this requirement.
Response: We appreciate commenters' varied perspectives on this
issue. As discussed earlier in this preamble, the statute requires that
we take into account differences in state plans and that we implement
standards most protective of enrollees (see sections
1859(f)(8)(B)(ii)(I) and (II) of the Act). Medicaid regulations
governing managed care plans currently allow variation from federal
regulations as long as the state policy complies with federal
standards, and thus we are designing the unified process for applicable
integrated plans to include similar state flexibilities. In effect, the
federal regulations we proposed and are finalizing operate as the
minimum requirements on unified grievance and appeals procedures;
states may use the contract they have with the D-SNP under Sec.
422.107 and the state Medicaid contract with the Medicaid managed care
plan to require timeframes that are more protective of the enrollees in
the applicable integrated plans. We also note that the unified process
will impact a relatively small universe of states and plans. The
proposed unified process will apply for enrollees in applicable
integrated plans in lieu of current federal Medicare and Medicaid
regulations. With respect to the burden and complexity of administering
these unified processes, D-SNPs that contract to provide Medicaid
benefits, including applicable integrated plans that must comply with
the unified appeal processes addressed in this rule, currently
administer two separate processes--one for Medicare and one for
Medicaid--in addition to complying with specific appeal requirements
for Part D benefits. Under the unified approach, they will only
administer one process for all non-Part D benefits. Thus, though there
may be some initial burden in implementing the new unified processes,
in the long term we expect the administrative burden on applicable
integrated plans to be reduced.
With respect to when the state flexibility will be allowed, to the
extent that a state statute or rule sets a standard that is more
protective of enrollees with respect to timeframes or notices than the
unified rules we are establishing in this final rule, which is the
standard set by Congress in the statute, then that state standard will
apply under the flexibility we are finalizing at Sec. 422.629(c) in
the unified processes, as it would currently in the state's Medicaid
program. With respect to how CMS will accommodate such flexibilities,
the flexibilities will need to be stated in the state's contracts with
the applicable integrated plan (meaning both the contract with the D-
SNP under Sec. 422.107 and the state contract with the Medicaid MCO).
States will then need to ensure compliance with state-specific
requirements. We expect that any state requirements that differ from
the requirements as written in this rule will reflect state-specific
Medicaid requirements, and will therefore ensure the same degree of
protection as that afforded to all Medicaid beneficiaries in the state.
CMS is committed to continuing our work with states based on their
specific policy priorities following the implementation of this final
rule, including any necessary changes to state regulations or
processes, and we will work to ensure changes and updates are
communicated to the public.
Comment: One commenter stated that our proposed requirement, at
Sec. 422.629(g), to send written acknowledgements of all integrated
reconsiderations was likely to cause confusion for enrollees and
increase administrative burden for applicable integrated plans.
Response: Sections 1859(f)(8)(B)(iii)(IV) and (V) of the Act, as
added by section 50311(b) of the Bipartisan Budget Act of 2018,
specifically call for unified timelines and procedures for
acknowledgement of appeals and grievances, and procedures to ensure
enrollees are notified of and can easily determine the status of the
grievance or appeal. We believe that that written acknowledgement best
meets these requirements and therefore decline to make any changes to
the requirement that applicable integrated plans send written
acknowledgment of each integrated reconsideration. We note that
applicable integrated plans have flexibility to tailor the
acknowledgement to the enrollee's case to improve clarity and help
avoid confusion. This requirement parallels the Medicaid regulation at
Sec. 438.406(b), and we note that MA guidance also addresses written
acknowledgement of oral requests for reconsideration (see Parts C & D
Enrollee Grievances, Organization/Coverage Determination, and Appeals
Guidance Sec. 50.2.1).\24\
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\24\ See https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/Downloads/Parts-C-and-D-Enrollee-Grievances-Organization-Coverage-Determinations-and-Appeals-Guidance.pdf.
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Comment: A commenter suggested that we consider ways to ensure that
plans are consistently and uniformly capturing and logging beneficiary
requests for appeals and grievances and that applicable integrated
plans are, at a minimum, required to provide oral notification of
resolutions.

[[Page 15732]]

Response: We are finalizing recordkeeping requirements at Sec.
422.629(h) to help ensure consistency in recordkeeping and
documentation of integrated grievances and appeals, including the date
that the applicable integrated plan notified the enrollee of the
resolution at Sec. 422.629(h)(vii), as well as other minimum data
elements. We also note that applicable integrated plans are required to
provide the resolution of each integrated grievance to the enrollee,
per Sec. 422.630(e), which we address in detail in section
II.A.2.b.(5) of this final rule. We will monitor the need for
additional guidance on this issue during and after implementation of
the unified appeals and grievance processes required by this final
rule.
Comment: We received several comments supporting the proposed
prohibition, at Sec. 422.629(i), on applicable integrated plans taking
punitive action against providers for supporting enrollees' integrated
organization determinations or integrated reconsiderations. One
commenter recommended that we clarify that this prohibition extends to
an applicable integrated plans' contracted and delegated entities.
Response: We appreciate commenters' support for this requirement
and note that it is our expectation that applicable integrated plans
will ensure that contracted and delegated entities follow this
requirement, since the managed care plan must ensure that requirements
are met completely by its delegated or subcontracted entity and/or
individual under current Medicaid rules (Sec. 438.230(b)) and current
MA rules (Sec. 422.504(i)).
Comment: One commenter noted support for our proposed requirement,
at Sec. 422.629(j), for applicable integrated plans to provide
information about the integrated grievance and appeals systems to all
providers and subcontractors at the time they enter into a contract,
and requested that we extend the provision to require annual refresher
trainings.
Response: We appreciate the commenter's support. Both Medicaid and
MA have general requirements about providing information, but no
specific requirements with respect to frequency (see Sec. Sec.
438.414, and 422.202(b)). We decline to incorporate the commenter's
suggested requirement at this time because annual refresher training is
beyond what current Medicaid or MA regulations require in connection
with training on appeals and grievances processes. We believe such a
requirement would be unduly prescriptive and constrain plans'
flexibility in informing and training their providers and
subcontractors. However, we do expect that applicable integrated plans
will provide information and training to providers and subcontractors
as often as is necessary to ensure requirements are well understood and
met by all delegated entities.
Comment: One commenter supported the proposed requirement at Sec.
422.629(k)(3) related to the specific individuals who can review an
organization determination. A commenter recommended that we strike
``nor a subordinate of any such individual'' in the requirement at
Sec. 422.629(k)(4) related to who, at the applicable integrated plan,
can review integrated reconsiderations.
Response: We appreciate the commenter's support for this
requirement, but we decline to make this change, since our proposed
rule applied the requirement in the Medicaid managed care regulations
and we do not see a reason to set a new, different standard for review
under the unified appeals process. We believe that prohibiting
subordinates of someone who had already made a decision in a case is
appropriate, since the goal of the requirement is to help ensure a new,
objective review of the case, and a subordinate may believe a conflict
of interest in this respect.
After review of the comments and for the reasons set forth in the
proposed rule and our responses to the related comments, we are
finalizing the definitions at Sec. 422.561 of applicable integrated
plan, integrated appeal, integrated grievance, integrated organization
determination, and integrated reconsideration substantively as proposed
with minor technical and grammatical modifications to the definition of
an integrated organization determination to improve readability. We are
finalizing the general provisions at Sec. 422.629(a) through (k)
requiring use of unified appeals and grievance processes by applicable
integrated plans substantively as proposed with a minor modifications
in paragraph (a) to make a non-substantive technical change to clarify
that the unified appeals and grievance procedures finalized in this
rule are applicable beginning January 1, 2021, and to clarify that
Sec. 422.618(a) does not apply to applicable integrated plans and to
remove the designation of the single paragraph as (a)(1).
(4) Parties and Authorization for Filing Appeals (Sec. 422.629(l))
In proposed at Sec. 422.629(l), we addressed who is able to
request integrated grievances, integrated organization determinations,
and integrated reconsiderations. Proposed Sec. 422.629(1) used the
heading ``Parties.'' Although not explicitly stated in the preamble of
the proposed rule, we intended the heading to signal that such
individuals would be parties to the resulting integrated grievance,
integrated organization determination, and integrated reconsideration.
We also proposed in Sec. 422.629(l)(1)(ii) to combine the MA and
Medicaid requirements, such that a treating provider or authorized
representative can file an appeal on behalf of an enrollee. Our
proposal primarily adopted the MA rules at Sec. 422.566(c) and Sec.
422.582(a) that allow a treating provider to file a request for an
organization determination or standard reconsideration on behalf of an
enrollee without written authorization from the enrollee, but also
require that the provider notify the beneficiary. In order to mitigate
the risk that a provider would file an appeal against an enrollee's
interest and without an enrollee's consent, particularly to take
advantage of the provisions that allow a benefit to continue while the
appeal is pending, we proposed that the appealing provider obtain the
enrollee's written consent before requesting an integrated
reconsideration if continuation of benefits is requested under Sec.
422.632. Our proposed regulation text at Sec. 422.629(l)(1)(ii) also
incorporated the MA provision at Sec. 422.574(b) that allows a
provider to become an assignee of the enrollee and thereby become a
party to the organization determination and redetermination if the
provider waives any right to payment from the enrollee for the service
that is the subject of the appeal.
We summarize the comments we received on proposed Sec. 422.629(l)
and respond to them as follows:
Comment: We received broad support for our approach to
authorization for filing grievances, integrated organizations, and
integrated reconsiderations. Most commenters agreed that our proposal
presented a workable compromise between MA and Medicaid rules that
should protect enrollees' rights and minimize the potential for
inappropriate appeals. A few commenters expressed concern that allowing
providers to pursue appeals without first obtaining enrollees' written
consent would create a risk of conflicts of interest and potentially be
used to manipulate negotiated rates.
Response: We thank commenters for their broad support of our
approach. Because we are adopting existing MA rules for circumstances
where written

[[Page 15733]]

consent is not required when requesting integrated reconsiderations, we
believe the potential for conflicts of interest under our proposal are
no greater than they are under MA. Moreover, because we believe the
most significant potential for inappropriate provider-filed appeals
exists when aid (that is, coverage and payment) pending integrated
reconsideration is requested, requiring enrollees' written consent in
these cases should mitigate these risks. Our proposal reflected this
concern by limiting a provider's ability to seek benefit continuation
pursuant to Sec. 422.632 to only when the provider had received the
written request of the enrollee in proposed Sec. 422.629(l)(1)(ii); we
are finalizing this specific provision in a new paragraph (l)(1)(iv).
Comment: One commenter expressed concern that requiring enrollees'
written consent for provider-filed appeals requesting continuation of
Medicare services would confuse enrollees and providers and raise the
risk that enrollees would miss out on the opportunity to request
continuation of benefits for Medicare-related appeals. Instead, the
commenter recommended allowing providers to file requests for
integrated reconsiderations on behalf of enrollees without enrollees'
written authorization in these cases.
Response: We appreciate this concern but disagree with the
recommendation. We believe the provision requiring enrollee
authorization for provider-filed appeals requesting benefits pending
appeal is necessary to mitigate against potential conflicts of
interest. Although it may be theoretically possible to exclude
Medicare-related appeals from the requirement for written enrollee
consent in integrated reconsiderations, implementing such an exception
would likely be more confusing for providers and enrollees in an
integrated appeals system. We are therefore not adopting this
suggestion, but we encourage plans, enrollees and their advocates, and
providers to advise us regarding any difficulties implementing this
provision.
Comment: One commenter requested that we clarify who is a party to
the integrated reconsideration, similar to what currently exists in
Sec. 422.582.
Response: Proposed Sec. 422.629(1) used the heading ``Parties''
and identified who could request an integrated grievance, integrated
organization determination, and integrated reconsideration. Although
not explicitly stated in the preamble, we intended the heading to be
clear that such individuals would be parties to the resulting
integrated grievance, integrated organization determination, and
integrated reconsideration. We are finalizing the proposal with
additional language clarifying, at Sec. 422.629(l)(1), that all of the
individuals listed in that paragraph are parties to the integrated
grievance, integrated organization determination, and integrated
reconsideration.
In addition, we are deleting the language proposed at Sec.
422.629(l)(3) regarding which parties can request an expedited
integrated organization determination and expedited integrated
reconsideration. The same provisions are also at Sec. 422.631(c)(1)
for expedited integrated organization determinations and at Sec.
422.633(e)(1) for expedited integrated reconsiderations, and including
duplicative provisions at Sec. 422.629(l)(3) created the potential for
confusion.
Comment: Several commenters requested clarification regarding
whether non-treating providers would be authorized to file appeals
without an enrollee's written consent.
Response: Under Sec. 422.578, only treating providers are
permitted to file reconsideration requests on behalf of enrollees
without obtaining the enrollees' written consent. We did not intend to
broaden the ability of providers to file appeals on behalf of enrollees
beyond what is permitted in MA or change the right of assignees of an
enrollee to be parties to an appeal. We are therefore finalizing
regulatory text in paragraph (l)(1)(ii) that an assignee of an enrollee
includes a physician or provider that has furnished or intends to
furnish a service to the enrollee and has waived the right to payment
from the enrollee for the service. However, we are moving the provision
regarding the need for physicians and providers to provide notice to
the enrollee when filing a request for an integrated reconsideration on
behalf on an enrollee to a new paragraph (l)(3) along with additional
clarifying language. In this new paragraph (l)(3), we clarify that only
treating providers may request an integrated pre-service
reconsideration on behalf of enrollees without obtaining the enrollees'
written consent, but must also provide notice to the enrollee of that
request. Finally, for additional clarity, we are also finalizing a new
paragraph (l)(1)(iv) in this final rule that explicitly states that any
providers that furnish or intend to furnish a service to the enrollee
may request an integrated organization determination or, subject to the
requirements of paragraph (l)(3), an integrated reconsideration. This
provision is similar to the MA provision at Sec. 422.566(c)(1)(ii),
and upon consideration of comments requesting clarity on the role of
treating and non-treating providers, we believe it will be helpful to
include this provision explicitly in this final rule. We are also
moving the requirement that a provider requesting continuation of
benefits on behalf of an enrollee must obtain the enrollee's written
consent from proposed paragraph (l)(1)(ii) to the new paragraph
(l)(1)(iv), as this new paragraph explicitly addresses the rights of
treating providers in connection with integrated appeals. We are not
finalizing in this new paragraph (l)(1)(iv) the requirement that was
proposed at (l)(1)(ii) in the proposed rule that an authorized
representative also needs to obtain written consent when requesting
continuation of benefits because authorized representatives have--by
definition--obtained authority to act on enrollees' behalf.
Comment: Several commenters requested clarification regarding
whether our proposal for provider authorization applies both to pre-
service and post-service appeals.
Response: MA rules at Sec. 422.578 specify that the procedures
permitting treating providers to request reconsiderations on an
enrollee's behalf without the enrollee's consent apply only to pre-
service appeals. As with the limitation to treating providers, we did
not intend to broaden providers' appeal rights in this area beyond
existing MA rules. We are therefore removing the regulatory text at
Sec. 422.629(l)(1)(ii) and adding to the new paragraph (l)(3) in this
final rule regulatory text clarifying that the ability of providers to
file for an integrated reconsideration without obtaining the enrollee's
written consent applies only to pre-service integrated
reconsiderations.
Comment: One commenter supported our proposal but suggested adding
an explicit requirement that providers obtain enrollees' consent and
provide enrollees with status updates during the appeal process.
Another commenter made a related suggestion that providers requesting
integrated reconsiderations on behalf of enrollees be required to sign
and document that they have informed the enrollees of the filing of the
appeal.
Response: We disagree that more explicit restrictions and
obligations need to be part of the regulation. The final regulation at
Sec. 422.629(l)(3) states that, as under the MA regulation at Sec.
422.578, only treating providers may request an integrated
reconsideration on behalf on an enrollee without the enrollee's written
consent upon providing notice to the enrollee. Pursuant to Sec.
422.578, a treating provider may, upon providing notice to the
enrollee, request a pre-service,

[[Page 15734]]

standard reconsideration on the enrollee's behalf; any provider acting
on behalf of an enrollee may request that the standard reconsideration
be expedited, and Sec. 422.584 does not require notice to the enrollee
of the request that the reconsideration be expedited. MA rules at Sec.
422.578 do not impose additional explicit obligations on plans
requiring specific documentation or monitoring of communications
between providers and enrollees to establish that notice to the
enrollee has been provided in these situations. Instead, MA policy
provides plans with flexibility in how to ascertain whether a provider
has adequately informed an enrollee of the request for reconsideration
(see Parts C & D Enrollee Grievances, Organization/Coverage
Determination, and Appeals Guidance, Sec. 50.1).\25\ We believe
similar flexibilities should apply to integrated reconsiderations. For
example, if there are no records indicating contact between the
provider and enrollee, the plan should take reasonable steps to confirm
that the provider has informed the enrollee. Such steps could include
asking the provider either directly or on the form used to request the
reconsideration, or looking to see that the enrollee is copied on
correspondence. The plan may also contact the enrollee to confirm.
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\25\ See https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/Downloads/Parts-C-and-D-Enrollee-Grievances-Organization-Coverage-Determinations-and-Appeals-Guidance.pdf.
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Comment: One commenter requested clarification regarding whether
the provider authorization rules in this section will also apply to
expedited integrated reconsideration requests.
Response: As under MA rule at Sec. 422.578, the rules regarding a
provider requesting a reconsideration on an enrollee's behalf apply
both to standard and expedited integrated reconsideration requests. The
new paragraph Sec. 422.629(l)(3) we are finalizing in this rule states
explicitly that the rule applies to both standard and expedited
integrated reconsideration requests. We note that if there is a request
for benefits pending appeal, then the enrollee's written consent is
required under the provision we are finalizing at Sec.
422.629(l)(1)(iv). In such a circumstance, the provider may file the
expedited request without a request for aid pending appeal in order to
get the reconsideration request filed as soon as possible. The provider
may then follow up with written authorization to request continuing
benefits on the enrollee's behalf after securing the enrollee's consent
to that request so long as the time period for requesting continuing
benefits has not expired.
After consideration of the comments and for the reasons provided in
the proposed rule and our responses to the comments, we are finalizing
Sec. 422.629(l) with some modifications. Specifically--
We have revised paragraph (l)(1) to more clearly state
that that the individuals and entities identified in that section are
parties to the case;
We moved the provisions addressing the ability of providers to file
appeals on behalf of enrollees that were proposed at paragraph
(l)(1)(ii) to a new paragraph (l)(3), and we have deleted references to
authorized representatives in that paragraph.
We have added a new paragraph (l)(1)(iv) to expressly
permit any treating provider to request an integrated organization
determination and integrated reconsideration. We have also moved the
provisions addressing the obligation of providers to obtain written
consent of enrollees when requesting continuation of benefits that were
proposed at paragraph (l)(1)(ii) to the new paragraph (l)(1)(iv);
In paragraph (l)(2), which addresses the use of the term
``enrollee,'' we have replaced the words ``this section' in the
proposed rule with ``Sec. Sec. 422.629 through 422.634'' because our
intent is that the use of the term enrollee as described in this
paragraph apply to the entire integrated grievance and appeal process.
As proposed, we are concerned the reference to ``this section'' was
ambiguous and therefore are clarifying it; and
We have deleted the proposed paragraph (l)(3) because that
language was redundant with provisions codified in Sec. Sec. 422.631
and 422.633.
(5) Integrated Grievances (Sec. 422.630)
At Sec. 422.630, we proposed to largely parallel Medicare and
Medicaid requirements where these requirements are the same with regard
to the treatment of integrated grievances. Where MA includes a
requirement that Medicaid does not, or vice versa, or where the MA and
Medicaid regulations conflict, we proposed applying the requirement
that best aligns with the principles and statutory requirements
discussed in section II.A.2.b. of the proposed rule. For integrated
grievances, we specifically proposed:
At paragraph (a), to establish the general purpose of the
regulation, similar to Sec. 438.402(a) and Sec. 422.564(a), by
requiring that an applicable integrated plan provide meaningful
procedures for timely hearing and resolving integrated grievances filed
by an enrollee. We proposed to define the scope of the required
procedures as being applicable to any grievances between the enrollee
and the plan or any entity or individual through which the applicable
integrated plan covers health care services. We proposed this
requirement for the applicable integrated plan to be responsible for
ensuring timely and appropriate resolution of a grievance even if the
grievance pertains to an act or decision by one of the applicable
integrated plan's providers of health care services. In the regulation
text, we proposed that the integrated grievance procedures applied to
``grievances between enrollees and the applicable integrated plan or
any other entity or individual through which the applicable integrated
plan provides health care services.''
At paragraph (b), to provide that an enrollee may file a
grievance at any time, paralleling the current Medicaid regulation at
Sec. 438.402(c)(2).
At paragraph (c), to allow grievances to be filed with the
applicable integrated plan orally or in writing, in alignment with MA
and Medicaid requirements; we also proposed to allow integrated
grievances related to Medicaid benefits to also be filed with the state
in states that have processes in place for that in accordance with
Sec. 438.402(c)(3).
At paragraph (d), we proposed to largely parallel the MA
requirements (at Sec. 422.564(f)) to authorize an enrollee to file an
expedited grievance when the complaint involves the applicable
integrated plan's decision to extend the deadline for certain appeals
or refusal to grant a request for an expedited integrated organization
determination or expedited integrated reconsideration.
At paragraph (e)(1), to parallel MA's maximum 30-day
timeframe for resolving the grievance and MA's requirements, at Sec.
422.564(e)(1), for how the applicable integrated plan must respond to
grievances, depending on how the grievance is received and the basis
upon which the enrollee filed the grievance. Although not discussed in
the preamble to the proposed rule, the proposed regulation text would
require the applicable integrated plan to resolve an integrated
grievance as expeditiously as the case requires based on the enrollee's
health status and within 30 days, which is the current requirement
under Medicare (see Sec. 422.564(e)(1)).
At paragraph (e)(2), to include a provision, paralleling
provisions in MA (Sec. 422.564(e)(2)) and Medicaid managed care (Sec.
438.408(c)(1)), permitting the applicable integrated plan to extend the
time period in which a determination on an integrated grievance must be

[[Page 15735]]

issued to the enrollee by up to 14 days. We proposed combining MA and
Medicaid requirements, such that applicable integrated plans must
notify enrollees immediately, but no later than within 2 calendar days,
which we believe to be in line with the principles identified in
section 1859(f)(8)(B)(iii) of the Act for timely, clear notification to
enrollees.
We invited comments on these topics, specifically whether the
proposed regulation text accurately incorporated the standards from the
underlying part 422 or part 438 regulation that are more beneficial to
the enrollee. We also solicited comment on whether we adequately
captured all relevant enrollee protections currently available under MA
and Medicaid. We summarize and respond to the comments on these
specific proposals as follows:
Comment: Many commenters supported our proposed integrated
grievance process, including provisions for an expedited grievance
process, the 14-day extension period for resolving integrated
grievances, the clarification that applicable integrated plans must
resolve grievances involving any entity or individual through which the
applicable integrated plan provides health care services, requiring
responses to grievances within 30 days, and allowing enrollees to file
at any time. A few commenters opposed the proposal to allow enrollees
to file integrated grievances at any time, and recommending that CMS
instead limit enrollees to filing integrated grievances within 60 days,
to be consistent with the current MA requirement.
Response: We appreciate the support for our proposed integrated
grievance requirements. We decline to establish in this final rule a
timeframe for enrollees to file a grievance. While we understand the
commenters' desire to be consistent with such limits in the MA program,
our proposed requirements were developed consistent with the statutory
requirement that we implement standards most protective of enrollees
(see section 1859(f)(8)(B)(ii)(I) of the Act). The relevant Medicaid
regulation (Sec. 438.402(c)(2)(i)) allows a grievance to be filed at
any time, while the MA regulation (Sec. 422.564(d)(a)) limits
grievance filing to within 60 days of the event at issue. Not having a
time limit for enrollees to file grievances is most protective for
enrollees by eliminating barriers to filing.
In addition, we note that the language as we proposed in Sec.
422.630(a) with respect to the types of benefits for which the
applicable integrated plans is responsible for resolving integrated
grievances was limited to disputes involving entities that provide
``health care services,'' which is the MA rule at Sec. 422.564(a). Our
intent was that an applicable integrated plan be responsible for
resolving grievances pertaining to all its contracted providers,
including those that provide items and services that might not be
strictly considered health care services, such as Medicaid non-
emergency transportation. Using a broader term will ensure that the
right to file an integrated grievance with an applicable integrated
plan includes grievances that could be filed for all Medicare and
Medicaid covered benefits. Therefore, we are revising Sec. 422.630(a)
to state that the applicable integrated plan is responsible for
resolving grievances between enrollees and entities through which the
plan provides ``covered items and services.'' We are adopting the
provision as set forth in the proposed rule with this minor revision as
noted.
Comment: Several commenters supported the proposal to allow
enrollees to file Medicaid-related grievances with the state. A few
commenters requested clarification on which integrated grievances could
be filed with the state. Another commenter suggested that CMS go
further and allow integrated grievances to be filed with providers and
1-800-Medicare, and a few commenters recommended that CMS ensure that
there is a ``no wrong door'' policy such that if an enrollee files a
grievance with the wrong entity, it is not just dismissed.
Response: We appreciate commenters' broad support for this
provision. We appreciate the importance of a ``no wrong door'' policy,
and we intend to work closely with states that permit enrollees to file
Medicaid grievances with the state to ensure that applicable integrated
plans have the guidance they need regarding policies and procedures for
these instances. Further, we will consider comments about establishment
of ``no wrong door'' processes for all enrollees in applicable
integrated plans; we note that CMS has established an online system for
Medicare beneficiaries to submit complaints and concerns about the
Medicare program, including MA plans. Additionally, 1-800-Medicare
currently accepts complaints related to Medicare, and CMS ensures
resolution of them.
With regard to the ability to file grievances with providers, we do
not believe additional regulatory provisions are needed. We expect
that, as currently is the case, most enrollees will submit grievances
directly to the applicable integrated plan. Under Sec. 422.629(j),
applicable integrated plans will be required to provide information
about the integrated grievance and appeals system to all contracted
providers (as noted in the proposed rule, this requirement already
exists for Medicaid MCOs). This information should enable contracted
providers to direct enrollee grievances properly to the applicable
integrated plan when necessary. In addition, plans may delegate
responsibility for handling grievances to provider groups consistent
with existing Medicare policy (see Sec. 422.504(i) and the Parts C & D
Enrollee Grievances, Organization/Coverage Determinations, and Appeals
Guidance, Sec. 10.4.3 \26\). In those circumstances, the plan remains
ultimately responsible for ensuring that contracted entities comply
with all rules governing responding to grievances.
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\26\ See https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/Downloads/Parts-C-and-D-Enrollee-Grievances-Organization-Coverage-Determinations-and-Appeals-Guidance.pdf.
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With regard to comments about filing grievances with the state, we
clarify that the regulation is designed to provide a means for the
state to address Medicaid grievances. If a grievance contains aspects
related to both Medicare and Medicaid benefits, the state can review
the Medicaid benefit portions, but should ensure that the Medicare
benefit portions are appropriately transferred to the applicable
integrated plan for review. If a grievance related to Medicaid benefits
is filed with both the state and the applicable integrated plan, we
expect the two entities to be in communication to ensure the grievance
is resolved, as would occur now for Medicaid managed care grievances.
Comment: One commenter requested that we require all responses to
grievances to be in writing. Several other commenters suggested that we
not require written acknowledgement of all grievances.
Response: We do not believe that a written response to all
integrated grievances is necessary; such a standard is not imposed
under current requirements for MA plans or for Medicaid managed care
plans. As proposed and finalized in this rule, the regulation (Sec.
422.630(e)(1)) requires applicable integrated plans to respond in
writing to integrated grievances when: (1) The integrated grievance was
filed in writing; (2) the enrollee requests a written response to an
integrated grievance that was orally submitted; and (3) the integrated
grievance was related to quality of care. The regulation permits
applicable integrated plans to respond in writing or orally to
integrated grievances that are filed orally, unless the enrollee
requests a

[[Page 15736]]

written response. Additionally, the applicable integrated plan must
send the enrollee a written notice when it extends the timeframe for
responding to the integrated grievance (consistent with Sec.
422.630(e)(2)(ii), it may extend the timeframe by up to 14 calendar
days). Consistent with Sec. 422.629(c) as finalized, there is
flexibility for states to set standards that are more protective of
enrollees in connection with timeframes and notices; a state could, at
its discretion, require that applicable integrated plans provide the
disposition of all grievances in writing. Such a requirement would need
to be specified in the state Medicaid agency contract with the D-SNP.
We note that an applicable integrated plan, consistent with Sec.
422.629(g), must send a written notice acknowledging receipt of the
grievance; in this notice, a plan could also note that the grievance is
considered resolved if the applicable integrated plan has previously
provided the enrollee an oral resolution to clarify the status of the
grievance for the enrollee. Accordingly, we are adopting without change
the provision as set forth in the proposed rule.
Comment: Several commenters requested clarification on the
requirement that applicable integrated plans notify enrollees within 2
calendar days when an extension is being taken.
Response: We clarify that the applicable integrated plan must
notify the enrollee that an extension is being taken within two
calendar days of when the applicable integrated plan, after justifying
the need for the extension and documenting how the delay is in the
enrollee's interest, makes the decision to extend the timeframe. We are
finalizing the regulation text at Sec. 422.630(e)(2)(ii) with
additional text to clarify this timing.
Comment: A commenter suggested that we implement integrated
reporting in the Complaint Tracking Module (CTM) for grievances in the
CMS Health Plan Management System (HPMS) and give states access to
track all grievances and resolutions for transparency and monitoring.
Response: We appreciate the comment and will consider it as we move
forward with implementation. If such a step is operationally feasible,
we do not believe it would require additional regulatory language.
For the reasons provided in the proposed rule and our responses to
the comments, we are finalizing the requirements at Sec. 422.630
substantively as proposed with some minor modifications as follows:
We are revising the regulatory text at paragraph (a) by
replacing ``health care services'' with ``covered items and services''
in order to ensure that grievances pertaining all Medicare and Medicaid
covered benefits are included in the requirement;
We are finalizing the regulatory text in paragraph (d)
with revisions to streamline the regulation text and, at paragraph
(d)(2), to clarify the terms used; and
We are revising paragraph (e)(2)(ii) to clarify how long
the plan has to notify the enrollee when it extends the time the
resolve a grievance.
(6) Integrated Organization Determinations (Sec. 422.631)
In proposed Sec. 422.631, we specified the procedures applicable
integrated plans would follow in making integrated organization
determinations. In paragraph (a), we proposed that, as part of a
unified process, all requests for benefits covered by applicable
integrated plans must be subject to the same integrated organization
determination process.
In paragraph (b), we proposed to adopt the MA provisions at Sec.
422.568(a) allowing an enrollee to request an integrated organization
determination either orally in writing, but requiring requests for
payment to be made in writing.
In paragraph (c), we proposed to articulate the standard for making
an expedited organization determination. Both MA (at Sec. 422.570(c))
and Medicaid (at Sec. 438.210(d)(2)) have similar standards for an
expedited organization determination, including who can file it
(proposed in Sec. 422.631(c)(1)) and how it should be decided
(proposed in Sec. 422.631(c)(3)). At paragraph (c)(2), we proposed
that the request to expedite the appeal can be made orally or in
writing.
In paragraph (d), we proposed rules regarding timeframes and
notices when resolving integrated coverage determinations. In paragraph
(d)(1), we proposed to require that an applicable integrated plan send
a written integrated notice when the organization determination
(standard or expedited) is adverse to the enrollee. We proposed to
include text specifically identifying as adverse determinations
requiring a notice any decision to authorize a service or item in an
amount, duration, or scope that is less than the amount requested or
previously requested or authorized for an ongoing course of treatment.
We also proposed to include text specifying, consistent with Medicaid
managed care requirements (Sec. 438.404(c)(5)), that the applicable
integrated plan must send an integrated determination notice when the
plan fails to make a timely decision because failure to make a decision
within the required timeframe is a denial (and thus an adverse
determination). The proposed notice would include information about the
determination, as well as information about the enrollee's appeal
rights under both Medicare and Medicaid. We also proposed that the
notice be written in plain language and available in a language and
format that is accessible to the enrollee; this proposed requirement is
consistent with section 1859(f)((8)(B)(iii)(III) of the Act.
In paragraph (d)(2), we proposed timelines for sending this notice
that largely align with both existing Medicare and Medicaid
requirements. We proposed, in paragraph (d)(2)(i)(A), to require that
applicable integrated plans send a notice of an integrated organization
determination at least 10 days before the date of action if a
previously authorized benefit is being reduced, suspended, or
terminated, with some exceptions in accordance with Sec. Sec. 431.213
and 431.214; we briefly explained the exceptions available in
accordance with Sec. Sec. 431.213 and 431.214 in the proposed rule (83
FR 55008). We proposed, in paragraph (d)(2)(i)(B), to require that
applicable integrated plans send the notice as expeditiously as the
enrollee's health condition requires but no later than 14 calendar days
from receipt of the request for a standard integrated organization
determination. We further proposed to permit extensions, in paragraph
(d)(2)(ii), in circumstances that largely parallel those that exist in
Medicare and Medicaid currently. In paragraph (d)(2)(iii), we proposed
requirements for notice to be provided to the enrollee in cases of
extension; these proposed requirements also largely parallel current MA
and Medicaid requirements at Sec. 422.572(b)(2) and Sec.
438.404(c)(4)(i), respectively. Proposed Sec. 422.631(d)(2)(iii)(A)
largely parallels Sec. 422.572(b)(2), which provides more specific
direction on timing of the notice. We also proposed in paragraph
(d)(2)(iii)(B) regulatory text controlling when the notice of the
integrated organization determination must be sent in cases where the
applicable integrated plan makes the decision to extend the timeframe.
In paragraph (d)(2)(iv)(A), we proposed the deadline for issuing
notice of expedited integrated organization determinations. Both MA and
Medicaid require expedited organization determinations (or adverse
actions) as expeditiously as the enrollee's health condition requires
but not later than within 72 hours of the request, with the possibility
of extending that timeframe

[[Page 15737]]

by 14 calendar days. We proposed, at paragraph (d)(2)(iv)(B), to mirror
the MA requirements (Sec. 422.570(d)), with required procedures when
an applicable integrated plan denies a request for expediting an
organization determination. In paragraph (d)(2)(iv)(C), we proposed to
include requirements, which parallel MA requirements (Sec.
422.572(d)), for applicable integrated plans when obtaining necessary
information from noncontract providers.
We received the following comments on the proposals at Sec.
422.631 and our responses follow.
Comment: We received many comments related to the notice
requirement in proposed Sec. 422.631(d)(1). Several commenters
supported the notice of the integrated organization determination, the
required content we proposed, and the requirement that it be written in
plain language and available in the language and format that is
accessible to the beneficiary. Several commenters requested
clarification regarding whether the existing Integrated Denial Notice
used by MA plans (Form CMS-10003-NDMCP) would be used to satisfy the
requirement for notice of the integrated organization determination.
Several other commenters also suggested that CMS develop a model notice
to serve as the integrated organization determination notice for
applicable integrated plans to use. A commenter recommended that the
notice only be required to be sent when there is a denial of the
service or item by all coverage sources (that is, Medicare and
Medicaid).
Response: We intend to develop a separate model notice that will be
used exclusively for integrated organization determinations and that
will be specifically tailored to contain information relevant to the
unified appeals process we are finalizing in this rule. As finalized in
Sec. 422.631(d)(1), the new integrated notice will be sent in cases
where a service or item is being denied under Medicare and Medicaid. In
addition, as is the case with the current MA Integrated Denial Notice
(Form CMS-10003-NDMCP), we will develop instructions for appropriate
use of the new model notice. The instructions will also explain how
plans should tailor the model notice to explain the outcome to the
enrollee in situations where a notice is required. As we note in the
Collection of Information section in this final rule, this model
notice, and its associated requirements and burden, will be submitted
to OMB for approval separately from this final rule once we develop the
model and accompanying analyses. The OMB approval process will include
a public comment period.
Comment: A commenter recommended that we also make the integrated
organization determination notice available for use by plans other than
applicable integrated plans.
Response: We decline to accept the commenter's suggestion. We
intend to tailor the model notice specifically to the unified appeals
process, and information and procedures relevant to that process, we
are finalizing in this rule. We do not believe the model notice will be
appropriate for enrollees outside the unified process and, as such, the
model notice for integrated organization determinations will be
specifically tailored for use by applicable integrated plans.
After consideration of the comments and for the reasons set forth
in the proposed rule and our responses to the related comments, we are
finalizing Sec. 422.631 substantively as proposed, but with minor
modifications to streamline the regulatory text at paragraph (d) as
follows:
We are finalizing proposed paragraph (d)(1) as three new
paragraphs, paragraphs (d)(1)(i) through (iii) and making minor
grammatical changes.
We are renumbering proposed paragraphs (d)(1)(i) through
(viii) in the final rule as paragraphs (d)(1)(iii)(A) through (H).
(7) Continuation of Benefits Pending Appeal (Sec. 422.632)
At Sec. 422.632, we proposed rules to implement the provisions
added to section 1859(f) of the Act by section 50311 of the Bipartisan
Budget Act of 2018 pertaining to continuation of benefits pending
appeal under Titles XVIII and XIX, specifically the new provision at
section 1859(f)(8)(B)(iv) of the Act. We explained in detail in the
proposed rule (83 FR 55008 through 55009) how we interpret this
provision as requiring CMS to apply continuation of benefits to all
Medicare Parts A and B and Medicaid benefits under our proposed unified
appeals processes.
Based on that interpretation, we proposed that the existing
Medicaid standards applicable to Medicaid managed care plans for
continuation of benefits at Sec. 438.420 apply to applicable
integrated plans for Medicare benefits under Parts A and B and Medicaid
benefits in our proposed integrated appeals requirements at Sec.
422.632. Under our proposal, if an applicable integrated plan decides
to stop (as a termination or suspension) or reduce a benefit that the
enrollee is currently authorized to receive, the enrollee could request
that the benefit continue to be provided at the currently authorized
level while the enrollee's appeal is pending through the integrated
reconsideration. The enrollee would be required to make a timely
request for the continuation. We proposed, at paragraph (a), a
definition for ``timely files.'' This proposed definition mirrored the
definition at Sec. 438.420(a), with minor revisions to make the text
applicable to applicable integrated plans instead of Medicaid managed
care plans.
We proposed, at paragraph (b), to require a previously authorized
service covered under Medicaid or Medicare Part A or Part B, excluding
supplemental benefits as defined at Sec. 422.102, to be continued
pending an appeal of a termination of those services. We proposed to
require that the continuation of these services as a covered benefit
would be conditioned on meeting the same five criteria listed in Sec.
438.420:
(1) The enrollee files the request for an integrated appeal timely
in accordance with Sec. 422.633(e);
(2) The integrated appeal involves the termination, suspension, or
reduction of previously authorized services;
(3) The services were ordered by an authorized provider;
(4) The period covered by the original authorization has not
expired; and
(5) The enrollee timely files for continuation of benefits.
Because proposed paragraph (b) repeated that language at section
1859(f)(8)(B)(iv) of the Act that limits the continuation of benefits
to only benefits under Parts A and B of title XVIII and title XIX of
the Act, we noted in the preamble to the proposed rule that MA
supplemental benefits would not be subject to the proposed rule (83 FR
55009).
We proposed, at paragraph (c), to require that an applicable
integrated plan continue such services pending issuance of the
integrated reconsideration. We noted in the proposed rule that for
Medicaid managed care plans that are not applicable integrated plans,
continuation of these services after the integrated reconsideration and
pending resolution of the state fair hearing is controlled by Sec.
438.420(c). Proposed Sec. 422.632(c)(2) provided that continuation of
services would end when the applicable integrated plan issues an
adverse integrated reconsideration. If the applicable integrated plan
finds in favor of the enrollee, benefits would continue in accordance
with the favorable integrated

[[Page 15738]]

reconsideration. In proposed Sec. 422.632(c)(3), we proposed
requirements for Medicaid-covered benefits to continue after the
applicable integrated plan issues an adverse integrated
reconsideration, mirroring the requirements currently in Medicaid
managed care regulations (see Sec. 438.420(c)(2)). The enrollee must
make the request and file for a state fair hearing within 10 calendar
days after the applicable integrated plan sends the notice of the
integrated reconsideration. We also proposed to mirror requirements
from Sec. 438.420 for how long Medicaid-covered benefits must continue
by requiring that the benefits continue until the enrollee withdraws
the request for the state fair hearing or until the state fair hearing
decision is issued.
In proposed paragraph (d), we addressed whether an applicable
integrated plan can seek recovery for the costs of services provided
while an appeal is pending. We proposed not to follow Medicaid's
regulations that allow states to determine whether or not a plan, or
the state, can seek recovery for the costs of services provided pending
appeal. We noted there is no analogous process in Medicare, as
continuation of benefits pending appeal is very limited in Medicare and
generally only available in cases involving QIO review of inpatient
discharges. Instead, drawing in part on the experience of a number of
Financial Alignment Initiative demonstrations, we proposed to prohibit
recovery of the costs of services provided pending the integrated
reconsideration and, for Medicaid-covered benefits, any state fair
hearing, to the extent that services were continued solely under Sec.
422.632, for all applicable integrated plans and state agencies.
We solicited comment generally on our proposal regarding
continuation of benefits and also requested comments on alternatives,
including regarding the feasibility of treating Medicare and Medicaid
benefits differently for the purpose of recovery of costs. We summarize
the comments on this topic and respond to them as follows:
Comment: Most commenters supported our overall interpretation of
the statute extending Medicaid's approach of providing aid pending
appeal to items and services covered under Medicare Part A and Part B.
One commenter, in supporting our overall approach, urged us to monitor
for any unexpected cost consequences to D-SNPs resulting from the rule
and encouraged us to ensure that any additional costs resulting from
the policy are allowable for bid purposes. Another commenter objected
to the entire approach based on concerns about potential cost
implications to the integrated D-SNPs subject to the provision. One
commenter disagreed with our approach, stating that we should make no
changes to Medicare's coverage of items and services pending appeal,
although this commenter provided no statutory basis for their
perspective.
Response: We appreciate the strong support for our overall
approach. As we discussed in the preamble to the proposed rule, we
believe the most logical reading of the statutory language directs us
to extend Medicaid's aid pending appeal procedure to Medicare Part A
and B services covered by applicable integrated plans. Regarding costs,
MMPs in the Financial Alignment Initiative have operated under similar
rules and have not reported any significant resulting adverse impact on
cost. The Regulatory Impact Analysis for our proposed rule, on which we
received no comments related to this specific proposal, projected a
minimal cost to plans from extending the Medicaid aid pending appeal
procedure to Medicare Parts A and B services. We will provide further
guidance on this topic for plans as part of the bid submission process.
Comment: We received many comments regarding our approach to
recovery of the costs of services provided pending appeal. Many
commenters supported our proposal as consistent with the statute,
clearer to administer than alternatives, and most protective of
beneficiaries. A significant number of other commenters, however,
expressed concern that our approach could increase costs and
recommended instead that states retain the flexibility to pursue
recovery of costs at their discretion.
Response: We thank the commenters for their comments on this issue.
After careful consideration of the commenters' perspectives, we are
finalizing our proposal with some modifications to Sec. 422.632(d)
regarding recovery of the costs. We are finalizing the proposed
regulation regarding recovery of costs at the integrated
reconsideration level, which is now codified at Sec. 422.632(d)(1). We
believe it is highly desirable to have one single rule regarding
recovery of costs apply to all services provided pending the issuance
of the integrated reconsideration decision pursuant to section
1859(f)(8)(B)(iv) of the Act, rather than to treat Medicare-related and
Medicaid-related services differently. We believe that it is simpler
and more protective of beneficiaries to prohibit the recovery of the
costs of all services provided by an applicable integrated plan pending
an integrated reconsideration pursuant to a request filed under Sec.
422.632. All services, both Medicare-related and Medicaid-related,
provided by applicable integrated plans through the end of the
integrated reconsideration process are considered to be furnished under
the requirements of Sec. 422.632 and are therefore not subject to
recovery of costs.
However, we find it persuasive that, for cases where a plan's
denial is ultimately affirmed, eliminating the ability of states to
recover the costs of Medicaid services provided by the applicable
integrated plan after the integrated reconsideration is final and
pending a state fair hearing could create significant inconsistencies
for state Medicaid appeal processes and potentially discourage states
from pursuing exclusively aligned enrollment and thereby adopting
integrated appeals. Moreover, because our entire integrated process
extends only to the integrated reconsideration stage and not to the
state fair hearing process, this rule limiting recovery of costs is
also limited to costs incurred for continuation of services pending the
integrated reconsideration stage. We are therefore designating the text
in proposed paragraph (d) as (d)(1) in this final rule with revised
text limiting that rule to recovery of costs for services continued
pending the integrated reconsideration. We are also finalizing a new
provision at paragraph (d)(2) to provide states with the flexibility to
recover the costs of services continued pending the state fair hearing
phase of an appeal (that is, after the date of the integrated
reconsideration decision and until the decision is issued on the state
fair hearing), consistent with state rules and with Sec. 438.420(d).
We believe this addition should mitigate concerns about costs to
states. We also note a number of Financial Alignment Initiative
demonstrations do not allow recoupment of costs and MMPs have not
reported any adverse financial impact, suggesting a minimal impact on
costs from limiting recovery of costs. In summary, under Sec.
422.632(d)(1) and (d)(2), recovery of costs is not permitted for
services provided pending the integrated reconsideration. If an
enrollee requests a state fair hearing after an adverse integrated
reconsideration, then state Medicaid procedures regarding continuation
of benefits and recovery of costs will apply. We will work with states
and plans to ensure that enrollees are fully informed of these rules.
Finally, we note that this provision is

[[Page 15739]]

unrelated to the requirement at Sec. 422.634(e) requiring a plan or
state to pay the costs of benefits provided in the event a plan's
initial decision is reversed at the integrated reconsideration or fair
hearing stage. The obligations at Sec. 422.634(e) are similar to those
under Medicaid at Sec. 438.424(b) governing effectuation of a
decision, and apply to any services the enrollee receives while the
appeal is pending, whether or not continuation of benefits was
requested under Sec. 422.632.
Comment: A commenter requested that CMS clarify whether services
were required to continue pending IRE review. We received a number of
comments recommending that we should require coverage of aid pending
appeal for Medicare Parts A and B services to extend through the IRE
level (and in some comments, through the administrative law judge (ALJ)
or higher appeal levels as well), rather than stopping after the
integrated reconsideration level. One commenter expressed concern that
stopping before the IRE level would discourage appeals. Others
encouraged continuation through the IRE level to ensure external review
of all appeals before services ended.
Response: The regulation, as proposed and finalized at Sec.
422.632(c)(2), requires integrated applicable plans to continue
Medicare Part A and Part B and Medicaid benefits through the issuance
of an integrated reconsideration decision under Sec. 422.633(f)(4). If
the applicable integrated plan affirms its decision at the integrated
reconsideration level and the case involves Medicaid benefits, an
enrollee may request a state fair hearing as described in Sec.
422.634(b)(2). From that point forward, existing Medicaid rules apply,
including Sec. 438.420 that requires Medicaid managed care plans--
regardless whether they are applicable integrated plans--to continue
provision of Medicaid benefits on certain terms through the state fair
hearing process. We decline at this time to require continuation of
Medicare services through the IRE level, and will retain our rule as
proposed that requires continuation of Medicare Parts A and B services
only through the integrated reconsideration level. Section
1859(f)(8)(B)(iv) of the Act provides authority to extend benefits
pending appeal in the context of the unified appeal procedures we are
adopting in this rule. We are not at this time integrating IRE review
into a unified appeal process; therefore, we believe we lack statutory
authority to extend benefits pending to the IRE level review under the
unified appeal process. In addition, most of the Financial Alignment
Initiative demonstrations have not included aid pending appeal through
the IRE level. As a result, we have little experience with either the
operational complexities or the financial impact of such a policy.
Finally, because IRE review is automatic for all adverse Medicare plan
reconsiderations under Sec. 422.592, there is not a risk that
enrollees will end their appeal prior to the IRE review. We believe the
more prudent course is to implement aid pending appeal for services
through the integrated reconsideration level as we have proposed. We
may consider the feasibility of broadening the unified appeal process
to include IRE review and continuation of benefits through additional
appeal levels in future rulemaking.
Comment: A few commenters recommended that continuation of benefits
pending appeal also apply to supplemental benefits provided by
applicable integrated plans.
Response: We decline to adopt this recommendation and believe that
it is not consistent with the statute. Section 1859(f)(8)(B)(iv) of the
Act, added by the Bipartisan Budget Act of 2018, authorizes
continuation of benefits for integrated appeals is limited to benefits
under Medicare Parts A and B as well as Medicaid, but does not include
MA supplemental benefits, which are offered under Part C of the Act
(specifically section 1852(a)(3) of the Act). We therefore do not have
the authority to require continuation of supplemental benefits pending
appeal. Plans may continue such benefits voluntarily, however, and
states may include conditions affecting coverage of such benefits in
their contracts with D-SNPs, so long as enrollees are made aware of any
potential risk of financial liability.
Comment: A few commenters suggested that we establish an expedited
process for integrated reconsiderations when continuation of benefits
pending appeal is requested in order to minimize the risk of payment
discrepancies.
Response: We decline to adopt this suggestion. We note that
continuation of services pending appeal has long been part of Medicaid
appeals and no special expedited process exists for such cases. We do
not see a reason for treating integrated reconsiderations differently
in this regard. In addition, applicable integrated plans may prioritize
resolution of integrated reconsiderations where services are
continuing, so long as these plans follow all procedural rules and
ensure that enrollees have a full opportunity to present their case.
Further, the requirement to expedite certain integrated
reconsiderations based on the enrollee's health status (discussed in
section II.A.2.b.(8) of this final rule) applies regardless whether
benefits are continued under Sec. 422.632.
Comment: A few commenters requested that we add language that would
allow plans to dismiss an integrated reconsideration request if an
enrollee becomes eligible for a service while the integrated
reconsideration is pending.
Response: We decline to make this addition. There are no
regulations in the MA program or Medicaid managed care program that
address dismissals of reconsiderations or appeals in these
circumstances, and we do not believe that we should create a new
procedure unique to integrated reconsiderations here. We note that the
Parts C & D Enrollee Grievances, Organization/Coverage Determinations,
and Appeals Guidance, Sec. 50.8, does include guidance regarding
dismissal of pre-service reconsideration requests when a service has
been provided before the reconsideration is completed. We will consider
if additional guidance is needed in this area for integrated
reconsiderations when continuation of services is requested.
After considering the comments and for the reasons set forth in the
proposed rule and our responses to the comments, we are finalizing
Sec. 422.632 as proposed with modifications to paragraph (d). In newly
designated paragraph (d)(1), we are making technical changes to the
proposed regulation text to clarify that an applicable integrated plan
or a state agency may not pursue recovery of costs for services
continued pending the integrated reconsideration. In new paragraph
(d)(2), we are finalizing a provision that authorizes states to recover
the costs of Medicaid services provided during the state fair hearing
phase of an appeal (that is, after the date of the integrated
reconsideration decision and until the decision is issued on the
Medicaid state fair hearing), consistent with state rules and with
Sec. 438.420(d).
(8) Integrated Reconsiderations (Sec. 422.633)
In proposed Sec. 422.633, we laid out our proposed provisions for
an integrated reconsideration process for applicable integrated plans.
As with other provisions, we compared relevant Medicare and Medicaid
provisions, and where they differ, we chose to adopt the policy that is
most protective of the beneficiary.
In paragraph (a), consistent with current MA and Medicaid
regulations (Sec. Sec. 422.590 and 438.402(b), respectively), we
proposed that

[[Page 15740]]

applicable integrated plans may only have one plan level of appeal
beyond the initial decision (the integrated organization
determination).
In paragraph (b), we proposed to adopt a rule similar to Sec.
438.402(c)(1)(i)(B) regarding the permissibility of external medical
reviews: Medicaid managed care plan enrollees may be offered an
opportunity to elect external medical review under a state external
review process. Under our proposal, the ability to elect external
medical review would apply only to Medicaid covered services that are
the subject of an adverse integrated reconsideration issued by an
applicable integrated plan because D-SNPs, like all MA plans, are not
subject to state external review procedures.\27\
---------------------------------------------------------------------------

\27\ Section 1856(b)(3) of the Act preempts state regulation of
MA plans.
---------------------------------------------------------------------------

In paragraph (c), we proposed a right for each enrollee, and their
representatives, to receive a copy of the enrollee's case file
(including medical records and evidence considered, generated, or
relied on by the integrated applicable plan in making the integrated
organization determination) free of charge, consistent with the
protection for Medicaid enrollees under Sec. 438.406(b)(5).
In paragraph (d)(1), we proposed timelines for filing for a
standard integrated reconsideration that, consistent with both MA (at
Sec. 422.582(b)) and Medicaid managed care (at Sec.
438.402(c)(2)(ii)) regulations, would require that an integrated
reconsideration be filed within 60 days of the date of the denial
notice. We proposed, in paragraph (d)(2), that oral inquiries seeking
to make an integrated reconsideration be treated as integrated
reconsiderations; this is generally consistent with Sec.
438.406(b)(3). We did not propose to include the language in Sec.
438.406(b)(3) requiring beneficiaries to provide written confirmation
of oral requests because such a requirement would be inconsistent with
MA policy that directs plans that do accept oral requests for
reconsideration to provide written confirmation to the beneficiary (see
Parts C & D Enrollee Grievances, Organization/Coverage Determination,
and Appeals Guidance, Sec. 50.2.1). We proposed, in paragraph (d)(3),
to include current requirements from MA (at Sec. 422.582(c)) that
allow for extending the timeframe for an enrollee, or a physician
acting on behalf of an enrollee, to file a late reconsideration.
In paragraph (e), we proposed to address procedures for filing
expedited integrated reconsiderations, consistent with current MA and
Medicaid rules. The proposed language in paragraphs (e)(1) and (e)(2)
aligns with Sec. 422.584 in permitting the enrollee or health care
provider to file a written or oral request for an expedited
reconsideration. The proposed language in paragraph (e)(3) aligns with
Sec. 422.584 in setting the standard that the applicable integrated
plan must use in deciding whether to expedite the integrated
reconsideration.
In paragraph (e)(4), we proposed notice requirements related to
requests for expedited integrated reconsiderations. We proposed
requirements that parallel Medicaid managed care requirements for
notice to the enrollee when the request for an expedited integrated
reconsideration is denied (Sec. 438.410(c)(2))--specifically, that the
plan must give prompt oral notice and written notice within 2 calendar
days and transfer the matter to the standard timeframe for making an
integrated reconsideration (that is, the timeframe specified in
paragraph (f)(1)). We proposed to apply the MA requirements for what
applicable integrated plans must include in the written notice to
enrollees when the request to expedite the integrated reconsideration
is denied (Sec. 422.584(d)(2)).
In paragraph (e)(5) we proposed to include requirements, which
mirror MA requirements (Sec. 422.590(d)(3)), for applicable integrated
plans when obtaining necessary information from noncontract providers.
These requirements specify that the applicable integrated plan must
reach out to a noncontract provider within 24 hours of the initial
request for an expedited integrated reconsideration.
In paragraph (f), we proposed timelines and procedures for
resolving an integrated reconsideration request. We proposed specific
requirements for applicable integrated plans. Both MA (at Sec.
422.590(a)) and Medicaid (at Sec. 438.408(b)(2)) require resolution of
pre-service standard appeal requests within 30 calendar days. We
proposed the rules in paragraph (f)(1), that parallel MA (at Sec.
422.590(a)) and Medicaid (at Sec. 438.408(b)(2)) with the addition of
a provision mirroring Sec. 422.590(a)(2), that the integrated
reconsideration decision be issued as expeditiously as the enrollee's
health requires but no later than 30 calendar days from the date the
applicable integrated plan receives the request for the integrated
reconsideration.
In Sec. 422.633(f)(1), we proposed to require that all integrated
reconsiderations--pre-service and post-service--be resolved as
expeditiously as the enrollee's health requires and within 30 calendar
days from the date the applicable integrated plan receives the request
for the integrated reconsideration. We noted that this timeframe is
consistent with Medicaid managed care requirements for both pre- and
post-service requests at Sec. 438.408(b)(2) and with pre-service
requests under MA at Sec. [thinsp]422.590(a). We deviated from the MA
requirements for post-service cases involving denial of payment, as
current MA requirements provide 60 calendar days for MA plans to
resolve these cases.
In paragraph (f)(2), we proposed to establish the timeframes for
expedited reconsiderations, which parallel both MA (at Sec.
422.590(d)(1)) and Medicaid (at Sec. 438.408(b)(3)) regulations for
managed care plans in requiring the applicable integrated plan to
resolve the expedited reconsideration as expeditiously as the
enrollee's health requires and within 72 hours from the date the
applicable integrated plan receives the request for the integrated
reconsideration. We also proposed to apply the Medicaid managed care
requirement (at Sec. 438.408(d)(2)(ii)) by requiring that applicable
integrated plans make reasonable efforts to give enrollees oral notice
of the resolution in expedited cases, in addition to sending the
written notice within 72 hours of receipt of the request.
In paragraph (f)(3)(i), we proposed criteria for an applicable
integrated plan to extend the timeframe for resolving either a standard
or expedited reconsideration. We proposed to adopt a standard similar
to current MA and Medicaid rules, allowing 14-day extensions upon
request of the enrollee (or the enrollee's representative) and
generally using the standard in Sec. 438.408(c) that the plan must
show that the extension is in the enrollee's interest and that the
information is necessary. We also proposed to use the MA standard that
the timeframe may be extended if there is a need for additional
information and there is a reasonable likelihood that receipt of such
information would lead to approval of the request. We clarified in the
preamble of the proposed rule that an applicable integrated plan could
not extend the timeframe for making an integrated reconsideration in
order to develop or find information to justify a denial of coverage.
In paragraph (f)(3)(ii), we proposed requirements for the notice
that applicable integrated plans must send to enrollees when the plan
extends the timeframe for making its determination, in accordance with
the requirements in this paragraph. We proposed to require that the
applicable integrated plan make reasonable efforts to give the enrollee

[[Page 15741]]

prompt oral notice and give the enrollee written notice within 2
calendar days. These requirements align with current Medicaid managed
care regulations at Sec. 438.408(c)(2). We also proposed that the
notice of the extension include the reason for the delay and inform the
enrollee of the right to file an expedited grievance if the enrollee
disagrees with the decision to extend the timeframe.
In paragraph (f)(4), we proposed requirements for providing
appellants with notices regarding the resolution of reconsiderations.
We proposed to require that applicable integrated plans send notices
within the resolution timeframes established in this section for all
integrated reconsideration determinations, paralleling the current
Medicaid managed care regulations which require notices of all
determinations. We also proposed to include language requiring that the
notice be written in plain language and available in a language and
format that is accessible to the enrollee consistent with section
1859(8)(B)(iii)(III) of the Act. We also proposed, in paragraphs
(f)(4)(i) and (ii), to adopt the standards similar to those governing
the content of a notice found in Sec. 438.408(e)--namely, that the
plan must provide to the enrollee a notice of the integrated
reconsideration for an adverse decision that includes the reason for
the decision and the date of completion. We proposed in paragraph
(f)(4)(ii)(A) that, for integrated notices not resolved wholly in the
enrollee's favor, the notice include an explanation of the next level
of appeal under both Medicare and Medicaid, and the steps the enrollee
must take to further pursue the appeal. We explained our expectation
that the integrated notice will enable the enrollee to understand which
program covers the benefit at issue. We also proposed in paragraph
(f)(4)(ii)(B) that the notice include specific information about the
ability to request continuation of Medicaid-covered benefits pending
appeal.
We summarize and respond to the comments on proposed Sec. 422.633
as follows:
Comment: Many commenters supported our proposed requirements
related to integrated reconsiderations, including the timeframes for
applicable integrated plans to resolve integrated reconsiderations. One
commenter specifically supported the inclusion of post-service appeals
in the expedited integrated reconsiderations process, at Sec.
422.633(e), noting significant financial need that may be present for
dual eligible individuals. Another commenter supported the requirement
at Sec. 422.633(f)(1) to use the same timeframes and processes for
pre-service and post-service appeals to simplify the process for
enrollees. One commenter opposed requiring post-service appeals to
follow the same decision timing as pre-service appeals, requesting that
CMS instead apply the MA rules, which allow 60 days for decision in
post-service appeals cases to allow applicable integrated plans more
time to gather necessary information, including from enrollees, and
potentially leading to fewer plan denials of integrated
reconsiderations.
Response: We appreciate the support for our proposed integrated
reconsideration requirements. We clarify that the post-service appeals
timing applies to appeals from noncontracted providers as well as to
enrollees. We understand the concern related to obtaining all necessary
information to make a determination for post-service integrated
reconsiderations; however, we decline to make a change to our proposed
requirements. As we noted in the proposed rule (83 FR 55010-55011),
Medicaid regulations at Sec. 438.408(b)(2) do not distinguish between
pre-service and post-service appeals--all appeals must be resolved
within 30 calendar days. We do not believe the volume of post-service
appeals, which would generally be only for payment, is high for dual
eligible individuals, and we believe it is more protective of enrollees
to have all integrated reconsiderations resolved in 30 calendar days,
particularly given what may be significant financial needs for these
individuals.
Comment: Several commenters expressed support for our proposed
requirement, at Sec. 422.633(c), that applicable integrated plans
provide the enrollee or the enrollee's representative with a copy of
the enrollee's case file for free, to help eliminate barriers to
enrollees in obtaining this information. A few commenters suggested we
establish specific timeframes for when the case file should be provided
to ensure that it is provided timely, and a commenter suggested that we
require the case file be sent automatically whenever an appeal is
filed, arguing that such a requirement would be consistent with
Medicaid rules.
Response: We decline to modify the regulation text at Sec.
422.633(c) to establish specific timeframes for provision of the case
file, since we are adopting the existing requirements related to case
files for Medicaid managed care plans at Sec. 438.406(b)(5); that
Medicaid managed care regulation does not include timeframes for
sending the case file but requires instead that the records and
information be provided sufficiently in advance of the resolution
timeframe for appeals. As proposed and finalized, Sec. 422.633(c) uses
the same standard. We believe this is sufficient and decline to
establish a specific deadline for provision of these records and
information. We also decline to specify that a plan send a case file
for every appeal filed. Rather, we believe that making it clear to
appellants that they may request the case file at no charge (for
example, as part of the denial notice) will be less burdensome for all
parties.
Comment: Several commenters supported the requirement at Sec.
422.633(d)(2) for applicable integrated plans to accept oral requests
without requiring written follow up from the enrollee, noting that this
requirement helps eliminate barriers for enrollees in filing appeals.
One commenter opposed this requirement. One commenter requested that
applicable integrated plans have discretion, as MA plans currently do
under guidance in the Parts & D Enrollee Grievances, Organization/
Coverage Determination, and Appeals Guidance Sec. 50.2.1, to require
written follow-up when enrollees file oral appeals because oral appeals
can be difficult to define, track, and standardize.
Response: We thank the commenters for their support of this
requirement, and decline to make any changes to it at this time. We
assume the comment related to the guidance interpreting Sec.
422.568(a)(1) and providing discretion to MA plans on whether to allow
oral reconsiderations referred to the previous version of the CMS
Medicare Managed Care Manual, Chapter 13, Sec. 70.2, which stated that
an MA plan may choose to accept an oral reconsideration. Similar
guidance was published more recently (February 22, 2019) in an updated
version of the Parts C & D Enrollee Grievances, Organization/Coverage
Determination, and Appeals Guidance, Sec. 50.2.1. We agree that this
requirement is an important way to remove barriers to filing appeals
for enrollees related to language, literacy, housing, and behavioral
health concerns. We believe that requiring applicable integrated plans
to allow oral appeals from enrollees without requiring the enrollee to
follow up in writing is most consistent with the provision in section
1859(f)(8)(B)(ii)(I) of the Act requiring us to adopt provisions that
are most protective for enrollees. In addition, we have recently
proposed making a similar change for similar reasons to the Medicaid
managed care rule at Sec. 438.402(c)(3)(ii) (see Medicaid and
Children's Health Insurance Program

[[Page 15742]]

(CHIP) Managed Care (CMS-2408-P), 83 FR 57264, 57283 (November 14,
2018)).
Comment: One commenter requested that, for expedited integrated
reconsiderations, we clarify our regulations to align with current MA
guidance and explicitly state that applicable integrated plans have
three calendar days to mail written notification when verbal outreach
to a member is successful.
Response: We decline to adopt this suggestion. Under Sec.
422.633(f)(4), as proposed and finalized in this rule, the applicable
integrated plan must send a written determination notice within the
resolution timeframes regulations. For expedited integrated
reconsiderations, these requirements are located at Sec.
422.633(f)(2). In order to clarify the regulation text and conform it
to the preamble of the proposed rule, we are finalizing paragraph
(f)(2) with revised text stating that the applicable integrated plan
must resolve the expedited integrated reconsideration as expeditiously
as the enrollee's health condition requires but no later than 72 hours
from the receipt of the request. Pursuant to paragraph (f)(4), this
timeframe will also apply to the required written notice to the
enrollee. We are also revising the language in the final rule regarding
expedited integrated reconsiderations under Sec. 422.633(f)(2) to
clarify that the applicable integrated plan must make reasonable
efforts to provide prompt oral notice of the determination in addition
to providing the written notice, which aligns with Medicaid rules that
require oral notification as a separate requirement that is not tied to
the timing of the written notification (see Sec. 438.408(d)(2)(ii)).
Comment: One commenter requested that we clarify when the timeline
begins for the applicable integrated plan to notify an enrollee of the
decision to extend the timeframe for deciding the integrated
reconsideration.
Response: We clarify that the applicable integrated plan must
notify the enrollee that an extension is being taken within two
calendar days of when the applicable integrated plan, after considering
the factors outlined in Sec. 422.633(f)(3)(i), makes the decision to
take an extension. We are finalizing revised regulation text at Sec.
422.633(f)(3)(ii) to clarify this timing.
Comment: A few commenters supported the requirement at Sec.
422.633(f)(4) that applicable integrated plans send a written
determination in all cases when an integrated reconsideration is filed.
They also supported the content requirements for the written
determination notice. One commenter noted that this notice should
include information on how to get assistance with the next level of
appeal.
Response: We thank the commenters for their support of this
requirement, and we agree that information on how to get assistance
with the next step in the appeal process is important and useful
information for the enrollee and would be beneficial to include in the
notice. We are adding this content requirement to the regulation at
Sec. 422.633(f)(4)(ii)(A). This information may include the name and
contact information of, for example, the State Health Insurance
Assistance Program (SHIP), a state ombudsman program if one exists, or
a legal aid office. State Medicaid agencies may also have appropriate
local referrals.
For the reasons set forth in the proposed rule and our responses to
the related comments, we are finalizing Sec. 422.633 substantively as
proposed, but with some minor modifications from proposed text as
follows:
At paragraph (c), we are revising the last sentence to
clarify that the records must be provided sufficiently in advance of
the resolution timeframe for the integrated reconsideration, or
subsequent appeal;
At paragraphs (d)(1) and (d)(2), we are including headings
to aid the reader;
At paragraph (f)(1), we have modified the regulatory text
to clarify that an applicable integrated plan has a maximum of 30
calendar days to resolve the integrated reconsideration, but must
resolve it more quickly if the enrollee's health requires faster
resolution. As finalized, this language exactly parallels the language
from the MA requirement at Sec. [thinsp]422.590(a);
At paragraph (f)(2), we have modified the regulatory text
to clarify that an applicable integrated plan has a maximum of 72 hours
to resolve the expedited integrated reconsideration, but must resolve
it more quickly if the enrollee's health requires faster resolution. As
finalized, this language exactly parallels the language from the MA
requirement at Sec. [thinsp]422.590(d)(1). We also clarify in
paragraph (f)(2) that an applicable integrated plan must make
reasonable efforts attempt to provide prompt oral notice of the
determination in addition to providing the written notice;
At paragraph(f)(3)(ii) we clarify the timeframe for the
applicable integrated plan to notify the enrollee that an extension is
being taken; and
At paragraph (f)(4), we are finalizing regulatory text as
proposed with a modification to clarify that the notice of resolution
the applicable integrated plan sends must be a written notice, and to
add, at paragraph (f)(4)(ii)(A), a requirement that the notice of
resolution contain information on how the enrollee can obtain
assistance in pursuing the next level of appeal under each program.
(9) Effect (Sec. 422.634)
We proposed, at Sec. 422.634(a), to use the same standard as in
existing MA and Medicaid regulations related to a plan's failure to
made a timely determination. If an applicable integrated plan fails to
make a timely determination at any point in the appeals process (for an
integrated organization determination or an integrated
reconsideration), that failure would constitute an adverse
determination, such that the enrollee could move forward with the next
level of appeal procedures (see Sec. Sec. 438.400(b)((b),
438.402(c)(1)(i)(A), 438.408(c)(3), 422.568(f), and 422.572(f)).
We proposed, at Sec. 422.634(b), to establish the next steps in
the appeals process if the enrollee receives an adverse decision from
the applicable integrated plan on the integrated reconsideration. For
cases involving Medicare benefits, we proposed, for applicable
integrated plans at Sec. 422.634(b)(1)(i), to codify the requirement
that adverse reconsiderations be reviewed and resolved by an IRE,
consistent with section 1852(g)(4) of the Act and existing Sec.
422.592. In Sec. 422.634(b)(1)(ii) and (iii), we proposed to mirror
existing MA regulations (Sec. 422.590(a)(2) and (d)(4)) \28\ with
requirements for applicable integrated plans to forward the case file
to the independent entity within set timeframes for both standard and
expedited integrated reconsiderations.
---------------------------------------------------------------------------

\28\ In the proposed rule (83 FR 55010), we erroneously cited to
Sec. 422.590(d)(3) instead of (d)(4) and use the correct reference
here.
---------------------------------------------------------------------------

At Sec. 422.634(b)(2), we proposed that for cases involving
Medicaid benefits, the enrollee may initiate a state fair hearing no
later than 120 calendar days from the date of the applicable integrated
plan's notice of resolution. We also proposed to include the
requirement that a provider who has not already obtained the written
consent of an enrollee must do so before filing a request for a state
fair hearing. We explained in the proposed rule how we intended the
timeframe to mirror the appeal right and requirement in the Medicaid
managed care regulation at Sec. 438.408(f)(2) and (3).
We proposed, at Sec. 422.634(c), language providing that
determinations are binding on all parties unless the case

[[Page 15743]]

is appealed to the next applicable level of appeal. We also proposed to
specify that this means that, in the event that an enrollee pursues an
appeal in multiple forums simultaneously (for example, files for an
external state medical review and an integrated reconsideration with
the applicable integrated plan, and the integrated reconsideration
decision is not in the enrollee's favor but the external state medical
review decision is), an applicable integrated plan would be bound by,
and must implement, decisions favorable to the enrollee from state fair
hearings, external medical reviews, and independent review entities
(IRE). As we explained in the proposed rule, for Medicare benefits, the
adverse integrated reconsideration would be automatically forwarded to
the IRE, pursuant to Sec. 422.634(b)(1), and thus the IRE's
determination in those cases would ultimately be binding.
We proposed, at Sec. 422.634(d), requirements for how quickly
services must be put in to place for an enrollee after he or she
receives a favorable decision on an integrated reconsideration or state
fair hearing. In the first sentence of paragraph (d), we proposed that
if an applicable integrated plan, or a state fair hearing with regard
to a Medicaid benefit, reverses a decision to deny, limit, or delay
services that were not furnished while the appeal was pending, the
applicable integrated plan must authorize or provide the disputed
services as expeditiously as the enrollee's condition requires but not
later than 72 hours. We intended this to mean that when an integrated
organization determination or integrated reconsideration decision is
favorable to the enrollee for any covered services, and, for Medicaid
benefits, when a state fair hearing reverses an applicable
reconsideration (that is, makes a decision that is favorable to the
enrollee with regard to Medicaid benefits), the same timeframe for the
applicable integrated plan to provide the benefits would apply. We also
proposed to cross-reference the existing MA regulations at Sec. Sec.
422.618 and 422.619 that provide how and when disputed Medicare
benefits must be provided when an integrated reconsideration denying
benefits is reversed at the post-plan level of appeal. Finally, we also
proposed in this paragraph to maintain the same effectuation timelines
for reversals by the Medicare independent review entity, an
administrative law judge or attorney adjudicator at the Office of
Medicare Hearings and Appeals, or the Medicare Appeals Council as apply
to other MA plans.
We proposed, at Sec. 422.634(e), for Medicaid-covered benefits, to
parallel Medicaid requirements from Sec. 438.424(b) governing how
services that were continued during the appeal must be paid for, if the
final determination in the case is a decision to deny authorization of
the services. For Medicare-covered services, we proposed that the
applicable integrated plan will cover the cost of the benefit.
We received the following comments regarding our proposed
provisions at Sec. 422.634, and our responses follow.
Comment: A commener supported the proposed requirements at Sec.
422.634. Another commenter requested that we align our requirement at
Sec. 422.634(b)(2) with the proposed Medicaid managed care rule to
allow states to give enrollees between 90 and 120 days to file for a
state fair hearing.
Response: We thank the commenter for their support. Our intent in
proposed Sec. 422.634(b)(2) was to follow the timeframes in the
existing Medicaid managed care requirements. Because we have proposed a
revision to the Medicaid managed care rules (see Medicaid and
Children's Health Insurance Program (CHIP) Managed Care (CMS-2408-P),
83 FR 57264 (November 14, 2018)), we are revising the requirement at
Sec. 422.634(b)(2) to refer to the timeline requirements in Sec.
438.408(f)(2) rather than stipulating those timelines in our final
regulations. By finalizing this cross-reference, the timeframe for an
enrollee to request a state fair hearing will be the same regardless of
whether the enrollee is appealing a decision by an applicable
integrated plan or a Medicaid managed care plan.
After considering the comments and for the reasons set forth in the
proposed rule and our responses to the related comments, we are
finalizing Sec. 422.634 substantively as proposed, but with some
clarifying modifications at paragraphs (a), (b), and (d). In paragraph
(a)(2), we are adding a citation to the parallel Medicaid managed care
rule at Sec. 438.408(f) for the timeframe for an enrollee to request a
state fair hearing. In paragraph (b)(2), we have revised the text to
cite to the state fair hearing in the timeframe specified in Sec.
438.408(f)(2), rather than cite a specific timeframe, to ensure
alignment with Medicaid managed care rules as described above. In
paragraph (d), we are finalizing the first sentence with revisions to
clarify that the applicable integrated plan's reversals--of integrated
organization determinations and integrated reconsiderations, as well as
of state fair hearing reversals--must be effectuated by the applicable
integrated plan within 72 hours rather than the MA timeframe in Sec.
422.618(a). The regulation text specifies that state fair hearing
decisions are only with regard to Medicaid benefits. Post-plan level
appeal decision on Medicare benefits (that is, by the Part C
independent review entity, an administrative law judge or attorney
adjudicator at the Office of Medicare Hearings and Appeals, or the
Medicare Appeals Council) must be effectuated in accordance with
Sec. Sec. 422.618, and 422.619.
(10) Unifying Medicare and Medicaid Appeals Subsequent to Integrated
Reconsideration
The new section 1859(f)(8)(B)(ii) of the Act directs us to include,
to the extent we determine feasible, consolidated access to external
review under an integrated process. We interpret ``external review'' in
this statutory provision as meaning review outside the plan, including
by a government agency or its designee. For MA, this includes the
independent review entity (IRE) and ALJ review described in Sec. Sec.
422.592 through 422.602. For Medicaid, this includes the state fair
hearing process described in Part 431 Subpart E, as well as any
additional external review offered under state law.
We believe that such a process could offer benefits to
beneficiaries, plans, states, and the federal government. Currently,
once a D-SNP or Medicaid managed care plan makes a final decision on an
appeal, the federally-administered Medicare and state-administered
Medicaid appeals processes are entirely separate. Although they have
some common principles, such as ensuring access to an independent
administrative hearing, they differ in many respects. In the proposed
rule (83 FR 55012 through 55015), we detailed the considerable
challenges of unifying D-SNP and Medicaid appeals subsequent to the
reconsideration level.
Based on these complexities, we stated in the proposed rule our
belief that it is not feasible to propose a unified post-plan appeals
process (that is, adjudication of appeal subsequent to an applicable
integrated plan's integrated reconsideration of an initial adverse
determination) at this time. Instead, we solicited comments on viable
paths forward given the constraints presented by the statutory mandates
for the MA and Medicaid appeals processes and our experience gained
through demonstrations. We received comments from six commenters.
Overall, the commenters expressed support for continued efforts

