[Federal Register Volume 85, Number 171 (Wednesday, September 2, 2020)]
[Rules and Regulations]
[Pages 54820-54874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19150]



[[Page 54819]]

Vol. 85

Wednesday,

No. 171

September 2, 2020

Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 410, 413, 414, et al.





Medicare and Medicaid Programs, Clinical Laboratory Improvement 
Amendments (CLIA), and Patient Protection and Affordable Care Act; 
Additional Policy and Regulatory Revisions in Response to the COVID-19 
Public Health Emergency; Final Rule

  Federal Register / Vol. 85 , No. 171 / Wednesday, September 2, 2020 / 
Rules and Regulations  

[[Page 54820]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 413, 414, 422, 423, 482, 483, 485, 488 and 493

[CMS-3401-IFC]
RIN 0938-AU33


Medicare and Medicaid Programs, Clinical Laboratory Improvement 
Amendments (CLIA), and Patient Protection and Affordable Care Act; 
Additional Policy and Regulatory Revisions in Response to the COVID-19 
Public Health Emergency

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period (IFC) revises 
regulations to strengthen CMS' ability to enforce compliance with 
Medicare and Medicaid long-term care (LTC) facility requirements for 
reporting information related to coronavirus disease 2019 (COVID-19), 
establishes a new requirement for LTC facilities for COVID-19 testing 
of facility residents and staff, establishes new requirements in the 
hospital and critical access hospital (CAH) Conditions of Participation 
(CoPs) for tracking the incidence and impact of COVID-19 to assist 
public health officials in detecting outbreaks and saving lives, and 
establishes requirements for all CLIA laboratories to report COVID-19 
test results to the Secretary of Health and Human Services (Secretary) 
in such form and manner, and at such timing and frequency, as the 
Secretary may prescribe during the Public Health Emergency (PHE).

DATES: Effective date: These regulations are effective on September 2, 
2020.
    Applicability date: These regulations are applicable for the 
duration of the PHE for COVID-19. Section 488.447 is applicable 1 year 
beyond the expiration of the PHE for COVID-19. The amendment to Sec.  
414.1305 and the expansion of telehealth codes used in beneficiary 
assignment for the CMS Web Interface and CAHPS for MIPS survey (found 
in section II.I. of the preamble) are applicable beginning January 1, 
2020.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on November 2, 2020.

ADDRESSES: In commenting, please refer to file code CMS-3401-IFC. 
Comments, including mass comment submissions, must be submitted in one 
of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-3401-IFC, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-3401-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    Debra Lyons, (410) 786-6780, for information on the LTC enforcement 
regulation at 42 CFR part 488.
    CAPT Scott Cooper, USPHS, (410) 786-9465, for the hospital and CAH 
COVID-19 reporting requirements.
    Sarah Bennett, (410) 786-3354, for laboratory reporting 
information.
    Julia Venanzi, (410) 786-1471, for provisions related to the 
Hospital Value-Based Purchasing Program.
    Erin Patton, (410) 786-2437, for provisions related to the Hospital 
Readmissions Reduction Program.
    Lang Le, (410) 786-5693, for provisions related to the Skilled-
Nursing Facility Value-Based Purchasing Program and the Hospital-
Acquired Condition Reduction Program.
    Delia Houseal, (410) 786-2724, for provisions related to the End-
Stage Renal Disease Quality Incentive Program.
    Kimberly Long, (410) 786-5702, or 
[email protected], for provisions related to NCD 
Procedural Volumes for Facilities and Practitioners to Maintain 
Medicare Coverage.
    Jennifer Dupee, (410) 786-6537, for provisions related to order 
requirements for COVID-19 and related testing.
    Jaya Ghildiyal, (301) 492-5149, for PPACA risk adjustment 
requirements.
    Christina Whitefield, (301) 492-4172, for PPACA medical loss ratio 
requirements.
    Elizabeth Goldstein, (410) 786-6665, or 
[email protected], for the modifications to the 
calculation of the 2022 Part C and D Star Ratings.
    Molly MacHarris, (410) 786-4461, for issues related to the Merit-
based Incentive Payment System (MIPS).
    Kianna Banks, (410) 786-3498, for the LTC resident and staff COVID-
19 testing requirements.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: http://regulations.gov. Follow the search instructions on 
that website to view public comments.

Table of Contents

I. Background
II. Provisions of the Interim Final Rule with Comment Period (IFC)
    A. New Enforcement Requirement for LTC Facilities
    B. Condition of Participation (CoP) Requirements for Hospitals 
and CAHs to Report COVID-19 Data As Specified by the Secretary 
During the PHE for COVID-19
    C. Requirements for Laboratories to Report SARS-CoV-2 Test 
Results During the PHE for COVID-19
    D. Quality Reporting: Updates to the Extraordinary Circumstances 
Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in 
Response to the PHE for COVID-19, and Update to the Performance 
Period for the FY 2022 SNF VBP Program
    E. NCD Procedural Volumes for Facilities and Practitioners to 
Maintain Medicare Coverage
    F. Limits on COVID-19 and Related Testing without an Order and 
Expansion of Testing Order Authority
    G. Recognizing Temporary Premium Credits as Premium Reductions
    H. Addressing the Impact of COVID-19 on Part C and Part D 
Quality Rating Systems
    I. Merit-Based Incentive Payment System (MIPS) Updates
    J. Requirement for Long-Term Care (LTC) Facilities to Test 
Facility Residents and Staff for COVID-19
III. Waiver of Proposed Rulemaking
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
    Regulations Text

Executive Summary

    This interim final rule with comment period (IFC) revises 
regulations to strengthen CMS' ability to enforce compliance with 
Medicare and

[[Page 54821]]

Medicaid long-term care (LTC) facility requirements for reporting 
information related to coronavirus disease 2019 (COVID-19), establishes 
a new requirement for LTC facilities for COVID-19 testing of facility 
residents and staff, establishes new requirements in the hospital and 
critical access hospital (CAH) Conditions of Participation (CoPs) for 
tracking the incidence and impact of COVID-19 to assist public health 
officials in detecting outbreaks and saving lives, and establishes 
requirements for all CLIA laboratories to report COVID-19 test results 
to the Secretary of Health and Human Services (Secretary) in such form 
and manner, and at such timing and frequency, as the Secretary may 
prescribe during the Public Health Emergency (PHE). This IFC updates 
the extraordinary circumstances exceptions granted for the ESRD Quality 
Incentive Program (QIP), Hospital Acquired Condition (HAC) Reduction 
Program, Hospital Readmissions Reduction Program (HRRP), and Hospital 
VBP Program for the PHE for COVID-19, and revises the FY 2022 
performance period under the Skilled Nursing Facility (SNF) VBP as a 
result of the PHE for COVID-19. This IFC also announces that with 
respect to the Hospital VBP Program, HRRP, HAC Reduction Program, SNF 
VBP Program and the ESRD QIP, if, as a result of a decision to grant a 
new nationwide ECE without request or a decision to grant a substantial 
number of individual ECE requests, we do not have enough data to 
reliably compare national performance on measures, we may propose to 
not score facilities, hospitals, or SNFs based on such limited data or 
make the associated payment adjustments for the affected program year. 
In addition, this IFC announces that CMS will not enforce certain 
procedural volume requirements for four national coverage 
determinations, revises the previous policy outlined in the May 8th 
COVID-19 IFC by establishing that one single COVID-19 diagnostic test 
and one of each other applicable related tests without an order from a 
treating physician or other practitioner is reasonable and necessary, 
establishes a policy whereby the orders of pharmacists and other 
practitioners that are allowed to order laboratory tests in accordance 
with state scope of practice and other pertinent laws can fulfill the 
requirements related to orders for covered COVID-19 and related tests 
for Medicare patients, specifies how temporary premium credits for 
individual and small group health insurance coverage are treated for 
purposes of the risk adjustment and medical loss ratio programs, 
modifies the application of the extreme and uncontrollable 
circumstances policy for calculation of the 2022 Part C and D Star 
Ratings to address the effects of the PHE for COVID-19, includes in the 
Merit-Based Incentive Payment System (MIPS) beneficiary assignment 
methodology for the CMS Web Interface and Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS survey for 
performance year 2020 and any subsequent performance year that starts 
during the PHE for COVID-19 certain Current Procedural Terminology 
(CPT) and Healthcare Common Procedure Coding System (HCPCS) code 
additions, and modifies IA_ERP_3.

I. Background

    The United States is responding to an outbreak of respiratory 
disease caused by coronavirus disease that was first detected in China 
and which has now been detected in more than 190 countries 
internationally, and all 50 States, the District of Columbia, and the 
U.S. territories. The virus has been named ``severe acute respiratory 
syndrome coronavirus 2'' (SARS-CoV-2'') and the disease it causes has 
been named ``coronavirus disease 2019'' (``COVID-19'').
    On January 30, 2020, the International Health Regulations Emergency 
Committee of the World Health Organization (WHO) declared the outbreak 
a ``Public Health Emergency of International Concern''. On January 31, 
2020, pursuant to section 319 of the Public Health Service Act (PHSA) 
(42 U.S.C. 247d), the Health and Human Services Secretary (the 
Secretary) determined that a public health emergency (PHE) exists for 
the United States to aid the nation's healthcare community in 
responding to COVID-19 (hereafter referred to as the PHE for COVID-19). 
On March 11, 2020, the WHO publicly declared COVID-19 a pandemic. On 
March 13, 2020, President Donald J. Trump (the President) declared the 
COVID-19 pandemic a national emergency. Effective July 25, 2020, the 
Secretary renewed the January 31, 2020 determination that was 
previously renewed on April 21, 2020, that a PHE for COVID-19 exists 
and has existed since January 27, 2020.
    The Centers for Disease Control and Prevention (CDC) has reported 
that some people are at higher risk of severe illness from COVID-19.\1\ 
These higher-risk categories include:
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    \1\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6915e3.htm.
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     Older adults, with risk increasing by age.
     People of any age who have certain underlying medical 
conditions such as:
    ++ Cancer.
    ++ Chronic kidney disease.
    ++ Obesity.
    ++ Serious heart conditions (for example, heart failure, coronary 
artery disease, or cardiomyopathies).
    ++ Sickle cell disease.
    ++ Diabetes mellitus.
    ++ Hypertension.
    ++ Chronic obstructive pulmonary disease (COPD).
    ++ Neurologic/Neurodevelopmental disability.\2\
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    \2\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6924e2.htm?s_cid=mm6924e2_w.
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    ++ Immunocompromised state from solid organ transplant.
     Residents of LTC facilities, including nursing homes, 
Intermediate Care Facilities for Individuals with Intellectual and 
Developmental Disabilities (ICF/IIDs), inpatient psychiatric and 
substance abuse treatment facilities including institutions for mental 
disorders (IMD) and Psychiatric Residential Treatment Facilities 
(PRTF), assisted living facilities, group homes for individuals with 
developmental disabilities and board-and-care facilities.
    The CDC has developed guidance to help in the risk assessment and 
management of people with potential exposures to COVID-19, including 
recommending that healthcare professionals make every effort to 
interview a person under investigation for infection by telephone, text 
monitoring system, or video conference.\3\
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    \3\ https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html.
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    As the healthcare community establishes and implements recommended 
infection prevention and control practices, regulatory agencies 
operating under appropriate waiver authority granted by the PHE for 
COVID-19 are also working to revise and implement regulations that 
support these healthcare community infection prevention and treatment 
practices. Based on the current and projected increases in the COVID-19 
incidence rates in the US, observed fatalities in the older adult 
population, and the impact on health workers who are at increased risk 
due to treating special populations, it is CMS' belief that certain 
regulations should be reviewed and revised as appropriate to offer 
additional flexibilities in furnishing and providing services to combat 
the PHE for COVID-19 and to address and minimize the

[[Page 54822]]

unique impact of the PHE for COVID-19 on other regulatory provisions. 
We addressed some of these regulations in two previous interim final 
rules with comment period (IFCs). The ``Medicare and Medicaid Programs; 
Policy and Regulatory Revisions in Response to the COVID-19 Public 
Health Emergency'' IFC appeared in the April 6, 2020 Federal Register 
(85 FR 19230) with an effective date of March 31, 2020 (hereafter 
referred to as the ``March 31st COVID-19 IFC''), and the ``Medicare and 
Medicaid Programs, Basic Health Program, and Exchanges; Additional 
Policy and Regulatory Revisions in Response to the COVID-19 Public 
Health Emergency and Delay of Certain Reporting Requirements for the 
Skilled Nursing Facility Quality Reporting Program'' IFC appeared in 
the May 8, 2020 Federal Register (85 FR 27550) with an effective date 
of May 8, 2020 (hereafter referred to as the ``May 8th COVID-19 IFC'').
    In this IFC, we are revising regulations to strengthen CMS' ability 
to enforce new LTC requirements added to 42 CFR part 483 published in 
the May 8th COVID-19 IFC to report facility data related to COVID-19 
and infection control at least weekly. Specifically, we are adding a 
regulation to specify the civil money penalty (CMP) amounts that may be 
imposed for the failure to electronically report COVID-19 data each 
week, which includes, among other things, suspected and confirmed 
COVID-19 infections among residents and staff, including residents 
previously treated for COVID-19, total deaths of COVID-19 deaths among 
residents and staff, and personal protective equipment and hand hygiene 
supplies in the facility.
    We are also requiring hospitals and CAHs to report information in 
accordance with a frequency, and in a standardized format, as specified 
by the Secretary during the PHE for COVID-19. We believe that universal 
reporting by all hospitals and CAHs is and will be an important tool 
for supporting surveillance of COVID-19 and for future planning to 
prevent the spread of the virus, especially to those most vulnerable 
and at risk to its effects.
    In this IFC, we also address condition-level noncompliance related 
to SARS-CoV-2 laboratory reporting and strengthen CMS' ability to 
enforce new requirements to electronically report SARS-CoV-2 test 
results in such form and manner, and at such timing and frequency, as 
the Secretary may prescribe during the PHE for COVID-19.
    On October 31, 1988, Congress enacted the Clinical Laboratory 
Improvement Amendments of 1988 (CLIA) (Pub. L. 100-578) (codified as 
amended at 42 U.S.C. 263a), requiring any laboratory that examines 
human specimens for the purpose of providing information for the 
diagnosis, prevention, or treatment of any disease or impairment of, or 
the assessment of health, of human beings to be certified by the 
Secretary for the categories of examinations or procedures performed by 
the laboratory. The implementing regulations at 42 CFR part 493 specify 
the conditions and standards that must be met to achieve and maintain 
CLIA certification. These conditions and standards strengthen federal 
oversight of clinical laboratories and help ensure the accuracy and 
reliability of patient test results.
    On March 27, 2020, the President signed the Coronavirus Aid, 
Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) into 
law. The CARES Act includes section 18115, which requires every 
laboratory that performs or analyzes a test that is intended to detect 
SARS-CoV-2 or to diagnose a possible case of COVID-19 to report the 
results for such test to the Secretary until the conclusion of the PHE 
for COVID-19.
    Subsequently, on June 4, 2020, the Department of Health and Human 
Services (HHS) published the COVID-19 Pandemic Response, Laboratory 
Data Reporting: CARES Act Section 18115 Guidance,\4\ implementing the 
requirement under section 18115 of the CARES Act for laboratories to 
report COVID-related information to the Secretary.
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    \4\ https://www.hhs.gov/sites/default/files/covid-19-laboratory-data-reporting-guidance.pdf.
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    With regard to laboratory oversight, HHS endeavors to improve 
consistency in application of laboratory standards, to improve 
coordination, collaboration, and communication in both routine and 
emergent situations, and thereby further improve the level of 
laboratory oversight and ultimately patient care. In order for CMS to 
ensure laboratories are properly reporting SARS-CoV-2 test results, CMS 
has determined that modifications to the CLIA regulations must be made. 
We are requiring all laboratories performing testing related to SARS-
CoV-2, to report SARS-CoV-2 test results in such form and manner, and 
at such timing and frequency, as the Secretary may prescribe during the 
PHE for COVID-19.
    In addition, this IFC clarifies the data reporting requirements for 
issuers of risk adjustment covered plans \5\ to specify that, for the 
purposes of 2020 benefit year risk adjustment data submissions, issuers 
of risk adjustment covered plans that provide temporary premium credits 
must report to their distributed data environments (EDGE servers) the 
adjusted plan premiums that reflect actual premiums billed to 
enrollees, taking the premium credits into account as a reduction in 
premiums. In addition, we clarify that, consistent with the reporting 
of the actual premium amounts billed to enrollees for 2020 benefit year 
risk adjustment data submissions, HHS's calculation of risk adjustment 
payment and charges for the 2020 benefit year under the state payment 
transfer formula will be calculated using the statewide average premium 
that reflects actual premiums billed, taking into account any temporary 
premium credits provided as a reduction in premium for the applicable 
months of 2020 coverage. In this IFC, we similarly clarify the Medical 
Loss Ratio (MLR) reporting and rebate calculation requirements in 45 
CFR part 158 for issuers that elect to provide temporary premium 
credits in 2020 such that these issuers must report as earned premium 
the actual premium paid, taking into account any temporary premium 
credits provided for the applicable months of 2020 coverage.
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    \5\ See 45 CFR 153.20 for a definition of ``risk adjustment 
covered plan''.
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    This IFC also announces that we will not enforce certain procedural 
volume requirements in order for facilities and practitioners to 
maintain Medicare coverage under specific national coverage 
determinations (NCDs). This applies to facilities and practitioners 
that, prior to the PHE for COVID-19, met the volume requirements for 
these NCDs.
    In this IFC, we are also revising the previous policy outlined in 
the May 8th COVID-19 IFC, which allowed for broad COVID-19 testing for 
a single beneficiary without a physician or other practitioner order, 
by establishing that one single COVID-19 diagnostic test and one of 
each other related tests (as listed in the May 8th COVID-19 IFC) 
without a treating physician or other practitioner order is reasonable 
and necessary. We are also establishing a policy whereby the orders of 
pharmacists and other practitioners that are allowed to order 
laboratory tests in accordance with state scope of practice and other 
pertinent laws can fulfill the requirements related to orders for 
covered COVID-19 tests for Medicare patients. In addition, this IFC 
updates the extraordinary circumstances exceptions (ECEs) we granted on 
March 22, 2020, for the ESRD Quality Incentive Program (QIP), Hospital 
Acquired Condition (HAC) Reduction Program, HRRP, and Hospital Value-
Based

[[Page 54823]]

Purchasing (VBP) Program in response to the PHE for COVID-19, revises 
the FY 2022 performance period under the SNF VBP as a result of the PHE 
for COVID-19, implements a COVID-19 reporting requirement for hospitals 
and critical access hospitals (CAHs), and modifies the application of 
the extreme and uncontrollable circumstances policy for calculation of 
the 2022 Part C and D Star Ratings to address the effects of the PHE 
for COVID-19.
    This IFC also announces that with respect to the Hospital VBP 
Program, HRRP, HAC Reduction Program, SNF VBP Program and the ESRD QIP, 
if, as a result of a decision to grant a new nationwide ECE without 
request or a decision to grant a substantial number of individual ECEs, 
we do not have enough data to reliably compare national performance on 
measures, we may propose to not score facilities based on such limited 
data or make the associated payment adjustments for the affected 
program year.
    In this IFC, for the 2020 performance year and any subsequent 
performance year that starts during the PHE for COVID-19, we are 
including in the MIPS beneficiary assignment methodology for the CMS 
Web Interface and Consumer Assessment of Healthcare Providers and 
Systems (CAHPS) for MIPS survey the following additions due to the PHE 
for COVID-19: (1) CPT codes: 99421, 99422, and 99423 (codes for online 
digital evaluation and management (E/M) service (e-visit)), and 99441, 
99442, and 99443 (codes for telephone E/M services); and (2) HCPCS 
codes: G2010 (code for remote evaluation of patient video/images) and 
G2012 (code for virtual check-in). In addition, we are: (1) Expanding 
the improvement activity IA_ERP_3 titled ``COVID-19 Clinical Trial'' to 
also allow credit for clinicians who participate in the care of 
patients diagnosed with COVID-19 and simultaneously submit relevant 
clinical data to a clinical data registry for ongoing or future COVID-
19 research; (2) updating the title; and (3) extending it through the 
CY 2021 performance period.
    In an effort to support national efforts to control the spread of 
COVID-19, we are also revising the LTC facility infection control 
regulations at Sec.  483.80 to establish a new requirement for LTC 
facilities to test their facility residents and staff, including 
individuals providing services under arrangement and volunteers. We are 
requiring that resident and staff testing in LTC facilities for COVID-
19 be conducted based on parameters set forth by the Secretary. We 
believe these requirements will positively and substantially impact 
efforts to control the spread of COVID-19 in LTC facilities.
    All provisions included in this IFC are effective only for the 
duration of the PHE for COVID-19, unless otherwise indicated. The 
provision at Sec.  488.447 is intended to be in effect beyond the 
expiration of the PHE for COVID-19.

II. Provisions of the Interim Final Rule With Comment Period (IFC)

    In this IFC, we use the term, ``Public Health Emergency (PHE),'' as 
defined at 42 CFR 400.200. The definition identifies the PHE determined 
to exist nationwide by the Secretary under section 319 of the PHSA on 
January 31, 2020, and renewed effective July 25, 2020,\6\ as a result 
of confirmed cases of COVID-19.
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    \6\ https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx.
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A. New Enforcement Requirement for LTC Facilities

    Under sections 1866 and 1902 of the Social Security Act (the Act), 
providers of services seeking to participate in the Medicare or 
Medicaid program, or both, must enter into an agreement with the 
Secretary or the state Medicaid agency, as appropriate. LTC facilities 
seeking to be Medicare and Medicaid providers of services must be 
certified as meeting federal participation requirements. LTC facilities 
include SNFs for Medicare and nursing facilities (NFs) for Medicaid. 
The federal participation requirements for these facilities are 
specified in sections 1819 and 1919 of the Act and in implementing 
regulations at 42 CFR part 483, subpart B.
    Under sections 1819(f)(1) and 1919(f)(1) of the Act, the Secretary 
must assure that the enforcement of compliance with the participation 
requirements are adequate to protect the health, safety, welfare, and 
rights of residents and to promote the effective use of public moneys. 
The federal requirements related to enforcement of the requirements for 
SNFs, NFs, or dually-certified facilities, are set forth in sections 
1819(h) and 1919(h) of the Act and codified in the regulations at 42 
CFR part 488, subpart F. Among the remedies available to be imposed for 
noncompliance with the requirements is a civil money penalty (CMP), as 
authorized in sections 1819(h)(2)(B)(ii) and 1919(h)(3)(C)(ii) of the 
Act, and Sec. Sec.  488.430 through 488.444.
    We are using our authority under this IFC to immediately implement 
a new enforcement regulation identified below in order to effectively 
enhance enforcement of the new infection prevention and control 
reporting requirements at Sec.  483.80(g)(1) and (2) that became 
effective on May 8, 2020 as discussed in the May 8th COVID-19 IFC.
    Prior to the PHE for COVID-19, regulations at Sec.  
483.80(a)(2)(ii) required facilities to have written standards, 
policies and procedures regarding infection control, which must include 
when and to whom possible incidents of communicable disease or 
infections should be reported. This includes reporting to local/state 
health authorities.
    In an effort to support ongoing surveillance of COVID-19 cases, we 
added to the infection control requirements provisions to establish 
weekly facility reporting of suspected and/or confirmed COVID-19 cases, 
among other information, at new Sec.  483.80(g) in the May 8th COVID-19 
IFC (85 FR 27550, 27601 through 27602). This new regulation requires 
nursing homes to report COVID-19 related facility data to the CDC 
National Healthcare Safety Network (NHSN). These new CMS reporting 
requirements do not preclude a facility from following all state and 
local public health reporting laws and regulations.
    Specifically, we revised our requirements by adding new provisions 
at Sec. Sec.  483.80(g)(1) and (2), to require facilities to 
electronically report information about COVID-19 in a standardized 
format and at a frequency specified by the Secretary, but not less than 
weekly to the CDC NHSN. This critical information will provide real-
time information on COVID-19 in nursing homes, and will be used to 
monitor trends in infection rates, and inform public health policies. 
To coincide with this new reporting requirement, we developed an 
automated process within the existing ASPEN (Automated Survey Process 
Environment) survey software application, which uses information 
received weekly from the CDC to determine whether a provider reported 
the data as required. We will determine if noncompliance exists through 
a retrospective review each week to identify the facilities that failed 
to take the necessary and timely actions to report to CDC. 
Noncompliance with this requirement for each weekly reporting cycle 
will be cited at a scope of widespread, and a severity of no actual 
harm with potential for more than minimal harm that is not immediate 
jeopardy, which constitutes a level ``F'' deficiency. This is 
consistent with guidance that was issued in QSO 20-

[[Page 54824]]

29-NH \7\ which also included enforcement policies for the imposition 
of a CMP for the failure to report to the CDC NHSN.
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    \7\ ``Interim Final Rule Updating Requirements for Notification 
of Confirmed and Suspected COVID-19 Cases Among Residents and Staff 
in Nursing Homes.'' QSO-20-29-NH (May 6, 2020) https://www.cms.gov/files/document/qso-20-29-nh.pdf.
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    With this IFC, we are furthering enforcement efforts of the 
recently issued requirements at Sec.  483.80(g)(1) and (2) that 
facilities report COVID-19 related information to the CDC's NHSN by 
making revisions to part 488. These revisions codify enforcement 
policies that are specifically tailored to reviewing compliance with 
and imposing CMPs for the failure to report. We are enforcing the new 
reporting requirements through the imposition of CMPs for each time a 
facility fails to report the required data to the CDC NHSN system. We 
believe that CMPs are an appropriate enforcement remedy that will 
facilitate a swift return to compliance with the new reporting 
requirement. Sections 1819(h)(2)(B)(ii)(I) and 1919(h)(3)(C)(ii)(I) of 
the Act limit the amount of a CMP to $10,000 \8\ for each day of 
noncompliance. We have determined that a minimum $1,000 initial CMP, 
with a $500 incremental increase, is within the authorized CMP range 
and an appropriate amount to deter noncompliance with this requirement. 
Specifically, we are noting that a minimum $1,000 CMP will be imposed 
for the first occurrence of noncompliance, that is, the first time the 
facility fails to submit a timely report as required under Sec.  
483.80(g)(1) and (2). For each subsequent time the facility fails to 
report the requisite COVID-19 related data, the amount of the CMP 
imposed will be increased by $500, which is consistent with sections 
1819(h)(2)(B) and 1919(h)(3)(C) of the Act providing for the imposition 
of incrementally more severe fines for repeated deficiencies. For 
example, if a facility fails to report in 1 week, a minimum $1,000 CMP 
will be imposed for that occurrence of noncompliance. If it fails to 
report again in the subsequent week that new noncompliance 
determination will lead to the imposition of another CMP but in the 
increased amount of $1,500 for that failure to report. In this example, 
if the facility complies with the reporting requirements by submitting 
the required report in a 3rd week, but then subsequently fails to 
report again in a following week, a CMP in the amount of $2,000 for 
failing to report a third time will be imposed for that missed weekly 
report (which is $500 more than the last imposed amount). After each 
CMP is imposed, CMS will place the facility back into compliance, 
without requiring a Plan of Correction (POC) in accordance with Sec.  
488.408(f). A facility may still submit a POC if it chooses to do so; 
however, because compliance will be imposed each week and facilities 
will be assessed an increased CMP amount for each subsequent failure to 
report, a POC will not be necessary. Facilities are offered an 
opportunity for Independent Informal Dispute Resolution under Sec.  
488.431. This may be requested for reasons, such as technical 
difficulties that should be adequately documented, that may have 
prevented the facility from submitting its report in a timely manner.
---------------------------------------------------------------------------

    \8\ This amount is adjusted annually under the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015, and 
listed in 42 CFR 102.3. The 2020 adjusted amount is $22,320 (85 FR 
2870, January 17, 2020): https://www.federalregister.gov/documents/2020/01/17/2020-00738/annual-civil-monetary-penalties-inflation-adjustment.
---------------------------------------------------------------------------

    Currently, under Sec.  488.408(d), Category 2 CMP remedies for 
noncompliance that is not immediate jeopardy, but is widespread 
deficient practice that does not constitute actual harm with a 
potential for more than minimal harm, or that constitutes actual harm, 
are imposed at a daily amount not to exceed $6,695.\9\ Similarly, 
because noncompliance with Sec.  483.80(g)(1) and (2) will be cited at 
an scope and severity of an ``F'', which would trigger a Category 2 
remedy, we will not continue incrementally increasing the CMPamount 
after 12 occurrences of noncompliance, so that the maximum CMP amount 
imposed would not exceed $6,500 for each subsequent occurrence of 
noncompliance. This specific maximum amount imposed for the failure to 
report was established to be consistent with the existing CMPs within 
Category 2 noncompliance. We believe imposing CMPs in this manner is a 
fair and effective penalty for the failure to report, as assessed each 
week.
---------------------------------------------------------------------------

    \9\ Reflects the 2020 annual inflation adjusted amount under the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015, listed in 42 CFR 102.3 (85 FR 2870, January 17, 2020): https://www.federalregister.gov/documents/2020/01/17/2020-00738/annual-civil-monetary-penalties-inflation-adjustment.
---------------------------------------------------------------------------

    To support and further codify these enhanced enforcement efforts, 
we are adding Sec.  488.447 to impose a minimum CMP amount of $1,000 
for the first occurrence of noncompliance with the reporting 
requirements at Sec.  483.80(g)(1) and (2), and will increase the CMP 
by $500 for each subsequent time the facility fails to report COVID-19 
related data as required. Compliance with the requirements at Sec.  
483.80(g)(1) and (2) will be assessed weekly. Facilities found out of 
compliance with Sec.  483.80(g)(1) and (2) are not required to submit a 
plan of correction as indicated in Sec.  488.408(f)(1). These CMP 
amounts are subject to annual adjustments for inflation at 45 CFR 
102.3. Under this rule, we will increase the CMP amounts for up to 12 
subsequent noncompliance occurrences to the amount specified in Sec.  
488.408(d)(1)(iii), which would be $6,500 per occurrence of 
noncompliance. CMPs imposed in accordance with this rule are subject to 
the same procedures as all other CMPs imposed under sections 1819(h) 
and 1919(h) of the Act, including notice, escrow, independent informal 
dispute resolution, and collections. Also, facilities may appeal the 
determination leading to a CMP imposed under this rule in accordance 
with 42 CFR part 498.
    As discussed in section III. of this IFC, ``Waiver of Proposed 
Rulemaking,'' we believe the urgency of this PHE for COVID-19 
constitutes good cause to waive the normal notice-and-comment process 
under Administrative Procedure Act (APA), 5 U.S.C. 533, and section 
1871(b)(2)(C) of the Act. Waiving notice and comment is in the public 
interest because the heightened threat to resident health and safety 
for, widespread infection control noncompliance necessitates the 
expedited imposition of enforcement remedies. Additionally, because it 
is imperative to track the incidence and impact of COVID-19 in nursing 
homes, it is crucial that a financial penalty be imposed for failure to 
report. The CMP amounts we codify in this IFC will help deter 
noncompliance and encourage facilities to establish procedures that 
result in prompt weekly COVID-19 related data reports for the duration 
of the PHE for COVID-19. Proper enforcement mechanisms designed to 
deter noncompliant behavior and prompt corrective actions will help to 
ensure that residents, staff, and the public are safe, and will help 
provide critical COVID-19 related data to assist CMS and public health 
authorities in detecting and expeditiously responding to outbreaks. 
Furthermore, requiring prior notice and comment is impracticable 
because the PHE for COVID-19 that the CMP amounts are tailored to 
address may expire or be nearly over before a proposed rule can be 
finalized. Finally, we think prior notice and comment is unnecessary 
because we have broad discretion under the statute and existing CMP 
regulations to establish a CMP amount, but we are

[[Page 54825]]

choosing to make our policies more transparent. We believe that a 
completely transparent CMP structure will help deter noncompliance, 
encourage timely reporting, and eliminate possible gaps in reporting 
that could hinder the government's response to the PHE for COVID-19 in 
specific geographic areas. For example, depending on the circumstances, 
the failure of one facility to report COVID-19 cases on a timely basis 
could delay our ability to detect and respond to an emerging COVID-19 
hot spot.
    For similar reasons, we are also waiving the 30-day delay in 
effective date for these provisions. The effective date for Sec.  
488.447 is the date of the publication of this rule (that is, the 
effective date as noted in the DATES section of this IFC). Furthermore, 
while we would generally expect that the new Sec.  488.447 would no 
longer be in effect as of the end of the PHE for COVID-19 as defined in 
Sec.  400.200, enhanced enforcement to ensure facilities continue to 
comply with infection control reporting requirements to avoid possible 
spread of COVID-19 will need to temporarily be in effect for a longer 
period of time. In conjunction with the PHE for COVID-19, these 
enforcement policies will continue to be in effect for up to one year 
beyond the end of the PHE.

B. Condition of Participation (CoP) Requirements for Hospitals and CAHs 
To Report COVID-19 Data As Specified by the Secretary During the PHE 
for COVID-19

    Under sections 1866 and 1902 of the Act, providers of services 
seeking to participate in the Medicare or Medicaid program, or both, 
must enter into an agreement with the Secretary or the state Medicaid 
agency, as appropriate. Hospitals (all hospitals to which the 
requirements of 42 CFR part 482 apply, including short-term acute care 
hospitals, LTC hospitals, rehabilitation hospitals, psychiatric 
hospitals, cancer hospitals, and children's hospitals) and CAHs seeking 
to be Medicare and Medicaid providers of services must be certified as 
meeting federal participation requirements. Our conditions of 
participation (CoPs), conditions for coverage (CfCs), and requirements 
set out the patient health and safety protections established by the 
Secretary for various types of providers and suppliers. The specific 
statutory authority for hospital CoPs is set forth in section 1861(e) 
of the Act; section 1820(e) of the Act provides similar authority for 
CAHs. The hospital provision authorizes the Secretary to issue any 
regulations he or she deems necessary to protect the health and safety 
of patients receiving services in those facilities; the CAH provision 
authorizes the Secretary to issue such other criteria as he or she may 
require. The CoPs are codified in the implementing regulations at part 
482 for hospitals, and at 42 CFR part 485, subpart F, for CAHs.
    Our CoPs at Sec.  482.42 for hospitals and Sec.  485.640 for CAHs, 
require that hospitals and CAHs, respectively, have active facility-
wide programs, for the surveillance, prevention, and control of 
healthcare-associated infections (HAIs) and other infectious diseases 
and for the optimization of antibiotic use through stewardship. 
Additionally, the programs must demonstrate adherence to nationally 
recognized infection prevention and control guidelines, as well as to 
best practices for improving antibiotic use where applicable, and for 
reducing the development and transmission of HAIs and antibiotic-
resistant organisms. Infection prevention and control problems and 
antibiotic use issues identified in the required hospital and CAH 
programs must also be addressed in coordination with facility-wide 
quality assessment and performance improvement (QAPI) programs.
    Infection prevention and control is a primary goal of hospitals and 
CAHs in their normal day-to-day operations, and these programs have 
been at the center of initiatives taking place in hospitals and CAHs 
during the PHE for COVID-19. Our regulations at Sec. Sec.  482.42(a)(3) 
and 485.640(a)(3) require infection prevention and control program 
policies to address any infection control issues identified by public 
health authorities. On March 4, 2020, we issued guidance \10\ stating 
that hospitals should inform infection prevention and control services, 
local and state public health authorities, and other healthcare 
facility staff as appropriate about the presence of a person under 
investigation for COVID-19.
---------------------------------------------------------------------------

    \10\ https://www.cms.gov/files/document/qso-20-13-hospitalspdf.pdf-2.
---------------------------------------------------------------------------

    In this IFC, we are now requiring hospitals and CAHs to report 
information in accordance with a frequency, and in a standardized 
format, as specified by the Secretary during the PHE for COVID-19. 
Examples of data elements that may be required to be reported include 
things such as the number of staffed beds in a hospital and the number 
of those that are occupied, information about its supplies, and a count 
of patients currently hospitalized who have laboratory-confirmed COVID-
19. This list is not exhaustive of those data items that we may require 
hospitals and CAHs to submit, as specified by the Secretary (see 
https://www.hhs.gov/sites/default/files/covid-19-faqs-hospitals-hospital-laboratory-acute-care-facility-data-reporting.pdf for the 
current list of data items specified.).
    We believe that universal reporting by all hospitals and CAHs is 
and will be an important tool for supporting surveillance of COVID-19 
and for future planning to prevent the spread of the virus, especially 
to those most vulnerable and at risk to its effects, and we thank the 
thousands of hospitals and CAHs that have voluntarily reported this 
data in support of our efforts. However, while we recognize the 
important and immeasurable role that the timely and continued delivery 
of COVID-19 information plays in protecting both individual patients, 
as well as the overall health of the general public, we also recognize 
the crucial need for data reporting options that will help eliminate 
the duplicative and sometimes competing reporting requests that 
continue to place a significant burden on hospitals and CAHs whose 
resources are already stressed during this PHE for COVID-19.
    We expect that the new reporting requirements that will be 
specified by the Secretary, would include reporting channel options to 
make submission of data as user-friendly as possible to reduce the 
strain and burden hospitals and CAHs are currently experiencing as they 
face data requests from a multitude of federal, state, local, and 
private entities. The new standards will require hospitals and CAHs to 
report information on COVID-19 in a standardized format specified by 
the Secretary. Also, the information must be reported at a frequency 
and manner specified by the Secretary.
    We believe that a streamlined approach to reporting data will 
greatly assist the White House Coronavirus Task Force (COVID-19 Task 
Force) in tracking the movement of the virus and identifying potential 
problems in the healthcare delivery system. The completeness, accuracy, 
and timeliness of the data will inform the COVID-19 Task Force 
decisions on capacity and resource needs to ensure a fully coordinated 
effort across the nation. Furthermore, we believe that consistent 
processes and streamlined methods for the reporting of COVID-19 
information will possibly reduce future, and urgent, requests for such 
data.
    We note here that the new reporting requirements at Sec. Sec.  
482.42(e) and 485.640(d) do not relieve a hospital or a CAH, 
respectively, of its obligation to continue to comply with Sec. Sec.  
482.42(a)(3)

[[Page 54826]]

or 485.640(a)(3), each of which requires a facility to address any 
infection prevention and control issues identified by public health 
authorities. We believe that the requirements, as specified in this 
rule, to collect and transmit these data, will also encourage greater 
awareness and promotion of best practices in infection prevention and 
control within these facilities.
    This reporting requirement supports our responsibility to protect 
and ensure the health and safety of hospital and CAH patients by, among 
other things, ensuring that these facilities follow infection 
prevention and control protocols based on recognized standards of 
practice. We believe that these reporting requirements are necessary 
for CMS to monitor whether individual hospitals and CAHs are 
appropriately tracking, responding to, and mitigating the spread and 
impact of COVID-19 on patients, the staff who care for them, and the 
general public. We believe that this action reaffirms our commitment to 
protecting the health and safety of all patients who receive care at 
the approximately 6,200 Medicare- and Medicaid-participating hospitals 
and CAHs nationwide.
    As discussed in section III. of this IFC, ``Waiver of Proposed 
Rulemaking,'' we believe the urgency of this PHE for COVID-19 
constitutes good cause to waive the normal notice-and-comment process 
under the APA and section 1871(b)(2)(C) of the Act. Waiving notice and 
comment is in the public interest because time is of the essence in 
tracking the incidence and impact of COVID-19 in hospitals and CAHs; 
such information will assist public health officials in detecting 
outbreaks and saving lives.
    The applicability date for Sec.  482.42(e) for hospitals and Sec.  
485.640(d) for CAHs is the date of the publication of this rule as 
noted in the DATES section of this IFC.
2. Enforcement of Requirements for Hospitals and Critical Access 
Hospitals (CAHs) To Report COVID-19 Data
    We believe reporting by hospitals and CAHs is an important tool for 
supporting surveillance of COVID-19 and we will enforce violations of 
reporting requirements to the extent authorized by the Secretary. 
Should a hospital or CAH fail to consistently report test results 
throughout the duration of the PHE for COVID-19, it will be non-
compliant with the hospital and the CAH CoPs set forth at Sec. Sec.  
482.42(e) and 485.640(d), respectively, and subject to termination as 
defined at 42 CFR 489.53(a)(3). We have taken a position on the 
importance of COVID-19 test results reporting in other provider areas, 
including use of CMPs for nursing homes that fail to report, and find 
it prudent to enact penalties for hospitals and CAHs that similarly 
fail to report COVID-19 test results. CMS currently lacks the statutory 
authority to impose CMPs against hospitals and CAHs; however, 
intermediate penalties such as CMPs have been an extremely useful tool 
in the enforcement of reporting requirements for nursing homes, helping 
to achieve 98 percent compliance. Therefore, we will continue to 
utilize all enforcement and payment authorities available to 
incentivize and promote compliance with all health and safety 
requirements, as allowed by statute and regulation.