[[Page 15744]]

to move forward in this area in the future. We thank these commenters
for the time and effort expended on providing us with comments on the
establishment of a unified post-plan appeals process in potential
future rulemaking. We will take the comments into consideration as we
continue work on this issue.
(11) Conforming Changes to Medicare Managed Care Regulations and
Medicaid Fair Hearing Regulations (Sec. 422.562, Sec. 422.566, Sec.
438.210, Sec. 438.400, and Sec. 438.402)
We proposed a number of changes to Medicaid managed care, Medicaid
fair hearing, and Medicaid single state agency regulations to conform
with our proposed unified grievance and appeals provisions. Following
is a summary of these proposed changes.
In Sec. 422.562(a)(1)(i) and (b), we proposed to add
cross references to the proposed integrated grievance and appeals
regulations along with new text describing how the provisions proposed
in this rule for applicable integrated plans would apply in place of
existing regulations.
In Sec. 422.566, we proposed to add additional language
to paragraph (a) to establish that the procedures we proposed in this
rule governing integrated organization determinations and integrated
reconsiderations at proposed Sec. 422.629 through Sec. 422.634 apply
to applicable integrated plans in lieu of the procedures at Sec. Sec.
422.568, 422.570, and 422.572.
In Sec. 438.210(c) and (d)(4), we proposed to add cross
references to the proposed integrated grievance and appeals regulations
along with new text describing how the provisions proposed in this rule
for applicable integrated plans would apply in place of existing
regulations to determinations affecting dual eligible individuals who
are also enrolled in a D-SNP with exclusively aligned enrollment, as
those terms are defined in Sec. 422.2. In Sec. 438.210(f), we
proposed to make these Medicaid changes applicable to applicable
integrated plans no later than January 1, 2021, but, consistent with
our discussion earlier on the effective dates of our proposed unified
appeals and grievance procedures overall, we would not preclude states
from applying them sooner.
In Sec. 438.400, we proposed adding a new paragraph
(a)(4) to include the statutory basis for the proposed integration
regulations (section 1859(f)(8) of the Act). We also proposed to amend
Sec. 438.400(c) to clarify that these Medicaid changes apply to
applicable integrated plans no later than January 1, 2021, but,
consistent with our discussion elsewhere in this final rule, we would
not preclude states from applying them sooner.
In Sec. 438.402, we proposed amending paragraph (a) to
allow a Medicaid managed care plan operating as part of an applicable
integrated plan to the grievance and appeal requirements laid out in
Sec. Sec. 422.629 through 422.634 in lieu of the normally applicable
Medicaid managed care requirements.
We received the following comments, and our responses follow.
Comment: We received several comments related to the effective date
for the unified grievance and appeals procedures, including our
statement in the proposed rule that states could require applicable
integrated plans to implement such procedures prior to January 1, 2021,
using the state Medicaid managed care contract and the contract with
the D-SNP required under Sec. 422.107. Some commenters objected to
earlier implementation, noting the many processes that applicable
integrated plans will need to complete, such as systems changes, staff
training, policy and procedure development and implementation, and
developing enrollee communication materials, as well as the need for
CMS to release further guidance prior to the effective date. One
commenter noted that applicable integrated plans need all final
guidance from CMS one year prior to implementation. Another commenter
supported early implementation, provided such early implementation
would be on a trial basis only, and plans would not be subject to
intermediate sanctions, penalties, or audits.
Response: We understand the commenters' concerns about the need for
sufficient time to implement the unified grievance and appeals
processes we are finalizing in this rule. As we stated in the proposed
rule, these processes will apply to a relatively small subset of states
and plans, and while early implementation at state option is possible,
we do not anticipate many states implementing the processes earlier
than required (that is, beginning January 1, 2021) for many of the
reasons cited by these commenters. However, CMS will work closely with
any state interested in early implementation to ensure that impacted
applicable integrated plans have the guidance they need.
For the reasons explained in the proposed rule and our responses to
comments, we are finalizing substantively as proposed the conforming
changes to Sec. Sec. 422.562, 422.566, 438.210, 438.400, and 438.402.
We are making the following additional non-substantive changes to the
noted regulations:
We are modifying the regulatory text at Sec.
422.562(a)(1)(i), (b)(1), (b)(2), (b)(3), (b)(4)(i), and (b)(4)(ii),
and at Sec. 422.566(a), to clarify that the effective date of the
unified appeals and grievance processes finalized in this rule is
January 1, 2021. We are also making a minor grammatical change to Sec.
422.566(a) to make the language addressing applicable integrated plans
a separate sentence.
We are changing ``MA plans'' to ``Medicare Advantage
plans'' in Sec. 438.400(a)(4) because the term ``MA plans'' is not
defined Part 438.
We are finalizing Sec. 438.402 substantively as proposed,
but with some modifications to clarify that, for post-plan appeals of
Medicaid benefits, state fair hearing processes and requests are
subject to Sec. 438.408(f).
We are changing ``section'' to ``part'' in Sec.
438.400(c)(2) to clarify that the provisions affecting applicable
integrated plans throughout Part 438 are applicable no later than
January 1, 2021.
3. Prescription Drug Plan Sponsors' Access to Medicare Parts A and B
Claims Data Extracts (Sec. 423.153)
a. Background
This final rule sets forth the manner in which CMS will implement
section 50354 of the Bipartisan Budget Act of 2018 (BBA), Public Law
115-123, enacted on February 9, 2018. Section 50354 amends section
1860D-4(c) of the Social Security Act by adding a new paragraph (6)
entitled ``Providing Prescription Drug Plans with Parts A and B Claims
Data to Promote the Appropriate Use of Medications and Improve Health
Outcomes''. Specifically, section 1860D-4(c)(6)(A), as added by section
50354 of the BBA, provides that the Secretary shall establish a process
under which the sponsor of a Prescription Drug Plan (PDP) that provides
prescription drug benefits under Medicare Part D may request, beginning
in plan year 2020, that the Secretary provide on a periodic basis and
in an electronic format standardized extracts of Medicare claims data
about its plan enrollees. Such extracts would contain a subset of
Medicare Parts A and B claims data as determined by the Secretary. In
defining the specific data elements and time frames for the Parts A and
B claims data included in such extracts, hereinafter referred to as
``Medicare claims data,'' the Secretary is instructed, at section
1860D-4(c)(6)(D) of the Social Security

[[Page 15745]]

Act, to include data ``as current as practicable.''
Section 1860D-4(c)(6)(B) of the Act, as added by section 50354 of
the BBA, further specifies that PDP sponsors receiving such Medicare
claims data for their corresponding PDP plan enrollees may use the data
for: (i) Optimizing therapeutic outcomes through improved medication
use; (ii) improving care coordination so as to prevent adverse
healthcare outcomes, such as preventable emergency department visits
and hospital readmissions; and (iii) for any other purposes determined
appropriate by the Secretary. Finally, section 1860D-4(c)(6)(C) states
that the PDP sponsor may not use the data: (i) To inform coverage
determinations under Part D; (ii) to conduct retroactive reviews of
medically accepted conditions; (iii) to facilitate enrollment changes
to a different PDP or a MA-PD plan offered by the same parent
organization; (iv) to inform marketing of benefits; or (v) for any
other purpose the Secretary determines is necessary to include in order
to protect the identity of individuals entitled to or enrolled in
Medicare, and to protect the security of personal health information.
b. Provisions of the Proposed Rule
To implement the new statutory provision at section 1860D-4(c)(6)
of the Act, as added by section 50354 of the BBA, we proposed to add a
new paragraph (g) at Sec. 423.153. We summarize our proposals and
comments received and provide our responses and final decisions.
c. Purposes and Limitations on the Use of Data
In accordance with section 1860D-4(c)(6)(B) of the Act we proposed
to limit the purposes for which PDP sponsors are permitted to use the
Medicare claims data. Consistent with the statute, we proposed at Sec.
423.153(g)(3) that PDP sponsors would be permitted to use Medicare
claims data to optimize therapeutic outcomes through improved
medication use, and to improve care coordination so as to prevent
adverse health outcomes. In addition, we proposed to permit PDP
sponsors to use Medicare claims data for the purposes described in the
first or second paragraph of ``health care operations'' under 45 CFR
164.501, or that qualify as ``fraud and abuse detection or compliance
activities'' under 45 CFR 164.506(c)(4). We also proposed to permit
disclosures that qualify as a ``required by law'' disclosure as defined
at 45 CFR 164.103.
In accordance with section 1860D-4(c)(6)(C) of the Act, we proposed
specific limitations on how Medicare claims data provided to the PDP
sponsors may be used. Consistent with statutory limitations, we
proposed that PDP sponsors must not use Medicare claims data provided
by CMS under this subsection for any of the following purposes: (1) To
inform coverage determinations under Part D; (2) to conduct retroactive
reviews of medically accepted indications determinations; (3) to
facilitate enrollment changes to a different prescription drug plan or
an MA-PD plan offered by the same parent organization; or (4) to inform
marketing of benefits.
Section 1860D-4(c)(6)(C)(v) of the Act provides that the Secretary
may place additional limitations on the use of Medicare claims data as
necessary to protect the identity of individuals entitled to, or
enrolled in, benefits under Part D, and to protect the security of
personal health information. Therefore, we also proposed to require
that the PDP sponsor contractually bind its Contractors that will be
given access to Medicare claims data, and to require those contractors
to contractually bind any further downstream data recipients, to the
terms and conditions imposed on the PDP Sponsor. In addition, we
proposed to allow CMS to refuse future releases of Medicare claims data
if it determines or has a reasonable belief that the PDP sponsor has
made unauthorized uses, reuses, or disclosures of prior data received
under this provision. We also proposed that a PDP sponsor would have to
complete a data attestation as part of the data request process to
ensure an understanding of the purposes for which the Medicare claims
data may be used and the limitations on its reuse, and redisclosure.
Comment: A commenter recommended CMS explore ways to share the same
Parts A and B claims data with Medicare Advantage (MA) plans and Cost
plans.
Response: We appreciate the suggestion that CMS explore ways to
share the same Medicare data with MA plans and Cost plans. While we
understand that this data may be helpful to MA and Cost plans, section
1860D-4(c)(6)(A) only provides that the Secretary shall establish a
process for the sponsor of a Prescription Drug Plan (PDP) sponsor. We
are continuing to evaluate additional pathways for data sharing and may
consider data sharing with MA plans and Cost plans in the future.
Comment: A commenter requested additional clarification on how the
data could be used for fraud and abuse detection purposes.
Specifically, the commenter requested that CMS clarify that while PDP
sponsors may not use the Parts A and B data to change individual
coverage determinations decisions alone, they may review this data as
part of an effective fraud and abuse detection program.
Response: We appreciate the request to clarify the relationship
between the prohibition that PDP sponsors must not use the Medicare
claims data provided under this provision to change individual coverage
determination decisions with the permissible use of the Medicare claims
for fraud and abuse detection or compliance activities. As stated
earlier, the statutory language prohibits the use of the Medicare
claims data to inform coverage determinations under Part D and to
conduct retroactive reviews of medically accepted determinations. There
are a number of fraud and abuse detection or compliance activities that
the Medicare claims data can be used for that would not impact an
individual Medicare enrollee's coverage determination under Part D. For
instance, the PDP sponsor could use the Medicare claims data to create
algorithms that detect fraud and abuse and this information could be
used to inform future policies or procedures. PDP sponsors also could
use the Medicare claims data for internal and external audits or to
identify fraud and abuse activities by providers and suppliers. We also
encourage the PDP sponsors to refer to the current compliance and
fraud, waste, and abuse programs that are in place under the Part D
Sponsor compliance program and the suggested elements that CMS has
provided to Part D sponsors to consider when developing these programs.
Comment: Most commenters supported CMS's proposal for the permitted
uses of the data. A few commenters suggested additional permissible
uses of the data. A commenter suggested that CMS allow the use of
Medicare claims data for value-based contracting. Another commenter
encouraged CMS to include, as a permissible use, use of the data to
make favorable coverage determination decisions. Finally, a commenter
suggested that CMS permit plan sponsors to use the data for any other
purpose for which protected health information can be used under HIPAA,
including as de-identified data.
Response: We thank commenters for their support of the proposal.
When we considered expanding the permitted uses of the data provided to
the PDP sponsors beyond the statutory uses, we took into account a
number of factors.

[[Page 15746]]

First, we examined the purpose for which Medicare claims data is
provided, namely to promote the appropriate use of medications and
improve health outcomes. Second, we considered the statutory
limitations imposed on the use of the data, specifically that the data
not be used to inform coverage determinations or to conduct retroactive
review of medically accepted indications. Finally, we took into account
that this is a new data disclosure. Therefore, we decided to make the
additional permitted uses narrow. While we will not expand the
permitted uses as suggested at this time, we will continue to assess
whether additional permissible uses of the data should be proposed in
future rulemaking.
Comment: A commenter requested CMS release more specific guidance
on how the data could potentially be used and provide for additional
comment opportunities so feedback can be shared with CMS.
Response: We thank the commenter and believe that the rule provides
adequate information on the limits and permissible uses of the data
under this section. We will continue to assess the program to determine
if additional guidance is needed and welcome stakeholders to provide
additional feedback or seek clarification on program requirements. If
CMS makes future changes to the regulatory requirements of this
program, then stakeholders will be able to provide feedback during that
rulemaking process.
Comment: A few commenters recommended that CMS not expand the
permissible uses beyond what was explicitly provided for in statute.
These commenters were concerned that the expanded uses conflict, or
have the potential to conflict, with the directive in the statute that
PDPs may not use this information ``to inform coverage determinations
under Part D'' or to conduct retroactive reviews of medically accepted
indications. In particular, they were concerned about the use of the
data for fraud and abuse detection and compliance activities. They
encouraged CMS to limit disclosures under this authority to those
expressly allowed by statute, to monitor plan's use of the data, and
only consider expansion after the Secretary has evaluated plans' actual
use of this data as well as the agency's audit and review capacity.
Response: We thank commenters for this feedback. Section 1860D-
4(c)(6)(B)(iii) of the Act states that the Secretary can determine if
there are other appropriate purposes for which the data can be used.
Therefore, consistent with this statutory authority, we proposed to
narrowly expand on the permitted uses of the Medicare claims data based
on the factors discussed earlier. In terms of concerns about the use of
the data for fraud and abuse detection and compliance activities, we
clarified previously that the use of the claims data would still need
to comply with the statutory limitations on the use of the data at
Sec. 423.153(g)(4). These fraud and abuse activities would not focus
on an individual Medicare enrollee's Part D coverage, but rather, these
fraud and abuse detection and compliance activities would be aimed at
plans and providers/suppliers. In addition, as discussed in the
proposed rule, we believe that PDP sponsors are required to comply with
the applicable HIPAA rules, so they would have extensive experience
ensuring that data is only used and disclosed as permitted or required
by applicable laws. We believe that PDP sponsors understand and will
abide by their obligations regarding the permitted uses and limitations
on the use of Medicare data provided under this provision.
Comment: A few commenters disagreed with the limitations on using
these data for coverage determinations and to conduct retroactive
reviews of medically accepted indications determinations. A commenter
stated that with access to claims data, PDP sponsors would be better
positioned to identify appropriate interventions related to medication
adherence, opioid overutilization, risk adjustment and other medication
management related requirements of PDP sponsors. Another commenter
stated that because plan sponsors that offer standalone Part D benefits
(PDP sponsors) have no contracts with prescribing providers, they
currently have no mechanism for ensuring that medications are
appropriate. They further asserted that access to claims data would
allow PDP sponsors to validate whether prescriptions are medically
supported, as well as to identify other interventions related to opioid
overutilization, medication adherence, risk adjustment and other
functions related to requirements for Part D sponsors.
Response: We appreciate the feedback on the limitations on the use
of the data; however, the statutory language at section 1860D-
4(c)(6)(C) of the Act states that PDP sponsors must not use Medicare
claims data provided by CMS under this subsection for any of the
following purposes: (1) To inform coverage determinations under Part D;
(2) to conduct retroactive reviews of medically accepted indications
determinations; (3) to facilitate enrollment changes to a different
prescription drug plan or an MA-PD plan offered by the same parent
organization; or (4) to inform marketing of benefits.
Comment: A number of commenters requested clarification that the
permissible uses and limitations provided in this rule only apply to
the Medicare data received under this provision and not to Medicare
data that is obtained through other data disclosure pathways. For
instance, a commenter requested that CMS clarify that Medicare data
obtained through different sources may still be used for coverage
determinations and to determine medically accepted indications. Another
commenter requested clarification on how the permissible and
impermissible use of this claims data will be taken into account for
purposes of audits and other reviews--specifically, they requested
confirmation that PDP sponsors will not be penalized for failing to
implement Medically Accepted Indications (MAI) and other restrictions,
even if the plan sponsor has Medicare claims data on hand since PDP
sponsors are explicitly prohibited from using the Medicare claims data
provided under this provision to conduct retroactive reviews of
medically accepted indications determinations.
Response: We appreciate the request for clarification. The
limitations and permissible uses of the Medicare claims data at Sec.
423.513(g)(3) and (4) only apply to the data received under the
authority of section 1860D-4(c)(6) of the Act. Medicare claims data
provided to PDP sponsors under another program or pathway are subject
to those program requirements. PDP sponsors are not permitted to use
the Medicare claims data provided under this provision for any of the
impermissible purposes specified by the statute at section 1860D-
4(c)(6)(C). Therefore, we do not see how a PDP sponsor would be held
accountable for not using that Medicare claims data in a manner that
conflicts with the statutory requirements.
Comment: We received several comments on the requirement that PDP
sponsors complete a data attestation as part of the data request
process. A few commenters questioned whether an attestation is
sufficient to ensure compliance and urged CMS to monitor Part D plan
sponsors' use of the data to ensure restrictions are enforced. A
commenter expressed concern that PDP sponsors do not need to show with
any specificity how they intend to use the data or the results that
they expect. Another commenter recommended CMS

[[Page 15747]]

not adopt an attestation requirement given the statutory obligations on
plans relating to their use of the Medicare data. Another commenter
mentioned that they would provide comments on the data attestation as
part of the PRA process.
Response: Section 1860D-4(c)(6)(C)(v) of the Act provides that the
Secretary may place additional limitations on the use of Medicare
claims data as necessary to protect the identity of individuals
entitled to, or enrolled for, benefits under Part D, and to protect the
security of personal health information. In proposing additional
limitations on the use of the Medicare data, we sought to balance the
burden on PDP plans with CMS' commitment to ensuring beneficiary-level
data is protected by strict privacy and security requirements. We
believe that the data attestation requirement is a means of ensuring an
understanding of, and compliance with, the terms and conditions of data
access and seeks an appropriate balance. In terms of monitoring, we
will pursue any complaints regarding a PDP sponsor's violation of
program requirements. We would emphasize that CMS may refuse to make
future releases of Medicare claims data to a PDP sponsor if the Agency
makes a determination or has a reasonable belief that unauthorized
uses, reuses, or disclosures have taken place. We believe this approach
to monitoring is sufficient since we believe that PDP sponsors are
required to comply with the HIPAA rules. Therefore, they have
experience ensuring that data can only be used and disclosed for
specific purposes. We believe that PDP sponsors understand and will
abide by their obligations regarding the permitted uses and limitations
on the Medicare data under this provision. However, as this program is
implemented, we will continue to monitor and assess our program
compliance policies to determine if additional oversight or guidance
materials are needed on the use of the data.
In terms of the PRA process, we published a stand-alone 60-day
Federal Register notice that set out the requirements and burden
associated with the request and attestation (November 30, 2018; 83 FR
61638). We are also realigning the provision with this rulemaking by
setting out such requirements and burden in section III.B.4 of this
final rule. In this regard we will not be publishing a stand-alone 30-
day Federal Register notice.
Comment: A commenter requested clarification as to PDP sponsors'
access to the data (for example, single point person or multiple
individuals within the PDP permitted to access the data extract).
Response: As discussed earlier, we believe that PDP sponsors are
required to comply with the HIPAA Rules, including Privacy, Security
and Breach Notification requirements. They are accustomed to dealing
with limitations on the use and disclosure of data. We expect that they
will designate a data custodian as the recipient, and establish
policies and procedures as to use and disclosure that will comply with
all applicable law, including this program's data usage limitations,
and the limits on use and disclosure under the HIPAA regulations,
including the minimum necessary concept.
We are finalizing the policy as proposed.
d. Data Request
Section 1860D-4(c)(6)(A) of the Act provides that the Secretary
shall establish a process under which a PDP sponsor of a prescription
drug plan may submit a request for the Secretary to provide the sponsor
with standardized extracts of Medicare claims data for its enrollees.
Therefore, we proposed at Sec. 423.153(g)(1) to establish a process by
which a PDP sponsor may submit a request to CMS to receive standardized
extracts of Medicare claims data for its enrollees. We proposed to
accept data requests on an ongoing basis beginning January 1, 2020. We
proposed to require that such data requests be submitted in a form and
manner specified by CMS. Consistent with the discretion accorded to the
Secretary under section 1860D-4(c) (6)(D) of the Act, we proposed not
to allow PDP sponsors to request data for subsets of their enrolled
beneficiary populations. We proposed allowing requests to be submitted
without an end date, such that the request, once reviewed for
completeness and approved, would remain in effect until one or more of
the following occur: the PDP sponsor notifies CMS that it no longer
wants to receive Medicare claims data, CMS cancels access to Medicare
claims data when a PDP sponsor leaves the Part D program, or CMS
concludes or has a reasonable belief, at its sole discretion, that the
PDP sponsor has used, reused or disclosed the Medicare claims data in a
manner that violates the requirements of section 1860D-4(c)(6) of the
Act and Sec. 425.153(g). Upon receipt of the request from the PDP
sponsor and the PDP's execution of an attestation discussed earlier,
and review for completeness and approval of the application by CMS or
its contractor, we proposed that the PDP sponsor would be provided
access to Medicare claims data. We note that access to Medicare claims
data will be further subject to all other applicable laws, including,
but not limited to, the part 2 regulations governing access to certain
substance abuse records (42 CFR part 2).
Comment: One commenter expressed concern about providing
information on the entire membership on a continuous basis regardless
of whether the Part D plan needs the complete data set or membership.
Response: We believe that in order to accomplish the purposes of
the statute to promote the appropriate use of medications and improve
health outcomes that the PDP sponsor will need Medicare claims data for
all of its enrollees. We also believe that this approach is consistent
with the discretion afforded to the Secretary under section 1860D-
4(c)(6)(D) of the Act.
Comment: A commenter requested that CMS clarify how this will
comply with the regulations governing the disclosure of substance use
disorder data and address whether PDP sponsors will be required to
scrub the substance use disorder data from the extract.
Response: In compliance with the part 2 regulations governing
access to certain substance abuse records (42 CFR part 2), we do not
anticipate providing substance use disorder data to PDP sponsor under
this program.
We are finalizing the policy as proposed.
e. Data Extract Content
Section 1860D-4(c)(6)(D) of the Act provides the Secretary with the
discretion to determine the time frame and claims data under Parts A
and B to be included in the standardized extracts provide to PDP
sponsors. To develop a proposed data set to include in the standardized
extracts of Medicare claims data, we first considered what Medicare
claims data PDP sponsors might require if they were to undertake the
activities expressly permitted by section 1860D- 4(c)(6)(B) of the Act.
In doing so, we attempted to limit the data set to the minimum data
that we believe PDP sponsors would need to carry out those statutory
activities and the additional activities we proposed to permit under
Sec. 423.153(g)(3). That is, we sought to establish data access limits
that would comport with the HIPAA Privacy Rule's minimum necessary
concept at 45 CFR 164.502(b) and 164.514(d), and CMS' policy-driven
data release policies.
We proposed that data from all seven claim types, including
inpatient, outpatient, carrier, durable medical equipment, hospice,
home health, and skilled nursing facility data, would be

[[Page 15748]]

required to carry out the permitted uses of the data under section
1860D-4(c)(6)(B) of the Act and the proposed provision at Sec.
423.153(g)(3). Because section 1860D-4(c)(6) of the Act focuses on
providing Medicare claims data to promote the appropriate use of
medications and improve health outcomes, we proposed to initially
include the following Medicare Parts A and B claims data elements
(fields) in the standardized extract: An enrollee identifier, diagnosis
and procedure codes (for example, ICD-10 diagnosis and Healthcare
Common Procedure Coding System (HCPCS) codes); dates of service; place
of service; provider numbers (for example, NPI); and claim processing
and linking identifiers/codes (for example, claim ID, and claim type
code). We proposed that CMS would continue to evaluate the data
elements provided to PDP sponsors to determine if data elements should
be added or removed based on the information needed to carry out the
permitted uses of the data. Any proposed changes would be established
through rulemaking.
We next considered the beneficiary population for which we should
draw the identified data elements, and what time span of data would
best serve PDP sponsors while honoring the requirement at section
1860D-4(c)(6)(D) of the Act that the data should be as current as
practicable. Therefore, because only the most timely data is needed for
care coordination purposes, we proposed at Sec. 423.153(g)(2) to draw
the standardized extracts of Medicare claims data for items and
services furnished under Medicare Parts A and B to beneficiaries who
are enrolled in a Part D plan offered by the Part D sponsor at the time
of the disclosure. We proposed to make standardized data extracts
available to eligible PDP sponsors at least quarterly, as described
earlier, but only on a specified release date that would be applicable
to all eligible PDP sponsors. We also anticipate that Medicare claims
data would be provided at least quarterly with approximately a 3-month
lag from the last day of the last month of the prior quarter. In
addition, given the permitted uses of the data, we proposed to use a
standard format to deliver the resulting data to each PDP sponsor with
standard format extracts, meaning that CMS would not customize the
extracts for a PDP sponsor. We believe that these standardized data
extracts would provide PDP sponsors with the minimum data necessary to
carry out the permitted uses specified in section 1860D-4(c)(6)(B) of
the Act and as proposed at Sec. 423.153 (g)(3). We solicited comments
about the proposed frequency and contents of the standardized data
extracts.
Comment: We received a few comments seeking clarification on the
standardized data extract. A commenter requested clarification about
the inclusion of Part A and B data furnished by MA plans. Another
commenter requested clarification that the data feed includes enrollees
who may not be new to Medicare coverage, but are new to the health or
PDP sponsor. A commenter requested the inclusion of Part D claims data
for lives enrolled in or attributed to MA Plans and ENHANCED Track
ACOs.
Response: We appreciate commenters' request for clarification. We
proposed at Sec. 423.153(g)(2) to draw the standardized extracts of
Medicare claims data for items and services furnished under Medicare
Parts A and B to beneficiaries who are enrolled in a Part D plan
offered by the Part D sponsor at the time of the disclosure. The
standardized data extract only includes Parts A and B claims data
furnished under Medicare as there are no Part A and B data for MA
plans. The standardized extract also does not include Part D data. We
would also clarify that the standardized data extract will include all
enrollees for a PDP sponsor at the time of the disclosure. Therefore,
if an enrollee is new to the PDP sponsor, but not to Medicare, that
enrollee will be included in the standardized extract.
Comment: A commenter recommended that CMS provide itself
flexibility to not have to amend the rules every time it changes the
data elements included in the data extract.
Response: We appreciate the commenter's suggestion, however, CMS
believes that it is necessary to provide stakeholders with the
opportunity to comment on any proposed data variables to ensure they
are necessary to carry out the statutory activities and the additional
activities that are proposed to be permitted under Sec. 423.153(g)(3).
Comment: Several commenters were supportive of the data elements
that were proposed. However, a commenter suggested that Hierarchical
Condition Category (HCC) and Prescription Drug Hierarchical Condition
Category (RxHCC), which are risk adjustment scores, would also be
beneficial as they could be used to assess the degree of morbidity and
potential morality associated with a beneficiary to determine whether
there is a need for outreach or interventions, which would improve
medication outcomes, and for identifying potential fraud and abuse.
Another commenter suggested the inclusion of national drug codes
(NDC), lab results, and patient reported outcomes to support the
evaluation of effectiveness of value-based contracts.
Response: We appreciate the suggested additions to the data
variables. We do not believe that the HCC and RxHCC risk scores that
are used to set payment rates are consistently informative for the
purposes for which data is made available under this regulation, namely
to provide PDPs with information that allows them to optimize
therapeutic outcomes through improved medication use, and to improve
care coordination so as to prevent adverse health outcomes. The claims
data that will be provided under this regulation will provide a
comprehensive clinical picture of each member, including utilization,
cost, and diagnostic information. We do not believe that risk scores
would provide significant information above and beyond what the claims
data will provide. Further, risk scores for a year are not finalized
until after that year is complete, and therefore, to the extent they
theoretically could be pertinent for some aspect of care coordination,
would not be complete until after treatment decisions have been made.
We also note that if a PDP sponsor were to want the risk score of their
members, they receive their Part D risk scores monthly, along with a
report of the specific HCCs that contribute to those scores. If they
believe that Part C risk scores would be helpful--that is, risk scores
that predicted relative expected expenditures for Part A and B
services--they would have the data available to them to calculate these
risk scores with the claims data. With respect to the NDC, Part A
claims data do not include NDC, and only very rarely is the NDC
included on the Part B claims data. The statute instructs the Secretary
to provide claims data, in which NCDs are generally not available.
Therefore, we do not have the authority under this program to
supplement the claims data made available under this provision.
Finally, CMS also does not have access to lab results or patient
reported outcomes in parts A and B claims data, and therefore would be
unable to provide that information.
Comment: One commenter suggested adopting an existing standard
format for Parts A and B data after soliciting and considering
stakeholder feedback.
Response: We anticipate that the data will be provided in standard
data format. CMS will publish the standard format publicly once it is
finalized. As this provision is implemented, we will continue to seek
feedback on the data format.

[[Page 15749]]

Comment: A number of commenters urged CMS to make data available as
real-time and with as short of a lag time as possible, for instance on
a monthly basis.
Response: We recognize that more timely data with a shorter lag
time would be helpful to PDP sponsors in achieving the goals of this
program. Currently, our infrastructure only supports delivery of
quarterly data extracts that have roughly a five-month lag time. Our
goal is to provide the Medicare data as timely and with as little of a
lag in the claims data as possible and are striving to meet this goal.
Comment: A few commenters suggested providing historical data for
enrollees. A commenter suggested providing historical data as it is
critical to support the execution of value-based contracts and
suggested a look back period of at least a year, similar to the
Enhanced Medication Therapy Management (EMTM) program. Another
commenter suggested providing historical data for the creation of
value-based care tools to avoid counter indications. Another commenter
recommended a 14-month look back similar to the Bundled Payment for
Care Improvement Initiative (BPCI).
Response: Section 1860D-4(c)(6)(D) of the Act provides that the
Secretary shall make standardized extracts available to PDP sponsors
with data that is the most current as practicable. While we understand
that historical data may assist PDP sponsors, we must adhere to the
statutory language. As this program matures, PDP sponsors will amass
historical data.
Comment: A commenter suggested the use of an Application
Programming Interface (API) given the volume of Medicare claims data
that will be provided to PDP sponsors. This commenter also suggested
leveraging the process established through Blue Button 2.0 to allow
beneficiaries to release Parts A and B claims directly to PDP plan
sponsors.
Response: We appreciate this comment and will explore leveraging an
API to enhance data releases to PDP sponsors.
Comment: Another commenter requested clarification on the term
``process and ship the data extracts.''
Response: Under the current data fulfillment process, CMS receives
the approved request for data. A CMS contractor then extracts the data
based on the cohort criteria, validates and performs a quality check on
the data extract, and ships the data on an encrypted external hard
drive to PBP sponsors.
Comment: A commenter believed that the CMS Health Plan Management
System (HPMS) would be an adequate delivery system for the data
extracts.
Response: We would clarify that the Medicare claims data extracts
will be shipped to PDP sponsors, however, we are exploring the use of
the CMS HPMS for submission of the data request by PDP sponsors.
We are finalizing the policies as proposed.

B. Improving Program Quality and Accessibility

1. Medicare Advantage and Part D Prescription Drug Plan Quality Rating
System (Sec. Sec. 422.162(a) and 423.182(a), Sec. Sec. 422.166(a) and
423.186(a), Sec. Sec. 422.164 and 423.184, and Sec. Sec. 422.166(i)
and 423.186(i))
a. Introduction
Last year, in the April 2018 final rule, CMS codified at Sec. Sec.
422.160, 422.162, 422.164, and 422.166 (83 FR 16725 through 83 FR
16731) and Sec. Sec. 423.180, 423.182, 423.184, and 423.186 (83 FR
16743 through 83 FR 16749) the methodology for the Star Ratings system
for the MA and Part D programs, respectively. This was part of the
Administration's effort to increase transparency and advance notice
regarding enhancements to the Part C and D Star Ratings program. Going
forward CMS must propose through rulemaking any changes to the
methodology for calculating the ratings, the addition of new measures,
and substantive measure changes. The April 2018 final rule included
mechanisms for the removal of measures for specific reasons (low
statistical reliability and when the clinical guidelines associated
with the specifications of measures change such that the specifications
are no longer believed to align with positive health outcomes) but,
generally, removal of a measure for other reasons would occur through
rulemaking.
Commenters to the November 2017 proposed rule (82 FR 56336)
expressed overall support for the use of the hierarchical clustering
algorithm which is the methodology used for determining the non-
Consumer Assessment of Healthcare Providers and Systems (CAHPS)
measure-specific cut points. The cut points are used to separate a
measure-specific distribution of scores into distinct, non-overlapping
groups, or star categories. The cut points are determined using the
hierarchical clustering algorithm based on the given year's performance
data. Performance data changes from year to year based on industry
performance. Therefore, the cut points can also change from year to
year. While there was overall support for the use of the hierarchical
clustering algorithm, the majority of commenters also recommended some
enhancements be made to the proposed clustering methodology to capture
the attributes that they consider important. Commenters expressed a
strong preference for cut points that are stable, predictable, and free
from undue influence of outliers. Further, some commenters expressed a
preference for caps to limit the amount of movement in cut points from
year to year. CMS did not finalize any changes in last year's rule to
the clustering algorithm for the determination of the non-CAHPS cut
points for the conversion of measure scores to measure-level Star
Ratings, in order to allow the necessary time to simulate and examine
the feasibility and impact of the suggestions provided in response to
the proposed rule. In addition, CMS evaluated the degree to which the
simulations captured the desired attributes identified by the
commenters.
In the November 2018 proposed rule, we proposed enhancements to the
cut point methodology for non-CAHPS measures. We also proposed
substantive updates to the specifications for 2 measures for the 2022
Star Ratings and substantive updates to the specifications for 1
measure for the 2023 Star Ratings. We also proposed rules for
calculating Star Ratings in the case of extreme and uncontrollable
circumstances. Unless otherwise stated, data would be collected and
performance would be measured as described in these proposed rules and
regulations for the 2020 measurement period; the associated quality
Star Ratings would be released prior to the annual election period held
in late 2021 for the 2022 contract year and would be used to assign
Quality Bonus Payment ratings for the 2023 payment year. Because of the
timing of the release and use in conjunction with the annual
coordinated election period, these would be the ``2022 Star Ratings.''
CMS appreciates the feedback we received on our proposals. In the
sections that follow, which are arranged by topic area, we summarize
the comments we received on each proposal and provide our responses.
Below we summarize some comments we received related to the Star
Ratings program that are not about any of the proposals outlined in the
November 2018 proposed rule.
Comment: A commenter suggested that quality incentive programs
should use a small set of outcomes, patient experience, and resource
use measures that are not unduly burdensome to

[[Page 15750]]

report. Because adjusting measure results for social risk factors can
mask disparities in clinical performance, Medicare should account for
social risk factors by directly adjusting payment through peer
grouping. Another commenter supports CMS efforts to modernize the CMS
Quality Rating System by relying more heavily upon measurable
improvement in patient clinical outcomes.
Response: We appreciate these comments and have been working
towards using more outcome measures and increasing the weight of
patient experience of care measures in the Star Ratings system.
Currently, to account for social risk factors we do not directly adjust
the measure scores (or resulting stars) but add the Categorical
Adjustment Index to address the average within-contract disparity in
performance among beneficiaries who receive a low income subsidy, are
dual eligible individuals, and/or are disabled. CMS is continuing to
monitor ongoing work related to socio-economic status of measure
developers such as National Committee for Quality Assurance (NCQA) and
the Pharmacy Quality Alliance (PQA) and the work of the Office of the
Assistant Secretary for Planning and Evaluation (ASPE) as it works to
complete its second Report to Congress as required by the Improving
Medicare Post-Acute Care Transformation Act of 2014 or the IMPACT Act
(Pub. L. 113-185). Changes to how CMS determines Quality Bonus Payments
and the methodology for payment to MA organizations generally are out
of scope for this rule.
Comment: A commenter urged CMS to develop a strategic plan that
includes defined goals for the Quality Star Ratings program and creates
a framework for the inclusion and retirement of measures. The commenter
stated that CMS should ensure that the Quality Star Ratings are
simplified, accurately reflect plan performance, and place the most
emphasis on measures plans can influence and that improve
beneficiaries' health. The commenter also noted that CMS should focus
on data-driven measures with objective clinical relevance, rather than
survey-based measures.
Response: We laid out the framework for the Star Ratings in the
April 2018 final rule. We will take these comments into consideration
as that framework is revised over time. As part of our efforts to put
patients first, obtaining direct feedback from beneficiaries is vital
in understanding the quality of care provided by plans and is an
important component of the Part C and D Star Ratings program.
Comment: A commenter supported CMS's position that all substantive
measure changes be proposed through rulemaking. However, this commenter
requested more information about what is considered ``substantive''.
Response: The April 2018 final rule provided specific examples of
substantive updates to measures. We direct readers to pages 83 FR 16534
through 16535 of the April 2018 final rule.
Comment: Several commenters offered suggestions related to
adjusting for socioeconomic status (SES). A commenter suggested CMS
adjust for social risk factors. Another commenter requested that
Categorical Adjustment Index (CAI) adjustments be made to individual
measures instead of to the overall Star Ratings, to increase the
measure accuracy. A commenter made suggestions, including that CMS:
Enhance the CAI by expanding the range of included measures, letting a
2 percent or greater absolute performance difference between low income
subsidy/dual eligible and non-low income subsidy/dual eligible
individuals be sufficient for measure inclusion; consider other methods
for measuring and rewarding quality for plans with complex members; and
engage with both NCQA and PQA to drive the development of adjustments
for socioeconomic factors for their respective measures; and accelerate
the inclusion of such adjusted measures in the Star Ratings program.
Another commenter recommended that to address D-SNPs, CMS compare
D-SNPs to D-SNPs, use appropriate measures for dual eligible
individuals, evaluate adjusting individual measures for social risk
factors, and make improvements to the CAI to make the adjustment more
effective, including additional measures and other adjusters. A
commenter suggested HOS-derived measures should be included in the CAI,
so that the complexities of each plan's enrollee population would be
taken into account. The commenter also requested CMS use HOS samples
that are larger when the plan enrollment is larger, to provide a truer
representation of the member population. Another commenter expressed
support for continued use of the CAI in the Star Ratings program while
CMS develops a long-term solution to address disparities in plan
performance associated with socio-economic status and other risk
factors.
Response: CMS appreciates these comments although changes to how
CMS addresses socioeconomic status (SES) are out of scope for this
regulation. There continues to be additional work in the research
community on both identifying the impact of social risk factors on
health outcomes and how to best address the impact on clinical quality
measurement such that comparisons across contracts yield accurate
representations of true differences in quality as opposed to
reflections of changes in the composition of beneficiaries in
contracts. CMS is following the related work of the National Quality
Forum (NQF) since it will have a widespread impact on quality
measurement across multiple settings. The NQF has a longstanding policy
prohibiting risk adjustment for SES and other demographic factors. NQF
released a final report in July 2017 \29\ on the findings of the 2-year
trial period that temporarily lifted that prohibition. In the report,
NQF recommended a 3-year initiative to further examine and consider
social risk adjustment to allow evidence as to whether a change in that
longstanding policy should be revised.
---------------------------------------------------------------------------

\29\ NQF's Final Report can be assessed using the following
link: http://www.qualityforum.org/Publications/2017/07/Social_Risk_Trial_Final_Report.aspx.
---------------------------------------------------------------------------

In addition, CMS has engaged the NCQA and PQA to review and
determine if any measures are sensitive to the composition of the
enrollees in a plan and whether any modifications to the specification
would be appropriate.
As part of this engagement by the agency, the PQA examined their
medication adherence measures, which are currently used in the Star
Ratings Program, for potential risk adjustment (that is, adjustment for
SES and demographic factors).\30\ Based on the results of this
analysis, beginning in 2018, the PQA included in the 2018 PQA Measure
Manual draft recommendations on risk adjustment of the three medication
adherence measures: Medication Adherence for Diabetes Medications,
Medication Adherence for Hypertension, and Medication Adherence for
Cholesterol. As part of PQA's draft recommendations, they suggest that
the three adherence measures be stratified by the beneficiary-level
sociodemographic status characteristics listed earlier to allow health
plans to identify disparities and understand how their patient
population mix is affecting their measure rates.
---------------------------------------------------------------------------

\30\ The PQA summary can be accessed at: SDS Risk Adjustment PQA
PDC CMS Part D Stars or http://files.constantcontact.com/e9a15233201/96107f74-f6df-46f9-91e9-4a79d7e1bf0a.pdf?ver
=1515729061000.
---------------------------------------------------------------------------

The PQA indicated that the risk-adjusted adherence measures will be
submitted through the NQF consensus

[[Page 15751]]

development process for maintenance of the measures (NQF Endorsed
#0541). If endorsed by NQF, CMS will consider how to implement the PQA
recommendations in the future for these Star Ratings measures.
NCQA's 2019 HEDIS Volume 2 includes the additional specifications
of 4 measures used in the MA Star Ratings. As discussed in the 2018
Call Letter, the additional specifications for Breast Cancer Screening,
Colorectal Cancer Screening, Comprehensive Diabetes Care--Eye Exam
Performed, and Plan All-Cause Readmissions \31\ break out the rates by
SES. While CMS continues to use specifications for the overall measure
rates not broken out by SES, which are the same rates as contracts have
submitted in past years, CMS is considering if and how to best
incorporate the information provided by the stratified reporting in
future years of the Star Ratings. In particular, CMS is considering to
what extent stratified reporting helps address in a more permanent way
the same issues addressed by the Categorical Adjustment Index (CAI).
---------------------------------------------------------------------------

\31\ A summary of the NCQA analysis and recommendations can be
accessed using the link that follows: http://www.ncqa.org/hedis-quality-measurement/research/hedis-and-the-impact-act.
---------------------------------------------------------------------------

The Office of the Assistant Secretary for Planning and Evaluation
(ASPE), as required in the Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT Act, Pub. L. 113-185), released the
first in a two-part series of Reports to Congress (RTC) in December
2016.\32\ ASPE's second report is due in the fall of 2019. In the
meantime, CMS continues to be in dialogue with ASPE to discuss
potential options for future MA Star Ratings.
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\32\ ASPE's first Report to Congress: Social Risk Factors and
Performance under Medicare's Value-Based Purchasing Programs can be
accessed using the link that follows: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
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Based on stakeholders' feedback, the April 2018 final rule expanded
the adjusted measure set for the determination of the CAI beginning
with the 2021 Star Ratings to all measures identified as a candidate
measure. A measure will be adjusted if it remains after applying the
following four bases for exclusions as follows: The measure is already
case-mix adjusted for SES (for example, CAHPS and HOS outcome
measures); the focus of the measurement is not a beneficiary-level
issue but rather a plan or provider-level issue (for example, appeals,
call center, Part D price accuracy measures); the measure is scheduled
to be retired or revised during the Star Rating year in which the CAI
is being applied; or the measure is applicable to only Special Needs
Plans (SNPs) (for example, SNP Care Management, Care for Older Adults
measures). HOS-outcome measures are not included in the measurement set
since they are already adjusted for SES. Additionally, since HOS
samples are random, increasing their size will not make them more
representative.
Comment: A few commenters supported the continued prior adjustments
for the lack of low-income subsidy in Puerto Rico which is part of the
current CAI calculations with a commenter recommending formalizing the
rules for determining the percent LIS for Puerto Rico contracts.
Response: CMS appreciates these comments. The rules for determining
the percent LIS for Puerto Rico contracts were codified in the April
2018 final rule at Sec. Sec. 422.166(f)(2)(vi) and (vii) and
Sec. Sec. 423.186(f)(2)(vi) and (vii).
Comment: A commenter suggested that CMS apply a hold harmless to
both the CAI and the Reward Factor going forward. This commenter urged
CMS to employ a hold harmless calculation for plan sponsors that are
negatively impacted by the CAI value if it lowers a contract's Summary
Ratings or Overall Ratings and to remove any negative consequences for
high performing contracts related to the Reward Factor since high
performing contracts are not able to achieve low variance as easily as
low performing contracts.
Response: We note that this comment raises an issue that is outside
of the scope of the proposals but we are explaining the current policy
and regulations. The CAI values address the average within-contract
disparity in performance revealed through the Star Ratings data each
year among beneficiaries who receive a low income subsidy, are dual
eligible individuals, and/or are disabled. The adjustment factor varies
by a contract's categorization into a final adjustment category that is
determined by a contract's proportion of low income subsidy/dual
eligible individuals and beneficiaries with disability status. By
design, the CAI values are monotonic and, thus, contracts with larger
percentages of enrollees that are low income subsidy/dual eligible and/
or have disability status realize larger positive adjustments.
Contracts with few beneficiaries that fall in the low income subsidy/
dual eligible and/or disability status categories have small negative
adjustments since achieving higher ratings is easier for these
contracts relative to ones with more significant percentages of
vulnerable beneficiaries. Thus, CMS disagrees that contracts with low
percentages of these vulnerable beneficiaries should receive a hold
harmless provision. It is not clear how the commenter suggests to
remove negative consequences of the Reward Factor since all of the
factors are 0 or positive adjustments.
Comment: Another commenter supported both the Star Ratings
methodology and past improvements that CMS has made to increase
accuracy. The commenter also supported enhancements that aim to signal
CMS's willingness to reward MA organizations that demonstrate excellent
outcomes and enrollee experiences. Another commenter requested CMS
acknowledge that outcome based measures are more challenging for plans
serving complex populations.
Response: CMS appreciates these comments. The Star Ratings
methodology weights the experience of enrollees and outcome measures
heavily, but also includes other metrics of plan performance, as
additional dimensions for holding MA and Part D plans accountable for
their performance. Outcome measures such as Improving or Maintaining
Physical Health and Improving or Maintaining Mental Health are adjusted
for the characteristics of the enrollees, including more complex
enrollees.
Comment: A commenter expressed support for retiring measures when
there are 1 percentage point differences in the same direction year-
over-year (for example, for 3 years).
Response: The April 2018 final rule codified rules for the
retirement of measures, at Sec. Sec. 422.164(e)(1) and 423.184(e)(1),
which provide for retirement when a measure has low reliability and/or
the clinical guidelines change such that the measure specifications are
no longer believed to align with positive health outcomes. We
appreciate this comment and will take it into consideration as we
contemplate future enhancements to these rules.
b. Definitions
We proposed to add the following definitions for the respective
subparts in part 422 and part 423, in paragraph (a) of Sec. Sec.
422.162 and 423.182, respectively.
Absolute percentage cap is a cap applied to non-CAHPS
measures that are on a 0 to 100 scale that restricts movement of the
current year's measure-threshold-specific cut point to no more than the
stated percentage as compared to the prior year's cut point.
Cut point cap is a restriction on the change in the amount
of movement a measure-threshold-specific cut point can make as compared
to the prior year's measure-threshold-specific cut

[[Page 15752]]

point. A cut point cap can restrict upward movement, downward movement,
or both.
Guardrail is a bidirectional cap that restricts both
upward and downward movement of a measure-threshold-specific cut point
for the current year's measure-level Star Ratings as compared to the
prior year's measure-threshold-specific cut point.
Mean resampling refers to a technique where measure-
specific scores for the current year's Star Ratings are randomly
separated into 10 equal-sized groups. The hierarchical clustering
algorithm is done 10 times, each time leaving one of the 10 groups out.
By leaving out one of the 10 groups for each run, 9 of the 10 groups,
which is 90 percent of the applicable measure scores, are used for each
run of the clustering algorithm. The method results in 10 sets of
measure-specific cut points. The mean cut point for each threshold per
measure is calculated using the 10 values.
Restricted range is the difference between the maximum and
minimum measure score values using the prior year measure scores
excluding outer-fence outliers (first quartile - 3*Interquartile Range
(IQR) and third quartile + 3*IQR).\33\
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\33\ The first quartile is median of the lower half of the data;
in other words, the value in the data once arranged in numerical
order that divides the lower half into two equal parts. The third
quartile is the median of the upper half of the data.
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We proposed to specify in the definition the criteria used to
identify the values that correspond to the outer fences which are used
to identify extreme outliers in the data. Outer-fence outliers use
established statistical criteria for the determination of the boundary
values that correspond to the outer fences. The outer fences are the
boundary values for an outer-fence outlier such that any measure score
that either exceeds the value of the upper outer fence (third quartile
+ 3*IQR) or that is less than the lower outer fence (first quartile-
3*IQR) is classified as an outer fence outlier and excluded from the
determination of the value of the restricted range cap.
Restricted range cap is a cap applied to non-CAHPS
measures that restricts movement of the current year's measure-
threshold-specific cut point to no more than the stated percentage of
the restricted range of a measure calculated using the prior year's
measure score distribution.
We received no comments on these proposed definitions in paragraph
(a) of Sec. Sec. 422.162 and 423.182 and are finalizing them with one
non-substantive change to the mean resampling definition; we have
finalized the definition with an additional sentence to clarify that by
leaving out one of the 10 groups for each run, 90 percent of the
measure scores are used for each run of the clustering algorithm.
c. Measure-Level Star Ratings (Sec. Sec. 422.166(a), 423.186(a))
At Sec. Sec. 422.166(a) and 423.186(a), we previously codified the
methodology for calculating Star Ratings at the measure level in the
April 2018 final rule. The methodology for non-CAHPS measures employs a
hierarchical clustering algorithm to identify the gaps that exist
within the distribution of the measure-specific scores to create groups
(clusters) that are then used to identify the cut points. The Star
Ratings categories are designed such that the scores in the same Star
Ratings category are as similar as possible and the scores in different
Star Ratings categories are as different as possible. The current
methodology uses only data that correspond to the measurement period of
the data used for the current Star Ratings program. The cut points, as
implemented now, are responsive to changes in performances from one
year to the next. Changes in the measure-level specific cut points
across a Star Ratings year reflect lower or higher measure performance
than the prior year, as well as shifts in the distribution of the
scores.
In the April 2018 final rule, CMS detailed the goals of the Star
Ratings program. The overarching goals of the Star Ratings program and
the specific sub-goals of setting cut points serve as the rationale for
any proposed changes.
The Star Ratings display quality information on Medicare Plan
Finder to help beneficiaries, families, and caregivers make informed
choices by being able to consider a plan's quality, cost, and coverage;
to provide information for public accountability; to incentivize
quality improvement; to provide information to oversee and monitor
quality; and to accurately measure and calculate scores and stars to
reflect true performance. In addition, pursuant to section 1853(o) of
the Act and the Medicare Program; Changes to the Medicare Advantage and
the Medicare Prescription Drug Benefit Programs for Contract Year 2012
and Other Changes Final Rule (76 FR 21485 through 21489), the Star
Ratings are also used to assign Quality Bonus Payments as provided in
Sec. 422.558(d).
To separate a distribution of measure scores into distinct groups
or star categories, a set of values must be identified to separate one
group from another group. The set of values that break the distribution
of the scores into non-overlapping groups is referred to as a set of
cut points. The primary goal of any cut point methodology is to
disaggregate the distribution of scores into discrete categories such
that each grouping accurately reflects true performance.
The current MA Star Ratings methodology converts measure-specific
scores to measure-level Star Ratings so as to categorize the most
similar scores within the same measure-level Star Rating while
maximizing the differences across measure-level Star Ratings. To best
serve their purpose, the Star Ratings categories must capture
meaningful differences in quality across the Star Ratings scale and
minimize the risk of misclassification. For example, it would be
considered a misclassification if a ``true'' 4-star contract were
scored as a 3-star contract, or vice versa, or if nearly-identical
contracts in different measure-level star categories were mistakenly
identified. CMS currently employs hierarchical clustering to identify
the cut points for non-CAHPS measures to ensure that the measure-level
Star Ratings accurately reflect true performance and provide a signal
of quality and performance on Medicare Plan Finder to empower
beneficiaries, families, and caregivers to make informed choices about
plans that would best align with their priorities.
We solicited comments in the 2017 proposed rule regarding the
approach to convert non-CAHPS measure scores to measure-level Star
Ratings (82 FR 56397 through 56399). We requested stakeholders to
provide input on the desirable attributes of cut points and
recommendations to achieve the suggested characteristics. In addition,
we requested that commenters either suggest alternative cut point
methodologies or provide feedback on several options detailed in the
proposed rule, such as setting the cut points by using a moving
average, using the mean of the 2 or 3 most recent years of data, or
restricting the size of the change in the cut points from 1 year to the
next.
The commenters identified several desirable attributes for the cut
points that included stability, predictability, attenuation of the
influence of outliers; restricted movement of the cut points from 1
year to the next; and either pre-announced cut points before the plan
preview period or pre-determined cut points before the start of the
measurement period. In the April 2018 final rule (83 FR 16567), we
expressed appreciation for our stakeholders' feedback and stated our
intent to use it to guide the development of an enhanced methodology.
So as not to

[[Page 15753]]

implement a methodology that may inordinately increase the risk of
misclassification, CMS analyzed and simulated alternative options to
assess the impact of any enhancements on the Star Ratings program and
assess the degree to which a new methodology captures the desirable
attributes that were identified by stakeholders. While CMS looked to
balance the request of stakeholders to increase predictability and
stability of the cut points from year to year in developing its
proposal for this rulemaking, the goals of the Star Ratings program,
the integrity of the methodology, and the intent of the cut point
methodology remain the same. The intent of the cut point methodology is
to accurately measure true performance.
A Technical Expert Panel (TEP), comprised of representatives across
various stakeholder groups, convened on May 31, 2018 to provide
feedback to CMS's Star Ratings contractor (currently RAND Corporation)
on the Star Ratings framework, topic areas, methodology, and
operational measures, including possible enhancements to the clustering
methodology used to convert non-CAHPS measure scores to measure-level
Star Ratings. Information about the TEP and their feedback can be found
at http://www.rand.org/star-ratings-analyses.
In developing the proposal for modifying how cut points are set for
non-CAHPS measures, CMS examined numerous alternative methodologies to
minimize the influence of outliers, to restrict the upward or downward
movement of cut points from one year to the next, and to simulate
prediction models to allow either limited advance notice or full
advance notice of cut points prior to the measurement period. As part
of our analyses, we analyzed trends in performance across the Star
Ratings measures. The ability to announce cut points before (full
advance notice) or during (partial advance notice) the measurement
period requires the use of modeling and older data to project the cut
points, as well as the need for an alternative methodology for new
measures introduced to the Star Ratings program. We explained in the
proposed rule that modeling is challenging given differences in the
performance trends over time across the Star Ratings measures; thus, a
single approach for predicting all future performance does not
accurately reflect performance for all measures.
We also discussed how using prediction models to establish future
cut points may have unintended consequences and misalign with the
underlying goals of the Star Ratings program and sub-goals of setting
cut points. Predicting future cut points using older data can lead to
both over or under-estimations of performance which results in a
distorted signal of the Star Ratings. Over projections in the cut
points will result in higher cut points and lower measure-level Star
Ratings. Conversely, under projections can lead to lower cut points and
higher measure-level Star Ratings. The risk of misclassification is
heightened when the accuracy of the projected cut points is diminished.
The use of older data for setting cut points does not allow the Star
Ratings to be responsive to changes in performance in the current year.
Furthermore, setting cut points in advance of the measurement year may
lead to MA organizations and Part D sponsors not focusing on certain
areas once they achieve a set threshold, eliminating incentives for
improvement.
For example, CMS provided incentives for eligible providers to
adopt certified Electronic Health Records (EHRs) and report quality
measures under the Meaningful Use (MU) initiative. Consequently, there
were large gains in performance for a subset of Star Ratings measures
that were enabled through the EHR, which reflected a structural change
among health care providers in the delivery of care. Further, an
examination of performance over time of EHR-enabled measures indicates
a decrease in variability of measure scores with contract performance
converging toward greater uniformity. Modeling future performance using
past performance from before this leveling out of performance would
fail to capture the large gains in performance in the EHR-enabled
measures, which would have resulted in cut points that were
artificially low and measure-level Star Ratings that were higher than
true performance.
We discussed in the proposed rule how pre-announced cut points for
other subsets of measures in the Star Ratings would present different
challenges as compared to EHR-enabled measures. Performance on new
measures typically has more room to improve, and large year to year
gains are possible and desirable from a quality improvement
perspective. Projecting cut points using older data from periods of
rapid improvement would artificially inflate future cut points which
would cause artificially low measure-level Star Ratings. Measures that
demonstrate very slow, consistent growth over time could have projected
cut points that are artificially high. The further the projection is in
advance of the measurement period, the larger the potential for
unintended consequences. In addition, there exists the possibility of
external factors, other than structural, that are unanticipated and
unforeseen that could impact the distribution of scores for which
modeling would not capture.
We listed in the proposed rule some of the challenges of full or
partial advance notice:
Older data often do not accurately reflect current
performance.
The trend in average performance is not always linear.
External or structural factors may occur that can lead to
substantial changes from period to period rather than steady, slow
year-over-year improvement.
Larger gains in performance year to year exist for
relatively new measures, compared to more established measures.
The rate of change is less likely to be linear at lower
threshold levels where contracts have greater opportunities for
improvement.
Decreasing variation in measure scores reflects greater
improvements in performance for lower versus higher-performing
contracts--contract performance is converging over time toward greater
uniformity.
These challenges are critical to consider because if we modify the
current methodology to predict (or set) cut points using older data and
a single model across all measures, we risk causing unintended
consequences such as significantly diminishing incentives for
improvement or having the Star Ratings misaligned with changes in
performance that may be due to external or structural factors.
Based on stakeholder feedback and analyses of the data, we proposed
two enhancements to the current hierarchical clustering methodology
that is used to set cut points for non-CAHPS measure stars in
Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i). The first proposed
enhancement was the use of mean resampling. With mean resampling,
measure-specific scores for the current year's Star Ratings are
randomly separated into 10 equal-sized groups. The hierarchical
clustering algorithm is done 10 times, each time leaving one of the 10
groups out. The method results in 10 sets of measure-specific cut
points. The mean cut point for each threshold per measure is calculated
using the 10 values. We explained in the proposed rule that mean
resampling reduces the sensitivity of the clustering algorithm to
outliers and reduces the random variation that contributes to
fluctuations in cut points and, therefore, improves the stability of
the cut points over time. Mean resampling uses the most recent

[[Page 15754]]

year's data for the determination of the cut points; thus, it does not
require assumptions for predicting cut points over time and it
continues to provide incentives for improvement in measure scores. The
drawback of mean resampling alone is that it does not restrict the
movement of the cut points, so the attribute of predictability is not
fully captured with this methodology.
To increase the predictability of the cut points, we also proposed
a second enhancement to the clustering algorithm: A guardrail for
measures that have been in the Part C and D Star Ratings program for
more than 3 years. We proposed a guardrail of 5 percent to be a bi-
directional cap that restricts movement both above and below the prior
year's cut points. A 5 percent cap restricts the movement of a cut
point by imposing a rule for the maximum allowable movement per measure
threshold; thus, it allows a degree of predictability. The trade-off
for the predictability provided by bi-directional caps is the inability
to fully keep pace with changes in performance across the industry.
While cut points that change less than the cap would be unbiased and
keep pace with changes in the measure score trends, changes in overall
performance that are greater than the cap would not be reflected in the
new cut points. A cap on upward movement may inflate the measure-level
Star Ratings if true gains in performance improvements cannot be fully
incorporated in the current year's ratings. Conversely, a cap on
downward movement may decrease the measure-level Star Ratings since the
ratings would not be adjusted fully for downward shifts in performance.
We discussed in the proposed rule that a measure-threshold-specific
cap can be set multiple ways and the methodology may differ based on
whether the measure is scored on a 0 to 100 scale or an alternative
scale. For measures on a 0 to 100 scale, the cap can restrict the
movement of the measure cut points from one year to the next by a fixed
percentage, such as an absolute 5 percentage point cap. For measures
not on a 0 to 100 scale, the cap can be determined for each measure by
using a percentage of the measure's score distribution or a subset of
the distribution, such as 5 percent of the range of the prior year
scores without outer fence outliers, referred to as a restricted range
cap. Alternatively, a restricted range cap can be used for all
measures, regardless of scale, using a cap based on the range of the
prior year scores without outliers. We proposed an absolute 5
percentage point cap for all measures scored on a 0 to 100 scale and 5
percent of the restricted range for all measures not on a 0 to 100
scale, but we explained that we were also considering alternatives to
the 5 percent cap, such as using 3 percent. We noted in the proposed
rule our belief that any cap larger than 5 percent would not provide
the predictability requested by stakeholders that our proposal was
designed to incorporate. While smaller caps provide more
predictability, it is more likely that the cut points will not keep
pace with changes in measure scores in the industry as the cap size
gets smaller, and may require future larger one-time adjustments to
reset the measure cut points. Therefore, we explained in the proposed
rule that we were not sure that a smaller cap, even at a 3 percent
threshold, would meet our programmatic needs and goals of providing
accurate pictures of the underlying performance of each contract and
its comparison to other contracts. We therefore proposed using a 5
percent cap because the use of the cap allows predictability of the cut
points from year to year, but also balances the desire to continue to
create incentives for contracts to focus on the quality of care of
their enrollees and strive to improve performance. If the cut points
are not keeping pace with the changes in the scores over time, CMS may
need to propose in the future how to periodically adjust the cut points
to account for significant changes in industry performance.
In summary, we proposed to amend Sec. Sec. 422.166(a)(2)(i) and
423.186(a)(2)(i) to add mean resampling of the current year's data to
the current clustering algorithm to attenuate the effect of outliers,
and measure-specific caps in both directions to provide guardrails so
that the measure-threshold-specific cut points do not increase or
decrease more than the cap from one year to the next. We proposed a 5
percentage point absolute cap for measures on a 0 to 100 scale and a 5
percent restricted range cap ((0.05) * (maximum value - minimum value),
where the maximum and minimum values are calculated using the prior
year's measure score distributions excluding outer fence outliers). For
any new measures that have been in the Part C and D Star Rating program
for 3 years or less, we proposed to use the hierarchal clustering
methodology with mean resampling for the first 3 years in the program
in order to not cap the initial increases in performance that are seen
for new measures. Under our proposal, existing provisions governing
cases where multiple clusters have the same measure score value range
(Sec. Sec. 422.166(a)(2)(ii) and 423.186(a)(2)(ii)) and how the
clustering algorithm would apply for setting cut points for the
improvement score (Sec. Sec. 422.166(a)(2)(iii) and 423.186(2)(iii))
remain the same. We solicited comments on this proposal, including
comments on the percentage used for the cap, whether the cap should be
an absolute percentage difference for measures on a 0 to 100 scale,
whether the cap should be a percent of the range of prior year scores
without outliers for all measures or for the subset of measures not on
a 0 to 100 scale, whether the cap should be in both the upward and
downward directions, and alternative methods to account for outliers.
Below we summarize the comments we received and provide our
responses and final decisions.
Comment: Commenters overwhelmingly supported increasing the
stability and predictability of cut points and attenuating the
influence of outliers.
Response: CMS appreciates the support for increasing the stability
and predictability of cut points and attenuating the influence of
outliers. CMS has examined numerous alternative methodologies for
setting cut points and the methodology changes we finalize in this rule
are intended to make cut points more stable and predictable.
Comment: Several commenters supported implementing cut point
methodology changes for contract year 2020 or as soon as possible and
opposed delaying such methodology changes until 2022 Ratings.
Response: CMS appreciates the commenters' requests to implement
these changes sooner but, as established in the 2018 final rule,
changes to the methodology for Star Ratings go through rulemaking and
are finalized prior to the relevant measurement year unless we are
applying a standard in the regulation text in making the change. We
proposed and are finalizing this change to how cut points for non-CAHPS
measures are set for the 2020 measurement year, which is associated
with the 2022 Star Ratings.
Comment: Many commenters requested more detail on the resampling
methodology, including simulations of the impact of resampling and
guardrails, and a couple of commenters requested an additional comment
period after CMS provided more detail on the resampling methodology,
but before making any changes to the cut point methodology.
Response: The reason for using the resampling approach is to
increase

[[Page 15755]]

stability and predictability of cut points. The approach is implemented
as follows. First, the current year's contract scores for a given
measure are randomly divided into 10 groups or subsamples. (The current
year's data means the data from the applicable performance year for the
given year of Star Ratings being calculated. For example, the 2022 Star
Ratings use data from the 2020 performance year.) The process can be
replicated when the random number generator is given the same seed
prior to each run. Then, for each of the 10 subsamples, the following
steps are taken:
Omit one subsample from the data.
Calculate thresholds using the clustering approach on the
data that combines the remaining 9 subsamples.
After those two steps are completed for each of the 10 subsamples, the
resulting 10 sets of cut points are averaged.
There are two advantages of resampling. It contributes to
stabilizing the cut points, which is its primary advantage over using
clustering without mean resampling, and it partially addresses the
sensitivity of the clustering approach to the ordering of the
observations in the data set. First, each observation is included in
only 90 percent of the cut point estimates that are averaged. This
reduces the contribution of each observation, including outliers, to
the final cut points. Second, pulling out a random 10 percent of the
data prior to cut point calculation alters the order of the data. It
partially accounts for the sensitivity of the clustering approach to
the ordering of observations, as the tie-breaking approach of the
clustering algorithm depends on the ordering of the data. Allowing for
altered orders of the data reduces the effect of the tie-breaking on
the final cut points. Resampling is computationally more feasible than
reordering a large (for example, 1,000) number of times to search for
multiple cut point combinations, given the timeline of the Star Ratings
calculations. HCAHPS uses an approach that is conceptually similar.
HCAHPS cut points are the average of cut points based on four segments
of the data, divided by quarters, where each segment contains 25
percent of the data. Whereas this proposal is to average the cut points
calculated from each of 10 segments where each segment contains 90
percent of the data.
In response to the commenters' requests, we simulated the impact of
the proposed changes to the cut point methodology including mean
resampling and a 5 percent guardrail on the 2018 Star Ratings. However,
we note that some commenters stated that they simulated the proposed
changes themselves prior to commenting on the proposed rule. All
commenters could have simulated the proposed changes themselves prior
to commenting on the proposed rule based on the measure data from 2018
or 2019 Star Ratings (available at http://go.cms.gov/partcanddstarratings). While these data do not contain contracts that
terminated from the Medicare program, the available data are sufficient
to simulate these methodological changes. Since the guardrail could
have an effect not only on the current Star Ratings year but also on
subsequent years, we accounted for this by starting our simulation of
the combined mean resampling and guardrail approach with the 2016 Star
Ratings data. The resulting cut points served as the reference point
for applying the guardrail to the cut points obtained through applying
both mean resampling and guardrails to the 2017 Star Ratings data.
Finally, we simulated the 2018 Star Ratings thresholds with mean
resampling and a 5 percent guardrail that referenced the simulated 2017
Star Ratings thresholds from the prior step. Overall the changes in
2018 Star Ratings under this approach were relatively modest. Six
percent of MA-PD contracts would have seen their overall rating
increase by half a star and five percent would have decreased by half a
star. For PDP contracts, 5 percent would have increased by half a star
and 7 percent would have decreased by half a star. In our simulations,
there was not a disproportionally negative impact on contracts with
more LIS/DE enrollees. For MA-PD contracts with LIS/DE beneficiaries of
up to 50 percent, 6 percent of contracts moved up a half-star on the
overall Star Ratings and 6 percent moved down by half-star. For
contracts with greater than 50 percent LIS/DE beneficiaries, 7 percent
moved up half-star and 2 percent moved down half-star. With regard to
the request for an additional comment period, many other commenters
requested CMS implement the changes as soon as possible. Further, as
explained previously, some commenters conducted simulations of the
proposed methodological changes themselves prior to commenting on the
proposed rule. Overall, we received 47 comments on the proposed changes
to the cut point methodology from the 60 day comment period. We believe
the public understood the proposal and were able to submit comments
effectively. Therefore, we are finalizing the proposal to implement
mean resampling, because resampling will provide increased stability
and predictability of cut points.
Comment: A couple commenters expressed concern that mean resampling
can provide varying results depending on the number of samples used and
questioned why 10 samples were chosen, and a couple commenters believed
mean resampling would make the cut point methodology more complicated.
Response: We proposed and are finalizing the use of 10 samples
because, as a common choice in related applications, such as cross-
validation, it has proven advantages. Using 10 samples is less
computationally intensive than using more samples, which is a
significant advantage in light of the limited time between the
availability of the measure data and the publication of Star Ratings
each year. By using the ``leave-one-out approach,'' we expect improved
stability in the cut point thresholds, as each data point (including
outliers) will be omitted from 10 percent of the cut points that are
estimated and then averaged across the ten 90 percent samples following
resampling. We appreciate the commenter's concern about the complexity
of mean resampling, however, we find that mean resampling is not overly
complex because it is replicable, as long as the contract groupings are
pre-specified.
Comment: A commenter suggested CMS provide Statistical Analysis
System (SAS) programming code to run the cut points analyses.
Response: CMS provides details about how the cut points are
determined, including SAS code, in the Technical Notes CMS provides for
each Star Ratings year (see the Attachment regarding Individual Measure
Star Assignment Process). The changes to the cut point methodology
finalized in this rule will be documented in the Technical Notes for
the 2022 Star Ratings. The Technical Notes can be found here: http://go.cms.gov/partcanddstarratings.
Comment: Several commenters supported mean resampling to address
outliers.
Response: CMS appreciates the support for mean resampling. We are
finalizing mean resampling as proposed.
Comment: Some commenters believed resampling would not be
sufficient to address outliers or believed resampling does not directly
address year to year changes in cut points. A couple commenters
supported removing outliers before clustering.
Response: CMS appreciates the commenters concerns and based on
these comments evaluated two options to address direct removal of
outliers--trimming and Tukey outer fence outlier

[[Page 15756]]

deletion. We conducted simulations of the impact of each outlier
deletion method combined with a cumulative 5 percent guardrail on the
2018 Star Ratings. In general, there tend to be more outliers on the
lower end of measure scores. As a result, the one to two star threshold
often increased in the simulations when outliers were removed compared
to the thresholds when outliers were not removed, while other
thresholds were not as impacted. The simulations of trimming and Tukey
outlier deletion also account for the removal of the two Part D appeals
measures (Appeals Auto-Forward and Appeals Upheld) and the Part C
measure Adult BMI Assessment, because these measures will be removed
starting with the 2022 Star Ratings, as announced in the 2020 Call
Letter.
Under trimming, all contracts with scores below the 1st percentile
or above the 99th percentile are removed prior to clustering. Although
trimming is a simple way to remove extreme values, it removes scores
below the 1st percentile or above the 99th percentile regardless of
whether the scores are true outliers. In some cases, true outliers may
be between the 1st and 99th percentile, and trimming will not remove
these outliers, and in other cases, trimming will remove scores that
are not true outliers, especially when the distribution of scores is
skewed. If trimming and a 5 percent cumulative guardrail had been
implemented for the 2018 Star Ratings, 2 percent of MA-PD contracts
would have seen their overall Star Rating increase by half a star and
17 percent would have had it decreased by half a star. For PDP
contracts, 4 percent would have increased their Part D summary Star
Rating by half a star and none would have decreased.
Tukey outer fence outlier deletion is a standard statistical method
for removing outliers. Under this methodology, outliers are defined as
values below a certain point (first quartile-3.0 x (third quartile-
first quartile)) or above a certain point (third quartile + 3.0 x
(third quartile-first quartile)). The Tukey outer fence outlier
deletion will remove all outliers based on the previous definition and
will not remove any cases that are not identified as outliers. As with
trimming, the values identified by Tukey outer fence outlier deletion
are removed prior to clustering. If Tukey outer fence outlier deletion
and a 5 percent cumulative guardrail had been implemented for the 2018
Star Ratings, 2 percent of MA-PD contracts would have seen their Star
Rating increase by half a star and 16 percent would have decreased by
half a star. For PDP contracts, 2 percent would have increased by half
a star and 18 percent would have decreased by half a star.
At this time, CMS is not finalizing a method to directly remove
outliers prior to clustering. The methods to directly remove outliers
resulted in some shifting of Star Ratings in the simulations, as
explained previously. Further, as these methods were not included in
the proposed rule, the public has not had an opportunity to comment on
them specifically. CMS will continue to evaluate these and possibly
other methods to directly address outliers and will consider proposing
outlier deletion in future rulemaking.
Comment: A commenter opposed resampling because based on the
commenter's simulations it would have little impact on cut points and
could lead to cut points being raised more often than lowered.
Response: CMS appreciates the commenter's concerns that the mean
resampling will not have a significant impact on cut points. However,
we believe that mean resampling in conjunction with the use of the
guardrails adequately addresses concerns about outliers and stability
from year to year. We are finalizing mean resampling because it will
lead to increased stability and predictability of cut points and will
address the sensitivity of clustering to the order of the data.
Comment: A couple commenters requested CMS consider whether
resampling could increase the influence of outliers on cut points.
Response: Mean resampling decreases the influence of outliers on
cut points because each measure score (regardless of whether the score
is an outlier) is omitted from 10 percent of the cut point estimates,
which are then averaged as part of mean resampling. Based on this, any
given outlier is omitted from the cut point estimates in one of the 10
runs of the clustering algorithm. When the 10 sets of cut point
estimates are averaged, the influence of an outlier is less than what
it would have been if resampling had not been done. Therefore,
resampling will not increase the influence of outliers as a function of
the methodology.
Comment: A commenter supported resampling but would like individual
contract scores to be weighted by enrollment to reduce the impact of
small contracts that may experience large changes in scoring from one
year to the next due to small numbers.
Response: CMS appreciates the commenter's support for resampling.
Giving contracts very different weights would decrease the stability of
clustering and increase the role of noise in setting thresholds. The
measures used in the Star Ratings program have minimum denominator
criteria that must be met for a contract to be scored on a measure. As
part of our usual administration of the Star Ratings system, CMS has
examined changes in scores from year to year when there have been
larger shifts in cut points. However, based on this comment, we again
examined the data for large changes in measure scores year-over-year
and found that such changes occur even for contracts with moderate or
large denominators. We therefore disagree with these commenters and
will not change the methodology as recommended.
Comment: A commenter opposed resampling because it does not address
social disparity issues faced by some plans and outlier removal would
disadvantage plans serving underserved communities by normalizing
metrics towards the median. Another commenter requested CMS to consider
how methodological changes may necessitate adjustments for socio-
economic status (SES) factors.
Response: The purpose of resampling is to create more stability in
the cut points over time. Separately, CMS in the April 2018 final rule
and the 2020 Call Letter finalized a policy to expand the adjusted
measures included in the Categorical Adjustment Index (CAI). Starting
with the 2020 Star Ratings the CAI values will be determined using all
measures in the candidate measure set for adjustment. A measure will be
adjusted if it remains after applying the exclusions as follows: The
measure is already case-mix adjusted for SES, the measure is a plan or
provider issue, the measure is being retired or revised during the
relevant Star Ratings year, or the measure only applies to Special
Needs Plans. Further, the CAI for a given ratings year is developed
using the same cut point methodology that will be applied in that
ratings year. We believe that the CAI adequately addresses the impact
of SES on the Part C and D Quality Star Ratings pending the conclusion
of ASPE's second report on this issue (scheduled to be released in the
fall of 2019) and steps taken by the measure stewards to further
address it.
Comment: A commenter supported reordering in place of resampling,
because the commenter believes resampling may not result in more stable
cut points and reordering would address the sensitivity of the
hierarchical clustering algorithm to the order of the data.