C. Requirements for Laboratories To Report SARS-CoV-2 Test Results 
During the PHE for COVID-19

    Assuring a rapid and thorough public health response to the COVID-
19 pandemic relies on having complete and comprehensive laboratory 
testing data, including standardized test results, relevant demographic 
details, and additional information that can improve both the response 
to SARS-CoV-2 and treatment of COVID-19. These data can contribute to 
understanding disease incidence and trends: Initiating epidemiologic 
case investigations, assisting with contact tracing, assessing 
availability and use of testing resources, and identifying supply chain 
issues for reagents and other material. Laboratory testing data, in 
conjunction with case reports and other data, also provide vital 
guidance for mitigation and control activities.
    Section 18115(a) of the CARES Act requires every laboratory that 
performs or analyzes a test that is intended to detect SARS-CoV-2 or to 
diagnose a possible case of COVID-19 (hereinafter referred to as a 
``SARS-CoV-2 test'' or ``COVID-19 diagnostic test'') to report the 
results from each such test to the Secretary until the end of the PHE 
for COVID-19. In addition, the statute authorizes the Secretary to 
prescribe the form and manner, and timing and frequency, of such 
reporting. As indicated in HHS guidance issued on June 4, 2020,\11\ in 
an effort to receive these data in the most efficient and effective 
manner, the Secretary has required that all data be reported through 
existing public health data reporting methods. The June 4, 2020 
guidance states that ``as a guiding principle, data should be sent to 
state or local public health departments using existing reporting 
channels (in accordance with state law or policies) to ensure rapid 
initiation of case investigations by those departments, concurrent to 
laboratory results being shared with an ordering provider, or patient 
as applicable.'' \12\
---------------------------------------------------------------------------

    \11\ COVID-19 Pandemic Response, Laboratory Data Reporting: 
Section 18115 of the CARES Act, https://www.hhs.gov/sites/default/files/covid-19-laboratory-data-reporting-guidance.pdf.
    \12\ https://www.hhs.gov/sites/default/files/covid-19-laboratory-data-reporting-guidance.pdf.
---------------------------------------------------------------------------

    The June 4, 2020 guidance further explains that ``all 
laboratories--including laboratories, testing locations operating as 
temporary overflow or remote locations for a laboratory, and other 
facilities or locations performing testing at point of care or with at-
home specimen collection related to SARS-CoV-2--shall report data for 
all testing completed, for each individual tested, within 24 hours of 
results being known or determined, on a daily basis to the appropriate 
state or local public health department based on the individual's 
residence.''
    On October 31, 1988, Congress enacted the CLIA (Pub. L. 100-578) 
(codified as amended at 42 U.S.C. 263a) requiring any laboratory that 
examines human specimens for the purpose of providing information for 
the diagnosis, prevention, or treatment of any disease or impairment 
of, or the assessment of health, of human beings to be certified by the 
Secretary for the categories of examinations or procedures performed by 
the laboratory. The implementing regulations at 42 CFR part 493 specify 
the conditions and standards that must be met to achieve and maintain 
CLIA certification. These conditions and standards strengthen federal 
oversight of clinical laboratories and help ensure the accuracy and 
reliability of patient test results.
    Currently, the CLIA program only collects non-waived testing 
specialty and subspecialty information from laboratories issued a 
Certificate of Compliance (CoC), Certificate of Accreditation (CoA), or 
Certificate of Registration (CoR). Such information is collected for 
certain specialties, subspecialties, and analytes for proficiency 
testing purposes and during surveys to ensure that the laboratory is 
meeting CLIA requirements for the level and specialty/subspecialty of 
testing performed. CMS does not know the complete universe of 
laboratories performing SARS-CoV-2 testing, or which tests are being 
performed as information related to specific test systems is not 
captured in our database.
    While we collect this information when laboratories initially apply 
for all certificate types, subsequently it is only

[[Page 54827]]

collected for CoC and CoA laboratories during an initial, 
recertification, validation, or complaint survey, as described above. 
This data is collected to ensure that such labs are meeting the 
applicable CLIA test complexity testing quality requirements. 
Certificate of Waiver (CoW) and Certificate for Provider-Performed 
Microscopy (PPM) laboratories are not required to submit information 
related to updating their test menu as long as the new testing falls 
under their current certificate. During this PHE for COVID-19, the Food 
and Drug Administration (FDA) is issuing Emergency Use Authorizations 
for in vitro diagnostics that are categorized to be run by certain 
CLIA-certified laboratories (which may include laboratories with a CoW 
or Certificate for PPM), depending on the scope and FDA's 
categorization of the authorized test. SARS-CoV-2 testing includes 
molecular, antibody, and antigen methods. Molecular (RT-PCR) tests 
detect the virus's genetic material and antigen tests detect specific 
proteins on the surface of the virus. Both types of tests are used to 
detect active or acute infection with SARS-CoV-2. Serology (antibody) 
testing is used to look for the presence of antibodies which are 
proteins produced by the body in response to infections. Due to the 
variety of COVID-19 testing available, our current informational 
limitations present a gap in understanding the universe of laboratories 
performing SARS-CoV-2 testing.
    We believe that, by collecting testing information, the CLIA 
program will be able to identify quality and accuracy issues with 
laboratories performing SARS-CoV-2 testing during this PHE for COVID-
19. Currently we do not have a specific reporting requirement that 
allows for collection of SARS-CoV-2 testing information. Once we have 
accurate information on which laboratories are performing SARS-CoV-2 
testing, our oversight authority will allow us to survey these 
laboratories to determine if they are performing testing within their 
appropriate CLIA certificate and that they are meeting applicable CLIA 
requirements to perform accurate and reliable testing. For CMS to 
ensure laboratories are reporting SARS-CoV-2 test results, the CLIA 
regulations need to be modified to require SARS-CoV-2 test result 
reporting. In the interest of ensuring quality laboratory testing 
during the PHE for COVID-19, we are finalizing the requirement for 
submission of SARS-CoV-2 test results to the Secretary. Specifically, 
we are finalizing that during the PHE for COVID-19, as defined in Sec.  
400.200, each laboratory that performs a SARS-CoV-2 test must report 
SARS-CoV-2 test results in such form and manner, and at such timing and 
frequency, as the Secretary may prescribe. We are also finalizing that 
failure to submit SARS-CoV-2 test results to the Secretary will be 
considered a violation of the new CLIA reporting requirements, 
resulting in condition level deficiencies for which CMPs or other 
penalties may apply.
    These regulatory amendments at Sec. Sec.  493.41 and 493.1100(a) 
will require all laboratories, including, those holding a CoW, to 
report SARS-CoV-2 test results to the Secretary for the duration of the 
PHE for COVID-19, and specify that failure to do so will result in a 
condition level violation of the CLIA regulations. Should a laboratory 
not report required SARS-CoV-2 test results, we will impose a CMP under 
Sec. Sec.  493.1804 and 493.1834.
    We are adding or amending the following regulations:
     At Sec.  493.2, Definitions, we are amending the 
definition of ``Condition level requirements'' to include the 
requirements in Sec.  493.41. This change is necessary to allow for the 
imposition of CMPs on CoW laboratories that fail to comply with Sec.  
493.41 during the Secretary's PHE declaration for COVID-19 or any 
extension of such declaration.
     At Sec.  493.41, we are adding a that, for the duration of 
the PHE for COVID-19, CoW laboratories report SARS-CoV-2 test results 
to the Secretary.
     At Sec.  493.555, we are amending the provision by adding 
paragraph (c)(6) requiring that, for the duration of the PHE for COVID-
19, CMS-deemed Accreditation Organizations (AO) and State Licensure 
Programs, Exempt States (ES), notify CMS within 10 days after 
identifying a laboratory that fails to report SARS-CoV-2 test results 
as required at Sec. Sec.  493.41 and 493.1100(a).
     At Sec.  493.1100, we are adding paragraph (a) which 
requires that, for the duration of the PHE for COVID-19, all 
laboratories performing non-waived SARS-CoV-2 testing report SARS-CoV-2 
test results to the Secretary.
     At Sec.  493.1804, we are revising paragraph (c)(1) to 
allow us to impose alternative sanctions (including CMPs) on CoW 
laboratories for failure to comply with Sec. Sec.  493.41 and 
493.1100(a) during the PHE for COVID-19.
     At Sec.  493.1834, we are amending the provision by adding 
paragraph (d)(2)(iii) to define the per day CMP amounts that may be 
imposed as a result of SARS-CoV-2 reporting violations. Such CMPs will 
be $1000 for the first day of noncompliance with the new reporting 
requirements, and $500 for each subsequent day the laboratory fails to 
report SARS-CoV-2 test results. The statute allows for the imposition 
of CMPs in an amount not to exceed $10,000 for each violation (for 
example, per sample not reported) or for each day of substantial 
noncompliance. We believe imposing CMPs based on a per day basis is a 
fairer and more effective penalty for failure to report than a per 
violation basis. The latter could lead to large CMPs for brief lapses 
in reporting.
    The CLIA regulations at Sec.  493.551(a)(1) require both the AOs 
and ESs to have requirements that are equal to, or more stringent than, 
the CLIA condition-level requirements, so we would expect the AOs and 
ESs to have equivalent reporting requirements to CMS. AOs do not impose 
CMPs; however, ESs do have the ability to impose CMPs, so we would 
expect ESs to have an equivalent penalty structure to CMS. The ESs are 
generally approved by CMS to operate their own oversight programs so we 
would expect that the two ESs would report these laboratories to CMS, 
but would then impose the penalties based on their updated CMS-approved 
standards. In the case of the accredited laboratories, the laboratories 
identified as not reporting SARS-CoV-2 results as required would result 
in CMS taking a subsequent enforcement action as described in this 
section.

D. Quality Reporting: Updates to the Extraordinary Circumstances 
Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in 
Response to the PHE for COVID-19, and Update to the Performance Period 
for the FY 2022 SNF VBP Program

    As part of our response to the COVID-19 pandemic, on March 22, 
2020, we granted ECEs to ESRD facilities, hospitals, and SNFs to reduce 
the data collection and reporting burden on these facilities and 
providers so they could direct their full resources to patient care 
during the early months of the pandemic. Each of these ECEs relieved 
these providers and facilities of their obligation to report data for 
the fourth quarter calendar year (CY) 2019, first quarter CY 2020 and 
second quarter CY 2020, but we stated that we would score such data if 
optionally reported.
    We continue to believe that the data we have excepted from 
mandatory reporting under these ECEs serves multiple purposes, 
including allowing us to understand the impact of the PHE for COVID-19 
on quality of care. However, we are concerned about the national 
comparability of these data due to the geographic differences of COVID-
19 incidence rates and hospitalizations, along with different impacts 
resulting from different state and local laws and

[[Page 54828]]

policy changes implemented in response to COVID-19.
    As a result, we believe it is necessary in this IFC to update the 
ECEs that we have granted for the following value-based purchasing 
programs:
     The End-Stage Renal Disease Quality Incentive Program 
(ESRD QIP);
     The Hospital-Acquired Condition (HAC) Reduction Program;
     The Hospital Readmissions Reduction Program (HRRP); and
     The Hospital Value-Based Purchasing (HVBP) Program.
    Under these updated ECEs, we will only score data that was 
optionally reported for fourth quarter CY 2019. We will also exclude 
all data that was optionally reported for the first or second quarter 
of CY 2020 from our calculation of performance. We note that all of the 
ECEs that have been granted for the time periods discussed above have 
now ended.
    In this IFC, we are also updating the performance period for the FY 
2022 SNF VBP Program because we are concerned that using qualifying 
claims from the two quarters that are not excepted under the ECE for 
COVID-19 (October 1, 2019 through December 31, 2019 (Q4 2019), and July 
1, 2020 through September 30, 2020 (Q3 2020)) for all SNFs nationwide 
to calculate the SNF Readmission Measure (SNFRM) for the FY 2022 
Program will not yield measure scores that reliably reflect SNF quality 
of care as determined by hospital readmission rates. As explained more 
fully below, the new performance period will be April 1, 2019 through 
December 31, 2019 and July 1, 2020 through September 30, 2020.
1. Updates to ESRD QIP: Utilization of Fourth Quarter CY 2019 ESRD QIP 
Data and the Removal of the Option for Facilities to Opt-Out of the 
Extraordinary Circumstances Exception (ECE) Granted With Respect to 
First and Second Quarter (CY) 2020 ESRD QIP Data
a. Background of the ESRD QIP ECE Policy
    The ESRD QIP is authorized under section 1881(h) of the Act, and it 
aims to promote high-quality care in dialysis facilities by linking a 
portion of their payment under the ESRD prospective payment system 
(PPS) directly to their performance on quality of care measures. The 
ESRD QIP assesses facility performance on clinical and reporting 
measures adopted through the rulemaking process and scores dialysis 
facilities based on that performance. A facility that does not meet or 
exceed the minimum total performance score (TPS) set by CMS for the 
applicable payment year receives up to a 2 percent reduction to its 
ESRD PPS payment for that year.
    In the CY 2015 ESRD PPS final rule (79 FR 66189 through 66190), we 
adopted an ECE policy for the ESRD QIP, which recognized that there are 
times when facilities are unable to submit required quality data due to 
extraordinary circumstances that are not within their control, and that 
facilities should not be penalized for such circumstances or have their 
burden unduly increase during these times. This policy was implemented 
under the authority of section 1881(h)(3)(A)(i) of the Act, which 
requires the Secretary to develop a methodology for assessing the total 
performance of each provider of services and renal dialysis facility 
based on performance standards for the measures selected under section 
1881(h)(2) of the Act for a performance period established under 
section 1881(h)(4)(D) of the Act. We interpreted section 
1881(h)(3)(A)(i) of the Act to enable us to configure the methodology 
for assessing facilities' total performance such that we would not 
require a facility to submit, nor penalize a facility for failing to 
submit, data on any ESRD QIP quality measure data from any month in 
which a facility is granted an ECE.
    In the CY 2018 ESRD PPS final rule (82 FR 50761 through 50763), we 
modified the requirements for the ESRD QIP's ECE policy to further 
align that policy with the ECE policy adopted by other quality 
reporting and VBP programs. In the CY 2020 ESRD PPS final rule (84 FR 
60714), we codified requirements for the ECE policy at 42 CFR 
413.178(d)(3) through (7), including a new option for facilities to 
reject an ECE granted by CMS under certain circumstances. We stated 
that this option would provide facilities with flexibility under the 
ECE policy. We also adopted this provision to provide further guidance 
to the public on the scope of our ECE policy.
b. Background of the ESRD QIP ECE Granted in Response to the PHE for 
COVID-19
    On March 22, 2020, in response to COVID-19, we announced relief for 
clinicians, providers, hospitals and facilities participating in 
Medicare quality reporting programs (QRPs) and VBP programs.\13\ On 
March 27, 2020, we published a supplemental guidance memorandum that 
described in more detail the scope and duration of the ECE we were 
granting under each Medicare QRP and VBP program.\14\
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    \13\ CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
    \14\ CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
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    Under the ECE for the PHE for COVID-19 that we granted to all 
facilities participating in the ESRD QIP, such facilities are currently 
excepted from the following reporting requirements and submission 
deadlines:
     For the National Healthcare Safety Network (NHSN) blood 
stream infection (BSI) clinical measure and NHSN Dialysis Event 
reporting measure:
    ++ March 31, 2020, June 30, 2020, September 30, 2020 reporting 
deadlines for encounters during the following periods:
    --October 1, 2019 to December 31, 2019 (Q4 2019)--We noted that 
data from the 4th quarter 2019 would be utilized if submitted.
    --January 1, 2020 to March 30, 2020 (Q1 2020).
    --April 1, 2020 to June 30, 2020 (Q2 2020).
     For ESRD QIP CROWNWeb reporting deadlines and applicable 
clinical months:
    ++ March 31, 2020 (January 2020 clinical month).
    ++ April 30, 2020 (February 2020 clinical month).
    ++ June 1, 2020 (March 2020 clinical month).
    ++ June 30, 2020 (April 2020 clinical month).
    ++ August 3, 2020 (May 2020 clinical month).
    ++ August 31, 2020 (June 2020 clinical month).
     For the Consumer Assessment of Healthcare Providers and 
Systems In-Center Hemodialysis (ICH-CAHPS) Survey:
    ++ The data collected to fulfill the July 2020 data submission 
deadline for the Spring 2020 Survey.
    ++ Data collected May 1, 2020-July 10, 2020.
     For ESRD QIP claims-based measures, claims data during the 
following times would be excluded from measure calculations:
    ++ March 1, 2020-June 30, 2020.
    With respect to the requirement that facilities selected for 
validation under one or both ESRD QIP data validation studies (CROWNWeb 
and NHSN) submit medical records within 60 days of the date identified 
on the written request letter, we excepted facilities from that 
requirement as follows:
     NHSN and CROWNWeb record requests for discharge periods:
    ++ January 1, 2019-March 31, 2019 (Q1 2019).

[[Page 54829]]

    ++ April 1, 2019-June 30, 2019 (Q2 2019).
    In the March 27, 2020 guidance, we also advised that facilities 
should be aware of the potential subsequent impact to a facility's TPS 
when data are excluded from score calculations, and noted that 
facilities impacted by COVID-19 could elect to opt out of this ECE by 
emailing their request to the ESRD QIP at [email protected] by June 
19, 2020.
c. Update to the ESRD QIP ECE Policy for the PHE for COVID-19
    We continue to believe that the ESRD QIP data we have excepted 
serves multiple purposes, including allowing us to understand the 
impact of the PHE for COVID-19 on the quality of ESRD care provided to 
Medicare beneficiaries and supporting the continued analysis and 
evaluation of ESRD quality data submitted to CROWNWeb. However, we are 
concerned about the national comparability of these data due to the 
geographic differences of COVID-19 incidence rates and 
hospitalizations, along with different impacts resulting from different 
state and local law and policy changes implemented in response to 
COVID-19. For these reasons, we are adopting in this IFC two updates to 
our current ECE policy for the ESRD QIP. First, we are updating our 
regulations at 42 CFR 413.178(d)(7) to state that a facility has opted 
out of the ECE for COVID-19 with respect to the reporting of fourth 
quarter 2019 NHSN data if the facility actually reported the data by 
the March 31, 2020 deadline but did not notify CMS that it would do so. 
Additionally, we are removing the ability of facilities to opt-out of 
the ECE we granted with respect to Q1 and Q2 2020 ESRD QIP data.
i. CY 2019 Fourth Quarter NHSN ESRD QIP Measure Data
    As described previously, we excepted facilities from the 
requirement to report fourth quarter CY 2019 data for the NHSN BSI 
clinical measure and NHSN Dialysis Event reporting measure to alleviate 
the reporting burden on facilities responding to the PHE for COVID-19 
that would otherwise be required to report these data by the March 31, 
2020 submission deadline. However, in both the March 22nd and March 
27th guidance we also stated that we would utilize these data if 
submitted. At the time we announced the ECE for COVID-19, there were 
approximately 9 days (time period between March 22, 2020 to March 31, 
2020) remaining for facilities to submit their fourth quarter 2019 NHSN 
data, and nearly all facilities (97.6 percent) timely reported fourth 
quarter 2019 ESRD QIP data on these measures. These data also assess 
facility performance prior to the start of the PHE for COVID-19. Unlike 
the first and second quarter 2020 data, we do not have concerns about 
the national comparability or representativeness of the fourth quarter 
2019 NHSN data because those data reflect facility performance prior to 
the start of the PHE for COVID-19. In addition, nearly all facilities 
reported these data prior to the announcement of the ECE with the 
expectation that they would be used for scoring. Accordingly, we are 
updating our regulations at Sec.  413.178(d)(7) to state that a 
facility has opted out of the ECE for COVID-19 with respect to the 
reporting of fourth quarter 2019 NHSN data if the facility actually 
reported the data by the March 31, 2020 submission deadline but did not 
notify CMS that it would do so, and we will include these data when we 
calculate facility TPSs for PY 2021 and performance standards for PY 
2023. This change will enable us to use the data which, as we explain 
above, are reflective of facility performance and were reported with 
the expectation that they would be used for scoring. This change is 
also consistent with our statement in the ECE announcement that we 
would score these data if they were submitted. A facility that did not 
timely report its fourth quarter 2019 NHSN BSI clinical measure and 
NHSN Dialysis Event reporting measure data will not be eligible to 
receive scores on those measures for PY 2021.
ii. CY 2020 First and Second Quarter ESRD QIP Data
    Under our current policy, facilities may opt out of the ECE we 
proactively granted in response to the PHE for COVID-19, and continue 
to report ESRD QIP data. We implemented this policy to give facilities 
flexibility to continue to report, in particular where a facility does 
not believe it has been impacted by the extraordinary circumstance(s). 
We do not believe that is the case here, as the PHE for COVID-19 is a 
nationwide PHE and an overwhelming majority of facilities continue to 
be impacted by COVID-19. For example, regardless of protocols in place 
at facilities, dialysis patients concerned about being exposed to 
COVID-19 at a facility may decide to skip their treatment sessions.\15\ 
This could be reflected in quality metrics captured for the facility 
when the patients return to treatment. Furthermore, due to the national 
nature of this PHE for COVID-19, we believe performance scores for 
certain measures could be biased and not reflective of nationally 
comparable performance. Similarly, we are concerned that there may be 
indirect and unintended consequences of calculating scores using 
potentially biased data that may not reflect the facility's overall 
quality. Due to facilities having the option to submit or not submit 
data for this period, the data may not provide a nationally comparable 
assessment of performance. Thus, reporting bias is possible due to the 
voluntary submission of data; that is, a bias could be potentially 
introduced because only high performers and/or facilities not impacted 
or better resourced would choose to submit data, while impacted 
facilities and/or facilities with fewer resources would choose not to 
submit data. This would affect comparisons between facilities with 
different circumstances, and would not be in keeping with the program 
goal of national comparison. Therefore, we believe that it would be 
inappropriate to include data submitted regarding care provided during 
first and second quarter CY 2020 in our calculation of a facility's 
TPS, which is used to determine each facility's payment adjustment. 
Therefore, we are revising the opt out policy currently codified at 
Sec.  413.178(d)(7) to provide that the opt out policy does not apply 
to data excepted due to the PHE for COVID-19 with--that is, the first 
quarter and second quarters of CY 2020 ESRD QIP data.
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    \15\ See https://www.kidney.org/coronavirus/dialysis-covid-19.
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    Finally, although the ECE we granted for the ESRD QIP has ended, 
with data collection and reporting requirements having resumed July 1, 
2020, we understand that geographic differences in COVID-19 incidence 
continue to change during the PHE for COVID-19. To maintain flexibility 
for addressing the impact of COVID-19 on the ESRD QIP and determine how 
best to implement the program equitably, we are announcing in this IFC 
that if, as a result of an extension of the ECE for the whole country 
that we grant without a request or the submission of individual ECE 
requests, we do not have enough data to reliably measure national 
performance under the ESRD QIP, we may propose to not score facilities 
based on such limited data or make the associated payment adjustments 
to facilities under the ESRD PPS for the affected program year. For 
example, if we granted an ECE that excepted facilities from the 
requirement to report data for 11 of the 12 months of a given 
performance period, we would consider

[[Page 54830]]

not scoring or applying payment adjustments for the associated ESRD QIP 
payment year because data from the one non-excepted month may not be 
large enough to calculate reliable measure results for scoring 
purposes. Although the data themselves may be accurate, the measure(s) 
might not meet the reliability standards because of the small sample of 
the remaining non-excepted part of the performance period.\16\ In 
addition, in the scenario we describe above, it is plausible that only 
larger facilities would be able to meet the required case minimums to 
be scored in the non-excepted part of the performance period. We may 
conclude that only scoring remaining facilities would not produce an 
accurate national comparison of dialysis facilities. Alternatively, if 
we do not extend the ECE to cover Q3 and Q4 2020, it is possible that a 
majority of facilities might still submit individual ECE requests for 
those quarters and it is possible that so many facilities will submit 
individual ECE requests that we will not be able to produce a reliable 
national comparison. In both cases, we are concerned about using the 
measures calculated based on these data to score facilities under the 
ESRD QIP and base payment adjustments on those scores. If circumstances 
warrant, we may propose to suspend prospective application of program 
penalties or payment adjustments through the annual ESRD PPS proposed 
rule. However, in the interest of time and transparency, we may provide 
subregulatory advance notice of our intentions to suspend such 
penalties and adjustments through routine communication channels to 
facilities, vendors, and Quality Improvement Organizations (QIOs). The 
communications could include memos, emails, and notices on the public 
QualityNet website (https://www.qualitynet.org/). We welcome public 
comments on the update to our regulations at Sec.  413.178(d)(7) to 
consider a facility as having opted out of the ECE with respect to NHSN 
data reported for Q4 2019 if the facility actually reported the data by 
the submission deadline, without notifying CMS, and we will include 
these data when we calculate facility TPSs for PY 2021 and performance 
standards for PY 2023. We also welcome public comments on the exception 
we are finalizing to the ECE opt out policy for the ESRD QIP, and we 
will exclude any ESRD QIP data that facilities optionally reported 
during Q1 and Q2 2020 from our calculation of Payment Year 2022 TPSs 
and from the baseline for PY 2023.
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    \16\ See http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86453 and choose the 
``Evaluation Guidance'' link.
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2. Updates to the Application of the HAC Reduction Program ECE Policy 
in Response to the PHE for COVID-19
a. Background of the HAC Reduction Program ECE Policy
    The Hospital-Acquired Condition Reduction Program (``HAC Reduction 
Program'') is authorized under section 1886(p) of the Act and it aims 
to heighten awareness of HACs and reduce the number of incidences that 
occur through implementing the payment adjustments authorized under 
such statute. The HAC Reduction Program began affecting hospitals' 
Medicare payments with FY 2015 discharges (that is, October 1, 2014). 
In the FY 2016 Inpatient Prospective Payment System (IPPS)/Long-term 
Care Hospitals (LTCH) PPS final rule (80 FR 49579 through 49581), we 
adopted an ECE policy for the HAC Reduction Program, which recognized 
that there may be periods of time during which a hospital is affected 
by an extraordinary circumstance beyond its control. We noted that we 
considered the feasibility and implications of excluding data for 
certain measures for a limited period of time from the calculations of 
the hospital's measure results or Total HAC Score for the applicable 
performance period. We expressed our aim to minimize data excluded from 
the program to allow affected hospitals to continue to participate in 
the HAC Reduction Program for a given year if these hospitals continue 
to meet applicable measure minimum threshold requirements. We further 
observed that section 1886(p)(4) of the Act permits the Secretary to 
determine the applicable period for HAC data collection, and we 
interpreted the statute to allow us to determine that the period not 
include times when hospitals may encounter extraordinary circumstances. 
This policy was similar to the ECE policy for the Hospital Inpatient 
QRP, as initially adopted in the FY 2012 IPPS/LTCH PPS final rule (76 
FR 51651), and modified in the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50836) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277).
    In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49580 through 
49581), we also stated that this policy would not preclude CMS from 
granting ECEs to hospitals that do not request them if we determine at 
our discretion that a disaster or other extraordinary circumstance has 
affected an entire region or locale. We noted that if CMS makes such a 
determination to grant an ECE to hospitals in an affected region or 
locale, we will convey this decision through routine communication 
channels to hospitals, vendors, and QIOs, including, but not limited 
to, issuing memos, emails, and notices on the QualityNet website. When 
time permits we will also communicate such decisions through the annual 
IPPS/LTCH PPS proposed rule.
    In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38276 through 
38277), we modified the requirements for the HAC Reduction Program ECE 
policy to further align with the process used by other QRP and VBP 
programs for requesting an exception from program reporting due to an 
extraordinary circumstance not within a provider's control.
b. Background of the HAC Reduction Program ECE Granted for the PHE for 
COVID-19
    On March 22, 2020, in response to COVID-19, we announced relief for 
clinicians, providers, hospitals, and facilities participating in 
Medicare QRPs and VBP programs.\17\ On March 27, 2020, we published a 
supplemental guidance memorandum that described in more detail the 
scope and duration of the ECEs we were granting under each Medicare QRP 
and VBP program.\18\
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    \17\ CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
    \18\ CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
---------------------------------------------------------------------------

    Under the ECE granted to all eligible hospitals under the HAC 
Reduction Program, we stated that qualifying claims would be excluded 
from the measure calculations for the CMS Patient Safety Indicators 
(PSI) 90 during the periods January 1, 2020-March 31, 2020 (Q1 2020) 
and April 1, 2020-June 30, 2020 (Q2 2020). We also provided an 
exception to reporting for all chart-abstracted HAC Reduction Program 
measures for the May, August, and November 2020 submission deadlines 
(for reporting Q4 2019, Q1 2020, and Q2 2020 data, respectively). This 
exception includes the following NHSN HAI Measures:
    ++ NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome 
Measure, National Quality Forum (NQF) #0138.
    ++ NHSN Central Line-Associated Blood Stream Infection (CLABSI) 
Outcome Measure, NQF #0139.
    ++ NHSN Facility-wide Inpatient Hospital-onset Clostridium 
difficile

[[Page 54831]]

Infection (CDI) Outcome Measure, NQF #1717.
    ++ NHSN Facility-wide Inpatient Hospital-onset Methicillin-
Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure, NQF 
#1716.
    ++ American College of Surgeons--Centers for Disease Control and 
Prevention Harmonized Procedure Specific Surgical Site Infection (SSI) 
Outcome Measure, NQF #0753.
    We also advised that hospitals should be aware of the potential 
subsequent impact to the HAC Reduction Program minimum case threshold 
counts for inclusion in these programs.
c. Update to the HAC Reduction Program ECE Granted in Response to the 
PHE for COVID-19
    We continue to believe that the HAC Reduction Program data we have 
excepted serves multiple purposes, including allowing us to understand 
the impact of the PHE for COVID-19 on quality of care. Furthermore, the 
chart-abstracted measures in the HAC Reduction Program are calculated 
based on data submitted to the CDC's NHSN. We recognize that because 
the CDC uses the same data for epidemiological surveillance, hospitals 
may have reporting requirements which are not affected by our ECE (for 
example, state requirements). We are also concerned with the national 
comparability of these data due to the geographic differences of COVID-
19 incidence rates and hospitalizations along with different impacts 
resulting from different state and local law and policy changes 
implemented in response to COVID-19.
    For data which hospitals optionally report, we believe that the 
exception granted for those programs with data submission deadlines in 
April and May 2020 (that is, data from the fourth quarter of CY 2019) 
is distinct from the exceptions granted because data collected may be 
greatly impacted by the response to COVID-19 (that is, data from the 
first and second quarters of CY 2020).
i. CY 2019 Fourth Quarter Data
    As described previously, we excepted hospitals from the requirement 
to report fourth quarter CY 2019 data for the HAC Reduction Program to 
alleviate the reporting burden on hospitals that were responding to the 
PHE for COVID-19 during the May 18, 2020 data submission deadline. 
However, nearly all hospitals (95.3 percent) reported these data by the 
submission deadline, which reflects care provided prior to January 27, 
2020, which is the start of the PHE for COVID-19 under the Secretary's 
declaration of a PHE under section 319 of the PHSA. Therefore, we 
determined that it would be appropriate to include data that were 
optionally reported by hospitals for the fourth quarter of CY 2019 in 
calculating hospitals' Total HAC Scores, which are used to determine 
the worst-performing 25 percent of hospitals on HAC performance for 
assessing the 1 percent HAC Reduction Program penalty. This 
determination is consistent with the policy stated in the March 27, 
2020 guidance memo.\19\
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    \19\ CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
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ii. CY 2020 First and Second Quarter Data
    In our application of the ECE policy for the PHE for COVID-19, we 
excepted hospitals from the requirement to report first and second 
quarter of CY 2020 HAC Reduction Program chart-abstracted measures and 
stated we would exclude qualifying claims both because we hoped to 
alleviate the reporting burden on hospitals that were responding to the 
PHE for COVID-19 and because of our concern that the representativeness 
of the data collected during this period may be greatly impacted by the 
response to COVID-19.
    We also noted that if hospitals optionally chose to report data, we 
would use that data for program calculations. While we continue to 
encourage optional submission of data, we also aim to have the most 
representative comparison of hospital performance as possible and do 
not wish to unfairly penalize hospitals that were responding to COVID-
19. We believe that using CY 2020 optionally reported data may not 
provide a nationally comparable assessment of hospital performance for 
multiple reasons. First, allowing hospitals the option to voluntarily 
submit for this period may introduce reporting bias; that is, a bias 
introduced because, for example, only high performers and/or hospitals 
not impacted or better resourced would choose to submit data, which 
would render comparisons between hospitals with different circumstances 
not in keeping with the program goal of national comparison. In 
addition, a number of other factors could also contribute to our 
ability to accurately calculate a national comparison. For example, 
geographic differences in COVID-19 incidence rates and COVID-19 related 
hospitalizations and differences resulting from changes in referral and 
hospitalization patterns could both impact the national comparability 
of optionally submitted data. Because the HAC Reduction Program relies 
on a relative scoring methodology, we believe that it would be 
inappropriate and could disparately impact hospitals to include data 
from quarters excepted under CMS guidance for the PHE for COVID-19 in 
our calculation of hospitals' performance for the program.
    Finally, although the ECE we granted for the HAC Reduction Program 
has ended, with data collection and reporting requirements resuming 
July 1, 2020, we understand that geographic differences in COVID-19 
incidence continue to change during the PHE for COVID-19. To maintain 
flexibility for addressing the impact of COVID-19 on the HAC Reduction 
Program and determine how best to implement the program equitably, we 
are announcing that if, as a result of the extension of the ECE for the 
whole country that we grant without a request or the submission of 
individual ECE requests, we do not have enough HAC Reduction Program 
data to reliably measure national performance, we may propose to not 
score hospitals based on such limited data or make the associated 
payment adjustments to hospitals under the IPPS for the affected 
program year. If we grant another ECE in the future, we would not 
require that hospitals report the excepted data for the duration of the 
ECE. Although a hospital may voluntarily report data during the ECE, we 
may determine that such data will not be used for scoring purposes. We 
would still require that hospitals report the non-excepted data. 
However, we may determine that it would be inappropriate to score such 
data or base payment adjustments on it because of reliability concerns. 
For illustrative purposes only, if a PHE excepted enough quarters from 
the HAC Reduction Program's 24-month performance period to lead to 
unreliable measure calculations, we might consider not scoring for the 
fiscal year because the sample may not be large enough to calculate 
reliable measure results for scoring purposes. Although the data itself 
may be accurate, the measure(s) may not meet the reliability standards 
because of the small sample of the remaining non-excepted part of the 
performance period. In addition, in the scenario we describe above, it 
is likely that only larger hospitals would be able to meet the required 
case minimums to be scored in the non-excepted part of the performance 
period. We may conclude that only scoring those remaining large 
hospitals will not produce an accurate national

[[Page 54832]]

comparison of hospitals. Alternatively, if we do not extend the ECE to 
cover Q3 and Q4 2020, it is possible that a majority of providers may 
still submit individual ECE requests for those quarters and it is 
possible that so many hospitals will submit individual ECE requests 
that we will not be able to produce a reliable national comparison. In 
both cases, we are concerned about using the measure calculated based 
on these data to score hospitals under the HAC Reduction Program and 
base payment adjustments on those scores. If circumstances warrant, we 
may propose to suspend prospective application of program penalties or 
payment adjustments through the annual IPPS/LTCH PPS proposed rule. 
However, in the interest of time and transparency, we may provide 
subregulatory advance notice of our intentions to suspend such 
penalties and adjustments through routine communication channels to 
hospitals, vendors, and Quality Improvement Organizations (QIOs). The 
communications could include memos, emails, and notices on the public 
QualityNet website (https://www.qualitynet.org/). We welcome public 
comments on our policy to exclude any data submitted regarding care 
provided during the first and second quarter of CY 2020 from our 
calculation of performance for the FY 2022 and FY 2023 program years.
3. Update to the HRRP ECE Granted in Response to the PHE for COVID-19
a. Background of the Hospital Readmissions Reduction Program ECE Policy
    In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49542 through 
49543), we adopted an ECE policy for the Hospital Readmissions 
Reduction Program, which recognized that there may be periods of time 
during which a hospital is not able to submit all claims (from which 
readmission measures data are derived) in an accurate or timely fashion 
due to an extraordinary circumstance beyond its control. We noted that 
we considered the feasibility and implications of excluding data for 
certain measures for a limited period of time from the calculations for 
a hospital's excess readmissions ratios for the applicable performance 
period. We expressed that we hoped to minimize data excluded from the 
program to allow affected hospitals to continue to participate in the 
HRRP for a given year if these hospitals otherwise continue to meet 
applicable measure minimum threshold requirements. We further observed 
that section 1886(q)(5)(D) of the Act permits the Secretary to 
determine the applicable period for readmissions data collection, and 
we interpreted the statute to allow us to determine that the period not 
include times when hospitals may encounter extraordinary circumstances. 
This policy was similar to the ECE policy for the Hospital Inpatient 
Quality Reporting (IQR) Program, as initially adopted in the FY 2012 
IPPS/LTCH PPS final rule (76 FR 51651), and modified in the FY 2014 
IPPS/LTCH PPS final rule (78 FR 50836) and the FY 2015 IPPS/LTCH PPS 
final rule (79 FR 50277).
    In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49542), we also 
stated that this policy would not preclude CMS from granting ECEs to 
hospitals that do not request them if we determined at our discretion 
that a disaster or other extraordinary circumstance has affected an 
entire region or locale. We noted that if CMS made such a determination 
to grant an ECE to hospitals in an affected region or locale, we would 
convey this decision through routine communication channels to 
hospitals, vendors, and QIOs, including, but not limited to, issuing 
memos, emails, and notices on the QualityNet website.
    In the 2018 IPPS/LTCH PPS final rule (82 FR 38239), we modified the 
requirements for the HRRP ECE policy to further align with the 
processes used by other QRP and VBP programs for requesting an 
exception from program reporting due to an extraordinary circumstance 
not within a provider's control.
b. Background of the HRRP ECE Granted for the PHE for COVID-19
    On March 22, 2020, in response to COVID-19, CMS announced relief 
for clinicians, providers, hospitals and facilities participating in 
Medicare QRPs and VBP programs.\20\ Specifically, we announced that we 
were granting ECEs for certain data reporting requirements and 
submission deadlines for the first and second quarters of CY 2020. On 
March 27, 2020, we published a supplemental guidance memorandum that 
described the scope and duration of the ECEs we were granting under 
each Medicare QRP and VBP program.\21\
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    \20\ CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
    \21\ CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
---------------------------------------------------------------------------

    Under the ECE for the PHE for COVID-19 that we granted to all 
hospitals subject to the HRRP, qualifying claims from January 1, 2020 
through March 31, 2020 (Q1 2020) and April 1, 2020 through June 30, 
2020 (Q2 2020) will be excluded from the measure calculations for the 
readmission measures used in the program. We also advised that 
hospitals should be aware of the potential subsequent impact to the 
HRRP minimum case threshold counts for inclusion in this program.
c. Update to the HRRP ECE Granted in Response to the PHE for COVID-19
    We continue to believe that the readmissions claims data we have 
excepted serve multiple purposes, including allowing us to understand 
the impact of the PHE for COVID-19 on the quality of care provided to 
Medicare beneficiaries. However, we are concerned that excess 
readmission ratios calculated using excepted claims data could affect 
the national comparability of these data due to the geographic 
differences of COVID-19 incidence rates and hospitalizations along with 
different impacts resulting from different state and local law and 
policy changes implemented in response to COVID-19. Thus, the excess 
readmission ratios and payment adjustments calculated from excepted 
data during the PHE for COVID-19 may not provide a nationally 
comparable assessment of performance in keeping with the program goal 
of national comparison.
i. CY 2019 Fourth Quarter Data
    Data were not excepted from the fourth quarter of CY 2019 from the 
HRRP. The readmissions measures used to evaluate performance are 
claims-based measures and do not require hospitals to report data to 
CMS. Additionally, we believe that the quality measure data regarding 
care provided prior to the PHE would not be affected by the PHE for 
COVID-19.
ii. CY 2020 First and Second Quarter Data
    In our application of the ECE policy for the PHE for COVID-19, we 
excepted the use of claims data from the first and second quarters of 
CY 2020 from the HRRP because of our concern that the data collected 
during this period may be greatly impacted by the response to COVID-19, 
and therefore, may not be reflective of a hospital's performance during 
this time due to concerns with national comparability, as described 
above. Therefore, we believe that it would be inappropriate to include 
claims data submitted regarding care provided during first and second 
quarter CY 2020 in our calculation of a hospital's performance that 
assesses their performance as compared to other

[[Page 54833]]

hospitals in the nation to determine penalties for excess readmissions.
    Finally, although the ECE we granted for HRRP has ended, with data 
collection and reporting requirements having resumed July 1, 2020, we 
understand that geographic differences in COVID-19 incidence continue 
to change during the PHE for COVID-19. To maintain flexibility for 
addressing the impact of COVID-19 on HRRP and determine how best to 
implement the program equitably, we are announcing in this IFC that if, 
as a result of the extension of the ECE for the whole country that we 
grant without a request or the submission of individual ECE requests, 
we do not have enough data to reliably measure national performance, we 
may propose to not score hospitals based on such limited data or make 
the associated payment adjustments to hospitals under the IPPS for the 
affected program year. If we grant another ECE in the future, we would 
not require that hospitals report the excepted data for the duration of 
the ECE. Although a hospital may report data during the ECE, we may 
determine that such data will not be used for scoring purposes. We 
would still require that hospitals report the non-excepted data. 
However, we may determine that it would be inappropriate to score such 
data or base payment adjustments on it because of reliability concerns. 
For illustrative purposes only, if a PHE excepted enough quarters from 
the HRRP 36-month performance period to lead to unreliable measure 
calculations, we might consider not scoring for the entire year because 
the sample may not be large enough to calculate reliable measure 
results for scoring purposes. Although the data itself may be accurate, 
the measure(s) may not meet the reliability standards because of the 
small sample of the remaining non-excepted part of the performance 
period. In addition, in the scenario we describe above, it is likely 
that only larger hospitals would be able to meet the required case 
minimums to be scored in the non-excepted part of the performance 
period. We may conclude that only scoring those remaining large 
hospitals will produce an accurate national comparison of hospitals. 
Alternatively, if we do not extend the ECE to cover Q3 and Q4 2020, it 
is possible that a majority of providers may still submit individual 
ECE requests for those quarters and it is possible that so many 
hospitals will submit individual ECE requests that we will not be able 
to produce a reliable national comparison. In both cases, we are 
concerned about using the measures calculated based on these data to 
score hospitals under the HRRP and base payment adjustments on those 
scores. If circumstances warrant, we may propose to suspend prospective 
application of program penalties or payment adjustments through the 
annual IPPS/LTCH PPS proposed rule. However, in the interest of time 
and transparency, we may provide subregulatory advance notice of our 
intentions to suspend such penalties and adjustments through routine 
communication channels to facilities, vendors, and QIOs). The 
communications could include memos, emails, and notices on the public 
QualityNet website (https://www.qualitynet.org/).
    We welcome public comments on our policy to exclude any data 
submitted regarding care provided during first and second quarter of CY 
2020 from our calculation of performance for FY 2022, FY 2023, and FY 
2024.
4. Update to the Hospital VBP Program ECE Granted in Response to the 
PHE for COVID-19
a. Background of the Hospital VBP ECE Policy
    In the FY 2014 IPPS/LTCH final rule (78 FR 50704 through 50707), we 
finalized a disaster/ECE policy for the Hospital VBP Program. We stated 
that, upon a hospital's request, we will consider providing an 
exception from the Hospital VBP Program requirements to hospitals 
affected by natural disasters or other extraordinary circumstances (78 
FR 50704 through 50706). Specifically, we stated that we interpreted 
the minimum number of cases and measures requirement in sections 
1886(o)(1)(C)(ii)(III) and (IV) of the Act to not include any measures 
or cases for which a hospital has submitted data during a performance 
period for which the hospital has been granted a Hospital VBP Program 
ECE.
    In the May 8th COVID-19 IFC (85 FR 27550), we modified the Hospital 
VBP Program's ECE policy to allow us to grant ECE exceptions to 
hospitals which have not requested them when we determine that an 
extraordinary circumstance that is out of their control, such as an act 
of nature (for example, a hurricane) or PHE (for example, the COVID-19 
pandemic), affects an entire region or locale, in addition to retaining 
the individual ECE request policy (85 FR 27597 through 27598). We 
stated that if we grant an ECE to hospitals located in an entire region 
or locale under this revised policy and, as a result of granting that 
ECE, one or more hospitals located in that region or locale does not 
report the minimum number of cases and measures required to enable us 
to calculate a TPS for that hospital for the applicable program year, 
the hospital will be excluded from the Hospital VBP Program for the 
applicable program year. We also stated that a hospital that does not 
report the minimum number of cases or measures for a program year will 
not receive a 2 percent reduction to its base operating diagnosis-
related group (DRG) payment amount for each discharge in the applicable 
program year, and will also not be eligible to receive any value-based 
incentive payments for the applicable program year. We referred readers 
to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42399 through 42400) for 
the minimum number of measures and cases that we currently require 
hospitals to report in order to receive a TPS for a program year under 
the Hospital VBP Program.
b. Background of the Hospital VBP Program ECE Granted in Response to 
the PHE for COVID-19
    On March 22, 2020, in response to COVID-19, CMS announced relief 
for clinicians, providers, hospitals, and facilities participating in 
Medicare QRPs and VBP programs.\22\ On March 27, 2020, CMS published a 
supplemental guidance memorandum that described in more detail the 
scope and duration of the ECEs we were granting under each Medicare QRP 
and VBP program.\23\
---------------------------------------------------------------------------

    \22\ CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
    \23\ CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
---------------------------------------------------------------------------

    Specifically, we granted an ECE for the PHE for COVID-19 to all 
hospitals participating in the Hospital VBP Program for the following 
reporting requirements:
     Hospitals will not be required to report data for the NHSN 
HAI measures and Hospital Consumer Assessment of Healthcare Providers 
and Systems (HCAHPS) survey for the following quarters: October 1, 2019 
through December 31, 2019 (Q4 2019), January 1, 2020 through March 31, 
2020 (Q1 2020), and April 1, 2020 through June 30, 2020 (Q2 2020). 
However, hospitals can optionally submit part or all of these data by 
the posted submission deadlines on the Hospital VBP Program QualityNet 
site (available at https://www.qualitynet.org/inpatient/iqr/participation). This includes the following specific measures:
    ++ HCAHPS, NQF #0166.