[[Page 15757]]

Response: We appreciate the commenter's concerns, but we are
finalizing mean resampling as proposed. The hierarchical clustering
algorithm is sensitive to the order of the data when ties occur in
identifying the clusters. This means the cut points generated by the
clustering algorithm can sometimes be slightly different depending on
the order of the data. Mean resampling helps to address this issue, and
we believe mean resampling combined with guardrails adequately
addresses concerns about outliers and stability from year to year.
Additionally, conducting a full-scale reordering is too computationally
intensive given the time constraints of the Star Ratings calculations.
Under mean resampling, each time 10 percent of the measure scores are
randomly selected and removed prior to clustering the remaining 90
percent, the order of the data will be altered. We will continue to
evaluate the impact of resampling on the issue identified by the
commenter and consider additional enhancements to the methodology if
needed.
Comment: Most commenters supported the implementation of
guardrails. While about half of commenters supported setting the
guardrails at 5 percent as proposed, other commenters were mixed in
supporting various other options for setting guardrails, such as a 2
percent guardrail, a 3 percent guardrail, and a 5 percent restricted
range guardrail for all measures.
Response: We thank commenters for their support for implementing
guardrails. While we appreciate commenters' suggestions for
alternatives to setting guardrails at 5 percent, we are finalizing the
guardrails at 5 percent as proposed. Guardrails at 5 percent provide a
balance between providing predictability in cut points while also
allowing cut points to keep pace with changes in measure scores in the
industry. Smaller guardrails may prevent the cut points from keeping
pace with changes in measure scores in the industry, and may limit the
incentive to improvement. Five percent guardrails will also allow for
less frequent or possibly no future adjustments to reset the measure
thresholds to keep pace with industry changes in measure scores as
compared to smaller guardrails. If cut points are not keeping pace with
the changes in scores over time, CMS may propose in the future how to
adjust the cut points to account for significant changes in industry
performance.
Comment: Some commenters requested additional information about the
guardrails including simulations of the impact. Some commenters
requested simulation data prior to implementation whereas other
commenters requested simulations of the impact but also supported the
proposed changes.
Response: We appreciate the commenters request for simulations of
the impact of guardrails. We refer readers to the earlier response to
comments where we provide the results of the simulations combining mean
resampling and a 5 percent guardrail. Commenters could also compare cut
points from prior years to see where the guardrail would go into effect
to determine which cut points would be affected. Additionally, data are
available to conduct a full simulation, as discussed previously.
Comment: A commenter requested CMS delay finalizing the application
of a guardrail until a final cut point methodology is finalized,
because guardrails should be assessed only after the final cut point
methodology is determined.
Response: CMS appreciates the commenter's request but does not
believe a delay is necessary or appropriate as the guardrails are a key
component of how we intend the cut point methodology to provide
stability and predictability from year to year, in balance with
reflecting true performance. In addition, many other commenters
requested CMS implement the changes as soon as possible. CMS has
assessed a number of different approaches for modifying the cut point
methodology and simulated the impact of the proposed modifications;
therefore, we understand the impact of such changes. We discussed the
results of these simulations in response to other comments earlier in
this preamble. We are finalizing the guardrails as proposed, because
this will lead to increased stability and predictability of cut points.
Comment: A commenter supported guardrails only above the prior
year's cut points combined with not allowing cut points to decline from
year to year, because the commenter believes cut points should not be
allowed to decrease compared to the following year. Another commenter
noted a concern for cut points getting lower from year to year since
downward movement could discourage plans from making improvements to
attain higher ratings.
Response: We thank the commenters for these suggestions and while
we share the underlying concern about incentivizing continued
improvement in performance, we do not believe restricting downward
movement in cut points from year to year is appropriate. There may be
instances in which industry performance declines from year to year as a
result of factors that are outside of plans' control and cut points
should be able to move to account for this. This is in line with our
intent for the Quality Star Ratings to provide comparative information
about MA and Part D plan performance.
Comment: A couple commenters were concerned about the
implementation of guardrails, because it could limit the ability of the
Star Ratings to respond to industry changes and make the Star Ratings a
less effective comparative tool, and these commenters also suggested
that guardrails would diminish incentives for improvement. A commenter
was concerned about the need to rebase cut points if they did not keep
up with changes in industry performance.
Response: We appreciate the commenters concern and agree the Star
Ratings should be able to respond to industry changes and to reflect
true performance as accurately as possible. To address this issue, we
are finalizing the guardrails at 5 percent as proposed rather than a
narrower guardrail. Guardrails at 5 percent provide a balance between
providing predictability in cut points while also allowing cut points
to keep pace with changes in measure scores in the industry. If cut
points are not keeping pace with the changes in scores over time, CMS
may propose in the future how to adjust the cut points to account for
significant changes in industry performance.
Comment: Some commenters also supported setting guardrails for new
measures.
Response: While CMS appreciates the desire for predictability of
cut points, we believe setting guardrails on new measures would not
allow cut points to keep pace with initial increases in performance
that are typically seen for new measures and would diminish incentives
for improvement. We have seen that for new measures, plans and their
providers work closely to implement processes to improve performance.
There is typically more room to improve for new measures and,
consequently, we see large year-to-year gains in measure scores in
particular for the first three or more years.
Comment: A couple commenters questioned how measures moved to
display as a result of specification changes would be treated when they
were returned to the Star Ratings.
Response: Measures returning to the Star Ratings after being on
display as a result of substantive specification changes would be
treated as new

[[Page 15758]]

measures. For these measures, we will use the hierarchal clustering
methodology with mean resampling for the first 3 years after returning
to the Star Ratings and add application of the guardrail only after
that point.
Comment: A handful of commenters requested that CMS continue to
work with stakeholders and other experts to improve guardrails over
time and to identify alternative methodologies to increase the
predictability and stability of cut points from year to year, including
how to address the impact of outliers.
Response: We appreciate the commenters' suggestions to continue to
obtain feedback on ways to improve the methodology over time. We will
continue to solicit feedback from stakeholders on this issue, and our
Star Ratings contractor will continue to obtain input from the Part C
and D Star Ratings Technical Expert Panel. We are committed to
continuing to analyze the impact of outliers in the data and may
propose additional enhancements to specifically address this issue. We
intend to consider all of this information as we develop future
policies and regulations for the Part C and Part D Quality Star Ratings
program.
Comment: A couple commenters supported guardrails for CAHPS
measures, such as a guardrail of 0.5 to 1.00.
Response: Because cut points for CAHPS measures have relatively
stable trends over time, CMS did not propose any guardrails for CAHPS
measures. We will not finalize any such guardrails in this rule. The
proposed narrow guardrails of 0.5 to 1.0 are below typical levels of
improvement for CAHPS measures.
Comment: A commenter requested consideration of the base cut points
that the guardrails are initially applied to. The commenter stated a
recalculation of base cut points using new or improved methodology may
be more appropriate prior to application of guardrails.
Response: We agree with the commenter. When guardrails and mean
resampling are implemented for the 2022 Star Ratings, CMS will rerun
the 2021 Star Ratings thresholds with mean resampling. The 2022 Star
Ratings thresholds that include mean resampling will then be compared
to the rerun 2021 Star Ratings thresholds in order to apply the 5
percent guardrail. Because our proposal occurred after the start of the
2019 performance period for the 2021 Star Ratings, the use of mean
resampling for setting cut points is limited to setting the actual cut
points for 2022 and subsequent Star Ratings. We will use the 2021 Star
Ratings cut points as the starting point for applying the guardrail
aspect of the new methodology, in order to allow for an apples-to-
apples comparison when applying the guardrails for the 2022 Star
Ratings.
Comment: A commenter believed the proposed methodology changes
addressed some of the concerns raised by stakeholders and the TEP and
are broadly defensible. However, the commenter believed CMS is moving
further away from a standardized, uniform approach to assigning Star
Ratings for the various care settings/institutions for which it issues
report cards, including the Part C and D Star Ratings program and the
multiple fee-for-service (FFS) Star Ratings programs for hospitals,
dialysis facilities, and skilled nursing facilities. The commenter also
stated the proposed methodology changes make an already complex
methodology even more complex and CMS should consider the trade-offs
between refining setting- or institution-specific methodologies with
the pressing need for simplicity and clarity for health care consumers.
Response: CMS understands the desire to balance customization of
the Star Ratings methodology for each of the different CMS programs
comparing the quality of care for various types of healthcare
providers, while also enhancing stability and predictability of cut
points for the MA and Part D Star Ratings programs. While CMS has an
overall interest and goal in aligning the various Star Ratings systems
across the agency to the extent feasible, our proposal was limited to
the Part C and D Star Ratings program and the needs and purposes of
that program. Under section 1853(o), the Part C and D Star Ratings are
used to identify MA organizations that are eligible for quality bonus
payments as well as a means to provide comparative information about
plan quality to Medicare beneficiaries. In other programs comparing the
quality of care for healthcare providers, such as Hospital Compare for
hospitals, Medicare FFS payment is not directly related to the overall
Star Rating that is publicly reported. We believe the relationship
between the Part C and D Star Ratings system and plan Quality Bonus
Payments means that providing a measure of stability and predictability
for the rated entities (in this case, MA and Part D contracts and
plans), even if it means moving further away from a standardized,
uniform approach to assigning Star Ratings across agency programs, is
appropriate to ensure predictability and stability. Requiring the
various Star Ratings systems to have a uniform methodology for setting
cut points would not be consistent with the goals and uses of the
separate programs and we decline to make uniformity a goal in and of
itself where we see significant policy reasons to modify the cut point
methodology for the Part C and D non-CAHPS measures. Simplicity and
clarity for healthcare consumers would not be sacrificed by differences
between methodologies between various CMS Star Ratings Systems because
consumers are less likely than other stakeholders to be interested in
understanding the underlying methodologies. For those who want access
to more details on the methodology, the Technical Notes can be found
here: http://go.cms.gov/partcanddstarratings. However, taking into
account these differences, CMS works to ensure that the MA and Part D
Star Ratings system is as closely aligned with other CMS rating systems
as necessary and possible to serve the programmatic needs of each Star
Rating system.
Comment: A few commenters supported distributing Quality Bonus
Payments on a continuous scale.
Response: We understand the commenters' interest in alternative
methods of distributing Quality Bonus Payments, however, the
distribution of Quality Bonus Payments is defined in statute to be
based on a Five-Star Rating system. Changes to the how Quality Bonus
Payments are distributed are out of scope for this regulation.
Comment: Some commenters supported using prospectively set
thresholds to create more predictability and stability, while others
were opposed to setting thresholds prospectively. A commenter supported
setting a predetermined cut point of 95 percent for 5 stars and stated
predetermined thresholds have the ability to limit the impact of
outliers and reduce the additional steps required by the cut point
methodology. Another commenter supported setting fixed 5-star cut-
points for measures that have stable performance among the top 25th
percentile of plans over time.
Response: We understand the desire of some commenters to have pre-
set thresholds. CMS had implemented pre-determined 4-star thresholds
for some measures in the 2011 Star Ratings to increase transparency for
organizations/sponsors and set a priori expectations for high
performance. However, we found that pre-set thresholds created more
``noise'' or measurement error in the system and disincentivized
contracts from improving once they hit the 4-star threshold. Further,
while we agree that operational considerations are

[[Page 15759]]

important in selecting and adopting the cut point methodology,
particularly as we have a limited amount of time to process the
performance data and issue Star Ratings each year, CMS does not believe
that those considerations should be the sole driving factor; the ease
achieved by using a pre-determined cut point needs to be weighed
against the drawbacks with that methodology and our overall policy
goals for the Star Ratings program.
Comment: A commenter raised concerns that plans must often set
unrealistic targets for physicians in order for the plan to earn
incentives from CMS and supported finalizing cut point methodologies
that do not impede clinical judgment.
Response: CMS does not set targets that Part C and D plans must
achieve to do well in the Star Ratings program; as discussed in the
prior response, CMS has moved away from the use of pre-determined cut
points for Part C and D Star Ratings. Plans should not be impeding
clinical judgment; physicians should be using their clinical expertise
to determine how to appropriately deliver care to their patients.
Further, the non-interference provision in section 1854(a)(6)(B)(iii)
prohibits CMS from requiring MA organizations from having a particular
price structure for payments to network providers; the Quality Star
Rating system does not itself incentivize plans to compromise the
delivery of medically necessary care to enrollees.
Comment: A few commenters suggested CMS use alternative clustering
methodologies to address outliers, including K-means clustering with
outlier removal (KMOR) and clustering with outlier removal (COR).
Response: CMS appreciates the commenters' suggestions and will
consider these comments and alternatives as one of the agency's goals
in administering the Quality Star Ratings program is continual
improvement. CMS is exploring standard outlier removal techniques, such
as Tukey outer fence outlier deletion prior to clustering, that are
similar to alternatives that the commenter suggests. These approaches
are available in SAS software and thus have the benefit of being
accessible and transparent to stakeholders. CMS will continue to
evaluate these and possibly other methods to directly address outliers
and will consider proposing outlier deletion in future rulemaking.
Comment: A commenter stated cut points need to reflect meaningful
differences in plan performance.
Response: CMS agrees that the cut points should provide a
meaningful way to distinguish true performance. CMS believes
hierarchical clustering combined with mean resampling and guardrails
will result in cut points that meaningfully distinguish performance
while also creating more stability and predictability. Further, CMS
monitors the performance distribution for each measure in the Star
Ratings program to determine if scores are tightly compressed and
differences are not practically meaningful. Even small differences in
scores can be meaningful. For example, Quigley, Elliott et al. (2018)
established that even one point differences in CAHPS scores are
meaningful. Further, CMS evaluates measures for retirement when scores
are compressed and topped out such that the measure has low
reliability.
Comment: A commenter supported the proposed changes as an interim
step, but offered a number of suggestions for CMS to model, in
particular to see the impact on plans with a high proportion of LIS/DE/
disabled enrollees. The commenter's suggestions included: Stratifying
cohort/peer group quintiles based on percent LIS/DE/disabled prior to
applying cut point thresholds, using state as unit of analysis rather
than contract, analyzing whether measures are sensitive to provider
actions, assessing measures to see whether performance differs across
plan benefit packages in a contract, addressing topped out measure
performance by assigning thresholds for higher stars based on clinical
or public health guidelines, and considering beneficiary
characteristics when examining measure results.
Response: CMS appreciates the feedback and will take these
suggestions into consideration as CMS makes future changes to the Star
Ratings methodology. CMS continually monitors cut points and will
evaluate the impact of the changes to the cut point methodology. CMS
will propose additional enhancements to the cut point methodology as
necessary to further the goals of providing ratings that are a true
reflection of plan quality and enrollee experience, minimize the risk
of misclassification, treat contracts fairly and equally, and minimize
unintended consequences.
Comment: A commenter supported rounding measures scores to the next
decimal place (tenths of a percent).
Response: Measure scores are already rounded to the precision
indicated next to the label ``Data display'' within the detailed
description of each measure in the Part C and D Star Ratings Technical
Notes found at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData.html. Most measures are
rounded to whole numbers so small differences in performance do not
drive the cut points.
Comment: A couple of commenters requested additional data to
validate calculations during the second plan preview and to simulate
proposed enhancements.
Response: CMS will post example measure data for one Part C and one
Part D measure in HPMS at the beginning of the second plan preview for
contracts to check the CMS programming. Additionally, all HEDIS data
from 1997 on are available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/MA-HEDIS-Public-Use-Files.html. These data are available in September of
each year and can be used to simulate and validate Ratings
calculations.
Comment: A commenter questioned whether CMS has considered if
measures that have shifts in cut points of 5 points should be included
in the Star Ratings due to their volatility.
Response: In general, CMS believes such measures should be included
in the Star Ratings. Some measures may have occasional large shifts in
the performance distribution, but this does not suggest that the
measure is not a reliable measure of performance. Shifts in 5
percentage points can happen occasionally since the clustering
algorithm not only looks at changes in the levels of performance, but
also takes into account changes in the distribution of scores across
the industry. When there are more significant shifts in performance,
there may be larger shifts in cut points. As finalized in this rule,
the mean resampling and guardrails will prevent any very large cut
point shifts.
Comment: A commenter raised concerns that the current clustering
methodology is flawed since small plans with more volatility can have
an outsized impact on thresholds, resulting in misclassification.
Another commenter believed the proposed changes would not adequately
address misclassifying nearly identical contracts into different Star
Ratings levels.
Response: We appreciate the commenters' concerns about volatility
and misclassification. The clustering algorithm is set up to maximize
differences across star categories and minimize differences within star
categories so to avoid misclassifying nearly identical contracts into
different Star Ratings levels. All measures have minimum denominators
to ensure that the scores included in the Star Ratings are reliable.
Outliers are seen not just for small plans that may have smaller

[[Page 15760]]

denominators, but with larger plans with moderate or large
denominators. Reducing the impact of outliers on the cut points will
help to address any potential volatility. CMS is finalizing mean
resampling to help address outliers. Along with guardrails, mean
resampling will increase the stability and predictability of cut
points. In an earlier response, CMS also presented results from
simulations that looked at two ways of directly addressing outliers.
CMS will continue to evaluate these and possibly other methods to
directly address outliers and will consider proposing outlier deletion
in future rulemaking.
Comment: A couple of commenters noted that currently plans may have
a score that improves but a star that declines or a score that declines
but a star that improves.
Response: Since the hierarchical clustering algorithm not only
looks at changes in the levels of performance but also takes into
account changes in the distribution of scores across the rated Part C
and Part D contracts, scores can decline from the prior year and have a
higher Star Rating and similarly scores can increase and have a lower
Star Rating. The Star Ratings provide information about comparative
performance and how the contracts performed compared to the other
contracts. CMS is also looking into methods that directly address
outliers and will consider proposing outlier deletion in future
rulemaking.
Comment: A commenter requested CMS consider that more beneficiaries
are enrolling in the MA program and future enhancements may be
warranted to accurately reflect plan performance and not the prior care
these beneficiaries received before they joined an MA plan, because
quality improvement often takes longer than a year.
Response: CMS appreciates this feedback and will continue to
monitor scores across the industry.
Comment: A commenter stated if methodologies are in place to
restrict extreme movement of cut points, then contracts should be able
to use the prior year's data to set goals and focus on improvement and
reaching specific benchmarks.
Response: CMS agrees that by increasing the stability and
predictability of the cut points, this methodology will assist Part C
and Part D organizations in setting specific goals for improvement on
Quality Star Ratings.
Comment: A commenter requested CMS reconsider the model for
developing CAHPS thresholds to create meaningful differences in plan
quality, because the CAHPS measure scores are clustered tightly.
Response: CMS believes that even one point differences in CAHPS
scores are meaningful. See Quigley, Elliott et al. (2018). Further, the
methodology for setting cut points for CAHPS measures is outside the
scope of the proposal and this rulemaking.
Comment: A commenter supported a three-year rolling average of cut
points to increase stability for measures that have not topped out; for
topped out measures the commenter supported fixed cut points based on
the most recent year when performance is categorized as topped out, and
providing advance notice of thresholds for new measures for the first
three Star Ratings years then move to the three-year rolling average.
Additionally, the commenter stated that topped out measures should not
be removed from Star Ratings if high quality is still important to
maintain.
Response: Using a three-year rolling average of cut points would
increase the lag used to determine cut points, which is problematic
because it does not account for real improvement trends in measure
performance over time. Providing an accurate reflection of the
performance on measures for the applicable measurement year is a key
goal of the Quality Star Ratings system. The methodology CMS proposed
and is finalizing in this rule will increase stability in cut points
without this limitation. As a measure is becoming topped out, the cut
points already do not change much from year to year so we disagree that
there would be a need to set fixed cut points. If there is no or very
little variation across contracts in a measure, the measure would have
low reliability and, pursuant to Sec. Sec. 422.164(e) and 423.184(e),
would be removed from the Star Ratings program. We will take these
comments into consideration as we consider any changes for our policies
regarding measures with low reliability.
Comment: A commenter recommends addressing data reliability by
having measure developers review outliers and measure methodology, and
set more appropriate specifications, such as increasing the minimum
denominator and excluding members for which the measure may not be
clinically appropriate. The commenter believes this will stabilize cut
points.
Response: CMS agrees that measures used in the Part C and Part D
Quality Star Rating System should be based on reliable data and provide
useful information about plan performance. As discussed in the April
2018 final rule (83 FR 16521) and November 2017 proposed rule (82 FR
56336), one of the goals of the Star Ratings system is for ratings to
be a true reflection of plan performance and enrollee experience and be
based on data that are accurate, complete, and reliable. Measure
developers have been reviewing their specifications to enhance them and
CMS will encourage them to continue to review the specifications to
improve their measure specifications. For example, NCQA has increased
the denominator for the Plan-All Cause Readmission measure to a minimum
of 150. NCQA has also been reviewing the HEDIS measures for the
additional exclusion for patients with advanced illness.
Comment: A commenter suggested we consider input from the Pharmacy
Quality Alliance (PQA).
Response: CMS welcomes input from all stakeholders, and considered
the comments submitted by the PQA when finalizing this rule.
Comment: A commenter suggested setting a minimum number of
contracts per cluster in order to address the concern that a single
contract could influence a change in cut points even with guardrails.
Response: CMS believes setting a minimum number of contracts per
cluster would require making a priori assumptions about the
distribution of measure scores. The proposed enhancements to the cut
point methodology address the commenter's concerns by moving in the
direction of increasing stability and predictability of the ratings
without having to make a priori assumptions. Additional outlier
deletion methods may be proposed through future rulemaking will further
address the commenter's concern. In an earlier response, CMS presented
results from simulations that looked at two ways of directly addressing
outliers. CMS will continue to evaluate these and possibly other
methods to directly address outliers and will consider proposing
outlier deletion in future rulemaking.
Comment: A commenter suggested that CMS communicate on Medicare
Plan Finder that the decrease in stars for PDPs for the 2019 Star
Ratings was due to differing cut points for PDPs versus MA-PDs and the
impact of outliers on PDPs.
Response: This comment is outside the scope of our proposal for
setting cut points for the 2022 and subsequent Star Ratings. The cut
points for MA-PDs and PDPs have historically been set separately since
performance across MA organizations that offer Part D and stand-alone
PDPs may differ given the

[[Page 15761]]

integration of health and drug benefits under an MA-PD is very
different than how a stand-alone PDP operates. CMS appreciates the
comment, but the notices on Medicare Plan Finder are not designed or
intended to address the intricacies of the methodology for the Star
Ratings program; however, the Technical Notes for each year's Star
Ratings are available publicly for those who are interested in that
information and are found at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData.html. CMS is
concerned that too much methodological detail can be overwhelming for
those who use the Medicare Plan Finder website and believes that most
consumers want just to see the Star Ratings, especially the overall
ratings. As discussed in this final rule and responses to comments in
this section, the proposed resampling and guardrails will help mitigate
significant changes in the cut points from year to year.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier in this final rule, we are
finalizing the methodology to determine cut points as proposed at
Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i). CMS is committed to
incorporating feedback received from commenters about the direct
removal of outliers from the calculations and will continue to evaluate
the methodologies described earlier for outlier removal and possibly
other methodologies. We will consider proposing outlier deletion in
future rulemaking to allow all stakeholders the opportunity to comment
on potential methodologies.
d. Updating Measures (Sec. Sec. 422.164, 423.184)
In the April 2018 final rule (83 FR 16537), CMS stated that due to
the regular updates and revisions made to measures, CMS would not
codify a list of measures and specifications in regulation text; CMS
adopted a final list of measures for the contract year 2019 measurement
period (83 FR 16537-16546) and indicated how changes to that list--
additions, updates, removals--would be done in the future, using the
Advance Notice and Rate Announcement under section 1853(b) of the Act
or rulemaking. The regulations at Sec. Sec. 422.164 and 423.184
specify the criteria and procedure for adding, updating, and removing
measures for the Star Ratings program. CMS lists the measures used for
the Star Ratings each year in the Technical Notes or similar guidance
document with publication of the Star Ratings. We proposed measure
changes to the Star Ratings program for performance periods beginning
on or after January 1, 2020 and performance periods beginning on or
after January 1, 2021. For new measures and substantive updates to
existing measures, as described at Sec. Sec. 422.164(c) and (d)(2),
and Sec. Sec. 423.184(c) and (d)(2), CMS will initially announce and
solicit comment through the Call Letter attachment to the announcements
issued for changes in and adoption of payment and risk adjustment
policies in section 1853(b) of the Act and will subsequently propose
these measures to be added to the Star Ratings program through
rulemaking. Proposals for substantive updates have been discussed in
prior Call Letters (contract years 2018 and 2019). We will continue the
process of announcing our intent with regard to measure updates in
future Call Letters. Any measures with substantive updates must be on
the display page for at least 2 years before use in the Star Ratings
program. For new measures and measures with substantive updates, as
described at Sec. Sec. 422.166(e)(2), 423.186(e)(2) and Sec. Sec.
422.164(d)(2), 423.184(d)(2), the measure will receive a weight of 1
for the first year in the Star Ratings program. In the subsequent
years, the measure will be assigned the weight associated with its
category.
(1) Proposed Measure Updates
(a) Controlling High Blood Pressure (Part C)
Due to the release of new hypertension treatment guidelines from
the American College of Cardiology and American Heart Association,\34\
NCQA implemented updates to the Controlling High Blood Pressure measure
for HEDIS 2019. NCQA revised the blood pressure target to <140/90 mmHg.
NCQA also made some structural changes to the measure that included
allowing two outpatient encounters to identify the denominator and
removing the medical record confirmation for hypertension, allowing the
use of telehealth services for one of the outpatient encounters in the
denominator, adding an administrative approach that utilizes CPT
category II codes for the numerator, and allowing remote monitoring
device readings for the numerator. Given the change to the blood
pressure target and our rules for moving measures with substantive
changes to the display page, this measure will be moved to the display
page for the 2020 and 2021 Star Ratings. We proposed to return this
measure as a measure with substantive updates by the measure steward
(NCQA) to the 2022 Star Ratings using data from the 2020 measurement
year with, as required by Sec. Sec. 422.164(d)(2) and 422.166 (e)(2),
a weight of 1 for the first year and a weight of 3 thereafter.
---------------------------------------------------------------------------

\34\ See Whelton P.K., Carey R.M., Aronow W.S., et al. (2018).
Guideline for the prevention, detection, evaluation, and management
of high blood pressure in adults: A report of the American College
of Cardiology/American Heart Association Task Force on Clinical
Practice Guidelines. Journal of the American College of Cardiology.
71(19): e127-e248. Available at http://www.onlinejacc.org/content/71/19/e127?_ga=2.143510773.1362500146.1536262802-126396490.1536262802.
---------------------------------------------------------------------------

Below we summarize the comments we received and provide our
responses and final decisions.
Comment: The majority of commenters supported our proposal.
Response: CMS appreciates receiving the support for this proposal.
Comment: A few commenters expressed support, but offered additional
measure specification change suggestions. These commenters questioned
whether the new standards are suitable for all populations (that is,
for those with special needs, the aged, and those with multiple co-
morbidities and advanced cognitive impairment populations as well as
for the generally healthy elderly population). These commenters
suggested adding some additional exclusions. A commenter disagreed with
the new clinical standards as specified in the updated measure.
Response: NCQA is the measure steward for the Controlling High
Blood Pressure measure. As codified at Sec. 422.164(c)(1) CMS tries to
include in the Star Ratings, to the extent possible, measures that are
nationally endorsed and in alignment with the private sector such as
the Plan All-Cause Readmissions measure developed by NCQA. Although a
few commenters offered suggestions for additional changes to the
measure, CMS is moving ahead to include the revised measure in the 2022
Star Ratings since we believe that this measure has been sufficiently
validated by the measure steward and most commenters supported the
measure updates to align with the new clinical guidelines for blood
pressure control. CMS will share all suggestions, including concerns
about additional exclusions and clinical disagreements with the
specified updates with NCQA for their consideration as they make future
enhancements to the measure.
Comment: A few commenters believe the current measure is too
important to remove from the Star Ratings. Rather, they suggested
keeping the legacy measure in the Star Ratings while the

[[Page 15762]]

updated measure is shown on the display pages.
Response: CMS agrees that the Controlling High Blood Pressure
measure is an important measure. However, CMS believes that keeping the
legacy measure in the Star Ratings while presenting the updated measure
on the display pages, would create significant data collection burden
on plans given the data collection complexities of the Controlling High
Blood Pressure measure. Although Sec. 422.164(d)(2) permits continued
use of legacy measures when there has been a substantive update, the
regulation does not require CMS to do so in all cases. Here, CMS
believes that it is not appropriate.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing our proposal
to return the Controlling High Blood Pressure measure, as updated by
the measure steward, to the 2022 Star Ratings using data from the 2020
measurement year with a weight of 1 for the first year and a weight of
3 thereafter, as required by Sec. Sec. 422.164(d)(2) and 422.166
(e)(2).
(b) MPF Price Accuracy (Part D)
Continued transparency and accuracy of sponsors' pricing data used
by beneficiaries is important; therefore, we proposed to make
enhancements to the MPF Price Accuracy measure to better measure the
reliability of a contract's MPF advertised prices. In accordance with
Sec. 423.184(d)(2), the substantively updated measure would be a
display measure for 2020 and 2021 and we proposed to use it in the 2022
Star Ratings in place of the existing MPF Price Accuracy measure, which
will remain in the Star Ratings until that replacement under Sec.
423.184(d)(2). The proposed update would measure the magnitude of
difference, as well as the frequency of price differences. We proposed
to implement the following changes for this measure:
Factor both how much and how often prescription drug event
(PDE) prices exceeded the prices reflected on the MPF by calculating a
contract's measure score as the mean of the contract's Price Accuracy
and Claim Percentage scores, based on the indexes in this rule:
++ The Price Accuracy index compares point-of-sale PDE prices to
plan-reported MPF prices and determines the magnitude of differences
found. Using each PDE's date of service, the price displayed on MPF is
compared to the PDE price. The Price Accuracy index is computed as:
(Total amount that PDE is higher than MPF + Total PDE cost)/(Total
PDE cost)
++ The Claim Percentage index measures the percentage of all PDEs
that meet the inclusion criteria with a total PDE cost higher than
total MPF cost to determine the frequency of differences found. The
Claim Percentage index is computed as:
(Total number of claims where PDE is higher than MPF)/(Total number
of claims)
++ The best possible Price Accuracy index is 1 and the best
possible Claim Percentage index is 0. This indicates that a plan did
not have PDE prices greater than MPF prices.
++ A contract's measure score is computed as:
--Price Accuracy Score = 100-((Price Accuracy Index-1) * 100)
--Claim Percentage Score = (1-Claim Percentage Index) * 100
--Measure Score = (0.5 * Price Accuracy Score) + (0.5 * Claim
Percentage Score)
Increase the claims included in the measure:
++ Expand the days' supply of claims included from 30 days to
include claims with fills of 28-34, 60-62, or 90-100 days.
++ Identify additional retail claims using the PDE-reported
Pharmacy Service Type code. Claims for pharmacies that are listed as
retail in the MPF Pharmacy Cost file and also have a pharmacy service
type on the PDE of either Community/Retail or Managed Care Organization
(MCO) will be included.
Round a drug's MPF cost to 2 decimal places for comparison
to its PDE cost. Post-rounding, the PDE cost must exceed the MPF cost
by at least one cent ($0.01) in order to be counted towards the
accuracy score (previously, a PDE cost which exceeded the MPF cost by
$0.005 was counted). A contract may submit an MPF unit cost up to 5
digits, but PDE cost is always specified to 2 decimal places.
Under our proposed update, PDEs priced lower than the MPF display
pricing will continue to be ignored and will not have an impact on the
measure score or rating. Only price increases are counted in the
numerator for this measure. We proposed to add this updated measure to
the 2022 Star Ratings based on the 2020 measurement year with a weight
of 1.
Below we summarize the comments we received and provide our
responses and final decisions.
Comment: The majority of commenters supported the measure's
proposed changes, citing it is critical to provide enrollees with
information they have confidence is reliable and accurate. There was
strong support for price transparency, and making sure contract
performance is measured in a meaningful and useful manner.
Response: CMS appreciates these commenters' support of this measure
and the proposed changes, and more broadly the confirmation that
beneficiaries rely on the MPF's accuracy to make critical enrollment
choices. We agree that it is essential to continue this measure so that
enrollees can remain confident that the data displayed on the MPF are
reliable and accurate. Our Star Ratings contractor will also continue
to obtain feedback on price transparency and related measure concepts
as part of their TEP. CMS always values feedback on display and Star
Ratings measures and will continue to identify future ideas in the 2021
Call Letter.
Comment: Several commenters opposed the addition of frequency of
price differences to the measure, stating this would not be a concern
to beneficiaries, or that the current Star Rating measure already
includes this. They also state the frequency of pricing differences
between the data available on the MPF and the price reflected in the
PDE data is not due to a contract's performance, but due to established
CMS timelines for MPF updates.
Response: We disagree with these commenters, and believe both the
magnitude and frequency of price inaccuracies are important. A one-time
discrepancy illustrates different performance by a Part D plan on this
issue than multiple occasions where the price is higher than posted on
the Medicare Plan Finder website; we believe both that beneficiaries
appreciate such differences in performance and need to be aware of
them. With the current methodology (as of the 2019 Star Ratings), a
sponsor who frequently submits small inaccuracies may receive a similar
score to a sponsor who submits MPF prices with very large price
differences only a few times.
Comment: Some commenters criticized the overall measure because MPF
files are prepared and submitted by a Part D plan according to the CMS-
issued calendar and guidelines, which do not allow submissions outside
the specified bi-weekly schedule. Because CMS posts files two weeks
after submission which are then displayed on MPF for two weeks, the
commenters state the data are typically between 19 to 31 days old.
Response: CMS understands that pricing may change much more
frequently than MPF submission

[[Page 15763]]

windows. We have instituted a biweekly submission window to allow for a
correction period (to avoid suppression of plans on MPF). This
submission schedule does not dictate the schedule or frequency by which
a sponsor chooses to update their own price files prior to submission
to CMS. Sponsors who perform well in this measure typically update
their pricing files at least every other week and typically closer to
the submission dates.
Comment: A few commenters were opposed to the measure because MPF
pricing data are based on a single reference/proxy NDC and are compared
to an expanded list of NDCs on the PDEs. They state this is a flaw
since drug costs vary by NDC, even those with the same strength or
dosage form. This variability leads to unavoidable inconsistencies
between a Part D plan's submitted price and the price on the claim or
PDE record.
Response: For the Star Rating measure, prices that are higher on
MPF as opposed to the PDE do not harm the plans' scores. CMS had
expanded the list of NDCs to be compared to the MPF prices beginning
with the 2011 Star Ratings in response to sponsors' requests to expand
the claims studied. Previously, sponsors were only evaluated with PDEs
with the same reference NDC, which limited claims, and sponsors stated,
unfairly portrayed their accuracy, especially if they did not support
the pricing NDC selected on the FRF. To ensure that the measure is
sensitive to the accuracy of claims of NDCs beyond those on the FRF,
claims for non-reference NDCs that can be linked to a reference NDC
with the same brand name, generic name, strength, and dosage form are
included in the measure. The inclusion of these additional claims
allows for a more robust method of measuring price accuracy. We remind
commenters that the average score in this measure ranged from 98-99 for
PDPs and MA-PDs in the 2019 Star Ratings.
Comment: A few commenters stated a meaningful price difference to
beneficiaries would be greater, and in the range $0.50-$1.00, and that
the de minimis amount of $0.01 also does not account for all rounding
errors.
Response: The measure's current price threshold of $0.005 was based
on data analyses, and sponsor performance has been high for many years.
We are raising to $0.01 to account for rounding, and thus allowing a
larger variation in prices that are not counted as price increases for
purposes of the measure than previously allowed. Raising the threshold
level for counting a price increase to $0.50 or higher would
significantly lower the usefulness of the measure as a whole, given
that plans' scores have been typically clustered in the high 90s.
Comment: Some commenters were overall against CMS using the MPF
Price Accuracy measure in the Star Ratings program. They state that a
100 rating in this measure does not reflect truly accurate pricing, but
instead is driven primarily by the timing of the files and subsequent
measure auditing of pricing. While they agree it is an important
measure to ensure MAOs and PDPs are accurately representing drug
pricing to plan members; the cut points require near perfection. They
propose the measure instead be moved to the display page for
monitoring, and that plans not be penalized by timing issues outside of
plan control.
Response: CMS disagrees. The cut points are based on the clustering
algorithm and reflects actual performance. CMS does not modify the cut
points to require near perfection, it is that Part D sponsors generally
do a good job of posting prices that are at least as high as the actual
charged prices. CMS sees sponsors' frequent auditing of MPF and price
adjudication files to be a beneficial result from the measure.
Beneficiaries and other public stakeholders are interested in this
measure as well. Knowing that they can expect accurate pricing on the
MPF is extremely helpful to beneficiaries using the tool to choose
their prescription drug plans.
Comment: A commenter recommended that CMS assess the additional
value to beneficiaries of the MPF measure based on usage patterns for
price data, etc., and weigh that against the costs to the program
(through higher plan bids) that will arise from additional investments
that may be required for Part D plans to comply with the revised
methodology for this measure.
Response: The regulation at Sec. Sec. 423.184 (c)(3) and (d)(2)
requires new measures and substantively updated measures to be on the
display page for at least two years prior to using the updated measure
to calculate and assign Star Ratings; for the revised Part D price
accuracy measure finalized here, this two year display period will be
the 2020 and 2021 display page. During that period, CMS will be using
the legacy measure in the Star Ratings. Additional feedback on this
revised measure may be submitted during the annual Call Letter process
based on experience with the revised measure on the display page. CMS
does not agree that the measure's revised methodology imposes
additional plan burden. Part D sponsors are required to submit accurate
pricing for MPF, and adjudicate claims accurately at the point of sale.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
related comments, we are finalizing the provisions related to updating
the MPF Price Accuracy measure. As proposed, we will first display the
updated measure for 2020 and 2021 and then use it to replace the
existing measure in the 2022 Star Ratings. Publishing the display
measure for at least two years will allow Part D sponsors additional
experience with contract-specific results using the new specifications.
(c) Plan All-Cause Readmissions (Part C)
NCQA is modifying the Plan All-Cause Readmissions measure for HEDIS
2020 (measurement year 2019).\35\ The measure assesses the percentage
of hospital discharges resulting in unplanned readmissions within 30
days of discharge. The changes made by NCQA to the measure are: Adding
observation stays as hospital discharges and readmissions in the
denominator and the numerator; and removing individuals with high
frequency hospitalizations. These changes were implemented by the
measure steward (NCQA) based on the rise in observation stays to ensure
the measure better reflects patient discharge and readmission volumes.
Removing individuals with high frequency hospitalizations from the
measure calculation allows the readmissions rates not to be skewed by
this population. To date, CMS has only included the 65+ age group in
the Plan All-Cause Readmissions measure. In addition to the updates
made by the measure steward, CMS proposed to combine the 18-64 and 65+
age groups as the updated measure specifications are adopted and to use
NCQA's new recommendation of 150 as the minimum denominator. Given the
substantive nature of the proposed updates for this measure, it would
be moved to display for the 2021 and 2022 Star Ratings under our
proposal and Sec. 422.164(d)(2). We proposed to return this measure as
a measure with substantive updates by the measure steward (NCQA) to the
2023 Star Ratings using data from the 2021 measurement year with, as
required by Sec. Sec. 422.164(d)(2) and 422.166(e)(2), a weight of 1
for the first year and a weight of 3 thereafter.
---------------------------------------------------------------------------

\35\ HEDIS 2019, Volume2, Technical Update, Attachment C.
https://www.ncqa.org/wp-content/uploads/2018/10/HEDIS-2019-Volume-2-Technical-Update.pdf.

---------------------------------------------------------------------------

[[Page 15764]]

\36\ Gupta A et al, JAMA Cardiol. 2018; 3(1): 44-53. https://jamanetwork.com/journals/jamacardiology/fullarticle/2663213.
---------------------------------------------------------------------------

Response: NCQA is the measure steward for the Plan All-Cause
Readmission measure. As codified at Sec. 422.164(c)(1) CMS tries to
include in the Star Ratings, to the extent possible, measures that are
nationally endorsed and in alignment with the private sector such as
the Plan All-Cause Readmissions measure developed by NCQA. Despite some
commenters questioning specific aspects of the measures, most
commenters provided support for the readmissions measure. CMS believes
that this is an important outcome measure for MA contracts since the
basis of the MA program is for MA contracts to coordinate the care of
their enrollees. MA contracts are responsible for coordinating care
following a hospitalization to ensure that their enrollees are
receiving appropriate care following a hospitalization, including
whether they need to be rehospitalized due to further declines in
health. CMS will share all comments concerning appropriate enrollees
eligible for the measure, the inclusion of observations stays, and the
belief that decreasing readmissions might increase mortality with NCQA
for consideration as they make future updates to the measure. Following
our rules for moving measures with substantive changes to the display
page, this measure will be moved to the display page for the 2021 and
2022 Star Ratings for contracts to acclimate to the new measure
specifications.
Comment: A commenter suggested that when the measure is returned to
the Star Ratings, the measure should have a weight of 1 for two years,
not only for the first year.
Response: Using a weight of 1 for the first year of a new or newly
revised MA measure is required by the regulations at Sec. Sec.
422.164(d)(2) and 422.166(e)(2). Measures with substantive
specification changes are treated as new measures. Changes to that
policy are out of scope for this regulation. We direct readers to 83 FR
16534 for a discussion of that particular policy.
Comment: A few commenters expressed the belief that the current
measure is too important to remove from the Star Ratings. Rather they
suggested keeping the legacy measure in the Star Ratings, while the
updated measure is on the display page for two years.
Response: CMS considered keeping the legacy measure in the Star
Ratings while displaying the updated measure on the display pages, but
believes that it would create a significant data collection burden for
plans to submit two different sets of data that follow different
specifications. This measure is relatively complex and we believe that
the value gained by reporting both the legacy and updated measure would
not be justified by the additional administrative burden. Although
Sec. 422.164(d)(2) permits continued uses of legacy measures when
there has been a substantive update, the regulation does not require
CMS to do so in all cases. Here, CMS believes that it is not
appropriate.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing our proposal
to return the Plan All-Cause Readmissions measure, as updated by the
measure steward, to the 2023 Star Ratings with a weight of 1 for the
first year and a weight of 3 thereafter, as required by Sec. Sec.
422.164(d)(2) and 422.166(e)(2). Pursuant to Sec. 422.164(d)(2), the
revised measure will be collected for display only for the measurement
periods of 2020 and 2021.
(d) Improvement Measures (Parts C and D)
The process for identifying eligible measures to be included in the
improvement measure scores is specified as a series of steps at
Sec. Sec. 422.164(f)(1) and 423.184(f)(1). As part of the first step,
the measures eligible to be included in the Part C and D improvement
measures are identified. Only measures that have a numeric score for
each of the 2 years examined are included. We proposed to add an
additional rule at Sec. Sec. 422.164(f)(1)(iv) and 423.184(f)(1)(iv)
that would exclude any measure that receives a measure-level Star
Rating reduction for data integrity concerns for either the current or
prior year from the improvement measure(s) used for the applicable
contract. The proposed new standard would ensure that the numeric
scores for each of the 2 years are unbiased. If a measure's measure-
level Star Rating receives a reduction for data integrity concerns in
either of the 2 years, the measure would not be eligible to be included
in the improvement measure(s) for that contract.
Below we summarize the comments we received and provide our
responses and final decisions.
Comment: The vast majority of commenters supported our proposal.
Response: CMS appreciates receiving the support for this proposal.
Comment: A few commenters suggested different ideas for how the
improvement measures should be calculated: (1) Use a logarithmic scale
rather than a linear scale; (2) calculate improvement measures for the
display measures and count them in the Star Ratings improvement
measures; (3) modify the hold harmless policy; and (4) weight the
improvement change taking into account how well the contract performed
in the prior year and the increased difficulty to improve at the higher
star levels. A commenter suggested that the improvement measures be
entirely dropped from the Star Ratings, stating they are unnecessary.
Response: CMS appreciates the additional feedback related to
potential enhancements to the improvement measures. However, these
suggestions are outside the scope of the proposed rule. CMS will
consider these suggestions as we contemplate future enhancements.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the
amendment to how improvement measures are identified and used as
proposed for performance periods beginning on or after January 1, 2020.

[[Page 15765]]

Table 2--Additions and Updates to Individual Star Rating Measures
The measure descriptions listed in the tables are high-level
summaries. The Star Ratings measure specifications supporting document,
Medicare Part C & D Star Ratings Technical Notes, provides detailed
specifications for each measure. Detailed specifications include, where
appropriate, the identification of a measure's: (1) Numerator; (2)
denominator; (3) calculation; (4) timeframe; (5) case-mix adjustment;
and (6) exclusions. The Technical Notes document is updated annually.
In addition, where appropriate, the Data Source descriptions listed in
this table reference the technical manuals of the measure stewards. The
annual Star Ratings are produced in the fall of the prior year to
assist beneficiaries in choosing their health and drug plan during the
annual open enrollment. For example, Star Ratings for the year 2022 are
produced in the fall of 2021.
1. If a measurement period is listed as `the calendar year 2 years
prior to the Star Ratings year' and the Star Ratings year is 2022, the
measurement period is referencing the January 1, 2020 to December 31,
2020 period.
2. For CAHPS, HOS, and HEDIS/HOS measures, the measurement period
is listed as `most recent data submitted for the survey of enrollees.'
See measure stewards' technical manuals, as referenced in Data Source
column, for the specific measurement periods of the most recent data
submitted.

Table 2A--Updates to Individual Star Rating Measures for Performance Periods Beginning on or After January 1, 2020
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Statistical method Reporting
Measure Measure Domain Measure category Data source Measurement period NQF endorsement for assigning star requirements
description and weight ratings (contract type)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Part C Measure
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Controlling Blood Pressure (CBP) Percent of plan Managing Chronic Intermediate HEDIS *........... The calendar year #0018............. Clustering........ MA-PD and MA-only.
members 18-85 (Long Term) Outcome Measure 2 years prior to
years of age who Conditions. Weight of 3. the Star Ratings
had a diagnosis year.
of hypertension
(HTN) and whose
blood pressure
was adequately
controlled (<140/
90).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Part D Measure
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MPF Price Accuracy.............. A score comparing Drug Safety and Process Measure PDE data, MPF The calendar year Not Applicable.... Clustering........ MA-PD and PDP.
the prices Accuracy of Drug Weight of 1. Pricing Files. 2 years prior to
members actually Pricing. the Star Ratings
pay for their year.
drugs to the drug
prices the plan
provided for the
Medicare Plan
Finder website.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* NCQA HEDIS Technical Specifications, Volume 2.

Table 2B--Updates to Individual Star Rating Measures for Performance Periods Beginning on or After January 1, 2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Statistical method Reporting
Measure Measure Domain Measure category Data source Measurement period NQF endorsement for assigning star requirements
description and weight ratings (contract type)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Part C Measure
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Plan All-Cause Readmissions Percent of acute Managing Chronic Intermediate HEDIS *........... The calendar year #1768............. Clustering........ MA-PD and MA-only,
(PCR). inpatient stays (Long Term) Outcome Measure 2 years prior to except for 1876
that were Conditions. Weight of 3. the Star Ratings Cost Plans.
followed by an year.
unplanned acute
readmission or an
observation stay
for any diagnosis
within 30 days,
for members ages
18 and over.
Rates are risk-
adjusted.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* NCQA HEDIS Technical Specifications, Volume 2.

Below we summarize additional comments CMS received on measures
that were not part of the proposed rule and provide our responses. CMS
appreciates the additional feedback related to potential enhancements
to measures and will take this feedback into consideration as we make
future measure enhancements.
Comment: Commenters requested measure updates for and possible
removal of the following measures: Annual Flu Vaccine, Osteoporosis
Management in Women who had a Fracture, and Rheumatoid Arthritis
Management. CMS also received requests for updates to the following
measures: Getting Needed Care, Getting Appointments and Care Quickly,
and Members Choosing to Leave the Plan. Some of the comments indicated
these measures need additional specifications and exclusions,
especially for the Puerto Rican population. Another commenter further
suggested the need for measures specifically designed for the advanced
illness populations.
Response: These comments are outside of the scope of the proposed
and final rules. Where appropriate CMS will share all measure
specification suggestions, including concerns about additional measure
exclusions and the design of measures specifically for the advanced
illness populations, with the appropriate measure stewards.

[[Page 15766]]

Comment: A commenter suggested that for the Part D Appeals Auto-
Forward measure the minimum enrollment size for a plan to be eligible
for this measure be raised or that plans having fewer than two auto-
forwards be exempted from reporting. Another commenter suggested that
CMS combine the call center sampling for the Part C and Part D Call
Center Foreign Language Interpreter and TTY Availability measures.
Response: These suggestions are outside the scope of the proposed
and final rules; however, we will take them into consideration as we
contemplate future enhancements.
Comment: For the measures Complaints about Health/Drug Plans, a
commenter stated these measures should be modified due to complaints
arising from restricting beneficiaries' access to opioids.
Response: This suggestion is outside the scope of the proposed and
final rules; however, we will take it into consideration as we
contemplate future enhancements. In addition, prior to use in the Star
Ratings, complaints are reviewed for resolution by plans' and CMS
Regional caseworkers. If necessary, a complaint may be labeled as a CMS
issue, and thus excluded from the Complaints Star Rating measure.
Please note however that not all opioid related complaints should be
considered to be ``CMS issues''; for example, a complaint that a plan
did not properly implement opioid safety edits, or did not follow Part
D requirements for coverage determinations/appeals would remain
included in a plan's complaints measure data.
Comment: A few commenters suggested the measure weights for both
the CAHPS and HOS measures should be reduced.
Response: In the April 2018 final rule, CMS codified, at Sec. Sec.
422.166(e)(1) and 423.186(e)(1), the general rules for assigning
measures the weight associated with their category. Changes to that
policy are out of scope for the proposed and final rules.
Comment: A few commenters suggested electronic survey
administration and electronic submission of hybrid measures to reduce
provider burden and paperwork.
Response: These comments are outside of the scope of the proposed
and final rules. CMS also supports the move to more electronic modes of
data collection. CMS will be soliciting comment in an OMB Paperwork
Reduction Act (PRA) package as CMS plans to test the web mode of survey
administration across various CMS surveys. NCQA has also developed
HEDIS Electronic Clinical Data Systems (ECDS) to support obtaining
information that is currently available in electronic clinical datasets
for HEDIS quality measures.
Comment: A commenter suggested that given the changes with the
implementation of section 17006 of the Cures Act, CMS should begin to
consider one or more ESRD quality measures specific to ESRD
beneficiaries, home dialysis, and/or education about home dialysis.
Response: These comments are outside of the scope of the proposed
and final rules. CMS has begun to consider what measures will
potentially be relevant for ESRD beneficiaries. We are following the
work NCQA will be doing with the National Kidney Foundation to develop
a provider-level measure focused on screening for nephropathy in
patients with diabetes. This work may inform potential updates/changes
for the plan-level measure in HEDIS. We are also following the quality
measurement work in the Comprehensive ESRD Care (CEC) Model test to see
if any of those measures will be relevant. We are open to suggestions
for additional measures.
Comment: A commenter suggested developing measures that reflect
care for under-65 populations who are Medicare-eligible due to
disability and that, while also being consistent with the Medicare Star
Ratings methodology, the measures also reflect complex medical
conditions that these individuals have. To bolster the ability of
states and others to analyze data across various factors and programs,
the commenter also requested CMS provide access to data at levels below
the contract and disaggregated.
Response: These comments are outside of the scope of the proposed
and final rules. CMS appreciates the importance of measuring plan
performance in serving the under-65 population and the comment
explaining why. To allow comparisons below the level of the contract
and/or disaggregated in other ways may be challenging, since valid and
reliable comparisons at those levels could be very burdensome to plans
or may not be possible. However, CMS has and will continue to explore
ways to address the needs of states and others to assess care for
subpopulations.
Comment: A commenter suggested CMS focus more on outcome measures
than on process measures.
Response: These comments are outside of the scope of the proposed
and final rules. CMS agrees with the importance of focusing on outcome
measures and welcomes all suggestions for potential outcome measures as
additions to the Star Ratings.
Comment: CMS received a request for additional discussions of how
MA and FFS/ACO regulations can be similarly constructed to streamline
provider compliance and beneficiary understanding. CMS received a
request to publicly post measure guides (for example, Patient Safety
Report User Guides) in addition to the Star Ratings Technical Notes.
The commenter referenced as an example CMS's use of member months in
the Statin Use in Persons with Diabetes (SUPD) measure which differs
from the PQA measure specifications, and that additional information
would help improve consistency in sponsors' quality improvement
efforts. Currently, more detailed information is included in the
Patient Safety Report User Guides compared to the Star Ratings
Technical Notes.
Response: CMS appreciates suggestions for standardizing measures
and regulations across programs. CMS is currently working to ensure
consistency of measure specifications across programs where applicable.
CMS will consider these suggestions as we contemplate future
enhancements.
CMS also agrees about the importance of transparency in CMS's
calculation of Star Ratings. Sponsors and their authorized users may
access the Patient Safety User Guides through the Patient Safety
Analysis website set up by CMS for Part D sponsors to have access to
monthly Patient Safety Reports to compare their performance to overall
averages and monitor their progress in improving the prescription drug
patient safety measures. We will consider options to either publicly
post the Patient Safety Report User Guides or incorporate additional
details in the Star Ratings Technical Notes. The commenter's reference
of CMS using member months in the SUPD measure is an example of a
modification necessary to fairly evaluate performance of Part D
sponsors. The member-years of enrollment adjustment is used to account
for beneficiaries who are enrolled for only part of the contract year.
The measure is weighted based on enrollment since beneficiaries with
longer enrollment episodes account for more member-years and therefore
have a larger impact on a contract's rates. Each episode of enrollment
is considered separately.
Comment: A commenter suggested CMS use the Net Promoter Score (NPS)
rather than CAHPS measures.
Response: These comments are outside of the scope of the proposed
and final rules. CMS disagrees that the NPS

[[Page 15767]]

should replace the CAHPS measures. NPS was developed to measure
customer loyalty and does not provide information about why a customer
may recommend a brand or product. Unless an organization is collecting
supplemental information, NPS scores will not help drive quality
improvement. Among proponents of the NPS score, there is agreement that
additional feedback needs to be collected from customers.\37\ This
score alone is not sufficient. MA and Part D contracts can collect for
their own purposes a limited number of supplemental survey items on the
CAHPS surveys if they add them to the end of the survey. Some contracts
do add similar questions to the NPS item to the current CAHPS surveys
for their own internal purposes. There are multiple concerns about
using the NPS score instead of CAHPS, including that the score may mask
important differences in performance between organizations and the
score is more volatile and less reliable than a composite measure that
includes multiple survey questions.
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\37\ https://aishealth.com/medicare-and-medicaid/nps-is-viewed-as-useful-but-not-best-as-sole-satisfaction-measure-for-ma-plans/.
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Summary of Regulatory Changes
No changes are being finalized based on these comments that are out
of scope of the proposed rule.
(5) Data Integrity (Sec. Sec. 422.164(g), 423.184(g))
In the April 2018 final rule (83 FR 16562), CMS codified, at
Sec. Sec. 422.164(g)(1)(iii) and 423.184(g)(1)(ii), a policy to make
scaled reductions to the Star Ratings for a contract's Part C or Part D
appeals measures because the relevant Independent Review Entity (IRE)
data are not complete based on the Timeliness Monitoring Project (TMP)
or audit information. The reduction is applied to the measure-level
Star Ratings for the applicable appeals measures. We proposed to add a
provision at Sec. Sec. 422.164(g)(1)(iii)(O) and 423.184(g)(1)(ii)(M)
that would assign a 1-star rating to the applicable appeals measure(s)
if a contract fails to submit TMP data for CMS's review to ensure the
completeness of their IRE data. We explained in the proposed rule that
we believe it is appropriate to assume that there is an issue related
to performance when the MA organization or Part D plan sponsor has
refused to provide information for the purposes of our oversight of the
compliance with the appeals requirements. We also explained how our
proposal to modify measure-specific ratings due to data integrity
issues is separate from any CMS compliance or enforcement actions
related to a sponsor's deficiencies; these rating reductions are
necessary to avoid falsely assigning a high star to a contract,
especially when the MA organization or Part D sponsor has refused to
submit data for us to evaluate performance in this area and to ensure
that the data submitted to the IRE are complete.
Below we summarize the comments we received and provide our
responses and final decisions.
Comment: Most commenters supported the downgrade to one star if a
contract fails to submit TMP data for CMS's review to ensure the
completeness of the IRE data. A commenter suggested that a reduction
should only occur when there is a complete failure to submit TMP data
for CMS review.
Response: CMS appreciates the support of the data integrity
policies. To fully assess the completeness of the appeals data, the TMP
data need to be complete and submitted in a timely manner. The data
integrity policies align with our commitment to data quality and
preserve the integrity of the Star Ratings. CMS designed the data
integrity policies to distinguish between occasional errors and
systematic issues. This policy and these rating reductions are
necessary to avoid falsely assigning a high Star Rating to a contract,
especially when deficiencies have been identified that show CMS cannot
objectively evaluate a sponsoring organization's performance in an
area.
Comment: A commenter questioned whether the proposal is only
referring to the Appeals Auto-Forward measure as the Part D appeals
measure.
Response: The data assignment of one star is for both the appeals
timeliness and upheld measures for Part C and Part D. If a contract
does not submit the TMP data for the Part C measures, Plan Makes Timely
Decision about Appeals (Part C) and the Reviewing Appeals Decisions
(Part C), both will receive reductions. The same policy applies to the
two Part D appeals measures, Appeals Auto-Forward (Part D) and Appeals
Upheld (Part D).
Comment: Many commenters generally opposed scaled reductions,
characterizing them as ``data integrity penalties'' using TMP and audit
data, and a commenter supported use of audits and TMP data for scaled
reductions. The commenters that were opposed stated these data
integrity findings are not a reflection of the plan's quality. Others
stated that the TMP is burdensome due to an additional requirement that
they need to budget for and manage. A commenter opposed use of audits
because they believe there could be auditor subjectivity (varying
interpretation of the same issue) and changes in the audit process.
Many commenters gave recommendations for the TMP or requested
clarifications on the process of scaled reductions. A couple of
commenters recommend consolidating auditing and/or TMP efforts with
other requirements and offered suggestions such as eliminating the TMP
and modifying the Part D reporting requirements and Technical
Specifications for Coverage Determinations and Redeterminations reports
to collect the same or similar data to confirm the accuracy of IRE
data. A commenter recommended applying the requirements of Executive
Order 13771 on Reducing Regulation and Controlling Regulatory Costs to
fulfill the Star Ratings integrity goal, be operationally less
burdensome for plan sponsors, and also save CMS and the Part D program
the amount it paid for the TMP audit in 2017 and 2018. A commenter
requested that CMS provide its methodology for determining which cases
are in scope for scaled reductions. Another commenter requested CMS
wait a minimum of 2 calendar years to use the findings in a
``punitive'' manner to allow the plans to adapt to the process. And a
commenter suggested CMS examine methods to simplify appeals
administration language and address areas of subjectivity identified
within the guidelines that result in differing interpretations.
Response: As explained in the proposed rule, the use of the data
downgrade is not a penalty or punitive but a necessary measure to
reflect how the data underlying the measure are not reliable and to
avoid false high ratings on these measures where the sponsoring
organization has failed to provide the data necessary to ensure that
performance is accurately reflected on these measures. As we explained
in the April 2018 final rule at 83 FR 16562, all measures and the
associated data for the Star Ratings have multiple levels of quality
assurance checks. Our longstanding policy has been to reduce a
contract's measure rating if we determine that a contract's data are
incomplete, inaccurate, or biased. If there are data issues, we cannot
accurately measure quality and performance. The data downgrade policy
was adopted not as a penalty but to address instances when the data
that will be used for specific measures are not reliable for measuring
performance

[[Page 15768]]

due to their incompleteness or biased/erroneous nature. For instances
where the integrity of the data is compromised because of the action or
inaction of the sponsoring organization (or its subcontractors or
agents), this policy reflects the underlying fault of the sponsor and
without it sponsoring organizations could ``game'' the Star Ratings and
merely fail to submit data that illustrate poor performance. Not only
is accepting biased data from a sponsor not fair to other organizations
that follow rules and have procedures in place to properly handle
appeals, but it is also not fair to beneficiaries, as they would
receive inaccurate information on the plan's performance regarding its
handling of appeals. The use of TMP data for scaled reductions of the
appeals measures was finalized in the April 2018 final rule. In this
CY2020 rulemaking, CMS only proposed a reduction to one star for the
applicable appeals measures for the contracts that do not submit any
TMP data but did not reopen for comment the entire provision regarding
use of TMP data or scaled reductions as a whole. Therefore, while CMS
appreciates this feedback related to the TMP and scaled reductions in
general, these comments are outside the scope of the proposed rule; CMS
will consider these suggestions as we make future enhancements.
Comment: A commenter stated the additional change modifies the
appeals measures from a timeliness measure to a timeliness and data
integrity measure.
Response: CMS disagrees with this assertion. The proposed addition
to the scaled reductions for not submitting TMP data is not a
modification to the appeals measures but a mechanism to ensure that the
data used for evaluating performance on a measure are accurate,
complete, and unbiased. If a contract does not submit TMP data, CMS
does not have information to assess the completeness of the data used
for these measures. The data used for CMS's Star Ratings must be
reliable, meaning that they are accurate, complete, and without bias.
CMS has historically identified issues with some contracts' data and
has taken steps to protect the integrity of the data and the Star
Ratings; publishing Star Ratings that are not an accurate reflection of
plan performance would not be consistent with CMS's statutory
obligation to provide comparative information to beneficiaries under
section 1851(d) of the Act or with the goals of the Quality Payment
Bonus under section 1853(o) of the Act. Our longstanding policy has
been to reduce a contract's measure rating if we determine that a
contract's measure data are incomplete, inaccurate, or biased.
Determinations that data are inaccurate or biased may result from the
mishandling of data, inappropriate processing, or implementation of
incorrect practices.
Comment: A few commenters noted that there is a short window for
the plans to submit TMP data and that results are not shared until 9
months later. A few commenters requested that plans be provided with
TMP results in advance of the first plan preview period. A commenter
requested that if CMS chooses to continue the TMP process, CMS should
hold the auditor accountable for providing at least a draft audit
report within 30 days.
Response: CMS appreciates this feedback. As described in the
December 21, 2018 HPMS memo entitled 2019 Timeliness Monitoring Project
(TMP), the data collection is done in three waves beginning in January
2019. CMS receives initial TMP results at the end of Spring 2019, and
then analyzes each contract's data to apply the scale reductions as
required by Sec. Sec. 422.164(g)(1)(iii) and 423.184(g)(1)(ii); where
the applicable regulation does not require a reduction, no reduction is
taken. There are no draft TMP reports. CMS will again provide TMP
results and scaled reduction information in the first plan preview and
sponsoring organizations may submit any questions or comments if they
believe they should not have received a reduction. CMS will consider if
it is operationally feasible to make these data available any earlier
in future years. CMS strongly recommends sponsoring organizations being
proactive in adopting policies to ensure that data are accurate,
complete, and unbiased, and that the data integrity downgrades are not
applicable to them.
Comment: A commenter did not support the proposal to reduce to one
star for not producing the TMP data citing that CMS should ensure that
the Star Ratings system is focused on improving quality of care
received by beneficiaries instead of incorporating ``penalties'' on
plans for compliance purposes. Another commenter supported the proposal
to reduce to one star if a contract fails to submit TMP data but stated
that reducing the Star Ratings for data integrity errors confuses
quality measurement with compliance and audit activities. The commenter
stated that a plan that is ``penalized'' through compliance audits
should not be ``penalized'' a second time through the Star Ratings,
which should be focused on clinical quality and beneficiary
satisfaction.
Response: CMS agrees that the Star Ratings should be focused on
improving the quality of care provided by health and drug plans, but in
order to ensure that the Star Ratings can focus on that, the data used
to measure performance in CMS's Star Ratings program must be accurate,
complete, and unbiased. We reiterate that (1) the reductions required
by Sec. Sec. 422.164(g) and 423.184(g) are not a penalty but a means
to reflect how the sponsoring organization has not produced accurate,
complete, and unbiased data for purposes of performance measurement and
(2) that our proposal was on the narrow issue of addressing the failure
of a sponsoring organization to submit TMP data so that CMS could
evaluate if the data integrity provision would require a scaled
reduction in certain appeals measures. Our longstanding policy has been
to reduce a contract's measure rating if we determine that a contract's
data are inaccurate, incomplete, or biased. If there are data issues,
we cannot accurately measure quality and performance. Public postings
of the Star Ratings data use a notice that CMS has identified issues
with a plan's data in lieu of the actual rating for a measure; this
notice is used when CMS has determined that inaccurate, incomplete, or
biased data (such as resulting from the mishandling of data,
inappropriate processing, or implementation of incorrect practices) has
had an impact on the measure score. The number of stars applied to the
measure will be governed by Sec. Sec. 422.164(g) and 423.184(g), which
address scaled reductions to appeals measures based on an analysis of
TMP or audit data and to one star for HEDIS measures and other measures
based on NCQA audits, lack of compliance with CMS data validation
policies, and other means to identify data integrity issues. The data
integrity policies align with our commitment to data quality and
preserve the integrity of the Star Ratings. CMS designed and finalized
these data integrity policies in the April 2018 final rule to
distinguish between occasional errors and systematic issues.
Comment: A commenter suggested that if the TMP is used to measure
completeness of data, it should be limited to the data for just one
measure, the Part D Appeals Auto-Forward measure.
Response: The TMP assess the completeness of the IRE data for all
applicable appeals measures which include two Part C and two Part D
appeals measures. The assignment to one star when no TMP data are
submitted is also applied to the applicable appeals measures since data
completeness issues impact the data used for both the timeliness and
upheld

[[Page 15769]]

measures for Part C and Part D. If cases are missing for the timeliness
measure for either Part C or Part D, it would also result in missing
cases for the applicable upheld measure.
Comment: A commenter requested that CMS provide more information on
the impact of cut points if a plan fails to submit their TMP audit
results and the proposal to reduce the plan's rating on the appeals
measures is implemented.
Response: If a contract fails to submit TMP data for CMS's review
to ensure the completeness of their IRE data, the contract receives one
star for the applicable appeals measure(s) under the new regulation
provision we proposed and are finalizing at Sec. Sec.
422.164(g)(1)(iii)(O) and 423.184(g)(1)(ii)(M). Because CMS would have
determined that the data reported as performance under the applicable
appeals measure(s) was inaccurate, incomplete or biased, that data are
not included in the creation of cut points. We base cut points on an
analysis of performance data believed to be accurate, complete, and
unbiased.
Comment: A commenter questioned what happens if a sponsor submits
TMP data late. Their understanding is that currently, because there is
no late submission deadline for submitting TMP data, the result is a
reduction to one star. They sought to understand the impact of
submitting data late under this new provision, and how this provision
differs from the existing one.
Response: Failure to submit data by the deadline or an extension
granted by CMS is failure to submit the TMP data. Under the new
regulation provision we proposed and are finalizing here at Sec. Sec.
422.164(g)(1)(iii)(O) and 423.184(g)(1)(ii)(M), the assignment of one
star for the applicable appeals measures will happen if a contract
fails to submit any TMP data. The December 21, 2018 HPMS memo entitled
2019 Timeliness Monitoring Project (TMP) provides details about data
submission, including the deadlines. Under the current practice, a
sponsor can let CMS know if there is an issue meeting the submission
deadline for the TMP data and CMS can work with the sponsor to
determine if an alternative deadline is feasible. CMS needs adequate
time to analyze the TMP data once submitted to be able to determine the
completeness of the appeals data. If the data are submitted beyond the
deadline or an extension granted by CMS, it is treated as a failure to
submit the TMP data.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing at
Sec. Sec. 422.164(g)(1)(iii)(O) and 423.184(g)(1)(ii)(M) the
assignment of a 1-star rating to the applicable appeals measure(s) if a
contract fails to submit TMP data for CMS's review to ensure the
completeness of the contract's IRE data.
(6) Review of Sponsors' Data (Sec. Sec. 422.166(h), 423.186(h))
At Sec. Sec. 422.164(h)(1) and 423.184(h)(1), CMS proposed to
codify a policy regarding the deadlines for an MA organization or Part
D plan sponsor to request the IRE or CMS to review a contract's appeals
data or CMS to review a contract's Complaints Tracking Module (CTM)
data. For example, information regarding the Part C and Part D appeals
process is available to MA organizations and is updated daily on the
IRE website. Additionally, sponsors can access the Part D Appeals
Reports under the Performance Metrics pages in HPMS. To allow enough
time for the IRE to make any necessary changes to ensure the accuracy
of a contract's measure score, we proposed that requests for CMS or the
IRE to review contract data must be received no later than June 30 of
the following year in order to have time to use accurate information in
the Star Ratings calculations (for example, changes to contract year
2018 appeals data must be made by June 30, 2019 for the 2020 Star
Ratings). Reopenings are not taken into account under this proposed
deadline for corrections to the IRE data. For purposes of the appeals
measures, if a reopening occurs and is decided prior to May 1, the
revised determination is used in place of the original reconsidered
determination. If the revised determination occurs on or after May 1,
the original reconsidered determination is used.
Similarly, we proposed that any requests for adjustments following
CMS's CTM Standard Operating Procedures for the complaints measures be
made by June 30 of the following year in order for the changes to be
reflected in a contract's Star Ratings data (for example, changes to
contract year 2018 complaints data must be made by June 30, 2019 for
the 2020 Star Ratings).
Below we summarize the comments we received and provide our
responses and final decisions.
Comment: Many of the commenters supported a deadline for an MA
organization or Part D plan sponsor to request the IRE or CMS to review
a contract's appeals or CMS to review a contract's CTM data, but they
did not support the proposal of the June 30th date. They all
recommended that the date should be following the first plan preview
stating that the later date would allow plans to fully respond to all
appeals and complaints.
Response: CMS appreciates the feedback and is finalizing our
proposal with a modification that will permit CMS to set the date
annually to allow flexibility each year to determine the date based on
the availability of data for plans to review.
Comment: A commenter noted that the timeframes/deadlines CMS is
proposing do not appear to align with the allotted timeframes CMS
allows for plans and the IRE to re-open decisions. The commenter
proposed CMS review the IRE reopening process and timeframes to ensure
all cases submitted to the IRE, in the measurement plan year, are fully
resolved by the first plan preview period. Additionally, the commenter
recommended that if the IRE does not meet the IRE reconsideration
timeframes, which are outlined in the MAXIMUS Federal Medicare Health
Plan Reconsideration Process Manual, then plans would still be held
accountable for the outcome of the reconsideration but those cases
should not be included in the plan's performance scores since they were
not fully resolved.
Response: Because CMS does not want to implement policies that
promote reopenings, CMS will not adopt the policy the commenter
recommends. Excluding cases that were reopened but do not yet have a
decision would encourage organizations to reopen more cases and
possibly manipulate their ratings. Therefore, if the reopening is not
decided by May 1st, the original reconsideration decision is used in
the measure. Reopenings are supposed to be rare. CMS appreciates the
feedback about the data timeframe for reopenings and will consider this
comment in the future.
Comment: A commenter did not support the data review deadline,
because CMS (and its contractor, MAXIMUS) does not provide full
visibility into the fields that are required to calculate compliance on
an ongoing basis. For example, the commenter pointed out that there is
no timeliness indicator on MAXIMUS' website and as a result, some of
the data cannot be monitored on an ongoing basis for accuracy. Instead,
MA plans must develop a workaround, such as monitoring case dates for
accuracy. Something as simple--and predictable--as a national holiday
where mail is not delivered can result in an incorrect timeliness
measure.

[[Page 15770]]

Response: Although there are enough data provided on the MAXIMUS
website for contracts to determine if a case is late, CMS has worked
with MAXIMUS, the IRE, to add a late indicator on the website for Part
C Appeals data to make it easier for plans to monitor the timeliness of
their cases. This update will further allow plans to request
adjustments to their Part C appeals, if necessary, in a timely manner
before Star Ratings calculations.
Comment: A commenter supported the proposal, but requested a
clarification of the application of the deadline related to CTM data,
because CMS often changes the CTM case status so that cases are no
longer visible and cannot be monitored for accuracy.
Response: We appreciate the support and the opportunity to clarify
which CTM data are used for Star Ratings purposes. For CTM, the
quarterly reports only contain CTM complaints that are used to
calculate the Star Rating CTM measure. If a CTM is not in the report,
the complaint is not considered a plan issue and it would not be
included in the Star Ratings measure. Therefore, sponsoring
organizations may wish to focus their requests for CMS review of CTM
data on the data that are part of the quarterly reports.
Comment: A few commenters supported the proposal but noted that CMS
should publish a schedule of the timing of all related reports, while a
commenter did not support the proposal and requested similarly a
schedule of reports. Additionally, a commenter stated the Part C
MAXIMUS IRE reports are not published and are only made available upon
request to the CMS account manager each quarter.
Response: We appreciate the support and the opportunity to clarify
the timing and availability of the reports which contain data used for
the Star Ratings. Part D appeals and CTM reports are posted in HPMS
quarterly; approximately 2 months following the close of the quarter.
Information regarding the Part C reconsideration process is available
to Medicare Advantage (MA) organizations on the www.medicareappeal.com
website. The data available on this website are updated daily;
therefore, MA organizations that notice discrepancies or have questions
about the data should bring these issues to the attention of the IRE as
they arise. On the website, MA organizations are able to see all the
cases related to a particular plan for the date range they chose and
they are also able to search by case number. MAXIMUS has added a late
indicator to their website to help in the review; therefore, plans
should be able to fully monitor their data throughout the year.
Comment: A commenter supported the codification of deadlines for
requests by an MA organization or Part D plan sponsor to review
contract appeals or Complaints Tracking Module data.
Response: CMS appreciates the support.