[[Page 54834]]

    ++ NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome 
Measure, NQF #0138.
    ++ NHSN CLABSI Outcome Measure, NQF #0139.
    ++ NHSN Facility-wide Inpatient Hospital-onset CDI Outcome Measure, 
NQF #1717.
    ++ NHSN Facility-wide Inpatient Hospital-onset MRSA Bacteremia 
Outcome Measure, NQF #1716.
    ++ American College of Surgeons--Centers for Disease Control and 
Prevention Harmonized Procedure SSI Outcome Measure, NQF #0753.
    In the March 27, 2020 guidance, we also advised that hospitals 
should be aware of the potential subsequent impact to its Hospital VBP 
Program minimum case threshold counts for inclusion in that program, 
and that data from the impacted quarters for the HCAHPS survey and HAI 
measures would be used if submitted voluntarily.
     The ECE also stated that we would exclude qualifying 
claims data from measure calculations for the following quarters: 
January 1, 2020 through March 31, 2020 (Q1 2020) and April 1, 2020 
through June 30, 2020 (Q2 2020). This exception applies to the 
following measures:
    ++ Medicare Spending Per Beneficiary (MSPB)-Hospital, NQF #2158.
    ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate 
Following Acute Myocardial Infarction (AMI) 30-Day Mortality Rate, NQF 
#0230.
    ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate 
Following Heart Failure (HF) 30-Day Mortality Rate, NQF #0229.
    ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate 
Following Pneumonia (PN) 30-Day Mortality Rate, NQF #0468.
    ++ Hospital-Level Risk-Standardized Complication Rate Following 
Total Hip Arthroplasty (THA)/Total Knee Arthroplasty Complication Rate 
(TKA), NQF #1550.
    ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate 
Following Chronic Obstructive Pulmonary Disease (COPD) 30-Day Mortality 
Rate, NQF #1893.
    ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate 
Following Coronary Artery Bypass Grafting (CABG) 30-Day Mortality Rate, 
NQF #2558.
c. Update to the Hospital VBP ECE Granted in Response to the PHE for 
COVID-19
    We continue to believe that the Hospital VBP Program data we have 
excepted serves multiple purposes, including allowing us to understand 
the impact of COVID-19 on quality of care. Furthermore, the HAI 
measures in the Hospital VBP Program are not abstracted from claims and 
are calculated based on data submitted to the CDC through the NHSN. We 
recognize that the CDC separately collects the same data for 
epidemiological surveillance and that hospitals may have other 
reporting requirements which are not affected by our ECE (for example, 
state requirements). We are concerned with the national comparability 
of these data due to the geographic differences of COVID-19 incidence 
rates and hospitalizations along with different impacts resulting from 
different state and local law and policy changes implemented in 
response to COVID-19. For these reasons, and as discussed more fully 
below, we are revising the current ECE we granted for the Hospital VBP 
Program with respect to first and second quarter CY 2020 excepted data. 
Under the revised ECE, we will not use any first or second quarter CY 
2020 excepted Hospital VBP data that hospitals optionally reported to 
calculate total performance scores for the FY 2022 through FY 2025 
program years or baseline scores for the FY 2024 through FY 2030 
program years. We will still use optionally reported fourth quarter CY 
2019 Hospital VBP Program data to calculate TPSs for those hospitals 
for the FY 2021 through FY 2024 program years and baseline scores for 
the FY 2026 through FY 2029 program years because, as explained below, 
we believe that the exception granted for those programs with data 
submission deadlines in April and May 2020 (that is, data from the 
fourth quarter of CY 2019) is distinct from the exceptions granted 
because data collected may be greatly impacted by the response to 
COVID-19 (that is, data from the first and second quarters of CY 2020).
i. CY 2019 Fourth Quarter Hospital VBP Program HAI and HCAHPS Data
    We excepted hospitals from the requirement to report fourth quarter 
CY 2019 HAI and HCAHPS data for the HVBP Program to alleviate the 
reporting burden on hospitals that were responding to the PHE for 
COVID-19 that would otherwise be required to report these data by the 
May 18, 2020 and April 1, 2020 submission deadlines, respectively. 
However, we believe that the quality measure data regarding care 
provided prior to the PHE for COVID-19 would not be affected. 
Additionally, as of April 2020, 92.6 percent of hospitals submitted 
fourth quarter CY 2019 HAI data. Therefore, we are not making changes 
to the Hospital VBP Program ECE that we granted with respect to these 
data for the PHE for COVID-19 and will include all voluntarily reported 
measure data for the HCAHPS survey and the five NHSN HAI measures when 
we calculate hospital TPSs for the FY 2021 program year, as well as 
when we calculate baseline data for the FY 2023 program year. Because 
we did not except fourth quarter CY 2019 claims-based data for the 
Hospital VBP Program, we will also include those data when we calculate 
hospital TPSs for the FY 2021 through FY 2024 program years and 
baseline data for the FY 2026 through FY 2029 program years.
ii. CY 2020 First and Second Quarter Hospital VBP Program Data
    We excepted hospitals from the requirement to report all first and 
second quarter CY 2020 Hospital VBP Program data to alleviate the 
reporting burden on hospitals that were responding to the PHE for 
COVID-19 and because we were concerned that the data collected during 
this period could be greatly impacted by the response to COVID-19. 
Although we permitted hospitals to voluntarily report these data, we 
aim to have the most representative comparison of hospital performance 
as possible and do not wish to unfairly penalize hospitals that were 
responding to COVID-19. We believe that using first and second quarter 
CY 2020 optionally reported data may not provide an accurate national 
assessment of hospital performance for multiple reasons. First, if only 
the optionally submitted data is used, it may not provide an accurate 
national comparison as it is possible that there may be reporting bias 
introduced by voluntary submission. Reporting bias could be introduced 
if, for example, only high performers and/or hospitals not impacted or 
better resourced would choose to submit data, hindering comparisons 
between hospitals with different circumstances and preventing the 
program from keeping with its goal of national comparison. A number of 
other factors could also contribute to CMS' ability to generate an 
accurate national comparison. For example, geographic differences in 
COVID-19 incidence rates and COVID-19 related hospitalizations and 
differences resulting from changes in referral and hospitalization 
patterns could both impact the national comparability of optionally 
submitted data. We believe that it would be inappropriate to include 
optionally submitted data regarding care provided

[[Page 54835]]

during first and second quarter CY 2020 in our calculation of a 
hospital's TPS.
    Accordingly, for these reasons, we will not use any first or second 
quarter CY 2020 excepted Hospital VBP data to calculate total 
performance scores for the FY 2022 through FY 2025 program years or 
baseline scores for the FY 2024 through FY 2030 program years to avoid 
unfairly penalizing hospitals.
    Finally, although the ECE we granted for the Hospital VBP Program 
has ended, with data collection and reporting requirements having 
resumed July 1, 2020, we understand that geographic differences in 
COVID-19 incidence continue to change during the PHE for COVID-19. To 
maintain flexibility for addressing the impact of COVID-19 on the 
Hospital VBP Program and determine how best to implement the program 
equitably, we are announcing in this IFC that if, as a result of the 
extension of the ECE for the whole country that we grant without a 
request or the submission of individual ECE requests, we do not have 
enough data to reliably measure national performance, we may propose to 
not score hospitals based on such limited data or make the associated 
payment adjustments to facilities under the Hospital VBP Program for 
the affected program year. If we grant another ECE in the future, we 
would not require that hospitals report the excepted data for the 
duration of the ECE. Although a hospital may voluntarily report data 
during the ECE, we may determine that it would be inappropriate to use 
such data for scoring purposes. We would still require that hospitals 
report the non-excepted data. However, we may determine that it would 
be inappropriate to score such data or base payment adjustments on it 
because of reliability concerns. For example, if we granted an ECE that 
excepted hospitals from the requirement to report data for 11 of the 12 
months of a given performance period, we would consider not scoring or 
applying payment adjustments for the associated program year because 
data from the one non-excepted month may not be large enough to 
calculate reliable measure results. Although the data itself may be 
accurate, the measure(s) may not meet the reliability standards because 
of the small sample of the remaining non-excepted part of the 
performance period. In addition, in the scenario we describe above, it 
is plausible that only larger hospitals would be able to meet the 
required case minimums to be scored in the non-excepted part of the 
performance period. We may conclude that only scoring those remaining 
large hospitals will produce an accurate national comparison of 
hospitals. Alternatively, if we do not extend the ECE to cover Q3 and 
Q4 2020, it is possible that a majority of hospitals may still submit 
individual ECE requests for those quarters and it is possible that so 
many hospitals will submit individual ECE requests that we will not be 
able to produce a reliable national comparison. In both cases, we are 
concerned about using the measures calculated based on these data to 
score facilities under the Hospital VBP Program and base payment 
adjustments on those scores. At this time, we are not applying this 
updated ECE policy to the Hospital VBP Program. If circumstances 
warrant, we may propose to suspend prospective application of program 
penalties or payment adjustments through the annual IPPS/LTCH PPS 
proposed rule. However, in the interest of time and transparency, we 
may provide subregulatory advance notice of our intentions to suspend 
such penalties and adjustments through routine communication channels 
to facilities, vendors, and QIOs. The communications could include 
memos, emails, and notices on the public QualityNet website (https://www.qualitynet.org/). We welcome public comments on our updated 
Hospital VBP Program ECE policy to exclude any data submitted regarding 
care provided during the first and second quarter of CY 2020 from our 
calculation of performance.
5. Revised Performance Period for the FY 2022 SNF VBP Program as a 
Result of the ECE Granted for the PHE for COVID-19
    In this IFC, we are revising the performance period for the FY 2022 
SNF VBP Program because, as explained more fully below, we are 
concerned that using qualifying claims from the two quarters that are 
not excepted under the ECE for COVID-19 (October 1, 2019 through 
December 31, 2019 (Q4 2019), and July 1, 2020 through September 30, 
2020 (Q3 2020)) for all SNFs nationwide to calculate the SNFRM for the 
FY 2022 Program will not yield measure scores that reliably reflect 
quality of care as determined by hospital readmission rates. We are 
also announcing that we may propose to update the SNF VBP ECE policy 
for future ECEs that may be granted during the PHE for COVID-19.
a. Background of the SNF VBP ECE Policy
    In the FY 2019 SNF PPS final rule (83 FR 39280 through 39281), we 
finalized an ECE policy for the SNF VBP Program. We stated that a SNF 
requesting an ECE would indicate the dates and duration of the 
extraordinary circumstance in its request, along with any available 
evidence of the extraordinary circumstance, and if approved, we would 
exclude the corresponding calendar months from that SNF's measure rate 
for the applicable measurement period and by extension, its SNF 
performance score for applicable fiscal years. We noted that this 
policy does not preclude us from granting exceptions to SNFs that have 
not requested them when we determine that an extraordinary 
circumstance, such as an act of nature or PHE, affects an entire region 
or locale.
    We also finalized under the SNF VBP Program ECE policy that we 
would score any SNFs receiving ECEs on achievement and improvement for 
any remaining months during the performance period, provided the SNF 
had at least 25 eligible stays during both of those periods. As an 
example, we stated that if a SNF received an approved ECE for 6 months 
of the performance period, we would score the SNF on its achievement 
during the remaining 6 months on the Program's measure as long as the 
SNF met the 25 eligible stay threshold during the performance period. 
We also stated that under this example, we would score the SNF on 
improvement as long as it met the proposed 25 eligible stay threshold 
during the applicable baseline period.
b. Background of the SNF VBP Program ECE Granted for the PHE for COVID-
19
    On March 22, 2020, in response to the PHE for COVID-19,\24\ we 
announced relief for clinicians, providers, hospitals and facilities 
participating in Medicare QRPs and VBP programs. On March 27, 2020, we 
published a supplemental guidance memorandum that described in more 
detail the scope and duration of the ECEs we were granting under each 
Medicare QRP and VBP program.\25\
---------------------------------------------------------------------------

    \24\ CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
    \25\ CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
---------------------------------------------------------------------------

    Under the ECE, SNFs qualifying claims are excepted from the 
calculation of the SNF 30-Day All-Cause Readmission Measure (SNFRM; NQF 
#2510) for the following periods:
     January 1, 2020-March 31, 2020 (Q1 2020).
     April 1, 2020-June 30, 2020 (Q2 2020).
    We refer readers to the March 22 and March 27, 2020 guidance memos 
for additional information regarding

[[Page 54836]]

exceptions related to the PHE for COVID-19.
    We continue to believe that the claims data we have excepted serves 
multiple purposes, including allowing us to understand the impact of 
the PHE for COVID-19 on the quality of care provided to Medicare 
beneficiaries. However, we excepted claims data from the first and 
second quarters of CY 2020 from the SNF VBP Program because of our 
concern that the data reliability during this period may be greatly 
impacted by the response to COVID-19. We are also concerned with the 
national comparability of these data due to the geographic differences 
of COVID-19 incidence rates and hospitalizations along with different 
impacts resulting from different state and local law and policy changes 
implemented in response to COVID-19. Therefore, we believe that it 
would be inappropriate to include data submitted regarding care 
provided during first and second quarter CY 2020 in our calculation of 
a SNF's performance score. However, by excluding 6 months of qualifying 
claims in CY 2020 (January 1, 2020 through June 30, 2020) for all SNFs 
nationally, this policy will impact the performance period (October 1, 
2019 through September 30, 2020) for the FY 2022 SNF VBP Program Year 
by reducing the total amount of data available to evaluate SNF 
performance. Accordingly, as discussed below, we are finalizing in this 
IFC a new performance period for the FY 2022 SNF VBP that we believe 
will more reliably reflect SNF performance and quality of care provided 
to Medicare beneficiaries.
    In addition, although the ECE we granted for the SNF VBP Program 
has ended, and data collection resumed July 1, 2020, we understand that 
geographic differences in COVID-19 incidence continue to change during 
the PHE for COVID-19. To maintain flexibility for addressing the impact 
of COVID-19 on the SNF VBP Program and determine how best to implement 
the program equitably, we are announcing in this IFC that if, as a 
result a ECE that we grant for the whole country without a request or 
the submission of individual ECE requests, we do not have enough SNF 
VBP Program data to reliably measure national performance, we may 
propose to not score facilities based on such limited data or make the 
associated payment adjustments to facilities under the SNF PPS for the 
affected program year. If we grant another ECE in the future, we would 
not use claims data submitted to CMS during the ECE for scoring 
purposes under the SNF VBP program. We may determine that it would be 
inappropriate to score remaining non-excepted data or base payment 
adjustments on it because of reliability concerns. For example, if we 
granted an ECE that excepted, for all facilities nationwide, the use of 
claims data for 11 of the 12 months of a given performance period, we 
would consider not scoring or applying payment adjustments for the 
associated program year because data from the one non-excepted month 
may not be large enough to calculate reliable measure results for 
scoring purposes. Although the data itself may be accurate, the 
measure(s) may not meet the reliability standards because of the small 
sample of the remaining non-excepted part of the performance period. In 
addition, in the scenario we describe above, it is likely that only 
larger facilities would be able to meet the required minimum number of 
eligible SNF stays to be scored in the non-excepted part of the 
performance period. We may conclude that only scoring those remaining 
large facilities will not produce an accurate national comparison of 
SNFs. Alternatively, if we do not extend the ECE to cover Q3 and Q4 
2020, it is possible that a majority of SNFs may still submit 
individual ECE requests for those quarters and it is possible that so 
many SNFs will submit individual ECE requests that we will not be able 
to produce a reliable national comparison. In both cases, we are 
concerned about using the measures calculated based on these data to 
score facilities under the SNF VBP Program and base payment adjustments 
on those scores. At this time, we are not applying this updated ECE 
policy to the SNF VBP Program. Rather, as described in detail in the 
next section, we are revising the performance period of the FY 2022 SNF 
VBP Program to include data from: April 1, 2019 through December 31, 
2019 and July 1, 2020 through September 30, 2020. However, if at a 
future date if circumstances warrant, we may propose to suspend 
prospective application of program penalties or payment adjustments 
through the annual SNF PPS proposed rule. However, in the interest of 
time and transparency, we may provide subregulatory advance notice of 
our intentions to suspend such penalties and adjustments through 
routine communication channels to facilities, vendors, and QIOs. The 
communications could include memos, emails, and notices on the public 
CMS website (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/SNF-VBP/SNF-VBP-Page) or, 
if time allows, through the annual SNF PPS proposed rule.
d. Revised Performance Period for the FY 2022 SNF VBP Program
    The performance period for the FY 2022 SNF VBP Program is FY 2020 
(84 FR 38822). The ECE for the PHE for COVID-19 excepts 6 months of 
claims data from the calculation of the SNFRM during the performance 
period of the FY 2022 SNF VBP Program.
    We are concerned that using qualifying claims during only the 
remaining 6 months of FY 2020 (October 1, 2019 through December 31, 
2019 (Q4 2019), and July 1, 2020 through September 30, 2020 (Q3 2020)) 
for all SNFs nationwide to calculate the SNFRM for the FY 2022 Program 
will not yield measure scores that reliably reflect quality of care as 
determined by hospital readmission rates because the reliability of the 
SNFRM rate is related to sample size. We distinguish between ECEs that 
grant exceptions for a limited number of SNFs on a case-by-case basis 
(that is, if a SNF submits an ECE form with appropriate supporting 
evidence), which would yield an acceptable reflection of those SNFs' 
performance, and blanket ECEs that grant exceptions for all SNFs 
nationwide, which may decrease the likelihood that measure performance 
would reflect the quality of care across a large number of SNFs. 
Furthermore, the NQF endorsed the SNFRM as a one-year measure.\26\ In 
line with NQF endorsement, the performance period and baseline period 
SNFRM rate for a program year has been calculated based on one year of 
data since the Program's inception. Our internal analysis indicates 
that calculating the SNFRM based on 6 months data for all SNFs 
nationwide would decrease the SNFRM's reliability by approximately one-
third compared to calculating the SNFRM based on one year of data, 
resulting in unacceptably low measure reliability. This situation 
differs from, for example, calculating the SNFRM based on 6-months of 
data for only several SNFs, which would not meaningfully impact the 
SNFRM's reliability and would not impact the vast majority of SNFs 
whose SNFRM rate would still be calculated based on one year of data. 
We do not believe it is appropriate to calculate the SNFRM in such a 
way that does not align with NQF endorsement and may decrease the 
likelihood that the SNFRM reliably reflects the quality of care 
provided by those SNFs. Therefore, we are revising the performance 
period for the FY 2022 SNF VBP Program. The revised

[[Page 54837]]

performance period for the FY 2022 SNF VBP program will include data 
from: April 1, 2019 through December 31, 2019 and July 1, 2020 through 
September 30, 2020. We note that this 12-month period includes 6 months 
of FY 2019 data and 6 months FY 2020 data, but does not include the 6 
months of data that we excepted for the SNF VBP Program under the ECE 
for the PHE for COVID-19. Eligible SNF stays with admissions during 
this revised 12-month period, April 1, 2019 through December 31, 2019 
and July 1, 2020 through September 30, 2020, will be included in 
performance period SNFRM calculations for the FY 2022 SNF VBP Program. 
We believe using data from these two periods, which combines 9 months 
of data prior to the start of the PHE for COVID-19 and 3 months of data 
after the end of the ECE we granted for this program, will provide 
sufficiently reliable data for evaluating SNF performance that can be 
used for FY 2022 scoring. We selected this performance period data as 
it was the most operationally feasible, did not use data from FY 2018 
(the baseline period for the SNF VBP FY 2022 program year), and 
provided the least overlap with performance periods for other program 
years.
---------------------------------------------------------------------------

    \26\ From https://www.qualityforum.org/Measures_Reports_Tools.aspx, click ``NQF-Endorsed Measures (QPS)'' 
under ``Find Measures'' then search ``2510'' to view the SNFRM.
---------------------------------------------------------------------------

    We are aware that the revised performance period for the FY 2022 
Program overlaps with the performance period of the FY 2021 Program (FY 
2019) by 6 months. However, in order to ensure that 12 months of claims 
data are used to calculate the SNFRM, we believe that this is the most 
feasible option. We also note that although April 1, 2019 through 
September 30, 2019 data would be used for two different program years 
(FY 2021 and FY 2022), October 1, 2019 through December 31, 2019 and 
July 1, 2020 through September 30, 2020 data would only be used for the 
FY 2022 program year. Beginning with the FY 2023 program year, the 
performance period will be FY 2021, consistent with our previously 
finalized policy. Furthermore, we note that historically there has been 
an instance of overlapping data during performance periods of the SNF 
VBP Program; when the SNF VBP Program transitioned from using CY to FY 
data for calculating the performance period, the performance period of 
the FY 2019 SNF VBP Program (CY 2017) overlapped with the performance 
period of the FY 2020 SNF VBP Program (FY 2018) by 3 months (October 1, 
2017 through December 31, 2017). We refer readers to the FY 2018 SNF 
PPS final rule (82 FR 36613 through 36614) for additional information 
on those performance periods.
    The baseline period of the FY 2022 Program has not been impacted by 
the PHE for COVID-19 and will remain as FY 2018 (October 1, 2017 
through September 30, 2018), and the FY 2022 Program performance 
standards included in the FY 2020 final rule (84 FR 38822 through 
38823) will remain as finalized.
    We welcome public comments regarding our policy to revise the FY 
2022 SNF VBP Program performance period to April 1, 2019 through 
December 31, 2019 and July 1, 2020 through September 30, 2020.

E. NCD Procedural Volumes for Facilities and Practitioners To Maintain 
Medicare Coverage

    National Coverage Determinations (NCDs) are determinations by the 
Secretary with respect to whether or not a particular item or service 
is covered nationally under title XVIII of the Act. Some NCDs include 
procedural volume requirements that facilities and/or practitioners 
must meet as conditions of coverage for specific items and services. If 
those volume requirements are not satisfied, Medicare payment would not 
be permitted. On March 18, 2020, CMS encouraged hospitals and 
practitioners to delay certain non-essential procedures due to the 
COVID-19 pandemic.\27\ On June 9, 2020, as coronavirus disease-related 
healthcare demand decreased, CMS found it was important to safely 
resume care to treat ongoing health needs that had been postponed and 
issued guidance that hospitals could resume providing these 
services.\28\ Even so, as a result of the PHE for COVID-19, hospitals 
and practitioners have performed fewer non-essential procedures for 
several months and as a result may not be able to meet certain 
procedural volume requirements that are set forth in these NCDs.
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    \27\ https://www.cms.gov/newsroom/press-releases/cms-releases-recommendations-adult-elective-surgeries-non-essential-medical-surgical-and-dental.
    \28\ https://www.cms.gov/files/document/covid-recommendations-reopening-facilities-provide-non-emergent-care.pdf.
---------------------------------------------------------------------------

    Four NCDs set forth such procedural volume requirements. These NCDs 
are:
     NCD 20.34 Percutaneous Left Atrial Appendage Closure 
(LAAC).
     NCD 20.32 Transcatheter Aortic Valve Replacement (TAVR).
     NCD 20.33 Transcatheter Mitral Valve Repair (TMVR).
     NCD 20.9.1 Ventricular Assist Devices (VADs).
    Because of the disruption in the healthcare delivery system, 
including the delay in non-essential procedures as noted above, we are 
not enforcing the procedural volume requirements contained in the four 
NCDs noted above for facilities and practitioners that, prior to the 
PHE for COVID-19, met the volume requirements. This enforcement 
discretion applies only during the period of the PHE for COVID-19 and 
ensures that beneficiaries will continue to have access to the services 
that are covered under the NCD.
    Please note that all other coverage requirements under these NCDs 
remain in effect.

F. Limits on COVID-19 and Related Testing Without an Order and 
Expansion of Testing Order Authority

    In this IFC, we are establishing that one COVID-19 diagnostic test 
and one of each other related test (as listed in the May 8th COVID-19 
IFC) without an order from a physician or other practitioner is 
reasonable and necessary for Medicare payment purposes. For the COVID-
19 and other related diagnostic tests for which an order is required, 
we are also establishing a policy whereby tests can be covered when 
ordered by a pharmacist or other healthcare professional who is 
authorized to order diagnostic laboratory tests in accordance with 
state scope of practice and other pertinent laws.
    In the May 8th COVID-19 IFC, CMS stated that, given the critical 
importance of expanding COVID-19 testing to combat the pandemic and the 
heightened risk that the disease presents to Medicare beneficiaries 
during the PHE for COVID-19, Medicare would not require an order from a 
physician or other applicable practitioner for COVID-19 testing. We 
amended our regulation at 42 CFR 410.32(a) to remove the requirement 
that otherwise covered COVID-19 diagnostic laboratory tests are covered 
only based on the order of a treating physician or other 
practitioner.\29\ In addition, we removed the ordering requirement for 
coverage of a diagnostic laboratory test for influenza virus and 
respiratory syncytial virus, a type of common respiratory virus, but 
only when these tests are furnished in conjunction with a COVID-19 
diagnostic laboratory test as medically necessary in the course of 
establishing or ruling out a COVID-19 diagnosis. We also noted that 
FDA-authorized COVID-19 serology tests are included as covered tests 
during the PHE for COVID-19, as they are

[[Page 54838]]

reasonable and necessary under section 1862(a)(1)(A) of the Act for 
beneficiaries with a known current or known prior COVID-19 infection or 
a suspected current or suspected prior COVID-19 infection.
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    \29\ The list of COVID-19, Influenza, and RSV clinical 
diagnostic laboratory tests is available at https://www.cms.gov/files/document/covid-ifc-2-flu-rsv-codes.pdf.
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    In this IFC, we are revising the previous policy adopted in the May 
8th COVID-19 IFC, which allowed for broad coverage of multiple 
instances of COVID-19 testing for a single beneficiary without a 
physician or other practitioner order, by establishing that one single 
COVID-19 diagnostic test and one of each other related test (as listed 
in the May 8th COVID-19 IFC) without an order from a physician or other 
practitioner is reasonable and necessary. This limitation on tests 
without a physician/other practitioner order will apply beginning on 
the effective date of this rule, and any tests furnished prior to the 
effective date will not be considered for purposes of this limit on 
tests without a physician or other practitioner order. In other words, 
if a beneficiary received a test or multiple tests without an order 
before the effective date of this rule, these tests would not count 
toward the limit of one test without a physician or other practitioner 
order under this rule. We believe that this approach will provide 
sufficient notice for laboratories to set up the systems and processes 
necessary to require an order beyond one test. For the COVID-19 and 
other related diagnostic tests for which an order is required, we are 
also establishing a policy whereby the tests can be covered when 
ordered by a pharmacist or other healthcare professional who is 
authorized to order diagnostic laboratory tests in accordance with 
state scope of practice and other pertinent laws.
    Just as the previous policy was developed based on what was known 
about COVID-19 at the time, as additional information has become 
available, policies require modification. This approach is consistent 
with the CDC's introductory statement in its July 2, 2020 testing 
guidance that ``recommendations for SARS-CoV-2 testing have been 
developed based on what is currently known about COVID-19 and are 
subject to change as additional information becomes available.'' \30\ 
Whereas we are committed to reducing impediments to access to COVID-19 
testing and the other related tests identified in the May 8th COVID-19 
IFC, we believe that it is contrary to the public interest to allow 
open-ended coverage of COVID-19 testing without an order from a 
physician, practitioner, or other healthcare professional. Our 
determination to revise the May 8th IFC policy is due both to the 
significant potential for fraud, waste, and abuse, as well as public 
health and safety issues that would arise from beneficiaries being 
subjected to repeated testing without proper medical attention or 
oversight, including public health issues with the ongoing spread of 
COVID-19, as outlined by CDC guidance on specific patient categories 
\31\ that has been published in the May 8th COVID-19 IFC.
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    \30\ https://www.cdc.gov/coronavirus/2019-ncov/hcp/testing-overview.html.
    \31\ https://www.cdc.gov/coronavirus/2019-ncov/hcp/testing-overview.html.
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    First, laboratory testing has been a significant source of fraud 
and abuse in the Medicare program. In one recent example from September 
2019, CMS, along with our law enforcement partners, undertook a 
landmark investigation and prosecution of fraudulent genetic cancer 
testing, resulting in charges against 35 defendants associated with 
dozens of telemedicine companies and cancer genetic testing 
laboratories for their alleged participation in one of the largest 
healthcare fraud schemes ever charged. According to the charges, the 
defendants fraudulently billed Medicare for genetic testing, using 
telemarketers to make phone calls and other unsolicited contacts with 
Medicare beneficiaries to fraudulently bill more than $2.1 billion to 
the Medicare program.\32\
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    \32\ https://oig.hhs.gov/newsroom/media-materials/2019/geneticscam/index.asp.
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    We have already found that similar schemes are occurring whereby 
fraudulent laboratories and telemarketing companies are directly 
contacting beneficiaries, oftentimes using stolen identifying 
information, to solicit items and services payable by Medicare under 
the guise of COVID-19 treatment or prevention. An HHS Office of 
Inspector General (HHS-OIG) fraud alert \33\ describes situations in 
which scammers are offering unapproved and illegitimate COVID-19 tests 
and other services to Medicare beneficiaries in exchange for personal 
details, including Medicare information. However, the services are 
unapproved and illegitimate. Fraudsters are targeting beneficiaries in 
a number of ways, including telemarketing calls, text messages, social 
media platforms, and door-to-door visits. The personal information 
collected can be used to fraudulently bill federal healthcare programs 
and commit medical identity theft. In addition, if Medicare denies the 
claim for an unapproved test, the beneficiary could be responsible for 
the cost. The availability of broad COVID-19 and related testing 
without an order significantly increases the risk and scope of these 
fraud schemes, leading not only to considerable risk to taxpayer 
dollars, but also potential physical and financial harm to Medicare 
beneficiaries.
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    \33\ https://oig.hhs.gov/coronavirus/fraud-alert-covid19.asp.
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    In addition to our concerns about previous laboratory schemes being 
applied to COVID-19 testing itself, the risk is exacerbated by the 
ability of the laboratory to perform add-on tests, such as to confirm 
or rule-out diagnoses other than COVID-19. The HHS-OIG has recognized 
that ``[r]elaxation of the [ordering] rules could allow unscrupulous 
actors more leeway for fraudulent billing of unnecessary add-on 
testing,'' and announced in June 2020 that it was undertaking a trend 
analysis for potential fraud and abuse with COVID-19 add-on 
testing.\34\
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    \34\ https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000489.asp.
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    In addition to our concerns about potential fraud, we believe that 
broad COVID-19 testing without the order of any healthcare 
professional--including testing for the related conditions identified 
in the May 8th COVID-19 IFC--may result in a beneficiary not receiving 
the medical attention and oversight required to ensure that diagnosis 
and treatment is applied consistent with CDC guidelines and other 
medical standards. Allowing testing to occur without proper medical 
attention or oversight can lead to direct or indirect harm to 
beneficiaries, their families and their contacts, from a variety of 
perspectives, including the fact that the beneficiary may not receive 
complete and accurate information on how the test results should be 
interpreted and acted upon (for example, contact tracing and public 
health precautions) and how the beneficiary should be monitored in the 
case of a positive test.
    Of the nearly 1.9 million beneficiaries who have been tested, 
approximately 83 percent have had only one test performed. However, 
claims data from the past 8 months have shown that the number of 
beneficiaries receiving more than one COVID-19 test has been 
increasing. While we do not have data to examine whether these tests 
are being performed without a physician or other practitioner order, we 
expect the proportion of beneficiaries who are tested more than once to 
increase over time until a vaccine or other containment strategy is 
available to

[[Page 54839]]

meaningfully reduce the risk of COVID-19. We believe that allowing 
Medicare payment for one test without an order will allow beneficiaries 
access to urgent testing, as we outlined in the May 8th COVID-19 IFC, 
yet also provide sufficient opportunity for beneficiaries to seek out 
the medical care needed to ensure that the test results are interpreted 
and acted upon appropriately, both from the perspective of the 
individual beneficiary and also in the context of the area of the 
country in which the beneficiary is located.
    While some areas of the country continue to have minimal impact 
from the disease or are seeing the COVID-19 infection curve flattening, 
other areas are seeing a resurgence. Executing an effective, regional 
response to COVID-19 disease requires coordinated effort and guidance 
by qualified medical professionals who know how to interpret and react 
to testing results. Recent experience with this disease has also 
demonstrated that substantial COVID-19 transmission occurs from 
infectious individuals both with and without symptoms, and that 
isolation of infected persons has been identified as a key strategy for 
preventing further spread of COVID-19. Testing without healthcare 
oversight can lead to a bypassing of risk-stratified protocols for 
management of negative COVID-19 test results. A negative test does not 
rule out the disease; if a physician or other appropriate healthcare 
professional suspects a patient may have COVID-19 based on symptoms or 
other factors, infection control measures should be implemented 
regardless of test results. For example, isolation of persons infected 
with SARS-CoV-2, the virus that causes COVID-19, is a key strategy for 
preventing further spread of COVID-19. In fact, when infected 
individuals are separated from others while awaiting their test 
results, transmission is reduced much more than when individuals are 
not separated. By having patients isolated one to two days earlier, 
spread of COVID-19 can be reduced significantly.\35\ When a physician 
or other health care provider is able to counsel patients who are being 
tested for COVID-19, beneficiaries may be more likely to isolate or 
quarantine themselves more quickly, which may reduce transmission in 
the community. Self-quarantine for those who may be infectious is also 
a key element to ensuring that health care providers and suppliers are 
able to continue to safely provide COVID-19-related and non-COVID-19 
essential care, patients can resume elective procedures, and that the 
nation can continue steps to reopen the economy.
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    \35\ https://www.cms.gov/files/document/se20011.pdf.
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    We remain committed to ensuring beneficiaries have access to needed 
testing services, and to the medical oversight required to address this 
complex pandemic. First, we note that our numerous provisions enhancing 
access to and use of telehealth and other communications technology-
based services (CTBS) have enabled beneficiaries to overcome some of 
the obstacles associated with seeking care in physician offices and 
other medical facilities during the PHE for COVID-19. The telehealth 
and CTBS flexibilities have provided a modernized framework for care 
delivery, including the ability for clinicians to remotely assess the 
medical condition of patients and determine the need for COVID-19 
testing and perform related clinical oversight, which takes advantage 
of modern technology while addressing the health needs of the Medicare 
beneficiary population.
    In addition, in our March 31st COVID-19 IFC, we established payment 
policies to provide specimen collection fees for independent 
laboratories collecting specimens from beneficiaries who are homebound 
or non-hospital inpatients for COVID-19 testing during the PHE for 
COVID-19. In our May 8th COVID-19 IFC, we also established payment 
mechanisms for specimen collection for COVID-19 testing under the 
Physician Fee Schedule (PFS) and OPPS during the PHE for COVID-19. To 
help ensure that laboratories located in the United States wishing to 
perform COVID-19 testing that are applying for a CLIA certificate are 
able to begin testing as quickly as possible during the PHE for COVID-
19, we have also reviewed our regulations (42 CFR part 493) and our 
procedures to expedite review of applications for a CLIA certificate. 
We are committed to taking critical steps to ensure Medicare 
beneficiaries are able to access safe and reliable COVID-19 and related 
testing.
    CMS and CDC are also taking steps to ensure that physicians and 
other practitioners who counsel patients on COVID-19 testing are paid 
for these services. On July 30, 2020, CMS and CDC announced that 
payment is available to practitioners and suppliers to counsel 
patients, at the time of COVID-19 testing, about the importance of 
self-isolation after they are tested and prior to the onset of 
symptoms.\36\ Through counseling, health care providers can discuss 
with patients: (1) The signs and symptoms of COVID-19; (2) the 
immediate need to separate from others by isolation, particularly while 
awaiting test results; (3) the importance of informing close contacts 
of the person being tested (for example, family members) to separate 
from the patient awaiting test results; (4) the fact that if the 
patient tests positive, the patient will be contacted by the public 
health department to learn the names of the patient's close contacts; 
and (5) the services that may be available to assist the patient in 
successfully isolating at home.
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    \36\ https://www.cms.gov/newsroom/press-releases/cms-and-cdc-announce-provider-reimbursement-available-counseling-patients-self-isolate-time-covid-19.
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    We also believe that pharmacists and other healthcare professionals 
play an important role in the response to the PHE for COVID-19, and we 
explicitly clarified in the May 8th COVID-19 IFC that pharmacists fall 
within the regulatory definition of auxiliary personnel under our 
regulation at Sec.  410.26. As such, pharmacists may provide services 
incident-to the professional services, and under the appropriate level 
of supervision, of the billing physician or practitioner, if payment 
for the services is not made under the Medicare Part D benefit. This 
includes providing the services incident to the services of the billing 
physician or practitioner and in accordance with the pharmacist's state 
scope of practice and applicable state law. We believe this 
clarification may encourage pharmacists to work with physicians and 
other applicable practitioners in new ways that expand the availability 
of health care services during the PHE for COVID-19. One service that 
may be rendered in accordance with these authorities is an assessment 
and specimen collection for COVID-19 testing. Specifically, we stated 
in the May 8th COVID-19 IFC that CPT code 99211 can be billed for both 
new and established patients for the duration of the PHE for COVID-19, 
when the services described by that code for a level 1 E/M visit are 
furnished for the purpose of a COVID-19 assessment and specimen 
collection. These services can be billed as services provided by 
auxiliary clinical staff, including pharmacists, if those staff meet 
all of the requirements to furnish services as ``incident to,'' as 
described in Sec.  410.26 of our regulations and in our frequently 
asked questions document discussing virtual supervision.\37\
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    \37\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
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    To further ensure that beneficiaries continue to have access to 
appropriate COVID-19 testing even when some

[[Page 54840]]

professional care is not separately billable under Medicare, we are 
establishing a policy whereby otherwise covered COVID-19 and specified 
related tests ordered by pharmacists and other healthcare professionals 
who are authorized to order diagnostic laboratory tests in accordance 
with state scope of practice and other pertinent laws are covered for 
the duration of the PHE for COVID-19. Under this policy, an otherwise 
covered COVID-19 test (and other related tests, as specified on the CMS 
website) is considered reasonable and necessary during the PHE for 
COVID-19 if ordered by a pharmacist or other healthcare professional 
who is practicing in accordance with applicable state scope of practice 
laws. Because pharmacists and certain other healthcare professionals 
are not considered to be physicians or practitioners under the Medicare 
statute, they cannot be paid directly under the Medicare program; 
therefore, pharmacists and other auxiliary personnel still need to be 
functioning in an incident-to arrangement with a physician or non-
physician practitioner for the services they provide to be paid by 
Medicare under Part B for the front-end assessment and specimen 
collection associated with the order, as described above. However, we 
believe this interim ordering policy is appropriate during the duration 
of the PHE for COVID-19 to ensure adequate access to testing as 
permitted under state scope of practice and other applicable laws.
    With this IFC, we are amending our regulation at Sec.  410.32(a)(3) 
to state that, starting with the effective date of the revision and 
carrying forward for the remaining duration of the PHE for COVID-19, 
the order of a physician or other practitioner is not required for one 
otherwise covered diagnostic laboratory test for COVID-19 and for one 
otherwise covered diagnostic laboratory test each for influenza virus 
or similar respiratory condition needed to obtain a final COVID-19 
diagnosis, when performed in conjunction with a COVID-19 diagnostic 
laboratory test in order to discount influenza virus or related 
diagnosis.\38\ This includes FDA-authorized COVID-19 serology tests, as 
they are reasonable and necessary under section 1862(a)(1)(A) of the 
Act for beneficiaries with known current or known prior COVID-19 
infection or suspected current or suspected prior COVID-19 infection. 
We are also amending the regulation so the orders of pharmacists and 
other practitioners that are allowed to order laboratory tests in 
accordance with state scope of practice and other pertinent laws can 
fulfill the requirements related to orders for covered COVID-19 tests 
for Medicare patients. We note that Medicare continues to cover other 
medically necessary clinical diagnostic laboratory tests when a 
treating physician or other practitioner orders them, and that other 
Medicare conditions of coverage and payment continue to apply, 
including any applicable local coverage determinations.
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    \38\ The list of COVID-19, Influenza, and RSV clinical 
diagnostic laboratory tests is available at https://www.cms.gov/files/document/covid-ifc-2-flu-rsv-codes.pdf.
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    The policies described in this section apply to the Medicare 
program only. Coverage policies for COVID-19 testing for group health 
plans and health insurance issuers offering group and individual health 
insurance coverage are generally governed by other rules of other 
federal agencies and/or HHS and states. States administer the Medicaid 
program and the Children's Health Insurance Program (CHIP) subject to 
federal requirements, and therefore, have significant responsibility 
for establishing coverage and payment policies for those programs, 
within federal parameters.

G. Recognizing Temporary Premium Credits as Premium Reductions

1. Background
    Title I of the Health Insurance Portability and Accountability Act 
of 1996 (HIPAA) (Pub. L. 104-191, enacted on August 21, 1996) added a 
new title XXVII to the PHSA to establish various reforms to the group 
and individual health insurance markets. These provisions of the PHSA 
have also been augmented by later laws, including the Patient 
Protection and Affordable Care Act (PPACA).\39\ Subtitles A and C of 
title I of the PPACA reorganized, amended, and added to the provisions 
of part A of title XXVII of the PHSA relating to group health plans and 
health insurance issuers in the group and individual markets.
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    \39\ The Patient Protection and Affordable Care Act (Pub. L. 
111-148) was enacted on March 23, 2010. The Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), which 
amended and revised several provisions of the Patient Protection and 
Affordable Care Act, was enacted on March 30, 2010. In this IFC, we 
refer to the two statutes collectively as the ``Patient Protection 
and Affordable Care Act'' or ``PPACA''.
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    Section 1321(a) of the PPACA provides broad authority for the 
Secretary to establish standards and regulations to implement the 
statutory requirements related to Exchanges,\40\ qualified health plans 
(QHPs), and other components of title I of the PPACA. Section 
1321(a)(1) of the PPACA directs the Secretary to issue regulations that 
set standards for meeting the requirements of title I of the PPACA for, 
among other things, the establishment and operation of Exchanges.
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    \40\ American Health Benefit Exchanges, or ``Exchanges,'' are 
entities established under the PPACA through which qualified 
individuals and qualified employers can purchase health insurance 
coverage in qualified health plans (QHPs).
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    Section 1321(d) of the PPACA provides that nothing in title I of 
the PPACA must be construed to preempt any state law that does not 
prevent the application of title I of the PPACA. Section 1311(k) of the 
PPACA specifies that Exchanges may not establish rules that conflict 
with or prevent the application of regulations issued by the Secretary.
    Section 1343 of the PPACA establishes an annual permanent risk 
adjustment program to provide payments to health insurance issuers that 
attract higher-than-average risk populations, such as those with 
chronic conditions, funded by payments from those that attract lower-
than-average risk populations, thereby reducing incentives for issuers 
to avoid higher-risk enrollees. Consistent with section 1321(c)(1) of 
the PPACA, the Secretary is responsible for operating the risk 
adjustment program on behalf of any state that does not elect to do so. 
We established the framework for the risk adjustment program in a final 
rule, published in the March 23, 2012 Federal Register (77 FR 17219) 
(Premium Stabilization Rule), and first established the federally-
certified risk adjustment methodologies and other parameters related to 
the risk adjustment program applicable to the 2014 benefit year in the 
2014 Payment Notice final rule in the March 11, 2013 Federal Register 
(78 FR 15409). In the October 30, 2013 Federal Register (78 FR 65046), 
we finalized the proposed modification to the HHS methodology related 
to community rating states. We published a correcting amendment to the 
2014 Payment Notice final rule in the November 6, 2013 (78 FR 66653) to 
address how an enrollee's age for the risk score calculation would be 
determined under the HHS methodology. We have generally published the 
parameters and methodology for the applicable risk adjustment benefit 
year in each subsequent HHS annual notice of benefit and payment 
parameters.\41\ In

[[Page 54841]]

the July 30, 2018 Federal Register (83 FR 36456), we published a final 
rule that adopted the 2017 benefit year risk adjustment methodology as 
established in the final rules published in the March 23, 2012 (77 FR 
17220 through 17252) and in the March 8, 2016 editions of the Federal 
Register (81 FR 12204 through 12352). The final rule sets forth 
additional explanation of the rationale supporting the use of the 
statewide average premium in the HHS-operated risk adjustment state 
payment transfer formula for the 2017 benefit year, including the 
reasons why the program is operated in a budget-neutral manner. The 
final rule permitted HHS to resume 2017 benefit year risk adjustment 
payments and charges. HHS also provided guidance as to the operation of 
the HHS-operated risk adjustment program for the 2017 benefit year in 
light of publication of this IFC.\42\
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    \41\ See the 2015 Payment Notice final rule published in the 
March 11, 2014 Federal Register (79 FR 13743); the 2016 Payment 
Notice final rule published in the February 27, 2015 Federal 
Register (80 FR 10749); the 2017 Payment Notice final rule published 
in the March 8, 2016 Federal Register (81 FR 12203); the 2018 
Payment Notice final rule published in the December 22, 2016 Federal 
Register (81 FR 94058); the 2019 Payment Notice final rule published 
in the April 17, 2018 Federal Register (83 FR 16930); and the 2019 
Payment Notice final rule correction published in the May 11, 2018 
Federal Register (83 FR 21925).
    \42\ ``Update on the HHS-operated Risk Adjustment Program for 
the 2017 Benefit Year.'' July 27, 2018. Available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2017-RA-Final-Rule-Resumption-RAOps.pdf.
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    In the August 10, 2018 Federal Register (83 FR 39644), we published 
a proposed rule seeking comment on adopting the 2018 benefit year risk 
adjustment methodology in the final rules published in the March 23, 
2012 (77 FR 17219) and in the December 22, 2016 editions of the Federal 
Register (81 FR 94058). The proposed rule set forth additional 
explanation of the rationale supporting use of statewide average 
premium in the HHS-operated risk adjustment state payment transfer 
formula for the 2018 benefit year, including the reasons why the 
program is operated in a budget-neutral manner. In the December 10, 
2018 Federal Register (83 FR 63419), we issued a final rule adopting 
the 2018 benefit year HHS-operated risk adjustment methodology as 
established in the final rules published in the March 23, 2012 (77 FR 
17219) and the December 22, 2016 (81 FR 94058) editions of the Federal 
Register. That final rule sets forth additional explanation of the 
rationale supporting use of statewide average premium in the HHS-
operated risk adjustment state payment transfer formula for the 2018 
benefit year, including the reasons why the program is operated in a 
budget-neutral manner. We adopted the risk adjustment methodology and 
parameters for the 2020 benefit year in the 2020 Payment Notice final 
rule in the April 25, 2019, Federal Register (84 FR 17454). On May 14, 
2020, we adopted the risk adjustment methodology and parameters for the 
2021 benefit year in the 2021 Payment Notice final rule in the Federal 
Register (85 FR 29164).
    Section 2718 of the PHSA, as added by the PPACA, generally requires 
health insurance issuers to submit an annual report to the Secretary 
that details the percentage of premium revenue (after certain 
adjustments) expended on reimbursement for clinical services provided 
to enrollees under health insurance coverage and on activities that 
improve healthcare quality. The ratio of premium revenue spent on 
clinical services and quality improvement activities is called the 
medical loss ratio (MLR). Section 2718(b) of the PHSA requires an 
issuer to provide rebates to enrollees if its MLR falls below specified 
MLR standards (generally 80 percent for the individual and small group 
markets, and 85 percent for the large group market). We published an 
interim final rule in the December 1, 2010 Federal Register (75 FR 
74863). A final rule was published in the December 7, 2011 Federal 
Register (76 FR 76573). The MLR program requirements were amended in 
final rules published in the December 7, 2011 Federal Register (76 FR 
76595), the May 16, 2012 Federal Register (77 FR 28790), the March 11, 
2014 Federal Register (79 FR 13743), the May 27, 2014 Federal Register 
(79 FR 30339), the February 27, 2015 Federal Register (80 FR 10749), 
the March 8, 2016 Federal Register (81 FR 12203), the December 22, 2016 
Federal Register (81 FR 94183), the April 17, 2018 Federal Register (83 
FR 16930), and the April 25, 2019 Federal Register (84 FR 17454).
    Due to the urgent need to help facilitate the nation's response to 
the COVID-19 pandemic, CMS announced the adoption of certain temporary 
policies of relaxed enforcement for all issuers offering health 
insurance coverage in the individual and small group markets to support 
continuity of coverage for individuals, families, and small employers 
who may struggle to pay premiums because of illness or loss of incomes 
or revenue resulting from the PHE for COVID-19. On August 4, 2020, CMS 
issued a memo, ``Temporary Policy on 2020 Premium Credits Associated 
with the COVID-19 Public Health Emergency,'' wherein CMS adopted 
certain temporary policies of relaxed enforcement for the premium rules 
set forth at 45 CFR 147.102, 155.200(f)(4), 155.400(e) and (g), 
155.706(b)(6)(1)(A), 156.80(d), 156.210(a), and 156.286(a)(2) through 
(4) to allow issuers in the individual and small group markets the 
flexibility, when consistent with state law, to temporarily offer 
premium credits for 2020 coverage.\43\ The memo also advised of our 
intention to pursue future rulemaking to address risk adjustment data 
submissions and MLR reporting requirements for issuers that elect to 
provide these credits to ensure that issuers accurately report premium 
amounts actually billed for months in 2020 for which issuers are 
providing these credits.
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    \43\ See https://www.cms.hhs.ov/CCIIO/Programs-and-Initiative/Health-Insurance-Marketplaces/Downloads/Premium-Credit-Guidance.pdf.
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    This IFC clarifies the data reporting requirements for issuers of 
risk adjustment covered plans \44\ to specify that, for the purposes of 
2020 benefit year risk adjustment data submissions, issuers of risk 
adjustment-covered plans that provide temporary premium credits must 
report to their dedicated distributed data environment (EDGE server) 
adjusted plan premiums that reflect actual premiums billed to 
enrollees, taking the premium credits into account as a reduction in 
premiums. In addition, this IFC clarifies, consistent with the 
reporting of the actual premium amounts billed to enrollees for 2020 
benefit year risk adjustment data submissions, HHS's calculation of 
risk adjustment payment and charges for the 2020 benefit year under the 
state payment transfer formula \45\ will be calculated using the 
statewide average premium that reflects actual premiums billed, taking 
into account any temporary premium credits provided as a reduction in 
premium for the applicable months of 2020 coverage.
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    \44\ See 45 CFR 153.20 for a definition of ``risk adjustment 
covered plan''.
    \45\ The state payment transfer formula refers to the part of 
the HHS risk adjustment methodology established consistent with 45 
CFR 153.320 that calculates payments and charges at the state market 
risk pool level. See, for example, the 2020 Payment Notice final 
rule, 84 FR at 17485. The state payment transfer calculations are 
performed prior to the calculation of the high-cost risk pool 
payment and charge terms.
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    This IFC similarly clarifies the MLR reporting and rebate 
requirements in 45 CFR part 158 for issuers that elect to provide 
temporary premium credits such that these issuers must report as earned 
premium the actual premium paid, taking into account any temporary 
premium credits as a reduction in premium for the applicable months of 
2020 coverage.
    These interim final provisions are effective as of the date of 
finalization of this IFC and apply to temporary

[[Page 54842]]

premium credits provided for 2020 coverage.
2. Standards Related to Reinsurance, Risk Corridors, and Risk 
Adjustment (45 CFR Part 153)
    This IFC addresses changes necessary to align the 2020 benefit year 
data submission requirements and state payment transfer formula 
calculations under the HHS-operated risk adjustment program with 
guidance published by CMS allowing temporary premium credits due to the 
PHE for COVID-19.
a. Provisions and Parameters for the Risk Adjustment Program
    In subparts A, B, D, G, and H of part 153, we established standards 
for the administration of the PPACA risk adjustment program. The risk 
adjustment program is a permanent program created by section 1343 of 
the PPACA that transfers funds from lower-than-average risk, risk 
adjustment covered plans to higher-than-average risk, risk adjustment 
covered plans in the individual and small group markets (including 
merged markets), inside and outside the Exchanges. HHS is responsible 
for operating risk adjustment in any state that does not elect to do 
so.\46\ HHS did not receive any requests from states seeking to operate 
their own risk adjustment program for the 2020 benefit year.\47\ 
Therefore, HHS is responsible for operating the risk adjustment program 
established under section 1343 of the PPACA in all 50 states and the 
District of Columbia for the 2020 benefit year.\48\
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    \46\ See section 1321(c)(1) of the PPACA. Also see 45 CFR 
153.310(a).
    \47\ See the 2020 Payment Notice final rule, 84 FR at 17463 
(April 25, 2019).
    \48\ Ibid.
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i. Calculation of Plan Average Premium and State Average Premium Under 
the Federally-Certified Risk Adjustment Methodology (Sec.  153.320)
    The HHS risk adjustment methodology applicable to the 2020 benefit 
year includes the state payment transfer formula and the high-cost risk 
pool parameters.\49\ The state payment transfer formula includes a set 
of cost adjustment terms that require transfers to be calculated at the 
geographic rating area level for each plan (that is, we calculate 
separate transfer amounts for each rating area in which a risk 
adjustment covered plan operates). It also includes a 14 percent 
administrative cost reduction to the statewide average premium. The 
state payment transfer formula generally calculates the difference 
between the revenues required by a plan, based on the health risk of 
the plan's enrollees, and the revenues that the plan can generate for 
those enrollees. These differences are then compared across plans in 
the state market risk pool \50\ and converted to a dollar amount based 
on the statewide average premium. The difference between the two 
premium estimates determines whether a plan pays a risk adjustment 
charge or receives a risk adjustment payment.\51\
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    \49\ See the 2020 Payment Notice final rule, 84 FR at 17466 
through 17468 and 17480 through 17486.
    \50\ Risk adjustment transfer under the state payment transfer 
formula are calculated at the risk pool level, and catastrophic 
plans are treated as a separate risk pool for purpose of these 
calculations.
    \51\ The value of the plan average risk score by itself does not 
determine whether a plan would be assessed a charge or receive a 
payment--even if the risk score is greater than 1.0, it is possible 
that the plan would be assessed a charge if the premium compensation 
that the plan may receive through its rating (as measured through 
the allowable rating factor) exceeds the plan's predicated liability 
associated with risk selection.
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    HHS chose to use statewide average premium and normalize the risk 
adjustment state payment transfer formula to reflect state average 
factors so that each plan's enrollment characteristics are compared to 
the state average and the calculated payment amounts equal calculated 
charges in each state market risk pool.\52\ Thus, the state payment 
transfer formula provides a per member per month (PMPM) transfer amount 
for a plan within a rating area. This resulting PMPM plan payment or 
charge is multiplied by the number of billable member months to 
determine the plan payment or charge based on plan liability risk 
scores for a plan's geographic rating area for the applicable state 
market risk pool. The payment or charge under the state payment 
transfer formula is thus calculated to balance the state market risk 
pool in question.
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    \52\ See the 2020 Payment Notice final rule for further details 
on other reasons why statewide average premium is the cost-scaling 
factor in the state payment transfer formula. See 84 FR at 17480 
through 17484.
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    In prior rulemaking,\53\ CMS finalized the calculation of plan 
average premium as equal to the actual premiums charged to plan 
enrollees, weighted by the number of months enrolled, and finalized the 
calculation of the state average premium as equal to the average of 
individual plan average premiums, weighted by each plan's share of 
statewide enrollment in the risk pool market, based on billable member 
months.
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    \53\ See, for example, the 2014 Payment Notice final rule, 78 FR 
15409, available at https://www.govinfo.gov/content/pkg/FR-2013-03-11/pdf/2013-04902.pdf (March 11, 2013). Also see the 2020 Payment 
Notice final rule, 84 FR 17454, available at https://www.govinfo.gov/content/pkg/FR-2019-04-25/pdf/2019-08017.pdf.
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    This IFC sets forth how HHS will treat temporary premium credits 
provided for purposes of applying the state payment transfer formula 
for the 2020 benefit year.\54\ For states where issuers of risk 
adjustment covered plans have provided temporary premium credits, the 
plan average premium and statewide average premium used in the state 
payment transfer formula will be calculated using issuers' adjusted 
premium amounts--that is, the actual premiums billed to plan enrollees 
will be the amounts used in the calculations under the state payment 
transfer formula. We clarify that HHS will use adjusted plan premiums 
for all enrollees whom the issuer has actually provided premium credits 
as a reduction to 2020 benefit year premiums, even if the credits were 
not provided in a manner consistent with the August 4, 2020 memo, when 
calculating transfers under the state payment transfer formula for the 
2020 benefit year. As detailed further below, issuers providing these 
temporary premium credits must report the lower, actual premium amounts 
billed to plan enrollees to their respective EDGE servers. We believe 
that the applicable definitions of plan average premium and state 
average premium retain the meaning previously finalized by reflecting 
the actual monthly premium billed to enrollees. In addition, the 
recognition of temporary premium credits for 2020 coverage as a 
reduction in premium for purposes of the risk adjustment program is a 
necessary and appropriate step to align risk adjustment charges and 
payments under the state payment transfer formula with the 
flexibilities provided to issuers and states elsewhere in this 
rulemaking to respond to the PHE for COVID-19. This approach also 
provides necessary clarity to issuers as they evaluate whether and in 
what amount to offer premium relief to enrollees to assist those 
adversely affected financially by the PHE for COVID-19 to maintain 
continuous health insurance coverage. This IFC does not change any 
other aspect of the state payment transfer formula or the method for 
calculating payments and charges under the HHS risk adjustment 
methodology (inclusive of the state payment transfer formula and high-
cost risk pool parameters).\55\
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    \54\ CMS intends to consider adopting a similar approach for the 
2021 benefit year, as may be appropriate (for example, if similar 
temporary premium credits are permitted for 2021 coverage).
    \55\ See the 2020 Payment Notice final rule, 84 FR at 17466 
through 17468 and 17480 through 17486.
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    In the 2019 Payment Notice, we provided states the flexibility to 
request

[[Page 54843]]

a reduction to the otherwise applicable risk adjustment transfers 
calculated under the HHS-operated risk adjustment methodology's state 
payment transfer formula, which is calibrated on a national dataset, 
for the state's individual, small group, or merged markets, by up to 50 
percent to more precisely account for differences in actuarial risk in 
the applicable state's market(s).\56\ For the 2020 benefit year, HHS 
approved a request from Alabama state insurance regulators to reduce 
risk adjustment transfers for the Alabama small group market by 50 
percent.\57\ Consistent with this IFC, the state payment transfer 
formula will incorporate calculations using issuers' adjusted premium 
amounts--that is, the lower actual premiums billed to plan enrollees 
will be the amounts used in the calculations under the state payment 
transfer formula to reflect these temporary premium credits. As such, 
if an issuer in the Alabama small group market chooses to provide 
temporary premium credits, the state average premium will decrease, and 
HHS will apply the 50 percent transfer reduction to the lower PMPM 
payment or charge transfer amount calculated under the state payment 
transfer formula for the Alabama small group market.
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    \56\ See the 2019 Payment Notice final rule, 83 FR at 6955 to 
16960. Also see 45 CFR 153.320(d).
    \57\ See the 2020 Payment Notice final rule, 84 FR at 17484 
through 17485. HHS approved a similar request to reduce 2021 benefit 
year Alabama small group market transfers by 50 percent. See the 
2021 Payment Notice final rule, 85 FR at 29193 through 29194.
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ii. Data Requirements for Risk Adjustment Covered Issuers (Sec.  
153.610 and Sec.  153.710)
    Section 153.610 requires an issuer of a risk adjustment covered 
plan to submit or make accessible risk adjustment data for all risk 
adjustment covered plans in accordance with the risk adjustment data 
collection approach established by a state, or HHS on behalf of a 
state. The HHS-operated risk adjustment program uses a distributed data 
collection approach, and issuers of risk adjustment covered plans must 
provide HHS with access to plan enrollment data, enrollee claims data, 
and enrollee encounter data through their respective EDGE server, 
pursuant to the requirements of Sec.  153.710 and applicable technical 
guidance.\58\ Issuers are required to report to their EDGE server 
subscriber-level premium information that is used by HHS to calculate 
each plan's total premium revenue for the state payment transfer 
formula. We clarify in this IFC that, for purposes of 2020 benefit year 
data submissions,\59\ the subscriber-level premium information that 
issuers upload to their EDGE servers must reflect the adjusted (that 
is, lower) monthly premium reflecting the amounts actually billed to 
their enrollees, inclusive of any premium credits provided. We clarify 
in this IFC that CMS will require issuers to submit adjusted plan 
premiums to their EDGE servers for all enrollees whom the issuer has 
actually provided premium credits as a reduction to 2020 benefit year 
premiums, even if these premium credits were not provided in a manner 
consistent with the August 4, 2020 memo. Issuers should continue to 
submit the full, unadjusted premium amounts for any coverage for which 
they did not provide temporary premium credits. This IFC does not 
change any other aspect of the 2020 benefit year data submission 
requirements for the HHS-operated risk adjustment program. As such, any 
temporary premium credits that are reported as a reduction in premium 
for risk adjustment purposes are subject to the applicable regulations 
at part 153, the EDGE server business rules, and applicable CMS 
guidance.
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    \58\ See EDGE Server Business Rules (ESBR) v16.0 Section 5.8 
Premium Amounts, at https://www.regtap.info/uploads/library/DDC_ESBR_V16.0_052920_5CR_052920.pdf.
    \59\ As noted above, CMS intends to consider adopting a similar 
approach for the 2021 benefit year, as may be appropriate.
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3. Issuer Use of Premium Revenue: Reporting Requirements (45 CFR Part 
158)
    In this IFC, we also address changes necessary to align the 
reporting and data submission requirements under the PPACA MLR program 
with the temporary premium credits that issuers may provide to 
enrollees in 2020.\60\
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    \60\ The MLR reporting year means a calendar year during which 
group or individual health insurance coverage is provided by an 
issuer. See 45 CFR 158.103. The 2020 MLR reporting year refers to 
the MLR reports that issuers must submit for the 2020 benefit year 
by July 31, 2021. See 45 CFR 158.110(b).
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a. Premium Revenue (Sec.  158.130)
    Section 2718(a) of the PHSA requires health insurance issuers to 
report to the Secretary the percentage of premium revenue (after 
certain adjustments) expended on reimbursement for clinical services 
provided to enrollees under health insurance coverage and on activities 
that improve healthcare quality. Section 158.130 specifies the 
reporting requirements with regard to earned premium, which must 
include all monies paid by a policyholder or subscriber as a condition 
of receiving coverage from the issuer, with certain adjustments.
    This IFC sets forth how CMS will treat temporary premium credits 
for purposes of MLR reporting and rebate requirements of these amounts 
for 2020 coverage.\61\ During 2020, a number of issuers are expected to 
provide premium relief to enrollees, which will result in policyholders 
and subscribers paying a reduced amount of premium for coverage in 2020 
in the months for which the credits are provided. The recognition of 
temporary premium credits as a reduction in premium for purposes of the 
MLR program is a necessary and appropriate step to align MLR 
calculations with the flexibilities provided to issuers and states 
elsewhere in this rulemaking to respond to the PHE for COVID-19. This 
approach also provides necessary clarity to issuers as they evaluate 
whether and in what amount to offer temporary premium credits to assist 
enrollees in maintaining continuous health insurance coverage during 
the PHE for COVID-19.
---------------------------------------------------------------------------

    \61\ CMS intends to consider adopting a similar approach if 
temporary premium credits are permitted for 2021 coverage, if 
appropriate.
---------------------------------------------------------------------------

    To ensure that an issuer's MLR accurately reflects the amounts 
actually paid by their enrollees as the issuer's premium revenue, we 
clarify that for purposes of Sec.  158.130, issuers must account for 
temporary premium credits as reductions in earned premium in the 
individual and small group (or merged) markets,\62\ consistent with any 
technical guidance set forth in the applicable MLR Annual Reporting 
Form Instructions.\63\ Specifically, we clarify that the amount of 
temporary premium credits \64\ constitutes neither collected premium 
nor due and unpaid premium described in the MLR Annual Reporting Form 
Instructions for purposes of reporting written premium (which is a 
component of earned premium). As a result of this flexibility, issuers 
who offer temporary premium credits should

[[Page 54844]]

report as earned premium for MLR and rebate calculation purposes the 
actual, reduced premium paid. We clarify that issuers must report the 
actual, reduced premium amount for all enrollees whom the issuer has 
actually provided premium credits for 2020 coverage, even if these 
premium credits were not provided in a manner consistent with the 
August 4, 2020 memo. This IFC does not change any other aspect of the 
MLR reporting or rebate calculation requirements.
---------------------------------------------------------------------------

    \62\ While this IFC and the August 4, 2020 memo focus on the 
individual and small group markets, to remove the barriers in 
support of issuers offering these premium credits to enrollees 
impacted by PHE for COVID-19, we note that issuers in the large 
group market may also, when consistent with state law, offer premium 
credits and should similarly report the lower, adjusted amount that 
accounts for the premium credits for MLR purposes.
    \63\ Available from https://www.cms.gov/cciio/Resources/Forms-Reports-and-Other-Resources/index#Medical_Loss_Ratio.
    \64\ MLR rebates provided in the form of premium credits are 
different than the temporary premium credits such as those outlined 
in the August 4, 2020 guidance issued by CMS. When MLR rebates are 
provided in the form of premium credits, issuers must continue to 
report the full amount of earned premium and may not reduce it by 
the amount of MLR rebates provided in form of premium credits, as 
required by Sec.  158.130(b)(3).
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H. Addressing the Impact of COVID-19 on Part C and Part D Quality 
Rating Systems

1. Background
    CMS develops and publicly posts a 5-star rating system for Medicare 
Advantage (MA) and Part D plans based on its authority to disseminate 
comparative information, including about quality, to beneficiaries 
under sections 1851(d) and 1860D-1(c) of the Act and authority to 
collect various types of quality data under section 1852(e) of the Act. 
The Star Rating system for MA and Part D plans is also the basis for 
determining quality bonus payment (QBP) status for MA plans under 
section 1853(o) of the Act and the amount of beneficiary rebates under 
section 1854(b) of the Act. As background, approximately $12 billion 
for 2020 will be paid as part of QBPs in the form of higher benchmarks 
for both Individual and Employer Group Waiver Plans, which represent 
about 4.35 percent of the total MA benchmarks. Cost plans under section 
1876 of the Act are also included in the MA and Part D Star Rating 
system, as codified at 42 CFR 417.472(k).
    The Star Ratings are generally based on measures of performance 
during a period that is 2 calendar years before the year for which the 
Star Ratings are issued; for example, 2022 Star Ratings will generally 
be based on performance during 2020. We use a variety of data sources 
to measure quality and performance of contracts, such as CMS 
administrative data, surveys of enrollees, information from health and 
drug plans, and data collected by CMS contractors. Various regulations 
require plans to report on quality improvement and quality assurance 
and to provide data which we can use to help beneficiaries compare 
plans (for example, Sec. Sec.  417.472(j) and (k), 422.152(b), 
423.153(c), and 423.156). In addition, we can require plans to report 
statistics and other information in specific categories (Sec. Sec.  
422.516 and 423.514). Data from these sources and other sources are 
used to calculate measures of plan sponsor performance each year, as 
provided in Sec. Sec.  422.162 and 423.182. The Star Ratings are 
central in providing comparative information to enrollees and are also 
used to determine whether an MA plan is eligible for a QBP and the 
amount of beneficiary rebates.
    Sections 1853(o) and 1854(b)(1)(c) of the Act provide for quality 
ratings, based on a 5-star rating system and the information collected 
under section 1852(e) of the Act, to be used in calculating payment to 
MA organizations beginning in 2012. Specifically, these provisions 
provide, respectively, for an increase in the benchmark against which 
MA organizations bid and in the portion of the savings between the bid 
and the benchmark available to the MA organization to use as a rebate. 
In addition, CMS assigns both low and high performing icons, which are 
displayed on https://www.medicare.gov/plan-compare/, to help Medicare 
beneficiaries make plan decisions, based on either consistently low 
performance (2.5 or fewer stars at the summary rating level) for 3 or 
more years or receipt of 5 stars for the highest rating in any given 
year.
    There are other regulations, regarding marketing authority, special 
enrollment periods, and contract terminations, that are tied to the 
Star Ratings, demonstrating how the Star Ratings are important to the 
MA and Part D programs as a whole. Because the Star Ratings serve a 
variety of purposes for CMS, cost plans, and MA and Part D plans, we 
assume plans engage in multiple activities during the measurement 
period to improve their Star Ratings. Therefore, it is necessary to 
adopt rules for, and provide information about how performance in 
2020--during the PHE for COVID-19--will be used in the Star Ratings 
program as quickly as possible. Without adopting these rules 
immediately, plans will believe that, based on current rules, CMS will 
be unable to assign Star Ratings for Contract Year 2022 and be unable 
to pay QBPs for Contract Year 2023. Given the significant impact of 
QBPs on overall plan payments, described above, without immediate 
action, plans would not have a clear incentive to focus on providing 
high quality care for enrollees impacted by COVID-19, and instead 
either spend time and effort trying to ensure that future Star Ratings 
and QBP ratings are not impacted by the PHE for COVID-19, or shift 
focus from providing quality care to cost containment. Delaying these 
changes would limit (or eliminate) the time left in the 2020 
measurement period for plans to manage their performance based on these 
changes.
    In the March 31st COVID-19 IFC, we adopted a series of changes to 
the 2021 and 2022 Star Ratings to accommodate the disruption to data 
collection and impact on performance posed by the PHE for COVID-19. The 
Star Ratings changes adopted in that rule addressed the need of health 
and drug plans and their providers to curtail certain data collections 
and to adapt their current practices in light of the PHE for COVID-19 
and the need to care for the most vulnerable patients, such as the 
elderly and those with chronic health conditions. As explained in the 
March 31st COVID-19 IFC, we believe that there will be changes in 
measure-level scores because of increased healthcare utilization due to 
COVID-19, reduced or delayed non-COVID-19 care due to advice to 
patients to delay routine and/or elective care, and changes in non-
COVID-19 inpatient utilization. We realize that this will impact the 
data collected during the 2020 measurement year which will impact the 
2022 Part C and D Star Ratings. Thus, as part of the March 31st COVID-
19 IFC, we made some adjustments to account for the potential decreases 
in measure-level scores so health and drug plans can have some degree 
of certainty knowing that the Star Ratings will be adjusted and can 
continue their focus on patients who are most in need right now.
    Specifically, the March 31st COVID-19 IFC:
     Eliminates the requirement to collect and submit 
Healthcare Effectiveness Data and Information Set (HEDIS) and Medicare 
CAHPS data otherwise collected in 2020, and replaces the 2021 Star 
Ratings measures calculated based on those HEDIS and CAHPS data 
collections with earlier values from the 2020 Star Ratings (which are 
not affected by the public health threats posed by COVID-19);
     Establishes how we will calculate or assign the 2021 Star 
Ratings in the event that CMS' functions become focused on only 
continued performance of essential agency operations and the agency 
and/or its contractors do not have the ability to calculate the 2021 
Star Ratings;
     Modifies the current rules for the 2021 Star Ratings to 
replace any measure that has a systemic data quality issue for all 
plans due to the COVID-19 outbreak with the measure-level Star Ratings 
and scores from the 2020 Star Ratings;
     Replaces the measures calculated based on Health Outcomes 
Survey (HOS) data collections with earlier values that are not affected 
by the public

[[Page 54845]]

health threats posed by COVID-19 for the 2022 Star Ratings in the event 
that we are unable to complete HOS data collection in 2020 (for the 
2022 Star Ratings) due to the PHE for COVID-19;
     Removes guardrails for the 2022 Star Ratings by delaying 
their application to the 2023 Star Ratings;
     Expands the existing hold harmless provision for the Part 
C and D Improvement measures to include all contracts for the 2022 Star 
Ratings; and
     Revises the definition of ``new MA plan'' so that, for 
purposes of 2022 QBPs based on 2021 Star Ratings only, new MA plan 
means an MA contract offered by a parent organization that has not had 
another MA contract in the previous 4 years, in order to address how 
the 2021 Star Ratings will be based in part on data for the 2018 
performance period.
    Please see the March 31st COVID-19 IFC for further information on 
these changes for the 2021 and 2022 Star Ratings.
2. Impact of COVID-19 on the Extreme and Uncontrollable Circumstance 
Policy for the 2022 Star Ratings
    The March 31st COVID-19 IFC amended, as necessary, certain 
calculations for the 2021 and 2022 Part C and D Star Ratings to 
incorporate changes to address the expected impact of the PHE for 
COVID-19 on data collection and performance in 2020 that were 
immediately apparent. As the PHE for COVID-19 has progressed and 
various federal and state agencies have taken steps to address the PHE, 
we have become aware that application of the current Star Ratings 
disaster policy for extreme and uncontrollable circumstances 
(Sec. Sec.  422.166(i) and 423.186(i)) will cause unintended and 
unworkable consequences for the 2022 Star Ratings, which will be based 
on the 2020 measurement period for cost, MA, and Part D plans. The Star 
Ratings disaster policy for extreme and uncontrollable circumstances 
was developed with natural disasters such as hurricanes and wildfires 
in mind. Those types of emergencies typically impact well-defined 
geographic areas. The policy uses declarations by the Federal Emergency 
Management Agency (FEMA) of counties or county-equivalents as 
Individual Assistance areas that make up all or part of a contract's 
service area, as well as whether the contract's service area is within 
an ``emergency area'' during an ``emergency period'' as defined in 
section 1135(g) of the Act, as a condition for applying an adjustment 
to how the Star Ratings are calculated for the contract. Contracts with 
a certain minimum percentage of enrollees residing in an area declared 
as an Individual Assistance area are eligible for Star Ratings 
adjustments for extreme and uncontrollable circumstances. The disaster 
policy was not designed to address global pandemics. In the past 
several years that we have used the extreme and uncontrollable 
circumstance adjustment for the Part C and D Star Ratings, the FEMA 
declarations have only been to county/county-equivalents and the 
declarations have only resulted in adjustments for a limited number of 
contracts.
    At the time of writing the March 31st COVID-19 IFC to adopt a 
series of changes for the 2021 and 2022 Star Ratings as a result of the 
PHE for COVID-19, no counties or county-equivalents had been declared 
Individual Assistance areas as a result of COVID-19. As of July 28, 
2020, 51 out of 55 states/territories \65\ covering all counties or 
county-equivalents within these states and territories have been 
designated as Individual Assistance areas due to COVID-19 with an 
incident period starting in 2020 (thus affecting the 2020 measurement 
year), and this number could continue to grow throughout 2020 as the 
PHE for COVID-19 evolves. This means that the PHE for COVID-19 now 
meets the Star Ratings criteria for an extreme and uncontrollable 
circumstance in nearly all states/territories (and service areas), and 
most contracts would be eligible for the extreme and uncontrollable 
circumstance adjustments to their 2022 Star Ratings as a result of the 
PHE for COVID-19.
---------------------------------------------------------------------------

    \65\ This includes the 50 states, Washington, DC, Guam, Northern 
Mariana Islands, Puerto Rico and Virgin Islands.
---------------------------------------------------------------------------

    Under the current disaster policy, for all non-CAHPS measures, the 
numeric scores for contracts with 60 percent or more of their enrollees 
living in a FEMA-designated Individual Assistance area at the time of 
the extreme and uncontrollable circumstance are excluded from: (1) The 
measure-level cut point calculations for non-CAHPS measures; and (2) 
the performance summary and variance thresholds for the Reward Factor 
as described at Sec. Sec.  422.166(i)(9)(i) and (i)(10)(i), and 
423.186(i)(7)(i) and (i)(8)(i). When only a small number of counties 
are designated as Individual Assistance areas, application of these 
exclusions means that the performance from other contracts serving 
larger or other service areas are used to establish the necessary 
thresholds for Star Ratings. Up until now, disasters have been 
localized, and the 60 percent rule has removed only a small fraction of 
contracts (that is, less than 5 percent of contracts on average).
    The unprecedented impact of COVID-19 creates a new methodological 
issue where, without a revision to our current disaster policy rules 
for calculating the measure-level cut points for the 2022 Star Ratings, 
we will not have enough contracts to reliably calculate the non-CAHPS 
measure-level cut points. Consequently, CMS will not be able to assign 
Star Ratings for all non-CAHPS measures. Similarly, we will not have 
enough contracts to reliably calculate the performance summary and 
variance thresholds for the Reward Factor. Applying the 60 percent rule 
for extreme and uncontrollable circumstances to the 2022 Star Ratings 
would result in removal of a large proportion of contracts (close to 98 
percent) from threshold calculations, resulting in too few contracts to 
reliably calculate cut points using the clustering methodology for the 
non-CAHPS measures and too few contracts to reliably calculate the 
weighted means and variance used to calculate the Reward Factor. Due to 
the unprecedented way the PHE for COVID-19 has affected all contracts 
in 2020, and the fact that a majority of the country has been 
designated as Individual Assistance areas, we are creating special 
rules for the 2022 Star Ratings to remove the 60 percent rule to avoid 
having to exclude the vast majority of contracts from the methodology 
used to assign Star Ratings which would result in unreliable ratings or 
missing data for all contracts in the 2022 Star Ratings.
    Under our current regulation, the 60 percent rule would remove 
nearly all values from the calculation of cut points and the Reward 
Factor for the 2022 Star Ratings and, if we are unable to calculate 
non-CAHPS measure-level cut points for the 2022 Star Ratings (such as 
because of the application of the 60 percent rule), all contracts will 
have missing measure-level Star Ratings for all non-CAHPS measures. In 
that circumstance, we will not have enough measures with Star Ratings 
to calculate either the 2022 overall or summary Star Ratings or 2023 
QBPs. In addition to the 60 percent rule, for contracts that have 25 
percent or more of their enrollees living in FEMA-designated Individual 
Assistance areas, our current regulations at Sec. Sec.  422.166(i) and 
423.186(i) apply various rules including permitting use of the previous 
year's measure-level rating and corresponding measure score if it is 
higher on most Star Rating measures. However, Sec. Sec.  422.166(i)(8) 
and 423.186(i)(6) state that if the measure-level rating is missing for 
most measures