Summary of Regulatory Changes

For the reasons set forth in the proposed rule and our responses to
related comments summarized earlier, we are finalizing the provisions
at Sec. Sec. 422.164(h)(1) and 423.184(h)(1) related to the policy
regarding the deadlines for an MA organization or Part D plan sponsor
to request CMS or the IRE to review its' appeals data or CMS to review
its' Complaints Tracking Module (CTM) data with a substantive
modification. We are not finalizing the June 30th deadline in
regulation. To provide more flexibility to set the deadline contingent
on the timing of the availability of data for plans to review, we are
finalizing in this regulation that an MA organization or Part D plan
sponsor may request that CMS or the IRE review its' data, provided that
the request is received by the annual deadline set forth by CMS for the
applicable Star Ratings year. We intend to use the annual Call Letter
or an HPMS memo to set the annual deadline.
e. Extreme and Uncontrollable Circumstances (Sec. Sec. 422.166(i),
423.186(i))
We proposed a policy to address how extreme and uncontrollable
circumstances may have a negative impact on the Quality Star Ratings of
an MA or Part D plan. Extreme and uncontrollable circumstances such as
natural disasters can directly affect Medicare beneficiaries and
providers, as well as the Parts C and D organizations that provide them
with important medical care and prescription drug coverage. These
circumstances may negatively affect the underlying operational and
clinical systems that CMS relies on for accurate performance
measurement in the Star Ratings program, all without fault on the part
of the MA organization or Part D plan sponsor. We proposed to adjust
the Star Ratings to take into account the effects of extreme and
uncontrollable circumstances that occurred during the performance or
measurement period in a manner that would generally hold the affected
contract harmless from reductions in Star Ratings. We proposed to
codify a series of special rules for calculation of the Star Ratings of
certain contracts in certain extreme and uncontrollable circumstances
in paragraph (i) of Sec. Sec. 422.166 and 423.186.
We proposed that the adjustments be tailored to the specific areas
experiencing the extreme and uncontrollable circumstance in order to
avoid over-adjustment or adjustments that are unnecessary. Health and
drug plans can serve enrollees across large geographic areas, and thus
they may not be impacted in the same manner as healthcare providers
such as hospitals or medical centers in specific physical locations. To
ensure that the Star Ratings adjustments focus on the specific
geographic areas that experienced the greatest adverse effects from the
extreme and uncontrollable circumstance and are not applied to areas
sustaining little or no adverse effects, our proposal targeted the
adjustments to specific contracts and further specified and limited the
adjustments.
Below we summarize the comments we received on the disaster
adjustments in general.
Comment: Most commenters supported our proposals to adjust Star
Ratings in the event of an extreme and uncontrollable circumstance.
Response: We thank the commenters for their support of the
proposal, which we are finalizing with some substantive modifications
in this final rule as described below.
Comment: A few commenters requested that CMS delay codifying the
extreme and uncontrollable circumstances policy and continue to assess
and develop the methodology in case additional modifications are
needed. A commenter requested that CMS implement the policy for
measurement year 2018 in order to avoid a temporary lapse in the
application of the proposed policy.
Response: The policy being adopted in this final rule will apply to
the 2022 Star Ratings and beyond, for extreme and uncontrollable
circumstances that begin on or after January 1, 2020. If adjustments
are needed to the policy, CMS will propose them through a future
rulemaking or sub regulatory guidance. The 2020 Call Letter includes
CMS's policy for the 2020 Star Ratings for extreme and uncontrollable
circumstances that occurred in 2018. We decline to delay adoption of
this policy for a future period, because similar procedures were
successfully applied to the 2019 Star Ratings as a result of the
multiple 2017 disasters.
(1) Identification of Affected Contracts
In paragraph (i)(1) of Sec. Sec. 422.166 and 423.186, we proposed
to identify MA

[[Page 15771]]

and Part D contracts affected by extreme and uncontrollable
circumstances during the performance or measurement period that may
have affected their performance on Star Ratings measures or their
ability to collect the necessary measure-level data. Under our
proposal, these ``affected contracts'' are the contracts eligible for
the specified adjustments that take into account the effects of the
extreme and uncontrollable circumstances. For an MA or Part D contract
to be considered an affected contract under our proposal, the contract
would need to meet all of the following criteria:
The contract's service area is within an ``emergency
area'' during an ``emergency period'' as defined in section 1135(g) of
the Act.
The contract's service area is within a county, parish,
U.S. territory or tribal area designated in a major disaster
declaration under the Stafford Act and the Secretary exercised
authority under section 1135 of the Act based on the same triggering
event(s).
A certain minimum percentage (25 percent for measure star
adjustments or 60 percent for exclusion from cut point and Reward
Factor calculations) of the enrollees under the contract must reside in
a Federal Emergency Management Agency (FEMA)-designated Individual
Assistance area at the time of the extreme and uncontrollable
circumstance.
We proposed to identify an area as having experienced extreme and
uncontrollable circumstances if it is within an ``emergency area'' and
``emergency period'' as defined in section 1135(g) of the Act, and also
is within a county, parish, U.S. territory or tribal government
designated in a major disaster declaration under the Stafford Act, and
the Secretary exercised authority under section 1135 of the Act based
on the same triggering event(s) (https://www.phe.gov/emergency/news/healthactions/section1135/Pages/default.aspx). Major disaster areas are
identified and can be located on FEMA's website at https://www.fema.gov/disasters. To ensure the policy is applied to those
contracts most likely to have experienced the greatest adverse effects,
we proposed to narrow it to apply to contracts with a certain minimum
percentage of enrollees residing in an area declared as an Individual
Assistance area because of the disaster declaration. Individual
Assistance includes assistance to individuals and households, crisis
counseling, disaster case management, disaster unemployment assistance,
disaster legal services, and the disaster Supplemental Nutrition
Assistance Program. We explained that our focus on enrollees residing
in counties eligible for Individual Assistance because of a major
disaster was because most Star Ratings measures are based on services
provided directly to beneficiaries in their local area. Health and drug
plans can serve enrollees across large geographic areas, and thus they
may not be impacted in the same manner as healthcare providers such as
hospitals or medical centers in specific physical locations. Therefore,
we proposed to target the adjustments based on extreme and
uncontrollable circumstances to contracts serving beneficiaries who
were eligible for individual and household assistance because of the
disaster declaration.
We further proposed that at least 25 percent or 60 percent of the
enrollees under the contract must reside in Individual Assistance areas
identified because of the extreme and uncontrollable circumstances in
order for the contract to be an affected contract eligible for
adjustments. We explained that this limitation would ensure that the
adjustments are limited to contracts that we believe may have
experienced a real impact from the extreme and uncontrollable
circumstance in terms of operations or ability to serve enrollees. In
calculations for the 2019 Star Ratings, we observed that contracts tend
to have either very few enrollees impacted or most of their enrollees
impacted due to the nature of contracts either covering a broad region
or a localized area; if 1 out of 4 enrollees were impacted during the
period of the year when the disaster hit, we stated our belief that
there would be a small chance that scores may have been impacted. We
proposed to exclude the numeric measure scores from contracts with 60
percent or more enrollees impacted by the extreme and uncontrollable
circumstances from the determination of the cut points and explained it
as a conservative rule that would apply only in cases where a clear
majority or all of the enrollees are impacted. We also explained that
using the Individual Assistance major disaster declaration as a
requirement to identify contracts that would be eligible for
adjustments ensures that the policy applies only when the event is
extreme, meriting the use of special adjustments to the Star Ratings.
We proposed that contracts that do not meet the definition of an
``affected contract'' would not be eligible for any adjustments based
on the occurrence of the extreme and uncontrollable circumstances but
also noted that the criteria to be an affected contract would not be
sufficient to receive all the adjustments we proposed.
Below we summarize the comments we received on the identification
of affected contracts and provide our responses and final decisions.
Comment: Several commenters suggested that CMS commit to being
transparent in how it has applied the regulations, such as which
contracts received adjustments and the impact on the Star Ratings
program. A few stated this would allow sponsors a better understanding
of marketplace performance and reduce inquiries to CMS. A commenter
recommended that CMS announce areas designated as disasters for the
purposes of Star Ratings on a quarterly basis, and another requested
greater specificity on how a plan within a given county would qualify
for the exemption rules. Another commenter requested that data and
analysis on affected contracts be shared with state Medicaid agencies
as this information is relevant to the states, and data sharing reduces
burden on the plans.
Response: Information about which areas are designated in a major
disaster declaration under the Stafford Act and when the Secretary
exercised authority under section 1135 of the Act based on the same
triggering event(s) are all public information we are extracting from
the relevant websites. CMS published the list of relevant 2017
disasters and affected counties in the 2019 Call Letter, and state,
county, and contract enrollment data are publicly available, so
information about affected contracts is already available. We agree
that providing additional information when the adjustments authorized
under Sec. Sec. 422.166(i) and 423.186(i) may be possible. To that
end, CMS plans to provide information identifying contracts that meet
the definition of affected contracts in Sec. Sec. 422.166(i)(1) and
423.186(i)(1). We note that the definition of ``affected contract'' in
these regulations is substantially similar to the definition and
standards CMS used to make similar adjustments in the 2019 Star Ratings
based on disasters that occurred in 2017. For the 2019 Star Ratings,
which were adjusted for the disasters (Hurricanes Harvey, Irma, and
Maria, and the wildfires in California) that occurred during the 2017
performance period, 77 contracts met the 25 percent threshold of
beneficiaries in FEMA-designated Individual Assistance areas at the
time of the disaster. Based on a similar policy to that we are now
codifying in Sec. Sec. 422.166(i) and 423.186(i), affected contracts
reverted to the prior year's rating an average of five times for Part

[[Page 15772]]

C measures and three times for Part D measures. For the 2019 Star
Ratings, 57 contracts met the 60 percent threshold of beneficiaries in
FEMA-designated Individual Assistance areas and had their numeric
values excluded from the clustering algorithm so they did not influence
cut points. CMS will continue to release the list of relevant disasters
and FEMA-designated Individual Assistance counties in the Call Letter
each year after the performance period so contracts know in advance of
the Star Ratings preview periods whether they might be considered an
affected contract based on their service area.\38\
---------------------------------------------------------------------------

\38\ Tables 14 and 15 in the 2020 Call Letter contain a list of
the section 1135 waivers that could affect the 2020 Star Ratings and
Individual Assistance counties from all of the 2018 FEMA major
disaster declarations. https://www.cms.gov/medicare/health-plans/
medicareadvtgspecratestats/announcements-and-documents.html.
---------------------------------------------------------------------------

Comment: A commenter questioned whether requiring affected
contracts to meet all three criteria in Sec. Sec. 422.166(i)(1) and
423.186(i)(1) was too restrictive if it requires a state-level
declaration of emergency and suggested that the third criteria (that
is, Sec. Sec. 422.166(i)(1)(iii) and 423.186(i)(1)(iii)) was most
applicable.
Response: Stafford Act disaster declarations are made by state but
designate specific counties that are affected. Our policy addresses
contracts with service areas in FEMA-designated Individual Assistance
counties. We proposed that for a contract to be considered an affected
contract it would need to meet all three criteria in Sec. Sec.
422.166(i)(1) and 423.186(i)(1). This ensures the extreme and
uncontrollable circumstances policy is limited to contracts that may
have experienced a real impact from the disaster in terms of operations
or ability to serve enrollees. It also ensures that it applies only
when the event is extreme, meriting the use of special adjustments to
the Star Ratings.
Comment: A commenter was concerned that contracts may deliberately
combine contracts with enrollment from a non-disaster area with
enrollment in a disaster area in order to meet the 25 percent threshold
for Star Ratings adjustments and encouraged CMS to implement safeguards
to prevent abuse of the extreme and uncontrollable circumstances
policy.
Response: CMS appreciates this comment and notes that the April
2018 final rule addresses contract consolidations. In particular, for
consolidations approved on or after January 1, 2019 we assign Star
Ratings based on the enrollment-weighted mean of the measure scores of
the surviving and consumed contract(s) so that the ratings reflect the
performance of all contracts (surviving and consumed) involved in the
consolidation. Further, the scenario described by the commenter is
unlikely to occur as contract consolidations are generally approved in
advance; a sponsoring organization would not be able to take advantage
of an extreme and uncontrollable circumstance by subsequently
consolidating contracts.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the
definition of an affected contract in paragraph (i)(1) of Sec. Sec.
422.166 and 423.186. We are also finalizing the introductory sentence
in paragraph (i) substantially as proposed to establish a rule that in
the event of certain extreme and uncontrollable circumstances, CMS
calculates Star Ratings for affected contracts using the rules
specified in paragraphs (i)(2) through (i)(10). Those specific rules
and the text in paragraphs (i)(2) through (i)(10) are addressed in
sections II.B.1.e.(2) through (10). In finalizing the first sentence of
paragraph (i), we are making a grammatical change to use ``calculates''
in place of ``will calculate.'' We address additional text we are also
finalizing as a new last sentence in the introductory text of paragraph
(i) in section II.B.1.e.(6).
(2) CAHPS Adjustments
For CAHPS, we proposed two different types of special rules for
affected contracts: Exemption from having to administer the CAHPS
survey or adjustments to the Star Ratings on the CAHPS measures if the
affected contract must administer the CAHPS survey. CAHPS measures are
based on a survey conducted early in the year in which the Star Ratings
are released, that is, the year before the year to which the Star
Ratings are applicable. For example, the CAHPS survey in early 2019
will be used for the 2020 Star Ratings, which are released in late
2019, before the annual coordinated election period for 2020.
We proposed at Sec. Sec. 422.166(i)(2)(i) and 423.186(i)(2)(i),
that an MA and Prescription Drug Plan contract, even if it is an
affected contract, must administer the CAHPS survey unless the contract
demonstrates to CMS that the required sample for the CAHPS survey
cannot be contacted because a substantial number of the contract's
enrollees are displaced due to a FEMA-designated disaster in the prior
calendar year and requests and receives a CMS approved exemption. We
explained in the proposed rule our belief that displacement of a
substantial number of the contract's enrollees would make it
practically impossible to contact the required sample for the CAHPS
survey. For an affected contract that receives the exemption from
administering the CAHPS survey, we proposed at Sec. Sec.
422.166(i)(2)(iii) and 423.186(i)(2)(iii) that the affected contract
would receive the prior year's CAHPS measure stars (and corresponding
measure scores).
We proposed that affected contracts with at least 25 percent of
enrollees in FEMA-designated Individual Assistance areas at the time of
the extreme and uncontrollable circumstance would receive the higher of
the previous year's Star Rating or the current year's Star Rating (and
corresponding measure score) for each CAHPS measure (including the
annual flu vaccine measure). For example, for the 2022 Star Ratings for
affected contracts, we would take the higher of the 2021 Star Ratings
or the 2022 Star Ratings for each CAHPS measure. The affected contract
would receive the CAHPS measure score for the corresponding Star Rating
year chosen. We proposed the 25 percent threshold to avoid including
contracts with very few enrollees impacted and explained our belief
that the measure-level scores should not be adjusted for contracts with
very few enrollees impacted by the extreme and uncontrollable
circumstances. We stated that if a small percentage of enrollees were
impacted by an extreme and uncontrollable circumstance, there should
not be a significant impact on measure scores. Comments received on
this specific proposal in Sec. Sec. 422.166(i)(2) and 423.186(i)(2)
are discussed in section II.B.1.e.(6) of this final rule.
(3) HOS Adjustments
For the HOS survey, we proposed to follow similar procedures as
CAHPS but due to the follow-up component of HOS, we proposed that the
adjustment be to the Star Ratings for the year after the completion of
the follow-up HOS survey (that is administered 2 years after the
baseline HOS survey). For example, the 2022 Star Ratings are based on
data collected from April through June 2020 and reflect experiences
over the past 12 months. The data collected in 2021 will be used for
the 2023 Star Ratings, so responses may reflect the impact of 2020
extreme and uncontrollable circumstances and thus, those circumstances
may have an impact on the 2023 Star Ratings.
We proposed at Sec. 422.166(i)(3)(i) that an MA contract, even if
it is an affected contract, must administer the HOS surveys the year
after the extreme and

[[Page 15773]]

uncontrollable circumstance unless the contract demonstrates to CMS
that the required sample cannot be contacted because a substantial
number of the contract's enrollees are displaced due to a FEMA-
designated disaster during the measurement period and requests and
receives a CMS approved exemption. For an affected contract that
receives the exemption from administering the HOS survey, we proposed
at paragraph (i)(3)(iii) that the affected contract would receive the
prior year's HOS and HEDIS-HOS measure stars (and corresponding measure
scores).
We proposed at Sec. 422.166(i)(3)(iv) that affected contracts with
at least 25 percent of enrollees in FEMA-designated Individual
Assistance areas at the time of the extreme and uncontrollable
circumstance would receive the higher of the previous year's Star
Rating or current year's Star Rating for each HOS and HEDIS-HOS measure
(and corresponding measure score) for the Star Ratings 3 years after
the eligible extreme and uncontrollable circumstance. As an example, we
explained that for the 2023 Star Ratings for contracts affected by an
extreme and uncontrollable circumstance in 2020, we would take the
higher of the 2022 or 2023 Star Rating (and corresponding measure
score) for each HOS and HEDIS-HOS measure in applying the proposal.
Comments received on this specific proposal in Sec. 422.166(i)(3) are
discussed in section II.B.1.e.(6).
(4) HEDIS Adjustments
For HEDIS, we proposed that an MA contract, even if an affected
contract, would be required to report HEDIS data to CMS unless the
contract demonstrates to CMS an inability to obtain both administrative
and medical record data required for HEDIS measures due to a FEMA-
designated disaster in the prior calendar year and requests and
receives a CMS approved exemption. We stated in the preamble of the
proposed rule that all contracts in FEMA-designated disaster areas can
work with NCQA to request modifications to the samples for measures
that require medical record review; however, in our proposed regulation
text codifying this ability, we proposed only that ``affected
contracts'' without an exemption from reporting HEDIS data would be
able to seek that kind of modification from NCQA. For affected
contracts that have service areas with at least 25 percent of enrollees
in a FEMA-designated Individual Assistance area at the time of the
extreme and uncontrollable circumstance, we proposed to take the higher
of the previous year's Star Rating or current year's Star Rating (and
corresponding measure score) for each HEDIS measure. For example, for
the 2022 Star Ratings for affected contracts we would take the higher
of the 2021 or 2022 Star Ratings for each HEDIS measure. Comments
received on this specific proposal in Sec. 422.166(i)(4) are discussed
in section II.B.1.e.(6). of this final rule.
(5) New Measure Adjustments
At proposed Sec. Sec. 422.166(i)(5) and 423.186(i)(3), we proposed
to implement a hold harmless provision for new Star Ratings measures if
the inclusion of all applicable new measure(s) brings down the summary
and/or overall rating. That is, for affected contracts with at least 25
percent of enrollees in a FEMA-designated Individual Assistance area at
the time of the extreme and uncontrollable circumstance, all the new
measures would be excluded from the calculation of the summary and/or
overall rating if their inclusion brings a contract's summary (or in
the case of MA-PD contracts, the overall) rating down. Comments
received on this specific proposal in Sec. Sec. 422.166(i)(5) and
423.186(i)(3) are discussed in section II.B.1.e.(6). of this final
rule.
(6) Other Star Ratings Measure Adjustments
For all other measures for affected contracts with at least 25
percent of enrollees in a FEMA-designated Individual Assistance area at
the time of the extreme and uncontrollable circumstance (that occurs
during the measurement or performance period), we proposed to take the
higher of the previous or current year's measure Star Rating (and then
use the corresponding measure score), as described at proposed
Sec. Sec. 422.166(i)(6)(i) and 423.186(i)(4)(i). For example, for the
2022 Star Ratings for affected contracts, we would take the higher of
the 2021 or 2022 Star Ratings. We also proposed to exclude from this
adjustment policy the Part C Call Center--Foreign Language Interpreter
and TTY Availability and Part D Call Center--Foreign Language
Interpreter and TTY Availability measures, except for extreme and
uncontrollable circumstances where there are continuing communications
issues related to loss of electricity and damage to infrastructure
during the call center study. We explained the proposed exclusion by
noting that these measures and the underlying performance are
completely in the plan's control and we believed therefore that there
should generally be no impact from the declaration of an extreme and
uncontrollable circumstance on plan performance in these areas.
Below we summarize the comments we received on the proposed rules
at Sec. Sec. 422.166(i)(2) through (6) and 423.186(i)(2) through (4)
for adjustments to CAHPS, HOS, HEDIS, new, and other measures and
provide our responses and final decisions.
Comment: A few commenters requested that we clarify whether our
extreme and uncontrollable circumstances policy is ``best of'' the Star
Rating or measure score. A commenter proposed that we take the higher
of the previous and current year's measure score if the Star Rating is
the same in both years to ensure the higher score is used in the
improvement calculation.
Response: We proposed, for affected contracts as described
specifically in the applicable regulation text, to select the higher of
the current or previous year's measure-level Star Rating and then use
the measure score that corresponds with the year selected with the
higher rating. We proposed this use of the ``higher Star Rating'' rule
for CAHPS, new, and other measures for MA and Part D ratings, and for
HOS and HEDIS measures for MA ratings. We use the Star Rating for the
measure-level comparison because the measure stars are used to
calculate the overall Star Rating and the measure-level cut points can
change each year. We use the corresponding measure scores for
improvement calculations in order to maintain consistency in the years
being compared. Where the higher score does not correspond to the
higher rating, we use the score from the year with the higher Star
Rating for the measure nonetheless. If the Star Rating for a measure is
the same in both years we use the current year's data (that is, Star
Rating and score). We only revert to the previous year's measure Star
Rating if it is higher. The regulation text reflects this rule by
referring to the higher of the previous or current year's Star Rating
(and corresponding measure score) in Sec. Sec. 422.166(i)(2)(iv),
422.166(i)(3)(iv), 422.166(i)(4)(v), 422.166(i)(6)(i),
423.186(i)(2)(iv), and 423.186(i)(4)(i).
Comment: A few commenters were concerned that the 25 percent cutoff
for measure-level adjustments may be inadequate, or that the policy is
biased against larger contracts serving populations spread across
multiple regions.
Response: CMS chose the 25 percent cutoff for measure-level
adjustments because this cutoff avoids including contracts with very
few enrollees impacted by extreme and uncontrollable circumstances. As
explained in the

[[Page 15774]]

proposed rule, we do not believe it would be appropriate to provide an
adjustment to the ratings when fewer than a quarter of the enrollees
covered under the contract are affected by the extreme and
uncontrollable circumstance. If only a small percentage of enrollees is
impacted by a disaster, there should not be a significant impact on
measure scores (and therefore not on Ratings). We disagree that the
policy is biased against larger contracts, since it is applied the same
to all contracts. Further, for contracts with smaller service areas,
the declaration of an emergency and designation of a FEMA-designated
Individual Assistance area in one county might be sufficient to result
in 25 percent or more of the contract's enrollees being in the FEMA-
designated Individual Assistance area whereas a larger contract
covering the same county might only have a small portion of its overall
enrollment in the FEMA-designated Individual Assistance area.
Comment: A few commenters suggested that we instead remove
beneficiaries who live within impacted geographic areas from
measurement calculations. Commenters stated this would ensure that all
affected contracts receive an adjustment that is proportionate with the
level of impact to plan performance, be consistent with other exclusion
criteria used in Star Ratings measures, and ensure that Star Ratings
performance is representative of performance during the measurement
period.
Response: We decline to revise our policy to include this type of
adjustment, either instead or in addition to the adjustments we
proposed and are finalizing in Sec. Sec. 422.166(i)(2) through (6) and
423.186(i)(2) through (4). For many measures, this is not operationally
feasible. For example, this would require modifications to CAHPS and
HOS sampling, as well as to HEDIS reporting requirements. Other
measures do not have beneficiary-level data that could be adjusted.
Comment: Several commenters questioned how CMS will apply the
policy for contracts impacted by disasters in consecutive years. A few
suggested that CMS use the ``higher of'' the current year's Star Rating
and prior year's adjusted Star Rating, or link back to the most recent
year's data not affected by disasters. Another suggested using best of
ratings from periods or sources: Current measurement year performance,
prior year performance, parent organization average performance, or
industry average performance. Other commenters were concerned about old
data being pulled forward each year. A commenter stated a ``higher of''
policy would be inappropriate for consecutive disasters, and that CMS
should treat multiple year-disaster contracts as new contracts, rate
them on a very small set of measures, or base their rating on a small
portion of their service area. A commenter suggested that that CMS drop
the threshold for relief below 25 percent and 60 percent for contracts
that have had two consecutive years of disaster impact. Several
commenters requested that CMS extend the disaster adjustment multiple
years for select regions continuing to recover from a disaster (for
example, Puerto Rico that is still recovering from 2017 hurricanes).
Response: CMS appreciates these comments and acknowledges that our
proposal did not address year-over-year disasters. Given the number of
comments on this topic, we believe it is appropriate to address by
adopting additional provisions specific to this topic. We agree with
commenters that are concerned about looking back too many years for
contracts affected by disasters multiple years in a row, as well as
about including too many measurement periods in 1 year of Star Ratings.
We also must consider operational feasibility, and using different
thresholds for contracts affected by disasters in different ways would
be very complicated for administration and for providing the necessary
transparency to MA organizations, Part D plan sponsors, and
beneficiaries who use and rely on the Star Ratings.
We must balance these concerns about using older data with concerns
about using data based on performance that has been impacted by
consecutive disasters. In striking a balance of these concerns, we are
finalizing a policy for setting the Star Ratings for contracts with at
least 25 percent of enrollees in FEMA-designated Individual Assistance
areas that were affected by disasters that began in one year that were
also affected by disasters that began in the previous year. Under the
regulations we are adopting in this final rule, such multiple year-
affected contracts receive the higher of the current year's Star Rating
or what the previous year's Star Rating would have been in the absence
of any adjustments that took into account the effects of the previous
year's disaster for each measure. For example, if a multiple year-
affected contract reverted back to the 2021 Star Rating on a given
measure in the 2022 Star Ratings, the 2021 Star Rating is not used in
determining the 2023 Star Rating; rather, the 2023 Star Rating is
compared to what the 2022 Star Rating would have been absent any
disaster adjustments. The rule for treatment of multiple year-affected
contracts then does not carry very old data forward into the Star
Ratings for many years. Under this final rule, we will use the measure
score associated with the year with the higher measure Star Rating
regardless of whether the score is higher or lower that year. We are
finalizing this policy to address when contracts are affected by
separate extreme and uncontrollable circumstances that occur in
successive years for the adjustments to CAHPS, HOS, HEDIS, and other
measures. This rule would apply for CAHPS, HOS, HEDIS, new, and other
measures. Therefore, we are adopting new provisions at Sec. Sec.
422.166(i)(2)(v), 422.166(i)(3)(v), 422.166(i)(4)(vi),
422.166(i)(6)(iv), 423.186(i)(2)(v), and 423.186(i)(4)(iv) to include
this rule for how ratings for these measures will be adjusted in these
circumstances.
The issue about whether and how to take into account extreme and
uncontrollable circumstances that occur in successive years also raises
the question of how to address a specific extreme and uncontrollable
circumstance that spans two years. For example, we note that while
Hurricane Maria happened in 2017 and the associated declarations of
emergency under section 1135 of the Act initially happened in 2017,
those declarations extended for some areas into 2018. We did not
propose a specific policy for addressing such situations. We are
finalizing new text at the end of the introductory language of
paragraph (i) of both Sec. Sec. 422.166 and 423.186 to clarify that
the incident start date will be used to determine which year of Star
Ratings could be affected. We believe this clarification is necessary
because, in some cases, the incident period end date may change, which
would make it difficult operationally to determine which Star Ratings
year is impacted. For example, the major disaster declaration (DR-4353)
for the California wildfires was declared January 2, 2018. The incident
period was originally only in December 2017, but it was subsequently
extended by FEMA through January 2018. Limiting adjustments for a
single extreme and uncontrollable circumstance to one year is
appropriate to avoid adversely impacting operational timelines, to
limit impacts on contracts not impacted by disasters, and to preserve
transparency of the Star Ratings for consumers by not using data from
many different measurement years. Further, as we finalized several
years ago, at Sec. Sec. 422.504(o) and 423.505(p), MA organizations
and Part D sponsors must develop, maintain, and implement

[[Page 15775]]

a business continuity plan containing policies and procedures to ensure
the restoration of business operations following disruptions to
business operations which would include natural or man-made disasters,
system failures, emergencies, and other similar circumstances and the
threat of such occurrences. We expect that these business continuity
plans will address many of the issues that would result in an impact on
the performance of an affected contract where there are extreme and
uncontrollable circumstances that occur in successive years or over
more than one performance period.
We note that the proposed rule establishing the exemption for
administering CAHPS (Sec. Sec. 422.166(i)(2)(ii) and
423.186(i)(2)(ii)), administering HOS (Sec. 422.166(i)(3)(ii)), and
reporting HEDIS (Sec. 422.166(i)(4)(ii)) did not specify which type of
affected contract could apply for the exemption. This lack of clarity
also affected the proposed rules in Sec. Sec. 422.166(i)(2)(iii),
422.166(i)(3)(iii), 422.166(i)(4)(iii), and 423.186(i)(2)(iii) that
address how a contract with the exemption would receive the prior
year's CAHPS, HOS, or HEDIS measure Star Rating (and corresponding
measure scores). We clarify here that we intended these specific rules
to apply to affected contracts with at least 25 percent of enrollees in
FEMA-designated Individual Assistance areas at the time of the extreme
and uncontrollable circumstance. In finalizing this policy, we are
using the lowest threshold identified in the definition of affected
contract in paragraph (i)(1)(iii). As a result, the most generous
interpretation of the potential ambiguity of our proposal is being
finalized.
Finally, comments about disasters that began in 2017 are out of
scope of this rule as our proposal and final regulations apply to
adjustments to Star Ratings to take into account extreme and
uncontrollable circumstances that begin on or after January 1, 2020.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the
methodology for adjustments to CAHPS measures (Sec. Sec. 422.166(i)(2)
and 423.186(i)(2)), HOS and HEDIS measures (Sec. Sec. 422.166(i)(3)
and (i)(4)), new measures (Sec. Sec. 422.166(i)(5) and 423.186(i)(3)),
and other Star Ratings measures (Sec. Sec. 422.166(i)(6) and
423.186(i)(4)) with substantive and non-substantive revisions. The
final regulation text includes the following substantive changes on
measure adjustments:
In Sec. Sec. 422.166(i)(2)(ii) and 423.186(i)(2)(ii) for
CAHPS measures, 422.166(i)(3)(ii) for HOS measures, and
422.166(i)(4)(ii) for HEDIS measures, we are finalizing additional text
to clarify the section applies to affected contracts with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance.
In Sec. 422.166(i)(4)(iv), the final regulation text
clarifies that all contracts required to report HEDIS data can work
with NCQA to request modifications to the samples for measures that
require medical record review. While we did not receive comments on
this, CMS realized that the preamble and proposed regulation
inadvertently limited which contracts are eligible to request
modifications to samples from NCQA. We are finalizing corrected
regulation text to eliminate this inadvertent limitation.
In Sec. Sec. 422.166(i)(2)(v) and 423.186(i)(2)(v) for
CAHPS measures, 422.166(i)(3)(v) for HOS measures, 422.166(i)(4)(vi)
for HEDIS measures, and 422.166(i)(6)(iv) and 423.186(4)(iv) for other
Star Ratings measures, we are finalizing regulation text to identify
multiple year-affected contracts as contracts that have at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years. We are finalizing regulation text that a multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
We noted that the regulation text did not address how this
policy would be applied in the event an extreme and uncontrollable
circumstance occurred during two performance periods. Because in some
cases the incident period end date may change, which would make it
difficult operationally to determine which Star Ratings year is
impacted, we are finalizing regulation text in the introductory
paragraph of (i) of Sec. Sec. 422.166 and 423.186 to clarify that the
start date of the incident period will be used to determine which year
of Star Ratings could be affected, regardless of whether the incident
period lasts until another calendar year.
In addition to these substantive changes, we are finalizing non-
substantive changes in paragraphs (ii)(B) and (iii) of Sec. Sec.
422.166(i)(2), 422.166(i)(3), 422.166(i)(4), and 423.186(i)(2) to
replace ``exception'' with ``exemption'' and refer to the exemption
``described'' elsewhere instead of ``defined'' elsewhere. We are also
making technical revisions to verb tense, and in Sec. Sec.
422.166(6)(i) and 423.186(4)(i) we changed ``then use the corresponding
measure score'' to ``(and corresponding measure score).'' In Sec.
422.166(i)(3)(ii)(A) we added the word ``paragraph,'' and we simplified
the description of Sec. Sec. 422.166(5) and 423.186(3) for clarity.
(7) Exclusion From Improvement Measures
Contracts must have data for at least half of the measures \39\
used to calculate the Part C or Part D improvement measures to be
eligible to receive a rating in each improvement measure. For affected
contracts that revert back to the data underlying the previous year's
Star Rating for a particular measure, we proposed that measure would be
excluded from both the count of measures (for the determination of
whether the contract has at least half of the measures needed to
calculate the relevant improvement measure) and the applicable
improvement measures for the current and next year's Star Ratings as
stated at proposed Sec. Sec. 422.166(i)(7) and 423.186(i)(5). That is,
we proposed to codify the application of our usual rule in these
special circumstances: To receive a Star Rating in the improvement
measures, a contract must have measure scores for both years in at
least half of the required measures used to calculate the Part C
improvement or Part D improvement measures; our proposal to use the
data from the previous year's Star Ratings means that there is no
measure score from the current year's Star Ratings, so the usual rule
would eliminate the measure from consideration. As an example, for
affected contracts that revert back to the 2021 Star Ratings data for a
particular measure for the 2022 Star Ratings, we would exclude that
measure from the count of measures and applicable improvement measures
for the 2022 and 2023 Star Ratings.
---------------------------------------------------------------------------

\39\ See Sec. Sec. 422.164(f) and 423.184(f) for more
information on Part C and Part D improvement measures.
---------------------------------------------------------------------------

Below we summarize the comments we received on the exclusion from
improvement measures and provide our responses and final decisions.

[[Page 15776]]

Comment: A commenter was concerned that CMS's policy would permit
quality improvement measures to be excluded continually when there are
repeated disasters, which they stated would undermine the goals of the
Star Ratings program. A couple of commenters noted that CMS's proposed
policy of using prior year's measure stars (and corresponding measure
scores) could influence its use in the improvement calculation.
Response: We proposed in Sec. Sec. 422.166(i)(7) and 423.186(i)(5)
that any measure that reverts back to the data underlying the previous
year's Star Rating under the rules in paragraph (i) of Sec. Sec.
422.166 or 423.186 is excluded from the improvement calculation. This
would apply to multiple year-affected contracts as well. Most affected
contracts should still receive improvement measure scores since
contracts only need data in half of the measures used to calculate
improvement to receive an improvement measure score. We also clarify in
the final regulations at Sec. Sec. 422.166(i)(7) and 423.186(i)(5)
that contracts affected by extreme and uncontrollable circumstances do
not have the option of reverting to the prior year's improvement
rating. This clarification is necessary because of the new multiple
year-affected contract policy. The improvement rating is based on other
measure data included in the Star Ratings program, so taking the higher
of the two improvement ratings would nullify the calculations and the
application of the disaster policy for the other measures. The
improvement measure calculates how much of the plan's performance
improved or declined from the previous year to the current year.
Allowing affected contracts to revert to the prior year's improvement
measure rating could result in different years of data being used for
the improvement scores and for the measure scores, or different time
periods used for improvement calculations for different contracts. This
would be difficult to operationalize and confusing to consumers.
Therefore, we decline to adopt such an adjustment in this final rule.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the rule for
calculating the improvement score for affected contracts at Sec. Sec.
422.166(i)(7) and 423.186(i)(5) as proposed with substantive and non-
substantive revisions. We are finalizing a substantive change to
clarify that contracts affected by extreme and uncontrollable
circumstances do not have the option of reverting to the prior year's
improvement rating. We are also making a technical revision to verb
tense.
(8) Missing Data
Except in cases where an exemption was granted as described
earlier, we proposed that for all measures eligible for the extreme and
uncontrollable circumstance adjustment, if an affected contract has
missing data in either the current or previous year (for example,
because of a biased rate or the contract is too new or too small), the
final measure rating would come from the current year. We proposed to
codify this rule at Sec. Sec. 422.166(i)(8) and 423.186(i)(6). For
example, if a contract affected by an eligible 2020 extreme and
uncontrollable circumstance was not granted an exemption for data
collection and does not have sufficient data to receive a measure-level
2022 Star Rating, it would not receive a numeric rating for that
measure for the 2022 Star Ratings regardless of whether it received a
numeric rating in the previous year. Similarly, if an affected contract
has missing measure data in the previous year but received a numeric
rating in the current year, it would receive the current year's rating
for its final measure rating. In both cases, the measure would be
excluded from the contract's improvement score(s) following our usual
rules.
Below we summarize the comments we received on missing data and
provide our responses and final decisions.
Comment: A commenter questioned how CMS will rate contracts
affected by disasters that are too new to be measured.
Response: The missing data policy proposed and codified in this
final rule at Sec. Sec. 422.166(i)(8) and 423.186(i)(6) applies to
contracts that are too new to be measured. As proposed and finalized,
the regulation does not exclude new contracts from its application. We
proposed that except in cases where an exemption was granted as
described earlier, for all measures eligible for the extreme and
uncontrollable circumstance adjustment, if an affected contract has
missing data in either the current or previous year (for example,
because of a biased rate or the contract is too new or too small), the
final measure rating would come from the current year.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the
methodology for missing data as proposed at Sec. Sec. 422.166(i)(8)
and 423.186(i)(6) as proposed with non-substantive revisions to replace
``will come'' with ``comes'' and ``exceptions'' with ``exemptions.''
(9) Cut Points for Non-CAHPS Measures
Currently, the Star Rating for each non-CAHPS measure is determined
by applying a clustering algorithm to the measures' numeric value
scores from all contracts required to submit the measure. The cut
points are derived from this clustering algorithm. At proposed
Sec. Sec. 422.166(i)(9) and 423.186(i)(7), we proposed to exclude from
this clustering algorithm the numeric values for affected contracts
with 60 percent or more of their enrollees in the FEMA-designated
Individual Assistance area at the time of the extreme and
uncontrollable circumstance. We explained that the exclusion would
ensure that any impact of the extreme and uncontrollable circumstance
on an affected contract's measure-level scores would not have an impact
on the cut points for other contracts. We also explained that, under
our proposal, these cut points calculated for all other non-affected
contracts would be used to assess these affected contracts' measure
Star Ratings. We would compare the affected contract's previous year's
measure Star Ratings to the current year's measure Star Ratings to
determine which is higher, and therefore used for the affected
contract's Star Ratings calculations, as previously discussed. For
example, for the 2022 Star Ratings we would compare the 2021 and 2022
measure Star Ratings for affected contracts.
Below we summarize the comments we received on cut points for non-
CAHPS measures and provide our responses and final decisions.
Comment: Several commenters were concerned that removing affected
contracts from cut point calculations may skew the clustering
methodology or adversely impact plans not affected by disasters, or
that contracts in disaster areas may make less of an effort to improve
on measures. A commenter requested a simulation of what the Star
Ratings would be using this methodology and 2019 data. A commenter
encouraged ongoing evaluation of cut points to ensure they are not
unduly impacted by adjustments for disaster-stricken areas year-over-
year.
Response: We proposed to exclude the performance data of affected
contracts that meet the 60 percent

[[Page 15777]]

threshold (that is, 60 percent or more of the contract's enrollees
reside in a FEMA-designated Individual Assistance area at the time of
the extreme and uncontrollable circumstance) from the data used to set
cut points for non-CAHPS measures. We proposed to limit this rule to
non-CAHPS measures because CAHPS measures use relative distribution and
significance testing rather than clustering to determine Star Ratings
cut points. This rule, codified at Sec. Sec. 422.166(i)(9) and
423.186(i)(7), ensures that any impact of the disaster on their
measure-level scores does not impact the cut points for other
contracts. In our analysis, when affected contracts were removed from
the distribution of measure-level scores, the distribution of the
remaining contracts looked very similar, suggesting that the affected
contracts are randomly distributed among the rating levels. CMS will
continue to review the impact of the extreme and uncontrollable
circumstances policy on the Star Ratings of affected and unaffected
contracts to determine whether any enhancements need to be proposed to
these regulations in the future. Finally, the extreme and
uncontrollable circumstances policy applied in the 2019 Star Ratings
was very similar so existing contracts have access to data on how their
contracts were affected.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the
methodology for cut points for non-CAHPS measures as proposed at
Sec. Sec. 422.166(i)(9) and 423.186(i)(7) with technical revisions to
the verb tense.
(10) Reward Factor
Similarly, at Sec. Sec. 422.166(i)(10) and 423.186(i)(8), we
proposed that affected contracts with 60 percent or more of their
enrollees impacted would also be excluded from the determination of the
performance summary and variance thresholds for the Reward Factor.
However, these contracts would still be eligible for the Reward Factor
based on the mean and variance calculations of other contracts.
Below we summarize the comments we received on the Reward Factor
and provide our responses and final decisions.
Comment: A commenter supported the 60 percent cutoff for Reward
Factor calculations but was concerned that the number of contracts
excluded from Reward Factor calculations could become significant if
disasters become more frequent.
Response: CMS appreciates the concern about frequency of extreme
and uncontrollable circumstances and will continue to monitor
application of the policy to determine if enhancements are needed.
Summary of Regulatory Changes
For the reasons set forth in the proposed rule and our responses to
the related comments summarized earlier, we are finalizing the
methodology for the Reward Factor as proposed at Sec. Sec.
422.166(i)(10) and 423.186(i)(8) with technical revisions to the verb
tense.
2. Improving Clarity of the Exceptions Timeframes for Part D Drugs
(Sec. Sec. 423.568, 423.570, and 423.572)
In the proposed rule we proposed a change to Part D adjudication
timeframes related to exceptions requests in cases where a prescribing
physician's or other prescriber's supporting statement has not been
received by the plan sponsor. We proposed to limit the amount of time
an exceptions request can be held open in a pending status while the
Part D plan sponsor attempts to obtain the prescribing physician's or
other prescriber's supporting statement. Due to the importance of the
prescriber's supporting statement in the exceptions process, the
adjudication timeframes for a coverage determination that involves an
exceptions request do not begin until the prescribing physician's or
other prescriber's supporting statement is received by the Part D plan.
As we noted in the preamble to the proposed rule, we are seeking to
balance the importance of the plan receiving the prescriber's
supporting statement so that a thorough decision may be made on the
request and having a standard maximum time for notifying an enrollee of
an exceptions request decision. We believe greater certainty in the
exceptions process will be beneficial to enrollees and plans.
We proposed to amend Sec. Sec. 423.568(b), 423.570(d)(1) and
423.572(a) to state that, for an exceptions request, the plan must
notify the enrollee (and the prescribing physician or other prescriber
involved, as appropriate) of its decision no later than 72 hours (or 24
hours in the case of an expedited decision) after receipt of the
prescriber's supporting statement or 14 calendar days after receipt of
the request, whichever occurs first. We invited comments on this
proposal and received the following comments discussed below.
Comment: Several commenters expressed support for the proposed
changes to the Part D exceptions timeframes, citing increased clarity
in the exceptions process, and questioned that CMS finalize the rule as
proposed.
Response: We thank the commenters for their support of our proposal
to add clarity to the exceptions process. We believe the timeframes we
are finalizing in this rule establish clear timeframes for exceptions
requests and strike a balance between timely notification of decisions
to enrollees and affording plan sponsors sufficient time to obtain and
review prescriber supporting statements. As explained more fully below,
we are modifying the proposal based on comments we received requesting
that the process clearly account for circumstances where a prescriber's
supporting statement is received late in the 14 calendar day timeframe.
Under this final rule, if a supporting statement is received by the end
of 14 calendar days from receipt of the exceptions request, the Part D
plan sponsor must notify the enrollee (and the prescribing physician or
other prescriber involved, as appropriate) of its determination as
expeditiously as the enrollee's health condition requires, but no later
than 72 hours (24 hours for an expedited request) from the date the
supporting statement was received. If a supporting statement is not
received by the end of 14 calendar days from receipt of the exceptions
request, the Part D plan sponsor must notify the enrollee (and the
prescribing physician or other prescriber involved, as appropriate) of
its determination as expeditiously as the enrollee's health condition
requires, but no later than 72 hours (24 hours for an expedited
request) from the end of 14 calendar days from receipt of the
exceptions request. In addition to achieving the goal of greater
certainty in the exceptions process, we believe this modified approach
balances protection for beneficiaries with affording plan sponsors
sufficient time to obtain and review prescriber supporting statements.
Comment: Several commenters supported the enhanced clarity of the
proposed rule in establishing a maximum timeframe of 14 days for a plan
sponsor to notify an enrollee of a decision on an exceptions request,
but also believe there is some ambiguity on how to handle cases where a
prescriber's supporting statement is received late in the 14 day period
and questioned whether the plan sponsor would have 72 hours (24 hours
for expedited) from the end of the 14 days period in which to notify an
enrollee of a decision.
Response: We thank commenters for their support for more certainty
in the process and for requesting additional

[[Page 15778]]

clarity on how to handle situations where a prescriber's supporting
statement is received late in the proposed 14 calendar day period. We
agree that if a prescriber's supporting statement is received late in
this 14 calendar day period, the plan sponsor should have adequate time
to review the clinical documentation to determine whether it is
appropriate to approve the exceptions request. After consideration of
these comments, we are establishing the 14 calendar day time period as
the outer limit for receipt of a prescriber's supporting statement. In
all cases, the plan sponsor must notify the enrollee (and prescriber,
as appropriate) of its decision no later than 72 hours (24 hours for
expedited cases) of the date of receipt of the supporting statement. If
the supporting statement is not received by the end of the 14 calendar
days, then the plan sponsor must notify the enrollee (and prescriber,
as appropriate) of its decision no later than 72 hours (24 for
expedited cases) from the end of the 14 calendar days from receipt of
the exception request. Plan sponsors are responsible for making
reasonable and diligent efforts to promptly obtain a prescriber's
supporting statement if the supporting statement is not included with
the request for an exception, so as to avoid the need for an exceptions
request to remain in a pending status for any longer than necessary. We
are finalizing this rule to reflect the policy stated previously.
Comment: A few commenters stated that they believe the proposed
rule is inconsistent with recently released draft manual guidance,
which recommends a 14-day timeframe to receive a supporting statement.
Commenters expressed support for this approach and suggested that the
final rule clearly align with the manual guidance. Commenters also
requested that CMS phase-in the effective dates of the manual guidance
and final rule to allow plans time to implement new procedures. Three
commenters requested a January 1, 2020 compliance effective date.
Response: We agree that plan sponsors should have up to 14 calendar
days in which to attempt to obtain a prescriber's supporting statement.
The prescriber's supporting statement is a key component of the
exceptions process. We believe that allowing up to 14 calendar days for
a plan sponsor to attempt to obtain a supporting statement
appropriately balances the interests of enrollees receiving a timely
decision based on a thorough clinical review of the request and of plan
sponsors having adequate time to review the exceptions request. In all
cases, the enrollee must be notified of the decision as expeditiously
as his or her health condition requires. We emphasize that it is not
our expectation that plan sponsors routinely have exceptions requests
in a pending status for 14 calendar days. When an exceptions request is
received, the plan sponsor is responsible for promptly requesting any
documentation needed to support the request. When a prescriber's
supporting statement is received, the plan must notify the enrollee of
its decision within 72 hours (24 hours for expedited cases) of receipt
of the supporting statement.
In response to the commenters' request that there be alignment
between the approach to Part D exceptions request timeframes taken in
this final rule and the combined Part C & Part D appeals manual
guidance, we agree and believe the modified approach taken in this
final rule aligns with the guidance; however, if additional clarity is
necessary, revisions will be made to the manual guidance. We also agree
with commenters who requested an effective date of January 1, 2020. The
requirements of the final rule are applicable January 1, 2020, and we
believe this applicability date provides plan sponsors adequate time to
implement this regulatory requirement. We expect plans are already
making and notifying enrollees of decisions on exceptions requests
under a similar reasonable timeframe and that changes to plan sponsor
operations will be minimal.
Comment: A commenter recommended CMS work with prescribers to
emphasize the need to submit supporting statements as expeditiously as
possible.
Response: We thank the commenter for the suggestion. We do not have
a direct contractual relationship with prescribers by which we could
influence timely submission of supporting statements, but we will
review our provider tip sheets and other provider communications to
ensure relevant CMS publications convey the importance of a
prescriber's supporting statement in the Part D exceptions process. We
also encourage MA-PDs to communicate the importance of timely
submission of supporting statements in their provider communication
materials.
Comment: We received one comment suggesting we specify that in
addition to notifying enrollees of appeal rights, the MA plan be
required to notify enrollees that they are also entitled to submit a
new exceptions request. The commenter states it would not be
appropriate for an enrollee to be denied a medically necessary and
appropriate exception because an arbitrary deadline has been missed.
Response: Under existing regulations, if a plan sponsor denies the
request because it does not receive timely supporting clinical
documentation, the enrollee (or the prescriber on the enrollee's
behalf) has the opportunity to address the exceptions request on appeal
by submitting documentation that demonstrates the medical necessity of
an exception. The right of an enrollee to request a coverage
determination (which includes an exceptions request) is not
extinguished by a plan sponsor issuing a denial; however, if an
exceptions request is denied, then the appropriate next step is an
appeal, and the plan can review and approve the request for a formulary
or tiering exception on appeal.
Comment: A commenter requested confirmation that this requirement
does not impose an obligation on the plan to do outreach and obtain the
prescriber's supporting documentation within the 14-day timeframe. The
commenter noted that compliance with such a requirement within that
timeframe would be operationally difficult.
Response: We thank the commenter for feedback on the operational
challenges of outreach for the purposes of obtaining the prescriber's
supporting statement within the 14 calendar day timeframe. Under
existing regulatory requirements at Sec. 423.566(a), Part D plans must
have a procedure in place for making coverage decisions. This includes
soliciting necessary clinical documentation. This rule does not change
plan sponsors' obligation for doing outreach for necessary clinical
documentation but, instead, establishes a time limit for a plan
sponsor's attempts to obtain the information. When a Part D sponsor
does not have all of the information it needs to make a coverage
decision, the plan must make reasonable and diligent efforts to obtain
all necessary information, including medical records and other
pertinent documentation, from the enrollee's prescriber within the
applicable adjudication timeframe. For guidance on best practices
related to outreach, please see the February 22, 2017 HPMS memorandum
titled ``Updated Guidance on Outreach for Information to Support
Coverage.'' The memorandum can be found under ``Downloads'' at: https://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/index.html?redirect=/MedPrescriptDrugApplGriev/.
We believe that plans will have ample time to modify, as needed,
their operations related to adjudication timeframes for exceptions in
order to comply with this final rule. We expect plans are already
making and notifying

[[Page 15779]]

enrollees of decisions on exceptions requests under a similar
reasonable timeframe and that changes to plan sponsor operations will
be minimal.
Comment: A commenter suggested that CMS standardize the policy for
14-day tolling followed by the 72 and 24 hour(s) adjudication timelines
across all exceptions requests; including exceptions related to
formulary, tiering, quantity limits, and utilization management. The
commenter also suggested that CMS apply tolling to other types of
coverage determinations.
Response: Based on the comment, there may be some confusion
regarding what types of decisions are covered by this rule. This rule
covers all types of exceptions requests, including tiering and
formulary exceptions (that is, requests for off-formulary drugs and
exceptions to utilization management requirements applicable to
formulary drugs). We appreciate the suggestion, but this rule does not
apply to other types of coverage determinations that do not involve an
exceptions request; for example, a coverage determination where the
enrollee is seeking to satisfy a utilization management requirement,
such as prior authorization.
Comment: A commenter expressed support for our efforts to expedite
the decision making process for beneficiaries, but noted concern about
the potential for denials because providers missed a deadline, or
because the plan lacked the time to review the documentation, causing
beneficiaries to rely on the appeals process. The commenter suggested
CMS require plans read and incorporate documentation as long as it
comes within the deadline.
Response: We appreciate the commenter's concerns about the
potential for denials due to an adjudication deadline. However, we
believe it is important for there to be certainty in the timeframe in
which a plan has to notify an enrollee of its decision. We acknowledge
that there may be circumstances where the plan has to issue a denial
because supporting documentation has not been received in a timely
manner, but we believe this is offset by enhancing certainty in the
process by having clear adjudication timeframes. With respect to the
commenter's suggestion, Sec. 423.566(a) requires Part D plan sponsors
to have procedures for making timely coverage decisions. This includes
soliciting necessary clinical documentation. If a Part D plan sponsor
does not have all of the information it needs to make a coverage
decision, the plan must make reasonable and diligent efforts to obtain
all necessary information, including medical records and other
pertinent documentation, from the enrollee's provider.
Comment: A few commenters stated they support CMS providing
additional clarity, stating the previous ``reasonableness'' standard
may have resulted in longer wait times. However, these commenters
encourage a shorter timeframe, citing a risk of significant delays in
enrollees getting access to needed medication.
Response: We thank the commenters for expressing support for the
proposal to provide additional clarity. While we understand the
commenters' concern about the length of the timeframe for adjudicating
exceptions requests, we are attempting to balance the need to provide a
timely decision with affording plan sponsors sufficient time to attempt
to obtain the prescriber supporting statement and perform the clinical
review necessary to determine if an exception should be granted. Plans
are responsible for attempting to obtain any necessary supporting
documentation and for notifying an enrollee of its decision no later
than 72 hours of receipt of the prescriber's supporting statement (24
hours for an expedited request). Again, it is not our intent in
establishing this timeframe that all exceptions requests be in a
pending status for 14 calendar days but, instead, to establish an outer
limit on the time a case can be pending for receipt of the prescriber's
supporting statement. We agree with the commenters who urged us to
account for circumstances where the supporting statement is not
received promptly following a plan's request for such information from
the prescriber and to allow sufficient time for review of the
supporting clinical documentation. Accordingly, we are modifying our
proposal to account for circumstances where the prescriber's supporting
statement is received late in the 14 calendar day period.
Comment: A commenter suggested CMS consider replacing tolling
altogether in favor of fixed processing timeframes.
Response: Under this final rule, we are retaining the current
regulatory requirement of the plan sponsor notifying the enrollee (and
the prescribing physician or other prescriber involved, as appropriate)
of its determination as expeditiously as the enrollee's health
condition requires, but no later than 72 hours (24 hours for an
expedited request) after receipt of the physician's or other
prescriber's supporting statement. As explained earlier, the
prescriber's supporting statement is a critical aspect of the
exceptions process. Therefore, we are retaining the existing standard
of tying the start of the adjudication timeframe to receipt of the
supporting statement. A plan sponsor cannot adequately assess the
merits of an exceptions request in the absence of the prescriber's
supporting statement. However, we are establishing a maximum timeframe
under which an exceptions request can be held open pending receipt of
the prescriber's supporting statement. If a supporting statement is not
received by the end of 14 calendar days from receipt of the exceptions
request, the Part D plan sponsor must notify the enrollee (and the
prescribing physician or other prescriber involved, as appropriate) of
its determination as expeditiously as the enrollee's health condition
requires, but no later than 72 hours (24 hours for an expedited
request) from the end of 14 calendar days from receipt of the
exceptions request. We believe this approach achieves the goals of
allowing adequate time to obtain the prescriber statement that supports
the exceptions request and establishing greater certainty in the
process by establishing a maximum period of time a request can be held
open.
Based on several comments received, we are finalizing this
provision with modification to account for circumstances where the
prescriber's supporting statement is received late in the 14 calendar
day period. Under this final rule, a Part D plan sponsor must notify
the enrollee (and the prescribing physician or other prescriber
involved, as appropriate) of its determination on an exceptions request
as expeditiously as the enrollee's health condition requires, but no
later than 72 hours (24 hours for an expedited request) after receipt
of the physician's or other prescriber's supporting statement. If a
supporting statement is not received by the end of 14 calendar days
from receipt of the exceptions request, the Part D plan sponsor must
notify the enrollee (and the prescribing physician or other prescriber
involved, as appropriate) of its determination as expeditiously as the
enrollee's health condition requires, but no later than 72 hours (24
hours for an expedited request) from the end of 14 calendar days from
receipt of the exceptions request. We believe this approach achieves
the goal of balancing the importance of the plan receiving the
prescriber's supporting statement so that a thorough review of the
request can be performed and having a maximum time for notifying an
enrollee of a decision so that exceptions requests are not held in a
pending status for an indefinite or unreasonable period of time.

[[Page 15780]]

C. Clarifying Program Integrity Policies

1. Preclusion List Requirements for Prescribers in Part D and
Individuals and Entities in MA, Cost Plans, and PACE
a. Background
In the April 2018 final rule, we removed several provider
enrollment requirements pertaining to the MA and Part D programs. One
requirement, outlined in Sec. 423.120(c)(6), stated that for a
prescription to be eligible for coverage under the Part D program, the
prescriber must have: (1) An approved enrollment record in the Medicare
fee-for-service program; or (2) a valid opt-out affidavit on file with
a Part A/Part B Medicare Administrative Contractor (A/B MAC). A second
requirement, outlined in Sec. 422.222, stated that providers
furnishing health care items or services to a Medicare enrollee who
receives his or her Medicare benefit through an MA organization must be
enrolled in Medicare and be in an approved status no later than January
1, 2019. (The removal of these requirements had been proposed in a
proposed rule published in the Federal Register on November 28, 2017,
titled ``Medicare Program; Contract Year 2019 Policy and Technical
Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-
for-Service, the Medicare Prescription Drug Benefit Programs, and the
PACE Program'' (82 FR 56336) (hereafter referred to as the November
2017 proposed rule).
The overall purpose of Medicare provider enrollment is to prevent
fraud, waste, and abuse, and to protect Medicare beneficiaries, by
allowing CMS to carefully screen all providers and suppliers
(especially those that potentially pose an elevated risk to Medicare)
to confirm that they are qualified to furnish, order, certify, refer,
or prescribe Medicare items, services, or drugs.
During our preparations to implement the Part D and MA enrollment
provisions by the January 1, 2019 effective date, several provider
organizations expressed concerns about our forthcoming requirements.
The principal concern was that the burden of the enrollment process on
the provider community would outweigh the program integrity benefits to
the MA and Part D programs.
Given this, we stated in the April 2018 final rule our belief that
the best means of reducing the burden of the Part D and MA enrollment
requirements without compromising our payment safeguard objectives
would be to focus on prescribers and providers that pose an elevated
risk to Medicare beneficiaries and the Trust Funds. We accordingly
established in the April 2018 final rule an overall policy under which:
(1) Such problematic parties would be placed on a ``preclusion list'';
and (2) payment for Part D drugs and MA services and items prescribed
or furnished by these individuals and entities would be rejected or
denied, as applicable. Among the policies we finalized in the April
2018 final rule were the following:
In Sec. 423.100 (for Part D) and Sec. 422.2 (for MA), we
stated that the term ``preclusion list'' means a CMS-compiled list of,
as applicable, prescribers and providers that:
++ Meet all of the following requirements:
++ The individual or entity is currently revoked from the Medicare
program under Sec. 424.535.
++ The individual or entity is currently under a reenrollment bar
under Sec. 424.535(c).
++ CMS determines that the underlying conduct that led to the
revocation is detrimental to the best interests of the Medicare
program. In making this determination under this paragraph, CMS
considers the following factors:
--The seriousness of the conduct underlying the individual's or
entity's revocation.
--The degree to which the individual's or entity's conduct could
affect the integrity of the Part D or MA program.
--Any other evidence that CMS deems relevant to its determination;
or
++ Meet both of the following requirements:
++ The individual or entity has engaged in behavior for which CMS
could have revoked the individual or entity to the extent applicable if
they had been enrolled in Medicare.
++ CMS determines that the underlying conduct that would have led
to the revocation is detrimental to the best interests of the Medicare
program. In making this determination under this paragraph, CMS
considers the following factors:
--The seriousness of the conduct underlying the individual's or
entity's revocation.
--The degree to which the individual's or entity's conduct could
affect the integrity of the Part D or MA program.
--Any other evidence that CMS deems relevant to its determination.
We revised and added various provisions in 42 CFR part
498, subpart A that permitted individuals and entities to appeal their
inclusion on the preclusion list. Specifically:
++ We added a new paragraph (20) to Sec. 498.3(b) stating that a
CMS determination to include an individual or entity on the preclusion
list constitutes an initial determination.
++ In Sec. 498.5, we added a new paragraph (n) containing the
following provisions:
--In paragraph (n)(1), we stated that any individual or entity
dissatisfied with an initial determination or revised initial
determination that they are to be included on the preclusion list may
request a reconsideration in accordance with Sec. 498.22(a).
--In paragraph (n)(2), we stated that if CMS or the individual or
entity under paragraph (n)(1) is dissatisfied with a reconsidered
determination under paragraph (n)(1), or a revised reconsidered
determination under Sec. 498.30, CMS or the individual or entity is
entitled to a hearing before an administrative law judge (ALJ).
--In paragraph (n)(3), we stated that if CMS or the individual or
entity under paragraph (n)(2) is dissatisfied with a hearing decision
as described in paragraph (n)(2), CMS or the individual or entity may
request review by the Departmental Appeals Board (DAB) and the
individual or entity may seek judicial review of the DAB's decision.
In Sec. 423.120(c)(6)(v) (for Part D) and Sec.
422.222(a)(2) (for MA), we stated that CMS would send written notice to
the individual or entity via letter of their inclusion on the
preclusion list. The notice would contain the reason for this inclusion
and would inform the individual or entity of their appeal rights. We
further stated that the affected party could appeal their inclusion on
the preclusion list in accordance with Part 498.
We stated in Sec. 423.120(c)(6)(iv)(A) that a Part D
sponsor or its Pharmacy Benefit Manager (PBM) must not reject a
pharmacy claim or request for reimbursement for a Part D drug unless
the sponsor has provided the written notice to the beneficiary
described in Sec. 423.120(c)(6)(iv)(B). Under paragraph (iv)(B), the
Part D sponsor or its PBM must:
++ Provide an advance written notice to any beneficiary who has
received a prescription from a prescriber on the preclusion list as
soon as possible but to ensure that the beneficiary receives the notice
no later than 30 days after the posting of the most recent preclusion
list; and
++ Ensure that reasonable efforts are made to notify the prescriber
of a beneficiary who was sent a notice under paragraph (iv)(B).

[[Page 15781]]

We stated in the preamble to the April 2018 final rule
that individuals and entities would only be placed on the preclusion
list upon exhausting their first level of appeal.
In the preamble to the November 2017 proposed rule (82 FR
56446), we stated that if a beneficiary's access to a service, item, or
drug is denied because of the application of the preclusion list to his
or her prescriber or provider, the beneficiary would be permitted to
appeal alleged errors in applying the preclusion list. In the preamble
to the April 2018 final rule (83 FR 16660), however, we stated that if
payment is denied because the prescriber or provider is on the
preclusion list, the beneficiary would not have the right to appeal as
denials due to preclusion are not coverage determinations accompanied
by appeal rights.
We stated in the preamble to the April 2018 final rule (83
FR 16642) that an unenrolled individual or entity would remain on the
preclusion list for the same length of time as the reenrollment bar
that we could have imposed on the individual or entity had they been
enrolled in Medicare and then revoked.
We also stated in that preamble that the preclusion list provisions
in the April 2018 final rule (83 FR 16440) were to become effective on
January 1, 2019.
b. Proposed Changes
In CMS-4185-P, we proposed several changes to our existing
preclusion list policies. These changes, for the most part, stemmed
from further CMS consideration of, and stakeholder feedback on, some of
the provisions we finalized in the April 2018 final rule and the need
for modifications thereto. These proposed provisions, and brief
explanations of the rationale for them, are summarized in this section
of this final rule.
(1) Appeals Process for Individuals and Entities on the Preclusion List
As already mentioned, we stated in the preamble to the April 2018
final rule (83 FR 16662) that individuals and entities would only be
placed on the preclusion list upon exhausting their first level of
appeal. Upon further analysis, we became concerned that there could be
a very lengthy delay before the individual or entity is actually placed
on the list. This is because the individual or entity, under existing
regulations, would be able to first appeal their Medicare revocation
and, if unsuccessful, could then appeal their placement on the
preclusion list (due to the revocation). This is inconsistent with the
principal goal of the preclusion list, which is to prevent payment for
Part D drugs or MA services or items prescribed or furnished, as
applicable, by problematic parties. So as to shorten the timeframe
before a provider is placed on the preclusion list, we proposed the
following regulatory revisions:
In Sec. 423.120(c)(6)(v), we proposed to:
++ Consolidate the existing version of paragraph (v) into a revised
Sec. 423.120(c)(6)(v)(A).
++ Establish a new Sec. 423.120(c)(6)(v)(B) stating that in
situations where the prescriber's inclusion on the preclusion list is
based on a contemporaneous Medicare revocation under Sec. 424.535:
--The notice described in paragraph (c)(6)(v)(A) must also include
notice of the revocation, the reason(s) for the revocation, and a
description of the prescriber's appeal rights concerning the
revocation.
--The appeals of the prescriber's inclusion on the preclusion list
and the prescriber's revocation shall be filed jointly by the
prescriber and, as applicable, considered jointly by CMS under 42 CFR
part 498.
In Sec. 422.222(a)(2), we proposed to do the following:
++ Move the existing version of this paragraph into a new Sec.
422.222(a)(2)(i).
++ Establish a new Sec. 422.222(a)(2)(ii) stating that in
situations where the individual's or entity's inclusion on the
preclusion list is based on a contemporaneous Medicare revocation under
Sec. 424.535:
--The notice described in paragraph (a)(2)(i) must also include
notice of the revocation, the reason(s) for the revocation, and a
description of the individual's or entity's appeal rights concerning
the revocation.
--The appeals of the individual's or entity's inclusion on the
preclusion list and the individual's or entity's revocation shall be
filed jointly by the individual or entity and, as applicable,
considered jointly by CMS under 42 CFR part 498.
In Sec. 498.5(n)(1), we proposed to:
++ Move the existing version of this paragraph to a new Sec.
498.5(n)(1)(i).
++ Establish a new Sec. 498.5(n)(1)(ii)(A) stating that in
situations where the individual's or entity's inclusion on the
preclusion list is based on a Medicare revocation under Sec. 424.535
and the individual or entity receives contemporaneous notice of both
actions, the individual or entity may request a joint reconsideration
of both the preclusion list inclusion and the revocation in accordance
with Sec. 498.22(a).
++ Establish a new Sec. 498.5(n)(1)(ii)(B) stating that the
individual or entity may not submit separate reconsideration requests
under paragraph (ii)(A) for inclusion on the preclusion list or a
revocation if the individual or entity received contemporaneous notice
of both actions.
We believed that these changes would clarify our expectations and
the program procedures concerning the filing of appeals when a party's
placement on the preclusion list is based on a Medicare revocation. We
also stressed that our proposed appeals consolidation would not affect
appeals of OIG exclusions, which are handled through a separate process
outlined in the applicable OIG regulations.
(2) Timing of Addition to the Preclusion List
While, again, we stated in the preamble to the April 2018 final
rule (83 FR 16662) that prescribers and providers would only be placed
on the preclusion list upon exhausting their first level of appeal, we
did not include this language in the regulatory text. We therefore
proposed to do so in CMS-4185-P. Specifically, we proposed in new Sec.
423.120(c)(6)(v)(C)(1) (for Part D) and new Sec. 422.222(a)(3)(i) (for
MA) that, respectively, a prescriber or provider would only be included
on the preclusion list after the expiration of either of the following:
If the prescriber or provider does not file a
reconsideration request under Sec. 498.5(n)(1), the prescriber or
provider will be added to the preclusion list upon the expiration of
the 60-day period in which the prescriber or provider may request a
reconsideration.
If the prescriber or provider files a reconsideration
request under Sec. 498.5(n)(1), the prescriber or provider will be
added to the preclusion list effective on the date on which CMS, if
applicable, denies the prescriber's or provider's reconsideration.\40\
---------------------------------------------------------------------------

\40\ In the April 2018 final rule, we adopted cross-references
in 42 CFR parts 417 and 460 to part 422 so that our MA preclusion
list provisions in that rule would also apply to, respectively, cost
plans (Part 417) and PACE organizations (Part 460). Consistent with
said cross-references, we proposed that our MA preclusion list
provisions in the proposed rule would similarly apply to cost plans
and PACE organizations.
---------------------------------------------------------------------------

Notwithstanding the above, we noted that section 1862(e) of the Act
(42 U.S.C. 1395y(e)) states that no federal health care program payment
may be made for any items or services furnished by an excluded
individual or entity, or directed or prescribed by an excluded
physician. We believed that a failure to add an excluded provider or
prescriber

[[Page 15782]]

to the preclusion list until the expiration of the applicable time
periods in Sec. 423.120(c)(6)(v)(C)(1) (for Part D) and Sec.
422.222(a)(3)(i) (for MA) would be inconsistent with section 1862(e) of
the Act. Accordingly, we proposed in new Sec. 423.120(c)(6)(v)(C)(2)
(for Part D) and Sec. 422.222(a)(3)(ii) (for MA) that an excluded
prescriber or provider would be added to the preclusion list effective
on the date of the exclusion.
(3) Effective Date
We generally proposed that the preclusion list regulatory revisions
and additions addressed in CMS-4185-P would become applicable to MA
organizations (and cost plans and PACE organizations by virtue of
cross-references in parts 417 and 460 to the MA part 422 regulation)
and Part D plans on January 1, 2020, which we believed would give
stakeholders adequate time to prepare for our proposed changes. We did,
however, propose one exception to this, in that the effective date of
our previously mentioned consolidated appeals provisions in Sec. Sec.
423.120(c)(6)(v), 422.222(a)(2), and Sec. 498.5(n)(1) would be 60 days
after their publication in a final rule. This was to ensure that
problematic providers and prescribers were placed on the preclusion
list as soon as possible. We also solicited public comments on whether
some or all of our other proposed preclusion list provisions discussed
in section III.C. of the proposed rule should become effective and
applicable beginning 60 days after the publication date of a final
rule.
We noted that the January 1, 2019 preclusion list effective date
identified in the April 2018 final rule for the provisions finalized in
that rule would remain in place.
(4) Claim Denials and Beneficiary Notification
We stated in the preamble to the April 2018 final rule (83 FR
16440) that, upon CMS' publication of the first preclusion list, once a
prescriber or provider is added to such initial list after the
completion of their first level of appeal, claims would not be impacted
for up to a 90-day period thereafter (82 FR 16667). We explained that
this 90-day period would include--(1) a 30-day period for the plans and
MA organizations to intake the preclusion list data; and (2) a 60-day
period in which the plan or MA organization would--(a) notify the
beneficiary of the prescriber's or provider's preclusion; and (b) allow
time for the beneficiary to transition to a new prescriber or provider.
Once this 90-day period expires, claim denials and rejections would
commence. Yet for all subsequent updates (that is, all updates after
the release of the initial preclusion list), we would not require the
expiration of a 90-day period before claims were denied.
After additional review, we became concerned that beneficiaries
whose prescribers and providers were added to subsequent updates to the
preclusion list would not receive any notice of those additions nor of
the consequences of placement of such providers and prescribers on the
preclusion list. Consequently, we proposed in CMS-4185-P that claim
denials for preclusion list updates, beginning in 2020, would occur
consistent with the following timeframes:
Upon the posting of the updated preclusion list, the Part
D sponsor or MA organization would be required to send notice to the
beneficiary that his or her prescriber or provider has been added to
preclusion list within 30 days of the posting of the updated preclusion
list.
Beginning 60 days after sending the beneficiary notice(s)
described in the previous paragraph, the plan sponsor or MA
organization would deny the prescriber's or provider's prescriptions or
claims. This 60-day period would give beneficiaries time to locate
another prescriber or provider from whom they can receive Part D
prescriptions or MA services and items.
We recognized in the proposed rule that applying this 60 to 90-day
period to subsequent updates (rather than exclusively to the initially
published list) could result in a precluded prescriber or provider
being permitted to continue treating Part D and MA beneficiaries for up
to 3 months without their Part D prescriptions or MA claims being
denied. However, we believed that the prevention of potentially serious
dangers to the health and safety of Medicare beneficiaries that could
ensue if they are without crucial medications for an extended period
must take precedence.
Although we discussed the delayed claim denial period in the
preamble to the April 2018 final rule, we did not incorporate this
policy into the regulatory text. In addition, while Sec. 423.120(c)(6)
contained certain provisions regarding beneficiary notification about
the preclusion list, there were no such concomitant provisions for MA
in Sec. 422.222. Thus, we proposed to make the following revisions and
additions, as applicable, to Sec. 423.120(c)(6) and Sec. 422.222 in
the April 2018 final rule:
Section 422.222 would be revised as follows:
++ Existing paragraph (a)(1) would be moved to a new paragraph
(a)(1)(i) that would state: ``Except as provided in paragraph
(a)(1)(ii) of this section, an MA organization must not make payment
for a health care item or service furnished by an individual or entity
that is included on the preclusion list, defined in Sec. 422.2.''
++ New paragraph (a)(1)(ii) would state: ``With respect to MA
providers that have been added to an updated preclusion list, the MA
organization must do all of the following:''
++ New paragraph (a)(1)(ii)(A) would state: ``No later than 30 days
after the posting of this updated preclusion list, must provide an
advance written notice to any beneficiary who has received an MA
service or item from the individual or entity added to the preclusion
list in this update.''
++ New paragraph (a)(1)(ii)(B) would state: ``Must ensure that
reasonable efforts are made to notify the individual or entity
described in paragraph (a)(1)(ii) of this section of a beneficiary who
was sent a notice under paragraph (a)(1)(ii)(A) of this section; and''
++ New paragraph (a)(1)(ii)(C) would state: ``Must not deny payment
for a service or item furnished by the newly added individual or
entity, solely on the ground that they have been included in the
updated preclusion list, in the 60-day period after the date it sent
the notice described in paragraph (a)(1)(ii)(A) of this section.''
We noted that, consistent with Sec. 422.224, the prohibition
against paying precluded individuals and entities would include
contracted and non-contracted parties for purposes of the provisions in
Sec. 422.222(a)(1).
Consistent with our proposed changes to Sec. 422.222(a)(1), we
proposed to delete the existing structure of Sec. 423.120(c)(6)(iv),
which we cited previously, and replace it with the following:
++ A new opening paragraph of (c)(6)(iv) would state: ``With
respect to Part D prescribers that have been added to an updated
preclusion list, the Part D plan sponsor must do all of the
following:''
++ Revised paragraph (c)(6)(iv)(A) would state: ``Subject to all
other Part D rules and plan coverage requirements, and no later than 30
days after the posting of this updated preclusion list, must provide an
advance written notice to any beneficiary who has received a Part D
drug prescribed by a prescriber added to the preclusion list in this
update.''

[[Page 15783]]

++ Revised paragraph (c)(6)(iv)(B) would state: ``Must ensure that
reasonable efforts are made to notify the prescriber described in
paragraph (c)(6)(iv) of this section of a beneficiary who was sent a
notice under paragraph (c)(6)(iv)(A) of this section; and''
++ New paragraph (c)(6)(iv)(C) would state: ``Must not reject a
pharmacy claim or deny beneficiary request for reimbursement for a Part
D drug prescribed by the prescriber, solely on the ground that they
have been included in the updated preclusion list, in the 60-day period
after the date it sent the notice described in paragraph (c)(6)(iv)(A)
of this section.''
We mentioned that for providers and prescribers that are both on
the preclusion list and excluded by the OIG, the aforementioned
beneficiary notification process would not be intended to replace or
supplant any existing OIG processes for notifying beneficiaries of
excluded providers or prescribers.
(5) Beneficiary Appeals
We noted earlier that in the preamble to the April 2018 final rule,
we stated that if payment is denied because the prescriber or provider
is on the preclusion list, the affected beneficiary would not have the
right to appeal that denial as denials due to preclusion are not
coverage determinations accompanied by appeal rights. As we did not
include accompanying regulatory text in the April 2018 final rule, we
proposed in CMS-4185-P to add new Sec. 423.120(c)(6)(viii) and Sec.
422.222(a)(4) stating that payment denials based upon, respectively, a
prescriber's or provider's inclusion on the preclusion list are not
appealable by beneficiaries.
(6) Felony Convictions
We proposed in the November 2017 proposed rule to keep unenrolled
prescribers and providers on the preclusion list for the same length of
time as the reenrollment bar that we could have imposed on the
prescriber or provider had they been enrolled and then revoked. While
this policy was finalized in the April 2018 final rule, it was not
included in the regulatory text. Given this, we proposed several
regulatory revisions.
First, we proposed to revise the definitions of ``preclusion list''
in Sec. Sec. 423.100 and 422.2. The current definitions contain two
general categories of parties that could be included on the preclusion
list--(1) prescribers and providers that are currently revoked from
Medicare and are under a reenrollment bar; and (2) prescribers and
providers that have engaged in behavior for which CMS could have
revoked the prescriber or provider to the extent applicable had they
been enrolled in Medicare. While these two categories encompass felony
convictions, we stated in CMS-4185-P that the severity of felonious
behavior warranted the establishment of a third category that is
specific to felony convictions. We therefore proposed to remove felony
convictions from the scope of the first two categories, with the new
third category covering prescribers and providers--regardless of
whether they are or were enrolled in Medicare--that have been convicted
of a felony under federal or state law within the previous 10 years
that CMS deems detrimental to the best interests of the Medicare
program. Recognizing that the facts of each case are different and must
be judged on their own merits, we proposed that CMS would first
consider the following factors before determining whether a
prescriber's or provider's inclusion on the preclusion list is
warranted under our new proposed third category for felony convictions:
(1) The severity of the offense; (2) when the offense occurred; and (3)
any other information that CMS deems relevant to its determination. In
conformity with this change, we also proposed to add an ``or'' to the
regulatory text immediately after the second category in the preclusion
list definitions; this would clarify that a prescriber or provider need
only come within the purview of one of the three categories to be
included on the preclusion list.
Second, we proposed to establish new Sec. Sec. 423.120(c)(6)(vii)
and 422.222(a)(5) that would codify, clarify, and expand upon the
previously mentioned policy concerning the length of a prescriber's or
provider's inclusion on the preclusion list:
In Sec. Sec. 423.120(c)(6)(vii)(A) and 422.222(a)(5)(i),
we proposed that, except as provided in Sec. Sec.
423.120(c)(6)(vii)(C) and (D) and 422.222(a)(5)(iii) and (iv), revoked
prescribers and providers, respectively, would be included on the
preclusion list for the same length of time as the prescriber's or
provider's reenrollment bar.
In Sec. Sec. 423.120(c)(6)(vii)(B) and 422.222(a)(5)(ii),
we proposed that, except as provided in Sec. Sec.
423.120(c)(6)(vii)(C) and (D) and 422.222(a)(5)(iii) and (iv),
unenrolled prescribers and providers, respectively, would be included
on the preclusion list for the same length of time as the reenrollment
bar that we could have imposed on the prescriber or provider had they
been enrolled and then revoked.
In Sec. Sec. 423.120(c)(6)(vii)(C) and
422.222(a)(5)(iii), we proposed that, except as provided in Sec. Sec.
423.120(c)(6)(vii)(D) and 422.222(a)(5)(iv), prescribers and
providers--regardless of whether they are or were enrolled in
Medicare--that are included on the preclusion list because of a felony
conviction would remain on the preclusion list for a 10-year period,
beginning on the date of the felony conviction, unless CMS determines
that a shorter time length of time is warranted. Factors that we would
consider in making such a determination would be: (1) The severity of
the offense; (2) when the offense occurred; and (3) any other
information that CMS deems relevant to its determination.
We mentioned in CMS-4185-P that because our proposed preclusion
list period for felonious prescribers and providers would begin on the
date of the conviction, such parties may actually be included on the
preclusion list for less than 10 years even if CMS imposes the full 10-
year period.
We also explained in CMS-4185-P that the OIG in many cases excludes
providers and prescribers for a period that is longer than the period
permitted for a reenrollment bar under Sec. 424.535(c). We believed
that CMS should keep an excluded provider or prescriber on the
preclusion list at least until the provider or prescriber has been
reinstated by the OIG in order to be consistent with section 1862(e) of
the Act. We thus proposed in new Sec. 423.120(c)(6)(vii)(D) and
422.222(a)(5)(iv) that in cases where a prescriber or provider is
excluded by the OIG, the prescriber or provider remains on the
preclusion list until the expiration of the CMS-imposed preclusion list
period or reinstatement by the OIG, whichever occurs later.
(7) Beneficiary Liability
Consistent with our existing authority under section 1857(e)(1) of
the Act, we proposed to add a new paragraph (g)(1)(iv) to Sec. 422.504
under which the MA organization is required to agree that the enrollee
must not have any financial liability for services or items furnished
to the enrollee by an MA contracted individual or entity on the
preclusion list, as defined in Sec. 422.2 and as described in Sec.
422.222. This provision would be limited to providers under contract
with the MA organization, for we believed this is consistent with the
general applicability and scope of Sec. 422.504 and the ability of the
MA organization to control or

[[Page 15784]]

impose requirements on the health care providers that furnish covered
services and items to enrollees. We stated our belief that proposed
paragraph (g)(1)(iv) would help financially protect beneficiaries from
problematic providers. It would also formally codify this position,
which we expressed in the preamble to the April 2018 final rule but did
not address in the regulatory text.
(8) Technical Correction Concerning the Term ``Individual'' in Sec.
423.120(c)(6)
We also proposed to make technical changes to Sec.
423.120(c)(6)(i), (ii), (iii), and (vi). These paragraphs stated as
follows, respectively:
Except as provided in paragraph (c)(6)(iv) of this
section, a Part D sponsor must reject, or must require its PBM to
reject, a pharmacy claim for a Part D drug if the individual who
prescribed the drug is included on the preclusion list, defined in
Sec. 423.100.
Except as provided in paragraph (c)(6)(iv) of this
section, a Part D sponsor must deny, or must require its PBM to deny, a
request for reimbursement from a Medicare beneficiary if the request
pertains to a Part D drug that was prescribed by an individual who is
identified by name in the request and who is included on the preclusion
list, defined in Sec. 423.100.
A Part D plan sponsor may not submit a prescription drug
event (PDE) record to CMS unless it includes on the PDE record the
active and valid individual NPI of the prescriber of the drug, and the
prescriber is not included on the preclusion list, defined in Sec.
423.100, for the date of service.
CMS has the discretion not to include a particular
individual on (or if warranted, remove the individual from) the
preclusion list should it determine that exceptional circumstances
exist regarding beneficiary access to prescriptions.
Because some states permit pharmacies to prescribe medications
under very specific circumstances, we believed that the use of the term
``individual'' in paragraphs (i), (ii), (iii), and (vi) was too
restrictive. We therefore proposed in paragraphs (i), (ii), and (vi) to
change this term to ``prescriber'' so as to clarify that the prescriber
need not be an individual when these specific circumstances are met. In
a similar vein, we proposed:
In Sec. 423.120(c)(6)(iii) to change the phrase
``individual NPI of the prescriber'' to ``NPI of the prescriber'', and
In paragraph (2)(i) of the definition of ``Preclusion
list'' in Sec. 423.100 (and as reflected in our previously discussed
proposal to revise this paragraph (see section (C)(1)(b)(6) above)) to
change the phrase ``he or she'' to ``prescriber.''
c. Comments Received
We received comments concerning our proposed changes from
approximately 25 commenters. The comments are summarized below,
followed respectively by our responses thereto. They are organized into
general categories, though we note that some comments and responses
involve multiple policy areas.
(1) Claim Denials
Comment: With respect to claim denials, a commenter questioned: (1)
Whether plans should deny all claim types (regardless of origin) when
the claim date of service is equal to or greater than the ``claim
reject date'' (for example, point of service claims; batch claims;
paper claims); and (2) whether the ``claim reject date'' is the date
that CMS will use to edit the PDE. In a similar vein, another comment
questioned whether: (1) Part D plan sponsors should utilize the ``claim
reject date'' (rather than the ``effective date'' field) as the
relevant field for the date when claim rejections begin; and (2) the
``claim reject date'' is the relevant date for when CMS validates the
PDE.
Response: We will be addressing operational issues in guidance as
necessary and appropriate. We note, though, that PDE editing will use
the ``claim reject date.'' (See HPMS memorandum, ``February 2019
Updates to the Drug Data Processing System (``DDPS''),'' dated January
8, 2019 and released January 9, 2019.)
Comment: A commenter stated that if CMS intends for each Part D
plan to separately track a 60-day period after beneficiary notices have
been sent before claim denials can occur, this could create non-
standardized effective dates for claim denials across the industry. The
commenter cited the example of one plan sponsor sending the beneficiary
notice on day 10 and another sending the notice on day 20. The
commenter recommended that CMS standardize the timing of the effective
claim denial date so as to ensure (1) consistency within the industry
and (2) that claim rejects start on the same day for precluded
prescribers.
Response: We respectfully decline to adopt the commenter's
suggestion as a regulatory requirement. Given that Part D plans may
have different internal procedures, different numbers of beneficiaries
to contact, and different operational mechanisms, we believe it is best
to afford them the maximum feasible flexibility in sending out
beneficiary notices. We believe this ensures that all beneficiaries are
provided equal notice and time to find a new provider or prescriber.
However, we do understand the commenter's concerns, and have indicated
a claims denial/reject date on the preclusion file shared with both
Part C and D plans. This date indicates the close of the 90-day period
and the latest point at which claims must deny or reject. We will
diligently monitor the preclusion list's implementation; should we
determine that more uniformity may be necessary, we will consider
addressing the matter in future rulemaking as appropriate.
Comment: Once a provider or prescriber has been added to the
preclusion list and claims from the precluded provider or prescriber
start to be denied, a commenter questioned how CMS expects a Part C
organization determination or Part D coverage determination (submitted
by either a provider on the preclusion list or an enrollee whose
provider or prescriber is on the preclusion list) to be reviewed.
Response: We respectfully believe that this comment may reflect a
misunderstanding of how a point-of-sale rejection is treated in the
Part D program. A rejection of a pharmacy claim at point-of-sale does
not constitute a coverage determination. If a claim is rejected because
the prescriber is on the preclusion list, the appropriate action is for
the enrollee to find another prescriber to prescribe the drug. Further,
as finalized in Sec. 422.222(a)(4), a beneficiary enrolled in an MA
plan (or a cost plan or PACE organization under the incorporation of
the MA regulation into those programs at Sec. Sec. 417.478 and 460.86)
will not be able to appeal a payment denial that is based on an
individual or entity's placement on the preclusion list. The appeal
rights available to an enrollee under 42 CFR part 422, subpart M are
tied to whether a decision by the MA plan is an organization
determination; because there will be no appeal rights for these
denials, we do not believe it is appropriate to characterize denials
that occur solely because of the preclusion list requirements as
organization determinations. We believe that this policy appropriately
balances the need to provide an appeal process to ensure protection of
Medicare beneficiaries and their ability to challenge denials issued by
an MA plan; an MA plan will not have any discretion to pay a precluded
provider where this final rule prohibits payment and an appeal by an
enrollee of a denial of payment to the precluded provider could never
be resolved in the enrollee's favor. Therefore, this is not an issue
that can be resolved through the benefit appeals process set forth at
part

[[Page 15785]]

422, subpart M, under the regulation we are finalizing.
(2) Provider Reinstatement
Comment: Several commenters stated that CMS should explain the
process and timing that will be used when a provider is no longer on
the preclusion list. A commenter sought clarification as to what a
provider record looks like when the provider is reinstated on the file
and how this compares to the original provider record.
Response: The preclusion list file will include a reinstatement
date indicating when a provider or prescriber is no longer precluded.
The reinstatement date will be published upon the provider or
prescriber being reinstated. Records of a provider's or prescriber's
preclusion will not be removed from the file. We will clarify
additional operational details pertaining to these issues in sub-
regulatory guidance.
Comment: A commenter requested confirmation as to whether
reinstated providers will: (1) Be removed from the preclusion list; or
(2) remain in the preclusion list database with a date indicating the
end of their preclusion period.
Response: As already mentioned, records of a provider's or
prescriber's preclusion will not be removed from the preclusion list
file. In such instances, the reinstated provider or prescriber will
remain in the preclusion list database. Upon the prescriber or provider
being reinstated, the reinstatement date will be indicated.
Comment: A commenter questioned whether reinstatement dates will be
provided for each preclusion effective date and, if so, how far in
advance of a provider being reinstated will the date be provided in the
file.
Response: CMS will not provide advance notice regarding a
reinstatement. However, once the provider is reinstated, CMS will
populate a reinstatement date on the file.
Comment: A commenter recommended that CMS clarify: (1) That the
removal of a provider who successfully appeals his or her addition to
the preclusion list would not be retroactive to the date of the
provider's original preclusion; (2) that the MA plan would not be
required to retroactively pay claims for such a provider; and (3) how
MA plans should implement such a provider's removal from the preclusion
list. These suggestions stemmed from several concerns the commenter
raised. First, requiring plans to pay such claims retroactively could
create confusion among members, who may be urged by their precluded
providers to continue to see the precluded provider during the appeals.
Second, members may be liable for cost sharing associated with the re-
submitted claims. Third, plans would face uncertainty in determining
how to pay such claims (for example, at what payment rate), for the
provider contract will likely have been terminated.
Response: We respectfully disagree with the commenter's apparent
request that CMS not reinstate a provider or prescriber back to the
original preclusion date. Providers or prescribers who are successful
upon appeal will be reinstated back to the preclusion effective date.
Once reinstated, the provider would have the option of resubmitting
claims that had been denied during the preclusion period, which would
be eligible for payment by an MA plan under this final rule, using the
plan's rules for claims processing; we are not finalizing a requirement
that an MA plan must waive any claims filing deadlines that may have
elapsed in the time between the date of service and the decision to
reinstate the provider. If a provider is reinstated retroactively,
plans should pay claims that were rejected or denied due to the
preclusion using, again, the MA plan's usual claims processing
procedures; it is, however, the provider's responsibility to resubmit
any rejected or denied claims. If a beneficiary paid out of pocket for
a Part D drug that was rejected based on the prescriber's preclusion,
the beneficiary would have to submit a request for reimbursement. We
will clarify the process for reinstated providers and prescribers to
resubmit claims in sub-regulatory guidance.
Comment: A commenter sought clarification as to how a beneficiary
would know to resubmit a previously rejected claim for reimbursement if
a precluded provider is reinstated retroactively.
Response: We intend to address this issue in sub-regulatory
guidance. While this final rule does not require the Part D or MA plan
to issue additional notices to enrollees about individuals or entities
that have been reinstated after a successful appeal of placement on the
preclusion list, we encourage plans to do so, especially in cases where
placement on the preclusion list was in error.
(3) ``Reasonable Efforts''/Notification
Comment: Several commenters requested clarification as to what the
term ``reasonable efforts'' means in the context of furnishing the
notification to the prescriber as described in Sec.
423.120(c)(6)(iv)(B). A commenter added that various parts of CMS' sub-
regulatory guidance indicate that the ``reasonable efforts''
notification is required but elsewhere state that it is optional; the
commenter recommended that CMS explain the circumstances under which it
is, or may be, required.
Response: The term ``reasonable efforts'' in both Sec.
423.120(c)(6)(iv)(B) and Sec. 422.222(a)(1)(ii)(B) involves the plan
using available contact information it has for a prescriber or provider
to copy them on the notice mailed to the beneficiary. We expect that MA
organizations would always have contact information for their MA-
contracted providers. We acknowledge, however, that they may not have
this data for non-contracted providers (unless the non-contracted
provider submits a claim) and that Part D plan sponsors may not have
this information concerning prescribers of drugs. Given this dilemma,
and to ensure that a proper balance is attained between the importance
of notification and the fact that contact data may be unavailable in
certain circumstances, we are changing the timing and scope of this
notification requirement. We are finalizing Sec. 422.222(a)(1)(ii)(B)
and Sec. 423.120(c)(6)(iv)(B) with the following modifications:
++ The existing versions of these paragraphs will be incorporated
into, respectively, new paragraphs Sec. Sec. 422.222(a)(1)(ii)(B)(1)
and 423.120(c)(6)(iv)(B)(1). The beginning of these respective new
paragraphs, moreover, will state, ``Subject to paragraph
(a)(1)(ii)(B)(2) of this section'' and ``Subject to paragraph
(c)(6)(iv)(B)(2) of this section''.
++ In new paragraphs Sec. Sec. 422.222(a)(1)(ii)(B)(2) and
423.120(c)(6)(iv)(B)(2), we will state that paragraph (B)(1) only
applies upon receipt of a claim from, respectively, a precluded MA
provider (contracted or non-contracted) or upon a prescriber writing a
Part D prescription when: (i) Sufficient contact information is
available; and (ii) the claim is received after the claim denial or
reject date in the preclusion file.
Paragraph (B)(2), in effect, means that the ``reasonable efforts''
requirement in paragraph (B)(1) will apply only if both of the
following conditions are met: (1) The MA organization or plan sponsor
has enough information on file to either copy the provider or
prescriber on the notification previously sent to the beneficiary or
send a new notice informing the provider or prescriber that they may
not see plan beneficiaries due to their preclusion status; and (2) the
claim is received after the claim denial or reject date in the
preclusion file. We believe this second criterion is

[[Page 15786]]

necessary to help clarify the timing of the notification requirement;
it will also help to mitigate instances where a beneficiary mistakenly
receives care from a precluded prescriber.
Comment: A number of commenters opposed the requirement under Sec.
422.222(a)(1)(ii)(B) or Sec. 423.120(c)(6)(iv)(B) that MA
organizations and Part D sponsors ensure that ``reasonable efforts''
are made regarding provider and prescriber notification. Some stated
that this activity should not be the responsibility of MA plans or Part
D plan sponsors; this is because CMS already adequately notifies
providers and prescribers of their placement on the preclusion list and
remains, in the commenters' view, in the best position to continue
doing so. The commenters believed that imposing the requirements of
Sec. 422.222(a)(1)(ii)(B) or Sec. 423.120(c)(6)(iv)(B) on MA plans
and Part D sponsors would thus: (1) Be both duplicative and a further
administrative burden on MA plans and Part D sponsors, involving
thousands of additional letters and unnecessary costs; (2) be
inconsistent with the Patients over Paperwork initiative; and (3) lead
to provider frustration and confusion because the provider would be
receiving multiple notices regarding the same matter. A commenter added
that precluded providers and prescribers are able to identify their
impacted patients and need not receive this information from MA plans
and Part D sponsors; the latter should not bear additional cost and
burden in order to assist problematic providers and prescribers with
managing impacted patients within their practices. Another commenter
stated that with respect to MA non-contracted providers, it is possible
that the services they provided were on an emergency/urgent basis,
rather than for ongoing, routine care; there is, consequently, little
value in MA plans furnishing additional notification under Sec.
422.222(a)(1)(ii)(B) given the limited impact on a ``go-forward''
basis. An additional commenter stated that these notification
requirements have not been imposed with respect to OIG-excluded
providers.
Response: We appreciate the concerns these commenters expressed
regarding the aforementioned requirement. Considering, however, the
plans' role in the daily operational and logistical facilitation of the
Medicare Part C and D programs and their close administrative
relationship with prescribers and providers, we believe that the plans
are best-positioned to communicate with prescribers and providers
regarding their relationships with specific beneficiaries. We mention
also that we have attempted to reduce to burden of this requirement
with our aforementioned revisions to Sec. 422.222(a)(1)(ii)(B) or
Sec. 423.120(c)(6)(iv)(B).
With respect to the final comment, we note that the OIG exclusion
list and the administrative requirements pertaining thereto are
separate from and non-binding on those regarding the preclusion list.
Merely because the OIG regulations lack a requirement concomitant with
Sec. 422.222(a)(1)(ii)(B) or Sec. 423.120(c)(6)(iv)(B) does not
mandate that CMS eliminate these two provisions.
(4) Notification to Provider of Preclusion
Comment: A commenter recommended that CMS notify the prescriber of
their inclusion on the preclusion list because having individual plan
sponsors perform simultaneous outreach to providers would be
inefficient and confusing.
Response: We believe that the commenter is referring to the CMS
requirement that was finalized in the April 2018 final rule and
codified in Sec. 423.120(c)(6)(v). Assuming this is so, we agree with
the commenter and stress that we did not propose to change this
requirement in the November 1, 2018 proposed rule.
Comment: A commenter urged that the written notice to the
individual or entity via letter of their inclusion on the preclusion
list be sent via certified mail and that the letter be standardized
across the MA and Part D programs. This, the commenter explained, would
prevent instances where an individual or entity is not properly
notified, the letter is lost in transit, or the letter goes to an
incorrect office or staff member; it will also help ensure a proper
chain of custody. The commenter also stated that standard language and
uniformity in the letter's format will assist individuals and entities
in distinguishing the notice and its purposes from other
communications.
Response: We appreciate this comment and wish to clarify that CMS
is indeed mailing these notices via certified mail. Additionally, the
same letter template, including similar format and language, is used
for notification to both Part C and D providers and prescribers.
(5) Relation to OIG Exclusion List
Comment: Several commenters urged CMS to treat the OIG exclusion
list and the preclusion list consistently to avoid provider,
beneficiary, and plan confusion. A commenter requested clarification
regarding CMS' rationale for treating precluded providers differently
than those on the OIG exclusion list, particularly with respect to the
timing for the denial of claims. The commenter noted that, in contrast
to the OIG exclusion process, claims denials will be delayed for the
initial preclusion list and subsequent lists.
Response: We appreciate these comments. As explained in sub-
regulatory guidance we have issued (https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/PreclusionList.html), we have attempted to conform the preclusion list
policies to those concerning the OIG exclusion list as much as
possible. We emphasize, however, that complete uniformity and/or full
integration of the two lists is impracticable at this time for several
reasons. First, the OIG exclusion list is governed by statute,
consistent with the provisions of section 1128 of the Act. The OIG
exclusion list (and the policies and procedures associated therewith)
is operated under an entirely different set of laws and regulations.
Second, the requirements for inclusion on the preclusion list and for
inclusion on the OIG exclusion list are very different. For instance,
revocation of Medicare enrollment (which can be based on any of the
reasons identified in Sec. 424.535(a)) and a non-health care related
felony can serve as bases for adding a provider to the preclusion list,
whereas these grounds are not, in and of themselves, bases for
inclusion on the OIG exclusion list. The revocation reasons in Sec.
424.535(a), moreover, are quite distinct from the reasons for imposing
an OIG exclusion under section 1128 of the Act. The Medicare
enrollment/revocation and OIG exclusion processes, in short, are
operated by different agencies under different rules with different
requirements, which prevents these lists from being uniform.
We also believe that the preclusion list will apply to a much
larger provider population than that included on the OIG exclusion
list. We remind commenters that the intent of the preclusion list was
to create an effective alternative to enrollment. We thus concluded
that it was necessary to establish criteria for a provider to be
precluded that were broader than those for exclusion, such as being
revoked from Medicare; otherwise, it was possible that certain
problematic providers and prescribers could continue to furnish MA
services and items or prescribe Part D drugs. By the same token, we
have certain safeguards for the preclusion list, such as the claim
denial timing, to prevent access to care

[[Page 15787]]

issues. We believe this properly balances the need for strong program
integrity measures (as evidenced by our above-referenced, broader
preclusion list criteria) and the importance of ensuring that
beneficiaries receive needed health care.
Notwithstanding the above, we emphasize that the OIG list should
take precedence over the preclusion list; consequently, no OIG-excluded
provider shall receive payment or the 60-day period addressed in this
rule. Once a provider is no longer excluded and a plan must review the
preclusion list, there will be instances (based on Medicare
reenrollment bars) where a provider is precluded after their
reinstatement from an exclusion.
Comment: A commenter stated that administering the preclusion list
differently than the OIG exclusion list increases administrative burden
for plans while adding little value. The commenter instead supported
terminating providers and denying claims in a timeframe consistent with
the OIG exclusion process, rather than waiting for at least 60 days
after release of the preclusion list, as CMS proposed. The commenter
stated that there should not be a 60-day period before claim denials,
for a provider would know that they are precluded and should thus not
be seeing Medicare beneficiaries or prescribing drugs. The commenter
added that having separate notices to the beneficiary and different
claims denial timeframes could lead to beneficiary confusion.
Accordingly, the commenter recommended that CMS: (1) Use one list that
combines exclusions and preclusions; or (2) revise the preclusion list
requirements to apply in the same manner as the OIG list, allowing
plans to deny claims upon release of the preclusion list.
Response: As already explained, the differing requirements for
inclusion on each list, the different legal and statutory requirements,
and the different operational aspects involved do not permit us to
establish any greater uniformity than that already described in the
above-mentioned sub-regulatory guidance. With respect to claim denials,
we recognize the validity of the commenter's concern. Considering,
however, that (1) the preclusion list is a new concept, (2) plans need
time to accustom themselves to the preclusion list process, and (3)
some beneficiaries will need time to find new prescribers or providers,
we are not in a position at this stage to require immediate claim
denials upon release of the preclusion list. In time, should
stakeholders (including the plan and beneficiary communities) become
fully acclimated to the preclusion list process such that a period as
long as 90 days is not realistically needed, CMS may revisit this issue
in future rulemaking.
Regarding the commenter's concerns about plan and beneficiary
burden and confusion, we will continue our educational and outreach
efforts to stakeholders so as to minimize these effects.
Comment: A commenter recommended that CMS only include non-OIG
excluded prescribers on the preclusion list in order to keep the
preclusion and OIG exclusion lists separate. The commenter was
concerned that with both programs releasing a monthly file at different
times during the month, the potential exists for timing problems and
confusion.
Response: We appreciate this suggestion. However, because (1) an
OIG exclusion constitutes grounds for revocation under Sec. 424.535(a)
and (2) the revocation policies in Sec. 424.535 (for example,
application of a reenrollment bar) would apply in such cases, we
believe it is important to include all revocation grounds and policies
within the scope of the preclusion list. We will continue to work with
stakeholders to minimize confusion regarding the interaction between
the two lists. We are confident that, with time, affected parties will
become acclimated to the different processes.
Comment: A commenter contended that including preclusion list
standards on top of the existing OIG exclusion statutory requirements
is unnecessary, creates numerous inconsistencies, and imposes
operational complexities. For example, the commenter stated, once a
provider is added to the OIG exclusion list, there is no grace period
during which plans can continue to make payment. The proposed rule,
however, contains such a period for the preclusion list under
Sec. Sec. 422.222(a)(1) and 423.120(c)(6)(iv). The commenter stated
that: (1) Simultaneous compliance with both of these standards is
impossible; and (2) CMS cannot create a rule that directly conflicts
with the OIG exclusion provisions in the Social Security Act. The
commenter added that while CMS could create exceptions to the
preclusion list requirements for excluded providers or revise the
preclusion list requirements to be consistent with those applicable to
excluded providers, it would be administratively cleaner to simply
extract excluded providers from the preclusion list.
Response: For reasons already stated, we are not in a position to
separate the two lists or to make the preclusion list processes
entirely consistent with those of the OIG exclusion list. We are also
unable to remove OIG excluded prescribers and providers from the
preclusion list, for CMS takes revocation action that is separate and
apart from whatever exclusion action the OIG might take. A revocation
action warrants the addition of the prescriber or provider to the
preclusion list and is accompanied by a reenrollment bar, which
determines the length of the preclusion. The reenrollment bar length
may exceed the period for which the prescriber or provider is OIG
excluded, which further prohibits the affected prescriber or provider
from furnishing items and services to Medicare beneficiaries.
Notwithstanding the above, however, we have already clarified via
sub-regulatory guidance that the OIG exclusion list takes precedence
over the preclusion list. Thus, if a plan locates a provider on the OIG
exclusion list, it need not consult the preclusion list with respect to
that provider. The plan would simply follow its processes for OIG
excluded providers as described at 42 CFR 422.204(b)(4), 422.224(a),
and 422.752(a)(8). We mention further that providers and prescribers
who are precluded due to an exclusion are not afforded the 60-day grace
period, for the plan would reject the claim or deny the provider's
requests for reimbursement based on the exclusion prior to determining
if the provider or prescriber is precluded.
To codify the above policy in regulation, we will clarify the
opening paragraphs of Sec. Sec. 423.120(c)(6)(iv) and
422.222(a)(1)(ii) to state that Sec. Sec. 423.120(c)(6)(iv) and
422.222(a)(1)(ii) do not apply if the prescriber or provider is
currently excluded by the OIG. This means, in effect, that if a
provider or prescriber is on both the OIG exclusion list and the
preclusion list, the MA organization or Part D plan sponsor need not
(with respect to that prescriber or provider) carry out the
requirements of Sec. Sec. 423.120(c)(6)(iv) and 422.222(a)(1)(ii) (for
example, provide advance written notice to the beneficiary; delay
payment denials). We believe this will help reduce duplicative
administrative functions (such as letters to beneficiaries) and ensure
compliance with the statutory payment prohibitions concerning OIG
exclusions (that is, no grace period).
Comment: A commenter recommended that CMS limit the preclusion list
to providers who are not on the OIG exclusion list so as to avoid
conflicts between the exclusion and preclusion requirements. If CMS
declines this suggestion, the commenter stated that giving plans up to
90 days to

[[Page 15788]]

begin denying payment would allow them to meet their obligation (under
both OIG and CMS regulations) to deny claims for items and services
provided by an excluded provider, while also allowing time--where
permitted--for members to be notified and transition to a new provider.
The commenter contended that this would be more consistent with MAOs'
current obligations to provide members with 30 days' advance notice of
a provider's contract termination; the commenter questioned why a
provider placed on the preclusion list should continue to be paid for a
longer period of time than a provider whose contract terminates for
another reason.
Response: We previously outlined our rationale for declining to
extract OIG-excluded parties from the preclusion list and the reasons
for the 90-day delay in claim denials. As we indicated regarding the
latter, though, we may in the future consider shortening this time
period via rulemaking should circumstances warrant and operational
considerations permit. We note that currently, pursuant to Sec.
422.202(d)(4), if an MA plan terminates a contracted provider from the
provider network for ``no cause'', the plan is required to furnish the
provider with 60 days' advance notice; if an MA plan terminates a
provider for cause, the provider is entitled to appeal rights under
Sec. 422.202(d)(1) through (3). Based on this, we believe that the
timeframe of 60-90 days before an MA plan can deny payment to a
precluded provider is similar to what is required when a provider is
terminated by the plan under Sec. 422.202(d)(4) without cause.
(6) Relationship to Medicaid
Comment: In cases where Medicaid is the primary payer for a drug
for a dual-eligible individual, a commenter questioned whether the
pharmacy must fill a prescription for a drug prescribed by a precluded
prescriber. The commenter stated that CMS must address how the
preclusion list applies to Medicaid-Medicare Plans (MMPs) with a three-
way contract. Specifically, in an MMP the enrollee has one insurance
card; he or she may thus be confused if the MMP rejects his or her Part
D drugs (because the prescriber is precluded) but then pays for the
Medicaid drug from the same prescriber.
Response: A Part D drug that is not covered because the prescriber
is on the preclusion list--but is otherwise coverable by Part D--is not
coverable under Medicaid, including under an MMP as the claim would not
cross over once rejected by the Part D plan. In the rare circumstance
that Medicaid is the primary payer for a prescription drug furnished to
a Part D eligible individual, the preclusion list does not apply as the
drug would be adjudicated through the Medicaid claims system.
Comment: A commenter requested that CMS collaborate with states if
future consideration is given to the preclusion list's potential
application to (and implementation by) state Medicaid agencies in
unison with private sector health plan partners.
Response: We appreciate this comment and will make certain to
collaborate with the states should the contingency the commenter
mentions arises.
(7) Timeframe for Denying Claims
Comment: Noting the proposed commencement of claim denials 61-90
days following preclusion list publication, a commenter recommended a
hard timeline of 90 days from file release to claim denial. The
commenter believed that this would foster industry-wide consistency.
Another commenter stated that if CMS intends to require plans to
terminate precluded providers from their networks, CMS should: (1)
Promulgate this requirement through rulemaking, not via sub-regulatory
guidance; and (2) permit plans to terminate providers at any time prior
to when plans must begin denying payments.
Response: We appreciate these comments. However, we do not wish to
delay claim denials any longer than absolutely necessary, which is why
we respectfully decline to mandate the expiration of a full 90-day
period. Under Sec. 422.222(a)(1), as amended in this final rule, an MA
organization is prohibited from paying a provider who is on the
preclusion list; this prohibition applies to claims with dates of
service that fall 60 days or more after the MA organization has
notified the enrollee that the provider has been placed on the
preclusion list and that claims for services furnished by that provider
will be denied. Section 422.222 does not itself require termination of
any contract between the MA organization and the precluded provider. We
anticipate, though, that many MA plans will take steps to terminate
their contracts with precluded providers, at least for purposes of the
MA plan, because of the prohibition on payments to precluded providers
in connection with items and services provided to Medicare
beneficiaries. Further, we do not believe that rulemaking is required
regarding language in CMS' sub-regulatory guidance, which only suggests
and does not require the removal of precluded providers from plan
networks.
We believe that compliance with Sec. 422.222(a)(1) by an MA plan
will take slightly different forms depending on whether the precluded
individual or entity has a contract with the MA plan to participate in
its network. In managing their contracted networks, MA plans: (1) Must
provide advance written notice to any beneficiary who received an item
or service from an individual or entity added to the preclusion list no
later than 30 days after the posting of the updated preclusion list;
and (2) may pay the precluded provider for 60-90 days, depending on
when the enrollee was notified. When an enrollee has received services
from a non-network precluded provider, MA plans should notify the
enrollee that the non-contract provider is precluded and the plan will
not pay any claims from the precluded provider with a date of service
after the expiration of the allowable payment period for that precluded
provider.
Comment: A commenter agreed that the previously mentioned 60-90 day
claim denial period will assist beneficiaries in transitioning to new
providers.
Response: We appreciate the commenter's support.
Comment: Several commenters expressed support for the proposed
application of the 90-day period before a claim is denied to all
releases of the preclusion list (not merely the initial preclusion
list).
Response: We appreciate the commenters' support.
Comment: A commenter stated that payment denials should be allowed
to begin at any point up to 90 days after the provider is placed on the
preclusion list. Any member notice requirement, the commenter
contended, should be independent of the time frame for denying
payments.
Response: Under Sec. 422.222(a)(1)(ii)(C), the prohibition on
payment to a precluded individual or entity is tied to expiration of a
period of 60 days from issuance of the advance written notice to the
enrollee. However, the MA plan may terminate a network provider under
its contract, thereby removing the provider from its network of
providers available to its enrollees in accordance with other
procedures and requirements. The MA regulation at Sec. 422.202(d)
permits for-cause and without-cause terminations of provider
participation agreements; Sec. 422.111(e) specifies that an MA
organization terminating a provider must make a good-faith effort to
notify enrollees at least 30 calendar days before the provider
termination date. If an enrollee is left without a primary care
provider

[[Page 15789]]

and one is necessary in order to access coverage and benefits under the
MA plan, Sec. 422.112(a)(2) permits the MA organization to assign a
primary care provider to the enrollee; further, Sec. 422.122(b)
imposes coordination of care responsibilities on MA organizations,
which CMS generally believes means that an MA organization should offer
to assist enrollees in locating a suitable provider and in ensuring
that ongoing treatment is properly transitioned to a new health care
provider. Section 422.222(a)(1)(ii)(A) requires that MA organizations
notify enrollees within 30 days from when the MA plan receives
notification from CMS that a provider has been placed on the preclusion
list, which will start the 60-day period for when denials of payment
based solely on the provider's inclusion on the preclusion must occur.
The enrollee notification of a terminated provider should inform
the enrollee that the terminated precluded provider is no longer
available to furnish plan services and offer to assist the enrollees in
transitioning to a new network provider. For services received from a
non-contracting precluded provider, the MA plan must also notify the
enrollee that the non-network provider is precluded and include in that
notification the date on which the plan will not pay any further claims
from that precluded provider. This gives the enrollee time to
transition to an alternative non-network provider if he or she chooses
to do so.
While we believe it is clear that Sec. 422.222 is equally
applicable to network and non-network precluded providers, we wish to
eliminate any confusion on this matter. As such, we are changing the
title of Sec. 422.222 from ``Preclusion list'' to ``Preclusion list
for contracted and non-contracted individuals and entities.'' We
believe this will help clarify the applicability of Sec. 422.222,
Comment: A commenter urged CMS to allow plans up to 90 days to
commence denying payments, meaning that plans would be permitted to:
(1) Immediately stop paying claims (as required with OIG excluded
providers); and (2) begin denials at any point within 90 days if there
is no other legal requirement to act immediately. The commenter stated
that requiring plans to pay claims for a period of time after the
provider is placed on the preclusion list conflicts with other
requirements that plans must follow and introduces multiple challenges.
The commenter added that because the applicable statute prohibits plans
from making payment for items and services furnished or prescribed by
an excluded provider, CMS cannot impose a separate requirement that
plans continue to pay claims for precluded providers (some of whom will
also be on the exclusion list) for a particular period of time.
Response: As previously explained, we believe that beneficiaries
should be afforded a sufficient opportunity to locate a new prescriber
or provider should their current prescriber or provider be included on
the preclusion list. We note also that nothing in the provisions we
finalized in the April 2018 final rule or are finalizing in the present
rule prohibit plans from immediately denying claims based on an OIG
exclusion pursuant to the long-standing requirement to do so under the
Social Security Act. Indeed, we refer the commenter to our previously
mentioned changes to Sec. Sec. 423.120(c)(6)(iv) and
422.222(a)(1)(ii), under which these provisions would not apply if the
prescriber or provider is currently excluded by the OIG.
Comment: A commenter stated that the April 2018 final rule
prohibits MAOs from paying claims from precluded providers and contains
no requirement that the MAO notify the member or otherwise delay the
denial of payment. The commenter also pointed out, however, that the
previously mentioned HPMS Memo ``recommends'' that MAOs wait 90 days
before denying payment. The commenter stated it will be impossible for
MAOs to comply with both the immediate payment prohibition and the 90-
day recommendation for claim denials.
Response: CMS acknowledges, in the previously mentioned HPMS memo,
the failure to include in the regulatory text of the April 2018 final
rule certain policies outlined in our responses to the comments
therein. Due to the language in the April 2018 final rule preamble
summarized above and our guidance in the HPMS memo, we believe that the
90-day approach is permissible for plans pending the applicability date
of this final rule and our amendments to Sec. 422.222(a). We clarify
here that the HPMS memo simply requests that plans follow the 90-day
approach and that this approach is being codified in the regulatory
text of this final rule. We mention, however, with the finalization of
this rule, that the above-referenced 60-day period and beneficiary
notification will be required upon the final rule's effective date.
(8) Beneficiary Notification
Comment: A commenter sought clarification on how a plan should
proceed (assuming a January 1, 2019 release of the initial preclusion
list) if, on day 89 following the publication of the preclusion list, a
beneficiary receives a service from a precluded provider for which no
pharmacy claims history exists. The commenter questioned whether: (1)
This beneficiary would receive notification from the plan about the
provider's preclusion; (2) the 90-day clock will begin to run again for
this beneficiary; and (3) a provider or prescriber identified on
January 1, 2019 as meeting the requirements for preclusion could
provide services to a Medicare beneficiary for close to 6 months
following its preclusion. The commenter believed that if CMS releases
the preclusion list on January 1, 2019, plans would have until February
1 to notify beneficiaries, at which time claims begin to be denied on
April 1; if, however, a beneficiary sees a provider placed on the
initial preclusion list on March 28, a new 90-day clock would begin to
run, under which the plan would be given 30 days to contact the
beneficiary (April 28) and claims would not be denied until June 28.
Response: First, we note that the commenter's example appears to be
about the preclusion list regulation adopted in the April 2018 final
rule that became applicable beginning January 1, 2019, and not about
our proposed rule. CMS has addressed this topic via sub-regulatory
guidance at the following link: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/PreclusionList.html. That guidance clarifies that if no claims history
exists for the previous 12-month period, the plan is not required to
notify beneficiaries. If no notification is made, the 60-90 day period
is not required, although plans may choose to wait to deny claims until
the claim denial/reject date included on the preclusion list file.
Second, under the amended regulations we are finalizing here and in
regard to the commenter's specific scenario, if a beneficiary received
a service from a precluded provider on the 89th day following
publication of the list, the plan would pay the claim. The provider
would not receive an additional 60-90 day period and after the 89th day
would thus be unable to continue furnishing MA items and services or
prescribing Part D drugs for Medicare beneficiaries. If the service was
provided on the 90th day, the plan would (upon receiving the claim)
deny or reject the claim and notify the provider or prescriber that he/
she is precluded, as we have finalized at Sec. 422.222(a)(1)(ii)(B)
and Sec. 423.120(c)(6)(iv)(B). In this specific scenario, we are
assuming the provider is granted the 60-90 day period as there

[[Page 15790]]

may be a claims history with at least one beneficiary. To further
clarify, in situations where there is no claims history concerning the
specific provider and any beneficiaries, the 60-90 day period is not
required.
Comment: Citing CMS' Patients over Paperwork initiative, a
commenter requested clarification of the rationale for requiring the
mailing of beneficiary notices instead of permitting email. The
commenter cited the situation where a beneficiary indicates that
electronic communication is his or her preferred method of
communication.
Response: Per the December 14, 2018 HPMS memo, CMS will not allow
different modes of communication regardless of the beneficiary's
preference. We recognize that some beneficiaries may prefer email.
However, we believe that using mail is the surest means of making
certain that the beneficiary receives the notice, a critical
consideration given the importance of the information furnished
therein.
Comment: Several commenters urged CMS to add language to the sample
beneficiary notification letter stating that appeal rights will not
apply when a claim is denied due to a precluded prescriber. Failure to
do so, a commenter contended, could lead to beneficiary confusion.
Response: In the sample notification letter, we refer the
beneficiary to our sub-regulatory guidance (https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/PreclusionList.html), in which we outline the
lack of beneficiary appeals in the situation the commenter describes.
We believe this furnishes sufficient notification to beneficiaries on
the issue of appeals.
Comment: A commenter stated that the sample notification letter
informs stand-alone Part D plans to insert the 1-800-Medicare number
but then leaves the ``hours of operation'' configurable. The commenter
questioned: (1) Whether the hours should be the standard hours for 1-
800-Medicare; (2) whether the stand-alone Part D enrollees should call
only if they need assistance in finding another prescriber but should
call plans at the plan number for further questions regarding the
status of their prescriptions; (3) whether, based on the sample notice,
there should be two numbers for stand-alone Part D plans; (4) whether
the 1-800-Medicare number should only be furnished if assistance is
needed in finding another provider; and (5) whether plans should list
their customer care phone number if there are further questions
regarding the status of their prescription with the plan's customer
care hours of operations.
Response: We will address these operational issues via sub-
regulatory guidance.
Comment: Regarding an enrollee who did not receive a notification
letter (and given the previously mentioned 90-day period), a commenter
sought clarification as to: (1) The requirements concerning PDE edits;
(2) whether CMS will pay for the PDE; and (3) whether a new PDE edit
will be created to reject PDEs submitted for precluded providers.
Response: We assume the commenter is referring to situations, per
the regulations finalized in the April 2018 rule, where the beneficiary
did not receive notification that his or her provider or prescriber is
precluded. PDE editing will be based on the ``claim reject date,''
regardless of beneficiary notification receipt status as the timing for
claim denials and/or rejections begins upon the notice being sent by
the plan. (See HPMS memorandum, ``February 2019 Updates to the Drug
Data Processing System (``DDPS''),'' dated January 8, 2019 and released
January 9, 2019.)
Comment: A commenter expressed concern that beneficiaries will not
have had adequate experience with the preclusion list initiative before
receiving the mandated 60-day notification.
Response: We understand the commenter's concern. We will work with
beneficiary groups to help educate potentially affected Medicare
patients about the preclusion list process.
Comment: A commenter urged that the beneficiary notification letter
should state that: (1) The beneficiary cannot request any review of
CMS' preclusion determination; and (2) he or she must seek a non-
precluded prescriber for future prescriptions.
Response: With respect to the first part of the comment, we do not
believe it is helpful for the notification letter to state what the
beneficiary cannot do under these circumstances. Instead, consistent
with the second part of the comment, we believe it is more helpful for
the notification letter to clearly explain the actions the beneficiary
can and should take to ensure future payments and coverage of benefits;
that is, to find another non-precluded provider to furnish similar
items or services.
(9) Pharmacies and Part B Drugs
Comment: A commenter stated that Part B pharmacy claims are
included in Part C reporting. The commenter sought guidance regarding--
if a plan offers both Part D and Part B pharmacy benefits to its
members--the Part B pharmacy drug claims process if the provider is on
the preclusion list. Specifically, the commenter questioned whether the
Part D processed claims will reject but Part B drug claims will be
allowed to process. The commenter stated that beneficiaries may be
confused if some of their claims involving a precluded provider are
denied while others are processed. Another commenter, too, sought
clarification as to whether MA or MA-PD plans should deny payment of
Part B pharmacy prescriptions written by a precluded provider. This
commenter cited the example of a beneficiary who presents a pharmacy
with two prescriptions from a precluded prescriber--one for a Part D
drug and one for a Part B drug; the commenter questioned whether the
pharmacy should reject one prescription (Part D) and fill the other
prescription (Part B).
Response: We believe this situation is likely to be rare, provided
that plans are applying the preclusion list to all claims submitted by
both contracted and non-contracted providers. However, we acknowledge
that such a situation could arise and, if it did, would cause confusion
for beneficiaries and pharmacies. To reduce confusion, therefore,, if
the prescriber or provider is precluded, the plan will be prohibited
from making payment regardless of whether the drug is a Part B or D
drug. After consideration of these comments, we will modify the
language in Sec. 422.222(a)(1)(i) that reads ``health care item or
service furnished'' to instead state ``health care item, service, or
drug that is furnished, ordered, or prescribed''. To ensure consistency
with this revision, we will make similar edits to Sec.
422.222(a)(1)(ii)(A) and (C) and to 422.504(g)(1)(iv); specifically, we
will include therein, as applicable, references to ``ordered,''
``prescribed,'' and ``drugs.''
Comment: A commenter requested that CMS clarify whether the
proposed replacement of the term ``individual'' with ``prescriber'' in
Sec. 423.120(c)(6) means that: (1) Type 2 NPIs--when submitted on the
PDE--can be accepted as a valid submission on claims; and (2) any valid
NPI--whether Individual or Organizational--can be used to adjudicate
claims.
Response: Based on comments we received regarding this proposed
change, we are concerned that such a revision will cause confusion that
will outweigh the proposal's objective. Indeed, we note that the policy
that Part D plans submit PDEs with Type I NPIs is a long-standing one
that supports an important program integrity goal. For

[[Page 15791]]

these reasons, we are not finalizing this proposal.
Comment: Several commenters recommended that CMS explain the scope
of the Part D preclusion list, indicate whether and how it applies to
pharmacies, and make any necessary regulatory revisions. A commenter
requested that the regulatory text clarify whether CMS intends to add
to the preclusion list those pharmacies that do not prescribe drugs to
Part D members but do fill member prescriptions. The commenter
contended that the applicable preclusion list regulations require the
denial of payments to precluded prescribers but do not extend to
pharmacies that fill member prescriptions. The commenter also requested
that CMS limit the preclusion list to those pharmacies that are
prescribers until the regulations are modified. The commenter stated
that the inclusion of non-prescribing pharmacies on the preclusion list
risks exposing plan sponsors that deny payments to such pharmacies to
legal claims in light of, the commenter contended, the lack of
regulatory authority for those denials.
Response: Although pharmacies are indeed on the preclusion list,
the regulations at 422.222 only apply to pharmacy claims for Part A or
B drugs covered under Part C and supplemental items or services
furnished by the pharmacy (that is, they will not affect the pharmacy's
ability to dispense Part D drugs so long as the prescription is not
from a precluded prescriber). Coverage of Part D drugs, whether by an
MA-PD or stand-alone Part D plan, are addressed in 423.120. As such, we
decline to add this requirement to regulatory text. We note that the
application of these requirements to pharmacies in Part C and not Part
D is due to the supplemental pharmacy benefits offered by some Part C
plans. We also clarify that Part A and B drugs are typically not
dispensed by the pharmacy under Part C but are furnished by the Part C
provider.
Comment: A commenter stated that in its December 14 FAQ, CMS
mentions that Part D plans are expected to remove precluded pharmacies
from their network. However, the commenter contended, the FAQ did not
furnish additional information (including the necessary rulemaking) for
such a decision to be made; the FAQ, the commenter stated, merely
references ``future rulemaking'' and does not contain legal authority
for such terminations.
Response: The November 2, 2018 CMS-issued HPMS memo entitled
``Preclusion List Requirements'' (https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/PreclusionList.html.) suggests that Part D plan sponsors remove
precluded pharmacies from their network as soon as possible. Thus,
there is no formal requirement that Part D plan sponsors do so.
(10) Implementation Timeframe
Comment: A number of commenters urged CMS to delay implementation
of all of the preclusion list requirements in their entirety (including
those in the April 2018 final rule) until January 1, 2020. A commenter
stated that the preclusion list policies place an extreme strain on
plans' resources, especially given the end-of-year testing. Other
commenters stated that CMS has not furnished sufficient responses to
stakeholders' questions and has not provided adequate guidance. This,
they contended, leaves numerous issues open to interpretation, which
will result in beneficiary and plan confusion. To efficiently implement
these rules, these commenters added, a delay until January 1, 2020 is
essential. Another commenter stated that while CMS has issued guidance
regarding the preclusion list, a significant number of outstanding
matters remain; these must be resolved before the preclusion list can
be implemented. An additional commenter expressed concern that the
varying effective dates (and contradictory requirements) concerning
preclusion list implementation will confuse beneficiaries, providers,
prescribers, and plans. This commenter and others added that such
confusion, combined with a hasty implementation, could also harm
beneficiaries who are unable to access medications or needed services.
Other commenters suggested an effective date for all preclusion list
requirements that is: (1) At least 18 months after CMS publishes the
necessary technical guidance and confirmed file layouts; (2) at least
18 months after the publication date of this final rule; (3) at least 1
year after the consolidation of the issues covered in multiple CMS
guidance documents; or (4) sometime after CMS engages with stakeholders
to address outstanding operational and logistical challenges.
Response: We appreciate these comments and understand the
sentiments raised. We must, however, respectfully decline to delay the
implementation of the preclusion list as the commenters suggest. It is
imperative that the preclusion list process commence as soon as
possible so as to protect the Medicare program and beneficiaries from
fraud, waste, and abuse. We believe that a delay until January 1, 2020
or later would be inconsistent with our obligations to safeguard the
Trust Funds and to ensure that payments are made correctly.
Nonetheless, we will closely monitor the preclusion list's progress
throughout 2019 and continue engaging regularly with all stakeholders
to facilitate as smooth an implementation as possible.
Comment: While recommending a January 1, 2020 implementation date
for all of the preclusion list requirements, several commenters
suggested that CMS could instead exercise enforcement discretion in
2019 against Medicare plans for good-faith efforts they make to
implement the preclusion list rules finalized in the April 2018 rule. A
commenter added that CMS could refrain from sanctioning plans that fall
short of implementing the preclusion list requirements until CY 2020.
In a similar vein, a commenter stated that CMS should not enforce the
preclusion list requirements (1) before January 1, 2020 and (2) until
CMS has released guidance that clarifies the outstanding operational
issues.
Response: As stated, we respectfully decline to establish a January
1, 2020 effective date for all of the preclusion list provisions. We
continue to believe it is imperative to implement the preclusion list
requirements as soon as possible in order to protect Medicare
beneficiaries and the Trust Funds.
Comment: A commenter urged CMS not to implement the provisions in
the proposed rule.
Response: As explained previously, we believe that the provisions
outlined in the proposed rule are necessary to ensure that the
preclusion list process satisfies our program integrity objectives
without unnecessarily burdening stakeholders.
Comment: Several commenters supported the January 1, 2020 effective
date for the provisions in the proposed rule.
Response: We appreciate the commenters' support, though we note
that our consolidated appeals provisions will become effective 60 days
after the publication of this rule.
Comment: A commenter supported having all of the proposed
preclusion list provisions become effective and applicable beginning 60
days after their publication in a final rule.
Response: While we appreciate this comment, we would prefer to give
stakeholders until January 1, 2020 to prepare for the provisions we are
finalizing in the rule (excluding the consolidated appeals policy).

[[Page 15792]]

(11) Beneficiary Liability
Comment: A commenter expressed concern about the potential
financial liability of beneficiaries for precluded out-of-network
providers. While supporting the proposed requirement that an MA
contract with CMS state that a MA enrollee must not have any financial
liability for items or services furnished to the beneficiary by a
precluded MA-contracted individual, the commenter noted that this would
not extend to out-of-network providers. In addition, the commenter
stated that the proposed rule does not allow a beneficiary to appeal a
payment denial based upon a provider's inclusion on the preclusion
list. Coupled together, the commenter stated, a beneficiary may have
financial liability but no administrative recourse. Regarding
beneficiary appeals and liability, another commenter recommended that
CMS either: (1) Allow a beneficiary to appeal a payment denial for
precluded out-of-network providers; or (2) require language in the
proposed advance written notice to the beneficiary of his or her
financial liability if he or she continues to receive services from the
out-of-network provider.
Response: We thank the commenter for the support for our proposal
to minimize enrollee liability for payments to network providers. We
are finalizing this requirement in Sec. 422.504(g)(1)(iv) with several
grammatical revisions; we are adding the language ``Ensure that'' to
the beginning of the paragraph to ensure that it properly and
grammatically flows from the closing wording of the opening paragraph
of Sec. 422.504(g). In addition, as previously explained, we are
adding references to ``ordered,'' ``prescribed,'' and ``drugs'' to this
new paragraph in the regulation.
In addition to the protection described in Sec. 422.504(g)(1)(iv),
we also proposed and are finalizing that the prohibition on payment to
a precluded provider under Sec. 422.222(a) must begin only after
advance written notice to enrollees that a provider from whom the
enrollee has previously received services is on the preclusion list. As
finalized at Sec. 422.222(a)(1)(ii)(A), plans are required to provide
at least 60 days' notice to enrollees within 30 days of the posting of
an updated list. We believe this timeframe will allow enrollees
sufficient time to locate a new provider and avoid seeking further
services from a precluded provider and any potential financial
liability that may result. We believe that this advance written notice
and delay as to when an MA plan is prohibited from paying a precluded
provider will ensure appropriate protection of the beneficiary.
CMS believes most plans will remove precluded providers and
prescribers from their networks upon identifying them. Therefore, as
required by Sec. 422.222(a)(1)(ii)(A) and consistent with Sec.
422.111(e), MA plans that choose to terminate a precluded provider must
make a good-faith effort to furnish enrollees with at least 30 days'
advance notice of the termination of a network provider. Further, upon
the expiration of the 60-day period (at which point both the provider
and beneficiary have been notified of the preclusion), if the provider
is terminated from the plan's network but seeks payment from the
Medicare beneficiary, the provider would be in violation of section
1848(g)(4)(A) of the Act. If the provider remains in the plan's
network, however, the provider is bound to the contractual requirements
within the provider's contract, with the plan prohibiting the provider
from seeking payment from the beneficiary in cases where the plan
denies requests for reimbursement due to the provider's precluded
status. Because the beneficiary's liability would be dependent on what
action the plan takes in regard to the provider's MA contract (for they
are not required to terminate the MA contract in order to
operationalize the payment prohibition), we believe it would be
inaccurate to add language to the notice regarding the beneficiary's
potential liability and therefore decline to do so.
In addition, with respect to services received from a non-
contracting precluded provider, the MA plan must notify the enrollee
that the provider is precluded and include in that notification the
date on which the plan will not pay any further claims from that
precluded provider.
Comment: A commenter stated that CMS should clarify the point at
which MA plans should terminate providers. The commenter explained that
MA plans may need or prefer to remain contracted with a provider for a
short period of time for various reasons. The commenter stated that:
(1) A requirement to terminate a contract while payments are still
being made would unnecessarily complicate delivery of the plan benefit;
and (2) plans should be able to retain contractual protections for
themselves (including contractual obligations imposed on providers and
agreed-upon pricing terms) while they are still making payments.
Moreover, the commenter stated that allowing termination up until
denial of the claims would conform to: (1) CMS' requirement to notify
members that a plan is terminating a network provider; and (2) similar
state laws.
Response: Our final rule at Sec. 422.222 does not require an MA
plan to terminate a provider from its network if or when the provider
is placed on the preclusion list. Provider termination is a decision
for the MA plan. MA plans may, however, not pay a precluded provider
for services rendered to plan enrollees after the 60-90 day beneficiary
notification period has expired.
Comment: A commenter expressed concern regarding the proposal that
an MAO's contract with CMS provide that a member shall not have any
financial liability for services or items furnished by a contracted
provider on the preclusion list. The commenter explained that this
provision would confront plans with inconsistent requirements--
specifically, that plans must not pay providers' claims while also
requiring that they hold members harmless if the provider bills the
member. If the provider indeed does the latter, the commenter
continued, plans might have to pay the provider (so as to hold the
member harmless); this would conflict with the requirement not to pay a
claim. Alternatively, plans might have to reimburse a member who has
paid the provider, effectively allowing the provider to circumvent the
preclusion list. The commenter recommended that, in lieu of the ``hold
harmless'' provision, CMS should either: (1) Prohibit the precluded
provider from billing or otherwise seeking payment from the member; or
(2) make the ``hold harmless'' obligation inapplicable (i) to services
and items furnished by precluded providers after their contracts have
been terminated or (ii) to claims the MAO must deny under Sec.
422.222(a)(1).
Response: Under Sec. 422.222(a)(1)(ii)(C), the MA plan may pay
precluded providers for up to 60 days after the MA plan has notified
enrollees that the provider has been precluded. We anticipate that MA
organizations will also use this period to assist affected enrollees in
transitioning to new providers or, if a new primary care provider is
necessary for the enrollee to access plan covered services, to assign a
new primary care provider to each affected enrollee. The plan's ability
to pay a provider for up to 60-90 days after preclusion will not
violate the MAO's contract with CMS and is an important beneficiary
protection. At the conclusion of the 60-day period, the provider will
no longer be eligible for payment from the plan and will be prohibited
from pursuing payment from the beneficiary as stipulated by the terms
of the contract between CMS and

[[Page 15793]]

the plan per 422.504(g)(1)(iv). Therefore, the provider would hold
financial liability for furnished, ordered, or prescribed services and
items after the close of the 60 day period, at which point the provider
and the beneficiary would have already received notification of the
preclusion. To formally incorporate this policy in regulatory text, we
are also finalizing a new paragraph (g)(1)(v) in Sec. 422.504; this
paragraph requires that the MA plan's provider agreements contain a
provision acknowledging the preclusion list requirements, prohibiting
the precluded network provider from seeking payment from the enrollee,
and providing that the provider will hold financial liability for any
items, services, or drugs the provider furnishes, orders, or prescribes
after the prohibition on payment begins (i.e., after expiration of the
60-90 day period). This will make clear that the MA organization must
agree to this requirement.
If the MA organization's participation agreement with the precluded
provider is terminated, we recognize that the MA organization will not
have a contractual means to prohibit the precluded provider from
seeking payment directly from the enrollee. We encourage MA
organizations to provide sufficient information and assistance to
enrollees so that they look for new providers from whom to receive
covered services. We further clarify that once the 60-day period ends
and the provider's network contract has been terminated (at which point
both the provider and beneficiary have been notified of the
preclusion), there is no legal mechanism to apply the hold harmless
provision nor would CMS or the plan be able to prohibit the provider
from seeking payment from the beneficiary.
Comment: A commenter concurred with the proposal that the
beneficiary be held harmless for financial liability if his or her
provider is included on the preclusion list. Noting that the policy
only applied to contracted providers, however, the commenter stated
that members who use non-contracted providers that are included on the
preclusion list are vulnerable to inappropriate demands for payments
sent directly to them by unscrupulous providers. The commenter added
that further communication and transparency concerning all providers on
the preclusion list would help minimize inappropriate billing.
Response: We concur with the commenter and will work with
stakeholders, including the plans and beneficiary groups, to consider
effective means of preventing the situations that the commenter
describes.
Comment: While supporting the limitation on beneficiary liability,
a commenter encouraged CMS to expand this protection to non-contracted
entities in the following two circumstances: (1) When the provider was
a contracted individual or entity prior to their preclusion but whose
contract was terminated as a result of the preclusion; and (2) when the
MA is a PPO and offers out-of-network coverage.
Response: As noted in the previous response, we will work with
stakeholders regarding effective methods to protect beneficiaries who,
through no fault of their own, receive services from a precluded
provider. We continue to believe, however, that the notification of
enrollees and the period available to pay precluded providers will
ensure that most MA patients of a precluded provider will have
sufficient time to transition to a new qualified provider who can be
paid by their MA plan. In regard to the commenter's suggestion of
expanding the limitation on beneficiary liability, we note that once a
provider's network contract is terminated, there is no legal mechanism
to apply the hold harmless provision nor would CMS or the plan be able
to prohibit the provider from seeking payment from the beneficiary.
(12) Appeals
Comment: Several commenters expressed support for the proposals to:
(1) Shorten the preclusion list appeal timeframe from 9 months to 5
months; and (2) place providers and prescribers on the preclusion list
after their first level of appeal. In both of these cases, a commenter
stated, CMS has taken common sense steps to reduce administrative
burden on MAOs and Part D plans, to ensure that precluded providers and
prescribers do not continue to provide care and/or prescribe
medications, and to consider the best interests of beneficiaries.
Response: We appreciate the commenters' support.
Comment: A commenter stated that notwithstanding the proposal that
beneficiaries may not appeal a payment denial based on their provider's
or prescriber's preclusion, CMS recently issued different guidance.
Specifically, the commenter stated that in a December 14 FAQ, CMS
declined to inform beneficiaries of their lack of appeal rights but
stated that an enrollee may seek a coverage decision from the plan if
there is a question regarding coverage for an item, service, or drug.
The commenter accordingly sought clarification on a number of issues:
(1) Whether enrollees will be permitted to appeal the denial of a claim
(due to a provider's preclusion) during CY 2019 given that beneficiary
appeals were not addressed in the April 2018 final rule applicable to
CY 2019; (2) if the answer to the prior issue is yes, how CMS intends
to notify beneficiaries of the change in policy for CY 2020; (3)
whether, based on the language in the December 14 FAQ, the
determination of a provider's preclusion constitutes a coverage
decision that is subject to standard appeal rights; and (4) whether a
beneficiary who did not receive notice that his or her provider was
excluded and accordingly continued to use that provider could appeal
the denial of the claim. Another commenter also raised the first,
second, and fourth issues, while questioning whether the beneficiary
can at least appeal the denial of the claim (given that he or she
cannot appeal the provider's preclusion status).
Response: We clarify that the cited guidance was issued based on
the April 2018 final rule. Therefore, that guidance is not fully
applicable to this final rule and the amendments we are making to
Sec. Sec. 422.222 and 423.120.
A Part D claim that is rejected at the point-of-sale does not
constitute a coverage determination; thus, there are no Part D appeal
rights. As with claims from prescribers on the OIG exclusion list, a
claim rejected at point-of-sale because the prescriber is on the
preclusion list does not return the 569 reject code. In other words,
the network pharmacy does not deliver the pharmacy notice that
instructs an enrollee how to request a coverage determination. As
previously noted in this preamble, a claim rejection at point-of-sale
due to preclusion is not a Part D coverage determination, so the
enrollee would not have appeal rights. This having always been the
case, nothing has changed between CY 2019 and CY 2020. As previously
stated in this preamble, we are finalizing Sec. 422.222(a)(4) to state
that a beneficiary enrolled in an MA plan (or a cost plan or PACE
organization under the incorporation of the MA regulation into those
programs at Sec. Sec. 417.478 and 460.86) will not be able to appeal a
payment denial that is based on an individual or entity's placement on
the preclusion list.

[[Page 15794]]

Finally, we note that Sec. 422.222(a)(1)(ii)(A), as amended by
this final rule, requires an MA plan to issue a notice to affected
enrollees when a provider is placed on the preclusion list. The
prohibition on payment will begin the earlier of 60 days after this
notice or 90 days after the provider was placed in the preclusion list.
An MA plan that fails to provide the notices required by this
regulation will be in violation of its responsibilities such that CMS
may take necessary enforcement action.
Comment: A commenter supported making the proposed appeals process
effective 60 days after publication of this final rule.
Response: We appreciate the commenter's support.
Comment: A commenter urged CMS to permit limited beneficiary
appeals of denials of claims based upon a provider or prescriber's
preclusion. The commenter stated that if the beneficiary notice
required at Sec. 422.222(a)(1)(ii)(A) described previously was
incomplete or ineffective, the beneficiary should not be responsible
for payment. The commenter added that CMS should consider mechanisms to
protect beneficiaries from liability in such circumstances.
Response: Under the regulation we are finalizing at Sec.
422.222(a)(4), denials of payment based on a provider's or prescriber's
preclusion cannot be resolved through the beneficiary appeals process
as outlined in Subpart M of 42 CFR part 423. If payment is denied
because of the prescriber's or provider's preclusion, the enrollee
should find another provider in the area to furnish these services and
to contact the plan if assistance is needed. (This is explained in the
beneficiary notice.) Further, a request for payment by a contract
provider where an enrollee is held harmless does not constitute an
organization determination.
Concerning an incomplete or ineffective notice, the provider or
prescriber would still have been made aware of the preclusion. Indeed,
this further supports our rationale for allowing claims to be paid
without penalty for 60 days following the issuance of the notice to the
beneficiary.
In regard to Part C, following the 60-day period and once a
provider's network contract is terminated, there is no legal mechanism
to apply the hold harmless provision nor would CMS or the plan be able
to prohibit the provider from seeking payment from the beneficiary if
the provider is terminated from the plan's network. However, if the
provider remains in the plan's network, the provider must comply with
contractual requirements prohibiting the provider from seeking payment
from the beneficiary in cases where the plan denies requests for
reimbursement due to the provider's precluded status.
We are finalizing our proposed changes concerning appeals with one
exception. We are deleting the phrase ``by CMS'' in proposed Sec.
422.222(a)(2)(ii)(B) and Sec. 423.120(c)(6)(v)(B)(2). This is to
clarify that Administrative Law Judges and the Department of Appeals
Board, which, as applicable, consider the appeals in question, are not
part of CMS.
(13) Miscellaneous Comments
Comment: A commenter suggested that the relevant notice provisions
and payment preclusions in Sec. 422.222(a)(1) be referenced in the
PACE regulation by including an explicit cross reference in Sec.
460.86. This would, the commenter stated, ensure that PACE
organizations know where in the CFR to find more detailed requirements
related to the preclusion list.
Response: We appreciate this comment and may consider it for future
rulemaking. At this time, we believe that the PACE regulation is
sufficient. We explained in the April 2018 final rule, in our proposed
rule, and in this final rule how the requirements in Sec. 422.222 are
incorporated into the requirements for the PACE program.
Comment: A commenter supported the discretion given to plans to not
include a particular prescriber on the preclusion list when CMS
determines that exceptional circumstances exist regarding beneficiary
access to prescriptions. The commenter recommended that CMS also
provide similar discretion to MA plans when CMS determines the
previously referenced exceptional circumstances exist.
Response: We clarify that only CMS has the discretion not to place
a provider on the preclusion list due to access to care concerns. Plans
can notify CMS if they believe there will be access to care issues by
removing a particular provider from their network, and CMS will notify
the plan of its determination regarding the preclusion. Nonetheless, we
agree with the commenters' general rationale that an exception should
be made for MA regarding access to care concerns. We are therefore
adding a new paragraph (a)(6) to Sec. 422.222 that mirrors the access
to care exception provided at Sec. 423.120(c)(6)(vi); specifically,
CMS will have the discretion not to include a particular individual or
entity on (or, if warranted, remove the individual from) the preclusion
list should it determine that exceptional circumstances exist regarding
beneficiary access to MA items, services, or drugs. In making a
determination as to whether such circumstances exist, CMS takes into
account: (i) The degree to which beneficiary access to MA services,
items, or drugs would be impaired; and (ii) any other evidence that CMS
deems relevant to its determination.
Comment: Concerning the 10-year period for the preclusion list, a
commenter recommended that CMS set a lower default preclusion period of
3 years and use aggravating or mitigating factors to adjust the period
as applicable. The commenter was concerned that under the proposed
rule, any felony conviction automatically defaults to a 10-year
preclusion period. Consistent with the March 1, 2016 proposed rule
published in the Federal Register titled ``Medicare, Medicaid, and
Children's Health Insurance Programs; Program Integrity Enhancements to
the Provider Enrollment Process'' (CMS-6058-P), the commenter stated
that the 10-year period should be maximum, not mandatory, unless the
party in question is excluded by the OIG for a longer period. The
commenter stated that the 10-year default period is greater than the
OIG mandatory exclusion of 5 years and the general default of 3 years
of permissive exclusions. Moreover, the commenter stated, OIG mandatory
exclusions only cover specific conduct and not all felonies. The
commenter added that CMS should provide parameters regarding what types
of felonies fall under this section; the commenter stated that this
would be consistent with felony determinations under Sec.
424.535(a)(3).
Response: We note that our proposed provisions do not automatically
require a 10-year preclusion list period for every felony conviction.
Under proposed Sec. 423.120(c)(6)(vii), for instance, a 10-year period
will be used unless CMS determines that a shorter timeframe is
warranted based upon CMS' consideration of several factors. In each
case, CMS will examine whether a period of less than 10 years is
justified. Insofar as the types of felonies that may come within the
purview of these provisions, we will consider further clarification via
sub-regulatory guidance.
Comment: Several commenters stated that, according to their
understanding, CMS would undertake a three-step process for
implementing the preclusion list: (1) Beginning on January 1, 2019, the
preclusion list will go into effect without the proposals outlined in
the proposed rule; (2) 60 days following

[[Page 15795]]

publication of CMS-4185-F, Medicare plans will be required to implement
the new consolidated appeals provisions; and (3) any other changes in
the proposed rule that are eventually finalized will not become
effective until January 1, 2020. The commenters expressed several
concerns about this process. First, they believed that it saddles
Medicare plans with managing multiple deadlines and effective dates
despite long-term planning already underway. Second, the process
involves changing and uncertain rules, which could confuse stakeholders
(including beneficiaries) as to which policies apply at which time (for
example, a beneficiary may be uncertain as to whether or when he or she
has appeal rights); this, the commenters believed, could interrupt
beneficiary care and cause beneficiary frustration with their Medicare
plans and providers.
Response: While we appreciate the commenters' concerns, we stress
that we have worked very closely with the plans and other stakeholders
to: (1) Prepare them for the preclusion list's implementation; and (2)
develop sub-regulatory guidance to address their questions. We are
closely and diligently monitoring the progress of the implementation.
We will continue regular communication with stakeholders and
expeditiously address issues if or as they develop.
Comment: A commenter stated that the previously mentioned HPMS memo
sought to impose requirements that go beyond the provisions of the
April 2018 final rule. The commenter contended that: (1) These
additional requirements must be promulgated through notice-and-comment
rulemaking; and (2) CMS should withdraw the HPMS memo and/or clarify
that it does not create binding requirements.
Response: We respectfully disagree. The HPMS memo focuses on
operational details that are most appropriately developed and
disseminated through sub-regulatory guidance.
Comment: Several commenters supported CMS' elimination of the
provider enrollment requirements for MA providers and Part D
prescribers.
Response: We appreciate the commenters' support.
Comment: A number of commenters supported the implementation of the
preclusion list requirements as a whole.
Response: We appreciate the commenters' support.
Comment: Numerous commenters stated that CMS must work with the
industry and other stakeholders to help ensure smooth execution of the
preclusion list with as little disruption in beneficiary care as
possible.
Response: We agree with the commenters. We have worked closely with
stakeholders to ensure an effective implementation of the preclusion
list and will continue to do so.
Comment: Several commenters stated that CMS must make certain that
the preclusion list: (1) Is updated frequently to minimize the time
between when a provider is precluded and the time that information is
available to plans and providers; and (2) contains information needed
to properly identify a precluded prescriber (for example, an NPI).
Response: We agree with the commenters. We are striving to ensure
that preclusion list updates are appropriately made and that the
preclusion list file contains sufficient identifying data.
Comment: A commenter questioned whether Medicare plans will be
limited in the number of users granted access to the preclusion list.
The commenter stated that PBMs that process and pay claims and others
need access to this file. Although the commenter contended that CMS
indicated in its December 14 sub-regulatory guidance that it will not
grant access to the preclusion list to PBMs, the commenter urged CMS to
reconsider this position, perhaps by making the preclusion list public.
Response: We state respectfully that CMS will not make the
preclusion list public. The list contains sensitive data (such as
revoked provider information), and CMS historically has not shared this
information publicly. Nonetheless, CMS is exploring secure means (other
than public release) to make the data available to PBMs and other plan
subcontracted entities.
Comment: A commenter recommended that CMS work with plans to
develop an automated process so that preclusion list requirements can
be better implemented and operationalized.
Response: We are always receptive to plan feedback regarding file
delivery and format. We are available to work with plans to implement
enhancements that would make the process more efficient. We believe,
however, that such enhancements are best considered once a baseline has
been implemented by the applicable deadline.
Comment: A commenter urged CMS to encourage plans to educate
beneficiaries about the preclusion list so that the latter understand
the concept before they perhaps encounter it.
Response: We agree and have indeed suggested that plans educate
their enrollees regarding the preclusion list for the reason the
commenter states.
Comment: A commenter questioned whether there will be a link to the
preclusion list or whether CMS will transmit the list to plans and MA
organizations.
Response: Plans are granted access to the list via a secure website
and file transfer process.
Comment: A commenter encouraged CMS to be flexible in overseeing
and enforcing the preclusion list, for stakeholders have been using
their best efforts to comply with the changing requirements and need
time to acclimate to the new processes.
Response: We appreciate this comment and recognize that
stakeholders have been making efforts to prepare for the preclusion
list's implementation. We will closely monitor the progress of this
implementation.
Comment: A commenter contended that the proposed changes
(especially the reduced timeline for the mandatory denial of claims)
will cause several difficulties without enhancing program integrity.
First, they will significantly increase plan administrative costs.
Second, beneficiaries could be harmed due to disruptions in their
medication. Third, beneficiaries could become dissatisfied with the
timeframes in which they must seek a new provider. Fourth, the proposed
rule contains no protections that could mitigate the above-referenced
problems. The commenter accordingly recommended that CMS retain the
standards established in the April 2018 final rule and engage MAOs (and
other stakeholders) in developing means of aligning preclusion list
processes with those for the OIG exclusion list.
Response: While we appreciate the commenter's concerns, we believe
the changes in this rule facilitate a more patient-minded approach. We
reiterate that enrollees will have 60-90 days' prior notification that
their provider is precluded. During that period, claims and
prescriptions associated with the precluded provider can be paid by the
Part C or D plan. This will give the enrollee time to transfer to a
new, non-precluded provider. Indeed, we note that Part C and D plans
are currently prohibited from paying for claims and prescriptions
associated with excluded providers. The additional administrative
burden for a plan to check the preclusion list is not, in our view, a
significant new requirement. While this rule establishes a beneficiary
notice timeframe, we have simultaneously streamlined the date that a
plan is to reject/deny claims for each version of the monthly
preclusion list, rather than require plans to track timeframes for

[[Page 15796]]

rejections/denials on a beneficiary basis. If plans were required to
implement the preclusion list in the manner that the OIG exclusion list
is operationalized, there may be no beneficiary notification period.
For these reasons, we respectfully decline to adopt the commenter's
suggestion.
Comment: A commenter stated that there is insufficient technical
guidance for dual-eligible special needs plans (D-SNPs), their PBMs,
and other delegated entities to sufficiently test and implement the
preclusion list process by January 1, 2019. The commenter urged CMS to
extend the first review period for D-SNPs to at least 180 days; this
would enable D-SNPs and CMS to ensure that systems are appropriately
configured and operational policies established prior to any payment
denials.
Response: We believe that the commenter is suggesting a minimum
180-day delay in the implementation of the preclusion list as a whole.
As stated previously, we respectfully decline to do so. However, we
will work closely with D-SNPs concerning this implementation and will
issue sub-regulatory guidance to assist D-SNPs in this regard.
Comment: A commenter questioned whether any of the fields are
conditionally required (for example, whether a date of birth for
businesses or an EIN is required).
Response: CMS will issue sub-regulatory guidance on this issue as
soon as feasible.
Comment: A commenter questioned whether there is a communication
process for questionable data records (for example, for missing
required fields such as an NPI or a missing effective date).
Response: CMS has issued sub-regulatory guidance that clarifies the
process for communicating questionable data records. It can be accessed
at the following link: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/PreclusionList.html.
Comment: A commenter sought clarification as to when PDE guidance
will be available.
Response: We refer the commenter to the PDE guidance issued in the
previously referenced HPMS memorandum, ``February 2019 Updates to the
Drug Data Processing System (``DDPS''),'' dated January 8, 2019 and
released January 9, 2019.
Comment: A commenter stated that the proposed rule lacks a ``look-
back'' period indicating which plan members must be notified of a
precluded provider. The commenter recommended that CMS revise proposed
Sec. Sec. 422.222(a)(1)(ii)(A) and 423.120(c)(6)(iv)(A) to clarify
that plans need only notify a member who has received services from a
precluded provider in the 12 months prior to the date the provider was
added to the preclusion list. Codifying a ``look back'' period in
regulation, rather than merely via sub-regulatory guidance, will
provide clarity to plans.
Response: While we appreciate this suggestion, we respectfully
decline to establish a formal look-back period in this rule. We must
retain the flexibility (especially during the early stages of the
preclusion list's implementation) to carefully monitor the program and
to make any revisions (such as a look-back period) only after a careful
deliberation.
Comment: Several commenters stated that CMS should clarify each of
the provider types and specialties that will be on the list.
Response: We appreciate this comment and may consider furnishing
such clarification, as needed, in subregulatory guidance.
Comment: Several commenters recommended that CMS detail the data
sources used to place dentists who have never enrolled in Medicare on
the preclusion list.
Response: Using CMS' internal data and systems (which includes, but
is not limited to, the Provider Enrollment, Chain, and Ownership System
and the National Plan and Provider Enumeration System), we will screen
any prescriber or provider that could potentially prescribe Part D
drugs or furnish MA services or items to a Medicare beneficiary through
an MA plan.
Comment: Several commenters recommended that when CMS notifies
providers that they are precluded, CMS should require those providers
to inform patients that they do not accept Medicare beneficiaries and
that their claims will not be processed. A commenter believed that this
approach would be particularly appropriate if there is no claim history
(for example, new patient or referral) and thus no ability for plans to
notify beneficiaries.
Response: We appreciate this comment and may consider it for future
rulemaking as appropriate.
Comment: Several commenters urged CMS to clarify whether urgent and
emergency services are exempt from the requirement that MA plans and
delegated entities deny claims for services furnished by precluded
providers.
Response: Urgent and emergency services are not exempt from the
claim denial requirements of Sec. 422.222.
Comment: A commenter expressed support for the proposals to add
language to the regulatory text concerning the following policies: (1)
Beneficiaries may not appeal payment denials based on a provider's
preclusion; and (2) unenrolled prescribers and providers should remain
precluded for the same length of time as the reenrollment bar that CMS
could have imposed had that prescriber or provider been enrolled and
then revoked.
Response: We appreciate the commenter's support.
Comment: A commenter contended that CMS' proposed changes to its
preclusion list policies would create additional complexities and be of
limited value. The commenter added that the separately required
beneficiary notices (and the claims denial deadlines triggered thereby)
are inconsistent with CMS' goal of operationalizing the preclusion list
in the same manner as the OIG exclusion list. Under the exclusion list
process, the commenter stated, CMS makes the exclusion list public,
updates it monthly, posts it 15 days prior to the exclusion effective
date, and expects plans to deny claims as of the effective date. The
commenter suggested that CMS make the preclusion list public and
implement it similar to the exclusion list. This approach, the
commenter believed, would alleviate inconsistencies and stakeholders'
concerns.
Response: For reasons stated previously, CMS is unable to make the
preclusion list public. Moreover, we do not believe it is possible to
implement the preclusion list in a fashion that mirrors the OIG
exclusion list. We believe that the preclusion list, upon full
implementation, will impact a much larger provider population than the
OIG exclusion list, for the intent of the preclusion list was to create
an effective alternative to enrollment. The criteria for a provider to
become precluded are therefore different and broader than those for
exclusion. For this reason, we believe the beneficiary notice period is
essential to protect beneficiaries from major disruptions of care. We
note also that CMS has added data fields to the file to increase
consistency between the notification period and the claims rejection/
denial date.
Comment: A commenter questioned whether a provider must inform
beneficiaries if they learn that another provider has been excluded.
The commenter cited the example of a beneficiary who attempts to fill a
prescription at a pharmacy retail location and the prescription is
denied

[[Page 15797]]

due to the provider being excluded. The commenter sought clarification
concerning the pharmacy's responsibility (if any) to notify the
beneficiary of the excluded provider.
Response: We appreciate this comment but believe it is outside the
scope of this rule.
Comment: Several commenters noted that in an FAQ issued December
14, 2018 (see (https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/PreclusionList.html.), CMS
stated that subcontractors will not be granted access to the preclusion
list and that MAOs will have to share the list with subcontractors as
needed. Some subcontractors, the commenters noted, process all claims
and credentialing activities, which makes direct access to the
preclusion list imperative. Without such access, the commenters stated,
downstream entities will have to work through MA organizations, which
could delay enrollee notification. In sum, the commenters requested
that: (1) Subcontractors and delegated entities be provided access to
the preclusion list; and (2) the enforcement date for subcontractors to
use the preclusion list be delayed until subcontractors have access to
it.
Response: As explained earlier, CMS is unable to publicize
preclusion data. However, CMS is exploring other secure means of making
the data available to PBMs and other plan subcontracted entities. We
must, however, respectfully decline to delay the implementation of the
preclusion list as the commenter suggests.
d. Final Provisions
Given the foregoing, we are finalizing all of our proposed
preclusion list provisions as proposed except as follows:
Our proposed revisions to Sec. 423.120(c)(6)(i), (ii),
and (vi) that would change the term ``individual'' to ``prescriber''
will not be finalized.
Our proposed change of the phrase ``individual NPI of the
prescriber'' to ``NPI of the prescriber'' in Sec. 423.120(c)(6)(iii)
will not be finalized.
In Sec. 422.222(a)(1)(i), we are changing the language
``health care item or service furnished'' to ``health care item,
service, or drug that is furnished, ordered, or prescribed''. We are
making similar edits to Sec. 422.222(a)(1)(ii)(A) and (C) and to Sec.
422.504(g)(1)(iv); specifically, we will include therein, as
applicable, references to ``ordered,'' ``prescribed,'' and ``drugs.''
We are deleting the phrase ``by CMS'' in proposed Sec.
422.222(a)(2)(ii)(B) and Sec. 423.120(c)(6)(v)(B)(2). This is to
clarify that Administrative Law Judges and the Department of Appeals
Board (which would, applicable, consider the appeals in question
jointly) are not part of CMS.
We are clarifying the opening paragraphs of Sec. Sec.
423.120(c)(6)(iv) and 422.222(a)(1)(ii) to state that Sec. Sec.
423.120(c)(6)(iv) and 422.222(a)(1)(ii) do not apply if the prescriber
or provider is currently excluded by the OIG.
We are revising Sec. Sec. 423.120(c)(6)(iv)(B) and
422.222(a)(1)(ii)(B) as follows:
++ The existing versions of these paragraphs will be incorporated
into new paragraphs Sec. Sec. 423.120(c)(6)(iv)(B)(1) and
422.222(a)(1)(ii)(B)(1), respectively. Also, we are inserting the
following language at the beginning of these respective new paragraphs:
``Subject to paragraph (c)(6)(iv)(B)(2) of this section'' and ``Subject
to paragraph (a)(1)(ii)(B)(2) of this section''.
++ In new paragraphs Sec. Sec. 423.120(c)(6)(iv)(B)(2) and
422.222(a)(1)(ii)(B)(2), we will state that paragraph (B)(1) will apply
only upon receipt of a claim from, respectively, a precluded provider
(either contracted or non-contracted) in Medicare Part C or upon a
prescriber writing a prescription in Medicare Part D when: (i) The MA
organization or plan sponsor has enough information on file to either
copy the provider or prescriber on the notification previously sent to
the beneficiary or send a new notice informing the provider or
prescriber that they may not see plan beneficiaries due to their
preclusion status; and (ii) the claim is received after the claim
denial or reject date in the preclusion file.
To clarify the applicability of Sec. 422.222, we are
changing the title of this section from ``Preclusion list'' to
``Preclusion list for contracted and non-contracted individuals and
entities.''
We are adding a new paragraph (a)(6) to Sec. 422.222 that
would mirror the existing version of Sec. 423.120(c)(6)(vi) and state
as follows:
++ The opening paragraph will read: ``CMS has the discretion not to
include a particular individual or entity on (or, if warranted, remove
the individual or entity from) the preclusion list should it determine
that exceptional circumstances exist regarding beneficiary access to MA
items, services, or drugs. In making a determination as to whether such
circumstances exist, CMS takes into account''
++ Paragraph (a)(6)(i) will read: ``The degree to which beneficiary
access to MA items, services, or drugs would be impaired; and
++ Paragraph (a)(6)(ii) will read: ``Any other evidence that CMS
deems relevant to its determination.''
++ We are adding the language ``Ensure that'' to the beginning of
Sec. 422.504(g)(1)(iv).
++ We are adding a new Sec. 422.504(g)(1)(v) that would state as
follows: ``Ensure that the plan's provider agreement contains a
provision stating that after the expiration of the 60-day period
specified in Sec. 422.222:

--The provider will no longer be eligible for payment from the plan and
will be prohibited from pursuing payment from the beneficiary as
stipulated by the terms of the contract between CMS and the plan per
Sec. 422.504(g)(1)(iv); and
--The provider will hold financial liability for services, items, and
drugs that are furnished, ordered, or prescribed after this 60-day
period, at which point the provider and the beneficiary will have
already received notification of the preclusion.''