[[Page 54846]]

in the current or prior year and a comparison cannot be done, the 
contract gets the current year's measure-level rating. Therefore, under 
our current regulations, without a change to the 60 percent rule to 
ensure that contracts receive measure-level ratings for the 2022 Star 
Ratings, we would not be able to apply the 25 percent rule to compare 
the 2022 measure-level Star Ratings to the 2021 measure-level Star 
Ratings, and nearly all contracts would have missing 2022 overall and 
summary Star Ratings and 2023 QBPs.
    The change adopted by this IFC will remove application of the 60 
percent rule and avoid the exclusion of contracts with 60 percent or 
more of their enrollees living in FEMA-designated Individual Assistance 
areas from calculation of the non-CAHPS measure-level cut points and 
calculation of the Reward Factor for the 2022 Star Ratings. By removing 
application of this particular exclusion, the performance of contracts 
in 2020 in these service areas will be used to calculate the cut points 
for all non-CAHPS measures and to calculate the Reward Factor; subject 
to these changes, all other Star Ratings rules (as revised in the March 
31st COVID-19 IFC) will apply. This change will ensure that CMS can: 
calculate measure-level cut points for the 2022 Star Ratings; calculate 
measure-level ratings for the 2022 Star Ratings; apply the ``higher 
of'' policy for non-CAHPS measures, as described at Sec. Sec.  
422.166(i)(3)(iv), 422.166(i)(4)(v) and 423.186(i)(4)(i); calculate the 
Reward Factor; and ultimately calculate overall and summary ratings for 
2022 Star Ratings and 2023 QBPs. It is critical to adopt the change in 
this IFC to avoid an unworkable result from the current policy in these 
extraordinary circumstances and so that CMS can measure actual 
performance for the 2020 measurement period so plans have an 
opportunity to demonstrate how they are tailoring care in innovative 
ways to meet the needs of their enrollees during the PHE for COVID-19. 
Given the unprecedented impacts of the PHE for COVID-19, it is 
important to be able to calculate the 2022 Star Ratings to help to 
continue to drive quality improvement for plans and providers.
3. Provisions of IFC
    In this IFC, we are adopting a change to tailor the existing 
disaster policy described at Sec. Sec.  422.166(i) and 423.186(i) to 
address the impact of the PHE for COVID-19 and in calculating the 2022 
Part C and D Star Ratings. As the current rules are written, we will 
not be able to calculate the 2022 overall or summary Star Ratings or 
2023 QBP ratings, and the change adopted in this IFC will avoid that 
outcome and preserve the ability to calculate and issue 2022 Star 
Ratings.
    Furthermore, plans need to know this change so they have certainty 
about how their ratings will be calculated which will allow them to 
focus on providing the best care possible to beneficiaries during the 
remainder of the 2020 measurement period. Without knowing the changes 
made by this IFC to the methodology for calculating the 2022 Star 
Ratings, plans could have conflicting priorities between continued 
focus on caring for enrollees impacted by COVID-19 and keeping Medicare 
beneficiaries safe, while at the same time wanting to ensure that 
future Star Ratings and QBP ratings are not impacted by the PHE for 
COVID-19 which could negatively impact future benefits offered by MA 
organizations. The changes to the calculations for 2022 Star Ratings 
are designed to avoid inadvertently creating incentives for plans to 
place cost considerations above efforts to address the care of patients 
during the PHE for COVID-19, which they may do if they believe that 
quality performance in 2020 would not factor into their 2022 Star 
Rating or potential 2023 QBP.
    This IFC modifies the calculation of the 2022 Part C and D Star 
Ratings to address the application of the extreme and uncontrollable 
circumstances policy for the PHE for COVID-19. Specifically, for the 
2022 Star Ratings, CMS will not exclude the numeric values (that is, 
the performance data) for affected contracts with 60 percent or more of 
their enrollees in FEMA-designated Individual Assistance areas during 
the 2020 performance and measurement period: (1) From the clustering 
algorithms; or (2) from the determination of the performance summary 
and variance thresholds for the Reward Factor. This means that CMS will 
use the performance scores for contracts for the 2020 performance and 
measurement period to establish cut points for non-CAHPS measures and 
the Reward Factor for the 2022 Star Ratings, subject to the other rules 
in the Star Ratings methodology, including the specific rules adopted 
in the March 31st COVID-19 IFC. We are not modifying the 25 percent 
rules, even though it is clear that the 25 percent rules will result in 
nearly all contracts being ``affected contracts'' and eligible for 
adjustment to their measure-level ratings for the 2022 Star Ratings 
because the PHE for COVID-19 was an extreme and uncontrollable 
circumstance that may have negatively impacted contracts' performance 
on Star Ratings measures. Under the 25 percent rules at Sec. Sec.  
422.166(i)(2) through (6) and 423.186(i)(2) through (5), contracts with 
at least 25 percent of their service area in a FEMA-designated 
Individual Assistance area in 2020 will receive the higher of their 
measure-level rating from the current and prior Star Ratings years for 
purposes of calculating the 2022 Star Ratings (thus, for 2022 Star 
Ratings, contracts will receive the higher of their measure-level 
rating from 2021 or 2022).
    For the 2022 Star Ratings, we expect data collection and submission 
of HEDIS and CAHPS data to continue as usual; those data will be 
collected during spring and summer 2021. The majority of measures for 
the 2022 Star Ratings are based on the 2020 measurement year, during 
which the PHE for COVID-19 continues. The March 31st COVID-19 IFC made 
some changes to the methodology for the 2022 Star Ratings so as not to 
inappropriately incentivize actions by plans and healthcare providers 
that are not directly related to the PHE for COVID-19 and to provide 
assurances to Medicare health and drug plans about how performance 
changes driven or caused by the PHE for COVID-19 will be addressed in 
the 2022 Star Ratings. The significant number of declarations of 
Individual Assistance areas makes it impossible to calculate the cut 
points of non-CAHPS measures for the 2022 Star Ratings since almost all 
contracts will be excluded from the calculations as a result of the 60 
percent exclusion rule. In this IFC, at Sec. Sec.  422.166(i)(11) and 
423.186(i)(9), we are revising, for 2022 Star Ratings only, the current 
disaster policy codified at Sec. Sec.  422.166(i) and 423.186(i) to: 
(1) Remove the 60 percent exclusion rule for cut point calculations for 
non-CAHPS measures; and (2) remove the 60 percent exclusion rule for 
the determination of the performance summary and variance thresholds 
for the Reward Factor. The new regulation for MA Star Ratings 
specifically provides that CMS will not apply the provisions Sec. Sec.  
422.166(i)(9) or (i)(10) in calculating the 2022 Star Ratings, and the 
new regulation for the Part D Star Ratings provides that CMS will not 
apply the provisions of Sec. Sec.  423.186(i)(7) or (i)(8) in 
calculating the 2022 Star Ratings. This change will ensure that CMS 
can: (1) Calculate measure-level cut points for the 2022 Star Ratings; 
(2) calculate measure-level Star Ratings for the 2022 Star Ratings; (3) 
apply the ``higher of'' policy for non-CAHPS measures, as described at 
Sec. Sec.  422.166(i)(3)(iv), 422.166(i)(4)(v), and 423.186(i)(4)(i) 
for all contracts with 25 percent or more of their enrollees living

[[Page 54847]]

in FEMA-designated Individual Assistance areas which will include 
almost all Part C and D contracts for the 2020 measurement period; and 
(4) ultimately calculate overall and summary ratings for 2022 Star 
Ratings and 2023 QBPs.

I. Merit-Based Incentive Payment System (MIPS) Updates

1. Quality Performance Category: Expansion of Telehealth Codes Used in 
Beneficiary Assignment for the CMS Web Interface and CAHPS for MIPS 
Survey
a. Background
    On March 17, 2020, we announced (https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet) the 
expansion of payment for telehealth services on a temporary and 
emergency basis pursuant to waiver authority added under section 
1135(b)(8) of the Act by the Coronavirus Preparedness and Response 
Supplemental Appropriations Act, 2020 (Pub. L. 116-123, enacted March 
6, 2020) such that Medicare can pay for telehealth services, including 
office, hospital, and other visits furnished by physicians and other 
practitioners to patients located anywhere in the country, including in 
a patient's place of residence, starting March 6, 2020. In the context 
of the PHE for COVID-19, we recognize that physicians and other 
healthcare professionals are faced with new challenges regarding 
potential exposure risks, including for Medicare beneficiaries, for 
healthcare providers, and for members of the community at large. For 
example, the CDC has urged healthcare professionals to make every 
effort to interview persons under investigation for infection by 
telephone, text messaging system, or video conference instead of in-
person (85 FR 27582). In the March 31st COVID-19 IFC, to facilitate the 
use of telecommunications technology as a safe substitute for in-person 
services, CMS added on an interim basis many services to the list of 
eligible Medicare telehealth services, eliminating frequency 
limitations and other requirements associated with particular services 
furnished via telehealth, and clarifying several payment rules that 
apply to other services that are furnished using telecommunications 
technologies that can reduce exposure risks (85 FR 19232).
    Section 1834(m) of the Act specifies the payment amounts and 
circumstances under which Medicare makes payment for a discrete set of 
services, all of which must ordinarily be furnished in-person, when 
they are instead furnished using interactive, real-time 
telecommunication technology. When furnished under the telehealth 
rules, these specified Medicare telehealth services are reported using 
the same codes used for the ``face-to-face'' services, but are 
furnished using audio/video, real-time, interactive communications 
technology instead of in person. As such, the majority of the codes for 
primary care services included in the additional telehealth services 
added in the March 31st COVID-19 IFC for purposes of the PHE for COVID-
19 are already included in the definition of primary care services for 
purposes of the MIPS beneficiary assignment methodology for the CMS Web 
Interface and CAHPS for MIPS survey (81 FR 77168 through 77169; and 82 
FR 53646 through 53647).
    In the March 31st COVID-19 IFC, we also established flexibilities 
and separate payment for certain services that are furnished virtually 
using communication technologies, but that are not considered Medicare 
telehealth services such as virtual check-ins and e-visits. 
Additionally, we established separate payment for telephone E/M and 
other services codes during the PHE for COVID-19. The communications 
technology-based services (CTBS) and the telephone E/M services are not 
currently included in the definition of primary care services that is 
used for purposes of the MIPS beneficiary assignment methodology for 
the CMS Web Interface and CAHPS for MIPS survey.
    We believe it is critical to include the codes for CTBS and 
telephone E/M services, as identified and discussed later in this 
section, in the definition of primary care services to ensure these 
services are included in our determination of where beneficiaries 
receive the plurality of their primary care for purposes of beneficiary 
assignment. Including these codes will ensure that the assignment 
methodology appropriately reflects the expanded use of technology that 
is helping people who need routine care during the PHE for COVID-19 and 
allowing vulnerable beneficiaries and beneficiaries with mild symptoms 
to remain in their homes, while maintaining access to the care they 
need. By including services provided virtually, either through 
telehealth or other uses of communications technology, we ensure that 
this care is appropriately reflected in our consideration of where 
beneficiaries receive the plurality of their primary care, for purposes 
of assigning beneficiaries to groups and virtual groups.
b. Use of Codes for Virtual Check-ins, Remote Evaluations, E-Visits, 
and Telephone E/M Services in MIPS Beneficiary Assignment for the CMS 
Web Interface and CAHPS for MIPS Survey
    We have added new services to the separately billable CTBS under 
the PFS over the past several years and as a result of the PHE for 
COVID-19, we expect that the utilization of CTBS will substantially 
increase during the PHE for COVID-19 and thereafter. We believe that 
clinicians are increasingly using such services as a key component of 
their ongoing primary care. At Sec.  414.1305, we are codifying the 
definition of primary care services for purposes of MIPS beneficiary 
assignment methodology for the CMS Web Interface and CAHPS for MIPS 
survey. The included codes consist of previously finalized codes that 
are already considered primary care services and additional codes that 
CMS will be treating as primary care services for the duration of the 
PHE for COVID-19. The previously finalized codes are as follows:
     CPT codes: 99201 through 99215 (codes for office or other 
outpatient visit for the E/M of a patient); 99304 through 99318 (codes 
for professional services furnished in a nursing facility, excluding 
professional services furnished in a SNF for claims identified by place 
of service (POS) modifier 31) (81 FR 77168); 99319 through 99340 (codes 
for patient domiciliary, rest home, or custodial care visit); 99341 
through 99350 (codes for E/M services furnished in a patients' home for 
claims identified by POS modifier 12); 99487, 99489, and 99490 (codes 
for chronic care management); and 99495 and 99496 (codes for 
transitional care management services); and
     HCPCS codes: G0402 (code for the Welcome to Medicare 
visit); and G0438 and G0439 (codes for the annual wellness visits).
    The additional codes we are adding through this IFC are as follows: 
(1) CPT codes: 99421, 99422, and 99423 (codes for online digital E/M 
service (e-visit)), and 99441, 99442, and 99443 (codes for telephone E/
M services); and (2) HCPCS codes: G2010 (code for remote evaluation of 
patient video/images) and G2012 (code for virtual check-in).
    We note that including these codes in the MIPS beneficiary 
assignment methodology for the CMS Web Interface and CAHPS for MIPS 
survey aligns with the revision that was made in the May 8th COVID-19 
IFC (85 FR 27583) to the definition of primary care services used for 
purposes of beneficiary assignment

[[Page 54848]]

under the Medicare Shared Savings Program to include the same codes in 
determining beneficiary assignment for performance year 2020 and any 
subsequent performance year that starts during the PHE for COVID-19.
    The services listed above are an important component of primary 
care and as a result, we believe it is appropriate to include these 
codes in the definition of primary care services used for assignment 
for the CMS Web Interface and CAHPS for MIPS survey because the 
services represented by these codes are being used during the PHE for 
COVID-19 in place of similar E/M services, the codes for which are 
already included in the list of codes used for assignment. It should be 
noted that the remote evaluation of patient video/images and virtual 
check-in codes, and the online digital E/M service (e-visit) codes are 
not separately billable by a clinician if they are related to a visit 
within the past 7 days or lead to a visit within the following 24 hours 
or next available appointment. The only codes that are newly billable 
during the PHE for COVID-19 pertain to the telephone E/M services.
    We are including these codes in the definition of primary care 
services for the 2020 MIPS performance year and any subsequent 
performance year that starts during the PHE for COVID-19. We recognize 
that the application of this policy for the 2020 MIPS performance 
period is retroactive. Section 1871(e)(1)(A)(ii) of the Act provides 
for retroactive application of a substantive change to an existing 
policy when the Secretary determines that failure to apply the policy 
change retroactively would be contrary to the public interest. Without 
the inclusion of these codes in the MIPS beneficiary assignment 
methodology for the CMS Web Interface and CAHPS for MIPS survey for the 
2020 MIPS performance year during the PHE for COVID-19, we would not be 
able to adequately account for the ways in which beneficiaries are 
receiving primary care services during the PHE for COVID-19 and as a 
result, the process to derive assignment and sampling of beneficiaries 
for the CMS Web Interface and CAHPS for MIPS survey would not be able 
to comprehensively capture how primary care services are being 
furnished to beneficiaries, which may cause many groups and virtual 
groups to have insufficient sample sizes to be able to administer the 
2020 CAHPS for MIPS survey or report data for the quality performance 
category using the CMS Web Interface measures.
    In regard to the CMS Web Interface, such groups and virtual groups 
may not have sufficient time to select an alternate collection type and 
prepare their systems to report on measures from a different collection 
type before the submission period begins for the 2020 MIPS performance 
period and as a result, they would not be able to meet the quality 
performance category reporting requirements, which could negatively 
impact their MIPS final score and MIPS payment adjustment. We believe 
it is important to include these codes in our assignment methodology 
because we determine assignment based upon where beneficiaries receive 
the plurality of their primary care services and whether beneficiaries 
have designated a MIPS eligible clinician as their primary clinician, 
responsible for their overall care, and hold groups and virtual groups 
accountable for the resulting assigned beneficiary population. 
Including these codes in the definition of primary care services used 
in MIPS beneficiary assignment during the PHE for COVID-19 will result 
in a more accurate identification of where beneficiaries have received 
the plurality of their primary care services.
2. Improvement Activities Performance Category: Improvement Activities 
Inventory Update
a. Background
    The CY 2018 Quality Payment Program final rule (82 FR 53660) 
finalized that we would add new improvement activities or make 
modifications to existing improvement activities in the Improvement 
Activities Inventory through notice-and-comment rulemaking. An 
improvement activity means an activity that relevant MIPS eligible 
clinician, organizations and other relevant stakeholders identify as 
improving clinical practice or care delivery and that the Secretary 
determines, when effectively executed, is likely to result in improved 
outcomes. We refer readers to Table H in the Appendix of the CY 2017 
Quality Payment Program final rule (81 FR 77177 through 77199), Tables 
F and G in the Appendix of the CY 2018 Quality Payment Program final 
rule (82 FR 54175 through 54229), Tables A and B in the Appendix 2 of 
the CY 2019 PFS final rule (83 FR 60286 through 60303), and Tables A, 
B, and C in the Appendix 2 of the CY 2020 PFS final rule (84 FR 63514 
through 63538) for our previously finalized Improvement Activities 
Inventory. We also refer readers to the Quality Payment Program website 
at https://qpp.cms.gov/ for a complete list of the most current list of 
improvement activities.
    The COVID-19 pandemic has been deemed a PHE \66\ by the Secretary 
of the Department of HHS. In response, in the March 31st IFC for COVID-
19 (85 FR 19276 through 19277), we added one new improvement activity 
to the Improvement Activities Inventory for the CY 2020 performance 
period in response to the PHE titled ``COVID-19 Clinical Trials.'' As 
described in the March 31st IFC for COVID-19, this improvement activity 
promotes clinician participation in a COVID-19 clinical trial utilizing 
a drug or biological product to treat a patient with a COVID-19 
infection.\67\ We stated that to receive credit for this improvement 
activity, a clinician must attest to participation in a COVID-19 
clinical trial utilizing a drug or biological product to treat a 
patient with a COVID-19 infection and report their findings through a 
clinical data repository or clinical data registry (85 FR 19276). In 
that IFC, we also stated that we believe that participation in this 
activity would likely result in improved outcomes by improving the 
collection of data clinicians use for the care of their patients as 
they monitor and manage COVID-19 and drive care improvements (85 FR 
19277). We stated that we believe that encouraging clinicians to 
utilize an open source clinical data repository or clinical data 
registry for data reporting will bring the results of their research to 
the forefront of healthcare far quicker than if it goes through the 
cycle of peer review and publishing (85 FR 19277). In addition, we 
stated that we believe that centralized data could improve clinical 
practice and care delivery (85 FR 19277).
---------------------------------------------------------------------------

    \66\ Information regarding the PHE for COVID-19 is available at 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx.
    \67\ For more information on the COVID-19 clinical trials, we 
refer readers to the U.S. National Library of Medicine website at 
https://clinicaltrials.gov/ct2/results?cond=COVID-19.
---------------------------------------------------------------------------

b. Modification
    Following the publication of the March 31st IFC for COVID-19, we 
received several inquiries through meetings, email correspondence, and 
Quality Payment Program help desk requesting further information on 
whether a clinician working with COVID-19 patients who provides their 
data to a clinical data registry, without participating in a clinical 
trial, may get credit for this activity. The Quality Payment Program 
help desk tracks, documents, and resolves inquiries submitted by MIPS 
eligible clinicians and groups. Stakeholders may submit inquiries to 
the help desk via 1-866-288-8292 (Monday-Friday 8 a.m.-8

[[Page 54849]]

p.m. ET) or email [email protected]mailto: [email protected]. Some 
stakeholders believed that clinicians providing care to patients with 
COVID-19 outside of a clinical trial that report that data through a 
clinical data registry should receive credit for this activity. It has 
come to our attention that clinical data registries not only collect 
data as part of clinical trials, but also collect data from clinicians 
not participating in clinical trials. The improvement activity as 
written was causing confusion for clinicians and groups attempting to 
meet the needs of patients and address gaps in research. Since IA_ERP_3 
titled ``COVID-19 Clinical Trials'' was established, this improvement 
activity has been the subject of approximately 30 percent of the 
inquiries to the Quality Payment Program help desk, demonstrating the 
desire for clinicians to improve clinical care and overall outcomes for 
patients diagnosed with COVID-19 by conducting this improvement 
activity, but also indicating the need for further clarity in its 
activity description.
    As a result, we are expanding the improvement activity to include 
clinicians participating in the care of a patient diagnosed with COVID-
19 who simultaneously submit their clinical patient data to a clinical 
data registry for research. Thus, in order to receive credit for this 
improvement activity, a MIPS eligible clinician or group must: (1) 
Participate in a COVID-19 clinical trial utilizing a drug or biological 
product to treat a patient with a COVID-19 infection and report their 
findings through a clinical data repository or clinical data registry 
for the duration of their study; or (2) participate in the care of 
patients diagnosed with COVID-19 and simultaneously submit relevant 
clinical data \68\ to a clinical data registry for ongoing or future 
COVID-19 research.\69\ Data would be submitted to the extent permitted 
by applicable privacy and security laws. We are also modifying the 
improvement activity title to reflect this change.
---------------------------------------------------------------------------

    \68\ We refer readers to the U.S. National Library of Medicine 
website at https://clinicaltrials.gov/ct2/results?cond=COVID-19 for 
more information on the COVID-19 clinical trials.
    \69\ We also refer readers to the National Institute of Health 
website at https://search.nih.gov/search?utf8=%E2%9C%93&affiliate=nih&query=COVID-19+registries&commit=Search for more information on COVID-19 
clinical data registries.
---------------------------------------------------------------------------

    For purposes of this improvement activity, clinical data registries 
must meet the following requirements: (1) The receiving entity must 
declare that they are ready to accept data as a clinical registry; and 
(2) be using the data to improve population health outcomes. Most 
public health agencies and clinical data registries declare readiness 
to accept data from clinicians via a public online posting. Clinical 
data registries should make publicly available specific information on 
what data the registry gathers, technical requirements or 
specifications for how the registry can receive the data, and how the 
registry may use, re-use, or disclose individually identifiable data it 
receives. For purposes of credit toward this improvement activity, any 
data should be sent to the clinical data registry in a structured 
format, which the registry is capable of receiving. A MIPS-eligible 
clinician may submit the data using any standard or format that is 
supported by the clinician's health IT systems, including but not 
limited to, certified functions within those systems. Such methods may 
include, but are not limited to, a secure upload function on a web 
portal, or submission via an intermediary, such as a health information 
exchange. To ensure interoperability and versatility of the data 
submitted, any electronic data should be submitted to the clinical data 
registry using appropriate vocabulary standards for the specific data 
elements, such as those identified in the United States Core Data for 
Interoperability (USCDI) standard adopted in 45 CFR 170.213.
    As stated in the March 31st COVID-19 IFC, we continue to believe 
that participation in this activity is likely to result in improved 
outcomes by improving the collection of data clinicians use for the 
care of their patients. We believe that all clinical data gathered in 
the treatment of patients diagnosed with COVID-19 may be helpful in 
finding a solution to end this pandemic. We believe encouraging 
clinicians collectively to utilize a clinical data registry for data 
reporting could facilitate sharing of data for use in additional 
clinical studies with larger sample sizes. These additional and larger 
clinical studies are likely to identify efficacy of certain treatments, 
which in turn could result in wider improvements in health outcomes, 
including reduced severity and mortality due to COVID-19 across the 
nation. This could benefit patients nationwide as well as improve 
clinical practice and care delivery for the patients of the clinician 
attesting to this improvement activity. We would like to encourage all 
clinicians to provide data through an open source clinical data 
repository or clinical data registry, meaning that the results of 
research are made public, including via publications and scientific 
data sources, which enables reuse, increases transparency, and 
facilitates reproducibility of research results. Furthermore, a 
clinical data registry may allow such data to be publicly available 
which may be used for research.
    We believe that this improvement activity would incentivize 
clinicians to submit COVID-19 data to clinical data registries, which 
is imperative to help combat the PHE for COVID-19 because the data 
could be used to inform research and treatment options and potentially 
save lives. We recognize that under the Promoting Interoperability 
performance category there is the required Public Health and Clinical 
Data Exchange Objective that includes the reporting of data to two 
different public health agencies or clinical data registries.
    We note that under the Promoting Interoperability performance 
category there are five specific types of public health agencies and 
clinical data registries that clinicians may submit data to, including 
an immunization registry or public health registry. The submission 
requirements for the Promoting Interoperability performance category 
would not be changed by this improvement activity. Thus a clinician 
could report COVID-19 data to a public health agency or clinical data 
registry as part of fulfilling one of the required Public Health and 
Clinical Data Exchange Objective reporting options under the Promoting 
Interoperability performance category and include it in their Promoting 
Interoperability performance category data submission. They could also 
receive credit for this improvement activity if they fulfill the 
requirements of the improvement activity and include it in their 
improvement activity performance category data submission.
    We refer readers to section IV.H.3.h.(4)(d)(i)(C) of CY 2019 PFS 
final rule (83 FR 59776 through 59777) where we discussed that high-
weighting should be used for activities that directly address areas 
with the greatest impact on beneficiary care, safety, health, and well-
being and/or is of high intensity, requiring significant investment of 
time and resources. We believe this modified improvement activity 
should still be high-weighted because it directly addresses an area 
with the greatest impact on beneficiary care, safety, health, and well-
being particularly under this PHE for COVID-19 and participation in a 
clinical trial and/or collection and submission of patient data to a 
clinical data registry or repository requires a significant investment 
of time and resources.

[[Page 54850]]

    In the CY 2019 PFS final rule (83 FR 59778 through 59782), we 
provided details regarding the Annual Call for Activities and how 
stakeholders submit potential improvement activities. In general, to 
nominate a new activity or request a modification to an existing 
improvement activity, a stakeholder must submit a nomination form 
available at www.qpp.cms.gov during the Annual Call for Activities. For 
this improvement activity, we made a one-time exception from our 
established Annual Call for Activities timeframe and processes due to 
the PHE for COVID-19 (85 FR 19277). In this IFC, we are again making an 
exception from our established Annual Call for Activities timeframe and 
processes due to the ongoing PHE for COVID-19. We believe the 
modifications to the improvement activity should be established as soon 
as possible because the PHE for COVID-19 continues to require 
considerable effort by clinicians and researchers. As discussed above, 
we want to allow clinicians treating patients with COVID-19 and 
providing that data to a clinical data registry receive credit for this 
improvement activity.
c. Continuation Through CY 2021 Performance Period
    As stated above, we previously added the improvement activity to 
the Inventory for the CY 2020 performance period only in response to 
the PHE for COVID-19. In this IFC, we are extending the newly modified 
COVID-19 Clinical Data Reporting with or without Clinical Trial 
improvement activity through the CY 2021 performance period due to the 
increased rate of COVID-19 infection we are experiencing nationwide. We 
anticipate the need for COVID-19 clinical trials and data collection/
sharing through registries to continue through CY 2021 at which time we 
will reassess whether there remains a need for additional data sharing 
or if preventive measures and clinical treatments have advanced to the 
point where these type of data are not needed. We would like eligible 
clinicians to be able to attest to this improvement activity if it is 
still pertinent. We believe that participation in this improvement 
activity is likely to result in improved outcomes by improving the 
collection of data clinicians use for the care of their patients as 
they monitor and manage COVID-19.
    Table 1 displays a full description of the modified improvement 
activity.

 Table 1--Continuation With Modification of Improvement Activity for the
                  MIPS CY 2020-2021 Performance Periods
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                          Improvement Activity
------------------------------------------------------------------------
Current Activity ID:..............  IA_ERP_3.
Current Subcategory:..............  Emergency Response and Preparedness.
Current Activity Title:...........  COVID-19 Clinical Trials.
Current Activity Description:.....  To receive credit for this activity,
                                     a MIPS-eligible clinician must
                                     participate in a COVID-19 clinical
                                     trial utilizing a drug or
                                     biological product to treat a
                                     patient with a COVID-19 infection
                                     and report their findings through a
                                     clinical data repository or
                                     clinical data registry for the
                                     duration of their study. For more
                                     information on the COVID-19
                                     clinical trials, we refer readers
                                     to the U.S. National Library of
                                     Medicine website at https://clinicaltrials.gov/ct2/results?cond=COVID-19.
Current Weighting:................  High.
Change and Rationale:.............  This improvement activity addresses
                                     the COVID-19 pandemic, which has
                                     been deemed a public health
                                     emergency (PHE) by the Secretary of
                                     the Department of Health and Human
                                     Services.* While this improvement
                                     activity was finalized in the
                                     interim final rule in response to
                                     the PHE for the CY 2020 performance
                                     period only (85 FR 19230), we
                                     believe it should be continued for
                                     the CY 2021 performance period
                                     because the COVID-19 pandemic may
                                     extend into CY 2021, and we would
                                     like eligible clinicians to be able
                                     to attest to this improvement
                                     activity if it is still pertinent.
                                    We believe that clinicians who treat
                                     patients diagnosed with COVID-19
                                     and simultaneously submit relevant
                                     data regarding that patient to a
                                     clinical data registry for COVID-19
                                     research should also receive
                                     credit. We believe that all
                                     clinical data gathered in the
                                     treatment of patients diagnosed
                                     with COVID-19 may be helpful in
                                     finding a solution to end this
                                     pandemic. Encouraging clinicians
                                     collectively to utilize a clinical
                                     data registry for data reporting
                                     could facilitate sharing of data
                                     for use in additional clinical
                                     studies with larger sample sizes.
                                     These additional and larger
                                     clinical studies are likely to
                                     identify efficacy of certain
                                     treatments, which in turn could
                                     result in wider improvements in
                                     health outcomes, including reduced
                                     severity and mortality due to COVID-
                                     19 across the nation. This could
                                     benefit patients nationwide as well
                                     as improve clinical practice and
                                     care delivery for the patients of
                                     the clinician attesting to this
                                     improvement activity.
                                    We refer readers to section
                                     IV.H.3.h.(4)(d)(i)(C) of CY 2019
                                     PFS final rule (83 FR 59776 through
                                     59777) where we discussed that high-
                                     weighting should be used for
                                     activities that directly address
                                     areas with the greatest impact on
                                     beneficiary care, safety, health,
                                     and well-being and/or is of high
                                     intensity, requiring significant
                                     investment of time and resources.
                                     We believe this modified
                                     improvement activity should still
                                     be high-weighted because it
                                     directly addresses an area with the
                                     greatest impact on beneficiary
                                     care, safety, health, and well-
                                     being particularly under this PHE
                                     and participation in a clinical
                                     trial and/or clinical data registry
                                     requires a significant investment
                                     of time and resources.
New Activity Title:...............  COVID-19 Clinical Data Reporting
                                     with or without Clinical Trial.

[[Page 54851]]

 
New Activity Description:.........  In order to receive credit for this
                                     improvement activity, a MIPS
                                     eligible clinician or group must:
                                     (1) Participate in a COVID-19
                                     clinical trial utilizing a drug or
                                     biological product to treat a
                                     patient with a COVID-19 infection
                                     and report their findings through a
                                     clinical data repository or
                                     clinical data registry for the
                                     duration of their study; or (2)
                                     participate in the care of patients
                                     diagnosed with COVID-19 and
                                     simultaneously submit relevant
                                     clinical data to a clinical data
                                     registry for ongoing or future
                                     COVID-19 research. Data would be
                                     submitted to the extent permitted
                                     by applicable privacy and security
                                     laws. Examples of COVID-19 clinical
                                     trials may be found on the U.S.
                                     National Library of Medicine
                                     website at https://clinicaltrials.gov/ct2/results?cond=COVID-19. In addition,
                                     examples of COVID-19 clinical data
                                     registries may be found on the
                                     National Institute of Health
                                     website at https://search.nih.gov/search?utf8=%E2%9C%93&affiliate=nih&query=COVID-19+registries&commit=Search.
                                    For purposes of this improvement
                                     activity, clinical data registries
                                     must meet the following
                                     requirements: (1) The receiving
                                     entity must declare that they are
                                     ready to accept data as a clinical
                                     registry; and (2) be using the data
                                     to improve population health
                                     outcomes. Most public health
                                     agencies and clinical data
                                     registries declare readiness to
                                     accept data from clinicians via a
                                     public online posting. Clinical
                                     data registries should make
                                     publically available specific
                                     information on what data the
                                     registry gathers, technical
                                     requirements or specifications for
                                     how the registry can receive the
                                     data, and how the registry may use,
                                     re-use, or disclose individually
                                     identifiable data it receives. For
                                     purposes of credit toward this
                                     improvement activity, any data
                                     should be sent to the clinical data
                                     registry in a structured format,
                                     which the registry is capable of
                                     receiving. A MIPS-eligible
                                     clinician may submit the data using
                                     any standard or format that is
                                     supported by the clinician's health
                                     IT systems, including but not
                                     limited to, certified functions
                                     within those systems. Such methods
                                     may include, but are not limited
                                     to, a secure upload function on a
                                     web portal, or submission via an
                                     intermediary, such as a health
                                     information exchange. To ensure
                                     interoperability and versatility of
                                     the data submitted, any electronic
                                     data should be submitted to the
                                     clinical data registry using
                                     appropriate vocabulary standards
                                     for the specific data elements,
                                     such as those identified in the
                                     United States Core Data for
                                     Interoperability (USCDI) standard
                                     adopted in 45 CFR 170.213.
New Weighting:....................  High.
------------------------------------------------------------------------
* For more information, see https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx.

J. Requirement for Long-Term Care (LTC) Facilities To Test Facility 
Residents and Staff for COVID-19

    Under sections 1866 and 1902 of the Act, providers of services 
seeking to participate in the Medicare or Medicaid program, or both, 
must enter into an agreement with the Secretary or the state Medicaid 
agency, as appropriate. LTC facilities seeking to be Medicare and 
Medicaid providers of services must be certified as meeting federal 
participation requirements. LTC facilities include skilled nursing 
facilities (SNFs) for Medicare and nursing facilities (NFs) for 
Medicaid. The federal participation requirements for SNFs, NFs, and 
dually certified facilities, are set forth in sections 1819 and 1919 of 
the Act and codified in the implementing regulations at 42 CFR part 
483, subpart B.
    Sections 1819(d)(4)(B) and 1919(d)(4)(B) of the Act explicitly 
authorize the Secretary to issue any regulations deemed necessary to 
protect the health and safety of residents. Sections 1819(d)(3) and 
1919(d)(3) of the Act authorize the Secretary to establish criteria for 
assessing a facility's compliance with such regulations with respect to 
infection control. Under the explicit instructions of Congress, 
existing regulations at Sec.  483.80 require facilities to establish 
and maintain an infection control program designed to provide a safe, 
sanitary, and comfortable environment in which residents reside and to 
help prevent the development and transmission of disease and infection.
    After several months facing the effects of COVID-19, we believe 
there exists a need to strengthen the requirements for LTC facilities 
to better protect residents, members of a high-risk population. As 
demonstrated by the PHE for COVID-19, a strong infection control 
program is critical to protect the health and safety of both residents 
and healthcare personnel of LTC facilities. The CDC has developed 
guidance identifying those who are ``. . . more likely than others to 
become severely ill . . .'' if they become infected with COVID-19 
titled, People Who Are at Increased Risk for Severe Illness (https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-at-increased-risk.html).\70\ Based on this guidance, given the congregate 
nature of LTC facilities and the high-risk nature of the population 
served, LTC facilities are at greater risk of COVID-19 outbreaks as 
well as higher rates of incidence, morbidity, and mortality. To support 
national efforts to control the spread of COVID-19, we are revising the 
LTC facility infection control regulations at Sec.  483.80 to establish 
a new requirement for LTC facilities to test their facility residents 
and staff, including individuals providing services under arrangement 
and volunteers. We believe these requirements will positively and 
substantially impact efforts to control the spread of COVID-19 in LTC 
facilities.
---------------------------------------------------------------------------

    \70\ The Centers for Disease Control and Prevention, (2020). 
People Who Are at Increased Risk for Severe Illness. Retrieved from: 
https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-at-increased-risk.html.
---------------------------------------------------------------------------

1. LTC Facility Resident and Staff Testing
    The CDC published guidelines titled, Testing Guidelines for Nursing 
Homes, which note that, ``Nursing home residents are at high risk for 
infection, serious illness, and death from COVID-19. Testing for 
[COVID-19] . . . can detect current infections . . . among residents in 
nursing homes. Testing is an important addition to other infection 
prevention and control recommendations aimed at preventing [COVID-19] 
from entering nursing homes, detecting cases quickly, and stopping 
transmission.'' \71\ CMS recognizes the need for facilities to protect 
LTC facility staff while preventing the spread of COVID-19 within the 
facility. As a result, we are amending the current infection control 
requirements for LTC facilities at Sec.  483.80 by adding a paragraph 
(h) that requires a facility to test all of its residents and facility 
staff for COVID-19. Under this requirement, ``staff'' are considered 
any individuals employed

[[Page 54852]]

by the facility, any individuals that have arrangements to provide 
services for the facility, and any individuals volunteering at the 
facility. An example of individuals providing services under 
arrangement include a hospice that may have an agreement in accordance 
with the requirements for the use of outside resources under Sec.  
483.70(g) and (o) to provide hospice care for residents in the 
facility. We expect that only those individuals that are physically 
working on-site at the facility be required to be tested for COVID-19. 
The facility may have staff, including individuals providing services 
under arrangement and volunteers, who provide services for the facility 
from an off-site location that is not physically located within the 
facility, and such staff would not be required to be tested for COVID-
19.
---------------------------------------------------------------------------

    \71\ The Centers for Disease Control and Prevention, (2020). 
Testing Guidelines for Nursing Homes. Retrieved from: https://www.cdc.gov/coronavirus/2019-ncov/hcp/nursing-homes-testing.html.
---------------------------------------------------------------------------

    Other individuals may require access to the facility, such as state 
surveyors and ombudsmen. Sections 1819(c)(3)(A) and 1919(c)(3)(A) of 
the Act, and implementing regulations at Sec.  483.10(f)(4)(i)(C), 
require that LTC facilities provide representatives of the State LTC 
Ombudsman with immediate access to any resident. In accordance with the 
guidance published in a CMS Quality, Safety, and Oversight Memorandum 
on April 24, 2020 (and revised on July 9, 2020), during the PHE for 
COVID-19, in-person access to residents may be restricted. If in-person 
access is not advisable due to infection control concerns and 
transmission of COVID-19, facilities must facilitate resident 
communication (for example, by phone or through use of other 
technology) with the ombudsman (QSO-20-28-NH, https://www.cms.gov/files/document/qso-20-28-nh-revised.pdf). Regarding state surveyors, 
facilities have a statutory obligation to allow facility access to the 
surveyors. In accordance with the requirements at 42 CFR part 488, 
state agencies are responsible for ensuring that surveyors are 
following CDC guidance for infection prevention and refraining or 
returning to work.
    At Sec.  483.80(h)(1), we are requiring that resident and staff 
testing for COVID-19 be conducted based on parameters set forth by the 
Secretary. These parameters may include, but are not limited to:
     Testing frequency;
     The identification of any facility resident or staff 
diagnosed with COVID-19 in the facility;
     The identification of any facility resident or staff with 
symptoms consistent with COVID-19 or with known or suspected exposure 
to COVID-19;
     The criteria for conducting testing of asymptomatic 
individuals specified in this paragraph, such as the positivity rate of 
COVID-19 in a county;
     The response time for test results; and
     Other factors specified by the Secretary that help 
identify and prevent the transmission of COVID-19.
    We recognize that there may be additional factors that may be 
useful in developing parameters for COVID-19 testing. As a result, we 
are soliciting comments on other factors the Secretary should consider 
for LTC facility resident and staff testing for COVID-19. The testing 
guidelines that have been specified by the Secretary will be made 
available to LTC facilities via CMS memoranda, and CMS and CDC 
websites.
    We are requiring at Sec.  483.80(h)(2) that all resident and staff 
testing be conducted in a manner that is consistent with current 
professional standards of practice for conducting COVID-19 tests. 
Current ``professional standards of practice'' refers to those 
professional standards that apply at the time that the care or service 
is delivered. Given that COVID-19 is caused by a newly discovered 
coronavirus, the standards of practice for testing for the virus may 
continue to change or evolve as more is learned about the virus and as 
technological advances are developed. Testing residents and staff for 
COVID-19 in a manner that is consistent with current professional 
standards of practice is important to ensure accurate and effective 
testing. A key factor in the effectiveness of testing is the turnaround 
time for results of the tests that are being used. There are many 
different tests available and facilities have the flexibility and 
discretion to select the test that best suits their needs so long as 
the tests are conducted in accordance with nationally recognized 
standards and meet the response time for test results as specified by 
the Secretary. The CDC provides detailed recommendations for testing 
both residents and healthcare personnel for COVID-19 at https://www.cdc.gov/coronavirus/2019-ncov/hcp/nursing-homes-testing.html. These 
recommendations provide information about the use of specific testing 
methods and focus on how testing can be added to other infection 
prevention and control practices to keep COVID-19 out of facilities, 
detect cases quickly, and stop its transmission.
    We are requiring at Sec.  483.80(h)(3)(i) that for each instance of 
resident or staff COVID-19 testing, which includes testing of 
individuals providing services under arrangement and volunteers, the 
facility document that testing was completed and the results of each 
staff test. We expect that this documentation would be located in the 
staff personnel record for all staff. In the case of individuals who 
are providing services under arrangement at the facility, we expect 
that this documentation be located in the record or file that the 
facility maintains for the individual. In the event that no such record 
or file is maintained, we expect that the agreement for the services 
that are being provided under arrangement include a process for 
documenting these results. Consistent with the documentation 
requirements we are adding for LTC facility staff, we are requiring at 
Sec.  483.80(h)(3)(ii) that the facility document in the resident's 
medical record that testing was offered, completed (as appropriate to 
the resident's testing status), and the results of each test.
    According the CDC, ``The virus that causes COVID-19 is spreading 
very easily and sustainably between people. Information from the 
ongoing COVID-19 pandemic suggests that this virus is spreading more 
efficiently than influenza. . . . In general, the more closely a person 
interacts with others and the longer that interaction, the higher the 
risk of COVID-19 spread.'' \72\ The nature of LTC facilities make 
outbreaks of COVID-19 difficult to control. To address the 
transmissibility of COVID-19 in LTC facilities, we are requiring at 
Sec.  483.80(h)(4) that the facility take actions to prevent the 
transmission of COVID-19 when a resident or staff member, including 
individuals providing services under arrangement and volunteers, 
present with symptoms consistent with COVID-19 or who test positive for 
COVID-19.
---------------------------------------------------------------------------