D. Implementing Other Changes

1. Clarification Regarding Accreditation for Quality Improvement
Programs
Section 1852(e)(4) of the Act requires the Secretary to deem that
an MA organization has met all of the requirements for any one out of
the six program areas listed in section 1852(e)(4)(B) of the Act if the
MA organization is accredited in that area by an accrediting
organization that has been approved by CMS and that uses the same (or
stricter) standards than CMS uses to evaluate compliance with the
applicable requirements. An amendment to the Act to revise subsection
(e) made by section 722(a) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 appears not to have been
fully incorporated into the provisions governing the authority to deem
compliance with section 1852(e)(3) of the Act by an MA organization
based on accreditation by an approved accreditation entity. We direct
readers to the proposed rule for additional discussion (83 FR 55041).
In the proposed rule, we clarified that an MA organization may be
deemed to have satisfied the requirements of section 1852(e)(3) of the
Act and the paragraphs of Sec. 422.152 related to section 1852(e)(3)
of the Act based on the review of an approved accreditation
organization. We received one comment thanking us for the
clarification. We will implement the clarified scope of the regulation
going forward.

[[Page 15798]]

2. Delete the Reference to Quality Improvement Projects in Sec.
422.156(b)(1)
Section 1852(e) of the Act requires each MA organization to have an
ongoing Quality Improvement (QI) Program for the purpose of improving
the quality of care provided to its enrollees. Our regulations at Sec.
422.152 outline the QI Program requirements MA organizations. Section
422.152(a)(3) requires each MA organization to conduct quality
improvement projects (QIPs) for its enrollees, and Sec. 422.152(d)
establishes the requirements for the QIPs. Effective January 1, 2019,
CMS eliminated the requirements for QIPs in Sec. Sec. 422.152(a)(3)
and 422.152(d) in the April 2018 final rule (83 FR 16440). However, the
reference to QIPs was not deleted in Sec. 422.156(b)(1), which says
QIPs are exempt from the process for deeming compliance based on
accreditation.
We proposed a technical correction that would delete the phrase
``the quality improvement projects (QIPs) and'' from Sec.
422.156(b)(1). We did not receive any comments on the proposal. We are
finalizing the technical correction without modification in this final
rule. We direct readers to the proposed rule for additional discussion
(83 FR 55041).

III. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), we are required to provide 30-day notice in the Federal Register
and solicit public comment before a ``collection of information,'' as
defined under 5 CFR 1320.3(c) of the PRA's implementing regulations, is
submitted to the Office of Management and Budget (OMB) for review and
approval. In order to fairly evaluate whether an information collection
requirement (ICR) should be approved by OMB, section 3506(c)(2)(A) of
the PRA requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
In the November 1, 2018 (83 FR 54982) proposed rule, we solicited
public comment on our proposed information collection requirements,
burden, and assumptions. As discussed in section III.B.1. of this final
rule, we received comments pertaining to Evidence of Coverage (EOC)
notifications and provider directory requirements. Based on internal
review, we have revised several cost estimates (see Wage Data). As
explained in section III.B.4. of this final rule, we have also added
burden related to Medicare Parts A and B claims data extracts.

A. Wage Data

To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' (BLS's) May 2017 National Occupational Employment and Wage
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 2 presents the mean hourly wage,
the cost of fringe benefits and overhead (calculated at 100 percent of
salary), and the adjusted hourly wage. The adjusted wages are used to
derive our cost estimates.

Table 3--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe
Occupation Mean hourly benefits and Adjusted
code wage ($/hr) overhead ($/ hourly wage ($/
hr) hr)
----------------------------------------------------------------------------------------------------------------
Business Operation Specialist................... 13-1199 $36.42 $36.42 $72.84
Lawyer.......................................... 23-1011 68.22 68.22 136.44
Software Developers and Programmers............. 15-1130 49.27 49.27 98.54
----------------------------------------------------------------------------------------------------------------

As indicated, we are adjusting our employee hourly wage estimates
by a factor of 100 percent. This is a necessary rough adjustment, both
because fringe benefits and overhead costs vary significantly from
employer to employer and because methods of estimating these costs vary
widely from study to study. We believe that doubling the hourly wage to
estimate total cost is a reasonably accurate estimation method.
While we did not receive any public comments pertaining to our
proposed wage estimates, based on internal review we have changed our
proposed Programmer respondent type (BLS occupation code 15-1311 at
$40.95/hr) to Software Developers and Programmers (BLS occupation code
15-1130 at $49.27/hr). The change adds $8.32/hr (mean) to our proposed
Programmer-specific cost estimates and $16.64/hr (adjusted). The change
affects sections III.B.2.a.(2), III.B.2.b.(2), and III.B.3.a.(2) of
this final rule.
We have also corrected the occupation code for Business Operations
Specialists from 13-000 to 13-1199. This correction adds $1.88/hr
(mean) to our proposed Business Operations Specialist-specific cost
estimates and $3.76/hr (adjusted). The change affects sections
III.B.2.a.(2), III.B.2.b.(2), III.B.3.a.(1), and III.B.4. of this final
rule.
We are not making any changes to the proposed Lawyer respondent
type (BLS occupation code 23-1011 at $68.22/hr (mean) and $136.44/hr
(adjusted)).

B. Information Collection Requirements (ICRs)

The following ICRs are listed in the order of appearance in section
II. of this final rule.
1. ICRs Regarding the Requirements for Medicare Advantage Plans
Offering Additional Telehealth Benefits (Sec. 422.135)
As described in section II.A.1. of this final rule, section 50323
of the Bipartisan Budget Act of 2018 allows MA plans the ability to
provide MA additional telehealth benefits to enrollees starting in plan
year 2020 and treat them as basic benefits. In this rule, we are
finalizing--with slight modifications--most proposed requirements at
Sec. 422.135, which will authorize and set standards for MA plans to
offer MA additional telehealth benefits. More specifically, we are
finalizing our requirement that MA plans must advise enrollees that
they may receive the specified Part B service(s) either through an in-
person visit or through electronic exchange (Sec. 422.135(c)(2)). As
discussed in section II.A.1. of this final rule, based on public
comments we are not finalizing

[[Page 15799]]

the portion of proposed Sec. 422.135(c)(2) that referenced the EOC
document as the required vehicle for this notification. Instead, we
intend to address the EOC in future sub-regulatory guidance.
MA plans will be required to make information about the coverage of
additional telehealth benefits available to CMS upon request (finalized
at Sec. 422.135(c)(4)). We do not anticipate requesting this
information from more than nine MA plans in a given year because
historically we have not received a large number of complaints about
coverage of benefits that might warrant our request for information
from many plans. However, we reserve the right to ask for this
information. Since we estimate fewer than 10 respondents, the
information collection requirement is exempt (5 CFR 1320.3(c)) from the
requirements of the PRA.
As discussed in section II.A.1. of this final rule, based on public
comments we are not finalizing our proposed provider directory
requirements under proposed Sec. 422.135(c)(3). We have therefore
modified our discussion of potential information collection
requirements and assumptions related to provider directories, as it is
no longer necessary to address them in the context of this final rule.
Similar to the EOC, we intend to address the provider directory in
future sub-regulatory guidance.
This final rule is consistent with our proposed rule in that
neither set out any burden related to MA plans offering MA additional
telehealth benefits.
2. ICRs Regarding Integration Requirements for Dual Eligible Special
Needs Plans (Sec. 422.107)
The following requirements and burden will be submitted to OMB for
approval under control number 0938-0753 (CMS-R-267).
As described in section II.A.2.a. of this final rule, we are
establishing new requirements in accordance with amendments to section
1859(f)(8) of the Act (made by section 50311(b) of the Bipartisan
Budget Act of 2018), which stipulates that all dual eligible special
needs plans (D-SNPs) meet certain new minimum criteria for Medicare and
Medicaid integration for 2021 and subsequent years. We are also
codifying the various forms of integrated care provided by D-SNPs that
have evolved since their establishment nearly 15 years ago.
In Sec. 422.107(d), any D-SNP that is not a fully integrated dual
eligible special needs plan (FIDE SNP) or a highly integrated dual
eligible special needs plan (HIDE SNP), as defined in Sec. 422.2, will
be subject to an additional contracting requirement. Under the
additional contracting requirement, the D-SNP must notify the state
Medicaid agency and/or individuals or entities designated by the state
Medicaid agency of hospital and skilled nursing facility (SNF)
admissions for at least one group of high-risk full-benefit dual
eligible individuals, as determined by the state Medicaid agency.
In addition, we are modifying existing requirements for the
contract between states and D-SNPs at Sec. 422.107(c). The
modifications will include requirements that the contract between the
D-SNP and the state: (1) Document the D-SNP's responsibility to
coordinate the delivery of Medicaid benefits for individuals who are
eligible for such services and, if applicable, to provide coverage of
Medicaid services for those eligible; (2) specify the categories and
criteria for eligibility for dual eligible individuals to be enrolled
in the plan; and (3) specify the Medicaid benefits covered by the MA
organization offering the D-SNP under a capitated contract with the
State Medicaid agency or by the D-SNP's parent organization or another
entity that is owned and controlled by its parent organization. We are
also finalizing a new requirement that the contract between a D-SNP
that is an applicable integrated plan, as defined in Sec. 422.561, and
the state document the D-SNP's use of the unified appeals and grievance
procedures required under Sec. Sec. 422.629 and 422.630, 438.210,
438.400, and 438.402, as finalized in this rule.
The primary burden arising from the modifications to the
contracting provisions between states and D-SNPs will consist of the
following:
Burden to states to--
++ Execute D-SNP contract modifications regarding new and modified
requirements under Sec. 422.107(c) and the notification requirement at
Sec. 422.107(d), as detailed in section II.A.2.a.(2). of this final
rule; and
++ Establish the terms of the notification at Sec. 422.107(d),
including its method, timing, and scope, and receive such notification
from D-SNPs about high-risk enrollees' hospital and SNF admissions (if
the state contracts with D-SNPs that are not FIDE SNPs or HIDE SNPs, as
those terms are defined in Sec. 422.2).
Burden to D-SNPs to--
++ Execute a contract modification with the state Medicaid agency
regarding new and modified requirements under Sec. 422.107(c) and the
notification requirement at Sec. 422.107(d), as detailed in section
II.A.2.a.(2). of this final rule; and
++ Notify the state Medicaid agency or its designee(s) about the
hospital and SNF admissions for the state-identified population of
high-risk enrollees (if the D-SNP is not a FIDE SNP or HIDE SNP, as
those terms are defined in Sec. 422.2).
a. Burden to States
(1) Contract Modifications With D-SNPs (Sec. 422.107)
For the initial year, we expect it will take 24 hours at $136.44/hr
for a lawyer to update the state Medicaid agency's contract with every
D-SNP in its market to address the changes to Sec. 422.107 made by
this final rule. Since half of the cost will be offset by federal
financial participation for Medicaid administrative activities, we have
adjusted our estimates for state agencies by 50 percent. Given the
market penetration of D-SNPs in certain states relative to others, we
recognize that this estimate reflects an average cost across all states
and territories with D-SNPs. We expect that the state Medicaid agency
will establish uniform contracting requirements for all D-SNPs
operating in their market. As of June 2018, there were 42 states, plus
the District of Columbia and Puerto Rico, in which D-SNPs were
available to MA enrollees.\41\ In aggregate, we estimate a one-time
burden of 1,056 hours (44 respondents x 24 hr/response) at an adjusted
cost of $72,040 (1,056 hr x $136.44/hr x 0.50). Over the course of
OMB's anticipated 3-year approval period, we estimate an annual burden
of 352 hours (1,056 hr x \1/3\) at a cost of $24,013 ($72,040 x \1/3\).
We are annualizing the one-time estimate since we do not anticipate any
additional burden after the 3-year approval period expires.
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\41\ Centers for Medicare & Medicaid Services (2018, June). SNP
Comprehensive Report. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.
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In future years, we anticipate minimal burden associated with
modifications to contract terms consistent with the changes we are
finalizing to Sec. 422.107(c)(1) through (3). While it is possible
more states will move toward increased integration by contracting with
applicable integrated plans and would therefore need to modify their
state Medicaid agency contracts with D-SNPs consistent with the changes
we are finalizing to Sec. 422.107(c)(9), we are unable to reliably
estimate the additional burden in subsequent years. In addition, while
we recognize that, over time, states could modify the newly required
contract term at

[[Page 15800]]

Sec. 422.107(d) to require notification about admissions for certain
high-risk enrollees (for example, by expanding the population of high-
risk full-benefit dual eligible individuals to whom this notification
applies), we do not believe that such a contract change will have a
material impact on time and effort and, therefore, will already be
accounted for in the burden estimate for the overall contract that the
state Medicaid agency has with each D-SNP.
Given the lack of material impact and the uncertainty involved in
estimating state behavior, we are estimating a minimum of zero burden
in subsequent years on plans. The maximum burden will be the estimated
first year cost. However, we believe the maximum estimate is unlikely
to be accurate since we expect any changes to contracting requirements
to be iterative compared to the first year update.
We solicited public comment on our assumptions in the proposed rule
and whether there are reasonable ways of modeling state behavior. We
received no comments on our information collection requirements, burden
estimates, and assumptions and are finalizing them without
modification.
(2) Notification (Sec. 422.107(d))
To address differences among the states in available
infrastructure, population sizes, and mix of enrollees, this rule
provides broad flexibility to identify the groups for which the state
Medicaid agency wishes to be notified and how the notification should
take place. These flexibilities include: (1) Consideration of certain
groups who experience hospital and SNF admissions; (2) protocols and
timeframes for the notification; (3) data sharing and automated or
manual notifications; and (4) use of a stratified approach over several
years starting at a small scale and increasing to a larger scale. This
final rule also allows states to determine whether to receive
notifications directly from D-SNPs or to require that D-SNPs notify a
state designee such as a Medicaid managed care organization, section
1915(c) waiver case management entity, area agency on aging, or some
other organization.
Some states, using a rich infrastructure and a well-developed
automated system, may fulfill this notification requirement with
minimal burden, while states with less developed or no infrastructure
or automated systems may incur greater burden. Furthermore, the burden,
especially to those states starting on a small scale, may differ
significantly from year to year. Because of the flexibilities provided
in this final rule, we expect that states will choose strategies that
are within their budget and best fit their existing or already-planned
capabilities. We expect any state choosing to receive notification
itself of such admissions to claim federal financial participation
under Medicaid for that administrative activity.
As of June 2018, there were 42 states, plus the District of
Columbia and Puerto Rico, in which D-SNPs were available to MA
enrollees. We estimate that there are nine (9) states and territories
with D-SNPs that are all expected to qualify as either FIDE SNPs or
HIDE SNPs--Arizona, Florida, Hawaii, Idaho, Massachusetts, Minnesota,
New Jersey, New Mexico, and Puerto Rico. We do not expect these states
to establish a notification system under this final rule because none
of their D-SNPs will be subject to the state notification requirement
at Sec. 422.107(d). We estimate that nine additional states that
primarily use managed care for long-term services and supports (LTSS)
(Michigan, New York, North Carolina, Ohio, Oregon, Pennsylvania,
Tennessee, Texas, and Virginia) will delegate receipt of this
information to their Medicaid managed care organizations. We also
estimate that approximately half of the remaining 26 states (42
states--16 states, excluding the District of Columbia and Puerto Rico)
or 13 states will build an automated system for receiving notification
of hospital and SNF admissions consistent with this final rule.
We estimate that, on average, this work could be accomplished in a
month with one software developer/programmer to build an automated
system and one business operations specialist to define requirements.
We estimate a one-time burden of 4,160 hours (13 states x 40 hr/week x
4 weeks x 2 FTEs). Since half of the cost will be offset by 50 percent
federal financial participation for Medicaid administrative activities,
we estimate an adjusted cost of $178,235 [((2,080 hr x $98.54/hr) +
(2,080 hr x $72.84/hr)) x 0.50]. Over the course of OMB's anticipated
3-year approval period, we estimate an annual burden of 1,386.667 hours
(4,160 hr x \1/3\) at a cost of $59,412 ($178,235 x \1/3\). We are
annualizing the one-time estimate since we do not anticipate any
additional burden after the 3-year approval period expires.
Because of the possible wide variability in states' approaches in
implementing this requirement, we solicited comment in the proposed
rule and requested suggestions for modeling state approaches and costs
related to this provision. Given the uncertainty involved in estimating
state behavior, we estimated a minimum of zero burden in subsequent
years on plans and a maximum burden that is the estimated first-year
cost. We received no comments and are finalizing our time estimates
without change. Our proposed cost estimates have been revised to
account for the changes discussed in section III.A. of this final rule.
b. Burden on Plans
(1) Contract Modifications With State Medicaid Agencies (Sec. 422.107)
For the initial year, we expect it will take 8 hours at $136.44/hr
for a lawyer to update their plan's contract with the state Medicaid
agency to reflect the revised and new provisions finalized in this rule
at Sec. 422.107(c)(1)-(3), (c)(9), and (d). We are unable to
differentiate how these provisions impact individual D-SNP contracts
due to the ways contracts are structured. For example, some contracts
will include FIDE SNPs, HIDE SNPs, and other D-SNPs, while others may
include only a subset of these D-SNP types. The specific requirements
for the content of and scope of changes to the contract vary somewhat
based on the type of D-SNP the plan is. However, it is reasonable to
project that every D-SNP contract will require contract modifications
with the state Medicaid agency.
There are 190 D-SNP contracts as of June 2018.\42\ In aggregate, we
estimate a one-time burden of 1,520 hours (190 D-SNPs x 8 hr/
modification) at a cost of $207,389 (1,520 hr x $136.44/hr). Over the
course of OMB's anticipated 3-year approval period, we estimate an
annual burden of 507 hours (1,520 hr x \1/3\) at a cost of $69,130
($207,389/3). We are annualizing the one-time estimate since we do not
anticipate any additional burden after the 3-year approval period
expires.
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\42\ Centers for Medicare & Medicaid Services (2018, June). SNP
Comprehensive Report. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.
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We believe that we have no reasonable way of estimating or
illustrating burden in later years. The expected behavior among states
is unknown relative to how often they will modify their contracts with
D-SNPs on this particular matter. For example, state Medicaid agencies
may remain satisfied with the initial year selection of high-risk
groups and see no reason to modify their contracts in later years. In
contrast, other state Medicaid agencies may seek to expand the
notification requirement

[[Page 15801]]

to encompass additional groups of high-risk dual eligible individuals
and may therefore modify their contracts on this basis. Given the
uncertainty involved in estimating state behavior, we are estimating a
minimum of zero burden in subsequent years on plans. The maximum burden
will be the first year costs.
We received no comments on our assumptions in the proposed rule or
on ways to reasonably model state behavior and are finalizing our
proposed estimates without modification. However, we are finalizing our
burden estimates to reflect the omission of the burden associated with
Sec. Sec. 422.107(c)(1) through (3) and 422.107(c)(9) in the proposed
rule.
(2) Notifications to State Medicaid Agencies or Their Designees (Sec.
422.107(d))
We have noted previously in section II.A.2.a. of this final rule
the broad flexibility in notification options for states. We also note
that MA organizations are already required to have systems that are
sufficient to organize, implement, control, and evaluate financial and
marketing activities, the furnishing of services, the quality
improvement program, and the administrative and management aspects of
their organization (Sec. 422.503(b)(4)(ii)). Independent of the state
Medicaid agency's selection of high-risk populations, protocols, and
notification schedules, an MA organization's most likely method of
sharing this notification will be through the use of an automated
system that could identify enrollees with criteria stipulated by the
states and issue electronic alerts to specified entities. We do not
believe that this work is very complex. Therefore, we estimate it could
be accomplished in a month with one software developer/programmer to
update systems and one business operations specialist to define
requirements. The burden will be at the contract, not the plan, level
for a subset of D-SNP contracts that are not FIDE SNPs or HIDE SNPs and
to which the notification requirements are applicable. As noted
previously, there are 190 D-SNP contracts as of June 2018, of which 37
contracts, or 12.7 percent (about one-eighth), are FIDE SNPs.\43\ While
we do not have a precise count of D-SNPs that will likely meet the
definition of a HIDE SNP, we estimate that another 12.7 percent of the
190 D-SNP contracts will be HIDE SNP contracts. Therefore, we expect
that the number of contracts needing modification is 190 D-SNP
contracts, less 37 FIDE SNP contracts, less 37 HIDE SNP contracts, or
116 D-SNP contracts. Accordingly, we estimate a one-time burden of
37,120 hours (116 contracts x 40 hr x 4 weeks x 2 FTEs) at a cost of
$3,180,813 [(18,560 hr x $98.54/hr) + (18,560 hr x $72.84/hr)]. Over
the course of OMB's anticipated 3-year approval period, we estimate an
annual burden of 12,373 hours (37,120 hr x \1/3\) at a cost of
$1,060,271 ($3,180,813 x \1/3\). We are annualizing the one-time
estimate since we do not anticipate any additional burden after the 3-
year approval period expires.
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\43\ Centers for Medicare & Medicaid Services (2018, June). SNP
Comprehensive Report. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data.html.
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c. Summary of Burden Related to Integration Provisions for Dual
Eligible Special Needs Plans
Table 4 summarizes the burden for the aforementioned provisions.
[GRAPHIC] [TIFF OMITTED] TR16AP19.000

3. ICRs Regarding Unified Grievance and Appeals Procedures for Dual
Eligible Special Needs Plans and Medicaid Managed Care Plans at the
Plan Level (Sec. Sec. 422.560 through 422.562, 422.566, 422.629
Through 422.634, 438.210, 438.400, and 438.402)
As described in section II.A.2.b. of this final rule, we are
establishing for inclusion in contracts for applicable integrated
plans, as defined in Sec. 422.561, no later than 2021, procedures
unifying Medicare and Medicaid grievances and appeals procedures in
accordance with the newly enacted amendments to section 1859(f)(8)(B)
and (C) of the Act. In this final rule, Sec. 422.562(a)(5) requires
that all dual eligible special needs plans (D-SNPs) provide assistance
to beneficiaries with Medicaid coverage issues, appeals and grievances.
When ready, the requirements and burden associated with these
requirements will be submitted to OMB for approval under control number
0938-0753 (CMS-R-267).
As of June 2018, our Special Needs Plan Comprehensive Report lists
190 D-SNP contracts with 412 D-SNP plans that have at least 11
members.\44\ The universe of D-SNPs to which our unified grievance and
appeals procedures will apply is comprised of D-SNPs that are either
fully integrated dual eligible special needs plans (FIDE SNPs) or
highly integrated dual eligible special needs plans (HIDE SNPs) with
exclusively aligned enrollment--that is, where all of the plan's
membership receives Medicare and Medicaid benefits from the same
organization. Currently, exclusively aligned enrollment occurs in only
eight states: Florida, Idaho, Massachusetts, Minnesota, New Jersey, New
York, Tennessee, and Wisconsin. Currently, there are only 37 D-SNPs
operating under 34 contracts with 150,000 enrollees that could be
classified as FIDE SNPs or HIDE SNPs which operate

[[Page 15802]]

in states with exclusively aligned enrollment. The 150,000 enrollment
figure for contract year 2018 is projected to grow to 172,000 (150,000
x 1.145) enrollees by 2021, the first year that compliance with these
provisions will be required.\45\ While unifying grievance and appeals
provisions will necessitate states with exclusively aligned enrollment
policies to modify their Medicaid managed care plan contracts to
incorporate the new requirements, it will impose this burden on fewer
than 10 states, thereby falling below the threshold for PRA purposes.
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\44\ See https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data-Items/SNP-Comprehensive-Report-2018-06.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending.
\45\ Table IV.C1, ``Private Health Enrollment'' in 2018 Trustee
Report, accessible at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2018.pdf.
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We believe that our requirements at Sec. Sec. 422.629, 422.630,
and 422.631 related to integrated organization determinations and
integrated grievances should not be altogether unfamiliar to applicable
integrated plans because, in general terms, we are adopting whichever
of the current MA D-SNP or Medicaid managed care plan contract
requirements under part 422 subpart M (Medicare Advantage) and part 438
subpart F (Managed Care), respectively, is more protective of the
rights of the beneficiary or provides the most state flexibility,
consistent with the statutory requirements of section 1859(f)(8) of the
Act. Furthermore, we believe that by unifying Medicare and Medicaid
integrated organization determination and grievance requirements for
applicable integrated plans (that is, FIDE SNPs and HIDE SNPs with
exclusively aligned enrollment), we are reducing duplicative reviews
and notices, thereby ultimately reducing the level of burden on these
organizations. We detail the following:
In section III.B.3.a. of this final rule, the burden
associated with the implementation of our integrated organization
determination and integrated grievance procedures (Sec. Sec. 422.629,
422.630, and 422.631).
In section III.B.3.b. of this final rule, that the
information collection activities undertaken to administer our unified
appeals procedures (Sec. Sec. 422.629, 422.633, and 422.634) are
exempt from the PRA.
In section III.B.3.c. of this final rule, that the
requirement for all D-SNPs to assist enrollees with Medicaid coverage
issues and grievances in Sec. 422.562(a)(5) is also exempt from the
PRA.
a. Integrated Organization Determinations and Integrated Grievances
(Sec. Sec. 422.629, 422.630, and 422.631)
Section 422.631 requires that each applicable integrated plan issue
one integrated organization determination, so that all requests for
benefits from and appeals of denials of coverage by applicable
integrated plans will be subject to the same integrated organization
determination process. Section 422.631(d)(1) requires that an
applicable integrated plan send an integrated notice when the
integrated organization determination is adverse to the enrollee. The
notice must include information about the determination, as well as
information about the enrollee's appeal rights for both Medicare and
Medicaid covered benefits. Though integrating information on Medicare
and Medicaid appeal rights will be a new requirement, we note that the
requirement for a notice and the content of the notice largely align
with current requirements in Medicaid (Sec. 438.404(b)) and MA (Sec.
422.572(e)). We believe that the provision will have minimal impact on
plans based on our understanding of how plans that will meet the
definition of an applicable integrated plan under this final rule
currently handle coverage determinations for full-benefit dual eligible
individuals receiving Medicare and Medicaid services through the plan.
Currently, if such a plan were to deny or only partially cover a
Medicaid service never covered by Medicare (like a personal care
attendant or a clear request for Medicaid coverage), it will only issue
a Medicaid denial (one notice). Under this final rule, it will do the
same (that is, issue one notice). On the other hand, if the plan denied
a service that is covered under either Medicare or Medicaid, such as
home health services, we believe that the plan covering both Medicare
and Medicaid benefits in most, if not all, states will issue an
integrated determination notice that includes information about the
application of Medicare and Medicaid coverage criteria to the requested
service and how to appeal under both Medicare and Medicaid (one
notice). This final rule codifies this practice for applicable
integrated plans.
Also under Sec. 422.568(d), if the plan covers a service such as
durable medical equipment or home health services under Medicaid, but
denies the same service under Medicare's rules, it must issue a
Medicare denial even though the service was actually covered by the
plan based on its Medicaid contract. Under this final rule, a plan
covering both Medicare and Medicaid benefits will no longer need to
issue a notice in this situation. We do not have data to estimate the
number of instances in which D-SNPs currently issue denial notices
related to overlap services; therefore, we are unable to reliably
estimate the reduction in plan burden resulting from our unified
appeals requirements. We solicited feedback on the burden imposed on
integrated plans by having to send such a Medicare denial notice when
the service is covered by the plan under Medicaid rules in the proposed
rule. We did not receive any comment.
We are developing a model integrated denial notice form for use by
applicable integrated plans. When ready, the model form and its
associated requirements and burden will be submitted to OMB for
approval. It will also be made available to the public for review/
comment under the standard PRA process which includes the publication
of 60- and 30-day Federal Register notices and the posting of the
collection of information documents on our PRA website. Additionally,
changes to the procedures for applicable integrated plans will be
reflected in the current Notice of Denial of Medical Coverage form and
instructions (OMB control number 0938-0892; CMS-10003), but will not
impact this rule's burden estimates. As we did not finalize the
necessary revisions for this notice at the time of the proposed rule's
publication date, we did not set out such burden or solicit such
comments. We are in the process of publishing a stand-alone 60-day
Federal Register notice that set outs the revised form and form
instructions.
Under Sec. 422.629(g), applicable integrated plans must send a
notice of acknowledgment for all integrated grievances and integrated
reconsiderations. Medicaid managed care organizations are currently
required to send this notice under Sec. 438.406(b)(1), whereas MA
plans are not currently required to send this notice. Under this final
rule, applicable integrated plans must now send this notice for all
grievances and appeals, not only those pertaining to Medicaid issues.
Section 422.630(e) requires that applicable integrated plans issue a
notice upon resolution of the integrated grievance, unless the
integrated grievance was made orally and it did not concern quality of
care, and the enrollee did not request a written response. A
beneficiary's integrated grievance and the subsequent information
collection activities necessitated by that grievance are exempt from
the requirements of the PRA since the grievance would be submitted in
response to an

[[Page 15803]]

administrative action against a specific individual (5 CFR 1320.4).
However, the impact related to these requirements is estimated in
section IV.B.3. of this final rule.
We believe this final rule will result in a reduction in the number
of grievance reviews conducted by applicable integrated plans detailed
under Sec. 422.629(k)(2) due to the elimination of duplicative
grievance reviews for Medicare and Medicaid overlap issues. We do not
estimate this burden reduction as this information collection activity
is exempt under 5 CFR 1320.4 from the requirements of the PRA since it
occurs as part of an administrative action. However, the impact from
changes to these activities are estimated in section IV.B.3. of this
final rule.
We estimate negligible impacts on information collection activities
involved in unifying grievances associated with our provisions at Sec.
422.630. Under Sec. 422.630(b), applicable integrated plans will be
required to accept grievances filed at any time consistent with the
Medicaid standard at Sec. 438.402(c)(2)(i). This change will have the
net effect of permitting enrollees to file a grievance for a Medicare-
covered service outside of the current 60-day timely filing standard,
as measured from the date of the event or incident that precipitated
the grievance. The provision will effectively eliminate the timely
filing period for Medicare-related grievances. We do not expect this
requirement to increase the volume of grievances that an applicable
integrated plan will be responsible for handling since we believe that
the timeframes for filing Medicare grievances were designed to be
consistent with current practice and were set in place only to
eliminate complaint outliers.
Under Sec. 422.630(c), enrollees of applicable integrated plans
may file integrated grievances with the plan orally or in writing, in
alignment with current Medicare and Medicaid requirements, or with the
state, in states that have existing processes for accepting Medicaid
grievances in place in accordance with Sec. 438.402(c)(3). Because
this provision simply extends an existing avenue for filing grievances,
in states where it exists, for enrollees to file Medicaid benefits
grievances with the state, we do not expect an increase in the volume
of grievances that either states or applicable plans will be
responsible for handling.
Section 422.630(d) will permit an enrollee to file an expedited
grievance, which is available under current law for Medicare-covered,
but not Medicaid-covered, benefits. We estimate that the availability
of an expedited grievance for Medicaid benefits will have a negligible
impact on information collection activities because applicable
integrated plans will already have procedures in place to handle
expedited grievances for Medicare-covered services, which could be
leveraged for Medicaid-covered services. Furthermore, the availability
of the expedited resolution pathway (where under current law there is
only one resolution pathway for Medicaid-covered services) will have no
impact on the volume of grievances.
Section 422.630(e)(1) will require that an applicable integrated
plan resolve a standard (non-expedited) grievance within 30 days
consistent with the MA standard (Sec. 422.564(e)); under Medicaid
(Sec. 438.408(b)), the timeframe is established by the state but may
not exceed 90 calendar days from day the plan receives the grievance.
We estimate that this change in timeframe will have a negligible impact
on information collection activities because applicable integrated
plans already have business processes in place to comply with a 30-day
timeframe under MA.
Section 422.630(e)(2) requires an applicable integrated plan, when
extending the grievance resolution timeframe, to make reasonable
efforts to notify the enrollee orally and send written notice of the
reasons for the delay within 2 calendar days. We do not believe that
this provision will have more than a negligible impact on plans since
it adopts existing MA requirements for how an applicable integrated
plan must notify an enrollee of an extension and the existing Medicaid
managed care requirement for the timeliness standard. Thus, applicable
integrated plans will already have business processes in place to
comply with these requirements.
Although we do not estimate burden for applicable integrated plans
related to information collection activities involved in unifying
grievances associated with our provisions at Sec. Sec. 422.629 and
422.630, some of the individual provisions in Sec. Sec. 422.629
(general requirements), 422.630 (integrated grievances), and 422.631
(integrated organization determinations) will necessitate operational
and systems changes on the part of applicable integrated plans. The
following sections set out our burden estimates related to updates to
policies and procedures and recordkeeping and storage.
(1) Updates to Policies and Procedures
We estimate a one-time burden for each applicable integrated plan
to update its policies and procedures to reflect the new integrated
organization determination and grievance procedures under Sec. Sec.
422.629, 422.630 and 422.631. We anticipate this task will take a
business operation specialist 8 hours at $72.84/hr. In aggregate, we
estimate a one-time burden of 272 hours (8 hr x 34 contracts) at a cost
of $19,812 (272 hr x $72.84/hr). Over the course of OMB's anticipated
3-year approval period, we estimate an annual burden of 91 hours (272
hr x \1/3\) at a cost of $6,604 ($19,812 x \1/3\). We are annualizing
the one-time estimate since we do not anticipate any additional burden
after the 3-year approval period expires.
(2) Recordkeeping and Storage
D-SNPs, like other MA plans, are currently required to maintain
records for grievances (Sec. 422.504(d)). However, Sec. 422.629(h)
will require the maintenance of specific data elements consisting of: A
general description of the reason for the integrated grievance; the
date of receipt; the date of each review or, if applicable, the review
meeting; the resolution at each level of the integrated grievance, if
applicable; the date of resolution at each level, if applicable; and
the name of the enrollee for whom the integrated grievance was filed.
We estimate a one-time burden for applicable integrated plans to
revise their systems for recordkeeping related to integrated
grievances. We anticipate this task will take a software developer/
programmer 3 hours at $98.54/hr. Three hours is consistent with the
per-response time estimated in the May 2016 Medicaid Managed Care final
rule (81 FR 27498). In aggregate, we estimate a one-time burden of 102
hours (3 hr x 34 contracts) at a cost of $10,051 (102 hr x $98.54/hr).
Over the course of OMB's anticipated 3-year approval period, we
estimate an annual burden of 34 hours (102 hr x \1/3\) at a cost of
$3,350 ($10,051 x \1/3\). We are annualizing the one-time estimate
since we do not anticipate any additional burden after the 3-year
approval period expires.
We do not expect the cost of storage to change under Sec.
422.629(h)(3) since D-SNPs are currently required to store records
under Sec. 422.504(d), and the provision will not impose any new or
revised storage requirements or burden.
We received no comments on our assumptions for estimating the
burden associated with the operational and systems changes necessitated
by Sec. Sec. 422.629, 422.630, and 422.631.
However, we are updating our proposed burden estimates to reflect
several omissions and minor modifications to two occupational codes

[[Page 15804]]

and corresponding adjusted hourly wages. Table 5 summarizes the burden
resulting from these provisions.
b. Unified Appeals Procedures (Sec. Sec. 422.629, 422.633, and
422.634)
A beneficiary's appeal of an adverse integrated coverage
determination and the subsequent information collection activities
necessitated by that appeal are exempt from the requirements of the PRA
since the appeal would be submitted in response to an administrative
action against a specific individual (5 CFR 1320.4). In the case of
this final rule, the exemption covers any information collection
activities undertaken after the adverse integrated organization
determination by an applicable integrated plan, including:
acknowledgement of integrated reconsiderations under Sec. 422.629(g),
recordkeeping related to integrated appeals at Sec. 422.629(h), and
notification of the applicable integrated plan's integrated
reconsideration determination at Sec. 422.633(f)(4).
c. Assisting With Medicaid Coverage Issues and Grievances (Sec.
422.562(a)(5))
We have not calculated the burden for all D-SNPs to assist
enrollees with the filing of their grievance or appeal as required in
Sec. 422.562(a)(5). Since the provision of such assistance is a usual
and customary business practice it is exempt from the PRA under 5 CFR
1320.3(b)(2). We believe that this function would be performed in the
absence of federal regulation.
d. Summary
The burden associated with the individual components of our
provisions for unified grievance and appeals procedures for applicable
integrated plans are summarized in Table 5.

Table 5--Summary of D-SNP Unified Grievance and Appeals Procedures Burden
[OMB Control Number 0938-0753, CMS-R-267]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Hours per Total hours
Item Regulation respondents respondent \1\ Hourly wage Total cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Updates to Policies and Procedures........ 422.629, 422.630, and 34 8 91 72.84 6,604
422.631.
Recordkeeping............................. 422.629(g).................. 34 3 34 98.54 3,350
-------------------------------------------------------------------------------
Total................................. ............................ 34 Varies 125 Varies 9,954
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. ICRs Regarding Prescription Drug Plan Sponsors' Access to Medicare
Parts A and B Claims Data Extracts (Sec. 423.153(g))
The following requirements and burden will be submitted to OMB for
approval under control number 0938-TBD \46\ (CMS-10691).
---------------------------------------------------------------------------

\46\ Currently, the control number is to be determined (TBD).
OMB will assign the control number upon their approval of this new
information collection request. Approval can be monitored at
reginfo.gov without any login or password.
---------------------------------------------------------------------------

As described in section II.A.3. of this final rule, section 50354
of the Bipartisan Budget Act of 2018 requires the establishment of a
process under which the sponsor of a PDP that provides prescription
drug benefits under Medicare Part D may request, beginning in plan year
2020, that the Secretary provide on a periodic basis and in an
electronic format standardized extracts of Medicare Parts A and B
claims data about its plan enrollees. In this final rule we add a new
Sec. 423.153(g) to implement the process for requesting this data. The
provision will allow the PDP sponsor to submit a request to CMS for
claims data for its enrollees and to attest that it will adhere to the
permitted uses and limitations on the use of the Medicare claims data
that are listed in Sec. 423.153.
At the time of the proposed rule's publication date, we did not
finalize the operational aspects of this provision. Therefore, we did
not set out such burden or request comment in the Collection of
Information section of that rule. However, since that time, we have
finalized the operational aspects and published a stand-alone 60-day
Federal Register notice that set out the requirements and burden
associated with the request and attestation (November 30, 2018; 83 FR
61638). Comments were received and are responded to below. We are also
realigning the proposed provision with this final rulemaking by setting
out such requirements and burden below. In this regard we will not be
publishing a stand-alone 30-day Federal Register notice.
Section 423.153(g)(1)(i) states that beginning in plan year 2020, a
PDP sponsor may submit a request to CMS for claims data on enrollees in
its prescription drug plans. In addition, Sec. 423.153(g)(5) provides
that as a condition of receiving the requested data, the PDP sponsor
must attest that it will adhere to the permitted uses and limitations
on the use of the Medicare claims data. In the stand-alone notice we
anticipated that the data request and attestation will be combined into
a single submission. We continue to estimate it will take a business
operations specialist 1 minute at $72.84/hr to complete the request for
data and the attestation. As mentioned in section III.A. of this rule,
we are updating the hourly wage associated with the business operations
specialist.
Currently, there are 63 PDP sponsors and we estimate that all PDP
sponsors would initially submit a request and attestation. We also
estimate that each year approximately 1 to 5 PDP sponsors would start
requesting CMS claims data for its enrollees. For purposes of impact
estimates we assume the maximum, 5 PDP sponsors per year. We estimate
it will take a business operations specialist 1 minute to complete the
request for data and the attestation. We also estimate that each year
approximately 1 to 5 PDP sponsors will request that CMS stop sending
claims data for its enrollees. For purposes of impact estimates we
assume the maximum, 5 sponsors, will request discontinuation. We
estimate it will take a business operations specialist 1 minute (1/60
hr) to submit a request to CMS to stop sending claims data for its
enrollees.
For first year sponsor requests we estimate a burden of 63/60 hours
(1 hour and 3 minutes) (63 sponsors x 1/60 hr/response) at an aggregate
cost of $76.48 (63 sponsors x 1/60 hr x $72.84/hr).
In subsequent years we estimate a burden of 10/60 hours (1/60/hr x
(5 requests for data + 5 requests for discontinuation) at an aggregate
cost of $12.14 (10/60 x 72.84).
The aggregate impact over 3 years is 83/60 hour (63/60 for the
first year + 10/60 x 2 for the next 2 years) at a cost $100.76 ($76.48
for the first year + $12.14 x 2 for the next 2 years). When

[[Page 15805]]

annualized over 3 years, the annual impact is 28/60 hr (83/60 divided
by 3) at a cost of $33.59.
While we received a few comments, none of them were related to the
PRA or any of our collection of information requirements or burden
estimates. Nonetheless, we considered the comments since they were
rule-related and have responded to them under the appropriate sections
of this preamble, namely section II.A.3. of this final rule.
5. ICRs Regarding Medicare Advantage and Part D Prescription Drug Plan
Quality Rating System (Sec. Sec. 422.162(a) and 423.182(a), 422.166(a)
and 423.186(a), 422.164 and 423.184, and 422.166(i)(1) and
423.186(i)(1))
As described in section II.B.1. of this final rule, we are
finalizing: Measure updates for the 2022 and 2023 Star Ratings,
enhancements to the cut point methodology for non-CAHPS measures, and a
policy for calculating the Part C and D Star Ratings when extreme and
uncontrollable circumstances occur. The provisions will not change any
respondent requirements or burden pertaining to any of CMS's Star
Ratings-related PRA packages, including: OMB control number 0938-0732
for CAHPS (CMS-R-246), OMB control number 0938-0701 for HOS (CMS-
10203), OMB control number 0938-1028 for HEDIS (CMS-10219), OMB control
number 0938-1054 for Part C Reporting Requirements (CMS-10261), and OMB
control number 0938-0992 for Part D Reporting Requirements (CMS-10185).
Since the provisions will not impose any new or revised information
collection requirements or burden, we are not making changes under any
of the aforementioned control numbers.
6. ICRs Regarding Improving Clarity of the Exceptions Timeframes for
Part D Drugs (Sec. Sec. 423.568, 423.570, and 423.572)
To establish greater certainty in the Part D exceptions process, we
limited the amount of time an exception request can be held in a
pending status while the Part D plan sponsor attempts to obtain the
prescriber's supporting statement; specifically, that a plan must
notify the enrollee (and the prescriber involved, as appropriate) of
its decision on an exceptions request no later than 72 hours (24 hours
for expedited) of receipt of the prescriber's supporting statement or
14 calendar days after receipt of the request, whichever occurs first.
These provisions will not impose any new or revised information
collection requirements or burden. Consequently, the provisions are not
subject to the PRA. We did not receive any comments pertaining to our
position that the proposed provisions are not subject to the PRA.
Consequently, we are finalizing our position without change.
7. ICRs Regarding Preclusion List Requirements for Prescribers in Part
D and Individuals and Entities in MA, Cost Plans, and PACE (Sec. Sec.
422.222 and 423.120(c)(6))
As described in section II.C.1. of this final rule, the provisions
in Sec. Sec. 422.222 and 423.120(c)(6) will not involve activities for
plan sponsors and MA organizations outside of those described in the
previously referenced April 2018 final rule (83 FR 16440). The
provisions are, generally speaking, clarifications of intended policy
and will not impose any new or revised information collection
requirements or burden. Consequently, the provisions are not subject to
the PRA.
We did not receive any comments pertaining to our position that the
proposed provisions are not subject to the PRA. Consequently, we are
finalizing our position without change.

C. Summary of Information Collection Requirements and Burden

[[Page 15806]]

[GRAPHIC] [TIFF OMITTED] TR16AP19.001

[[Page 15807]]

IV. Regulatory Impact Analysis

A. Statement of Need

This final rule implements specific provisions of the Bipartisan
Budget Act of 2018 related to MA additional telehealth benefits, MA
dual eligible special needs plans (D-SNPs), and Part D sponsors' access
to Medicare claims data. The rule will also improve quality and
accessibility; clarify certain program integrity policies; reduce
burden on providers, MA organizations, and Part D sponsors through
providing additional policy clarification; and implement other
technical changes regarding quality improvement. Although satisfaction
with the MA and Part D programs remains high, these changes are
necessary to implement certain provisions of the Bipartisan Budget Act
of 2018 and are responsive to input we received from stakeholders while
administering the programs, as well as through our requests for
comment. We decided to modify the MA and Part D Prescription Drug Plan
Quality Rating System in response to comments from the proposed rule
entitled Medicare Program; Contract Year 2019 Policy and Technical
Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-
for-Service, The Medicare Prescription Drug Benefit Programs, and the
PACE program (November 28, 2017, 82 FR 56336).
In this final rule, our policies continue to drive affordable
private plan options for Medicare beneficiaries that meet their unique
healthcare needs, such as supporting innovation in telehealth among MA
plans to provide more options and additional benefits for MA enrollees.
These provisions align with the Administration's focus on the interests
and needs of beneficiaries, providers, MA plans, and Part D sponsors.

B. Overall Impact

We examined the impact of this final rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), Executive Order 13272 on Proper Consideration of
Small Entities in Agency Rulemaking (August 13, 2002), section 1102(b)
of the Act, section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA) (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C.
804(2)), and Executive Order 13771 on Reducing Regulation and
Controlling Regulatory Costs (January 30, 2017).
The RFA, as amended, requires agencies to analyze options for
regulatory relief of small businesses, if a rule has a significant
impact on a substantial number of small entities. For purposes of the
RFA, small entities include small businesses, nonprofit organizations,
and small governmental jurisdictions.
This final rule affects MA plans and Part D sponsors (North
American Industry Classification System (NAICS) category 524114) with a
minimum threshold for small business size of $38.5 million (http://www.sba.gov/content/small-business-size-standards). This final rule
additionally affects hospitals (NAICS subsector 622) and a variety of
provider categories, including physicians and specialists (NAICS
subsector 621).
To clarify the flow of payments between these entities and the
federal government, note that MA organizations submit bids (that is,
proposed plan designs and projections of the revenue needed to provide
those benefits, divided into three categories--basic benefits,
supplemental benefits, and Part D drug benefits) in June 2019 for
operation in contract year 2020. These bids project payments to
hospitals, providers, and staff as well as the cost of administration
and profits. These bids in turn determine the payments from the
Medicare Trust Fund to the MA organizations that pay providers and
other stakeholders for their provision of covered benefits to
enrollees. Consequently, our analysis will focus on MA organizations.
There are various types of Medicare health plans, including MA
plans, Part D sponsors, demonstrations, section 1876 cost plans, PDPs,
and PACE plans. Forty-three percent of all Medicare health plan
organizations are not-for-profit, and 31 percent of all MA plans and
Part D sponsors are not-for-profit. (These figures were determined by
examining records from the most recent year for which we have complete
data, 2016.)
There are varieties of ways to assess whether MA organizations meet
the $38.5 million threshold for small businesses. The assessment can be
done by examining net worth, net income, cash flow from operations, and
projected claims as indicated in their bids. Using projected monetary
requirements and projected enrollment for 2018 from submitted bids, 32
percent of the MA organizations fell below the $38.5 million threshold
for small businesses. Additionally, an analysis of 2016 data--the most
recent year for which we have actual data on MA organization net
worth--shows that 32 percent of all MA organizations fall below the
minimum threshold for small businesses.
Executive Order 13272 requires that the Department of Health and
Human Services (HHS) thoroughly review rules to assess and take
appropriate account of their potential impact on small business, small
governmental jurisdictions, and small organizations (as mandated by the
RFA).
If a final rule may have a significant economic impact on a
substantial number of small entities, then the final rule must discuss
steps taken, including alternatives, to minimize burden on small
entities. The RFA does not define the terms ``significant economic
impact'' or ``substantial number.'' The Small Business Administration
(SBA) \47\ advises that this absence of statutory specificity allows
what is ``significant'' or ``substantial'' to vary, depending on the
problem that is to be addressed in the rulemaking, the rule's
requirements, and the preliminary assessment of the rule's impact. To
ensure that a broad range of impacts are fully considered in the
analysis, we consider ``substantial number'' to mean 5 percent or more
of the affected small entities within an identified industry.
---------------------------------------------------------------------------

\47\ The Regulatory Flexibility Act An Implementation Guide for
Federal Agencies, pages 17-19. Issued by SBA's Office of Advocacy,
and accessible at www.sba.gov/advo.
---------------------------------------------------------------------------

The 1984 HHS Handbook, On Developing Low Burden and Low Cost
Regulatory Proposals, set forth the following definitional narrative
for the term ``significant economic impact'' and is still applicable: A
rule has a significant economic impact on the small entities it
affects, if it significantly affects their total costs or revenues. If
the economic impact is expected to be similar for all affected small
entities and those entities have similar costs and revenues, then an
average impact can be calculated. If the average annual impact on small
entities is 3 to 5 percent or more, then we consider the rule has a
significant economic impact on small entities.
While a significant number (more than 5 percent) of not-for-profit
organizations and small businesses are affected by this final rule, the
impact is not significant. To assess impact, we use the data in Table
17, which show that the raw (not discounted) net cost of this final
rule over 10 years is $24.1 million. Comparing this number to the total
monetary amounts projected to be needed just for 2020, based on plan
submitted bids, we find that the impact

[[Page 15808]]

of this rule is significantly below the 3 to 5 percent threshold for
significant impact. Had we compared the 2020 impact of the rule to
projected 2020 monetary need, the impact would still be less.
Consequently, the Secretary has determined that this final rule
will not have a significant economic impact on a substantial number of
small entities, and we have met the requirements of Executive Order
13272 and the RFA. In addition, section 1102(b) of the Act requires us
to prepare a regulatory analysis for any final rule under title XVIII,
title XIX, or Part B of Title XI of the Act that may have significant
impact on the operations of a substantial number of small rural
hospitals. We are not preparing an analysis for section 1102(b) of the
Act because the Secretary certifies that this final rule will not have
a significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of UMRA also requires that agencies assess anticipated
costs and benefits before issuing any final rule whose mandates require
spending in any 1 year of $100 million in 1995 dollars, updated
annually for inflation. In 2019, that threshold is approximately $154
million. This final rule is not anticipated to have an effect on state,
local, or tribal governments, in the aggregate, or on the private
sector of $154 million or more.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a final rule that imposes
substantial direct requirement costs on state and local governments,
preempts state law, or otherwise has federalism implications. Since
this final rule does not impose any substantial costs on state or local
governments, the requirements of Executive Order 13132 are not
applicable.
If regulations impose administrative costs on reviewers, such as
the time needed to read and interpret this final rule, then we should
estimate the cost associated with regulatory review. There are
currently 750 MA contracts (which also includes PDPs), 50 state
Medicaid agencies, and 200 Medicaid managed care organizations (1,000
reviewers total). We assume each entity will have one designated staff
member who will review the entire rule. Other assumptions are possible.
Using the wage information from the Bureau of Labor Statistics
(BLS) for medical and health service managers (code 11-9111), we
estimate that the cost of reviewing this final rule is $107.38 per
hour, including fringe benefits and overhead costs (http://www.bls.gov/oes/current/oes_nat.htm). Assuming an average reading speed, we
estimate that it will take approximately 12.5 hours for each person to
review this final rule. For each entity that reviews the rule, the
estimated cost is $1,342 (12.5 hours * $107.38). Therefore, we estimate
that the total cost of reviewing this final rule is $1,342,000 ($1,342
* 1,000 reviewers).
Note that this analysis assumed one reader per contract. Some
alternatives include assuming one reader per parent organization. Using
parent organizations instead of contracts will reduce the number of
reviewers to approximately 500 (assuming approximately 250 parent
organizations), and this will cut the total cost of reviewing in half.
However, we believe it is likely that reviewing will be performed by
contract. The argument for this is that a parent organization may have
local reviewers assessing potential region-specific effects from this
final rule.
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by the Office of Management and Budget (OMB).
We received no comments on our estimates of impact on small
businesses and other items mentioned in the Overall Impact section.
Therefore, we are finalizing this section as without modification.

C. Anticipated Effects

1. Requirements for Medicare Advantage Plans Offering Additional
Telehealth Benefits (Sec. Sec. 422.100, 422.135, 422.252, 422.254, and
422.264)
As described in section II.A.1. of this final rule, section 50323
of the Bipartisan Budget Act of 2018 allows MA plans the ability to
provide MA additional telehealth benefits to enrollees starting in plan
year 2020 and treat them as basic benefits. In this rule, we are
finalizing--with slight modifications--most proposed requirements at
Sec. 422.135, which will authorize and set standards for MA plans to
offer MA additional telehealth benefits. Section 422.135(a) defines
these benefits as Part B services that have been identified by the MA
plan for the applicable year as clinically appropriate to furnish
through electronic exchange when the physician (as defined in section
1861(r) of the Act) or practitioner (described in section
1842(b)(18)(C) of the Act) providing the service is not in the same
location as the enrollee. We are revising our proposed impact estimates
based on stakeholder feedback. In the proposed rule, we set forth the
following impacts.
There are two primary aspects of the MA additional telehealth
benefits provision that could affect the cost and utilization of MA
basic benefits, with a corresponding impact on Medicare program
expenditures. The most direct effect is the reclassification of certain
telehealth services covered by MA plans pre-Bipartisan Budget Act of
2018 from MA supplemental telehealth benefits to basic benefits. This
change will lead to higher basic benefit bids, as the cost of MA
additional telehealth benefits will be included in the basic benefit
bid. The impact on the basic benefit bid may be muted due to the
exclusion from the bid of capital and infrastructure costs related to
MA additional telehealth benefits.
Prior to estimating the impact on the bid, we point out several
other sources of impact. Many studies have argued that telehealth will
increase utilization of medical services by making them more
accessible. However, the increased utilization could lead to increased
savings or cost. The increased utilization could lead to significant
savings due to prevention of future illness. Alternatively, the
increased utilization could lead to increased costs if enrollees start
seeing doctors for complaints on which they did not traditionally seek
medical advice. We cite studies for each possibility. Additionally, if
there are more telehealth visits, providers may request more in-person
visits to protect themselves from liability.
Consequently, there are four potential impacts of this provision,
which we discuss in more detail later in this section. The four areas
are as follows:

Impact on the Medicare Trust Fund
Savings for Enrollees due to Decreased Travel Time to
Providers
Savings from Illness Prevention due to Increased Access to
Services
Increased Costs if Unnecessary Medical Visits Increase

The final rule allows for differential cost sharing. We expect that
enrollees would incur lower cost sharing from telehealth services than
they would from in-person visits. This would result in enrollee
savings. However, we have no way of estimating this savings because we
lack any data experience with this differential cost sharing.
Therefore, we are scoring this as a qualitative savings.
Because of the wide variability in potential impact, in the
proposed rule we solicited comments on best practices in telehealth and
the resulting savings. In the following sections, we summarize and
respond to these comments.

[[Page 15809]]

a. Impact on the Medicare Trust Fund
Superficially, there appears to be no program change since the
provision simply reclassifies certain benefits as basic instead of MA
supplemental. Thus, the same benefits are provided. However, a closer
look at the language and assumptions of the provision show that, while
collectively MA additional telehealth benefits will yield a negligible
change in program spending, there is a small transfer of costs
(estimated to be 0.002 percent of the MA baseline) from enrollees to
the Medicare Trust Fund, associated with reclassifying these benefits
from MA supplemental benefits to basic benefits. MA supplemental
benefits are generally paid with rebates while basic benefits are paid
by a capitation rate, calculated with reference to the bid. For MA
plans to provide benefits using rebates requires additional funding
since the amount of rebates provided by the Medicare Trust Fund
averages only $0.66 on the dollar. Thus, the effect of the rebate
aspect is that the enrollee either pays a lower supplemental premium or
receives richer MA supplemental benefits. In either case, whether the
enrollee saves or receives richer MA supplemental benefits, the
Medicare Trust Fund incurs a cost. It follows that this provision
creates a cost transfer from the Medicare Trust Fund to enrollees. The
direction of the cost is classified by whether the Medicare Trust Fund
loses or gains. In this case, since the Medicare Trust Fund loses
money, we classify the transfer as a cost. However, the transfer
results in a savings to enrollees. After accounting for the exclusion
of capital and infrastructure costs, and backing out the Part B
premium, the extra cost to the Medicare Trust Fund is projected to be
$80 million over 10 years. The calculations for these 10 years are
presented in Table 7 and discussed in the narrative.
In order to estimate the 10-year impact (2020 through 2029) of the
MA additional telehealth benefits provision on the Medicare Trust Fund,
we considered the following six factors.
First, we estimated the costs of MA additional telehealth
benefits that are to be transferred from MA supplemental telehealth
benefits to basic benefits. Using the 2019 submitted bid information,
we estimated that $0.09 per member per month (PMPM) will be
transferred. We computed $0.09 by examining and averaging the largest
organizations' MA supplemental telehealth benefits, particularly under
the category ``Web and Phone Based Technology.'' The reason for basing
estimates on the largest organizations is that in past years, only the
largest organizations included the category ``Web and Phone Based
Technology'' as a separate line item in their bids; by contrast, the
other organizations combined multiple, non-telehealth benefits in the
same line as the MA supplemental telehealth benefits, and so we were
not able to distinguish the costs between telehealth and non-telehealth
for the smaller organizations. Information from the 2018 Medicare
Trustees Report \48\ shows that the applicable medical-inflation trend
that should be applied to the $0.09 PMPM is 5.2 percent per year; the
average trend can be derived from information in Table IV.C3 of this
report.
---------------------------------------------------------------------------

\48\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2018.pdf.
---------------------------------------------------------------------------

We applied the PMPM amounts to the projected MA enrollment
for the years 2020 through 2029. The source of the projected MA
enrollment is Table IV.C1 of the 2018 Medicare Trustees Report.
We assumed that 15 percent of the MA additional telehealth
benefits will be considered capital and infrastructure costs. As
discussed in section II.A.1. of this final rule, these costs are
excluded from the Medicare Trust Fund payments for MA additional
telehealth benefits. We obtained the 15 percent assumption by
subtracting the 85 percent required medical loss ratio (MLR) from 100
percent. We used the MLR as a proxy for the medical share of provider
payments.
We applied the average rebate percentage of 66 percent,
which is based on the expected submitted bid information, including
expected enrollment and expected average Star Ratings.
We applied a factor of 86 percent to the calculation,
which represents the exclusion or the backing out of the Part B
premium.
However, per OMB guidance, ordinary inflation should be
carved out of estimates, while medical inflation, which outpaces
ordinary inflation (as well as enrollment growth), may be retained. The
source of the ordinary inflation is Table IV.D1 of the 2018 Medicare
Trustees Report. It is 2.6 percent per year for each of the years 2020
through 2029.

Table 7--Calculations of Net Costs Per Year to the Medicare Trust Fund for MA Additional Telehealth Benefits
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Gross amount Capital and Backing out of
Year MA enrollment PMPM cost months per ($ in infrastructure Average rebate Part B premium Net cost ($ in Ordinary Net costs ($
(in thousands) year millions) costs (%) percentage (%) (%) millions) inflation (%) in millions)
(A) (B) (C) (D) (A * (1 - B) * (F) (E)/(1 + (F))
(1 - C) * (D)) [caret] (year-
(E) 2019)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2020............................ 21,995 0.09 12 25.0 15 66 86 6.2 2.6 6.1
2021............................ 22,873 0.10 12 27.3 15 66 86 6.8 2.6 6.5
2022............................ 23,739 0.10 12 29.8 15 66 86 7.4 2.6 6.9
2023............................ 24,584 0.11 12 32.5 15 66 86 8.1 2.6 7.3
2024............................ 25,395 0.12 12 35.3 15 66 86 8.8 2.6 7.7
2025............................ 26,198 0.12 12 38.4 15 66 86 9.5 2.6 8.2
2026............................ 26,986 0.13 12 41.6 15 66 85 10.2 2.6 8.5
2027............................ 27,737 0.14 12 44.9 15 66 85 11.0 2.6 9.0
2028............................ 28,455 0.14 12 48.5 15 66 85 11.9 2.6 9.5
2029............................ 29,101 0.15 12 52.2 15 66 85 12.8 2.6 9.9
---------------------------------------------------------------------------------------------------------------------------------------------------------------
Raw Total................... .............. .............. .............. .............. .............. .............. .............. .............. .............. 79.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Combining these six factors, we calculated the net costs to the
Medicare Trust Fund to be $6.1 million in 2020, $6.5 million in 2021,
$6.9 million in 2022, $7.3 million in 2023, and $7.7 million in 2024.
We calculated the net costs to the Medicare Trust Fund for years 2025
through 2029 to be $8.2 million, $8.5 million, $9.0 million, $9.5

[[Page 15810]]

million, and $9.9 million, respectively. The calculations of impact for
years 2020 through 2029 are summarized in Table 7. The total cost for
all 10 years is found in the right-most column of Table 7, titled ``Net
Costs.''
b. Savings for Enrollees Due to Decreased Travel Time to Providers
MA additional telehealth benefits will save enrollees the cost of
traveling to and from providers. Currently, Medicare telehealth
services are used to bring healthcare services to MA enrollees,
including those in rural locations. In their comments on the proposed
rule, as well as in response to specific inquiries we made in the
proposed rule related to telehealth, stakeholders have informed CMS
that MA enrollees benefit from the use of telehealth services to reduce
travel times and have greater access to providers that may not
otherwise be available. Several commenters provided specific details
from their own experiences on the nature of these savings.
(1) Assumptions
Prior to our actual estimation of the savings for enrollees due to
decreased travel time to providers, we discuss seven assumptions
underlying our calculations.
(a) Current MA Supplemental Telehealth Benefits' Usage
Under the current MA program, MA plans may offer MA supplemental
telehealth benefits in the form of telemonitoring and remote access
technologies (including nursing hotlines).\49\ However, the plan
benefit package software does not have sufficient granularity to
identify which types of MA supplemental telehealth benefits are being
offered. Analyzing supporting documentation for the plan bids, the
Office of the Actuary (OACT) has found an average spending of $0.09
PMPM for MA supplemental telehealth benefits among the large MA plans
(smaller plans do not provide this data). OACT estimates that in 2019
there will be an average rebate of $110 PMPM. Of this $110, on average,
44 percent is applied to reduction in cost sharing (compared to cost
sharing in original Medicare for Part A and B benefits), and 32 percent
is applied to buying down the Part B and Part D premiums, leaving 24
percent or $27 PMPM with which to fund additional services. It follows
that large MA plans use only 0.33 percent ($0.09/$27) of available
rebate resources to fund MA supplemental telehealth benefits. It is
reasonable that the $0.09 PMPM average for large MA plans is even less
for smaller plans who may not have the resources to be as aggressive in
their MA supplemental telehealth benefit designs.
---------------------------------------------------------------------------

\49\ Chapter 4 of the Managed Care Manual, Section 30.3 https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
---------------------------------------------------------------------------

These considerations--coupled with a discussion of how CMS and
stakeholders expect telehealth to be used--suggest that while current
MA policy theoretically allows MA supplemental telehealth benefits,
they are not being significantly offered. The arguments for this are as
follows:
Telehealth Specialties and Telemonitoring: In response to
our discussion and request for comments in the proposed rule,
commenters enthusiastically supported the MA additional telehealth
benefits proposal as a saver precisely because both telemonitoring and
certain specialties--especially dermatology, cardiology, and
psychiatry--will be used significantly more often under these new
benefits. Commenters pointed out that there are not enough
dermatologists, cardiologists, and psychiatrists to provide all needed
services in rural areas. The availability of MA additional telehealth
benefits will remedy a lack of access based on this lack of resources.
Some commenters related their personal experience and the savings they
expected to accrue. No commenter dissented whether this provision would
significantly save. The tone of the comments seem to imply that these
commenters believed that the final rule would allow these MA additional
telehealth benefits or greatly facilitate their offering.
Current Allowed MA Supplemental Telehealth Benefits: As
discussed previously in the estimates of impact on the Medicare Trust
Fund, we found that approximately $0.09 PMPM was being used for current
MA supplemental telehealth benefits (telemonitoring and remote access
technologies). Telehealth services are not low-cost (though they cost
less than in-person visits). This $0.09 must pay for the provider
review and assessment. Hence, this $0.09 reflects a significantly low
utilization. The following simple hypothetical example illustrates
this. Suppose in a plan, once a month, 30 enrollees in a plan with
8,300 total enrollees are using MA supplemental telehealth benefits,
which costs $100/hr and takes 15 minutes to review. Then the cost to
the plan is 30 enrollees x $100/hr x 0.25 hr = $750. However, the cost
per enrollee is $750/8,300 = $0.09. This illustrative example with
hypothetical numbers clarifies why we are inferring from the $0.09 that
plan utilization is extremely low.
Although this $0.09 reflects the cost to the plan, it is legitimate
to use this to estimate savings to enrollees. The logic behind this is
as follows. The low cost of $0.09 indicates low utilization, and it is
the low utilization which drives our assumption that few enrollees are
spending travel time currently. For example, in our simple hypothetical
example above, without MA additional telehealth benefits, only 30
enrollees would have to travel back and forth to a provider once a
month. We are estimating that, under this final rule, there would be
more usage of telehealth; we expect more than 30 enrollees to use this
and we expect it to be used more than once a month. Without MA
additional telehealth benefits, this would necessitate the cost of
travel, while with MA additional telehealth benefits, there is no
travel; hence, the estimate of savings is justified. Tables 8 and 9
indicate the frequency of utilization we expect over the next 10 years.
Despite the previous arguments, we must concede that currently some
telehealth benefits are being offered as MA supplemental telehealth
benefits. In the absence of further data, we are making an assumption
that less than 50 percent of the telehealth services that will be
furnished under this final rule are currently available. This
assumption has intuitive appeal. If only $0.09 out of $27 is being used
for MA supplemental telehealth benefits, while the remaining $26.91 is
being used to fund non-telehealth benefits, it is very reasonable to
assume that current utilization is less than 50 percent of what it is
expected to become under the final rule when plans can fund these
benefits from the Medicare Trust Fund without using their rebate
dollars.
(b) Possible Overutilization
In the proposed rule, although we did estimate the potential
savings to enrollees from reduced travel time to and from providers
arising from MA additional telehealth benefits, we did not include this
estimate in the summary and accounting tables (Tables 16 and 17)
because there was a concern that telehealth would possibly lead to
overutilization of provider visits, thus offsetting the savings. We
address this concern in the following points:
Only one article raised this concern, and the article
itself listed several drawbacks to its conclusion.\50\ More
specifically, the article--
---------------------------------------------------------------------------

\50\ J. Ashwood, A. Mehrotra, D. Cowling, and L. Uscher-Pines,
``Direct to Consumer Telehealth May Increase Access to Care but Does
not Decrease Spending,'' Health Affairs 36(3), 2017, accessible at
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.1130.

---------------------------------------------------------------------------

[[Page 15811]]

++ Used data from only one telehealth company;
++ Used data on only specific medical conditions;
++ Referenced a population study that had a ``low uptake of
telehealth;'' and
++ Was from an early period in telehealth.
Despite low uptake of telehealth in 2013, we have seen a
significant increase in telehealth usage over the past few years.
Furthermore, one article on telehealth points to the importance of
patient buy-in, which is more common today.\51\
---------------------------------------------------------------------------

\51\ Harry Wang, Director Health and Mobile Product Research,
Parks Associates ``Virtual Health Care will revolutionize the
Industry If we let it'', Forbes, 2014, accessible at https://www.forbes.com/sites/ciocentral/2014/04/03/virtual-health-care-visits-will-revolutionize-the-industry-if-we-let-it/#4ee9a9e97c25;
https://www.forbes.com/sites/ciocentral/2014/04/03/virtual-health-care-visits-will-revolutionize-the-industry-if-we-let-it/#4ee9a9e97c25.
---------------------------------------------------------------------------

To better understand the concern regarding
overutilization, we solicited comments in the proposed rule on whether
MA additional telehealth benefits would save enrollees due to reduced
travel time. We received numerous comments from several sources, and
the commenters were overwhelmingly supportive. The comments were not
subjective but evidence-based, reflecting MA plans' first-hand
experience with telehealth in some of their existing products. Some
commenters specifically addressed the travel time issue. For example, a
commenter indicated that virtual visits can not only reduce patient
travel time, but can also potentially supplant nursing and in-home
visits. In addition, the commenter referenced a virtual care experience
in one particular plan which spoke to both clinician and patient time-
in-transit savings. Other commenters simply echoed the travel time
estimates in the proposed rule. However, many commenters discussed
increased usage of telehealth services particularly in specialties such
as cardiology, psychiatry, and dermatology, and especially in rural
areas where there is a shortage of specialists.
Based on the previous discussion, we are including our estimates of
travel savings in the summary and accounting tables (Tables 16 and 17).
In making these estimates, we are assuming that the number of visits
will remain the same overall but that a certain percentage of the in-
person visits will be replaced by visits through electronic exchange
from MA additional telehealth benefits.
(c) Telehealth Provider Utilization by Age
The available statistics discuss telehealth without adequate
distinction based on age. It is very likely that a breakout by age
would give more precise estimates, but unfortunately we do not have
such data.
(d) Avoiding Overestimation of Telehealth Growth
In creating a 10-year estimate, there are several conflicting
sources with the growth of telehealth visits. To avoid problems of
overestimation, we adopted the lower growth rate estimates. We present
numerical details of this approach in the section containing the actual
estimates.
(e) Enrollee Savings Versus Medicare Trust Fund Impact
We explicitly clarify that the $80 million cost over 10 years,
estimated in Table 7, is a cost incurred by the Medicare Trust Fund and
represents a transfer from the government to enrollees, because the
rebate dollars that formerly paid for MA supplemental telehealth
benefits are now being freed, possibly, for additional benefits to
enrollees either in the form of MA supplemental benefits or reduced
cost sharing. However, the savings described are savings to enrollees.
(f) Internet Access in the 65+ Population
Our estimates of impact include a trend factor for increased
general use of telehealth over the next few years. This trend factor is
for the entire population. We therefore clarify that we do not believe
that access to telehealth will be lower in the 65+ population because
of the following:
Telehealth does not exclusively require broadband internet
capability; for example, telehealth access may also be provided through
cell phones providing internet access.
Many seniors have children or other members of their
social support group who regularly visit them and could provide
internet access through laptops, tablets, cell phones, or other
internet-capable devices during their visits.
There is now a large market for internet access, possibly
without computers, offered by major manufacturers and targeted
specifically for seniors. Current products include smart televisions
allowing access without a computer, laptops specifically designed for
seniors, and free or low-cost laptops provided by a number of national
and local organizations in an effort to specifically encourage senior
computer use.
There are a variety of free online courses specifically
targeted to seniors to facilitate familiarity with internet usage.
Therefore, we believe that the uniformity of trend for telehealth
access is not an issue.
(g) Healthcare Savings
Although we are including in our impact analysis the savings to
enrollees arising from reduced travel time, we are not including a
quantification of healthcare savings. The commenters overwhelmingly
supported the idea that telehealth would reduce healthcare spending due
to increased preventive measures, consequent reduced readmissions and
reduced initial hospitalizations, and greater access to certain
specialties where access is currently low, such as cardiology,
psychiatry, and dermatology. Furthermore, in the proposed rule, we had
provided references, estimating in specific (typically one-time)
settings, and the healthcare savings per inpatient enrollee. We have
omitted mention of these studies in this final rule because MA
additional telehealth benefits only apply to Part B services, not to
inpatient services. However, commenters merged comments about savings
from both inpatient telehealth and specialty telehealth such as tele-
cardiology, tele-dermatology, and tele-psychiatry. In general, the
commenters were enthusiastic about all aspects of telehealth saving
money for both Part B and Part A services. Many of the commenters cited
similar studies or their own experience. These articles and comments
point to a quantitative savings in health care. Although, as mentioned
previously, in the early years of telehealth there was concern for
overutilization which would raise costs, this does not seem to be major
issue today.
However, we are not quantifying the healthcare savings since each
dollar of healthcare savings does not automatically become a dollar
reduction in Medicare Trust Fund expenditures paying for plan bid
estimates. As a simple example, some savings may translate to higher
administrative margins (increased profits). Similarly, a portion of the
healthcare savings may be allocated to increased benefits, for example,
preventive benefits. We do not have a basis for quantifying these
factors. Therefore, we are leaving the healthcare savings as a
qualitative impact without further quantification.

[[Page 15812]]

(2) Actual Estimation
Having completed our discussion of assumptions, we next turn to the
actual estimation. We require four component estimates to estimate
aggregate savings for enrollees due to decreased travel time to
providers. We provide these four component estimates as follows:
(a) Average Travel Time and Average Travel Distance per Visit
While it is difficult to estimate the savings in reduced travel
time quantitatively, since distances from enrollees to providers vary
significantly, to estimate the travel time to providers we use a former
CMS standard that providers should be located within 30 minutes or 30
miles of each enrollee. While this standard has since been replaced by
a more sophisticated measurement of access, we can use it as a proxy.
The former CMS standard was used because it is formulated simply in
terms of time (30 minutes) and mileage (30 miles) and does not
differentiate among provider types. The current standards for access
involve sophisticated algorithms, which involve more than two
parameters (time and mileage) and additionally differ by geographic
location and provider types. Therefore, the current standards were not
suitable due to their complexity. We therefore assume that the
midpoint, 15 minutes or 0.25 hour, represents the typical travel time
to providers per enrollee visit. We note that our estimate of 30
minutes round-trip is close to the 37-minute estimate used in one
article.\52\ Similarly, we believe that 15 miles (one-half of 30 miles)
is the average travel distance per provider visit.
---------------------------------------------------------------------------

\52\ J. Ashwood, A. Mehrotra, D. Cowling, and L. Uscher-Pines,
``Direct to Consumer Telehealth May Increase Access to Care but Does
not Decrease Spending,'' Health Affairs 36(3), 2017, accessible at
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.1130.
---------------------------------------------------------------------------

In estimating the savings in wages due to reduced travel time, we
first note that the group of individual respondents varies widely by
respondent age, location, years of employment, educational attainment,
and working status with many people over 65 retired. To deal with this
variability, we follow the OMB guidance for estimating hourly wages for
enrollees using the occupational title ``All Occupations'' (occupation
code 00-0000 on the BLS website), with a mean wage of $24.34/hour. This
guidance reflects the OMB approach that all time should have a dollar
value. However, since we believe most MA enrollees are not working, we
are not adding 100 percent for overtime and fringe benefits. In other
words, we are scoring the wages as $24.34/hour.
Thus, the net impact per enrollee per telehealth visit to providers
would be $18.17 (15 miles * 2 (round trip) * $0.20 per mile (cost of
gasoline for medical transportation \53\) + 0.25 hours travel time * 2
(round trip) * $24.34/hr). The $0.20 per mile for cost of gasoline for
medical transportation reflects updated numbers by the Internal Revenue
Service (IRS) for 2019. As discussed previously, we assume that at most
50 percent of expected telehealth visits are currently being offered.
Therefore, we save at most $9.09 (0.5 x $18.17) per enrollee per
telehealth visit. The actual percentage saved may be significantly more
than 50 percent. This is summarized in Table 8.
---------------------------------------------------------------------------

\53\ https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2019.
---------------------------------------------------------------------------

(b) Average Number of Visits per Enrollee
In 2014, the Centers for Disease Control and Prevention (CDC)
estimated that persons 65 years of age and older average 5.89 visits
per person per year.\54\
---------------------------------------------------------------------------

\54\ https://www.cdc.gov/nchs/products/databriefs/db292.htm;
https://www.cdc.gov/nchs/products/databriefs/db292.htm.
---------------------------------------------------------------------------

(c) Number of MA Enrollees
Table IV.C1 of the 2018 Medicare Trustees Report provides the
projected MA enrollment.
(d) Percent, per Year, of Provider Visits That Are Telehealth
Ideally, we would like an estimate on the number of total visits
and telehealth visits for 65-year-olds. However, these data are not
available. Therefore, we use the best available proportions. We proceed
as follows.
The CDC website cited earlier estimates 885 million provider visits
in 2014. This is an aggregate number over all age groups; the 885
million was not broken out further by age group.
Absent information on the proportion of telehealth visits among
total visits by 65-year-olds to providers, we use general averages
(across all age groups) with the understanding that some accuracy is
lost. The Statista website suggests 22 million telehealth visits in
2014.\55\ This implies that 2.49 percent (22/885) of all physician
visits were telehealth visits.
---------------------------------------------------------------------------

\55\ https://www.statista.com/statistics/820756/number-of-telehealth-visits-in-us/; https://www.statista.com/statistics/820756/number-of-telehealth-visits-in-us/.
---------------------------------------------------------------------------

Inferring growth rates from the numbers on the Statista website,
the projected low and high growth rates for telehealth services are 8.9
percent and 22 percent respectively. Other websites give similar
ranges. For example, Becker gives three estimates for telehealth growth
rates of 14.3 percent, 16.5 percent, and 27.5 percent.\56\ Because of
this variability, we use the lower estimate for projected telehealth
growth, which is about 8.9 percent. These numbers can be used to
estimate the proportion of provider visits that will be telehealth in
future years. For example, in 2015, we assume 1.089 (growth rate) *
2.49 percent (proportion of provider visits that are telehealth in
2014) = 2.71 percent of provider visits will be telehealth visits.
---------------------------------------------------------------------------

\56\ See https://www.beckershospitalreview.com/healthcare-information-technology/telemedicine-to-attract-7m-patient-users-by-2018-12-statistics-on-the-thriving-market.html; https://www.beckershospitalreview.com/telehealth/global-telemedicine-market-to-experience-16-5-annual-growth-rate-through-2023.html; https://www.beckershospitalreview.com/healthcare-information-technology/the-growth-of-telehealth-20-things-to-know.html; https://www.beckershospitalreview.com/telehealth/global-telemedicine-market-to-experience-16-5-annual-growth-rate-through-2023.html.
---------------------------------------------------------------------------

Multiplying these four component estimates together--average
savings per visit ($9.09) * visits per enrollee (5.89) * number of MA
enrollees * percent of provider visits that are telehealth (2.49
percent * 1.089 per year)--we arrive at a conservative aggregate
savings estimate of $30 million, growing to $50 million in 2024, and
$88 million in 2029. Had we used the higher projected visits, we would
have obtained $30 million, growing to $280 million. The aggregate
savings over 10 years is $557 million. The results are summarized in
Table 9.

[[Page 15813]]

Table 8--Travel Savings per Provider Visit, Telehealth
------------------------------------------------------------------------
Label Item Amount Source
------------------------------------------------------------------------
(A).......... One way travel 0.25 hours........ Prior CMS standard
to provider. of provider
availability within
30 minutes or 30
miles. We use the
midpoint of 30 and
0 minutes, or 15
minutes/0.25 hours.
An alternative
approach uses the
Health Affairs
article of 37
minutes total.
(B).......... Travel to and 2
from provider.
(C).......... Wages for $24.34............ OMB guidance, use of
enrollee per occupational code
hour. 00-0000 on BLS
website. OMB
provided further
guidance that,
although it
supports the idea
of dollar value of
time, since many
enrollees are
retirees, the wage
estimate should not
be doubled to
reflect overhead
and benefits.
(D).......... Mileage cost $0.20............. IRS website.
per mile for
medical travel.
(E).......... Mileage........ 15 miles.......... Prior CMS standard
of provider
availability within
30 minutes or 30
miles. We use the
midpoint of 30 and
0 miles, or 15
miles.
(F).......... Wage savings $12.17............ (A) * (B) * (C).
per provider
visit.
(G).......... Mileage savings $6.00............. (E) * (B ) * (D).
per provider
visit.
(H).......... Factor to be 0.50.............. Currently, only 0.3%
applied for of rebate dollars
current available for
telehealth supplemental
usage. benefits are spent
on telehealth
services. This
small percentage
suggests that, at
most, half of all
expected telehealth
services are
currently being
offered.
-----------------------------------------
Total $9.09............. 0.5 x [(F) + (G)]
savings per
visit.
------------------------------------------------------------------------
Notes: This table reflects savings based on the following two
assumptions: The value of enrollee time is $24.34/hr and at most 50%
of expected telehealth is being offered.

Table 9--Travel Savings per Year, Telehealth
----------------------------------------------------------------------------------------------------------------
Total travel Percent of
savings ($ in Savings per Provider provider
Year thousands) to MA enrollment telehealth visits per visits that
enrollees from (in thousands) visit enrollee use telehealth
telehealth (percent)
----------------------------------------------------------------------------------------------------------------
2020........................ $30,903.7 23,181 $9.09 5.89 2.49
2021........................ 34,912.4 24,062 9.09 5.89 2.71
2022........................ 39,441.6 24,972 9.09 5.89 2.95
2023........................ 44,440.5 25,858 9.09 5.89 3.21
2024........................ 50,048.2 26,708 9.09 5.89 3.50
2025........................ 56,218.7 27,549 9.09 5.89 3.81
2026........................ 63,057.8 28,375 9.09 5.89 4.15
2027........................ 70,572.1 29,161 9.09 5.89 4.52
2028........................ 78,981.9 29,969 9.09 5.89 4.92
2029........................ 88,393.9 30,799 9.09 5.89 5.36
-----------------------------------------------------------------------------------
Raw Total............... 556,970.9 ................ .............. .............. ..............
----------------------------------------------------------------------------------------------------------------

c. Savings From Illness Prevention Due to Increased Access to Services
Telehealth savings due to preventive telemonitoring may arise from
easier or increased access to Part B services. The MA additional
telehealth benefits to be included in the MA basic benefit bid stem
from the Bipartisan Budget Act of 2018 amendment of section 1852 of the
Act, and will likely represent a mix of replacement of pre-Bipartisan
Budget Act of 2018 in-person visits and additional Part B services. We
believe that increased coverage of the MA additional telehealth
benefits will generally result in an aggregate reduction in use of
emergency room visits and inpatient admissions because the relative
increased ease of receiving healthcare services should improve health
outcomes and reduce avoidable utilization that results from untreated
conditions that exacerbate illness. Several studies predict that
telehealth can significantly reduce illness through prevention. We
mention two situations where Part B services could be provided by a
physician or practitioner via MA additional telehealth benefits: (1)
Comprehensive medication reviews and (2) post-discharge transitional
care programs.
(1) Comprehensive Medication Reviews \57\
---------------------------------------------------------------------------

\57\ Our current MA program allows telemonitoring, hospital
readmission prevention programs, and post-discharge in home
medication reconciliation.
---------------------------------------------------------------------------

Telehealth can help significantly with patients who need multiple
medications. Remote medication management can reduce the multiple
patient visits that are often necessary to get the appropriate mix of
medications. One recent meta-study on medication reviews summarizes
seven studies, showing that using comprehensive medication reviews
reduced hospitalizations, readmissions, drugs, and mortality.\58\
---------------------------------------------------------------------------

\58\ Evan A. DeZeeuw, PharmD; Ashley M. Coleman, PharmD; and
Milap C. Nahata, PharmD, MS, ``Impact of Telephonic Comprehensive
Medication Reviews on Patient Outcomes'', Am J Manag Care.
2018;24(2):e54-e58.
---------------------------------------------------------------------------

(2) Post-Discharge Transitional Care Programs
Telehealth has been used to provide transitional care for
discharged hospital patients. One study found a savings of $1,333 per
beneficiary, half of which

[[Page 15814]]

was due to reduced inpatient follow-up care.\59\
---------------------------------------------------------------------------

\59\ Keith Kranker, Ph.D.; Linda M. Barterian, MPP; Rumin
Sarwar, MS; G. Greg Peterson, Ph.D.; Boyd Gilman, Ph.D.; Laura Blue,
Ph.D.; Kate Allison Stewart, Ph.D.; Sheila D. Hoag, MA; Timothy J.
Day, MSHP; and Lorenzo Moreno, Ph.D. ``Rural Hospital Transitional
Care Program Reduces Medicare Spending'', Am J Manag Care.
2018;24(5):256-260.
---------------------------------------------------------------------------

In the proposed rule, we solicited comments on potential savings.
Numerous commenters were overwhelmingly supportive of CMS's projected
savings. Furthermore, they backed their support with quantifiable
details from their own experiences in their various products.
Commenters particularly emphasized healthcare savings due to increased
preventive care, significantly reduced hospital admissions, and
increased access to specialties with insufficient providers to meet
current demands (for example, tele-cardiology, tele-psychiatry, and
tele-dermatology).
d. Increased Costs if Unnecessary Medical Visits Increase
We have moved the content in this section of the proposed rule to
the previous section ``Possible Overutilization.'' We noted that we
received overwhelming support from commenters that there should be no
concern about overutilization, and the one article citing this concern
is an old article in a very specific setting (the article itself cast
doubt on its own findings).
We are finalizing our requirement that MA plans must advise
enrollees that they may receive the specified Part B service(s) either
through an in-person visit or through electronic exchange (Sec.
422.135(c)(2)). As discussed in section II.A.1. of this final rule,
based on public comments, we are not finalizing the portion of proposed
Sec. 422.135(c)(2) that referenced the Evidence of Coverage (EOC)
document as the required vehicle for this notification. Instead, we
intend to address the EOC in future subregulatory guidance.
We received the following comments, and our responses follow.
Comment: In response to CMS's request for comments in the proposed
rule on whether there would be savings to enrollees arising from
reduced travel time to and from providers, several commenters expressed
overwhelming support. More specifically, there were no dissenting
comments that overutilization of services would reduce these enrollee
savings.
Response: We appreciate the commenters' support. Although there
will be no change in policy, based on these comments, we are confident
in including the savings due to reduced enrollee travel time to and
from providers in the summary and accounting tables (Tables 16 and 17).
This will result in a $557 million savings over 10 years, making this
final rule economically significant.
Comment: In response to CMS's request for comments in the proposed
rule on whether telehealth would significantly reduce medical spending,
a variety of commenters also expressed overwhelming support. Commenters
pointed out that savings would arise from increased prevention, reduced
hospital readmissions, and increased access in such areas as tele-
dermatology and tele-psychiatry. Commenters frequently provided
statistics based on their own experience.
Response: We thank the commenters for their support. Although it is
clear that telehealth will result in healthcare savings, we do not have
enough information to estimate the impact on reductions of Medicare
Trust Fund payments. Consequently, we are scoring this as a qualitative
savings in this final rule.
We received several comments on our estimated impacts for MA
additional telehealth benefits. The comments were overwhelmingly
supportive with no one dissenting to our impact estimates. After
careful consideration of all comments received, and for the reasons set
forth in our responses to the related comments summarized earlier, we
are finalizing our impact analysis for this provision with the
following modification. We are revising our proposed impact of this
rule. The final rule is now expected to be an economically significant
rule that will save enrollees $557 million over 10 years. The savings
to enrollees are due to the MA additional telehealth benefits
provision, which will reduce enrollee travel time to and from
providers.
2. Integration Requirements for Dual Eligible Special Needs Plans
(Sec. Sec. 422.2, 422.60, 422.102, 422.107, 422.111, and 422.752)
As stated in the earlier in the preamble of this final rule,
starting in 2021, section 50311(b) of the Bipartisan Budget Act of 2018
establishes new Medicare and Medicaid integration standards for MA
organizations seeking to offer D-SNPs and enrollment sanctions for
those MA organizations that fail to comply with the new standards. We
proposed to add a revised definition for ``D-SNP'' at Sec. 422.2 and
establish at Sec. 422.107 revisions to the existing minimum state
Medicaid agency contracting requirement for D-SNPs other than FIDE SNPs
and HIDE SNPs, which are also defined at Sec. 422.2.
As noted in the preamble of the proposed rule and at section
II.A.2.a. of this final rule, many of the changes we proposed would
unify and streamline existing requirements, which should reduce burden
and are therefore not expected to have impact. For example--
Passive enrollment: The reference to the definition of a
HIDE SNP at Sec. 422.2 will not materially change the plan types that
are eligible for passive enrollment; rather, the existing rule simply
refers to them as the D-SNPs that meet a high standard of integration
under the supplemental benefit authority at Sec. 422.102(e); and
Enhanced Supplemental Benefits: We are also clarifying at
Sec. 422.102(e) that not only are HIDE SNPs that meet minimum quality
and performance standards eligible to offer supplemental benefits, but
FIDE SNPs that similarly meet minimum quality and performance standards
may do so as well. While this amendment does not change what has
occurred in practice, we believe it clarifies the types of plans that
are eligible to offer enhanced supplemental benefits.
The impacts were presented in section III.B.2. of this final rule.
However, the COI reduced the cost to state Medicaid agencies by 50
percent, reflecting a 50 percent Federal Financial Participation (FFP)
rate; consequently, the RIA must include this 50 percent FFP rate as a
cost to the federal government. Table 10 repeats the analysis
summarized in Table 4 and includes transfers to the federal government.
The narrative accompanying Table 4 presents our assumptions in reaching
this impact as well as our assumption that there are no costs in
subsequent years. As noted in section III.B.2. of this final rule, wage
estimates and occupational titles were updated to reflect greater
specificity as well as the latest BLS wage data.
As detailed in this section, the total first year cost is $3.9
million ($3.4 million to plans + $0.25 million to State Medicaid
Agencies and $0.25 million to the federal government). The $3.9 million
represents a true cost since it pays for the services of lawyers,
software developers and programmers, and business operation
specialists. Of this $3.9 million, $3.4 million is a cost to plans,
while $0.5 million is a cost to the state Medicaid agencies which
transfers $0.25 million to the federal government.

[[Page 15815]]

Table 10--First Year Costs of D-SNP Integration Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cost to Transfers to
Hours per Cost per Cost to D- state federal
Item Number of respondents respondent Total hours hour ($) SNPs ($) Medicaid government
agencies ($) ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial update by state Medicaid 44 (states).................. 24 1,056 136.44 ............ 72,040 72,040
agency of its contracts with D-SNPs.
Initial establishment of system for 13........................... 160 2,080 98.54 ............ 102,482 102,482
notification of hospital and SNF 13........................... 160 2,080 72.84 75,754 75,754
admissions by state Medicaid agency.
Initial update by D-SNPs of their 190 (D-SNPs)................. 8 1,520 136.44 207,389 ............ ............
contracts with state Medicaid agency.
Initial notification of hospital and 116.......................... 160 18,560 98.54 1,828,902 ............ ............
SNF admissions by D-SNPs to state 116.......................... 160 18,560 72.84 111,351,910
Medicaid agency.
-----------------------------------------------------------------------------------
Total by Stakeholder............. ............................. ............ ............ ............ 3,388,201 250,276 250,276
--------------------------------------------------------------------------------------------------------------------------------------------------------

We received no comments on our impact estimates related to these
provisions and therefore are finalizing our estimates as proposed, with
modifications to reflect the omission of estimates for the impact of
the contract modification at Sec. Sec. 422.107(c)(1) through (3) and
422.107(c)(9) in the proposed rule, minor modifications to the
occupational codes, and the corresponding adjusted hourly wages
previously mentioned in this section.
3. Unified Grievance and Appeals Procedures for Dual Eligible Special
Needs Plans and Medicaid Managed Care Plans at the Plan Level
(Sec. Sec. 422.560 Through 422.562, 422.566, 422.629 Through 422.634,
438.210, 438.400, and 438.402)
The addition of the appeals and grievances provisions at Sec. Sec.
422.629 through 422.634 focus on creating MA and Medicaid appeal and
grievances processes that are unified for D-SNPs that also have
comprehensive Medicaid managed care contracts (or are the subsidiary of
a parent organization or share a parent organization with the entity
with a comprehensive Medicaid managed care contract) and have
exclusively aligned enrollment. The final rule addresses appeals at the
plan level. Currently, Medicaid and MA appeals and grievance processes
differ in several key ways. These differences hinder a streamlined
grievance and appeals process across Medicare and Medicaid managed care
sectors and create unnecessary administrative complexity for plans that
cover dual eligible individuals for both Medicare and Medicaid
services. These new regulations will allow enrollees in a D-SNP that is
also a Medicaid managed care plan through which the enrollees get
Medicaid coverage to better understand the grievance and appeals
processes and generally receive a resolution of their grievances and
appeals more quickly.
There are four areas where this provision will have an impact,
listed here and discussed in further detail later in this section.
Furnishing Medicare Parts A and B Services during the
pendency of appeals (that is, through the integrated reconsideration);
Updating plan grievance policies and procedures and
consolidation of plan grievance notifications and reviews;
Updating applicable integrated plan appeals policies and
procedures; and
Sending appeal files to enrollees who request them.
Following are details on these four areas of impact.
a. Furnishing Medicare Parts A and B Services During the Pendency of
Appeals
One of the provisions related to appeals integration may marginally
impact the ways MA sponsors bid for their D-SNPs, which could impact
Medicare spending. We are finalizing as proposed that the existing
standards for continuation of benefits at Sec. 438.420 apply to
applicable integrated plans for Medicare benefits under Parts A and B
and Medicaid benefits in the new integrated appeals requirements at
Sec. 422.632. Under our final rule, and as is applicable to Medicaid
managed care plans currently, if an applicable integrated plan decides
to stop or reduce a benefit that the enrollee is currently authorized
to receive, the enrollee could request that the benefit continue to be
provided at the currently authorized level while the enrollee's appeal
is pending through the integrated reconsideration. Currently, MA plans
generally are not required to provide benefits pending appeal, whereas
in Medicaid it has been a long-standing feature.
We expect that the new integrated appeals provisions will result in
an increase in expenditures by applicable integrated plans for Medicare
Parts A and Part B covered services because they will be required to
continue coverage for services during the pendency of the
reconsideration request, or first-level appeal under our final rule.
The estimate of impact of this continuation is based on calendar
year 2016 appeal metrics, which are then trended to calendar year 2021.
The assumptions, sources and calculations are summarized in Tables 11
and 12 in this rule and further clarified as follows.
The first step in this estimation is to determine the number of
integrated reconsiderations per 1,000 beneficiaries enrolled in
applicable integrated plans affected by this provision. Given the
similarity of population characteristics, the reconsideration
experience for the Medicare-Medicaid Plans (MMPs) participating in the
Financial Alignment Initiative was used as a proxy for the applicable
integrated plans. In 2016, MMP enrollees were impacted by 1,232
reconsiderations for services which were resolved adversely or
partially favorably to the beneficiary. The corresponding MMP
enrollment in 2016 was 368,841, which implies a rate of 3.3
reconsiderations per 1,000 in 2016.
We projected D-SNP enrollment impacted by the unified procedures to
grow from 150,000 in 2018 to 172,000 (150,000 * 1.145) in 2021 based on
the estimated enrollment growth for all D-SNPs during the period of
14.5 percent. Applying the MMP reconsideration rate of 3.3 per 1,000 to
the projected 2021 enrollment in applicable integrated plans of 172,000
results in an estimated 568 (172,000 * 3.3/1,000) service
reconsiderations for applicable integrated plans in 2020.
The next step is to determine the average level of benefit subject
to the appeals. Table 1 in the report Medicare Part C QIC
Reconsideration Data for

[[Page 15816]]

2016 \60\ contains data on the number and benefit amounts by service
category for the second level appeals filed in 2016. Analysis of these
data resulted in an estimated per-appeal benefit value of $737 for
2016. The determination of this value took into account that some
services would not be subject to the regulatory extension of coverage
due to the existence of immediate review rights (inpatient hospital,
skilled nursing facility, and home health), other benefits would likely
have been rendered already (emergency room, and ambulance), and other
services are not covered as a D-SNP basic benefit (hospice and non-
Medicare benefits). Accounting for 19.5 percent inflation in per-capita
Medicare spending between 2016 and 2021, and carving out the 13.38
percent consumer price index inflation in years 2016-2020 inclusive,
results in an estimated per-appeal benefit value of $774 (that is, $737
* 1.195/1.1338) for 2021.
---------------------------------------------------------------------------

\60\ https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/IRE.html.
---------------------------------------------------------------------------

Taking the product of the number of applicable integrated plan
service reconsiderations in 2021 (568) and average benefit value in
2021 ($774) yields an estimated cost in 2021 of $439,632 (that is, 568
* $774) due to an increase in Medicare expenditures stemming from the
unified appeals procedures for applicable integrated plans. We believe
that this figure represents an upper bound of the cost given that not
all applicable services will be rendered during the extended period of
benefit continuation in this regulation. These calculations are
summarized in Table 11.
Using the 2021 estimates as a basis, estimates for 2021 through
2029 are presented in Table 12. The following assumptions were used in
creating Table 12:
As described earlier in this section, the numbers in the
row for 2021 come from Table 11.
The projected FIDE SNP enrollment for 2022 through 2029
was obtained by multiplying the estimated 2021 FIDE SNP enrollment of
172,000, using SNP enrollment growth factors inferred from Table IV.C1
in the 2018 Medicare Trustees Report.
The projected cost per appeal for 2022 through 2029 was
obtained by first multiplying the estimated 2021 cost per appeal of
$774 by FFS per capita growth rates obtained from internal
documentation for the Table of FFS USPCC, non-ESRD estimates in
attachment II of the 2019 Rate Announcement and Call Letter (https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2019.pdf).
As summarized in Table 12, there is an estimated true cost
(reflecting purchase of goods and services) of $0.4 million in 2021 and
$0.5 million in 2022 through 2025, modestly increasing to $0.6 and $0.7
million in 2026 through 2029. Eighty-six percent of this cost is
transferred from the plans to the Medicare Trust Fund; the remainder of
this cost is born by beneficiary cost sharing.

[[Page 15817]]

[GRAPHIC] [TIFF OMITTED] TR16AP19.002

[[Page 15818]]

Table 12--Net Cost per Year to the Medicare Trust Fund for Integrated Plan Appeals
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net cost of Net cost of
Appeals per Number of Gross cost of Share of cost appeals to appeals to
Contract year Affected FIDE 1,000 affected affected Cost per appeals ($ in funded by medicare trust beneficiaries
SNP enrollment enrollees appeals per appeal millions) medicare trust fund ($ in ($ in
year fund (%) millions) millions)
(A) (B) (C) = (A)/ (D) (E) = (D) * (C)/ (F) (F) * ( E ) (1-F) * (E)
1000 * (B) 1,000,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2021......................................................... 172,000 3.3 568 $774 0.4 86% 0.4 ..............
2022......................................................... 179,000 3.3 591 791 0.5 86 0.4 0.1
2023......................................................... 185,000 3.3 611 808 0.5 86 0.4 0.1
2024......................................................... 191,000 3.3 630 828 0.5 86 0.4 0.1
2025......................................................... 197,000 3.3 650 842 0.5 86 0.5 0.1
2026......................................................... 203,000 3.3 670 861 0.6 85 0.5 0.1
2027......................................................... 209,000 3.3 690 883 0.6 85 0.5 0.1
2028......................................................... 215,000 3.3 710 903 0.6 85 0.5 0.1
2029......................................................... 220,000 3.3 726 920 0.7 85 0.6 0.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b. Updating Plan Grievance Policies and Procedures and Consolidation of
Plan Grievance Notifications and Reviews
As detailed in section III.B.3. of this final rule, there are only
34 contracts representing 37 D-SNPs that we currently believe will be
classified as a HIDE SNP or FIDE SNP and operate in states that have
policies requiring exclusively aligned enrollment across MA and
Medicaid managed care plans. In addition to the costs estimated in
section III.B.3. of this final rule, we estimate the following impacts:
(1) Sending a notice of acknowledgement; (2) sending a notice of
resolution; and (3) review of integrated grievances.
(1) Sending a Notice of Acknowledgement
Under Sec. 422.629(g), applicable integrated plans must send a
notice of acknowledgment for all grievances, both those submitted
orally and in writing. Medicaid managed care organizations are
currently required to send this notice under Sec. 438.406(b)(1),
whereas MA plans are not currently required to send this notice. Under
this final rule, applicable integrated plans must now send this notice
for all grievances, not only those pertaining to Medicaid issues. In
the absence of data on the types of grievances submitted, we assume
half the grievances currently made to an applicable integrated plan are
related to Medicare issues and half are related to Medicaid issues.
Estimates of impacts for this notice take into account overlapping
Medicare and Medicaid benefits. As we do not have data on grievances
for overlapping Medicare and Medicaid benefits, we assume 25 percent of
all grievances are related to overlapping Medicare and Medicaid
benefits. This 25 percent estimate reflects our belief that there is
some (more than 0 percent) overlap, but that the majority of grievances
(more than 50 percent) do not overlap. The average of 0 percent and 50
percent results in the 25 percent assumption we have made. We use the
following 6 estimates to estimate the costs associated with this
provision:
As detailed in section IV.B.3.a of this final rule, we
estimate that the aggregate number of enrollees in applicable
integrated plans in Contract Year 2021 is 172,000. We used an average
of the following two estimates for the percentage of enrollees expected
to file a grievance:
++ The May 2016 Medicaid Managed Care final rule estimate of a 2
percent filing rate; and
++ The currently approved burden under OMB control number 0938-0753
(CMS-R-267) estimate of a 6.8 percent filing rate.
Thus we estimate that 4.4 percent (\1/2\ x (6.8 percent + 2
percent) of all enrollees file a grievance.
As indicated previously, we estimate that 50 percent of
all grievances are related to Medicare coverage issues and half are
related to Medicaid coverage issues.
As indicated previously, we estimate 25 percent of all
grievances for applicable integrated plans are regarding overlapping
Medicare and Medicaid benefits issues.
We estimate that the time for mailing an acknowledgment
notice using a standard form is 1 minute, or 1/60th of an hour.
A business operations specialist would perform this task
at an hourly wage of $72.84/hr.
Therefore, we estimate there are 7,568 grievances (172,000
enrollees x 4.4 percent who file a grievance), of which 3,784 (7,568
grievances x 50 percent) are related to enrollees' Medicare coverage
and 3,784 are related to their Medicaid coverage. We estimate that
1,892 grievances (7,568 grievances x 25 percent of grievances for
overlapping benefits) are made with respect to overlapping Medicare and
Medicaid issues and currently only require acknowledgment notices under
Medicaid rules. It follows that the new burden arising from this
provision applies to 1,892 grievances (3,784 grievances related to
Medicare coverage minus the 1,892 grievances that would have resulted
in notices of acknowledgement because they related to Medicaid
coverage).
Thus the aggregate annual burden across all plans from this
provision is 32 hours (1,892 grievances x 1/60 hr) at a cost of $2,297
(1,892 grievances x 1/60 hr x $72.84/hr).
(2) Sending a Notice of Resolution
Section 422.630(e) requires that applicable integrated plans issue
a notice upon resolution of the integrated grievance, unless the
grievance was made orally and: (1) Was not regarding quality of care;
and (2) the enrollee did not request a written response. To estimate
the savings from the reduction in the number of grievance resolution
notices due to unification of grievance processes for applicable
integrated plans, we first estimate the total cost of issuing such
notices and then multiply by 25 percent (the estimated number of
grievances that are regarding overlapping Medicare and Medicaid
benefits). The resulting amount is the cost of the eliminated
duplicative grievance notices under the unified procedures. We used the
following 7 estimates in our calculation:
As previously discussed regarding sending the notice of
acknowledgement, we estimate that the aggregate number of enrollees in
applicable integrated plans in Contract Year 2021 is 172,000.
As previously discussed regarding sending the notice of
acknowledgement, we estimate that 4.4 percent of all enrollees file a
grievance.
The currently approved burden under OMB control number
0938-0753 (CMS-R-267) estimates that 60 percent

[[Page 15819]]

of all those who file a grievance will file orally.
We estimate that of those who file orally, 10 percent will
request a follow up written response.
We estimate 9.5 percent of those who file a grievance,
file on quality matters.\61\
---------------------------------------------------------------------------

\61\ This percent estimate comes from the total percent of
grievances relating to quality of care as reported by MA plans for
calendar Year 2017 Medicare Part C Reporting Requirements Data.
---------------------------------------------------------------------------

We estimate that it will take one-quarter of an hour to
prepare a written response to a grievance, reflecting the current time
estimate under OMB control number 0938-0753 (CMS-R-267).
A business operations specialist would perform this task
at an hourly wage of $72.84/hr.
We use these 7 estimates to derive the following:
We estimate there will be 7,568 grievances (172,000
enrollees x 4.4 percent who file a grievance)
51.13 percent of those who file a grievance require
written responses, either because the grievance was on a quality issue,
was submitted in writing, or was orally submitted (but not on quality
issues) and the enrollee requested a written response. The 51.13
percent estimate is based on the following assumptions:
++ 9.5 percent of all grievances are on quality matters, all of
which require written response;
++ 36.2 percent of all grievances are submitted in writing and not
on quality issues (90.5 percent of grievances that are not on quality
issues x 40 percent (100 percent-60 percent of grievances submitted
orally));
++ 5.43 percent of all grievances are orally submitted (but not on
quality issues), and the enrollee requested a written response (90.5
percent of grievances that are not on quality issues x 60 percent of
grievances are filed orally x 10 percent of all oral grievances request
a written response).
It therefore follows that 51.13 percent of grievances (9.5 percent
+ 36.20 percent + 5.43 percent) require written response.
Thus, the aggregate burden associated with responding in writing to
grievances is 967 hours (7,568 grievances x 51.13 percent of grievances
requiring a written response x 0.25 hr to write a response) at a cost
of $70,436 (967 hours x $72.84/hour wage of a business operations
specialist). It follows that the savings due to reduction of
duplicative notices is 242 hours (967 hours x 0.25 grievances involving
an overlap of Medicare and Medicaid benefits) at an annual savings of
$17,616 (172,000 enrollees x 4.4 percent of enrollees who file
grievances x 51.13 percent of grievances requiring a written response x
one quarter of grievances eliminated due to overlap of Medicare and
Medicaid x one quarter hour x $72.84/hour).
(3) Review of Grievances
We estimate a burden adjustment from grievance reviews detailed
under Sec. 422.629(k)(2) in a manner similar to the estimates for
sending notices of acknowledgement and resolution. We first estimate
total cost and then estimate the savings as 25 percent of that total
cost due to the elimination of duplicative grievance reviews for
Medicare and Medicaid overlap issues. We assume that the review of each
grievance will be done by a business operations specialist working at
$72.84/hr. Based on the May 2016 Medicaid Managed Care final rule (81
FR 21498), we assume the average grievance takes 30 minutes for a
business operations specialist to resolve. We estimate the aggregate
annual cost for grievance review is 3,784 hours (172,000 enrollees x
0.044 x 0.5 hr) at a cost of $275,627 (3,784 hr x $72.84/hr).
Therefore, the reduction in grievance reviews is 946 hours (3,784 hr x
25 percent), at an annual savings of $68,907 (3,784/h4 x $72.84).
Thus, the total annual savings associated with consolidation of
applicable integrated plans' grievance notifications and reviews is
$84,226 per year [($17,616 (notice of resolution) + $68,907 (grievance
review)-$2,297 (notice of acknowledgement).]
Section III.B.3. of this final rule estimates a one-time cost of
$29,864 ($19,812 for updating policies and procedures + $10,051 for
recordkeeping). Thus, the total impact arising from updating policies
and procedures and consolidation of grievance notices and reviews is a
savings of $54,362 ($88,820-$29,864) in the first year and savings of
$84,226 in subsequent years.
c. Updating Applicable Integrated Plan Appeals Policies and Procedures
Applicable integrated plans' internal appeals policies and
procedures must be updated to comply with the unified appeals
requirements. In terms of updates, we see no reason to differentiate
between the work required for grievances and appeals. Therefore, as
indicated in section IV.B.3.b. of this final rule, we estimated a one-
time cost of $29,864 for updating applicable integrated plans' appeals
policies and procedures.
d. Sending Appeal Files to Enrollees Who Request Them
Medicaid managed care regulations under Sec. 438.406(b)(5)
currently require plans to send, for free, appeal case files to
enrollees who appeal while, in contrast, the Parts C & D Enrollee
Grievance, Organization/Coverage Determinations, and Appeals Guidance,
Sec. 50.5.2, requires MA plans to send such files at a reasonable
cost.\62\ Our final rule requires the applicable integrated plans to
send such files for free. To estimate this cost, we must first estimate
the cost of sending such a file.
---------------------------------------------------------------------------

\62\ See https://www.cms.gov/Medicare/Appeals-and-Grievances/MMCAG/Downloads/Parts-C-and-D-Enrollee-Grievances-Organization-Coverage-Determinations-and-Appeals-Guidance.pdf.
---------------------------------------------------------------------------

Livanta, a Quality Improvement Organization, estimates the cost per
case file as $40-$100.\63\ This can be justified independently with a
stricter range as follows: Assuming a typical case file has 100 pages,
it would weigh about 1 pound at 6 pages per ounce. The cost of mailing
a 1-pound case file by FedEx (to assure security) is $10. The cost of
photocopying 100 pages at a minimum rate of $0.05 per page is $5. The
$0.05 per page is likely to be an overestimate for plans that own their
own photocopying equipment. Thus, the total cost of photocopying and
mailing would be about $15. We assume a correspondence clerk, BLS
occupation code 43-4021,\64\ would take 1 hour of work, at $36.64 per
hour (including 100 percent for overtime and fringe benefits) to
retrieve the file, photocopy it, and prepare it for mailing. Thus we
estimate the total cost at $36.64 + $10 + $5 = $51.64.
---------------------------------------------------------------------------

\63\ See https://bfccqioareal.com/recordrequests.html.
\64\ https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

We need further estimates to complete the calculation. We assume
43.5 total appeals (favorable and unfavorable) per 1,000.\65\ Based on
our experience, we assume that 10 percent of all appeals would require
a file sent. Finally, as indicated in section III.B.3. of this final
rule, there are 37 applicable integrated plans in 34 contracts with
150,000 enrollees in 2018 projected to grow to 172,000 enrollees in
2021. Thus we estimate the total annual cost of mailing files to
enrollees as $38,637 (that is, 172,000 enrollees * 4.35 percent appeals
* 10 percent requesting files * $51.64 cost).
---------------------------------------------------------------------------

\65\ https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/PartCDDataValidation.html.
---------------------------------------------------------------------------

The various impacts of unified grievances and appeals are
summarized in Table 13. The aggregate impact is a cost $0.4 to $0.6
million per year for the

[[Page 15820]]

next 10 years. This impact reflects both costs to the Medicare Trust
Fund, costs to enrollees, costs related to first-year updates to
policies and procedures, and savings due to consolidation of
notifications to enrollees as a result of unified grievance procedures.

Table 13--Summary of Costs for Grievance Integration Provision ($ in Millions)
[Negative numbers indicate savings]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Updating
policies and
Cost to Cost sharing procedures and Updating Sending files
Item Medicare Trust for MA consolidation of appeal to enrollees Total impact
Fund enrollees grievance policies and who request
notices and procedures them
reviews
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subsection in this Unified Grievance Section.......... (a) (a) (b) (c) (d)
2020.................................................. n/a n/a n/a n/a n/a n/a
2021.................................................. 0.38 0.06 (0.05) 0.03 0.038 0.5
2022.................................................. 0.4 0.07 (0.08) 0 0.038 0.4
2023.................................................. 0.42 0.07 (0.08) 0 0.038 0.4
2024.................................................. 0.45 0.07 (0.08) 0 0.038 0.5
2025.................................................. 0.47 0.08 (0.08) 0 0.038 0.5
2026.................................................. 0.49 0.09 (0.08) 0 0.038 0.5
2027.................................................. 0.52 0.09 (0.08) 0 0.038 0.6
2028.................................................. 0.54 0.1 (0.08) 0 0.038 0.6
2029.................................................. 0.57 0.1 (0.08) 0 0.038 0.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

We note that these costs and savings are true costs and savings
since they reflect payment for additional or fewer economic resources
(reduced notifications and increased cost of appeals). The increased
appeals costs are a cost to MA plans, which transfer this cost to
enrollees and the Medicare Trust Fund (the government).
We received no comments on our estimates and therefore are
finalizing them with modifications to reflect the omission of the
impact associated with sending the notice of acknowledgement and to the
occupational codes and corresponding adjusted hourly wages as
previously mentioned in this section.
4. Proposal for Prescription Drug Plan Sponsors' Access to Medicare
Parts A and B Claims Data Extracts (Sec. 423.153)
As described in section II.A.3. of this final rule, section 50354
of the Bipartisan Budget Act of 2018 requires the establishment of a
process under which the sponsor of a PDP that provides prescription
drug benefits under Medicare Part D may request, beginning in plan year
2020, that the Secretary provide on a periodic basis and in an
electronic format standardized extracts of Medicare claims data about
its plan enrollees. In the proposed rule, we proposed to add a new
Sec. 423.153(g) to implement the process for requesting these data.
To estimate the impact we required a model of operationalizing this
provision, without however committing to a particular operationalizing
process. We outlined a process which--
Meets all regulatory requirements; and
Requires as little burden as possible to make and grant
requests.
We solicited comments from stakeholders on this proposed
operationalization.
Electronic request and transfers are superior (have less burden)
than paper processes. We could therefore add functionalities to the CMS
HPMS system (or other CMS systems) which would allow the following
functions:
Request of claims data for the current and future quarters
for enrollees of the PDP requesting the data.
Request to no longer receive data.
Attestation that all regulatory requirements will be
complied with. The attestation would be in the form of a screen listing
all regulatory requirements; the authorized PDP HPMS user would have to
electronically attest by clicking a button.
Such a process would combine request and attestation. The receipt
of the submission would verify completeness of request. Furthermore,
there would be no burden in request (under 1 minute of work).
The HPMS contractors estimated that there would be a one-time
update costing approximately $200,000.
Besides requesting the data, data must be transmitted to the
requesting sponsor. Ideally, data would be transmitted electronically
but we do not yet have such an API. Instead, we would treat requested
data like data requested for research. Typically, such data is
downloaded onto encrypted external hard drives and mailed to
requestors.
The data could come from the Chronic Condition Warehouse (CCW). We
asked our contractors the cost of downloading quarterly such data and
sending it out. The cost varies by sponsor size. Currently, based on
CMS public data, there are 63 PDP sponsors. Their size and the
quarterly cost per sponsor of providing them with data, should they
request it, is summarized in Table 14.

Table 14--Cost per PDP Sponsor per Quarter for Transmitting Claims Data
------------------------------------------------------------------------
Cost per quarter per
sponsor for
PDP size in enrollees Number of sponsors transmission of
claims data
------------------------------------------------------------------------
Above 5 million............. 1 $26,500
1 million-5 million......... 6 17,500
100,000-1 million........... 11 10,500

[[Page 15821]]

Under 100,000............... 45 10,500
------------------------------------------------------------------------

To complete the annual impact analysis we needed an estimate of
proportions for each plan size that would request data. For example, we
are certain that the 1 PDP sponsor with over 5 million enrollees will
request data. Thus the annual burden for that plan size is 1 * 4
quarters x $26,500 per quarter = $106,000. Similarly, if we assume that
all six PDP sponsors with enrollments between 1 and 5 million would
request data then the annual burden is 6 sponsors * 4 quarters *
$17,500 per quarter per sponsor = $420,000. If we assume that only
three-quarters of these six sponsors request data then the annual
burden would be 0.75 * $420,000 = $315,000. In the absence of any other
basis for the decision, it is reasonable to assume that the proportion
goes down as the size goes down. In the absence of data, we could use a
descent of simple fractions (1, three-fourths, one-half, one-fourth).
Note, that 50 percent of plans with under 100,000 enrollees have under
10,000 enrollees. It is very unlikely that such plans would have the
resources to use the data. Thus an assumption that only 50 percent of
plans under 100,000 request data is reasonable. However, we considered
multiple scenarios. Table 15 presents for a variety of scenarios of
proportions and their total impact. The average of the five scenarios
is $1.5 million while the median is $1.3 million. The range of impacts
is $0.8 million to $2.9 million. For purposes of Executive Order 13771
accounting we listed the impact as $1.5 million annually, with a $0.2
million one-time cost in the first year. We did not trend this estimate
by year since the number of PDP sponsors has remained at 63 since 2015.

Table 15--Annual Burden of Providing Claims Data to PDP Sponsors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proportion of Proportion of
Proportion of Proportion of sponsors with sponsors with Aggregate
sponsors with sponsors with 1- 100,000 to 1 less than annual burden
Scenario label over 5 million 5 million million 100,000 based on costs
enrollees enrollees enrollees enrollees provided in
requesting data requesting data requesting data requesting data Table 14 ($ in
(%) (%) (%) (%) millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A.................................................................. 100 75 50 33 1.3
B.................................................................. 100 100 75 50 1.8
C.................................................................. 100 50 33 25 0.9
D.................................................................. 100 100 100 100 2.9
E.................................................................. 100 100 50 0 0.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

We did not anticipate any further burden. It is most likely that
the PDP sponsor would exclusively use the data. In the event that
downstream entities are shared any data they are already bound in their
contracts by all Medicare regulations including the regulations of this
provision.
We received no comments on this proposal and therefore are
finalizing this provision without modification.
5. Medicare Advantage and Part D Prescription Drug Plan Quality Rating
System (Sec. Sec. 422.162(a) and 423.182(a), Sec. Sec. 422.166(a) and
423.186(a), Sec. Sec. 422.164 and 423.184, and Sec. Sec.
422.166(i)(1) and 423.186(i)(1))
We proposed some measure specification updates. These type of
changes are routine and do not have an impact on the highest ratings of
contracts (that is, overall rating for MA-PDs, Part C summary rating
for MA-only contracts, and Part D summary rating for stand-alone
prescription drug plans). Hence, there will be no, or negligible,
impact on the Medicare Trust Fund.
We also proposed some adjustments to MA and Part D Star Ratings for
extreme and uncontrollable circumstances. The proposed policy will make
adjustments to take into account the potential impact on contracts when
there are extreme and uncontrollable circumstances affecting them. This
policy is in response to the multiple disasters in 2017 and 2018,
including several hurricanes and wildfires. We proposed a policy to
permit an adjustment to Star Ratings when extreme and uncontrollable
circumstances occur during the performance period or measurement period
for MA and Part D plans.
We also proposed enhancements to the current methodology to set
Star Ratings cut points. The intent of the changes is to increase the
stability and predictability of cut points from year to year. This
proposal is consistent with the CMS goal to increase transparency. We
believe this provision would also have minimal impact on the highest
ratings of contracts. Specifically, simulations of the proposed changes
to the Star Ratings methodology using the 2018 Star Ratings data show
that the impact on the MA Quality Bonus Payment (QBP) ratings is
minimal with the QBP ratings overall increasing for less than 1 percent
of MA enrollees.
We received no comments on our proposed RIA statement and,
therefore, are finalizing this provision without modification.
6. Improving Clarity of the Exceptions Timeframes for Part D Drugs
(Sec. Sec. 423.568, 423.570, and 423.572)
We proposed to limit the amount of time an exceptions request can
be held open to 14 calendar days, meaning that there will be an outside
limit to how long the request is in a pending status while the Part D
plan sponsor attempts to obtain the prescribing physician's or other
prescriber's supporting statement. Under current manual guidance, plan
sponsors are instructed that an exceptions request should only be held
open for a reasonable period of time if a supporting statement is
needed. We believe that no more than 14 calendar

[[Page 15822]]

days is a reasonable period of time to have an exceptions request open
and this rule seeks to codify that standard. Based on comments
received, we are modifying the proposed approach to clearly account for
circumstances where a prescriber's supporting statement is received
late or not received at all within the 14 calendar day timeframe. Under
this final rule, if a supporting statement is not received by the end
of 14 calendar days from receipt of the exceptions request, the Part D
plan sponsor must notify the enrollee (and the prescribing physician or
other prescriber involved, as appropriate) of its determination as
expeditiously as the enrollee's health condition requires, but no later
than 72 hours (24 hours for an expedited request) from the end of 14
calendar days from receipt of the exceptions request. We do not expect
this to have any new impact on the number of pending appeals or pose a
potential burden to plan sponsors, as we expect plans are already
making and notifying enrollees of decisions on exceptions requests
under a similar reasonable timeframe. Based on findings from plan
sponsor audits, this approach is generally consistent with how plans
sponsors have operationalized the current guidance that cases only be
held open for a reasonable period of time pending receipt of a
prescriber's supporting statement. Therefore, we do not expect that
plan sponsors would need to hire more staff or adjust their operations
in a manner that would affect costs. Consequently, we expect the impact
of this final rule to be negligible.
We received no comments on our proposed RIA statement and therefore
are finalizing this provision of the RIA statement without
modification.
7. Preclusion List Requirements for Prescribers in Part D and
Individuals and Entities in MA, Cost Plans, and PACE (Sec. Sec.
422.222 and 423.120(c)(6))
We do not anticipate any additional cost or savings associated with
our preclusion list provisions. As we indicated in section II.C.1 of
this final rule, said provisions will not involve activities for plan
sponsors and MA organizations outside of those described in the
previously mentioned April 2018 final rule. The provisions are,
generally speaking, clarifications of our intended policy and do not
constitute new requirements. Hence, the expected impact is negligible.
We received no comments on our proposed RIA statement and are
therefore finalizing it without modification.

D. Alternatives Considered

1. Requirements for Medicare Advantage Plans Offering Additional
Telehealth Benefits (Sec. Sec. 422.100, 422.135, 422.252, 422.254, and
422.264)
Section 1852(m)(2)(A)(i) of the Act, as added by the Bipartisan
Budget Act of 2018, defines MA additional telehealth benefits as
services that are identified for the applicable year as clinically
appropriate to furnish using electronic information and
telecommunications technology when a physician (as defined in section
1861(r) of the Act) or practitioner (described in section
1842(b)(18)(C) of the Act) providing the service is not at the same
location as the plan enrollee (which we refer to as ``through
electronic exchange''). We considered various alternative definitions
of ``clinically appropriate'' but decided not to finalize specific
regulation text defining the term. We are finalizing our proposal to
implement the statutory requirement for MA additional telehealth
benefits to be provided only when ``clinically appropriate'' to align
with existing CMS rules for contract provisions at Sec.
422.504(a)(3)(iii), which requires each MA organization to agree to
provide all benefits covered by Medicare ``in a manner consistent with
professionally recognized standards of health care.''
The statute does not specify who or what entity identifies the
services for the year. We considered various alternatives, including
retaining the authority as an agency to specify what services are
clinically appropriate to furnish each year. MA plans could have been
required to comply with an annual list of clinically appropriate
services identified by CMS. However, we rejected this alternative as
too restrictive; we believe MA plans are in the best position and it is
in their own interest to stay abreast of professional standards
necessary to determine which services are clinically appropriate. MA
plans have a vested interest in staying abreast of the current
professionally recognized standards of health care. Healthcare
standards and technology continuously develop as a result of new
advancements in modern medicine. As healthcare standards change over
time and differ from practice area to practice area, we believe our
approach is flexible enough to allow plans to take those changes and
differences into account. We believe that failing to allow this
flexibility will result in the need for another regulation that
addresses future technological changes in health care. We do not want
to unduly burden MA plans with an unnecessary regulation or restrict
their efforts to provide healthcare services. Thus, we are finalizing
our proposal to interpret this provision broadly by not specifying the
Part B services that an MA plan may offer as MA additional telehealth
benefits for the applicable year, but instead allowing MA plans to
independently determine which services each year are clinically
appropriate to furnish in this manner. Our final definition of
additional telehealth benefits at Sec. 422.135(a)(2) provides that it
is the MA plan (not CMS) that identifies the appropriate services for
the applicable year.
We also considered alternatives to implement how telehealth
benefits are provided through ``electronic exchange.'' CMS considered
defining the specific means of ``electronic exchange.'' However, we
decided to define ``electronic exchange'' at Sec. 422.135(a) as
``electronic information and telecommunications technology,'' as the
former is a concise term for the latter, which is the statutory
description of the means used to provide the MA additional telehealth
benefits. We did not propose specific regulation text that defines or
provides examples of electronic information and telecommunications
technology. We considered providing a complete list of means of
providing electronic information and telecommunications technology.
Although we provided examples of electronic information and
telecommunications technology in the proposed rule, we did not provide
a comprehensive list because the technology needed and used to provide
MA additional telehealth benefits will vary based on the service being
offered. CMS appreciates that health care is evolving. CMS's purpose in
not providing specific regulation text that defines or provides
examples of electronic information and telecommunications technology is
to promote flexibility that allows plans to continue to develop methods
of healthcare delivery. CMS cannot contemplate the various
technological methods plans will use to deliver healthcare services. We
do not believe plans will misuse this flexibility because it is in
their best interest to provide healthcare services that meet the
changing needs of enrollees. We also believe the more narrow approach
of defining or providing examples of electronic information and
telecommunications technology will cause the added burden of requiring
another CMS rule.
We believe this broad approach will avoid tying the authority in
the final rule to specific information formats or technologies that
permit non-face-to-

[[Page 15823]]

face interactions for furnishing clinically appropriate services. This
approach will also result in savings due to increased disease
prevention among enrollees because plans will be able to develop
technology that is less expensive, more predictive, and more accurate.
We received no comments on our alternatives considered for this
provision and are therefore finalizing our explanation of them without
modification.
2. Integration Requirements for Dual Eligible Special Needs Plans
(Sec. Sec. 422.2, 422.60, 422.102, 422.107, 422.111, and 422.752)
This final rule requires D-SNPs that--(1) do not meet the HIDE SNP
or FIDE SNP integration standard; and (2) do not have a parent
organization assuming clinical and financial responsibility for
Medicare and Medicaid benefits to notify the state Medicaid agency or
its designee when a high-risk full-benefit dual eligible individual has
a hospital or skilled nursing facility admission. We considered several
alternatives to this proposal, as explained in section II.A.2.a.(2). of
the proposed rule, including examples provided in the Bipartisan Budget
Act of 2018: Notifying the state in a timely manner of enrollees'
emergency room visits and hospital or nursing home discharges;
assigning each enrollee a primary care provider; and data sharing that
benefits the coordination of items and services under Medicare and
Medicaid. However, we believe our final rule is preferable to the
alternatives when considering the degree to which it meets our criteria
for establishing minimum contract criteria discussed in section
II.A.2.a.(2) of the proposed and final rules. While we lack experience
and data to quantify cost, these alternatives would impact a larger
number of D-SNP enrollees and require additional state data-sharing
infrastructure than the notification requirement we are finalizing in
this rule, which we believe would result in increased administrative
burden and implementation costs. We received no comments on this
discussion of alternatives to the proposed rule and therefore are
finalizing our discussion without modification.
3. Unified Grievance and Appeals Procedures for Dual Eligible Special
Needs Plans and Medicaid Managed Care Plans at the Plan Level
(Sec. Sec. 422.560, 422.562, 422.566, 422.629 Through 422.634,
438.210, 438.400, and 438.402)
We are creating unified grievance and appeals procedures for
certain D-SNPs (FIDE SNPs and HIDE SNPs) with exclusively aligned
enrollment, which we define as occurring when such a D-SNP limits
enrollment to full-benefit dual eligible individuals whose Medicaid
benefits are covered by the D-SNP itself, or by a Medicaid managed care
organization that is the same organization, the D-SNP's parent
organization, or another entity that is owned and controlled by the D-
SNP's parent organization. Because most D-SNP enrollees are not
enrolled in D-SNPs with exclusively aligned enrollment, we considered
the feasibility of broadening the scope of these unified procedures to
apply to more D-SNPs--that is, to D-SNPs without exclusively aligned
enrollment. However, in most states, the majority of D-SNP enrollees
have Medicaid coverage either through a different organization's
Medicaid MCO, in a prepaid ambulatory or inpatient health plan (PAHP or
PIHP), or through a state's Medicaid fee-for-service system. In these
circumstances, the D-SNP has no control over the Medicaid grievance and
appeals process. Even a D-SNP that has a Medicaid managed care
organization operated by such plan's parent organization available to
its enrollees, but whose members may instead enroll in other Medicaid
plans, can only unify the procedures for Medicaid appeals and
grievances of those enrollees who are also simultaneously enrolled in
the Medicaid managed care organization controlled by such plan's parent
organization. We lack experience and data to quantify the cost of this
alternative due to the uncertainty involved in calculating the
additional levels of administrative burden and cost associated with
unifying grievance and appeals processes when D-SNPs and Medicaid
managed care plans that do not have the same enrollees, or where the
organizations offering the D-SNPs and Medicaid plans are unaffiliated
or even competitors. We received no comments on this proposal and
therefore are finalizing our discussion here without modification.

E. Accounting Statement and Table

The following table summarizes costs, savings, and transfers by
provision.
As required by OMB Circular A-4 (available at https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/), in Table 16, we
have prepared an accounting statement showing the savings, costs, and
transfers associated with the provisions of this final rule for
calendar years 2020 through 2029. Table 16 is based on Tables 17A, B,
and C which lists savings, costs, and transfers by provision.
BILLING CODE 4120-01-P

[[Page 15824]]

[GRAPHIC] [TIFF OMITTED] TR16AP19.003

The following Table 17 summarizes savings, costs, and transfers by
provision and forms a basis for the accounting table. For reasons of
space, Table 17 is broken into Table 17A (2020 through 2023), Table 17B
(2024 through 2027), and Table 17C (2028, 2029, and totals). In these
tables, all numbers are positive; positive numbers in the savings
columns indicate actual dollars saved while positive numbers in the
cost columns indicate actual dollars spent; and the aggregate row
indicates savings less costs and does not include transfers. The
transfer numbers are expressed as negative numbers to reflect the fact
that the Medicare Trust Fund incurs a cost while enrollees experience a
cost savings. All numbers are in millions. Tables 17A, 17B, and 17C
form the basis for Table 16 and for the

[[Page 15825]]

calculation to the infinite horizon discounted to 2016, mentioned in
the conclusion.
[GRAPHIC] [TIFF OMITTED] TR16AP19.004

[[Page 15826]]

[GRAPHIC] [TIFF OMITTED] TR16AP19.005

BILLING CODE 4120-01-C

F. Conclusion

As indicated in Tables 17A through C, we estimate that this final
rule generates annual cost savings of approximately $25 to $86 million
per year over 2020 through 2029. The raw total net savings over 10
years is $534 million.

G. Reducing Regulation and Controlling Regulatory Costs

Executive Order 13771 requires that the costs associated with
significant new regulations ``shall, to the extent permitted by law, be
offset by the

[[Page 15827]]

elimination of existing costs associated with at least two prior
regulations.'' In line with Executive Order 13771, in Table 18 we
estimate present and annualized values of costs and cost savings over
an infinite time horizon. Both costs and savings are presented as
positive numbers; net savings equals savings minus costs and is
positive. As shown, this final rule generates level annual cost savings
of $55.80 million in 2016 dollars over an infinite time horizon,
discounted at 7 percent. Based on these cost savings, this final rule
would be considered a deregulatory action under Executive Order 13771.
Details on estimated savings is found in the preceding analyses.

Table 18--Executive Order 13771 Summary Table in 2016 Dollars Over an
Infinite Time Horizon
[$ In millions]
------------------------------------------------------------------------
Primary Primary
Item (7%) (3%)
------------------------------------------------------------------------
Present Value of Costs............................ 27.27 68.39
Present Value of Cost Savings..................... 824.36 2,431.69
Present Value of Net Costs........................ 797.09 2,363.30
Annualized Costs.................................. 1.91 2.05
Annualized Cost Savings........................... 57.71 72.95
Annualized Net Savings............................ 55.80 70.90
------------------------------------------------------------------------

List of Subjects

42 CFR Part 422

Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Medicare, Penalties, Privacy, and
Reporting and recordkeeping requirements.

42 CFR Part 423

Administrative practice and procedure, Emergency medical services,
Health facilities, Health maintenance organizations (HMO), Health
professionals, Medicare, Penalties, Privacy, and Reporting and
recordkeeping requirements.

42 CFR Part 438

Grant programs-health, Medicaid, Reporting and recordkeeping
requirements.

42 CFR Part 498

Administrative practice and procedure, Health facilities, Health
professions, Medicare, and Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 422--MEDICARE ADVANTAGE PROGRAM

0
1. The authority citation for part 422 is revised to read as follows:

Authority: 42 U.S.C. 1302 and 1395hh.

0
2. Section 422.2 is amended--
0
a. By adding definitions of ``Aligned enrollment'' and ``Dual eligible
special needs plan'' in alphabetical order;
0
b. By revising the definition of ``Fully integrated dual eligible
special needs plan'';
0
c. By adding the definition of ``Highly integrated dual eligible
special needs plan'' in alphabetical order; and
0
d. In the definition of ``Preclusion list'' by revising the
introductory text and paragraphs (1)(i), (2)(i), (2)(ii)(C) and adding
paragraph (3).
The additions and revisions read as follows:

Sec. 422.2 Definitions.

* * * * *
Aligned enrollment refers to the enrollment in a dual eligible
special needs plan of full-benefit dual eligible individuals whose
Medicaid benefits are covered under a Medicaid managed care
organization contract under section 1903(m) of the Act between the
applicable State and: the dual eligible special needs plan's (D-SNP's)
MA organization, the D-SNP's parent organization, or another entity
that is owned and controlled by the D-SNP's parent organization. When
State policy limits a D-SNP's membership to individuals with aligned
enrollment, this condition is referred to as exclusively aligned
enrollment.
* * * * *
Dual eligible special needs plan or D-SNP means a specialized MA
plan for special needs individuals who are entitled to medical
assistance under a State plan under title XIX of the Act that--
(1) Coordinates the delivery of Medicare and Medicaid services for
individuals who are eligible for such services;
(2) May provide coverage of Medicaid services, including long-term
services and supports and behavioral health services for individuals
eligible for such services;
(3) Has a contract with the State Medicaid agency consistent with
Sec. 422.107 that meets the minimum requirements in paragraph (c) of
such section; and
(4) Beginning January 1, 2021, satisfies one or more of the
following criteria for the integration of Medicare and Medicaid
benefits:
(i) Meets the additional requirement specified in Sec. 422.107(d)
in its contract with the State Medicaid agency.
(ii) Is a highly integrated dual eligible special needs plan.
(iii) Is a fully integrated dual eligible special needs plan.
* * * * *
Fully integrated dual eligible special needs plan means a dual
eligible special needs plan--
(1) That provides dual eligible individuals access to Medicare and
Medicaid benefits under a single entity that holds both an MA contract
with CMS and a Medicaid managed care organization contract under
section 1903(m) of the Act with the applicable State;
(2) Whose capitated contract with the State Medicaid agency
provides coverage, consistent with State policy, of specified primary
care, acute care, behavioral health, and long-term services and
supports, and provides coverage of nursing facility services for a
period of at least 180 days during the plan year;
(3) That coordinates the delivery of covered Medicare and Medicaid
services using aligned care management and specialty care network
methods for high-risk beneficiaries; and
(4) That employs policies and procedures approved by CMS and the
State to coordinate or integrate beneficiary communication materials,
enrollment, communications, grievance and appeals, and quality
improvement.
* * * * *
Highly integrated dual eligible special needs plan means a dual
eligible special needs plan offered by an MA organization that provides
coverage, consistent with State policy, of long-term services and
supports, behavioral health services, or both, under a capitated
contract that meets one of the following arrangements--
(1) The capitated contract is between the MA organization and the
Medicaid agency; or
(2) The capitated contract is between the MA organization's parent
organization (or another entity that is owned and controlled by its
parent organization) and the Medicaid agency.
* * * * *
Preclusion list means a CMS compiled list of individuals and
entities that--
(1) * * *
(i) The individual or entity is currently revoked from Medicare for
a reason other than that stated in Sec. 424.535(a)(3) of this chapter.
* * * * *
(2) * * *
(i) The individual or entity has engaged in behavior, other than
that

[[Page 15828]]

described in Sec. 424.535(a)(3) of this chapter, for which CMS could
have revoked the individual or entity to the extent applicable had they
been enrolled in Medicare.
(ii) * * *
(C) Any other evidence that CMS deems relevant to its
determination; or
(3) The individual or entity, regardless of whether they are or
were enrolled in Medicare, has been convicted of a felony under Federal
or State law within the previous 10 years that CMS deems detrimental to
the best interests of the Medicare program. Factors that CMS considers
in making such a determination under this paragraph (3) are--
(i) The severity of the offense;
(ii) When the offense occurred; and
(iii) Any other information that CMS deems relevant to its
determination.
* * * * *

0
3. Section 422.60 is amended by revising paragraph (g)(2)(i) to read as
follows:

Sec. 422.60 Election process.

* * * * *
(g) * * *
(2) * * *
(i) Operate as a fully integrated dual eligible special needs plan
or highly integrated dual eligible special needs plan.
* * * * *

0
4. Section 422.100 is amended by revising paragraphs (a) and (c)(1) to
read as follows:

Sec. 422.100 General requirements.

(a) Basic rule. Subject to the conditions and limitations set forth
in this subpart, an MA organization offering an MA plan must provide
enrollees in that plan with coverage of the basic benefits described in
paragraph (c)(1) of this section (except that additional telehealth
benefits may be, but are not required to be, offered by the MA plan)
and, to the extent applicable, supplemental benefits as described in
paragraph (c)(2) of this section, by furnishing the benefits directly
or through arrangements, or by paying for the benefits. CMS reviews
these benefits subject to the requirements of this section and the
requirements in subpart G of this part.
* * * * *
(c) * * *
(1) Basic benefits are all items and services (other than hospice
care or coverage for organ acquisitions for kidney transplants) for
which benefits are available under parts A and B of Medicare, including
additional telehealth benefits offered consistent with the requirements
at Sec. 422.135.
* * * * *

0
5. Section 422.102 is amended by revising paragraph (e) introductory
text to read as follows:

Sec. 422.102 Supplemental benefits.

* * * * *
(e) Supplemental benefits for certain dual eligible special needs
plans. Subject to CMS approval, fully integrated dual eligible special
needs plans and highly integrated dual eligible special needs plans
that meet minimum performance and quality-based standards may offer
additional supplemental benefits, consistent with the requirements of
this part, where CMS finds that the offering of such benefits could
better integrate care for the dual eligible population provided that
the special needs plan--
* * * * *

0
6. Section 422.107 is amended by--
0
a. Revising the section heading;
0
b. By revising paragraphs (a), (b), (c)(1), (c)(2), and (c)(3);
0
c. By redesignating paragraph (d) as paragraph (e); and
0
d. Reserving paragraph (d).
The revisions and additions read as follows:

Sec. 422.107 Special needs plans and dual eligibles: Contract with
State Medicaid Agency.

(a) Definition. For the purpose of this section, a contract with a
State Medicaid agency means a formal written agreement between an MA
organization and the State Medicaid agency documenting each entity's
roles and responsibilities with regard to dual eligible individuals.
(b) General rule. MA organizations seeking to offer a dual eligible
special needs plan must have a contract consistent with this section
with the State Medicaid agency.
(c) * * *
(1) The MA organization's responsibility to--
(i) Coordinate the delivery of Medicaid benefits for individuals
who are eligible for such services; and
(ii) If applicable, provide coverage of Medicaid services,
including long-term services and supports and behavioral health
services, for individuals eligible for such services.
(2) The category(ies) and criteria for eligibility for dual
eligible individuals to be enrolled under the SNP, including as
described in sections 1902(a), 1902(f), 1902(p), and 1905 of the Act.
(3) The Medicaid benefits covered under a capitated contract
between the State Medicaid agency and the MA organization offering the
SNP, the SNP's parent organization, or another entity that is owned and
controlled by the SNP's parent organization.
* * * * *
(d) [Reserved]

0
7. Effective January 1, 2021, Sec. 422.107 is further amended by
adding paragraphs (c)(9), (d), and (e)(2) to read as follows:

Sec. 422.107 Special needs plans and dual eligibles: Contract with
State Medicaid Agency.

(c) * * *
* * * * *
(9) For each dual eligible special needs plan that is an applicable
integrated plan as defined in Sec. 422.561, a requirement for the use
of the unified appeals and grievance procedures under Sec. Sec.
422.629 through 422.634, 438.210, 438.400, and 438.402.
* * * * *
(d) Additional minimum contract requirement. For any dual eligible
special needs plan that is not a fully integrated or highly integrated
dual eligible special needs plan, the contract must also stipulate
that, for the purpose of coordinating Medicare and Medicaid-covered
services between settings of care, the SNP notifies, or arrange for
another entity or entities to notify, the State Medicaid agency,
individuals or entities designated by the State Medicaid agency, or
both, of hospital and skilled nursing facility admissions for at least
one group of high-risk full-benefit dual eligible individuals,
identified by the State Medicaid agency. The State Medicaid agency must
establish the timeframe(s) and method(s) by which notice is provided.
In the event that a SNP authorizes another entity or entities to
perform this notification, the SNP must retain responsibility for
complying with this requirement.
(e) * * *
(2) MA organizations offering a dual eligible SNP must comply with
paragraphs (c)(9) and (d) of this section beginning January 1, 2021.
* * * * *

0
8. Section 422.111 is amended by revising paragraph (b)(2)(iii) to read
as follows:

Sec. 422.111 Disclosure requirements.

* * * * *
(b) * * *
(2) * * *
(iii) By a dual eligible special needs plan, prior to enrollment,
for each prospective enrollee, a comprehensive written statement
describing cost

[[Page 15829]]

sharing protections and benefits that the individual is entitled to
under title XVIII and the State Medicaid program under title XIX.
* * * * *

0
9. Section 422.135 is added to subpart C to read as follows:

Sec. 422.135 Additional telehealth benefits.

(a) Definitions. For purposes of this section, the following
definitions apply:
Additional telehealth benefits means services:
(1) For which benefits are available under Medicare Part B but
which are not payable under section 1834(m) of the Act; and
(2) That have been identified by the MA plan for the applicable
year as clinically appropriate to furnish through electronic exchange
when the physician (as defined in section 1861(r) of the Act) or
practitioner (described in section 1842(b)(18)(C) of the Act) providing
the service is not in the same location as the enrollee.
Electronic exchange means electronic information and
telecommunications technology.
(b) General rule. An MA plan may treat additional telehealth
benefits as basic benefits covered under the original Medicare fee-for-
service program for purposes of this part 422 provided that the
requirements of this section are met. If the MA plan fails to comply
with the requirements of this section, then the MA plan may not treat
the benefits provided through electronic exchange as additional
telehealth benefits, but may treat them as supplemental benefits as
described in Sec. 422.102, subject to CMS approval.
(c) Requirements. An MA plan furnishing additional telehealth
benefits must:
(1) Furnish in-person access to the specified Part B service(s) at
the election of the enrollee.
(2) Advise each enrollee that the enrollee may receive the
specified Part B service(s) through an in-person visit or through
electronic exchange.
(3) Comply with the provider selection and credentialing
requirements provided in Sec. 422.204, and, when providing additional
telehealth benefits, ensure through its contract with the provider that
the provider meet and comply with applicable State licensing
requirements and other applicable laws for the State in which the
enrollee is located and receiving the service.
(4) Make information about coverage of additional telehealth
benefits available to CMS upon request. Information may include, but is
not limited to, statistics on use or cost, manner(s) or method of
electronic exchange, evaluations of effectiveness, and demonstration of
compliance with the requirements of this section.
(d) Requirement to use contracted providers. An MA plan furnishing
additional telehealth benefits may only do so using contracted
providers. Coverage of benefits furnished by a non-contracted provider
through electronic exchange may only be covered as a supplemental
benefit.
(e) Bidding. An MA plan that fully complies with this section may
include additional telehealth benefits in its bid for basic benefits in
accordance with Sec. 422.254.
(f) Cost sharing. MA plans offering additional telehealth benefits
may maintain different cost sharing for the specified Part B service(s)
furnished through an in-person visit and the specified Part B
service(s) furnished through electronic exchange.

Sec. 422.156 [Amended]

0
10. Section 422.156 is amended in paragraph (b)(1) by removing the
phrase ``the quality improvement projects (QIPs) and''.

0
11. Section 422.162 (a) is amended by adding the definitions ``Absolute
percentage cap'', ``Cut point cap'', ``Guardrail'', ``Mean
resampling'', ``Restricted range'', and ``Restricted range cap'' in
alphabetical order to read as follows:

Sec. 422.162 Medicare Advantage Quality Rating System.

(a) * * *
Absolute percentage cap is a cap applied to non-CAHPS measures that
are on a 0 to 100 scale that restricts movement of the current year's
measure-threshold-specific cut point to no more than the stated
percentage as compared to the prior year's cut point.
* * * * *
Cut point cap is a restriction on the change in the amount of
movement a measure-threshold-specific cut point can make as compared to
the prior year's measure-threshold-specific cut point. A cut point cap
can restrict upward movement, downward movement, or both.
* * * * *
Guardrail is a bidirectional cap that restricts both upward and
downward movement of a measure-threshold-specific cut point for the
current year's measure-level Star Ratings as compared to the prior
year's measure-threshold-specific cut point.
* * * * *
Mean resampling refers to a technique where measure-specific scores
for the current year's Star Ratings are randomly separated into 10
equal-sized groups. The hierarchal clustering algorithm is done 10
times, each time leaving one of the 10 groups out. By leaving out one
of the 10 groups for each run, 9 of the 10 groups, which is 90 percent
of the applicable measure scores, are used for each run of the
clustering algorithm. The method results in 10 sets of measure-specific
cut points. The mean cut point for each threshold per measure is
calculated using the 10 values.
* * * * *
Restricted range is the difference between the maximum and minimum
measure score values using the prior year measure scores excluding
outer fence outliers (first quartile -3*Interquartile Range (IQR) and
third quartile + 3*IQR).
Restricted range cap is a cap applied to non-CAHPS measures that
restricts movement of the current year's measure-threshold-specific cut
point to no more than the stated percentage of the restricted range of
a measure calculated using the prior year's measure score distribution.
* * * * *

0
12. Section 422.164 is amended by adding paragraphs (f)(1)(v),
(g)(1)(iii)(O), and (h) to read as follows:

Sec. 422.164 Adding, updating, and removing measures.

* * * * *
(f) * * *
(1) * * *
(v) CMS excludes any measure that receives a measure-level Star
Rating reduction for data integrity concerns for either the current or
prior year from the improvement measure(s).
* * * * *
(g) * * *
(1) * * *
(iii) * * *
(O) CMS reduces the measure rating to 1 star for the applicable
appeals measure(s) if a contract fails to submit Timeliness Monitoring
Project data for CMS's review to ensure the completeness of the
contract's IRE data.
* * * * *
(h) Review of sponsors' data. (1) An MA organization may request
that CMS or the IRE review its' contract's appeals data provided that
the request is received by the annual deadline set by CMS.
(2) An MA organization may request that CMS review its' contract's
Complaints Tracking Module (CTM) data provided that the request is
received by the annual deadline set by CMS for the applicable Star
Ratings year.

[[Page 15830]]

0
13. Section 422.166 is amended by revising paragraph (a)(2)(i) and
adding paragraph (i) to read as follows:

Sec. 422.166 Calculation of Star Ratings.

(a) * * *
(2) * * *
(i) The method maximizes differences across the star categories and
minimizes the differences within star categories using mean resampling
with the hierarchal clustering of the current year's data, and a
guardrail so that the measure-threshold-specific cut points for non-
CAHPS measures do not increase or decrease more than the value of the
cap from one year to the next. The cap is equal to 5 percentage points
for measures having a 0 to 100 scale (absolute percentage cap) or 5
percent of the restricted range for measures not having a 0 to 100
scale (restricted range cap). New measures that have been in the Part C
and D Star Rating program for three years or less use the hierarchal
clustering methodology with mean resampling with no guardrail for the
first three years in the program.
* * * * *
(i) Extreme and uncontrollable circumstances. In the event of
extreme and uncontrollable circumstances that may negatively impact
operational and clinical systems and contracts' abilities to conduct
surveys needed for accurate performance measurement, CMS calculates the
Star Ratings as specified in paragraphs (i)(2) through (10) of this
section for each contract that is an affected contract during the
performance period for the applicable measures. We use the start date
of the incident period to determine which year of Star Ratings could be
affected, regardless of whether the incident period lasts until another
calendar year.
(1) Identification of affected contracts. A contract that meets all
of the following criteria is an affected contract:
(i) The contract's service area is within an ``emergency area''
during an ``emergency period'' as defined in section 1135(g) of the
Act.
(ii) The contract's service area is within a county, parish, U.S.
territory or tribal area designated in a major disaster declaration
under the Stafford Act and the Secretary exercised authority under
section 1135 of the Act based on the same triggering event(s).
(iii) As specified in paragraphs (i)(2) through (10) of this
section, a certain minimum percentage (25 percent or 60 percent) of the
enrollees under the contract must reside in a Federal Emergency
Management Agency (FEMA)-designated Individual Assistance area at the
time of the extreme and uncontrollable circumstance.
(2) CAHPS adjustments. (i) A contract, even if an affected
contract, must administer the CAHPS survey unless exempt under
paragraph (i)(2)(ii) of this section.
(ii) An affected contract with at least 25 percent of enrollees in
FEMA-designated Individual Assistance areas at the time of the extreme
and uncontrollable circumstance is exempt from administering the CAHPS
survey if the contract completes both of the following:
(A) Demonstrates to CMS that the required sample for the survey
cannot be contacted because a substantial number of the contract's
enrollees are displaced due to the FEMA-designated disaster identified
in paragraph (i)(1)(iii) of this section in the prior calendar year.
(B) Requests and receives a CMS approved exemption.
(iii) An affected contract with an exemption described in paragraph
(i)(2)(ii) of this section receives the contract's CAHPS measure stars
and corresponding measure scores from the prior year.
(iv) For an affected contract with at least 25 percent of enrollees
in FEMA-designated Individual Assistance areas at the time of the
extreme and uncontrollable circumstance, the contract receives the
higher of the previous year's Star Rating or the current year's Star
Rating (and corresponding measure score) for each CAHPS measure.
(v) When a contract is an affected contract with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years, it is a multiple year-affected contract. A multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
(3) HOS adjustments. (i) An affected contract must administer the
HOS survey unless exempt under paragraph (i)(3)(ii) of this section.
(ii) An affected contract with at least 25 percent of enrollees in
FEMA-designated Individual Assistance areas at the time of the extreme
and uncontrollable circumstance is exempt from administering the HOS
survey if the contract completes the following:
(A) Demonstrates to CMS that the required sample for the survey
cannot be contacted because a substantial number of the contract's
enrollees are displaced due to the FEMA-designated disaster identified
in paragraph (i)(1)(iii) of this section during the measurement period.
(B) Requests and receives a CMS approved exemption.
(iii) Affected contracts with an exemption described in paragraph
(i)(3)(ii) of this section receive the prior year's HOS and Healthcare
Effectiveness Data and Information Set (HEDIS)-HOS measure stars and
corresponding measure scores.
(iv) For an affected contract with at least 25 percent of enrollees
in FEMA-designated Individual Assistance areas at the time of the
extreme and uncontrollable circumstance, the affected contract receives
the higher of the previous year's Star Rating or the current year's
Star Rating (and corresponding measure score) for each HOS and HEDIS-
HOS measure.
(v) When a contract is an affected contract with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years, it is a multiple year-affected contract. A multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
(4) HEDIS adjustments. (i) An affected contract must report HEDIS
data unless exempted under paragraph (i)(4)(ii) of this section.
(ii) An affected contract with at least 25 percent of enrollees in
FEMA-designated Individual Assistance areas at the time of the extreme
and uncontrollable circumstance is exempt from reporting HEDIS data if
the contract completes the following:
(A) Demonstrates an inability to obtain both administrative and
medical record data that are required for reporting HEDIS measures due
to a FEMA-designated disaster in the prior calendar year.
(B) Requests and receives a CMS approved exemption.
(iii) Affected contracts with an exemption described in paragraph

[[Page 15831]]

(i)(4)(ii) of this section receive the prior year's HEDIS measure stars
and corresponding measure scores.
(iv) Contracts that do not have an exemption defined in paragraph
(i)(4)(ii) of this section may contact National Committee for Quality
Assurance (NCQA) to request modifications to the samples for measures
that require medical record review.
(v) For an affected contract with at least 25 percent of enrollees
in FEMA-designated Individual Assistance areas at the time of the
extreme and uncontrollable circumstance, the affected contract receives
the higher of the previous year's Star Rating or the current year's
Star Rating (and corresponding measure score) for each HEDIS measure.
(vi) When a contract is an affected contract with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years, it is a multiple year-affected contract. A multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
(5) New measure adjustments. For affected contracts with at least
25 percent of enrollees in a FEMA-designated Individual Assistance area
at the time of the extreme and uncontrollable circumstance, CMS holds
the affected contract harmless by using the higher of the contract's
summary or overall rating or both with and without including all of the
applicable new measures.
(6) Other Star Ratings measure adjustments. (i) For all other
measures except those measures identified in this paragraph (i)(6)(ii)
of this section, affected contracts with at least 25 percent of
enrollees in a FEMA-designated Individual Assistance area at the time
of the extreme and uncontrollable circumstance receive the higher of
the previous or current year's measure Star Rating (and corresponding
measure score).
(ii) CMS does not adjust the scores or Star Ratings for the
following measures, unless the exemption in paragraph (i)(6)(iii) of
this section applies.
(A) Part C Call Center--Foreign Language Interpreter and TTY
Availability.
(B) Part D Call Center--Foreign Language Interpreter and TTY
Availability.
(iii) CMS adjusts the measures listed in paragraph (i)(6)(ii) of
this section using the adjustments listed in paragraph (i)(6)(i) of
this section for contracts affected by extreme and uncontrollable
circumstances where there are continuing communications issues related
to loss of electricity and damage to infrastructure during the call
center study.
(iv) When a contract is an affected contract with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years, it is a multiple year-affected contract. A multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
(7) Exclusion from improvement measures. Any measure that reverts
back to the data underlying the previous year's Star Rating due to the
adjustments made in paragraph (i) of this section is excluded from both
the count of measures and the applicable improvement measures for the
current and next year's Star Ratings for the affected contract.
Contracts affected by extreme and uncontrollable circumstances do not
have the option of reverting to the prior year's improvement rating.
(8) Missing data. For an affected contract that has missing data in
the current or previous year, the final measure rating comes from the
current year unless any of the exemptions described in paragraphs
(i)(2)(ii), (i)(3)(ii), and (i)(4)(ii) of this section apply.
(9) Cut points for non-CAHPS measures. (i) CMS excludes the numeric
values for affected contracts with 60 percent or more of their
enrollees in the FEMA-designated Individual Assistance area at the time
of the extreme and uncontrollable circumstance from the clustering
algorithms described in paragraph (a)(2) of this section.
(ii) The cut points calculated as described in paragraph (i)(9)(i)
of this section are used to assess all affected contracts' measure Star
Ratings.
(10) Reward Factor. (i) CMS excludes the numeric values for
affected contracts with 60 percent or more of their enrollees in the
FEMA-designated Individual Assistance area at the time of the extreme
and uncontrollable circumstance from the determination of the
performance summary and variance thresholds for the Reward Factor
described in paragraph (f)(1) of this section.
(ii) All affected contracts are eligible for the Reward Factor
based on the calculations described in paragraph (i)(10)(i) of this
section.