    \72\ The Centers for Disease Control and Prevention (2020). How 
COVID-19 Spreads. Retreived from: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
---------------------------------------------------------------------------

    In accordance with the current regulatory requirements for LTC 
facilities at Sec.  483.80(g), facilities are required to 
electronically report information about COVID-19 in a standardized 
format specified by the Secretary, which includes reporting suspected 
and confirmed COVID-19 infections among residents and staff.
    For facility staff, we expect facilities to restrict the access to 
the facility for any staff member, including individuals providing 
services under arrangement and volunteers, who presents with symptoms 
consistent with COVID-19 or who tests positive for COVID-19 until he or 
she is deemed to be safe to return to work. The testing guidelines 
specified

[[Page 54853]]

by the Secretary include specified return to work criteria. Following 
the return to work criteria established by the Secretary will ensure 
that staff, including individuals providing services under arrangement 
and volunteers, who are still capable of spreading the virus do not 
have access to the facility, thus increasing resident safety by 
removing any potential threats of exposure. These proactive efforts 
support a facility's ability to prevent outbreaks, create opportunities 
for early intervention, and mitigate the transmission of the virus 
between healthcare personnel and facility residents.
    For facility residents who present with symptoms consistent with 
COVID-19 or who test positive for COVID-19, we expect the facility to 
take measures to mitigate the transmission of the virus within the 
facility that may include resident cohorting, consistent with CDC's 
guidance, Responding to Coronavirus (COVID-19) in Nursing Homes.\73\ 
Cohorting involves preventing the spread of COVID-19 in the facility by 
confining residents who are known or suspected to have COVID-19 to a 
specified area to prevent contact with other residents who do not have 
(or suspected to have) COVID-19. The CDC's current recommendations 
include avoiding the sharing of staff between residents that are COVID-
19 positive and residents that have not tested positive.
---------------------------------------------------------------------------

    \73\ The Centers for Disease Control and Prevention, (2020). 
Responding to Coronavirus (COVID-19) in Nursing Homes. Retrieved 
from: https://www.cdc.gov/coronavirus/2019-ncov/hcp/nursing-homes-responding.html.
---------------------------------------------------------------------------

    We acknowledge that not all residents and staff will consent to 
COVID-19 testing. In accordance with the requirements at Sec.  
483.10(c)(6), residents have the right to refuse and/or discontinue 
treatment. In addition, staff retain the right to refuse COVID-19 
testing. There may also be instances in which facility residents or 
staff are not able to be tested, such as the presence of anatomical or 
other medical contraindications. At Sec.  483.80(h)(5), we are 
requiring that the facility have procedures for addressing residents 
and staff, including individuals providing services under arrangement 
and volunteers, who refuse or are unable to be tested. In these 
instance, we also expect facilities to take steps to maintain the 
health and safety of its staff and residents who have not been 
diagnosed with COVID-19 that may include limiting the staff's access to 
the facility and cohorting residents.
    We are requiring at Sec.  483.80(h)(6) that the LTC facility must 
coordinate with state and local health departments on the availability 
of testing supplies, obtaining testing supplies, and processing test 
results when necessary. As appropriate, facilities should also 
coordintate with their tribal representatives and authorities for these 
resources as well. Facilities may also coordinate with their local 
certified laboratories covered under Clinical Laboratory Improvement 
Amendments (CLIA) on the availability of testing supplies, obtaining 
testing suppliers, and processing test results. Considerations such as 
access to adequate testing supplies and arrangements for acquiring 
testing supplies must be addressed by a facility's infection prevention 
and control plan. Additionally, the testing plan must include any 
arrangements that may be necessary to conduct, process, and receive 
test results prior to the administration of the required tests.
    LTC facilities are currently required to have policies and 
procedures in place to address the use of volunteers in an emergency 
under the emergency preparedness requirements at Sec.  483.73(b)(6). 
During this pandemic, the use of volunteers and other emergency 
staffing strategies, including the use of state and federal healthcare 
professionals, is important in addressing staff shortages. Facilities 
are expected to assess their ability to replace workers who can no 
longer work, either on a short term basis or permanently, with 
personnel trained for the vacant positions. The LTC facility should 
maintain an appropriate staffing level at all times to provide a safe 
work environment for healthcare personnel (HCP) and safe resident care. 
As the COVID-19 pandemic continues, staffing shortages will likely 
occur due to HCP exposures and illness. Due to the unique challenges in 
managing the mitigation of COVID-19, facilities should assess their 
staffing needs and the minimum number of staff needed to provide a safe 
work environment and care for residents. In addition, facilities should 
be prepared to make various adjustments such as using volunteers, and 
adjusting work and time-off schedules. Facilities should also be 
prepared to contact ``The Emergency System for Advance Registration of 
Volunteer Health Professionals'' (https://www.phe.gov/esarvhp), their 
local healthcare coalition, federal, state and local healthcare 
partners for assistance with staffing shortages. Further resources and 
guidelines, such as those provided by the CDC at https://www.cdc.gov/coronavirus/2019-ncov/hcp/mitigating-staff-shortages.html, can provide 
additional suggestions for managing staff shortages.
    We believe that these new regulatory actions strengthen CMS' 
response to the PHE for COVID-19, and reaffirms our commitment to 
transparency and protecting the health and safety of LTC residents. As 
discussed in section III. of this IFC, ``Waiver of Proposed 
Rulemaking'', we believe the urgency of this PHE for COVID-19 
constitutes good cause to waive the normal notice-and-comment process 
under the APA and section 1871(b)(2)(C) of the Act. Waiving notice and 
comment is in the public interest, because time is of the essence in 
controlling the spread of COVID-19, and universal resident and staff 
testing will assist public health officials in detecting outbreaks and 
saving lives.

III. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule before 
the provisions of the rule are finalized, either as proposed or as 
amended in response to public comments, and take effect, in accordance 
with the Administrative Procedure Act (APA) (Pub. L. 79-404), 5 U.S.C. 
553, and, where applicable, section 1871 of the Act. Specifically, 5 
U.S.C. 553 requires the agency to publish a notice of the proposed rule 
in the Federal Register that includes a reference to the legal 
authority under which the rule is proposed, and the terms and substance 
of the proposed rule or a description of the subjects and issues 
involved. Further, 5 U.S.C. 553 requires the agency to give interested 
parties the opportunity to participate in the rulemaking through public 
comment before the provisions of the rule take effect. Similarly, 
section 1871(b)(1) of the Act requires the Secretary to provide for 
notice of the proposed rule in the Federal Register and a period of not 
less than 60 days for public comment for rulemaking carrying out the 
administration of the insurance programs under title XVIII of the Act. 
Section 1871(b)(2)(C) of the Act and 5 U.S.C. 553 authorize the agency 
to waive these procedures, however, if the agency for good cause finds 
that notice and comment procedures are impracticable, unnecessary, or 
contrary to the public interest and incorporates a statement of the 
finding and its reasons in the rule issued.
    Section 553(b)(B) of title 5 of the U.S. Code ordinarily requires a 
30-day delay in the effective date of a final rule from the date of its 
publication in the Federal Register. This 30-day delay in effective 
date can be waived, however, if an

[[Page 54854]]

agency finds good cause to support an earlier effective date. Section 
1871(e)(1)(B)(i) of the Act also prohibits a substantive rule from 
taking effect before the end of the 30-day period beginning on the date 
the rule is issued or published. However, section 1871(e)(1)(B)(ii) of 
the Act permits a substantive rule to take effect before 30 days if the 
Secretary finds that a waiver of the 30-day period is necessary to 
comply with statutory requirements or that the 30-day delay would be 
contrary to the public interest. Furthermore, section 1871(e)(1)(A)(ii) 
of the Act permits a substantive change in regulations, manual 
instructions, interpretive rules, statements of policy, or guidelines 
of general applicability under Title XVIII of the Act to be applied 
retroactively to items and services furnished before the effective date 
of the change if the failure to apply the change retroactively would be 
contrary to the public interest. Finally, the Congressional Review Act 
(CRA) (Pub. L. 104-121, Title II) requires a delay in the effective 
date for major rules unless an agency finds good cause that notice and 
public procedure are impracticable, unnecessary, or contrary to the 
public interest, in which case the rule shall take effect at such time 
as the agency determines. 5 U.S.C. 801(a)(3), 808(2).
    On January 30, 2020, the International Health Regulations Emergency 
Committee of the World Health Organization (WHO) declared the outbreak 
a ``Public Health Emergency of international concern''. On January 31, 
2020, pursuant to section 319 of the PHSA, the Secretary determined 
that a PHE exists for the United States to aid the nation's healthcare 
community in responding to COVID-19. On March 11, 2020, the WHO 
publicly declared COVID-19 a pandemic. On March 13, 2020, the President 
declared the COVID-19 pandemic a national emergency. Effective July 25, 
2020, the Secretary renewed the January 31, 2020 determination that was 
previously renewed on April 21, 2020, that a PHE exists and has existed 
since January 27, 2020. This declaration, along with the Secretary's 
January 30, 2020 declaration of a PHE, conferred on the Secretary 
certain waiver authorities under section 1135 of the Act. On March 13, 
2020, the Secretary authorized waivers under section 1135 of the Act, 
effective March 1, 2020.\74\
---------------------------------------------------------------------------

    \74\ https://www.phe.gov/emergency/news/healthactions/section1135/Pages/covid19-13March20.aspx.
---------------------------------------------------------------------------

    Ensuring the health and safety of all Americans, including Medicare 
beneficiaries, Medicaid recipients, and healthcare workers is of 
primary importance. This IFC directly supports that goal by requiring 
COVID-19 reporting by hospitals, CAHs, and CLIA laboratories; by 
requiring testing of nursing home staff and residents; and by 
strengthening enforcement of important nursing home infection 
prevention and control requirements related to COVID-19 reporting. It 
is critically important that we implement the policies in this IFC as 
quickly as possible. As we are in the midst of the PHE for COVID-19, we 
find good cause to waive notice and comment rulemaking as we believe it 
would be impracticable and contrary to the public interest for us to 
undertake normal notice and comment rulemaking procedures. For the same 
reasons, because we cannot afford any delay in effectuating this IFC, 
we find good cause to waive the 30-day delay in the effective date and, 
moreover, to establish these policies in this IFC applicable as of the 
date this rule is published.
    In this IFC, we are revising the previous policy outlined in the 
May 8th COVID-19 IFC, which allowed for broad COVID-19 testing for a 
single beneficiary without a physician order, by establishing that only 
a single COVID-19 test and one of each other related test (as listed in 
the May 8th COVID-19 IFC) without a treating physician or NPP order is 
reasonable and necessary. We are also establishing a policy whereby the 
orders of pharmacists and other practitioners that are allowed to order 
laboratory tests in accordance with state scope of practice and other 
pertinent laws can fulfill the requirements related to orders for 
covered COVID-19 tests for Medicare patients.
    Just as the previous policy was developed based on what was known 
about COVID-19 at the time, as additional information has become 
available, policies require modification. Whereas we are committed to 
reducing impediments to access to COVID-19 testing and the other 
related tests identified in the May 8th COVID-19 IFC, we believe that 
it is contrary to the public interest to allow open-ended coverage of 
COVID-19 testing without an order from a physician, practitioner, or 
other healthcare professional. Our determination to revise the May 8th 
IFC policy is due both to the significant potential for fraud, waste, 
and abuse, as well as public health and safety issues that would arise 
from beneficiaries being subjected to repeated testing without proper 
medical attention or oversight, including public health issues with the 
ongoing spread of COVID-19.
    Laboratory testing has been a significant source of fraud and abuse 
in the Medicare program. We have already found that schemes are 
occurring whereby fraudulent laboratories and telemarketing companies 
are directly contacting beneficiaries, oftentimes using stolen 
identifying information, to solicit items and services payable by 
Medicare under the guise of COVID-19 treatment or prevention. In fact, 
an HHS Office of Inspector General (HHS-OIG) fraud alert \75\ describes 
situations in which scammers are offering unapproved and illegitimate 
COVID-19 tests and other services to Medicare beneficiaries in exchange 
for personal details, including Medicare information. The financial 
impact of this fraud risk is exacerbated by the ability of the 
laboratory to perform expensive add-on tests, such as to confirm or 
rule-out diagnoses other than COVID-19, that are not medically 
necessary.
---------------------------------------------------------------------------

    \75\ https://oig.hhs.gov/coronavirus/fraud-alert-covid19.asp.
---------------------------------------------------------------------------

    We also believe that allowing Medicare payment for one test without 
an order will allow beneficiaries access to urgent testing, as we 
outlined in the May 8th COVID-19 IFC, yet also provide sufficient 
opportunity for beneficiaries to seek out the medical care needed to 
ensure that the test results are interpreted and acted upon 
appropriately, both from the perspective of the individual beneficiary 
and also in the context of the area of the country in which the 
beneficiary is located. Executing an effective, regional response to 
COVID-19 disease requires coordinated effort and guidance by qualified 
medical professionals who know how to interpret and react to testing 
results. When a physician or other healthcare provider is able to 
counsel patients who are being tested for COVID-19, beneficiaries may 
be more likely to isolate themselves more quickly, which may reduce 
transmission in the community. Consistent with this information, CMS 
and CDC recently announced that they are taking steps to ensure that 
physicians and other practitioners who counsel patients on COVID-19 
testing are paid for these services.\76\
---------------------------------------------------------------------------

    \76\ https://www.cms.gov/newsroom/press-releases/cms-and-cdc-announce-provider-reimbursement-available-counseling-patients-self-isolate-time-covid-19.
---------------------------------------------------------------------------

    We also believe that pharmacists and other healthcare professionals 
play an important role in the response to the PHE for COVID-19, and to 
further ensure that beneficiaries continue to have access to 
appropriate COVID-19 testing even when some professional care is not 
separately billable under

[[Page 54855]]

Medicare, we are establishing a policy whereby otherwise covered COVID-
19 and specified related tests ordered by pharmacists and other 
healthcare professionals who are authorized to order diagnostic 
laboratory tests in accordance with state scope of practice and other 
pertinent laws are covered for the duration of the PHE for COVID-19.
    In this IFC, we are updating the extraordinary circumstances 
exceptions (ECEs) we granted on March 22, 2020, for the ESRD QIP, HAC 
Reduction Program, HRRP, and Hospital VBP Program in response to the 
PHE for COVID-19. We are also revising the FY 2022 performance period 
under the SNF VBP Program.
    We believe that these policy updates are immediately necessary to 
provide clarification to hospitals, dialysis facilities, and SNFs on 
which reporting requirements under the ESRD QIP, HAC Reduction Program, 
HRRP, Hospital VBP Program, and SNF VBP Program are excepted and how 
the exceptions will impact program scoring. These updates will also 
clarify how optionally submitted data for excepted reporting periods 
will be used. Since existing Q1 and Q2 2020 deadlines are upcoming in 
August, October and November 2020, providing this clarification now 
will allow hospitals, facilities and SNFs to have the information they 
need and the flexibility to determine how best to direct their 
resources during the PHE for COVID-19. Therefore, we believe that it 
would be impracticable and contrary to the public interest to undertake 
full notice and comment rulemaking to implement these policies.
    The IFC also modifies the calculation of the 2022 Part C and D Star 
Ratings to address the application of the extreme and uncontrollable 
circumstances policy for the PHE for COVID-19. Applying the 60 percent 
rule to 2022 Star Ratings would result in removal of a large fraction 
of contracts from threshold calculations, resulting in too few 
contracts to reliably calculate cut points for non-CAHPS measures using 
the clustering methodology and too few contracts to reliably calculate 
and apply Reward Factors for 2022 Star Ratings; failure to adopt the 
change would result in CMS' inability to calculate 2022 Star Ratings. 
This change to the calculation methodology for the 2022 Star Ratings is 
urgently necessary to ensure that MA organizations, cost plans, and 
Part D plan sponsors are aware during the 2020 measurement period how 
their performance in the 2020 measurement period will be used in 
calculating the Star Ratings.
    We believe that the clarifications are immediately necessary to 
address both program integrity and clinical issues that have arisen 
since the publication of the May 8th COVID-19 IFC. We believe that it 
is contrary to the public interest to allow open-ended coverage of 
COVID-19 testing without an order due to the significant potential for 
fraud, waste, and abuse, as well as public health and safety issues 
that would arise from beneficiaries being subjected to testing without 
proper medical necessity or oversight.
    In this IFC, we clarify the data reporting requirements for issuers 
of risk adjustment covered plans to specify that, for the purposes of 
2020 benefit year risk adjustment data submissions, issuers of risk 
adjustment-covered plans that provide temporary premium credits must 
report to their EDGE server the adjusted plan premiums that reflect 
actual premiums billed to enrollees, taking the premium credits into 
account as a reduction in premiums. In addition, we clarify that, 
consistent with the reporting of the actual premium amounts billed to 
enrollees for 2020 benefit year risk adjustment data submissions, HHS's 
calculation of risk adjustment payment and charges for the 2020 benefit 
year under the state payment transfer formula \77\ will be calculated 
using the statewide average premium that reflects actual premiums 
billed, taking into account any temporary premium credits provided as a 
reduction in premium for the applicable months of 2020 coverage, 
including premium credits that were not provided in a manner consistent 
with the August 4, 2020 memo. We believe that, in light of the 
temporary premium credits authorized in CMS guidance during the PHE for 
COVID-19, immediate clarification on risk adjustment reporting 
requirements are necessary in order to maintain confidence in the risk 
adjustment program and stability in the individual and small group (or 
merged) insurance markets, as issuers have already begun to prepare for 
2020 benefit year risk adjustment data submission. These clarifications 
are also immediately necessary to enable issuers to move quickly to 
evaluate the impact of these policies and, for those that elect to do 
so, to begin providing this premium relief to support continuity of 
coverage for those enrollees adversely affected financially by the PHE 
for COVID-19. We believe that it is contrary to the public interest to 
require full notice and comment because delayed clarification may 
prevent some issuers from offering temporary premium credits and may 
lead some enrollees who have been adversely affected financially by 
COVID-19 to lose health insurance coverage.
---------------------------------------------------------------------------

    \77\ The state payment transfer formula refers to the part of 
the HHS risk adjustment methodology established consistent with 45 
CFR 153.320 that calculates payments and charges at the state market 
risk pool level. See, for example, the 2020 Payment Notice final 
rule, 84 FR at 17485. The state payment transfer calculations are 
performed prior to the calculation of the high-cost risk pool 
payment and charge terms.
---------------------------------------------------------------------------

    In this IFC, we similarly clarify the MLR reporting and rebate 
requirements in 45 CFR part 158 for issuers that elect to provide 
temporary premium credits in 2020 such that these issuers must report 
as earned premium the actual premium billed to enrollees, taking into 
account any temporary premium credits as a reduction in premium for the 
applicable months of 2020 coverage. These changes are necessary to 
align MLR calculations with the flexibilities provided to issuers and 
states elsewhere in this rulemaking to respond to the PHE for COVID-19. 
HHS believes that these clarifications are immediately necessary to 
enable issuers to quickly and accurately evaluate the financial impact 
of offering temporary premium credits to enrollees to support 
continuity of coverage during the PHE for COVID-19. We believe that it 
is contrary to the public interest to require full notice and comment 
because delayed clarification may prevent some issuers from offering 
temporary premium credits and may lead some enrollees who have been 
adversely affected financially by COVID-19 to lose health insurance 
coverage.
    In this IFC, we are including CPT and HCPCS codes for CTBS and 
telephone E/M services to the definition of primary care services that 
is used for purposes of the MIPS beneficiary assignment methodology for 
the CMS Web Interface and the CAHPS for MIPS survey in order to ensure 
these services are included in determining where beneficiaries receive 
the plurality of their primary care for purposes of beneficiary 
assignment. Without the inclusion of these codes in the MIPS 
beneficiary assignment methodology for the CMS Web Interface and CAHPS 
for MIPS survey for the 2020 MIPS performance year and any subsequent 
performance year that starts during the PHE for COVID-19, we would not 
be able to adequately account for the ways in which beneficiaries are 
receiving primary care services during the PHE for COVID-19 and as a 
result, the process to derive assignment and sampling of beneficiaries 
for the CMS Web Interface and CAHPS for MIPS survey would not be able 
to comprehensively capture how primary care services are being 
furnished to beneficiaries, which may

[[Page 54856]]

cause many groups and virtual groups to have insufficient sample sizes 
to be able to administer the 2020 CAHPS for MIPS survey or report data 
for the quality performance category using the CMS Web Interface 
measures. Therefore, these codes are necessary to ensure a 
comprehensive assessment of MIPS quality performance and avoid imposing 
undue burden on clinicians during the PHE for COVID-19.
    Lastly, under the MIPS Program in this IFC, we are also: (1) 
Expanding IA_ERP_3 to include clinicians participating in the care of a 
patient diagnosed with COVID-19 who simultaneously submit their 
clinical patient data to a clinical data registry for research; (2) 
updating the title; and (3) extending the activity through the CY 2021 
performance period. For this improvement activity, we are making a one-
time exception from our established Annual Call for Activities 
timeframe and processes due to the ongoing PHE for COVID-19. The 
modifications to the improvement activity should be established as soon 
as possible because the PHE for COVID-19 continues to require 
considerable effort by clinicians and researchers and this modified 
improvement activity would allow clinicians who treat patients with 
COVID-19 and provide data to a clinical data registry to receive credit 
under MIPS. We believe that this improvement activity as modified would 
incentive clinicians to submit COVID-19 data to clinical data 
registries, which is imperative to help combat the PHE for COVID-19 as 
the data could be used to inform research and treatment options and 
potentially save lives. We believe that all clinical data gathered in 
the treatment of patients diagnosed with COVID-19 may be helpful in 
finding a solution to end this pandemic, and the earlier the data is 
collected and shared, the sooner clinical treatment can evolve and a 
solution may be found. In this IFC, we are also extending the newly 
modified COVID-19 Clinical Data Reporting with or without Clinical 
Trial improvement activity through the CY 2021 performance period due 
to the increased rate of COVID-19 infection we are experiencing 
nationwide. We believe that the continued and increasing need for a 
solution to the PHE for COVID-19 indicates that we should encourage 
both participation in clinical trials, as well as data collection and 
sharing through clinical data registries as soon as practicable and at 
least through CY 2021.
    For this IFC, we believe it would be impracticable and contrary to 
the public interest for us to undertake normal notice and comment 
procedures and to thereby delay the effective date of this IFC. We find 
good cause to waive notice of proposed rulemaking under the APA, 5 
U.S.C. 553(b)(B), and section 1871(b)(2)(C) of the Act. For those same 
reasons, as authorized by the CRA, 5 U.S.C. 808(2), we find it is 
impracticable and contrary to the public interest not to waive the 
delay in effective date of this IFC under the CRA, 5 U.S.C. 801(a)(3). 
Therefore, we find there is good cause to waive the CRA's delay in 
effective date pursuant to the CRA, 5 U.S.C. 808(2).

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 (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.
Collection of Information for Clinical Laboratories
    We are soliciting public comment on each of the section 
3506(c)(2)(A)-required issues for the following information collection 
requirements (ICRs). The requirements and burden related to laboratory 
test result reporting is covered under OMB Control Number 0920-1299. 
CDC will be collecting the test results and other information related 
to SARS-CoV-2 testing. CDC will then provide the information to CMS to 
ensure that CLIA-certified laboratories are reporting as required under 
the CLIA regulations.

A. Laboratory Costs To Develop a Mechanism to Track SARS-CoV-2 Test 
Results

    As discussed in section II. of this IFC, we are adding Sec. Sec.  
493.41 and 493.1100(a) to require that, during the PHE for COVID-19, 
each CLIA-certified laboratory that performs a test that is intended to 
detect SARS-CoV-2 or to diagnose a possible case of COVID-19 must 
report SARS-CoV-2 test results in such form and manner, and at such 
timing and frequency, as the Secretary may prescribe. We estimate that 
approximately 30 percent (n (number) =77,024) of the total CLIA-
certified laboratories \78\ could potentially be performing SARS-CoV-2 
testing. We are soliciting public comments related to the number of 
laboratories performing SARS-CoV-2 testing. Each of these laboratories 
would incur a one-time cost for the time needed to develop a mechanism 
to track and collect SARS-CoV-2 test results to be in compliance with 
this new requirement. We estimate it would take each laboratory 5 to 7 
hours to develop such a mechanism. The burden hours range from 385,120 
to 539,168 (77,024 laboratories x 5 or 7 hours). A management level 
employee (11-9111) would perform this task at an hourly wage of $55.37 
per hour as published by the Bureau of Labor Statistics (BLS) in 
2019).\79\ The wage rate would be doubled to $110.74 to include 
overhead and fringe benefits. In addition, a database administrator/
architect (15-1245) would be needed to perform this task at an hourly 
wage of $46.21 per hour as published by the BLS in 2019.\80\ The wage 
rate would be doubled to $92.42 to include overhead and fringe 
benefits. The total hourly wage would be $203.16 ($110.74+ $92.42). The 
total cost would range from $78,240,979 to $109,537,371 (385,120 to 
539,168 x $203.16).
---------------------------------------------------------------------------

    \78\ Includes Certificate of Waiver (CoW), Certificate of 
Provider-Performed Microscopy (PPM), Certificate of Compliance (CoC) 
and Certificate of Accreditation (CoA). Based on the CLIA web page 
the total number of laboratories as of March 2020 are as follows: 
CoW, n=193,474; PPM n=30,120; CoC n=17,432; CoA n=15,721; total 
=256,747.
    \79\ https://www.bls.gov/oes/current/oes_nat.htm. (11-9111).
    \80\ https://www.bls.gov/oes/current/oes_nat.htm. (15-1245).
---------------------------------------------------------------------------

B. Laboratory Costs To Collect SARS-CoV-2 Test Results for Reporting

    As discussed in section II. of this IFC, we are adding Sec. Sec.  
493.41 and 493.1100(a) to require that, during the PHE for COVID-19, 
each laboratory that performs a SARS-CoV-2 test must report SARS-CoV-2 
test results in such form and manner, and at such timing and frequency, 
as the Secretary may prescribe. We estimate that the approximately 30 
percent (n=77,024) of the total CLIA-certified laboratories could 
potentially be performing SARS-CoV-2 and need to collect and report 
test results in accordance with Sec. Sec.  493.41 and 493.1100(a). For 
purposes of this IFC, we are estimating a wide range of

[[Page 54857]]

test volumes to approximate a range from low volume laboratory to a 
laboratory using high throughput technology. We estimate that a low 
volume laboratory may report out 20 test results in a 24-hour period 
and a high throughput laboratory may report out 500 test results during 
the same period. We estimate it would take each laboratory 
approximately 0.5 hours for low volume laboratories and approximately 3 
hours per day for a high throughput laboratory to collect this 
information to be in compliance with this new requirement. The burden 
hours range from 38,512 to 231,072 (77,024 laboratories x 0.5 or 3 
hours). A clinical laboratory technician would perform this task at an 
hourly wage of $26.34 per hour as published by the BLS in 2019.\81\ The 
wage rate would be doubled to $52.68 to include overhead and fringe 
benefits. The total cost would range from $2,028,812 to $12,172,873 
(38,512 to 231,072 x $52.68) per day to collect the required 
information. Collection of test results would be an ongoing burden for 
each laboratory performing this type of testing.
---------------------------------------------------------------------------

    \81\ https://www.bls.gov/oes/current/oes_nat.htm. (29-2010).
---------------------------------------------------------------------------

C. Laboratory Costs To Report SARS-CoV-2 Test Results

    As discussed in section II. of this IFC, we are adding Sec. Sec.  
493.41 and 493.1100(a) to require that, during the PHE for COVID-19, 
each laboratory that performs a SARS-CoV-2 test must report SARS-CoV-2 
test results in such form and manner, and at such timing and frequency, 
as the Secretary may prescribe. We estimated the number of laboratories 
as outlined in section IV.A. of this IFC. We estimate that the 
approximately 30 percent (n=77,024) of the total CLIA-certified 
laboratories could potentially be performing SARS-CoV-2 and need to 
report test results in accordance with Sec. Sec.  493.41 and 
493.1100(a).
    For purposes of this IFC, we are estimating a wide range of test 
volumes to approximate a range from low volume laboratory to a 
laboratory using high throughput technology. We estimate that a low 
volume laboratory may report out 20 test results in a 24-hour period 
and a high throughput laboratory may report out 500 test results during 
the same period. We estimate it would take each laboratory 
approximately 0.5 hours for low volume laboratories and approximately 3 
hours for a high throughput laboratory to report this information to be 
in compliance with this new requirement. The burden hours range from 
38,512 to 231,072 (77,024 laboratories x 0.5 or 3 hours). A healthcare 
support worker (31-9099) would perform this task at an hourly wage of 
$19.24 per hour as published by the BLS in 2019.\82\ The wage rate 
would be doubled to $38.48 to include overhead and fringe benefits. The 
total cost would range from $1,481,942 to $8,891,651 (38,512 to 231,072 
x $38.48) per day to collect the required information. Reporting of 
test results would be an ongoing burden for each laboratory performing 
this type of testing.
---------------------------------------------------------------------------

    \82\ https://www.bls.gov/oes/current/oes_nat.htm. (31-9099).
---------------------------------------------------------------------------

D. Laboratory Costs to Update Policies and Procedures

    We expect that the approximately 77,024 laboratories performing 
SARS-CoV-2 testing would incur costs for the time needed to review the 
revised reporting regulations and update their policies and procedures 
to be in compliance. We estimate the total one-time burden per 
laboratory to review and update affected policies and procedures is 5 
hours. The burden hours are 385,120 (77,024 laboratories x 5 hours). A 
management level employee would perform this task at an hourly wage of 
$55.37 per hour as published by the BLS in 2019.\83\ The wage rate 
would be $110.74 to include overhead and fringe benefits. The total 
estimated cost would be $42,648,189 (385,120 hours x $110.74).
---------------------------------------------------------------------------

    \83\ https://www.bls.gov/oes/current/oes_nat.htm. (11-9111).
---------------------------------------------------------------------------

E. Accreditation Organization (AO) and Exempt State (ES) Costs To 
Update Standards for Reporting SARS-CoV-2 Test Results

    We would expect the seven approved AOs and two ESs would have to 
review their standards, provide updates and submit the changes to CMS 
related to SARS-CoV-2 test reporting for approval (9 organizations/
exempt states x 25 or 30 hours). The CLIA regulations require both the 
AOs and ESs to have requirements that are equal to, or more stringent 
than the CLIA condition-level requirements, and the laboratory would 
meet the condition-level requirements if it were inspected against 
these requirements.\84\ We assume a one-time cost of 25 to 30 hours to 
identify the applicable legal obligations and to develop the updated 
standards needed to reflect the new requirements for SARS-CoV-2 
testing. The burden hours range from 225 to 270 (9 AO/ESs x 25 or 30 
hours). A management level employee (11-9111) would perform this task 
at an hourly wage of $55.37 per hour as published by the BLS in 
2019.\85\ The wage rate would be doubled to $110.74 to include overhead 
and fringe benefits. The total cost would range from would range from 
$24,917 to $29,900 (225 to 270 hours x $110.74).
---------------------------------------------------------------------------

    \84\ CLIA Requirements at 42 CFR 493.551 (https://www.ecfr.gov/cgi-bin/text-idx?SID=1248e3189da5e5f936e55315402bc38b&node=pt42.5.493&rgn=div5%23se42.5.493_1551).
    \85\ https://www.bls.gov/oes/current/oes_nat.htm. (11-9111).
---------------------------------------------------------------------------

F. Accreditation Organization (AO) and Exempt State (ES) Costs To 
Update Policies and Procedures Related to Reporting Laboratories 
Performing SARS-CoV-2 Testing That Do Not Report Results as Required

    We would expect the seven approved AOs and two ESs would have to 
develop policies and procedures related to identifying laboratories 
that do not report SARS-CoV-2 test results in order to report these 
laboratories to CMS. In the case of the accredited laboratories, the 
laboratories identified as not reporting SARS-CoV-2 results as required 
would result in CMS taking an enforcement action as described in 
section II. of this IFC. As stated in section IV.G. of this IFC, the 
CLIA regulations require both the AOs and ESs to have requirements that 
are equal to, or more stringent, the CLIA condition-level requirements, 
so we would expect the AOs and ESs to have equivalent reporting 
requirements to CMS. AOs do not impose CMPs; however, ESs do have the 
ability to impose CMPs so we would expect ESs to have an equivalent 
penalty structure to CMS. The ES are generally approved by CMS to 
operate their own oversight programs so we would expect that the two 
ESs would report these laboratories to CMS, but would then impose the 
penalties based on their CMS-approved updated standards. We are 
requiring the AOs/ESs to report this information to CMS no later than 
10 days from identifying a laboratory that has failed to report SARS-
CoV-2 test results as required. We assume a one-time cost of 10 to 15 
hours to develop the policy and procedures needed to reflect the new 
requirements for reporting of SARS-CoV-2 test results. The burden hours 
range from 90 to 135 (9 AO/ESs x 10 or 15 hours). A management level 
employee (11-9111) would perform this task at an hourly wage of $55.37 
per hour as published by the BLS in 2019. The wage rate would be 
doubled to $110.74 to include overhead and fringe benefits. The total 
cost would range from $9,967 to $14,950 (90 to 135 hours x $110.74). In 
addition, the AOs and ESs would be required to report to CMS

[[Page 54858]]

every 10 days those laboratories that have not reported test results as 
required. The annual total number of times each AO and ES is required 
to report to CMS is 36.5. We assume a weekly cost of 2 to 4 hours to 
identify the laboratories and submit the information to CMS. The total 
burden hours range from 18 to 36 (9 AO/ESs x 2 or 4 hours). A computer 
network support specialist (15-1231) would perform this task at an 
hourly wage of $33.10 per hour as published by the BLS in 2019.\86\ The 
wage rate would be doubled to $66.20 to include overhead and fringe 
benefits. The total cost would range from would range from $1,192 to 
$2,383 (18 to 36 hours x $66.20) per 10 days for an annual total of 
$43,508 to $86,980 ($1,192 to $2,383 x 36.5).
---------------------------------------------------------------------------

    \86\ https://www.bls.gov/oes/current/oes_nat.htm. (15-1231).
---------------------------------------------------------------------------

G. Condition of Participation (CoP) Requirements for Hospitals and 
Critical Access Hospitals (CAHs) To Report COVID-19 Data as Specified 
by the Secretary During the PHE for COVID-19

    We are revising the regulations by adding provisions to the CoPs 
(Sec.  482.42 for hospitals and Sec.  485.640 for CAHs), requiring 
hospitals and CAHs to electronically report information related to 
confirmed or suspected COVID-19 cases in a standardized format, and at 
a frequency, specified by the Secretary. Our preliminary estimates for 
these reporting activities can be found in Tables 2 and 3.

                                   Table 2--Estimated Annualized Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                                                     Number of       Number of      burden per     Total burden
      Type of respondent            Form name       respondents    responses per   response  (in       hours
                                                                    respondent        hours)
----------------------------------------------------------------------------------------------------------------
Hospitals and CAHs............  HHS Teletracking            5500             365             1.5       3,011,250
                                 COVID-19 Portal.
                               ---------------------------------------------------------------------------------
    Total.....................  ................  ..............  ..............  ..............       3,011,250
----------------------------------------------------------------------------------------------------------------


                              Table 3--Estimated Annualized Respondent Burden Costs
----------------------------------------------------------------------------------------------------------------
                                                            Total burden                        Total respondent
                   Type of respondent                          hours         Hourly wage rate        costs
----------------------------------------------------------------------------------------------------------------
Hospital Staff--Registered Nurses......................          3,011,250           * $70.48       $212,232,900
                                                        --------------------------------------------------------
    Total..............................................  .................  .................        212,232,900
----------------------------------------------------------------------------------------------------------------
* The wage rate includes overhead and fringe benefits.

    The burden associated with these reporting activities will be 
submitted under OMB Control Number 0990-NEW.

H. Requirements for Long-Term Care (LTC) Facilities To Test Facility 
Residents and Staff for COVID-19

    As discussed in section II.J. of this IFC, we are revising the 
regulations at Sec.  483.80(h) to require LTC facilities to test 
residents and facility staff, including individuals providing services 
under arrangement and volunteers, for COVID-19. We are also requiring 
at Sec.  483.80(h)(3)(i) that for each instance of resident and staff 
COVID-19 testing (which includes testing of individuals providing 
services under arrangement and volunteers), the facility document that 
testing was completed and the results of each test. We expect that this 
documentation would be located in the staff personnel record for all 
staff. In the case of individuals who are providing services under 
arrangement at the facility, we expect that this documentation be 
located in the record or file that the facility maintains for such 
individuals. In the event that no such record or file is maintained, we 
expect that the agreement for the services that are being provided 
under arrangement include a process for documenting these results. 
Consistent with the documentation requirements we are adding for LTC 
facility staff, we are requiring at Sec.  483.80(h)(3)(ii) that the 
facility document in the resident's medical record that testing was 
offered, completed (as appropriate to the resident's testing status), 
and the results of each test.
    Based on data from the Kaiser Family Foundation's report on 
coronavirus statistics (https://www.kff.org/report-section/covid-19-and-workers-at-risk-examining-the-long-term-care-workforce-tables), we 
estimate that 1.8 million LTC facility staff would be tested for COVID-
19 initially for each facility. We also estimate that 1.3 million 
residents would be tested. We have estimated that it will take 
approximately 2 minutes to locate a staff's file and document the 
result of a COVID-19 test. Furthermore, we estimate that, based on the 
guidelines given regarding testing frequency, the criteria for 
conducting a test, and the response time for test result, not all staff 
will be tested on the same frequency. For example, a third of the staff 
population could be tested weekly and two thirds of the staff 
population could receive a test every ten days or monthly. However, 
with variables that are not knowable at this time, we have provided an 
estimate based on an average schedule of all staff receiving a test 
every 14 days and residents to be tested monthly during the PHE for 
COVID-19. We estimate that it would take 2 minutes to provide 
documentation in 1.8 million records of staff members for 30 weeks 
(from September 2020 to March 2021) to record the test was administered 
and to record the test results. We also estimate that it would take 2 
minutes to provide the same documentation in 1.3 million medical 
records of residents for the same period of time. The annual and 
ongoing cost to comply with this requirement can be further assessed 
based on guidelines established by the Secretary. The ongoing burden 
associated with these reporting activities will, if necessary, be

[[Page 54859]]

submitted under OMB Control Number 0938-New.
    For the purpose of this analysis, we estimate that it would take 2 
minutes to document the initial test and that a healthcare support 
worker (31-9099) would perform this task at an hourly wage of $19.24 
per hour as published by the BLS in 2019.\87\ The wage rate would be 
doubled to $38.48 to include overhead and fringe benefits. Based on our 
assumptions, we estimate that the total cost to document the testing 
results for staff and LTC residents over the estimated course of the 
PHE for COVID-19 would be $48,158,193. See Table 4.
---------------------------------------------------------------------------

    \87\ https://www.bls.gov/oes/current/oes_nat.htm. (31-9099).
    \88\ https://www.kff.org/report-section/covid-19-and-workers-at-risk-examining-the-long-term-care-workforce-tables/.

            Table 4--Total Cost To Document the Testing Results for Staff and LTC Residents Over the Estimated Course of the PHE for COVID-19
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Wage for
                                      Time to document         Staff         Resident         Testing         Testing      health staff        Total
                                                                                             frequency       duration         worker
--------------------------------------------------------------------------------------------------------------------------------------------------------
Staff.............................  2 minutes...........  \88\ 1,899,000  ..............         14 days        30 weeks        * $38.48     $36,344,360
Resident..........................  2 minutes...........  ..............       1,315,757         30 days        7 months          $38.48      11,813,833
                                    ....................  ..............  ..............  ..............  ..............  ..............      48,158,193
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The wage rate includes overhead and fringe benefits.

I. Quality Reporting: Updates to the Extraordinary Circumstances 
Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in 
Response to the PHE for COVID-19, and Update to the Performance Period 
for the FY 2022 SNF VBP Program

1. Updates to ESRD QIP: Utilization of Fourth Quarter CY 2019 ESRD QIP 
Data and the Removal of the Option for Facilities To Opt-Out of the 
Extraordinary Circumstances Exception (ECE) Granted With Respect to 
First and Second Quarter (CY) 2020 ESRD QIP Data
    In section II.D.1. of this IFC, we are updating our regulations at 
Sec.  413.178(d)(7) to state that a facility has opted out of the ECE 
for COVID-19 with respect to the reporting of fourth quarter 2019 NHSN 
data if the facility actually reported the data by the March 31, 2020 
deadline but did not notify CMS that it would do so. Additionally, we 
are removing the ability of facilities to opt-out of the ECE we granted 
with respect to Q1 and Q2 2020 ESRD QIP data. These updates do does not 
require facilities to complete any forms or submit any additional 
information to receive an ECE, and therefore, the program does not 
anticipate any change in burden associated with this IFC.
2. Updates to the Application of the HAC Reduction Program ECE Policy 
in Response to the PHE for COVID-19
    In section II.D.2. of this IFC, we are updating the ECE granted for 
the HAC Reduction Program to not use Q1 and Q2 2020 data that were made 
optional under the Guidance memo for scoring in the HAC Reduction 
Program for scoring calculations in future program years (that is, the 
FY 2022 and FY 2023 program years). This policy does not require 
hospitals to complete any forms or submit any additional information to 
receive an ECE, and therefore, the program does not anticipate any 
change in burden associated with this IFC.
3. Update to the HRRP ECE Granted in Response to the PHE for COVID-19
    In section II.D.3. of this IFC, we excepted the use of claims data 
from the first and second quarters of CY 2020 from the HRRP because of 
our concern that the data collected during this period may be greatly 
impacted by the response to COVID-19, and therefore, may not be 
reflective of a hospital's performance during this time due to concerns 
with national comparability of the data. This update does not require 
hospitals to complete any forms or submit any additional information, 
and therefore, the program does not anticipate any change in burden 
associated with this IFC.
4. Update to the Hospital VBP Program ECE Granted in Response to the 
PHE for COVID-19
    In section II.D.4. of this IFC, we are updating the ECE granted for 
the Hospital VBP Program to not use Q1 and Q2 2020 data that was made 
optional under the Guidance memo for scoring in the Hospital VBP 
Program for the FY 2022 payment year. This change to the ECE policy 
does not require hospitals to complete any forms or submit any 
additional information, and therefore, the program does not anticipate 
any change in burden associated with this IFC.
5. Revised Performance Period for the FY 2022 SNF VBP Program as a 
Result of the ECE Granted for the PHE for COVID-19
    As described in section II.D.5. of this IFC, we granted an ECE for 
the PHE for COVID-19 to exclude qualifying claims from the claims-based 
SNF 30-Day All-Cause Readmission Measure (SNFRM; NQF #2510) calculation 
for the following periods: January 1, 2020 through March 31, 2020 (Q1 
2020); and April 1, 2020 through June 30, 2020 (Q2 2020).
    Because we are excluding qualifying claims from January 1, 2020 
through June 30, 2020, we are adopting a revised performance period for 
the FY 2022 SNF VBP Program Year in section II.D.5. of this IFC. The 
revised performance period for the FY 2022 SNF VBP program will be 
from: April 1, 2019 through December 31, 2019, and July 1, 2020 through 
September 30, 2020.
    Changing the performance period for a SNF VBP Program Year does not 
require SNFs to complete any forms or submit any additional 
information. Accordingly, the SNF VBP Program does not anticipate any 
change in burden associated with this IFC.

J. Submission of Adjusted Premium Amounts for PPACA Risk Adjustment

    Sections 153.610 and 153.710 provide that issuers of a risk 
adjustment covered plan must provide HHS with access to risk adjustment 
data through a dedicated distributed data environment, in a manner and 
timeframe specified by HHS. In section II.G.2. of this IFC, we clarify 
that, for purposes of 2020 benefit year risk adjustment data 
submissions, issuers that choose to provide temporary premium credits 
must submit the adjusted (that is, lower) plan premiums for those 
months, instead of the

[[Page 54860]]

unadjusted plan premiums. We also clarify that CMS will require issuers 
to submit adjusted plan premiums to their EDGE servers for all 
enrollees whom the issuer has actually provided premium credits as a 
reduction to 2020 benefit year premiums, even if these premium credits 
were not provided in a manner consistent with the August 4, 2020 memo. 
This IFC does not change any other aspect of the 2020 benefit year data 
submission requirements for the HHS-operated risk adjustment program.
    We do not believe that issuers who elect to provide these temporary 
premium credits will incur additional operational burden associated 
with EDGE server data submissions as a result of these requirements 
because we expect issuers' premium reporting systems will already be 
configured to enable issuers to upload the billable premiums actually 
charged to enrollees for the applicable benefit year to the EDGE 
server. Additionally, the current EDGE server operational guidance for 
the risk adjustment program allows issuers to submit billable premium 
changes so there will be no changes to the data submission rules.\89\ 
Therefore, the burden related to this information collection is 
currently approved under OMB control number 0938-1155 (Standards 
Related to Reinsurance, Risk Corridors, Risk Adjustment, and Payment 
Appeals). The information collection request expires on February 23, 
2021.
---------------------------------------------------------------------------

    \89\ See EDGE Server Business Rules (ESBR) v16.0 Section 5.8 
Premium Amounts, at https://www.regtap.info/uploads/library/DDC_ESBR_V16.0_052920_5CR_052920.pdf.
---------------------------------------------------------------------------

K. Medical Loss Ratio Premium Reporting Requirements

    In section II.G.3. of this IFC, we are clarifying that issuers that 
elect to provide temporary premium credits to consumers in 2020 must 
account for these credits as reductions to premium for the applicable 
months during 2020 when reporting earned premium for the applicable MLR 
reporting year.\90\ We do not anticipate that this clarification will 
require changes to the MLR Annual Reporting Form or change the 
associated burden for issuers. As noted above, we expect issuers' 
premium reporting systems will already be configured to enable issuers 
to track the premiums actually charged to enrollees for the applicable 
benefit year, enabling issuers that offer temporary premium credits to 
accurately report the adjusted (that is, lower) amounts actually billed 
to their enrollees on their respective MLR Annual Reporting Forms. The 
burden related to this information collection is currently approved 
under OMB control number 0938-1164 (Medical Loss Ratio Annual Reports, 
MLR Notices, and Recordkeeping Requirements (CMS-10418)). The 
information collection request expires on October 31, 2020.
---------------------------------------------------------------------------

    \90\ Because the MLR and rebate calculations are based on 3 
years of data, reporting earned premium for the 2020 benefit year 
will impact the MLR and rebate calculations for the 2020 through 
2022 reporting years. See section 2718(b)(1)(B)(ii) of the PHSA. 
Also see 45 CFR 158.220(b).
---------------------------------------------------------------------------

L. Merit-Based Incentive Payment System (MIPS) Updates

    In section II.I. of this IFC, for the 2020 performance year, we are 
proposing to include in the MIPS assignment methodology for the CMS Web 
Interface and CAHPS for MIPS survey the following additions due to the 
PHE for COVID-19: (1) CPT codes: 99421, 99422, and 99423 (codes for 
online digital E/M service (e-visit)), and 99441, 99442, and 99443 
(codes for telephone E/M services); and (2) HCPCS codes: G2010 (code 
for remote evaluation of patient video/images) and G2012 (code for 
virtual check-in). We do not believe this proposal will impact the 
number of beneficiaries selected for sampling, which will be used to 
complete quality reporting via the CMS Web Interface or administer the 
CAHPS for MIPS survey; however, this proposal could impact the number 
of beneficiaries eligible to be sampled. Therefore, we do not 
anticipate any change in burden or impact on clinicians.
    In addition, we are: (1) Expanding the improvement activity 
IA_ERP_3 titled ``COVID-19 Clinical Trial'' to also allow credit for 
clinicians who participate in the care of patients diagnosed with 
COVID-19 and simultaneously submit relevant clinical data to a clinical 
data registry for ongoing or future COVID-19 research; (2) updating the 
title; and (3) extending it through the CY 2021 performance period. 
Because MIPS eligible clinicians are still required to submit the same 
number of activities and the per response time for each activity is 
uniform, we do not expect this proposal to affect our currently 
approved information collection burden estimates in terms of neither 
the number of estimated respondents nor the burden per response.

M. Summary of Burden in This IFC

    Table 5 shows the burden and associated costs for sections IV.A. 
through F. in this IFC.

                  Table 5--Burden and Associated Costs for the Provisions Included in This IFC
----------------------------------------------------------------------------------------------------------------
                                                                               Burden hours
                      Information collection requests                           increase/         Cost (+/-) *
                                                                            decrease  (+/-) *
----------------------------------------------------------------------------------------------------------------
A. Laboratory Costs to Develop Mechanism to Track Results (one time cost).           +539,168       +109,537,371
B. Laboratory Costs to Collect Results for Reporting (per day cost *).....           +231,072        +12,172,873
C. Laboratory Costs to Report Results (per day cost *)....................           +231,072         +8,891,651
D. Laboratory Costs to Update Policies/Procedures (one time cost).........           +385,120        +42,648,189
E. AO/ES Costs to Update Standards (one time cost)........................               +270            +29,900
F. (a) AO/ES Costs to Update Policies/Procedures (one time cost)..........               +135            +15,971
F. (b) AO/ES Costs to Report Laboratories to CMS for not Reporting Results                +36            +86,980
                                                                           -------------------------------------
    Total.................................................................         +1,386,873       +173,382,935
----------------------------------------------------------------------------------------------------------------
* Note that these are per day costs. For annual costs, see Table 9.

V. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed

[[Page 54861]]

with a subsequent document, we will respond to the comments in the 
preamble to that document.

VI. Regulatory Impact Analysis

A. Statement of Need

    Throughout this IFC, we discuss several changes to payment and 
coverage policies intended to allow healthcare providers and health 
insurance issuers maximum flexibility to minimize the spread of COVID-
19 among Medicare and Medicaid beneficiaries, consumers of health 
insurance coverage in the individual and small group insurance markets, 
healthcare personnel, and the community at large, and increase capacity 
to address the needs of their patients. The flexibilities and changes 
contained within this IFC are responsive to this developing pandemic 
emergency and to recent legislation that gives us additional authority. 
Given the potentially catastrophic impact to public health, it is 
difficult to estimate the economic impact of the spread of COVID-19 
under current payment rules compared to the rules issued in this IFC.
    We believe that the needs of Medicare and Medicaid beneficiaries 
and consumers of health insurance coverage in the individual and small 
group insurance markets suffering from COVID-19 will likely test the 
capacity of the healthcare system over the coming months. Our policies 
implemented in this IFC will provide flexibilities, during the PHE for 
COVID-19, to physicians and other practitioners, and clinical 
laboratories. Additionally, the policies and regulatory updates 
implemented in this IFC will increase the affordability and support 
continuity of health insurance coverage for consumers in the individual 
and small group (or merged) market during the PHE for COVID-19.

B. Overall Impact

    We have examined the potential impacts of this 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), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(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).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) (Having 
an annual effect on the economy of $100 million or more in any 1 year, 
or adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order. For CLIA purposes, no 
regulatory alternatives were considered as the CARES Act requires all 
laboratories to reports SARS-CoV-2 test results. Only CLIA regulations 
requiring laboratories to report SARS-CoV-2 test results were added/
revised.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). As described in section IV. of this IFC (Collection of 
Information Requirements) and this section, this IFC would be 
economically significant within the meaning of section 3(f)(1) of the 
Executive Order. We are adding Sec. Sec.  493.41 and 493.1100(a) to 
require that, during the PHE for COVID-19, as defined in Sec.  400.200, 
each laboratory that performs a test that is intended to detect SARS-
CoV-2 or to diagnose a possible case of COVID-19 must report SARS-CoV-2 
test results in such form and manner, and at such timing and frequency, 
as the Secretary may prescribe. These anticipated costs would result 
from laboratories needing to develop a mechanism to collect and report 
SARS-CoV-2 test results, update policies and procedures, update 
software, and train personnel. In addition, AOs and Exempt States (ESs) 
will also need to update their laboratory standards and policies and 
procedures to comply with the new federal regulatory changes. We have 
provided an assessment of the impact of estimated costs of these 
changes in Tables 6 and 7.
    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017 and requires that the 
costs associated with significant new regulations ``shall, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations.'' This IFC's 
designation under Executive Order 13771, titled Reducing Regulation and 
Controlling Regulatory Costs (82 FR 9339), which was issued on January 
30, 2017, will be informed by public comments received.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that the 
great majority of laboratories are small entities, either by being 
nonprofit organizations or by meeting the Small Business Administration 
definition of a small business (having revenues of less than $8.0 
million to $41.5 million in any 1 year). For purposes of the RFA, 
approximately 75 percent of laboratories performing SARS-CoV-2 testing 
qualify as small entities. For purposes of this IFC, we expect that 
approximately 30 percent (n=77,024) of the total CLIA certified 
laboratories (n=256,747) could potentially be performing SARS-CoV-2 
tests. Further, based on data from the CLIA website, we are estimating 
that 75 percent of the laboratories have a CoW (n=57,768) and 25 
percent have a Certificate of PPM, CoC, CoA, or CoR (n=19,256). Each 
individual EUA test system authorized by the FDA specifies the settings 
in which the tests are authorized to be used during the PHE for COVID-
19. Generally, COW and PPM laboratories include, but are not limited 
to, the following types of facilities: Physician office laboratories; 
pharmacies; skilled nursing/nursing facilities; and other types of 
point-of-care facilities. Generally, we would consider these types of 
laboratories to be small entities. Individuals and states are not 
included in the definition of a small entity. All laboratories 
performing SARS-CoV-2 testing are affected by this IFC, and the impact 
is economically significant. Therefore, the Secretary has determined 
that this IFC will have a significant economic impact on a substantial 
number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a

[[Page 54862]]

significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a metropolitan statistical area and has fewer than 100 beds. There are 
approximately 905 small rural hospitals in the U.S. Of the 905 small 
rural hospitals, approximately 500 are subsection (d) hospitals paid 
under IPPS and are subject to the HAC Reduction Program and HRRP. In 
section II.D. of IFC, we are updating the ECE policy for the two 
programs to allow the exclusion of data submitted for quarters impacted 
by the PHE for COVID-19. We estimate that the impact of the exclusion 
of data on scoring for small rural hospitals for the programs will be 
dependent upon hospitals' individual performance and experience, but 
that the exclusion of data will make small hospitals less likely to 
receive measure scores or meet minimum eligible discharge requirements 
for participation in the HAC Reduction Program and HRRP. All small 
rural hospitals, that is, both subsection (d) and critical access 
hospitals, often provide very limited laboratory services or may refer 
all their testing to larger facilities. We are unable to estimate the 
number of laboratories that support small rural hospitals, but do 
expect that the rule will have a significant impact on small rural 
hospitals. Therefore, the Secretary has determined that this rule will 
have a significant impact on the operations of a substantial number of 
small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any proposed rule, or any final rule preceded by a proposed 
rule whose mandates require spending in any 1 year of $100 million in 
1995 dollars, updated annually for inflation. In 2020, that threshold 
is approximately $156 million. This IFC was is not preceded by a 
general notice of proposed rulemaking, and thus the requirements of 
UMRA do not apply.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that imposes substantial 
direct requirement costs on state and local governments, preempts state 
law, or otherwise has federalism implications. Two states have exempt 
status, which means we have determined that the state has enacted laws 
relating to the laboratory requirements that are equal to or more 
stringent than CLIA requirements and the state licensure program has 
been approved by us. These two states, New York and Washington, would 
need to update their standards, policies and procedures to maintain 
their exempt status to require reporting to CMS those accredited/exempt 
laboratories that have not reported SARS-CoV-2 test results as 
required. In addition, these two states would need to develop a CMP 
structure to impose CMPs that is equivalent to CMS and is based on 
their updated standards. In order to determine compliance with the 
reporting requirements, the State Agencies would be required to perform 
additional surveys on 5 percent of CoW and 5 percent of PPM 
laboratories. As previously stated, these two type of laboratories are 
not routinely surveyed. The total number of CoW laboratories as of 
March 2020 is 193,474. Five percent of 193,474 is 9,674 so for the 
duration of the IFC (3 years), a total of 3,225 CoW surveys would need 
to be performed annually across all State Agencies. The total number of 
PPM laboratories as of March 2020 is 30,120. Five percent of 30,120 is 
1,506 so for the 3 years that this IFC would be in place, a total of 
502 PPM surveys would need to be performed annually across all State 
Agencies. The combined number of these surveys that will need to be 
performed annually over the 3 years of the timeframe of the IFC is 
3,727 across all State Agencies. Over the 3 years that this IFC is in 
place, one-third of the total number CoW and PPM laboratories would be 
surveyed each year. This would ensure that a total of 5 percent of each 
of these types of laboratories are surveyed during the duration of the 
PHE for COVID-19 to determine if SARS-CoV-2 requirements are met. 
Currently, there are no resources available to the State Agencies to 
perform these additional surveys. Therefore, this IFC would have a 
substantial direct effect on state or local governments. This IFC would 
also have a direct effect on preempting state laboratory requirements 
as they must change their current laboratory standards to remain equal 
to or more stringent than Federal laws when finalized.

C. Detailed Economic Analysis of the Provisions of the IFC

1. Revised Enforcement Requirements for LTC Facilities
    Section II.A. of this IFC which implements a policy for specifying 
the CMP amounts tailored to noncompliance related to Sec.  483.80(g)(1) 
and (2) (electronic reporting COVID-19 related data) will not result in 
any additional financial burden for LTC providers if they remain 
compliant in reporting. Following the May 8th effective date of this 
reporting requirement, we began assessing the compliance for all 15,674 
(data from Quality, Certification and Oversight Reports (QCOR) as of 
August 11, 2020) Medicare and Medicaid certified nursing homes each 
week and have found compliance has consistently increased week after 
week. Based on data provided to CMS by the CDC, compliance with this 
requirement has been greater than 98 percent since the reporting week 
ending June 28, 2020. Although there has been unprecedented compliance 
with the requirement to report, CMS has issued 2,507 citations for 
noncompliance as of August 10, 2020, with corresponding CMPs imposed. 
Financial impact will occur for facilities who are not compliant with 
the new reporting requirement. We do not expect these requirements to 
have a substantial economic impact or pose a financial burden to 
nursing homes beyond that which has already been established by CMS's 
existing enforcement regulations. This rule does not add new 
requirements, but clarifies our process to impose penalties for a 
failure to report for which compliance is assessed on a weekly basis, 
which is different from how all other LTC requirements are reviewed. 
CMS' enforcement authority remains unchanged under this IFC. Instead, 
it clarifies the specific CMP penalty range for noncompliance with the 
new COVID-19 related reporting requirements at Sec.  483.80(g)(1) and 
(2). Furthermore, the penalty amounts are consistent with the lower 
level penalty range available at Sec.  488.438(a)(1)(ii) in order to 
encourage compliance and to discourage similar conduct in the future 
without causing undue hardship that could impair a facility's ability 
to minimize COVID-19 infections among its residents and staff. In 
addition, the penalty is not aggregated but is increased only if future 
compliance assessments reveal repeated violations. In the event that a 
facility is unable to meet reporting requirements and/or experiences 
financial hardship, a facility may utilize the Independent Informal 
Dispute Resolution process under Sec.  488.431 to dispute the findings 
and may submit a financial hardship request to CMS.

[[Page 54863]]

2. CoP Requirements for Hospitals and CAHs, and Requirements for LTC 
Facilities
a. CoP Requirements for Hospitals and CAHs To Report COVID-19 Data as 
Specified by the Secretary During the PHE for COVID-19
    Section II.B. of this IFC revises the infection prevention and 
control requirements for hospitals and CAHs to more effectively respond 
to the specific challenges posed by the COVID-19 pandemic. 
Specifically, we are adding provisions to require facilities to 
electronically report information related to confirmed or suspected 
COVID-19 cases in a standardized format specified by the Secretary. 
Many hospitals are already reporting data in a standardized format 
voluntarily. As detailed in section IV.G. of this IFC, we currently 
estimate the cost of these reporting requirements to total 
$212,232,900. This estimate is likely an overestimate of the costs 
associated with reporting because it assumes that all hospitals will 
report manually. Efforts are underway to automate hospital and CAH 
reporting that have the potential to significantly decrease reporting 
burden and improve reliability. We anticipate that the need for 
reporting will be temporary in direct relationship to the duration of 
the PHE. Existing guidance on reporting, which may be revised in the 
future, can be found at https://www.hhs.gov/sites/default/files/covid-19-faqs-hospitals-hospital-laboratory-acute-care-facility-data-reporting.pdf, and these guidance documents will be in CMS' 13891 
portal. Data reported to the Secretary is used by Federal agencies and 
states, to provide data for the unified hospital picture, as well as 
guidance on the distribution of resources.
b. Requirement for Long-Term Care Facilities To Test Facility Staff and 
Residents for COVID-19
    Section II.J. of this IFC revises the infection control 
requirements for LTC facilities at Sec.  483.80 to require facilities 
to test their staff and residents for COVID-19 based on parameters set 
forth by the Secretary. Based on data from CDC and states where similar 
policies have already been implemented, we anticipate that this will 
result in widespread testing and significant resource use, but catch 
many cases that might otherwise go undetected. For example, 
implementing universal testing in 11 LTC facilities in Maryland 
increased the total number of detected cases in those facilities from 
153 to 507.\91\ Costs incurred by facilities have potential to vary 
drastically depending on the extent of outbreaks in their respective 
communities, whether the facility has point-of-care testing, and the 
size of each facility; however, for some of these facilities the cost 
of testing may be less than the costs associated with lost productivity 
and revenue due to unmitigated outbreaks. We solicit comments on our 
cost estimates, as well as any additional costs associated with 
acquiring reagents, test kits, or anything else we may not have 
considered.
---------------------------------------------------------------------------

    \91\ Bigelow BF, Tang O, Barshick B, et al. Outcomes of 
Universal COVID-19 Testing Following Detection of Incident Cases in 
11 Long-term Care Facilities. JAMA Intern Med. Published online July 
14, 2020. doi:10.1001/jamainternmed.2020.3738.
---------------------------------------------------------------------------

    Best practices for catching and eliminating these outbreaks, as 
well as availability of the tools necessary to do so, is a quickly 
changing landscape. As of late July, over 600 point-of-care antigen 
testing devices had already been shipped to LTC facilities nationwide, 
with plans to provide every facility with their own instrument(s) and 
tests within 14 weeks.\92\ This method of testing effectively reduces 
the cost-per-test from approximately $100 to only $20. These efforts to 
provide every facility with these devices continue, but for the 
purposes of our estimates below, we assume a cost of $60 per test; this 
accounts for the potential cost of replacing the antigen testing 
device, as well as the possibility that some facilities will choose to 
verify negative results with lab testing. The cost of these testing 
activities will ultimately depend on the extent of future outbreaks, 
and how the best practices, and thus our parameters for universal 
testing, evolve. We recognize that testing alone is not enough to 
control, treat, and eliminate outbreaks of COVID-19. Providing safe 
care is the inherent duty of all long term care facilities. 
Implementing highly effective infection prevention and control 
procedures, such as proper hand washing techniques and techniques for 
donning and removing PPE, are expected to be part of everyday facility 
procedures and do not impose an additional burden upon facilities. CDC 
provides, and continually updates, their infection control guidance for 
LTC facilities.\93\ This guidance recommends, among other things, 
expanded viral testing of all residents if there is an outbreak in a 
facility; cohorting residents in a COVID-19 care unit; assigning 
dedicated staff to the aforementioned care unit; and additional 
cleaning procedures. Although we do not have data to support exactly 
how many facilities are fully prepared for intervention at this scale, 
we assume that most facilities have made basic preparations in line 
with current best practices. Acknowledging this uncertainty, we are 
assuming the average facility requires intervention costing between 5 
and 40 hours of the hourly wage of a registered nurse for each 
additional round of testing, doubled to account for the cost of 
overhead and fringe benefits. For facilities that are less prepared, a 
different mix of staffing could provide additional support for a 
similar cost.
---------------------------------------------------------------------------

    \92\ https://www.cms.gov/files/document/covid-faqs-snf-testing.pdf.
    \93\ https://www.cdc.gov/coronavirus/2019-ncov/hcp/long-term-care.html.
---------------------------------------------------------------------------

    In Tables 6 and 7, we provide sensitivity analyses showing the 
potential costs of universal testing in LTC facilities given these 
unknown variables described above. All costs below are assumed to be in 
addition to the current baseline testing activities; facilities that 
are already performing tests that would be in compliance with these 
testing requirements, or different parameters to trigger the testing 
requirements, would impact the number of facilities affected as 
detailed below. In the context of the Table 6, ``rounds of testing'' 
refers to the number of times each facility tests their entire staff 
and resident population on an annual basis. In light of uncertainty, 
this can be interpreted as the number of times the parameters set forth 
by the Secretary are triggered; additional tests that may be necessary 
to facilitate cohorting and identify new transmission events; or 
additional tests to verify negative results. We note that if baseline 
testing is not accounted for, benefits of this provision would be 
overstated in addition to (this category of) costs.
---------------------------------------------------------------------------

    \94\ For these estimates we assume the number of staff and 
residents are evenly distributed across facilities. This $10 million 
estimate is equal to: (approximately 3.2 million staff and residents 
* 5 percent of facilities * $60 per test * 1 round of testing) + 
(($37.24 cost for RN * 2 for fringe benefits and overhead) * 5 hours 
* 1 round of testing).

[[Page 54864]]



                               Table 6--Sensitivity Analysis of Potential Costs of LTC Testing; Low Costs of Intervention
                                                                      [In millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Facilities affected
                                                         -----------------------------------------------------------------------------------------------
                    Rounds of testing                           5%              10%             25%             50%             75%            100%
                                                         -----------------------------------------------------------------------------------------------
                                                                775            1,550           3,874           7,748          11,621          15,495
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................        \94\ $10             $20             $50             $99            $149            $198
2.......................................................              20              40              99             198             297             396
3.......................................................              30              59             149             297             446             594
4.......................................................              40              79             198             396             594             792
5.......................................................              50              99             248             495             743             990
6.......................................................              59             119             297             594             891           1,188
7.......................................................              69             139             347             693           1,040           1,386
8.......................................................              79             158             396             792           1,188           1,584
9.......................................................              89             178             446             891           1,337           1,783
10......................................................              99             198             495             990           1,485           1,981
11......................................................             109             218             545           1,089           1,634           2,179
12......................................................             119             238             594           1,188           1,783           2,377
13......................................................             129             257             644           1,287           1,931           2,575
14......................................................             139             277             693           1,386           2,080           2,773
15......................................................             149             297             743           1,485           2,228           2,971
16......................................................             158             317             792           1,584           2,377           3,169
17......................................................             168             337             842           1,683           2,525           3,367
18......................................................             178             357             891           1,783           2,674           3,565
19......................................................             188             376             941           1,882           2,822           3,763
20......................................................             198             396             990           1,981           2,971           3,961
--------------------------------------------------------------------------------------------------------------------------------------------------------


                               Table 7--Sensitivity Analysis of Potential Costs of LTC Testing; High Costs of Intervention
                                                                      [In millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Facilities affected
                                                         -----------------------------------------------------------------------------------------------
                    Rounds of testing                           5%              10%             25%             50%             75%            100%
                                                         -----------------------------------------------------------------------------------------------
                                                                775            1,550           3,874           7,748          11,621          15,495
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................           * $12             $24             $60            $119            $179            $238
2.......................................................              24              48             119             238             358             477
3.......................................................              36              72             179             358             537             715
4.......................................................              48              95             238             477             715             954
5.......................................................              60             119             298             596             894           1,192
6.......................................................              72             143             358             715           1,073           1,431
7.......................................................              83             167             417             835           1,252           1,669
8.......................................................              95             191             477             954           1,431           1,908
9.......................................................             107             215             537           1,073           1,610           2,146
10......................................................             119             238             596           1,192           1,788           2,384
11......................................................             131             262             656           1,311           1,967           2,623
12......................................................             143             286             715           1,431           2,146           2,861
13......................................................             155             310             775           1,550           2,325           3,100
14......................................................             167             334             835           1,669           2,504           3,338
15......................................................             179             358             894           1,788           2,683           3,577
16......................................................             191             382             954           1,908           2,861           3,815
17......................................................             203             405           1,013           2,027           3,040           4,054
18......................................................             215             429           1,073           2,146           3,219           4,292
19......................................................             227             453           1,133           2,265           3,398           4,531
20......................................................             238             477           1,192           2,385           3,577           4,769
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For these estimates we assume the number of staff and residents are evenly distributed across facilities. This $12 million estimate is equal to:
  (Approximately 3.2 million staff and residents * 5 percent of facilities * $60 per test * 1 round of testing) + (($37.24 cost for RN * 2 for fringe
  benefits and overhead) * 40 hours * 1 round of testing). This upper-bound scenario accounts for the possibility that each round of testing and
  intervention costs approximately $2,607 more per facility than the lower-bound scenario.

    While we currently have no reason to believe testing will be 
required anywhere near the extent demonstrated at the high end of this 
range, we are presenting our cost estimates in this format to 
underscore the unpredictable nature of this pandemic. Other potential 
administrative costs associated with this provision are detailed in 
section IV.G.2. of this IFC. We note that almost half of the potential 
costs detailed above would be attributable to the testing of residents, 
the vast majority of which are enrolled in Medicare, Medicaid, or both, 
but Medicaid is the primary payer for approximately 62% of residents. 
The Families First Coronavirus Response Act requires state Medicaid and 
CHIP programs to cover any COVID-19-related testing and diagnostic 
services; cost-sharing is not permitted for COVID-19 testing and 
testing-related services. For residents in a Medicare covered Part A 
skilled nursing facility

[[Page 54865]]

stay, testing is covered by the global PPS per diem rate that the long 
term care facility receives. In addition, HHS recently announced 
approximately $5 billion in Provider Relief Fund distributions under 
the CARES Act for nursing homes. However, we would like to note that 
LTC facilities are responsible for the costs of testing in order to 
comply with the infection control requirements of this rule, regardless 
of whether specific reimbursement is available from Medicare, Medicaid, 
the Provider Relief Fund, or any other sources. Of this amount, 
approximately $2.5 billion provides upfront funding to support 
increased testing, staffing, and Personal Protective Equipment (PPE), 
according to facilities' needs.\95\
---------------------------------------------------------------------------

    \95\ https://www.hhs.gov/about/news/2020/08/07/hhs-announces-allocations-of-cares-act-provider-relief-fund-for-nursing-homes.html.
---------------------------------------------------------------------------

    There is also potential for substantial benefits by catching and 
eliminating COVID-19 outbreaks early in these facilities. HHS' 
``Guidelines for Regulatory Impact Analysis'' explain in some detail 
the concept of Quality Adjusted Life Years (QALYs).\96\ QALYs, when 
multiplied by a monetary estimate such as the Value of a Statistical 
Life Year (VSLY), are estimates of the value that people are willing to 
pay for life-prolonging and life-improving health care interventions of 
any kind (see sections 3.2 and 3.3 of the HHS Guidelines for a detailed 
explanation). The QALY and VSLY amounts used in any estimate of overall 
benefits is not meant to be precise, but instead are rough statistical 
measures that allow an overall estimate of benefits expressed in 
dollars.\97\
---------------------------------------------------------------------------

    \96\ https://aspe.hhs.gov/pdf-report/guidelines-regulatory-impact-analysis.
    \97\ We note that using such a measure to make coverage or 
reimbursement determinations is prohibited by Section 1182(e) of the 
Act. That prohibition does not apply to the situation addressed in 
this IFC, where the purpose is not to determine medical coverage for 
individual patients, but to measure overall success in life-saving 
efforts to avert disease.
---------------------------------------------------------------------------

    Research surrounding changes in health-related quality of life due 
to the novel coronavirus, as well as the overall case fatality rate, is 
still ongoing. Due to these substantial uncertainties, as well as the 
unknown extent of future outbreaks, we have presented a threshold 
analysis of life-saving benefits below. The following estimates assume 
a the Value of a Statistical Life (VSL) of approximately $10.1 million 
in 2020 as described in the aforementioned HHS Guidelines, inflated to 
2019 dollars using the Implicit Price Deflators for Gross Domestic 
Product. We note, as detailed in the HHS Guidelines, that there is 
substantial uncertainty regarding how VSL varies with age,\98\ making 
estimates of the VSL, which are typically developed using wage data for 
working-age populations, potentially overstated in contexts such as 
this for a novel coronavirus that disproportionately affects the 
elderly; overstatement of the VSL would in turn lead to underestimation 
of the fatal illnesses that would need to be avoided in order for the 
regulatory provision to break even.
---------------------------------------------------------------------------

    \98\ There is somewhat more clarity about willingness-to-pay 
being positively correlated with length of life extension achieved 
by a rule or other policy intervention--an outcome that is related 
to age, but only somewhat loosely.
---------------------------------------------------------------------------

    Consistent with the HHS Guidelines, we assume that the average 
individual in these underlying VSL studies is approximately 40 years of 
age, allowing us to calculate a VSLY of approximately $469,000 to 
$818,000 at 3 and 7 percent discount rates respectively. Table 8, when 
viewed alongside Table 7, demonstrates the number of years of life 
extension needed to break-even with the corresponding costs of testing 
and intervention. We reiterate, as discussed in our cost estimates, 
that the break-even points below are subject to any flaws in our 
assumptions of costs. Due to this uncertainty, these estimates are 
based on our high estimate of the costs of intervention.

 Table 8--Threshold Analysis of Avoided Fatal Illnesses, Due to LTC Testing and Associated Protective Actions, Required for the Regulatory Provision To
                                                                       Break Even
                                                                     [In life years]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Facilities affected
                                                         -----------------------------------------------------------------------------------------------
                    Rounds of testing                           5%              10%             25%             50%             75%            100%
                                                         -----------------------------------------------------------------------------------------------
                                                                775            1,550           3,874           7,748          11,621          15,495
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................           15-26           29-51          73-128         145-254         219-382         291-507
2.......................................................           29-51          59-102         145-254         291-507         438-763        583-1017
3.......................................................           44-77          88-153         219-382         438-763        657-1145        874-1524
4.......................................................          59-102         116-203         291-507        583-1017        874-1524       1166-2034
5.......................................................          73-128         145-254         364-635        729-1271       1093-1906       1457-2541
6.......................................................          88-153         175-305         438-763        874-1524       1312-2287       1749-3051
7.......................................................         101-177         204-356         510-889       1021-1780       1531-2669       2040-3558
8.......................................................         116-203         234-407        583-1017       1166-2034       1749-3051       2333-4068
9.......................................................         131-228         263-458        657-1145       1312-2287       1968-3432       2624-4575
10......................................................         145-254         291-507        729-1271       1457-2541       2186-3812       2915-5082
11......................................................         160-279         320-559        802-1398       1603-2795       2405-4193       3207-5592
12......................................................         175-305         350-610        874-1524       1749-3051       2624-4575       3498-6099
13......................................................         189-330         379-661        947-1652       1895-3304       2842-4957       3790-6609
14......................................................         204-356         408-712       1021-1780       2040-3558       3061-5338       4081-7116
15......................................................         219-382         438-763       1093-1906       2186-3812       3280-5720       4373-7626
16......................................................         234-407         467-814       1166-2034       2333-4068       3498-6099       4664-8133
17......................................................         248-433         495-863       1238-2160       2478-4321       3717-6481       4956-8643
18......................................................         263-458         524-915       1312-2287       2624-4575       3935-6862       5247-9150
19......................................................         278-484         554-966       1385-2415       2769-4829       4154-7244       5539-9659
20......................................................         291-507        583-1017       1457-2541       2916-5084       4373-7626      5830-10167
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 54866]]

    As described above, it is difficult to predict how many lives might 
be saved as a result of these testing requirements, but the benefits of 
catching, treating, and eliminating COVID-19 transmission and outbreaks 
among the over 3.2 million employees and residents of LTC facilities 
has potential to far exceed the costs. These benefits may be compounded 
by the possibility of LTC staff unknowingly infecting their families 
and respective communities, giving these testing requirements the 
potential for far-reaching benefits beyond the walls of LTC facilities.
3. Clinical Laboratories
    As discussed in section II.C of this IFC, these provisions could 
impact all of the 256,747 CLIA-certified laboratories \99\ to some 
extent. However, for purposes of this IFC, we estimate that 
approximately 30 percent (n=77,024) of the total CLIA-certified 
laboratories could potentially be performing SARS-CoV-2 testing. 
Although complete data are not available to calculate all estimated 
costs and benefits that would result from the changes in this IFC, we 
are providing an analysis of the potential impact based on available 
information and certain assumptions. Assuring a rapid and thorough 
public health response to the COVID-19 pandemic relies on having 
complete and comprehensive laboratory testing data, including 
standardized test results, relevant demographic details, and additional 
information that can improve both the public health response to SARS-
CoV-2 and treatment of COVID-19. These data can contribute to 
understanding disease incidence and trends: Initiating epidemiologic 
case investigations, assisting with contact tracing, assessing 
availability and use of testing resources, and identifying supply chain 
issues for reagents and other material. Laboratory testing data, in 
conjunction with case reports and other data, also provide vital 
guidance for mitigation and control activities. Implementation of the 
requirements of this IFC will result in changes that are anticipated to 
have both quantifiable and non-quantifiable impacts on laboratories. In 
estimating the quantifiable impacts, we include costs to all 
laboratories that could result from the need to meet the new CLIA 
provisions.
---------------------------------------------------------------------------

    \99\ https://www.cms.gov/Regulations-and-Guidance/Legislation/CLIA/Downloads/cert_type.pdf.
---------------------------------------------------------------------------

a. Laboratory Costs To Develop a Mechanism To Track SARS-CoV-2 Test 
Results
    As discussed in section II.C. of this IFC, we are adding Sec. Sec.  
493.41 and 493.1100(a) to require that, during the PHE for COVID-19, as 
defined in Sec.  400.200, each laboratory that performs a test that is 
intended to detect SARS-CoV-2 or to diagnose a possible case of COVID-
19 must report SARS-CoV-2 test results in such form and manner, and at 
such timing and frequency, as the Secretary may prescribe. We estimate 
that approximately 30 percent (n=77,024) of the total CLIA-certified 
laboratories \100\ could potentially be performing SARS-CoV-2 testing. 
Each of these laboratories would incur a one-time cost for the time 
needed to develop a mechanism to track and report SARS-CoV-2 test 
results to be in compliance with this new requirement. As described in 
Table 10, we estimate the one-time costs for all laboratories to 
implement this requirement to be $78,240,979 to $109,537,371. (See 
section IV.A. of this IFC.)
---------------------------------------------------------------------------