0
14. Effective June 17, 2019, Sec. 422.222 is amended by revising
paragraph (a)(2) to read as follows:

Sec. 422.222 Preclusion list.

(a) * * *
(2)(i) CMS sends written notice to the individual or entity via
letter of their inclusion on the preclusion list. The notice must
contain the reason for the inclusion and inform the individual or
entity of their appeal rights. An individual or entity may appeal their
inclusion on the preclusion list, defined in Sec. 422.2, in accordance
with part 498 of this chapter.
(ii) If the individual's or entity's inclusion on the preclusion
list is based on a contemporaneous Medicare revocation under Sec.
424.535 of this chapter:
(A) The notice described in paragraph (a)(2)(i) of this section
must also include notice of the revocation, the reason(s) for the
revocation, and a description of the individual's or entity's appeal
rights concerning the revocation.
(B) The appeals of the individual's or entity's inclusion on the
preclusion list and the individual's or entity's revocation must be
filed jointly by the individual or entity and, as applicable,
considered jointly under part 498 of this chapter.

0
15. Section 422.222 is amended by revising the section heading and
paragraph (a) to read as follows:

Sec. 422.222 Preclusion list for contracted and non-contracted
individuals and entities.

(a)(1)(i) Except as provided in paragraph (a)(1)(ii) of this
section, an MA organization must not make payment for a health care
item, service, or drug that is furnished, ordered, or prescribed by an
individual or entity that is included on the preclusion list, defined
in Sec. 422.2.
(ii) With respect to MA providers that have been added to an
updated preclusion list but are not currently excluded by the OIG, the
MA organization must do all of the following:
(A) No later than 30 days after the posting of this updated
preclusion list,

[[Page 15832]]

must provide an advance written notice to any beneficiary who has
received or been prescribed an MA service, item, or drug from or by the
individual or entity added to the preclusion list in this update.
(B)(1) Subject to paragraph (a)(1)(ii)(B)(2) of this section, must
ensure that reasonable efforts are made to notify the individual or
entity described in paragraph (a)(1)(ii) of this section of a
beneficiary who was sent a notice under paragraph (a)(1)(ii)(A) of this
section.
(2) Paragraph (a)(1)(ii)(B)(1) of this section applies only upon
receipt of a claim from a precluded provider in Medicare Part C when--
(i) The MA organization has enough information on file to either
copy the provider on the notification previously sent to the
beneficiary or send a new notice informing the provider that they may
not see plan beneficiaries due to their preclusion status; and
(ii) The claim is received after the claim denial or reject date in
the preclusion file.
(C) Must not deny payment for a service, item, or drug furnished,
ordered, or prescribed by the newly added individual or entity, solely
on the ground that they have been included in the updated preclusion
list, in the 60-day period after the date it sent the notice described
in paragraph (a)(1)(ii)(A) of this section.
(2)(i) CMS sends written notice to the individual or entity via
letter of their inclusion on the preclusion list. The notice must
contain the reason for the inclusion and inform the individual or
entity of their appeal rights. An individual or entity may appeal their
inclusion on the preclusion list, defined in Sec. 422.2, in accordance
with part 498 of this chapter.
(ii) If the individual's or entity's inclusion on the preclusion
list is based on a contemporaneous Medicare revocation under Sec.
424.535 of this chapter:
(A) The notice described in paragraph (a)(2)(i) of this section
must also include notice of the revocation, the reason(s) for the
revocation, and a description of the individual's or entity's appeal
rights concerning the revocation.
(B) The appeals of the individual's or entity's inclusion on the
preclusion list and the individual's or entity's revocation must be
filed jointly by the individual or entity and, as applicable,
considered jointly under part 498 of this chapter.
(3)(i) Except as provided in paragraph (a)(3)(ii) of this section,
an individual or entity will only be included on the preclusion list
after the expiration of either of the following:
(A) If the individual or entity does not file a reconsideration
request under Sec. 498.5(n)(1) of this chapter, the individual or
entity will be added to the preclusion list upon the expiration of the
60-day period in which the individual or entity may request a
reconsideration; or
(B) If the individual or entity files a reconsideration request
under Sec. 498.5(n)(1) of this chapter, the individual or entity will
be added to the preclusion list effective on the date on which CMS, if
applicable, denies the individual's or entity's reconsideration.
(ii) An OIG excluded individual or entity is added to the
preclusion list effective on the date of the exclusion.
(4) Payment denials based upon an individual's or entity's
inclusion on the preclusion list are not appealable by beneficiaries.
(5)(i) Except as provided in paragraphs (a)(5)(iii) and (iv) of
this section, an individual or entity that is revoked under Sec.
424.535 of this chapter will be included on the preclusion list for the
same length of time as the individual's or entity's reenrollment bar.
(ii) Except as provided in paragraphs (a)(5)(iii) and (iv) of this
section, an individual or entity that is not enrolled in Medicare will
be included on the preclusion list for the same length of time as the
reenrollment bar that CMS could have imposed on the individual or
entity had they been enrolled and then revoked.
(iii) Except as provided in paragraph (a)(5)(iv) of this section,
an individual or entity, regardless of whether they are or were
enrolled in Medicare, that is included on the preclusion list because
of a felony conviction will remain on the preclusion list for a 10-year
period, beginning on the date of the felony conviction, unless CMS
determines that a shorter length of time is warranted. Factors that CMS
considers in making such a determination are as follows:--
(A) The severity of the offense.
(B) When the offense occurred.
(C) Any other information that CMS deems relevant to its
determination.
(iv) In cases where an individual or entity is excluded by the OIG,
the individual or entity must remain on the preclusion list until the
expiration of the CMS-imposed preclusion list period or reinstatement
by the OIG, whichever occurs later.
(6) CMS has the discretion not to include a particular individual
or entity on (or if warranted, remove the individual or entity from)
the preclusion list should it determine that exceptional circumstances
exist regarding beneficiary access to MA items, services, or drugs. In
making a determination as to whether such circumstances exist, CMS
takes into account:
(i) The degree to which beneficiary access to MA items, services,
or drugs would be impaired; and
(ii) Any other evidence that CMS deems relevant to its
determination.
* * * * *

0
16. Section 422.252 is amended by revising the definition of ``MA
monthly basic beneficiary premium'', ``MA monthly MSA premium'',
``Monthly aggregate bid amount'', ``Plan basic cost sharing'', and
``Unadjusted MA statutory non-drug monthly bid amount'' to read as
follows:

Sec. 422.252 Terminology.

* * * * *
MA monthly basic beneficiary premium means the premium amount (if
any) an MA plan (except an MSA plan) charges an enrollee for basic
benefits as defined in Sec. 422.100(c)(1), and is calculated as
described at Sec. 422.262.
MA monthly MSA premium means the amount of the plan premium for
coverage of basic benefits as defined in Sec. 422.100(c)(1) through an
MSA plan, as set forth at Sec. 422.254(e).
* * * * *
Monthly aggregate bid amount means the total monthly plan bid
amount for coverage of an MA eligible beneficiary with a nationally
average risk profile for the factors described in Sec. 422.308(c), and
this amount is comprised of the following:
(1) The unadjusted MA statutory non-drug monthly bid amount for
coverage of basic benefits as defined in Sec. 422.100(c)(1).
(2) The amount for coverage of basic prescription drug benefits
under Part D (if any).
(3) The amount for provision of supplemental health care benefits
(if any).
* * * * *
Plan basic cost sharing means cost sharing that would be charged by
a plan for basic benefits as defined in Sec. 422.100(c)(1) before any
reductions resulting from mandatory supplemental benefits.
* * * * *
Unadjusted MA statutory non-drug monthly bid amount means a plan's
estimate of its average monthly required revenue to provide coverage of
basic benefits as defined in Sec. 422.100(c)(1) to an MA eligible
beneficiary with a nationally average risk profile for the

[[Page 15833]]

risk factors CMS applies to payment calculations as set forth at Sec.
422.308(c).

0
17. Section 422.254 is amended by--
0
a. Revising paragraph (b)(1)(i);
0
b. Adding paragraph (b)(3)(i);
0
c. Reserving paragraph (b)(3)(ii); and
0
d. Revising paragraphs (b)(4), (c)(3)(i), and (e)(2).
The revisions and addition read as follows:

Sec. 422.254 Submission of bids.

* * * * *
(b) * * *
(1) * * *
(i) The unadjusted MA statutory non-drug monthly bid amount, which
is the MA plan's estimated average monthly required revenue for
providing basic benefits as defined in Sec. 422.100(c)(1).
* * * * *
(3) * * *
(i) MA plans offering additional telehealth benefits as defined in
Sec. 422.135(a) must exclude any capital and infrastructure costs and
investments directly incurred or paid by the MA plan relating to such
benefits from their bid submission for the unadjusted MA statutory non-
drug monthly bid amount.
(ii) [Reserved]
(4) The bid amount is for plan payments only but must be based on
plan assumptions about the amount of revenue required from enrollee
cost-sharing. The estimate of plan cost-sharing for the unadjusted MA
statutory non-drug monthly bid amount for coverage of basic benefits as
defined in Sec. 422.100(c)(1) must reflect the requirement that the
level of cost sharing MA plans charge to enrollees must be actuarially
equivalent to the level of cost sharing (deductible, copayments, or
coinsurance) charged to beneficiaries under the original Medicare fee-
for-service program option. The actuarially equivalent level of cost
sharing reflected in a regional plan's unadjusted MA statutory non-drug
monthly bid amount does not include cost sharing for out-of-network
Medicare benefits, as described at Sec. 422.101(d).
* * * * *
(c) * * *
(3) * * *
(i) The provision of basic benefits as defined in Sec.
422.100(c)(1);
* * * * *
(e) * * *
(2) The amount of the MA monthly MSA premium for basic benefits (as
defined in Sec. 422.252);
* * * * *

0
18. Section 422.264 is amended by revising paragraph (a) to read as
follows:

Sec. 422.264 Calculation of savings.

(a) Computation of risk adjusted bids and benchmarks--(1) The risk
adjusted MA statutory non-drug monthly bid amount is the unadjusted MA
statutory non-drug monthly bid amount (defined at Sec.
422.254(b)(1)(i)), adjusted using the factors described in paragraph
(c) of this section for local plans and paragraph (e) of this section
for regional plans.
(2) The risk adjusted MA area-specific non-drug monthly benchmark
amount is the unadjusted benchmark amount for coverage of basic
benefits defined in Sec. 422.100(c)(1) by a local MA plan, adjusted
using the factors described in paragraph (c) of this section.
(3) The risk adjusted MA region-specific non-drug monthly benchmark
amount is the unadjusted benchmark amount for coverage of basic
benefits defined in Sec. 422.100(c)(1) by a regional MA plan, adjusted
using the factors described in paragraph (e) of this section.
* * * * *

0
19. Section 422.504 is amended by adding paragraphs (g)(1)(iv) and (v)
to read as follows:

Sec. 422.504 Contract provisions.

* * * * *
(g) * * *
(1) * * *
(iv) Ensure that the enrollee does not have any financial liability
for services, items, or drugs furnished, ordered, or prescribed to the
enrollee by an MA contracted individual or entity on the preclusion
list, as defined in Sec. 422.2 and as described in Sec. 422.222.
(v) Ensure that the plan's provider agreement contains a provision
stating that after the expiration of the 60-day period specified in
Sec. 422.222:
(A) The provider will no longer be eligible for payment from the
plan and will be prohibited from pursuing payment from the beneficiary
as stipulated by the terms of the contract between CMS and the plan per
Sec. 422.504(g)(1)(iv); and
(B) The provider will hold financial liability for services, items,
and drugs that are furnished, ordered, or prescribed after this 60-day
period, at which point the provider and the beneficiary will have
already received notification of the preclusion.
* * * * *

0
20. Effective January 1, 2021, Sec. 422.560 is amended by adding
paragraphs (a)(4) and (b)(5) to read as follows:

Sec. 422.560 Basis and scope.

(a) * * *
(4) Section 1859(f)(8) of the Act provides for, to the extent
feasible, unifying grievances and appeals procedures under sections
1852(f), 1852(g), 1902(a)(3), 1902(a)(5), and 1932(b)(4) of the Act for
Medicare and Medicaid covered items and services provided by
specialized MA plans for special needs individuals described in
subsection 1859(b)(6)(B)(ii) of the Act for individuals who are
eligible under titles XVIII and XIX of the Act. Beginning January 1,
2021, procedures established under section 1859(f)(8) of the Act apply
in place of otherwise applicable grievances and appeals procedures with
respect to Medicare and Medicaid covered items and services provided by
applicable integrated plans.
(b) * * *
(5) Requirements for applicable integrated plans with respect to
procedures for integrated grievances, integrated organization
determinations, and integrated reconsiderations.
* * * * *

0
21. Section 422.561 is amended by adding the definitions ``Applicable
integrated plans'', ``Integrated appeal'', ``Integrated grievance'',
``Integrated organization determination'', and ``Integrated
reconsideration'' in alphabetical order to read as follows:

Sec. 422.561 Definitions.

* * * * *
Applicable integrated plan means:
(1) A fully integrated dual eligible special needs plan with
exclusively aligned enrollment or a highly integrated dual eligible
special needs plan with exclusively aligned enrollment, and
(2) The Medicaid managed care organization, as defined in section
1903(m) of the Act, through which such dual eligible special needs
plan, its parent organization, or another entity that is owned and
controlled by its parent organization covers Medicaid services for
dually eligible individuals enrolled in such dual eligible special
needs plan and such Medicaid managed care organization.
* * * * *
Integrated appeal means any of the procedures that deal with, or
result from, adverse integrated organization determinations by an
applicable integrated plan on the health care services the enrollee
believes he or she is entitled to receive, including delay in
providing, arranging for, or approving the health care services (such
that a delay would adversely affect the health of the enrollee), or on
any amounts the enrollee must pay for a service. Integrated appeals
cover procedures that would otherwise be defined and

[[Page 15834]]

covered, for non-applicable integrated plans, as an appeal defined in
Sec. 422.561 or the procedures required for appeals in accordance with
Sec. Sec. 438.400 through 438.424 of this chapter. Such procedures
include integrated reconsiderations.
Integrated grievance means a dispute or compliant that would be
defined and covered, for grievances filed by an enrollee in non-
applicable integrated plans, under Sec. 422.564 or Sec. Sec. 438.400
through 438.416 of this chapter. Integrated grievances do not include
appeals procedures and QIO complaints, as described in Sec. 422.564(b)
and (c). An integrated grievance made by an enrollee in an applicable
integrated plan is subject to the integrated grievance procedures in
Sec. Sec. 422.629 and 422.630.
Integrated organization determination means an organization
determination that would otherwise be defined and covered, for a non-
applicable integrated plan, as an organization determination under
Sec. 422.566, an adverse benefit determination under Sec. 438.400(b),
or an action under Sec. 431.201 of this chapter. An integrated
organization determination is made by an applicable integrated plan and
is subject to the integrated organization determination procedures in
Sec. Sec. 422.629, 422.631, and 422.634.
Integrated reconsideration means a reconsideration that would
otherwise be defined and covered, for a non-applicable integrated plan,
as a reconsideration under Sec. 422.580 and appeal under Sec.
438.400(b) of this chapter. An integrated reconsideration is made by an
applicable integrated plan and is subject to the integrated
reconsideration procedures in Sec. Sec. 422.629 and 422.632 through
422.634.
* * * * *

0
22. Section 422.562 is amended by--
0
a. Revising paragraph (a)(1)(i);
0
b. By adding paragraph (a)(5); and
0
c. By revising paragraphs (b)(1), (b)(2), (b)(3), (b)(4)(i), and
(b)(4)(ii).
The revisions and addition read as follows:

Sec. 422.562 General provisions.

(a) * * *
(1) * * *
(i) A grievance procedure as described in Sec. 422.564 or,
beginning January 1, 2021, Sec. 422.630 as applicable, for addressing
issues that do not involve organization determinations;
* * * * *
(5) An MA organization that offers a dual eligible special needs
plan has the following additional responsibilities:
(i) The dual eligible special needs plan must offer to assist an
enrollee in that dual eligible special needs plan with obtaining
Medicaid covered services and resolving grievances, including
requesting authorization of Medicaid services, as applicable, and
navigating Medicaid appeals and grievances in connection with the
enrollee's own Medicaid coverage, regardless of whether such coverage
is in Medicaid fee-for-service or a Medicaid managed care plan, such as
a Medicaid MCO, PIHP, or PAHP as defined in Sec. 438.2 of this
chapter. If the enrollee accepts the offer of assistance, the plan must
provide the assistance. Examples of such assistance include the
following:
(A) Explaining to an enrollee how to make a request for Medicaid
authorization of a service and how to file appeal following an adverse
benefit determination, such as--
(1) Assisting the enrollee in identifying the enrollee's specific
Medicaid managed care plan or fee-for-service point of contact;
(2) Providing specific instructions for contacting the appropriate
agency in a fee-for-service setting or for contacting the enrollee's
Medicaid managed care plan, regardless of whether the Medicaid managed
care plan is affiliated with the enrollee's dual eligible special needs
plan; and
(3) Assisting the enrollee in making contact with the enrollee's
fee-for-service contact or Medicaid managed care plan.
(B) Assisting a beneficiary in filing a Medicaid grievance or a
Medicaid appeal.
(C) Assisting an enrollee in obtaining documentation to support a
request for authorization of Medicaid services or a Medicaid appeal.
(ii) The dual eligible special needs plan must offer to provide the
assistance described in paragraph (a)(5)(i) of this section whenever it
becomes aware of an enrollee's need for a Medicaid-covered service.
Offering such assistance is not dependent on an enrollee's specific
request.
(iii) The dual eligible special needs plan must offer to provide
and actually provide assistance as required by paragraph (a)(5)(i) of
this section using multiple methods.
(A) When an enrollee accepts the offer of assistance described in
paragraph (a)(5)(i) of this section, the dual eligible special needs
plan may coach the enrollee on how to self-advocate.
(B) The dual eligible special needs plan must also provide an
enrollee reasonable assistance in completing forms and taking
procedural steps related to Medicaid grievances and appeals.
(iv) The dual eligible special needs plan must, upon request from
CMS, provide documentation demonstrating its compliance with this
paragraph (a)(5).
(v) The obligation to provide assistance under paragraph (a)(5)(i)
of this section does not create an obligation for a dual eligible
special needs plan to represent an enrollee in a Medicaid appeal.
(b) * * *
(1) The right to have grievances between the enrollee and the MA
organization heard and resolved, as described in Sec. 422.564 or,
beginning January 1, 2021, Sec. 422.630, as applicable.
(2) The right to a timely organization determination, as provided
under Sec. 422.566 or, beginning January 1, 2021, Sec. 422.631, as
applicable.
(3) The right to request an expedited organization determination,
as provided under Sec. Sec. 422.570 or, beginning January 1, 2021,
Sec. 422.631(e), as applicable.
(4) * * *
(i) The right to a reconsideration of the adverse organization
determination by the MA organization, as provided under Sec. 422.578
or, beginning January 1, 2021, Sec. 422.633, as applicable.
(ii) The right to request an expedited reconsideration, as provided
under Sec. 422.584 or, beginning January 1, 2021, Sec. 422.633(f), as
applicable.
* * * * *

0
23. Effective January 1, 2021, Sec. 422.566 is amended by revising
paragraph (a) to read as follows:

Sec. 422.566 Organization determinations.

(a) Responsibilities of the MA organization. Each MA organization
must have a procedure for making timely organization determinations (in
accordance with the requirements of this subpart) regarding the
benefits an enrollee is entitled to receive under an MA plan, including
basic benefits as described under Sec. 422.100(c)(1) and mandatory and
optional supplemental benefits as described under Sec. 422.102, and
the amount, if any, that the enrollee is required to pay for a health
service. The MA organization must have a standard procedure for making
determinations, in accordance with Sec. 422.568, and an expedited
procedure for situations in which applying the standard procedure could
seriously jeopardize the enrollee's life, health, or ability to regain
maximum function, in accordance with Sec. Sec. 422.570 and 422.572.
For an applicable integrated plan, beginning January 1, 2021, the MA

[[Page 15835]]

organization must comply with Sec. Sec. 422.629 through 422.634 in
lieu of Sec. Sec. 422.566(c) and (d), 422.568, 422.570 and 422.572
with regard to the procedures for making determinations, including
integrated organization determinations and integrated reconsiderations,
on a standard and expedited basis.
* * * * *

0
24. Effective January 1, 2021, add an undesignated center heading and
Sec. Sec. 422.629 through 422.634 to Subpart M to read as follows:

Subpart M--Grievances, Organization Determinations and Appeals

* * * * *

Requirements Applicable to Certain Integrated Dual Eligible Special
Needs Plans

Sec.
422.629 General requirements for applicable integrated plans.
422.630 Integrated grievances.
422.631 Integrated organization determinations.
422.632 Continuation of benefits while the applicable integrated
plan reconsideration is pending.
422.633 Integrated reconsideration.
422.634 Effect.

Requirements Applicable to Certain Integrated Dual Eligible Special
Needs Plans

Sec. 422.629 General requirements for applicable integrated plans.

(a) Scope. The provisions in this section and in Sec. Sec. 422.630
through 422.634 set forth requirements for unified appeals and
grievance processes with which applicable integrated plans must comply.
Beginning January 1, 2021, these provisions apply to an applicable
integrated plan in lieu of Sec. Sec. 422.564, 422.566(c) and (d), and
422.568 through 422.590, and 422.618(a) and Sec. Sec. 438.404 through
438.424 of this chapter.
(b) General process. An applicable integrated plan must create
integrated processes for enrollees for integrated grievances,
integrated organization determinations, and integrated
reconsiderations.
(c) State flexibilities. A State may, at its discretion, implement
standards for timeframes or notice requirements that are more
protective for the enrollee than required by this section and
Sec. Sec. 422.630 through 422.634. The contract under Sec. 422.107
must include any standards that differ from the standards set forth in
this section.
(d) Evidence. The applicable integrated plan must provide the
enrollee a reasonable opportunity, in person and in writing, to present
evidence and testimony and make legal and factual arguments for
integrated grievances, and integrated reconsiderations. The applicable
integrated plan must inform the enrollee of the limited time available
for presenting evidence sufficiently in advance of the resolution
timeframe for appeals as specified in this section if the case is being
considered under an expedited timeframe for the integrated grievance or
integrated reconsideration.
(e) Assistance. In addition to the requirements in Sec.
422.562(a)(5), the applicable integrated plan must provide an enrollee
reasonable assistance in completing forms and taking other procedural
steps related to integrated grievances and integrated appeals.
(f) Applicable requirements. The requirements in Sec. Sec.
422.560, 422.561, 422.562, 422.566, and 422.592 through 422.626 apply
to an applicable integrated plan unless otherwise provided in this
section or in Sec. Sec. 422.630 through 422.634.
(g) Acknowledgement. The applicable integrated plan must send to
the enrollee written acknowledgement of integrated grievances and
integrated reconsiderations upon receiving the request.
(h) Recordkeeping. (1) The applicable integrated plan must maintain
records of integrated grievances and integrated appeals. Each
applicable integrated plan that is a Medicaid managed care organization
must review the Medicaid-related information as part of its ongoing
monitoring procedures, as well as for updates and revisions to the
State quality strategy.
(2) The record of each integrated grievance or integrated appeal
must contain, at a minimum:
(i) A general description of the reason for the integrated appeal
or integrated grievance.
(ii) The date of receipt.
(iii) The date of each review or, if applicable, review meeting.
(iv) Resolution at each level of the integrated appeal or
integrated grievance, if applicable.
(v) Date of resolution at each level, if applicable.
(vi) Name of the enrollee for whom the integrated appeal or
integrated grievance was filed.
(vii) Date the applicable integrated plan notified the enrollee of
the resolution.
(3) The record of each integrated grievance or integrated appeal
must be accurately maintained in a manner accessible to the State and
available upon request to CMS.
(i) Prohibition on punitive action. Each applicable integrated plan
must ensure that no punitive action is taken against a provider that
requests an integrated organization determination or integrated
reconsideration, or supports an enrollee's request for these actions.
(j) Information to providers and subcontractors. The applicable
integrated plan must provide information about the integrated grievance
and integrated appeal system to all providers and subcontractors at the
time they enter into a contract including, at minimum, information on
integrated grievance, integrated reconsideration, and fair hearing
procedures and timeframes as applicable. Such information must include
the following:
(1) The right to file an integrated grievance and integrated
reconsideration.
(2) The requirements and timeframes for filing an integrated
grievance or integrated reconsideration.
(3) The availability of assistance in the filing process.
(k) Review decision-making requirements--(1) General rules.
Individuals making decisions on integrated appeals and grievances must
take into account all comments, documents, records, and other
information submitted by the enrollee or their representative without
regard to whether such information was submitted or considered in the
initial adverse integrated organization determination.
(2) Integrated grievances. Individuals making decisions on
integrated grievances must be individuals who--
(i) Were neither involved in any previous level of review or
decision-making nor a subordinate of any such individual; and
(ii) If deciding any of the following, have the appropriate
clinical expertise in treating the enrollee's condition or disease:
(A) A grievance regarding denial of expedited resolution of an
appeal.
(B) A grievance that involves clinical issues.
(3) Integrated organization determinations. If the applicable
integrated plan expects to issue a partially or fully adverse medical
necessity (or any substantively equivalent term used to describe the
concept of medical necessity) decision based on the initial review of
the request, the integrated organization determination must be reviewed
by a physician or other appropriate health care professional with
sufficient medical and other expertise, including knowledge of Medicare
and Medicaid

[[Page 15836]]

coverage criteria, before the applicable integrated plan issues the
integrated organization determination. Any physician or other health
care professional who reviews an integrated organization determination
must have a current and unrestricted license to practice within the
scope of his or her profession.
(4) Integrated reconsideration determinations. Individuals making
an integrated reconsideration determination must be individuals who--
(i) Were neither involved in any previous level of review or
decision-making nor a subordinate of any such individual; and
(ii) If deciding an appeal of a denial that is based on lack of
medical necessity (or any substantively equivalent term used to
describe the concept of medical necessity), are a physician or other
appropriate health care professional who have the appropriate clinical
expertise, in treating the enrollee's condition or disease, and
knowledge of Medicare coverage criteria, before the MA organization
issues the organization determination decision.
(l) Parties. (1) The following individuals or entities can request
an integrated grievance, integrated organization determination, and
integrated reconsideration, and are parties to the case:
(i) The enrollee or his or her representative;
(ii) An assignee of the enrollee (that is, a physician or other
provider who has furnished or intends to furnish a service to the
enrollee and formally agrees to waive any right to payment from the
enrollee for that service), or any other provider or entity (other than
the applicable integrated plan) who has an appealable interest in the
proceeding;
(iii) The legal representative of a deceased enrollee's estate; or
(iv) Subject to paragraph (l)(3) of this section, any provider that
furnishes, or intends to furnish, services to the enrollee. If the
provider requests that the benefits continue while the appeal is
pending, pursuant to Sec. 422.632 and consistent with State law, the
provider must obtain the written consent of the enrollee to request the
appeal on behalf of the enrollee.
(2) When the term ``enrollee'' is used throughout Sec. Sec.
422.629 through 422.634, it includes providers that file a request and
authorized representatives consistent with this paragraph, unless
otherwise specified.
(3) A provider who is providing treatment to the enrollee may, upon
providing notice to the enrollee, request a standard or expedited pre-
service integrated reconsideration on behalf of an enrollee.

Sec. 422.630 Integrated grievances.

(a) General rule. In lieu of complying with Sec. 422.564, and the
grievance requirements of Sec. Sec. 438.402, 438.406, 438.408,
438.414, and 438.416 of this chapter, each applicable integrated plan
must comply with this section. Each applicable integrated plan must
provide meaningful procedures for timely hearing and resolving
integrated grievances between enrollees and the applicable integrated
plan or any other entity or individual through which the applicable
integrated plan provides covered items and services.
(b) Timing. An enrollee may file an integrated grievance at any
time with the applicable integrated plan.
(c) Filing. An enrollee may file an integrated grievance orally or
in writing with the applicable integrated plan, or with the State for
an integrated grievance related to a Medicaid benefit, if the State has
a process for accepting Medicaid grievances.
(d) Expedited grievances. An applicable integrated plan must
respond to an enrollee's grievance within 24 hours if the complaint
involves the applicable integrated plan's--
(1) Decision to invoke an extension relating to an integrated
organization determination or integrated reconsideration; or
(2) Refusal to grant an enrollee's request for an expedited
integrated organization determination under Sec. 422.631 or expedited
integrated reconsideration under Sec. 422.633.
(e) Resolution and notice. (1) The applicable integrated plan must
resolve standard integrated grievances as expeditiously as the case
requires, based on the enrollee's health status, but no later than 30
calendar days from the date it receives the integrated grievance.
(i) All integrated grievances submitted in writing must be
responded to in writing.
(ii) Integrated grievances submitted orally may be responded to
either orally or in writing, unless the enrollee requests a written
response.
(iii) All integrated grievances related to quality of care,
regardless of how the integrated grievance is filed, must be responded
to in writing. The response must include a description of the
enrollee's right to file a written complaint with the QIO with regard
to Medicare covered services. For any complaint submitted to a QIO, the
applicable integrated plan must cooperate with the QIO in resolving the
complaint.
(2) The timeframe for resolving the integrated grievance may be
extended by 14 calendar days if the enrollee requests an extension or
if the applicable integrated plan justifies the need for additional
information and documents how the delay is in the interest of the
enrollee. When the applicable integrated plan extends the timeframe, it
must--
(i) Make reasonable efforts to promptly notify the enrollee orally
of the reasons for the delay; and
(ii) Send written notice to the enrollee of the reasons for the
delay immediately, but no later than within 2 calendar days of making
the decision to extend the timeframe to resolve the integrated
grievance. This notice must explain the right to file an integrated
grievance if the enrollee disagrees with the decision to delay.

Sec. 422.631 Integrated organization determinations.

(a) General rule. An applicable integrated plan must adopt and
implement a process for enrollees to request that the plan make an
integrated organization determination. The process for requesting that
the applicable integrated plan make an integrated organization
determination must be the same for all covered benefits.
(b) Requests. The enrollee, or a provider on behalf of an enrollee,
may request an integrated organization determination orally or in
writing, except for requests for payment, which must be in writing
(unless the applicable integrated plan or entity responsible for making
the determination has implemented a voluntary policy of accepting
verbal payment requests).
(c) Expedited integrated organization determinations. (1) An
enrollee, or a provider on behalf of an enrollee, may request an
expedited integrated organization determination.
(2) The request can be oral or in writing.
(3) The applicable integrated plan must complete an expedited
integrated organization determination when the applicable integrated
plan determines (based on a request from the enrollee or on its own) or
the provider indicates (in making the request on the enrollee's behalf
or supporting the enrollee's request) that taking the time for a
standard resolution could seriously jeopardize the enrollee's life,
physical or mental health, or ability to attain, maintain, or regain
maximum function.
(d) Timeframes and notice--(1) Integrated organization
determination notice. (i) The applicable integrated plan must send an
enrollee a written

[[Page 15837]]

notice of any adverse decision on an integrated organization
determination (including a determination to authorize a service or item
in an amount, duration, or scope that is less than the amount
previously requested or authorized for an ongoing course of treatment)
within the timeframes set forth in this section.
(ii) For an integrated organization determination not reached
within the timeframes specified in this section (which constitutes a
denial and is thus an adverse decision), the applicable integrated plan
must send a notice on the date that the timeframes expire. Such notice
must describe all applicable Medicare and Medicaid appeal rights.
(iii) Integrated organization determination notices must be written
in plain language, be available in a language and format that is
accessible to the enrollee, and explain the following:
(A) The applicable integrated plan's determination.
(B) The date the determination was made.
(C) The date the determination will take effect.
(D) The reasons for the determination.
(E) The enrollee's right to file an integrated reconsideration and
the ability for someone else to file an appeal on the enrollee's
behalf.
(F) Procedures for exercising enrollee's rights to an integrated
reconsideration.
(G) Circumstances under which expedited resolution is available and
how to request it.
(H) If applicable, the enrollee's rights to have benefits continue
pending the resolution of the integrated appeal process.
(2) Timing of notice--(i) Standard integrated organization
determinations. (A) The applicable integrated plan must send a notice
of its integrated organization determination at least 10 days before
the date of action (that is, before the date on which a termination,
suspension, or reduction becomes effective), in cases where a
previously approved service is being reduced, suspended, or terminated,
except in circumstances where an exception is permitted under
Sec. Sec. 431.213 and 431.214 of this chapter.
(B) For other integrated organization determinations that are not
expedited integrated organization determinations, the applicable
integrated plan must send a notice of its integrated organization
determination as expeditiously as the enrollee's health condition
requires, but no later than 14 calendar days from when it receives the
request for the integrated organization determination.
(ii) Extensions. The applicable integrated plan may extend the
timeframe for a standard or expedited integrated organization
determination by up to 14 calendar days if--
(A) The enrollee or provider requests the extension; or
(B) The applicable integrated plan can show that--
(1) The extension is in the enrollee's interest; and
(2) There is need for additional information and there is a
reasonable likelihood that receipt of such information would lead to
approval of the request, if received.
(iii) Notices in cases of extension. (A) When the applicable
integrated plan extends the timeframe, it must notify the enrollee in
writing of the reasons for the delay as expeditiously as the enrollee's
health condition requires but no later than upon expiration of the
extension, and inform the enrollee of the right to file an expedited
integrated grievance if he or she disagrees with the applicable
integrated plan's decision to grant an extension.
(B) If the applicable integrated plan extends the timeframe for
making its integrated organization determination, it must send the
notice of its determination as expeditiously as the enrollee's health
condition requires and no later than the date the extension expires.
(iv) Expedited integrated organization determinations. (A) The
applicable integrated plan must provide notice of its expedited
integrated organization determination as expeditiously as the
enrollee's health condition requires, but no later than 72 hours after
receiving the request.
(B) If the applicable integrated plan denies the request for an
expedited integrated organization determination, it must:
(1) Automatically transfer a request to the standard timeframe and
make the determination within the 14-day timeframe established in this
paragraph for a standard integrated organization determination. The 14-
day period begins with the day the applicable integrated plan receives
the request for expedited integrated organization determination.
(2) Give the enrollee prompt oral notice of the denial and transfer
and subsequently deliver, within 3 calendar days, a written letter
that--
(i) Explains that the applicable integrated plan will process the
request using the 14-day timeframe for standard integrated organization
determinations;
(ii) Informs the enrollee of the right to file an expedited
integrated grievance if he or she disagrees with the applicable
integrated plan's decision not to expedite;
(iii) Informs the enrollee of the right to resubmit a request for
an expedited integrated organization determination with any physician's
support; and
(iv) Provides instructions about the integrated grievance process
and its timeframes.
(C) If the applicable integrated plan must receive medical
information from noncontract providers, the applicable integrated plan
must request the necessary information from the noncontract provider
within 24 hours of the initial request for an expedited integrated
organization determination. Noncontract providers must make reasonable
and diligent efforts to expeditiously gather and forward all necessary
information to assist the applicable integrated plan in meeting the
required timeframe. Regardless of whether the applicable integrated
plan must request information from noncontract providers, the
applicable integrated plan is responsible for meeting the timeframe and
notice requirements of this section.

Sec. 422.632 Continuation of benefits while the applicable integrated
plan reconsideration is pending.

(a) Definition. As used in this section, timely files means files
for continuation of benefits on or before the later of the following:
(1) Within 10 calendar days of the applicable integrated plan
sending the notice of adverse integrated organization determination.
(2) The intended effective date of the applicable integrated plan's
proposed adverse integrated organization determination.
(b) Continuation of benefits. The applicable integrated plan must
continue the enrollee's benefits under Parts A and B of title XVIII and
title XIX if all of the following occur:
(1) The enrollee files the request for an integrated appeal timely
in accordance with Sec. 422.633(e);
(2) The integrated appeal involves the termination, suspension, or
reduction of previously authorized services;
(3) The services were ordered by an authorized provider;
(4) The period covered by the original authorization has not
expired; and
(5) The enrollee timely files for continuation of benefits.
(c) Duration of continued or reinstated benefits. If, at the
enrollee's request, the applicable integrated plan continues or
reinstates the enrollee's benefits, as described in paragraph (b) of
this section, while the integrated reconsideration is pending, the
benefits must be continued until--

[[Page 15838]]

(1) The enrollee withdraws the request for an integrated
reconsideration;
(2) The applicable integrated plan issues an integrated
reconsideration that is unfavorable to the enrollee related to the
benefit that has been continued;
(3) For an appeal involving Medicaid benefits--
(i) The enrollee fails to file a request for a State fair hearing
and continuation of benefits, within 10 calendar days after the
applicable integrated plan sends the notice of the integrated
reconsideration;
(ii) The enrollee withdraws the appeal or request for a State fair
hearing; or
(iii) A State fair hearing office issues a hearing decision adverse
to the enrollee.
(d) Recovery of costs. In the event the appeal or State fair
hearing is adverse to the enrollee--
(1) The applicable integrated plan or State agency may not pursue
recovery for costs of services furnished by the applicable integrated
plan pending the integrated reconsideration, to the extent that the
services were furnished solely under of the requirements of this
section.
(2) If, after the integrated reconsideration decision is final, an
enrollee requests that Medicaid services continue through a State fair
hearing, state rules on recovery of costs, in accordance with the
requirements of Sec. 438.420(d) of this chapter, apply for costs
incurred for services furnished pending appeal subsequent to the date
of the integrated reconsideration decision.

Sec. 422.633 Integrated reconsideration.

(a) General rule. An applicable integrated plan may only have one
level of integrated reconsideration for an enrollee.
(b) External medical reviews. If a State has established an
external medical review process, the requirements of Sec.
438.402(c)(1)(i)(B) of this chapter apply to each applicable integrated
plan that is a Medicaid managed care organization, as defined in
section 1903 of the Act.
(c) Case file. Upon request of the enrollee or his or her
representative, the applicable integrated plan must provide the
enrollee and his or her representative the enrollee's case file,
including medical records, other documents and records, and any new or
additional evidence considered, relied upon, or generated by the
applicable integrated plan (or at the direction of the applicable
integrated plan) in connection with the appeal of the integrated
organization determination. This information must be provided free of
charge and sufficiently in advance of the resolution timeframe for the
integrated reconsideration, or subsequent appeal, as specified in this
section.
(d) Timing. (1) Timeframe for filing--An enrollee has 60 calendar
days from the date on the adverse organization determination notice to
file a request for an integrated reconsideration with the applicable
integrated plan.
(2) Oral inquires--Oral inquires seeking to appeal an adverse
integrated organization determination must be treated as a request for
an integrated reconsideration (to establish the earliest possible
filing date for the appeal).
(3) Extending the time for filing a request--(i) General rule. If a
party or physician acting on behalf of an enrollee shows good cause,
the applicable integrated plan may extend the timeframe for filing a
request for an integrated reconsideration.
(ii) How to request an extension of timeframe. If the 60-day period
in which to file a request for an integrated reconsideration has
expired, a party to the integrated organization determination or a
physician acting on behalf of an enrollee may file a request for
integrated reconsideration with the applicable integrated plan. The
request for integrated reconsideration and to extend the timeframe
must--
(A) Be in writing; and
(B) State why the request for integrated reconsideration was not
filed on time.
(e) Expedited integrated reconsiderations. (1) An enrollee may
request, or a provider may request on behalf of an enrollee, an
expedited review of the integrated reconsideration.
(2) The request can be oral or in writing.
(3) The applicable integrated plan must grant the request to
expedite the integrated reconsideration when it determines (for a
request from the enrollee), or the provider indicates (in making the
request on the enrollee's behalf or supporting the enrollee's request),
that taking the time for a standard resolution could seriously
jeopardize the enrollee's life, physical or mental health, or ability
to attain, maintain, or regain maximum function.
(4) If an applicable integrated plan denies an enrollee's request
for an expedited integrated reconsideration, it must automatically
transfer a request to the standard timeframe and make the determination
within the 30-day timeframe established in paragraph (f)(1) of this
section for a standard integrated reconsideration. The 30-day period
begins with the day the applicable integrated plan receives the request
for expedited integrated reconsideration. The applicable integrated
plan must give the enrollee prompt oral notice of the decision, and
give the enrollee written notice within 2 calendar days. The written
notice must do all of the following:
(i) Include the reason for the denial.
(ii) Inform the enrollee of the right to file a grievance if the
enrollee disagrees with the decision not to expedite, including
timeframes and procedures for filing a grievance.
(iii) Inform the enrollee of the right to resubmit a request for an
expedited determination with any physician's support.
(5) If the applicable integrated plan must receive medical
information from noncontract providers, the applicable integrated plan
must request the necessary information from the noncontract provider
within 24 hours of the initial request for an expedited integrated
reconsideration. Noncontract providers must make reasonable and
diligent efforts to expeditiously gather and forward all necessary
information to assist the applicable integrated plan in meeting the
required timeframe. Regardless of whether the applicable integrated
plan must request information from noncontract providers, the
applicable integrated plan is responsible for meeting the timeframe and
notice requirements of this section.
(f) Resolution and notification. The applicable integrated plan
must make integrated reconsidered determinations as expeditiously as
the enrollee's health condition requires but no later than the
timeframes established in this section.
(1) Standard integrated reconsiderations. The applicable integrated
plan must resolve integrated reconsiderations as expeditiously as the
enrollee's health condition requires but no longer than 30 calendar
days from the date of receipt of the request for the integrated
reconsideration. This timeframe may be extended as described in
paragraph (f)(3) of this section.
(2) Expedited integrated reconsiderations. The applicable
integrated plan must resolve expedited integrated reconsiderations as
expeditiously as the enrollee's health condition requires but no later
than within 72 hours of receipt for the integrated reconsideration.
This timeframe may be extended as described in paragraph (f)(3) of this
section. In addition to the written notice required under paragraph
(f)(4) of this section, the applicable integrated plan must make
reasonable efforts to provide prompt oral notice of the expedited
resolution to the enrollee.

[[Page 15839]]

(3) Extensions. (i) The applicable integrated plan may extend the
timeframe for resolving integrated reconsiderations by 14 calendar days
if--
(A) The enrollee requests the extension; or
(B) The applicable integrated plan can show that--
(1) The extension is in the enrollee's interest; and
(2) There is need for additional information and there is a
reasonable likelihood that receipt of such information would lead to
approval of the request, if received.
(ii) If the applicable integrated plan extends the timeframe for
resolving the integrated reconsideration, it must make reasonable
efforts to give the enrollee prompt oral notice of the delay, and give
the enrollee written notice within 2 calendar days of making the
decision to extend the timeframe to resolve the integrated
reconsideration. The notice must include the reason for the delay and
inform the enrollee of the right to file an expedited grievance if he
or she disagrees with the decision to grant an extension.
(4) Notice of resolution. The applicable integrated plan must send
a written notice to enrollees that includes the integrated reconsidered
determination, within the resolution timeframes set forth in this
section. The notice of determination must be written in plain language
and available in a language and format that is accessible to the
enrollee and must explain the following:
(i) The resolution of and basis for the integrated reconsideration
and the date it was completed.
(ii) For integrated reconsiderations not resolved wholly in favor
of the enrollee:
(A) An explanation of the next level of appeal available under the
Medicare and Medicaid programs, and what steps the enrollee must take
to pursue the next level of appeal under each program, and how the
enrollee can obtain assistance in pursuing the next level of appeal
under each program; and
(B) The right to request and receive Medicaid-covered benefits
while the next level of appeal is pending, if applicable.

Sec. 422.634 Effect.

(a) Failure of the applicable integrated plan to send timely notice
of a determination. If the applicable integrated plan fails to adhere
to the notice and timing for an integrated organization determination
or integrated reconsideration, this failure constitutes an adverse
determination for the enrollee.
(1) For an integrated organization determination, this means that
the enrollee may request an integrated reconsideration.
(2) For integrated reconsiderations of Medicare benefits, this
means the applicable integrated plan must forward the case to the
independent review entity, in accordance with the timeframes under
paragraph (b) of this section and Sec. 422.592. For integrated
reconsiderations of Medicaid benefits, this means that an enrollee or
other party may file for a State fair hearing in accordance with Sec.
438.408(f) of this chapter, or if applicable, a State external medical
review in accordance with Sec. 438.402(c) of this chapter.
(b) Adverse integrated reconsiderations. (1) Subject to paragraph
(b)(2) of this section, when the applicable integrated plan affirms, in
whole or in part, its adverse integrated organization determination
involving a Medicare benefit--
(i) The issues that remain in dispute must be reviewed and resolved
by an independent, outside entity that contracts with CMS, in
accordance with Sec. Sec. 422.592 and 422.594 through 422.619;
(ii) For standard integrated reconsiderations, the applicable
integrated plan must prepare a written explanation and send the case
file to the independent review entity contracted by CMS, as
expeditiously as the enrollee's health condition requires, but no later
than 30 calendar days from the date it receives the request (or no
later than the expiration of an extension described in Sec.
422.633(f)(3)). The applicable integrated plan must make reasonable and
diligent efforts to assist in gathering and forwarding information to
the independent entity; and
(iii) For expedited integrated reconsiderations, the applicable
integrated plan must prepare a written explanation and send the case
file to the independent review entity contracted by CMS as
expeditiously as the enrollee's health condition requires, but no later
than within 24 hours of its affirmation (or no later than the
expiration of an extension described in Sec. 422.633(f)(3)). The
applicable integrated plan must make reasonable and diligent efforts to
assist in gathering and forwarding information to the independent
entity.
(2) When the applicable integrated plan affirms, in whole or in
part, its adverse integrated organization determination involving a
Medicaid benefit, the enrollee or other party (that is not the
applicable integrated plan) may initiate a State fair hearing in the
timeframe specified in Sec. 438.408(f)(2) following the integrated
plan's notice of resolution. If a provider is filing for a State fair
hearing on behalf of the enrollee as permitted by State law, the
provider needs the written consent of the enrollee, if he or she has
not already obtained such consent.
(c) Final determination. The reconsidered determination of the
applicable integrated plan is binding on all parties unless it is
appealed to the next applicable level. In the event that the enrollee
pursues the appeal in multiple forums and receives conflicting
decisions, the applicable integrated plan is bound by, and must act in
accordance with, decisions favorable to the enrollee.
(d) Services not furnished while the appeal is pending. If an
applicable integrated plan reverses its decision, or, for a Medicaid
benefit, a State fair hearing reverses an applicable plan's integrated
reconsideration decision, to deny, limit, or delay services that were
not furnished while the appeal was pending, the applicable integrated
plan must authorize or provide the disputed services promptly and as
expeditiously as the enrollee's health condition requires but no later
than 72 hours from the date it receives notice reversing the
determination in lieu of the timeframes described in Sec. 422.618(a).
Reversals by the Part C independent review entity, an administrative
law judge or attorney adjudicator at the Office of Medicare Hearings
and Appeals, or the Medicare Appeals Council must be effectuated under
same timelines applicable to other MA plans as specified in Sec. Sec.
422.618 and 422.619.
(e) Services furnished while the appeal is pending. If the
applicable integrated plan or the State fair hearing officer reverses a
decision to deny, limit, or delay Medicaid-covered benefits, and the
enrollee received the disputed services while the integrated
reconsideration was pending, the applicable integrated plan or the
State must pay for those services, in accordance with State policy and
regulations. If the applicable integrated plan reverses a decision to
deny, limit, or delay Medicare-covered benefits, and the enrollee
received the disputed services while the integrated reconsideration was
pending, the applicable integrated plan must pay for those services.

0
25. Effective January 1, 2021, Sec. 422.752 is amended by adding
paragraph (d) to read as follows:

Sec. 422.752 Basis for imposing intermediate sanctions and civil
money penalties.

* * * * *

[[Page 15840]]

(d) Special rule for non-compliant dual eligible special needs
plans. Notwithstanding any other provision of this section, CMS must
impose during plan years 2021 through 2025 intermediate sanctions
specified at Sec. 422.750(a) on an MA organization with a contract to
operate a dual eligible special needs plan if CMS determines that the
dual eligible special needs plan fails to comply with at least one of
the criteria for the integration of Medicare and Medicaid benefits
provided in the definition of a dual eligible special needs plan at
Sec. 422.2. If CMS imposes such an intermediate sanction, the MA
organization must submit to CMS a corrective action plan in a form,
manner, and timeframe established by CMS. The procedures outlined in
Sec. 422.756 apply to the imposition of the intermediate sanction
under this provision.

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
26. The authority citation for part 423 is revised to read as follows:

Authority: 42 U.S.C. 1302, 1395w-101 through 1395w-152, and
1395hh.

0
27. In 423.100, in the definition of ``Preclusion list'', revise
paragraphs (1)(i), (2)(i), (2)(ii)(C) and add paragraph (3) to read as
follows:

Sec. 423.100 Definitions.

* * * * *
Preclusion list * * *
(1) * * *
(i) The prescriber is currently revoked from Medicare for a reason
other than that stated in Sec. 424.535(a)(3) of this chapter.
* * * * *
(2) * * *
(i) The prescriber has engaged in behavior, other than that
described in Sec. 424.535(a)(3) of this chapter, for which CMS could
have revoked the individual to the extent applicable had he or she been
enrolled in Medicare.
(ii) * * *
(C) Any other evidence that CMS deems relevant to its
determination; or
(3) The prescriber, regardless of whether he or she is or was
enrolled in Medicare, has been convicted of a felony under Federal or
State law within the previous 10 years that CMS deems detrimental to
the best interests of the Medicare program. Factors that CMS considers
in making such a determination under this paragraph are as follows:
(i) The severity of the offense.
(ii) When the offense occurred.
(iii) Any other information that CMS deems relevant to its
determination.
* * * * *

0
28. Effective June 17, 2019, Sec. 423.120 is amended by revising
paragraphs (c)(6)(iv) to read as follows:

Sec. 423.120 Access to covered Part D drugs.

* * * * *
(c) * * *
(6) * * *
(iv) With respect to Part D prescribers who have been added to an
updated preclusion list but are not currently excluded by the OIG, the
Part D plan sponsor must do all of the following:
(A) Subject to all other Part D rules and plan coverage
requirements, and no later than 30 days after the posting of this
updated preclusion list, must provide an advance written notice to any
beneficiary who has received a Part D drug prescribed by an individual
added to the preclusion list in this update and whom the plan sponsor
has identified during the applicable 30-day period.
(B)(1) Subject to paragraph (c)(6)(iv)(B)(2) of this section, must
ensure that reasonable efforts are made to notify the individual
described in paragraph (c)(6)(iv) of this section of a beneficiary who
was sent a notice under paragraph (c)(6)(iv)(A) of this section.
(2) Paragraph (c)(6)(iv)(B)(1) of this section applies only upon a
prescriber writing a prescription in Medicare Part D when:
(i) The plan sponsor has enough information on file to either copy
the prescriber on the notification previously sent to the beneficiary
or send a new notice informing the prescriber that they may not see
plan beneficiaries due to their preclusion status; and
(ii) The claim is received after the claim denial or reject date in
the preclusion file.
(C) Must not reject a pharmacy claim or deny a beneficiary request
for reimbursement for a Part D drug prescribed by the prescriber,
solely on the ground that they have been included in the updated
preclusion list, in the 60-day period after the date it sent the notice
described in paragraph (c)(6)(iv)(A) of this section.

0
29. Section 423.120 is further amended by--
0
a. Revising paragraphs (c)(6)(v); and
0
b. Adding paragraphs (c)(6)(vii) and (viii).
The revision and additions read as follows:

Sec. 423.120 Access to covered Part D drugs.

* * * * *
(c) * * *
(6) * * *
(v)(A) CMS sends written notice to the prescriber via letter of his
or her inclusion on the preclusion list. The notice must contain the
reason for the inclusion on the preclusion list and inform the
prescriber of his or her appeal rights. A prescriber may appeal his or
her inclusion on the preclusion list under this section in accordance
with part 498 of this chapter.
(B) If the prescriber's inclusion on the preclusion list is based
on a contemporaneous Medicare revocation under Sec. 424.535 of this
chapter:
(1) The notice described in paragraph (c)(6)(v)(A) of this section
must also include notice of the revocation, the reason(s) for the
revocation, and a description of the prescriber's appeal rights
concerning the revocation.
(2) The appeals of the prescriber's inclusion on the preclusion
list and the prescriber's revocation must be filed jointly by the
prescriber and, as applicable, considered jointly under part 498 of
this chapter.
(C)(1) Except as provided in paragraph (c)(6)(v)(C)(2) of this
section, a prescriber will only be included on the preclusion list
after the expiration of either of the following:
(i) If the prescriber does not file a reconsideration request under
Sec. 498.5(n)(1) of this chapter, the prescriber will be added to the
preclusion list upon the expiration of the 60-day period in which the
prescriber may request a reconsideration.
(ii) If the prescriber files a reconsideration request under Sec.
498.5(n)(1) of this chapter, the prescriber will be added to the
preclusion list effective on the date on which CMS, if applicable,
denies the prescriber's reconsideration.
(2) An OIG excluded prescriber is added to the preclusion list
effective on the date of the exclusion.
* * * * *
(vii)(A) Except as provided in paragraphs (c)(6)(vii)(C) and (D) of
this section, a prescriber who is revoked under Sec. 424.535 of this
chapter will be included on the preclusion list for the same length of
time as the prescriber's reenrollment bar.
(B) Except as provided in paragraphs (c)(6)(vii)(C) and (D) of this
section, a prescriber who is not enrolled in Medicare will be included
on the preclusion list for the same length of time as the reenrollment
bar that CMS could have imposed on the prescriber had the prescriber
been enrolled and then revoked.
(C) Except as provided in paragraph (c)(6)(vii)(D) of this section,
an

[[Page 15841]]

individual, regardless of whether the individual is or was enrolled in
Medicare, that is included on the preclusion list because of a felony
conviction will remain on the preclusion list for a 10-year period,
beginning on the date of the felony conviction, unless CMS determines
that a shorter length of time is warranted. Factors that CMS considers
in making such a determination are--
(1) The severity of the offense;
(2) When the offense occurred; and
(3) Any other information that CMS deems relevant to its
determination.
(D) In cases where an individual is excluded by the OIG, the
individual must remain on the preclusion list until the expiration of
the CMS-imposed preclusion list period or reinstatement by the OIG,
whichever occurs later.
(viii) Payment denials under paragraph (c)(6) of this section that
are based upon the prescriber's inclusion on the preclusion list are
not appealable by beneficiaries.
* * * * *

0
30. Section 423.153 is amended by revising the section heading and
adding paragraph (g) to read as follows:

Sec. 423.153 Prescription drug plan sponsors' access to Medicare
Parts A and B claims data extracts.

* * * * *
(g) Parts A and B claims data extracts--(1) General rule. (i)
Beginning in plan year 2020, a PDP sponsor may submit a request to CMS
for the data described in paragraph (g)(2) of this section about
enrollees in its prescription drug plans.
(ii) CMS makes the data requested in paragraph (g)(1)(i) of this
section available to eligible PDP sponsors, in accordance with all
applicable laws. The data is provided at least quarterly on a specified
release date, and in an electronic format to be determined by CMS.
(iii) If CMS determines or has a reasonable belief that the PDP
sponsor has violated the requirements of this paragraph (g) or that
unauthorized uses, reuses, or disclosures of the Medicare claims data
have taken place, at CMS' sole discretion, the PDP sponsor may be
denied further access to the data described in paragraph (g)(2) of this
section.
(2) Data described. The data that may be requested under paragraph
(g)(1) of this section are standardized extracts of claims data under
Medicare parts A and B for items and services furnished under such
parts to beneficiaries who are enrolled in a plan offered by the PDP
sponsor at the time of the disclosure.
(3) Purposes. A PDP sponsor must comply with all laws that may be
applicable to data received under this provision, including State and
Federal privacy and security laws, and, furthermore subject to the
limitations in paragraph (g)(4) of this section may only use or
disclose the data provided by CMS under paragraph (g)(1) of this
section for the following purposes:
(i) To optimize therapeutic outcomes through improved medication
use, as such phrase is used in paragraph (d)(1)(i) of this section.
(ii) To improve care coordination so as to prevent adverse health
outcomes, such as preventable emergency department visits and hospital
readmissions.
(iii) For activities falling under paragraph (1) of the definition
of ``health care operations'' under 45 CFR 164.501.
(iv) For activities falling under paragraph (2) of the definition
of ``health care operations'' under 45 CFR 164.501.
(v) For ``fraud and abuse detection or compliance activities''
under 45 CFR 164.506(c)(4)(ii).
(vi) For disclosures that qualify as ``required by law''
disclosures at 45 CFR 164.103.
(4) Limitations. A PDP sponsor must comply with the following
requirements regarding the data provided by CMS under this paragraph
(g):
(i) The PDP sponsor will not use the data to inform coverage
determinations under Part D.
(ii) The PDP sponsor will not use the data to conduct retroactive
reviews of medically accepted indications determinations.
(iii) The PDP sponsor will not use the data to facilitate
enrollment changes to a different prescription drug plan or an MA-PD
plan offered by the same parent organization.
(iv) The PDP sponsor will not use the data to inform marketing of
benefits.
(v) The PDP sponsor will contractually bind its contractors that
have access to the Medicare claims data, and require their contractors
to contractually bind any other potential downstream data recipients,
to the terms and conditions imposed on the PDP sponsor under this
paragraph (g).
(5) Ensuring the privacy and security of data. As a condition of
receiving the requested data, the PDP sponsor must attest that it will
adhere to the permitted uses and limitations on the use of the Medicare
claims data listed in paragraphs (g)(3) and (4) of this section.

0
31. Section 423.182(a) is amended by adding the definitions ``Absolute
percentage cap'', ``Cut point cap'', ``Guardrail'', ``Mean
resampling'', ``Restricted range'', and ``Restricted range cap'' in
alphabetical order to read as follows:

Sec. 423.182 Part D Prescription Drug Plan Quality Rating System.

[[Page 15842]]

0
32. Section 423.184 is amended by adding paragraphs (f)(1)(iv),
(g)(1)(ii)(M), and (h) to read as follows:

Sec. 423.184 Adding, updating, and removing measures.

* * * * *
(f) * * *
(1) * * *
(iv) CMS excludes any measure that receives a measure-level Star
Rating reduction for data integrity concerns for either the current or
prior year from the improvement measure(s).
* * * * *
(g) * * *
(1) * * *
(ii) * * *
(M) CMS reduces the measure rating to 1 star for the applicable
appeals measure(s) if a contract fails to submit Timeliness Monitoring
Project data for CMS's review to ensure the completeness of the
contract's IRE data.
* * * * *
(h) Review of sponsors' data. (1) A Part D plan sponsor may request
that CMS or the IRE review its' contract's appeals data provided that
the request is received by the annual deadline set by CMS for the
applicable Star Ratings year.
(2) A Part D plan sponsor may request that CMS review its'
contract's Complaints Tracking Module (CTM) data provided that the
request is received by the annual deadline set by CMS for the
applicable Star Ratings year.

0
33. Section 423.186 is amended by revising paragraph (a)(2)(i) and
adding paragraph (i) to read as follows:

Sec. 423.186 Calculation of Star Ratings.

(a) * * *
(2) * * *
(i) The method maximizes differences across the star categories and
minimizes the differences within star categories using mean resampling
with the hierarchal clustering of the current year's data, and a
guardrail so that the measure-threshold-specific cut points for non-
CAHPS measures do not increase or decrease more than the value of the
cap from one year to the next. The cap is equal to 5 percentage points
for measures having a 0 to 100 scale (absolute percentage cap) or 5
percent of the restricted range for measures not having a 0 to 100
scale (restricted range cap). New measures that have been in the Part C
and D Star Rating program for three years or less use the hierarchal
clustering methodology with mean resampling with no guardrail for the
first 3 years in the program.
* * * * *
(i) Extreme and uncontrollable circumstances. In the event of
extreme and uncontrollable circumstances that may negatively impact
operational and clinical systems and contracts' abilities to conduct
surveys needed for accurate performance measurement, CMS calculates the
Star Ratings as specified in paragraphs (i)(2) through (8) of this
section for each contract that is an affected contract during the
performance period for the applicable measures. We use the start date
of the incident period to determine which year of Star Ratings could be
affected, regardless of whether the incident period lasts until another
calendar year.
(1) Identification of affected contracts. A contract that meets all
of the following criteria is an affected contract:
(i) The contract's service area is within an ``emergency area''
during an ``emergency period'' as defined in section 1135(g) of the
Act.
(ii) The contract's service area is within a county, parish, U.S.
territory or tribal area designated in a major disaster declaration
under the Stafford Act and the Secretary exercised authority under
section 1135 of the Act based on the same triggering event(s).
(iii) As specified in paragraphs (i)(2) through (8) of this
section, a certain minimum percentage (25 percent or 60 percent) of the
enrollees under the contract must reside in a Federal Emergency
Management Agency (FEMA)-designated Individual Assistance area at the
time of the extreme and uncontrollable circumstance.
(2) CAHPS adjustments. (i) A contract, even if an affected
contract, must administer the CAHPS survey unless exempt under
paragraph (i)(2)(ii) of this section.
(ii) An affected contract with at least 25 percent of enrollees in
FEMA-designated Individual Assistance areas at the time of the extreme
and uncontrollable circumstance is exempt from administering the CAHPS
survey if the contract completes both of the following:
(A) Demonstrates to CMS that the required sample for the survey
cannot be contacted because a substantial number of the contract's
enrollees are displaced due to the FEMA-designated disaster identified
in paragraph (i)(1)(iii) of this section in the prior calendar year.
(B) Requests and receives a CMS approved exemption.
(iii) An affected contract with an exemption described in paragraph
(i)(2)(ii) of this section receives the contract's CAHPS measure stars
and corresponding measure scores from the prior year.
(iv) For an affected contract with at least 25 percent of enrollees
in FEMA-designated Individual Assistance areas at the time of the
extreme and uncontrollable circumstance, the contract receives the
higher of the previous year's Star Rating or the current year's Star
Rating (and corresponding measure score) for each CAHPS measure.
(v) When a contract is an affected contract with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years, it is a multiple year-affected contract. A multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
(3) New measure adjustments. For affected contracts with at least
25 percent of enrollees in a FEMA-designated Individual Assistance area
at the time of the extreme and uncontrollable circumstance, CMS holds
the affected contract harmless by using the higher of the contract's
summary or overall rating or both with and without including all of the
applicable new measures.
(4) Other Star Ratings measure adjustments. (i) For all other Part
D measures except those measures identified in this paragraph
(i)(4)(ii) of this section, affected contracts with at least 25 percent
of enrollees in a FEMA-designated Individual Assistance area at the
time of the extreme and uncontrollable circumstance receive the higher
of the previous or current year's measure Star Rating (and
corresponding measure score).
(ii) CMS does not adjust the scores of the Star Ratings for the
Part D Call Center--Foreign Language Interpreter and TTY Availability
measure, unless the exemption listed in paragraph (i)(4)(iii) of this
section applies.
(iii) CMS adjusts the measure listed in paragraph (i)(4)(ii) of
this section using the adjustments listed in paragraph (i)(4)(i) of
this section for contracts affected by extreme and uncontrollable
circumstances where there are continuing communications issues related
to loss of electricity and damage to infrastructure during the call
center study.

[[Page 15843]]

(iv) When a contract is an affected contract with at least 25
percent of enrollees in FEMA-designated Individual Assistance areas at
the time of the extreme and uncontrollable circumstance with regard to
separate extreme and uncontrollable circumstances that begin in
successive years, it is a multiple year-affected contract. A multiple
year-affected contract receives the higher of the current year's Star
Rating or what the previous year's Star Rating would have been in the
absence of any adjustments that took into account the effects of the
previous year's disaster for each measure (using the corresponding
measure score for the Star Ratings year selected).
(5) Exclusion from improvement measures. Any measure that reverts
back to the data underlying the previous year's Star Rating due to the
adjustments made in paragraph (i) of this section is excluded from both
the count of measures and the applicable improvement measures for the
current and next year's Star Ratings for the affected contract.
Contracts affected by extreme and uncontrollable circumstances do not
have the option of reverting to the prior year's improvement rating.
(6) Missing data. For an affected contract that has missing data in
the current or previous year, the final measure rating comes from the
current year unless an exemption described in paragraph (i)(2)(ii) of
this section applies.
(7) Cut points for non-CAHPS measures. (i) CMS excludes the numeric
values for affected contracts with 60 percent or more of their
enrollees in the FEMA-designated Individual Assistance area at the time
of the extreme and uncontrollable circumstance from the clustering
algorithms described in paragraph (a)(2) of this section.
(ii) The cut points calculated as described in paragraph (i)(7)(i)
of this section are used to assess all affected contracts' measure Star
Ratings.
(8) Reward factor. (i) CMS excludes the numeric values for affected
contracts with 60 percent or more of their enrollees in the FEMA-
designated Individual Assistance area at the time of the extreme and
uncontrollable circumstance from the determination of the performance
summary and variance thresholds for the Reward Factor described in
paragraph (f)(1) of this section.
(ii) All affected contracts are eligible for the Reward Factor
based on the calculations described in paragraph (i)(8)(i) of this
section.

0
34. Section 423.568 is amended by revising paragraph (b) to read as
follows:

Sec. 423.568 Standard timeframe and notice requirements for coverage
determinations.

* * * * *
(b) Timeframe for requests for drug benefits. When a party makes a
request for a drug benefit, the Part D plan sponsor must notify the
enrollee (and the prescribing physician or other prescriber involved,
as appropriate) of its determination as expeditiously as the enrollee's
health condition requires, but no later than 72 hours after receipt of
the request. For an exceptions request, the Part D plan sponsor must
notify the enrollee (and the prescribing physician or other prescriber
involved, as appropriate) of its determination as expeditiously as the
enrollee's health condition requires, but no later than 72 hours after
receipt of the physician's or other prescriber's supporting statement.
If a supporting statement is not received by the end of 14 calendar
days from receipt of the exceptions request, the Part D plan sponsor
must notify the enrollee (and the prescribing physician or other
prescriber involved, as appropriate) of its determination as
expeditiously as the enrollee's health condition requires, but no later
than 72 hours from the end of 14 calendar days from receipt of the
exceptions request.
* * * * *

0
35. Section 423.570 is amended by revising paragraph (d)(1) to read as
follows:

Sec. 423.570 Expediting certain coverage determinations.

* * * * *
(d) * * *
(1) Make the determination within the 72-hour timeframe established
in Sec. 423.568(b) for a standard determination. The 72-hour period
begins on the day the Part D plan sponsor receives the request for
expedited determination. For an exceptions request, the Part D plan
sponsor must notify the enrollee (and the prescribing physician or
other prescriber involved, as appropriate) of its determination as
expeditiously as the enrollee's health condition requires, but no later
than 72 hours after receipt of the physician's or other prescriber's
supporting statement. If a supporting statement is not received by the
end of 14 calendar days from receipt of the exceptions request, the
Part D plan sponsor must notify the enrollee (and the prescribing
physician or other prescriber involved, as appropriate) of its
determination as expeditiously as the enrollee's health condition
requires, but no later than 72 hours from the end of 14 calendar days
from receipt of the exceptions request.
* * * * *

0
36. Section 423.572 is amended by revising paragraph (a) to read as
follows:

Sec. 423.572 Timeframes and notice requirements for expedited
coverage determinations.

(a) Timeframe for determination and notification. Except as
provided in paragraph (b) of this section, a Part D plan sponsor that
approves a request for expedited determination must make its
determination and notify the enrollee (and the prescribing physician or
other prescriber involved, as appropriate) of its decision, whether
adverse or favorable, as expeditiously as the enrollee's health
condition requires, but no later than 24 hours after receiving the
request. For an exceptions request, the Part D plan sponsor must notify
the enrollee (and the prescribing physician or other prescriber
involved, as appropriate) of its determination as expeditiously as the
enrollee's health condition requires, but no later than 24 hours after
receipt of the physician's or other prescriber's supporting statement.
If a supporting statement is not received by the end of 14 calendar
days from receipt of the exceptions request, the Part D plan sponsor
must notify the enrollee (and the prescribing physician or other
prescriber involved, as appropriate) of its determination as
expeditiously as the enrollee's health condition requires, but no later
than 24 hours from the end of 14 calendar days from receipt of the
exceptions request.
* * * * *

PART 438--MANAGED CARE

0
37. The authority for part 438 is revised to read as follows:

Authority: 42 U.S.C. 1302.

0
38. Effective January 1, 2021, Sec. 438.210 is amended by--
0
a. Revising paragraph (c);
0
b. Adding paragraph (d)(4); and
0
c. Revising paragraph (f).
The addition and revisions read as follows:

Sec. 438.210 Coverage and authorization of services.

* * * * *
(c) Notice of adverse benefit determination. Each contract must
provide for the MCO, PIHP, or PAHP to notify the requesting provider,
and give the enrollee written notice of any decision by the MCO, PIHP,
or PAHP to deny a service authorization request, or to authorize a
service in an amount, duration, or scope that is less than

[[Page 15844]]

requested. For MCOs, PIHPs, and PAHPs, the enrollee's notice must meet
the requirements of Sec. 438.404. For Medicaid contracts with an
applicable integrated plan, as defined in Sec. 422.561 of this
chapter, in lieu of the provisions in this paragraph governing notices
of adverse benefit determinations, the provisions set forth in
Sec. Sec. 422.629 through 422.634 of this chapter apply to
determinations affecting dually eligible individuals who are also
enrolled in a dual eligible special needs plan with exclusively aligned
enrollment, as defined in Sec. 422.2 of this chapter.
(d) * * *
* * * * *
(4) For Medicaid contracts with an applicable integrated plan, as
defined in Sec. 422.561 of this chapter, timelines for decisions and
notices must be compliant with the provisions set forth in Sec. Sec.
422.629 through 422.634 of this chapter in lieu of Sec. Sec. 438.404
through 438.424.
* * * * *
(f) Applicability date. (1) Subject to paragraph (f)(2) of this
section, this section applies to the rating period for contracts with
MCOs, PIHPs, and PAHPs beginning on or after July 1, 2017. Until that
applicability date, States are required to continue to comply with
Sec. 438.210 contained in the 42 CFR parts 430 to 481, edition revised
as of October 1, 2015.
(2) Provisions in this section affecting applicable integrated
plans, as defined in Sec. 422.561 of this chapter, are applicable no
later than January 1, 2021.

0
39. Effective January 1, 20121, Sec. 438.400 is amendedby adding
paragraph (a)(4) and revising paragraph (c) to read as follows:

Sec. 438.400 Statutory basis, definitions, and applicability.

(a) * * *
(4) Section 1859(f)(8)(B) of the Act requires that the Secretary,
to the extent feasible, establish procedures unifying grievances and
appeals procedures under sections 1852(f), 1852(g), 1902(a)(3),
1902(a)(5), and 1932(b)(4) of the Act for items and services provided,
by specialized Medicare Advantage plans for special needs individuals
described in section 1859(b)(6)(B)(ii), under Titles XVIII and XIX of
the Act.
* * * * *
(c) Applicability. (1) Subject to paragraph (c)(2) of this section,
this subpart applies to the rating period for contracts with MCOs,
PIHPs, and PAHPs beginning on or after July 1, 2017. Until that
applicability date, States, MCOs, PIHPs, and PAHPs are required to
continue to comply with subpart F contained in the 42 CFR parts 430 to
481, edition revised as of October 1, 2015.
(2) Provisions in this part affecting applicable integrated plans,
as defined in Sec. 422.561 of this chapter, are applicable no later
than January 1, 2021.

0
40. Effective January 1, 2021, Sec. 438.402 is amended by revising
paragraph (a) to read as follows:

Sec. 438.402 General requirements.

(a) The grievance and appeal system. Each MCO, PIHP, and PAHP must
have a grievance and appeal system in place for enrollees. Non-
emergency medical transportation PAHPs, as defined in Sec. 438.9, are
not subject to this subpart F. For grievances and appeals at the plan
level, an applicable integrated plan as defined in Sec. 422.561 of
this chapter is not subject to this subpart F, and is instead subject
to the requirements of Sec. Sec. 422.629 through 422.634 of this
chapter. For appeals of integrated reconsiderations, applicable
integrated plans are subject to Sec. 438.408(f).
* * * * *

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT
AFFECT THE PARTICIPATION OF ICFs/IID AND CERTAIN NFs IN THE
MEDICAID PROGRAM

0
41. The authority for part 498 is revised to read as follows:

Authority: 42 U.S.C. 1302, 1320a-7j, and 1395hh.

0
42. Effective June 17, 2019, Sec. 498.5 is amended by revising
paragraph (n)(1) to read as follows:

Sec. 498.5 Appeal rights.

* * * * *
(n) * * *
(1)(i) Any individual or entity that is dissatisfied with an
initial determination or revised initial determination that they are to
be included on the preclusion list (as defined in Sec. 422.2 or Sec.
423.100 of this chapter) may request a reconsideration in accordance
with Sec. 498.22(a).
(ii)(A) If the individual's or entity's inclusion on the preclusion
list is based on a Medicare revocation under Sec. 424.535 of this
chapter and the individual or entity receives contemporaneous notice of
both actions, the individual or entity may request a joint
reconsideration of both the preclusion list inclusion and the
revocation in accordance with Sec. 498.22(a).
(B) The individual or entity may not submit separate
reconsideration requests under paragraph (n)(1)(ii)(A) of this section
for inclusion on the preclusion list or a revocation if the individual
or entity received contemporaneous notice of both actions.
* * * * *

Dated: March 27, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: March 28, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-06822 Filed 4-5-19; 4:15 pm]
BILLING CODE 4120-01-P