    \100\ Includes Certificate of Waiver (CoW), Certificate of 
Provider-Performed Microscopy (PPM), Certificate of Compliance (CoC) 
and Certificate of Accreditation (CoA). Based on the CLIA web page 
(https://www.cms.gov/Regulations-and-Guidance/Legislation/CLIA/Downloads/cert_type.pdf), the total number of laboratories as of 
March 2020 are as follows: CoW, n=193,474; PPM n=30,120; CoC 
n=17,432; CoA n=15,721; total =256,747.
---------------------------------------------------------------------------

b. Laboratory Costs To Collect Test Results for Reporting SARS-CoV-2 
Test Results
    As discussed in section II.C. of this IFC, we are adding Sec. Sec.  
493.41 and 493.1100(a) to require that, during the PHE for COVID-19, as 
defined in Sec.  400.200, each laboratory that performs a test that is 
intended to detect SARS-CoV-2 or to diagnose a possible case of COVID-
19 must report SARS-CoV-2 test results in such form and manner, and at 
such timing and frequency, as the Secretary may prescribe. We estimate 
that approximately 30 percent (n=77,024) of the total CLIA-certified 
laboratories could potentially be performing SARS-CoV-2, and by this 
rule would need to collect those test results to report them in 
accordance with Sec. Sec.  493.41 and 493.1100(a). We estimate the 
total cost would range from $2,028,812 to $12,172,873 per day to 
collect and report the SARS-CoV-2 test results. Collection of test 
results, as well as reporting would be an ongoing burden (including, 
for example, the daily requirement to report, testing, volume, and 
personnel) for each laboratory performing this type of testing. See 
sections IV.B. and IV.D. of this IFC.
c. Laboratory Costs To Report SARS-CoV-2 Test Results
    As discussed in section II.C. of this IFC, we are adding Sec. Sec.  
493.41 and 493.1100(a) to require that, during the PHE for COVID-19, as 
defined in Sec.  400.200, each laboratory that performs a test that is 
intended to detect SARS-CoV-2 or to diagnose a possible case of COVID-
19 must report SARS-CoV-2 test results in such form and manner, and at 
such timing and frequency, as the Secretary may prescribe. We expect 
that approximately 30 percent (n=77,024) of the total CLIA-certified 
laboratories could potentially be performing SARS-CoV-2 and need to 
report test results as required by the Secretary. Each of these 
laboratories would incur a per day cost that would range from 
$1,481,942 to $8,891,651. Reporting of test results would be an ongoing 
burden for each laboratory performing this type of testing. (See to 
section IV.C. of this IFC.)
d. Laboratory Costs To Update Policies and Procedures
    We expect that the approximately 77,024 laboratories performing 
SARS-CoV-2 testing would incur costs for the time needed to review the 
revised reporting regulations and update their policies and procedures 
to be in compliance. The total one-time burden per laboratory to review 
and update affected policies and procedures is $42,648,189. (See 
section IV.D. of this IFC.).
e. Accreditation Organization (AO) and Exempt State (ES) Costs To 
Update Standards for Reporting SARS-CoV-2 Test Results
    We would expect the seven approved AOs and two ESs would have to 
review their standards, provide updates and submit the changes to CMS 
related to SARS-CoV-2 test reporting for approval (9 organizations/
exempt states x 25 or 30 hours). We assume a one-time cost of from 
$24,917 to $29,900 to identify the applicable legal obligations and to 
develop the updated standards needed to reflect the new requirements 
for SARS-CoV-2 testing. (See section IV E. of this IFC.)
f. Accreditation Organization (AO) and Exempt State (ES) Costs To 
Update Policies and Procedures Related to Reporting Laboratories 
Performing SARS-CoV-2 Testing That Do Not Report Results as Required
    We would expect the seven approved AOs and two ESs would have to 
develop policies and procedures related

[[Page 54867]]

to identifying laboratories that do not report SARS-CoV-2 test results 
in order to report these laboratories to CMS. We are requiring the AOs/
ESs to report this information no later than 10 days after determining 
a laboratory is not reporting results, as required under Sec. Sec.  
493.41 and 493.1100(a). We assume a one-time cost would range from 
$9,967 to $14,950. In addition, the AOs and ESs would be required to 
report to CMS every 10 days those laboratories that have not reported 
test results as required. The annual total number of times each AO and 
ES is required to report to CMS is 36.5 (365 days/10 days). We estimate 
a cost of $1,192 to 2,383 per 10 days which translates to an annual 
total cost range of $43,508 to $86,980 to identify the laboratories and 
submit the information to CMS. (See section IV.F. of this IFC.)
g. Enforcement, Imposition of Civil Money Penalties (CMPs)
    CLIA/AO/ES surveyors typically perform approximately 16,577 surveys 
annually.\101\ In addition, the new requirements would also require 
3,727 COW and PPM laboratories to be surveyed annually for reporting 
requirements. This is a total of 20,304 laboratories that would be 
required to be surveyed annually and that may be impacted by the 
imposition of CMPs for failing to report SARS-CoV-2 as required. We 
estimate the fiscal impact of imposing CMPs on the estimated 20,304 
laboratories performing this testing to be 20 percent of laboratories 
performing SARS-CoV-2 testing. That is, 4,061 laboratories may have a 
CMP imposed during the PHE for COVID-19 for not complying with the new 
CLIA reporting requirements. While we believe initially the number of 
laboratories having a CMP imposed would be significantly higher, we 
postulate that the number of laboratories that will require the 
imposition of a CMP for not reporting SARS-CoV-2 test results will 
decrease during the PHE for COVID-19. We believe this decrease will be 
a result of laboratories implementing the new requirements included in 
this IFC.
---------------------------------------------------------------------------

    \101\ As of March 2020, there were 17,432 Certificate of 
Compliance and 15,721 Certificate of Accreditation laboratories. 
CLIA surveys are performed biennially, so each year approximately 
half of the laboratories would be surveyed (33,154 x 0.50 = 16,577).
---------------------------------------------------------------------------

    We have no data indicating how imposition of the alternative 
sanction of CMP would affect all laboratories. Prior to the changes 
included in this IFC, CMPs were not imposed on CoW laboratories. In 
2016, CMS imposed 30 CMPs for an average of $35,436 per laboratory; in 
2017, 25 CMPs were imposed for an average of $72,237 per laboratory; 
and in 2018, 24 CMPs were imposed for an average of $44,230 per 
laboratory. The average total CMP imposed per fined laboratory over the 
3-year period was $52,634. Based on our CMP requirements specific to 
SARS-CoV-2 at 493.1834(d)(2)(iii), we anticipate that would be a range 
of $1,000 per violation and $500 for each additional day of 
noncompliance that test results are not reported. For example, we are 
providing estimates for a minimum period of 3 days and a maximum period 
of 30 days. We estimate that the total cost of CMPs imposed across all 
laboratories collectively would range from $8,122,000 to $62,945,500 
(4,061 laboratories x $2000 (3 days) or 4,061 laboratories x $15,500 
(30 days)) for laboratories performing SARS-CoV-2 testing. (see Table 
9).
h. Infrastructure
    Several issues related to infrastructure have been identified (that 
is, reporting test results, personnel) that will have an increased 
burden on all laboratories. As stated above, for purposes of this IFC, 
we expect that the approximately 30 percent (n=77,024) of the total 
CLIA-certified laboratories could potentially be performing SARS-CoV-2 
testing. Furthermore, based on data from the CLIA website \102\ we are 
estimating that 75 percent of the 77,024 laboratories have a CoW 
(n=57,768), and 25 percent have a Certificate of PPM, CoC, CoA, or CoR 
(n=19,256). Generally, the types of facilities that have a CoW include, 
but are not limited to: Physician office laboratories (45%); pharmacies 
(5%); skilled nursing/nursing facility (6%); and other types of point-
of-care facilities.\103\ The facilities with PPM generally are 
physician office laboratories (POL) or other types of point-of-care 
(POC) facilities.\104\ We would also estimate that 45 percent of the 
CoC, CoA, and CoR laboratories would be POLs. For these POL and POC 
laboratories (n=66,433; 57,768 (CoWs) + 8,665 (other certificate 
types)), we believe there would be infrastructure issues related to 
implementing the new CLIA requirement that test results must be 
reported as required by the Secretary. While reporting of SARS-CoV-2 
test results affects all laboratories performing this testing, we 
believe that meeting the new reporting requirements will be more 
challenging for POL and POC laboratories given that this requirement 
creates the need for systemic changes to the ability to report results. 
If a laboratory does not currently have this capability to report in 
the form and manner specified by the Secretary, they would need to 
expeditiously ensure that the laboratory was able to submit the SARS-
CoV-2 test results in such form and manner, and at such timing and 
frequency, as the Secretary may prescribe. Personnel would need to be 
trained to implement the new CLIA reporting requirements related to 
reporting of test results as prescribed by the Secretary. Further, 
given that CoW laboratories are not required to meet any personnel 
requirements, including laboratory director and testing personnel, this 
could contribute a significant challenge for these laboratories. In 
some cases, laboratory directors and testing personnel are not medical 
professionals. CoW laboratories may not have individuals in place that 
can train laboratory personnel to perform this task and may need to 
outsource this training.
---------------------------------------------------------------------------

    \102\ https://www.cms.gov/Regulations-and-Guidance/Legislation/CLIA/Downloads/cert_type.pdf.
    \103\ https://www.cms.gov/Regulations-and-Guidance/Legislation/CLIA/Downloads/factype.pdf.
    \104\ https://www.cms.gov/Regulations-and-Guidance/Legislation/CLIA/Downloads/factype.pdf.
---------------------------------------------------------------------------

    While we do not have any data to be able estimate the fiscal burden 
that it would cost to update a laboratory's current software to ensure 
that the laboratory is able to report test results as required by the 
Secretary, we can estimate the time it would take each laboratory to 
implement the requirement. We are soliciting public comments related to 
cost and time it would take laboratories to update their software to 
ensure reporting of SARS-CoV-2 test results. It would take 
approximately 3 hours to implement or update to the form and manner 
prescribed by the Secretary and approximately 1 hour to train employees 
to be in compliance with this new requirement. We estimate the burden 
hours for updating and implementing the form would be 231,072 (77,024 
laboratories x 3 hours). We estimate a database administrator/architect 
(15-1245) would be needed to implement or update the software to report 
the test results at an hourly wage of $46.21 per hour as published by 
the BLS in 2019.\105\ The wage rate would be doubled to $92.42 to 
include overhead and fringe benefits. The total estimated cost to 
implement this requirement per laboratory would be $21,355,674 (77,024 
laboratories x 3 hours x $92.42). We estimate a healthcare support 
worker (31-9099) would train employees to collect the additional 
required information at an hourly wage of $19.24 per hour as published 
by the

[[Page 54868]]

BLS in 2019.\106\ We estimate that at least one new or existing 
employee per laboratory (n=77,024) would need to be trained for the 
purpose of collecting this information. The wage rate would be doubled 
to $38.48 to include overhead and fringe benefits. The total estimated 
cost would be $2,963,884 (77,024 laboratories x 1 hour x $38.48) per 
day to collect the required information. Reporting of test results 
would be an ongoing burden for each laboratory performing this type of 
testing since laboratories would need to train employees to perform 
this task as employees left and needed to be replaced. (See Table 9.)
---------------------------------------------------------------------------

    \105\ https://www.bls.gov/oes/current/oes_nat.htm.
    \106\ https://www.bls.gov/oes/current/oes_nat.htm. 31-9099.

    Table 9--Estimated Costs, Including Daily Costs, to Laboratories, Accreditation Organizations (AO) and Exempt States (ES) to Implement Reporting
                                                                      Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Hours          Range of cost estimate for
                                                             Total number                            ------------------       implementing new CLIA
         Regulatory change               Affected group       of affected   Hourly cost   Occupation                              requirements
                                                               entities                                 Low      High  ---------------------------------
                                                                                                                         Low estimate     High estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Collect Laboratory Results \1\.....  All Laboratories               77,024       $52.68      29-2010      0.5        3    $405,762,400    $2,434,574,600
                                      Performing SARS-CoV-
                                      2 Testing.
Reporting Costs \1\................  All Laboratories               77,024        38.48      31-9099      0.5        3     296,388,400     1,778,330,200
                                      Performing SARS-CoV-
                                      2 Testing.
AO/ES Reporting to CMS \2\.........  AO/ES................               9        66.20      15-1231        2        4          43,508            86,980
Imposition of CMPs.................  All Laboratories                4,061          n/a          n/a      n/a      n/a       8,122,000        62,945,500
                                      Performing SARS-CoV-
                                      2 Testing.
                                                                                                                       ---------------------------------
    Total Increased Cost...........  .....................  ..............  ...........  ...........  .......  .......     710,316,308     4,275,937,280
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Please note that ``Collect Laboratory Results'' and ``Reporting Costs'' per day estimates are $2,028,812 to $12,172,873, and $1,481,942 to
  $8,891,651, respectively. For purposes of the annual cost, we estimated 200 days/year for testing/reporting (365 days/year-104 weekend days-10 federal
  holidays-approximately 50 days to account for laboratories who do not test 7 days/week.)
\2\ Reporting requirement of once every 10 days. Calculation factor is 36.5 (365 days per year/10 days). The total cost would range from $1,192 to
  $2,383 (9 x 2 or 4 hours x $66.20) per 10 days for an annual total cost of $43,508 to $86,980 ($1,192 or $2,383 x 36.5).


     Table 10--Estimated One-Time Costs to Laboratories, Accreditation Organizations (AO) and Exempt States (ES) to Implement Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Hours          Range of cost estimate for
                                                                                                     ------------------       implementing new CLIA
                                                             Total number                                                 requirements \1\ and Section
         Regulatory change               Affected group       of affected   Hourly cost   Occupation                        3202(b) of the CARES Act
                                                               entities                                 Low      High  ---------------------------------
                                                                                                                         Low estimate     High estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tracking Mechanism.................  All Laboratories               77,024      $203.16  11-9111, 15-       5        7     $78,240,979      $109,537,371
                                      Performing SARS-CoV-                       [sup1]         1245
                                      2 Testing.
Update Policies and Procedures.....  All Laboratories               77,024       110.74      11-9111        5      n/a      42,648,189        42,648,189
                                      Performing SARS-CoV-
                                      2 Testing.
AO/ES Updating Standards...........  AO/ES................               9       110.74      11-9111       25       30          24,917            29,900
AO/ES Update Policies and            AO/ES................               9       110.74      11-9111       10       15           9,967            14,950
 Procedures.
Infrastructure, Implementation of    All Laboratories               77,024        92.42      15-1245        3      n/a      21,355,674        21,355,674
 Test Reporting.                      Performing SARS-CoV-
                                      2 Testing.
Infrastructure, Personnel..........  All Laboratories               77,024        38.48      31-9099        1      n/a       2,963,884         2,963,884
                                      Performing SARS-CoV-
                                      2 Testing.
                                                                                                                       ---------------------------------

[[Page 54869]]

 
    Total Increased Cost...........  .....................  ..............  ...........  ...........  .......  .......     145,243,610       176,529,968
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ $101.58 hourly rate includes $55.37 (Management Level Employee) + $46.21 (Database Administrative/Architect). The wage rate would be double to
  $203.16 to include overhead and fringe benefits.

4. Quality Reporting: Updates to the Extraordinary Circumstances 
Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in 
Response to the PHE for COVID-19, and Update to the Performance Period 
for the FY 2022 SNF VBP Program
a. Updates to ESRD QIP: Utilization of Fourth Quarter CY 2019 ESRD QIP 
Data and the Removal of the Option for Facilities To Opt-Out of the 
Extraordinary Circumstances Exception (ECE) Granted With Respect to 
First and Second Quarter (CY) 2020 ESRD QIP Data a
    In section II.D.1. of this IFC, we are updating our regulations at 
42 CFR 413.178(d)(7) to state that a facility has opted out of the ECE 
for COVID-19 with respect to the reporting of fourth quarter 2019 NHSN 
data if the facility actually reported the data by the March 31, 2020 
deadline but did not notify CMS that it would do so., Additionally, we 
are removing the ability of facilities to opt-out of the ECE we granted 
with respect to Q1 and Q2 2020 ESRD QIP data. These updates do not 
require facilities to complete any forms or submit any additional 
information to receive an ECE, and therefore, the program does not 
anticipate any change in burden associated with this IFC.
    The existing individual ECE request form policy is accounted for in 
the currently approved Hospital Inpatient Reporting PRA package, OMB 
control #0938-1022 (expiration date December 31, 2022). There are no 
changes to the individual ECE request form policy and therefore no 
changes to the burden associated with the ESRD QIP.
b. Updates to the Application of the HAC Reduction Program ECE Policy 
in Response to the PHE for COVID-19
    In section II.D.2. of this IFC, we are updating the ECE policy for 
the HAC Reduction Program to not use Q1 and Q2 2020 data that were made 
optional under the Guidance memo for scoring in the HAC Reduction 
Program for scoring calculations in future program years (that is, the 
FY 2022 and FY 2023 program years). The existing individual ECE request 
form policy is accounted for in the currently approved Hospital 
Inpatient Reporting PRA package, OMB control #0938-1022 (expiration 
date December 31, 2022). There are no changes to the individual ECE 
request form policy.
    This update does not require hospitals to complete any forms or 
submit any additional information to receive an ECE, and therefore, the 
program does not anticipate any change in burden associated with this 
IFC.
c. Update to the HRRP ECE Granted in Response to the PHE for COVID-19
    In section II.D.3. of this IFC, we excepted the use of claims data 
from the first and second quarters of CY 2020 from the Hospital 
Readmissions Reduction Program because of our concern that the data 
collected during this period may be greatly impacted by the response to 
COVID-19, and therefore, may not be reflective of a hospital's 
performance during this time. The existing individual ECE request form 
policy is accounted for in the currently approved Hospital Inpatient 
Reporting PRA package, OMB control #0938-1022 (expiration date December 
31, 2022). There are no changes to the individual ECE request form 
policy.
    This update does not require hospitals to complete any forms or 
submit any additional information, and therefore, the program does not 
anticipate any change in burden associated with this IFC.
d. Update to the Hospital VBP Program ECE Granted in Response to the 
PHE for COVID-19
    Section II.D.4. of this IFC updates the Hospital VBP Program ECE 
policy to allow CMS to exclude any data submitted regarding care 
provided during the first and second quarter of CY 2020 from our 
calculation of performance. This change does not require hospitals to 
complete any forms or submit any additional information, and therefore, 
the program does not anticipate any change in burden associated with 
this IFC.
    The existing individual ECE request form policy is accounted for in 
the currently approved Hospital Inpatient Reporting PRA package, OMB 
control #0938-1022 (expiration date December 31, 2022). There are no 
changes to the individual ECE request form policy, and therefore, no 
changes to the burden associated with the Hospital VBP Program.
e. Revised Performance Period for the FY 2022 SNF VBP Program as a 
Result of the ECE Granted for the PHE for COVID-19
    In section II.D.5. of this IFC, we are revising the performance 
period for the FY 2022 SNF VBP Program Year.
    In the FY 2021 SNF PPS final rule,\107\ we set out estimated 
impacts of the FY 2021 SNF VBP Program. At this time, those estimates 
represent our best approximation of the financial impact of the FY 2022 
SNF VBP Program. We anticipate that the revised performance period 
would not have a substantial impact on the estimated payback 
percentage, Medicare savings, and amount of value-based incentive 
payments redistributed to SNFs for the FY 2022 SNF VBP Program.
---------------------------------------------------------------------------

    \107\ The FY 2021 SNF PPS Final Rule can be accessed at https://www.federalregister.gov/documents/2020/08/05/2020-16900/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities.
---------------------------------------------------------------------------

5. NCD Procedural Volumes for Facilities and Practitioners to Maintain 
Medicare Coverage
    As discussed in section II.E. of this IFC, these provisions result 
in no impact to the Medicare program because they will enable 
facilities and practitioners to continue to be eligible for coverage 
under the impacted NCDs during the PHE for COVID-19 that would have 
been eligible for coverage if the COVID-

[[Page 54870]]

19 pandemic had not occurred. Without the pandemic, facilities and 
practitioners would likely have continued to perform procedures 
necessary to meet the procedural volume requirements specified in the 
NCDs.
6. Limits on COVID-19 and Related Testing Without an Order
    As discussed in section II.F. of this IFC, we are revising the 
previous policy outlined in the May 8th COVID-19 IFC, which allowed for 
broad COVID-19 testing for a single beneficiary without a physician or 
other practitioner order by establishing that only a single COVID-19 
diagnostic test and one of each other related test (as listed in the 
May 8th COVID-19 IFC) without a treating physician or other 
practitioner order is reasonable and necessary for Medicare payment. 
This limitation on tests without a treating physician/practitioner 
order will apply beginning on the effective date of this rule, and any 
tests furnished prior to the effective date would not be considered for 
purposes of the limit on tests without a physician or eligible ordering 
practitioner order. We are also establishing a policy whereby the 
orders of pharmacists and other practitioners that are allowed to order 
laboratory tests in accordance with state scope of practice and other 
pertinent laws can fulfill the requirements related to orders for 
covered COVID-19 tests for Medicare patients. We do not anticipate that 
these changes will affect overall Medicare expenditures over time 
because they will better align the requirements for COVID-19 and 
related testing with other Medicare laboratory tests, which require the 
order of a physician or other practitioner based on the clinical needs 
of the beneficiary.
6. Premium Reductions
a. PPACA Risk Adjustment
    In this IFC, we clarify that issuers that choose to provide 
temporary premium credits to consumers \108\ must report the adjusted 
plan premium amount, taking into account the credits provided to 
consumers as a reduction to premiums for the applicable months during 
2020, for risk adjustment data submissions for the 2020 benefit year. 
As stated in section IV. of this IFC, the Collection of Information 
section, we do not believe that the clarifications regarding risk 
adjustment reporting in this IFC would impose additional administrative 
burden on health insurance issuers beyond the effort already required 
to submit data to HHS for the purposes of operating risk adjustment. 
Although we do not know how many states will permit issuers to provide 
temporary credits to reduce 2020 premiums or how many issuers will 
elect to do so, for purposes of this analysis, we estimate that 
approximately 40 percent of risk adjustment covered plans in each state 
market risk pool will provide these temporary premium credits to reduce 
the premiums charged to enrollees to support continuity of coverage 
during the PHE for COVID-19. We anticipate that reporting of the 
adjusted, lower subscriber level premiums for 2020 benefit year risk 
adjustment data submissions will lower the statewide average premium 
used to determine risk adjustment transfer amounts under the state 
payment transfer formula for the 2020 benefit year, thereby lowering 
aggregate risk adjustment payments, aggregate risk adjustment charges, 
and the overall magnitude of risk adjustment transfers, proportional to 
the amount of temporary premium credits provided by issuers of risk 
adjustment covered plans for the 2020 benefit year. Consistent with the 
assumptions used for the MLR program, as described below, we estimate 
that the aggregate impact of premium credits will result in an 8 
percent reduction in annual premium, and a commensurate 8 percent 
reduction in transfers for the 2020 benefit year.\109\ In the 2020 
Payment Notice, HHS finalized the risk adjustment state payment 
transfer formula under the HHS risk adjustment methodology for the 2020 
benefit year, and reaffirmed that HHS will continue to operate the risk 
adjustment program in a budget neutral manner. Therefore, there is no 
net aggregate financial impact on health insurance issuers or the 
federal government as a result of the risk adjustment provisions in 
this IFC. However, while risk adjustment transfers are net neutral in 
aggregate, we recognize that individual issuers may be financially 
impacted by reduced transfers (either lower risk adjustment payments or 
lower risk adjustment charges) if any issuer in the issuer's state 
market risk pool provides premium credits to enrollees. The extent of 
this impact will vary based on the number of issuers in a state market 
risk pool that elect to provide the temporary premium credits, the 
amount of these premium credits provided, as well as the market share 
of the issuers that provide these premium credits. For example, issuers 
with larger market share that offer large premium credits will affect 
the statewide average premium more significantly. Although we recognize 
the potential for financial impacts for individual issuers as a result 
of the clarifications in this IFC, we believe that if HHS permitted 
issuers that provided premium credits to submit unadjusted premiums for 
the purposes of calculating risk adjustment, distortions could occur 
which could also financially impact individual issuers. For example, 
absent the requirement that issuers that offer premium credits report 
the adjusted, lower premium amount for risk adjustment purposes, an 
issuer with a large market share with higher-than-average risk 
enrollees that provides temporary premium credits would inflate the 
statewide average premium by submitting the higher, unadjusted premium 
amount, thereby increasing its risk adjustment payment. In such a 
scenario, a smaller issuer in the same state market risk pool that owes 
a risk adjustment charge, and also provides premium credits to 
enrollees, would pay a risk adjustment charge that is relatively higher 
than it would have been if it were calculated based on a statewide 
average that reflected the actual, reduced premium charged to enrollees 
by issuers in the state market risk pool. Therefore, we believe that 
requiring issuers that offer temporary premium credits for 2020 
coverage to accurately report to the EDGE server the adjusted, lower 
premium amounts actually charged to enrollees is most consistent with 
existing risk adjustment program requirements and mitigates the 
distortions that would occur if issuers that offer these temporary 
premium credits did not report the actual amounts charged to enrollees, 
while not imposing additional financial burden on issuers, as compared 
to an approach that would permit issuers to report unadjusted premium 
amounts.
---------------------------------------------------------------------------

    \108\ See the CMS Memo ``Temporary Policy on 2020 Premium 
Credits Associated with the COVID-19 Public Health Emergency,'' 
(August 4, 2020), available at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/Premium-Credit-Guidance.pdf.
    \109\ The effects of the risk adjustment program, including 
estimated outlays and receipts for the 2020 benefit year are 
provided in the 2020 Payment Notice final rule, published in the 
April 25, 2019, Federal Register (84 FR 17454 at 17551). We relied 
on those estimates for purposes of estimating the impacts of the 
temporary premium credit policies in this IFC.
---------------------------------------------------------------------------

b. Medical Loss Ratio
    In this IFC, we clarify that issuers that choose to provide 
temporary premium credits to consumers in 2020 must account for these 
credits as reductions to premium for the applicable months during 2020 
when reporting earned premium for the applicable MLR reporting 
year.\110\ Although we do not

[[Page 54871]]

know how many states will permit issuers to provide temporary credits 
to reduce premiums or how many issuers will elect to do so, for 
purposes of this analysis, we estimate that approximately 40 percent of 
issuers offering individual, small group or merged market health 
insurance coverage will provide these temporary premium credits to 
reduce the 2020 premiums charged to enrollees to support continuity of 
coverage during the PHE for COVID-19. If an issuer provides temporary 
premium credits and consequently reports a lower premium amount for MLR 
purposes, the lower reported premium will have the effect of increasing 
MLRs and reducing rebates. Although we do not know the number of 
issuers that will provide these credits or the amount of premium 
credits that issuers may elect to provide, for purposes of this 
estimate we assume that such premium credits would on average 
constitute approximately 8 percent of total annual premium (equivalent 
to one month of premium). Based on data for the 2018 MLR reporting 
year, we estimate that rebates for the 2020 MLR reporting year that 
will be paid in 2021 to enrollees by issuers that choose to provide 
temporary premium credits could decline by up to $500 million, as a 
result of enrollees receiving a total of up to $2 billion in premium 
relief up front in 2020. Because the MLR calculation uses three 
consecutive years of data, there may be additional rebate decreases in 
subsequent years, although the impact on rebates may be smaller as 
issuers would likely account for the premium relief provided to 
enrollees through these temporary premiums credits at the time they 
develop premium rates for the 2021 and 2022 benefit years.
---------------------------------------------------------------------------

    \110\ Because the MLR and rebate calculations are based on three 
years of data, reporting earned premium for the 2020 benefit year 
will impact the MLR and rebate calculations for the 2020 through 
2022 reporting years. See section 2718(b)(1)(B)(ii) of the PHSA. 
Also see 45 CFR 158.220(b).
---------------------------------------------------------------------------

7. Merit-Based Incentive Payment System (MIPS) Updates
    In section II.I. of this IFC, for the 2020 MIPS performance period, 
we are proposing to include in the MIPS assignment methodology for the 
CMS Web Interface and CAHPS for MIPS survey the following additions due 
to the PHE for COVID-19: (1) CPT codes: 99421, 99422, and 99423 (codes 
for online digital E/M service (e-visit)), and 99441, 99442, and 99443 
(codes for telephone E/M services); and (2) HCPCS codes: G2010 (code 
for remote evaluation of patient video/images) and G2012 (code for 
virtual check-in). We do not believe this proposal will impact the 
number of beneficiaries selected for sampling, which will be used to 
complete quality reporting via the CMS Web Interface or administer the 
CAHPS for MIPS survey; however, this proposal could impact the number 
of beneficiaries eligible to be sampled. Therefore, we do not 
anticipate any change in burden or impact on clinicians. In addition, 
we are modifying the improvement activity IA_ERP_3 previously titled 
``COVID-19 Clinical Trial'' and continuing it through CY 2021. Because 
MIPS eligible clinicians are still required to submit the same number 
of activities and the per response time for each activity is uniform, 
we do not expect this modification to affect our impact estimates in 
terms of the number of estimated respondents or the burden of 
compliance.
8. Addressing the Impact of COVID-19 on Part C and Part D Quality 
Rating Systems
    As discussed in section II.H. of this IFC, this policy allows us to 
calculate the 2022 Star Ratings. We do not anticipate changes in the 
distribution of ratings from prior years. Therefore, these provisions 
result in no impact to the Medicare program since ratings will be 
similar to prior years.

List of Subjects

42 CFR Part 410

    Diseases, Health facilities, Health professions, Laboratories, 
Medicare, Reporting and recordkeeping requirements, Rural areas, X-
rays.

42 CFR Part 413

    Diseases, Health facilities, Medicare, Puerto Rico, Reporting and 
recordkeeping requirements.

42 CFR Part 414

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

42 CFR Part 422

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

42 CFR Part 482

    Grant program-health, Hospitals, Medicaid, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 483

    Grant programs-health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.

42 CFR Part 485

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

42 CFR Part 488

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

42 CFR Part 493

    Administrative practice and procedure, Grant programs-health, 
Health facilities, Laboratories, Medicaid, Medicare, Penalties, 
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 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
1. The authority citation for part 410 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.


0
2. Section 410.32 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  410.32  Diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests: Conditions.

    (a) * * *
    (3) Public Health Emergency exceptions. During the Public Health 
Emergency for COVID-19, as defined in Sec.  400.200 of this chapter, 
the order of a physician or other applicable practitioner is not 
required for one otherwise covered diagnostic laboratory test for 
COVID-19 and for one otherwise covered diagnostic laboratory test each 
for influenza virus or similar respiratory condition needed to obtain a 
final COVID-19 diagnosis when performed in conjunction with COVID-19 
diagnostic laboratory test in order to rule-out influenza virus or 
related diagnosis. Subsequent otherwise covered COVID-19 and related 
tests described in the previous sentence are reasonable and necessary 
when ordered by a physician

[[Page 54872]]

or nonphysician practitioner in accordance with this paragraph (a), or 
when ordered by a pharmacist or other healthcare professional who is 
authorized under applicable state law to order diagnostic laboratory 
tests. FDA-authorized COVID-19 serology tests are included as covered 
tests subject to the same order requirements during the Public Health 
Emergency for COVID-19, as defined in Sec.  400.20 of this chapter, as 
they are reasonable and necessary under section 1862(a)(1)(A) of the 
Act for beneficiaries with known current or known prior COVID-19 
infection or suspected current or suspected prior COVID-19 infection.
* * * * *

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT 
RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY 
INJURY DIALYSIS

0
3. The authority citation for part 413 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), 
(i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww.


0
4. Section 413.178 is amended by revising paragraph (d)(7) to read as 
follows:


Sec.  413.178  ESRD quality incentive program.

* * * * *
    (d) * * *
    (7) With the exception of first and second quarter 2020 ESRD QIP 
data for which CMS granted an exception under paragraph (d)(6) of this 
section, a facility that has been granted an exception to the data 
submission requirements under paragraph (d)(6) of this section may 
notify CMS that it will continue to submit data under paragraph (d)(1) 
of this section by sending an email signed by the CEO or another 
designated contact to the ESRD QIP mailbox at [email protected]. Upon 
receipt of an email under this clause, CMS will notify the facility in 
writing that CMS is withdrawing the exception it previously granted to 
the facility. With respect to fourth quarter 2019 ESRD QIP data for 
which CMS granted an exception under paragraph (d)(6) of this section, 
a facility is deemed to have met the requirements of this paragraph if 
the facility actually submitted the data by the March 31, 2020 
submission deadline but did not notify CMS that it would do so.
* * * * *

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
5. The authority citation for part 414 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).


0
6. Section 414.1305 is amended by adding the definition of ``Primary 
care services'' in alphabetical order to read as follows:


Sec.  414.1305  Definitions.

* * * * *
    Primary care services for purposes of CMS Web Interface and the 
CAHPS for MIPS survey beneficiary assignment means the set of services 
identified by any of the following:
    (1) CPT codes:
    (i) 99201 through 99215 (codes for office or other outpatient visit 
for the evaluation and management of a patient); 99304 through 99318 
(codes for professional services furnished in a nursing facility, 
excluding professional services furnished in a SNF for claims 
identified by place of service (POS) modifier 31); 99319 through 99340 
(codes for patient domiciliary, rest home, or custodial care visit); 
99341 through 99350 (codes for evaluation and management services 
furnished in a patient's home for claims identified by POS modifier 
12); 99490 (code for chronic care management); and 99495 and 99496 
(codes for transitional care management services);
    (ii) Beginning with the 2020 MIPS payment year, 99487 and 99489 
(codes for chronic care management); and
    (iii) For the CY 2020 MIPS performance period and any subsequent 
performance period that starts during the Public Health Emergency, as 
defined in Sec.  400.200, 99421, 99422, and 99423 (codes for online 
digital evaluation and management services (e-visit)); and 99441, 
99442, and 99443 (codes for telephone evaluation and management 
services).
    (2) HCPCS codes:
    (i) G0402 (code for the Welcome to Medicare visit); and G0438 and 
G0439 (codes for the annual wellness visits); and
    (ii) For the CY 2020 MIPS performance period and any subsequent 
performance period that starts during the Public Health Emergency, as 
defined in Sec.  400.200, G2010 (code for remote evaluation of patient 
video/images); and G2012 (code for virtual check-in).
* * * * *

PART 422--MEDICARE ADVANTAGE PROGRAM

0
7. The authority citation for part 422 continues to read as follows:

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


0
8. Section 422.166 is amended by adding paragraph (i)(11) to read as 
follows:


Sec.  422.166  Calculation of Star Ratings.

* * * * *
    (i) * * *
    (11) Special rules for the 2022 Star Ratings only. For the 2022 
Star Ratings only, CMS will not apply the provisions in paragraph 
(i)(9) or (10) of this section and CMS will not exclude 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 or from the determination of the performance summary and 
variance thresholds for the Reward Factor.
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
9. The authority citation for part 423 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, 
and 1395hh.


0
10. Section 423.186 is amended by adding paragraph (i)(9) to read as 
follows:


Sec.  423.186  Calculation of Star Ratings.

* * * * *
    (i) * * *
    (9) Special rules for the 2022 Star Ratings only. For the 2022 Star 
Ratings only, CMS will not apply the provisions in paragraphs (i)(7) or 
(8) of this section and CMS will not exclude 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 or from 
the determination of the performance summary and variance thresholds 
for the Reward Factor.
* * * * *

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

0
11. The authority citation for part 482 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395hh, and 1395rr, unless otherwise 
noted.


0
12. Section 482.42 is amended by adding paragraph (e) to read as 
follows:

[[Page 54873]]

Sec.  482.42  Condition of participation: Infection prevention and 
control and antibiotic stewardship programs.

* * * * *
    (e) COVID-19 Reporting. During the Public Health Emergency, as 
defined in Sec.  400.200 of this chapter, the hospital must report 
information in accordance with a frequency as specified by the 
Secretary on COVID-19 in a standardized format specified by the 
Secretary.

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

0
13. The authority citation continues to read as follows:

    Authority: 42 U.S.C. 1302, 1320, 1320a-7, 1395i, 1395hh and 
1396r.


0
14. Section 483.80 is amended by adding paragraph (h) to read as 
follows:


Sec.  483.80  Infection control.

* * * * *
    (h) COVID-19 Testing. The LTC facility must test residents and 
facility staff, including individuals providing services under 
arrangement and volunteers, for COVID-19. At a minimum, for all 
residents and facility staff, including individuals providing services 
under arrangement and volunteers, the LTC facility must:
    (1) Conduct testing based on parameters set forth by the Secretary, 
including but not limited to:
    (i) Testing frequency;
    (ii) The identification of any individual specified in this 
paragraph diagnosed with COVID-19 in the facility;
    (iii) The identification of any individual specified in this 
paragraph with symptoms consistent with COVID-19 or with known or 
suspected exposure to COVID-19;
    (iv) The criteria for conducting testing of asymptomatic 
individuals specified in this paragraph, such as the positivity rate of 
COVID-19 in a county;
    (v) The response time for test results; and
    (vi) Other factors specified by the Secretary that help identify 
and prevent the transmission of COVID-19.
    (2) Conduct testing in a manner that is consistent with current 
standards of practice for conducting COVID-19 tests;
    (3) For each instance of testing:
    (i) Document that testing was completed and the results of each 
staff test; and
    (ii) Document in the resident records that testing was offered, 
completed (as appropriate to the resident's testing status), and the 
results of each test.
    (4) Upon the identification of an individual specified in this 
paragraph with symptoms consistent with COVID-19, or who tests positive 
for COVID-19, take actions to prevent the transmission of COVID-19.
    (5) Have procedures for addressing residents and staff, including 
individuals providing services under arrangement and volunteers, who 
refuse testing or are unable to be tested.
    (6) When necessary, such as in emergencies due to testing supply 
shortages, contact state and local health departments to assist in 
testing efforts, such as obtaining testing supplies or processing test 
results.
* * * * *

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

0
15. The authority citation for part 485 continues to read as follows:

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


0
16. Section 485.640 is amended by adding paragraph (d) to read as 
follows:


Sec.  485.640  Condition of participation: Infection prevention and 
control and antibiotic stewardship programs.

* * * * *
    (d) COVID-19 Reporting. During the Public Health Emergency, as 
defined in Sec.  400.200 of this chapter, the CAH must report 
information in accordance with a frequency as specified by the 
Secretary on COVID-19 in a standardized format specified by the 
Secretary.

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
17. The authority citation for part 488 continues to read as follows:

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


0
18. Section 488.447 is added to read as follows:


Sec.  488.447  Civil Money Penalties imposed for failure to comply with 
42 CFR 483.80(g)(1) and (2).

    (a) CMS may impose a civil money penalty for noncompliance with the 
requirements at Sec.  483.80(g)(1) and (2) of this chapter as follows:
    (1) Minimum. A minimum of $1,000 for the first occurrence.
    (2) Increased amount. An amount equal to $500 added to the 
previously imposed civil money penalty amount for each subsequent 
occurrence, not to exceed the maximum amount set forth in Sec.  
488.408(d)(1)(iii).
    (b) The penalty amounts in this section will be adjusted annually 
under 45 CFR part 102.
    (c) Compliance with the requirements at Sec.  483.80(g)(1) and (2) 
of this chapter will be assessed weekly. Facilities found out of 
compliance with Sec.  483.80(g)(1) and (2) of this chapter are not 
required to submit a plan of correction as indicated in Sec.  
488.408(f)(1).
    (d) This section is in effect during and the Public Health 
Emergency (PHE), as defined in Sec.  400.200 of this chapter, and will 
continue for up to one year after the end of the PHE.

PART 493--LABORATORY REQUIREMENTS

0
19. The authority citation for part 493 is revised to read as follows:

    Authority: 42 U.S.C. 263a, 1302, 1395x(e), the sentence 
following 1395x(s)(11) through 1395x(s)(16)).


0
20. Section 493.2 is amended by revising the definition of ``Condition 
level requirements'' to read as follows:


Sec.  493.2  Definitions.

* * * * *
    Condition level requirements means any of the requirements 
identified as ``conditions'' in Sec.  493.41 and subparts G through Q 
of this part.
* * * * *

0
21. Section 493.41 is added to subpart B to read as follows:


Sec.  493.41  Condition: Reporting of SARS-CoV-2 test results.

    During the Public Health Emergency, as defined in Sec.  400.200 of 
this chapter, each laboratory that performs a test that is intended to 
detect SARS-CoV-2 or to diagnose a possible case of COVID-19 
(hereinafter referred to as a ``SARS-CoV-2 test'') must report SARS-
CoV-2 test results to the Secretary in such form and manner, and at 
such timing and frequency, as the Secretary may prescribe.

0
22. Section 493.555 is amended by adding paragraph (c)(6) to read as 
follows:


Sec.  493.555  Federal review of laboratory requirements.

* * * * *
    (c) * * *
    (6) Notify CMS within 10 days of any conditional level deficiency 
under Sec. Sec.  493.41 or 493.1100(a).

0
23. Section 493.1100 is amended by adding paragraph (a) and reserving 
paragraph (b) to read as follows:


Sec.  493.1100  Condition: Facility administration.

* * * * *
    (a) Reporting of SARS-CoV-2 test results. During the Public Health 
Emergency, as defined in Sec.  400.200 of this chapter, each laboratory 
that performs a test that is intended to detect SARS-CoV-2 or to 
diagnose a possible

[[Page 54874]]

case of COVID-19 (hereinafter referred to as a ``SARS-CoV-2 test'') 
must report SARS-CoV-2 test results to the Secretary in such form and 
manner, and at such timing and frequency, as the Secretary may 
prescribe.
    (b) [Reserved]

0
24. Section 493.1804 is amended by revising paragraph (c)(1) to read as 
follows:


Sec.  493.1804  General considerations.

* * * * *
    (c) * * *
    (1) CMS may impose alternative sanctions in lieu of, or in addition 
to principal sanctions. (Except for a condition level deficiency under 
Sec. Sec.  493.41 or 493.1100(a), CMS does not impose alternative 
sanctions on laboratories that have certificates of waiver because 
those laboratories are not routinely inspected for compliance with 
condition-level requirements.)
* * * * *

0
25. Section 493.1834 is amended by adding paragraph (d)(2)(iii) to read 
as follows:


Sec.  493.1834  Civil money penalty.

* * * * *
    (d) * * *
    (2) * * *
    (iii) For a condition level deficiency under Sec. Sec.  493.41 or 
493.1100(a), the penalty amount is $1,000 for the first day of 
noncompliance and $500 for each additional day of noncompliance.
* * * * *

    Dated: August 14, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: August 21, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-19150 Filed 8-27-20; 4:15 pm]
BILLING CODE 4120-01-P