[Federal Register Volume 85, Number 216 (Friday, November 6, 2020)]
[Rules and Regulations]
[Pages 71142-71205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24332]



[[Page 71141]]

Vol. 85

Friday,

No. 216

November 6, 2020

Part II





Department of the Treasury





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Internal Revenue Service





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26 CFR Part 54





Office of the Secretary





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31 Part 33





Department of Labor





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Employee Benefits Security Administration





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29 CFR Part 2590





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 410, 411, 414, et al.





Office of the Secretary





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45 CFR Parts 147, 155 and 182





Additional Policy and Regulatory Revisions in Response to the COVID-19 
Public Health Emergency; Interim Final Rule

  Federal Register / Vol. 85, No. 216 / Friday, November 6, 2020 / 
Rules and Regulations  

[[Page 71142]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9931]

Office of the Secretary

31 CFR Part 33

RIN 1545-BP97

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB98

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 411, 414, 417, 433, and 510

Office of the Secretary

45 CFR Parts 147, 155, and 182

[CMS-9912-IFC]
RIN 0938-AU35


Additional Policy and Regulatory Revisions in Response to the 
COVID-19 Public Health Emergency

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS); Internal Revenue Service, Department 
of the Treasury; Employee Benefits Security Administration, Department 
of Labor.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule with request for comments (IFC) 
discusses CMS's implementation of section 3713 of the Coronavirus Aid, 
Relief, and Economic Security Act (CARES Act), which established 
Medicare Part B coverage and payment for Coronavirus Disease 2019 
(COVID-19) vaccine and its administration. This IFC implements 
requirements in the CARES Act that providers of COVID-19 diagnostic 
tests make public their cash prices for those tests and establishes an 
enforcement scheme to enforce those requirements. This rule also 
establishes an add-on payment for cases involving the use of new COVID-
19 treatments under the Medicare Inpatient Prospective Payment System 
(IPPS). This IFC provides for separate payment for new COVID-19 
treatments under the Outpatient Prospective Payment System (OPPS) for 
the remainder of the PHE for COVID-19 when these treatments are 
provided at the same time as a Comprehensive Ambulatory Payment 
Classification (C-APC) service. This rule also interprets and 
implements the requirement to maintain Medicaid beneficiary enrollment 
in order to receive the temporary increase in Federal funding in the 
Families First Coronavirus Response Act (FFCRA). This IFC modifies 
policies of the Comprehensive Care for Joint Replacement (CJR) model 
and adds technical changes to accommodate these policy changes. 
Specifically, we are extending Performance Year (PY) 5 by adding 6 
months, creating an episode-based extreme and uncontrollable 
circumstances COVID-19 policy, providing two reconciliation periods for 
PY 5, and adding DRGs 521 and 522 for hip and knee procedures. This 
rule also amends regulations regarding coverage of preventive health 
services to implement section 3203 of the CARES Act, which shortens the 
timeframe within which non-grandfathered group health plans and health 
insurance issuers offering non-grandfathered group or individual health 
insurance coverage must begin to cover without cost sharing qualifying 
coronavirus preventive services, including recommended COVID-19 
immunizations. This IFC also revises regulations to set forth 
flexibilities in the public notice requirements and post award public 
participation requirements for State Innovation Waivers under section 
1332 of the Patient Protection and Affordable Care Act (PPACA) during 
the public health emergency for COVID-19.

DATES: Effective date: These regulations are effective on November 2, 
2020, except for amendatory instructions 36 and 37, which are effective 
on January 1, 2021.
    Applicability date: Except as otherwise specified in this 
paragraph, these regulations are applicable from November 2, 2020, 
until the end of the public health emergency for COVID-19 as determined 
by the HHS Secretary. The regulations at 42 CFR 410.57, 410.152, 
410.160, 411.15, 414.701, 414.707, 414.900, and 414.904 and at 42 CFR 
part 510 (other than 42 CFR 510.300(a)(1)(i) and (iii)) are applicable 
November 2, 2020. Because the requirement at section 6008(b)(3) of the 
Families First Coronavirus Response Act (FFCRA) is not limited to the 
duration of the public health emergency for COVID-19, regulations at 42 
CFR part 433, subpart G, apply from November 2, 2020, through the end 
of the last month of the public health emergency for COVID-19 in 
accordance with section 6008(b)(3) of the Families First Coronavirus 
Response Act. Regulations at 42 CFR 510.300(a)(1)(i) and (a)(1)(iii) 
are applicable October 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 January 4, 2021.

ADDRESSES: In commenting, please refer to file code CMS-9912-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-9912-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-9912-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: Laura Kennedy, (410) 786-3377, for 
discussion related to COVID-19 vaccine and administration payment 
provided under Medicare Part B.
    Lina Rashid, (443) 902-2823, or Michelle Koltov, (301) 492-4225, 
Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Services, Kimberly Koch, (202) 622-0854, Department of 
the Treasury, for issues related to State Innovation Waivers Policy and 
Regulatory Revisions in Response to the COVID-19 Public Health 
Emergency.
    Dr. Terri Postma or Rhonda Sheppard, (410) 786-8465, or via email 
at [email protected], for provisions related to Price 
Transparency for COVID-19 Diagnostic Testing.

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    Cristina Nigro, (410) 786-7763, for issues related to the Medicare 
Inpatient Prospective Payment System (IPPS) New COVID-19 Treatments 
Add-on Payment (NCTAP) for the remainder of the public health 
emergency.
    David Mlawsky, (410) 786-1565, Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Elizabeth 
Schumacher, (202) 693-8335, Employee Benefits Security Administration, 
Department of Labor, Dara Alderman, (202) 317-5500, Internal Revenue 
Service, Department of the Treasury, for issues related to Rapid 
Coverage of Preventive Services for Coronavirus.
    Stephanie Bell, (410) 786-0617, for issues related to the temporary 
increase in Federal Medicaid funding.
    Bobbie Knickman, (410) 786-4161; Heather Holsey, (410) 786-0028; 
Sarah Mioduski, (410) 786-2014 or email [email protected] for the 
Comprehensive Care for Joint Replacement Model.

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.

Background

    The United States is responding to an outbreak of respiratory 
disease caused by a novel coronavirus that was first detected in China 
and has now been detected in more than 190 countries internationally, 
and all 50 States, the District of Columbia, and 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 (PHS) Act 
(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 health care 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 October 23, 2020, the 
Secretary renewed the January 31, 2020 determination that was 
previously renewed on April 21, 2020 and July 23, 2020 that a PHE 
exists and has existed since January 27, 2020.
    The Administration is committed to ensuring that Americans have 
access to a COVID-19 vaccine through Operation Warp Speed, a 
partnership among components of the HHS, including the Centers for 
Disease Control and Prevention (CDC), the Food and Drug Administration 
(FDA), the National Institutes of Health (NIH), and the Biomedical 
Advanced Research and Development Authority (BARDA). Operation Warp 
Speed engages with private firms and other Federal agencies, including 
the Department of Defense (DoD), Department of Agriculture, the 
Department of Energy, and the Department of Veterans Affairs. Through 
the work of the Federal Government and the private sector, Operation 
Warp Speed seeks to accelerate the development, manufacture, and 
distribution of a COVID-19 vaccine to the American people.
    The 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.

     Older adults, with risk increasing by age.
     People who have serious chronic medical conditions such 
as:
    ++ Obesity.
    ++ Cardiovascular disease.
    ++ Diabetes mellitus.
    ++ Hypertension.
    ++ Chronic lung disease.
    ++ 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 individuals.
     Residents of Long Term Care (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 Disease (IMDs) & Psychiatric Residential 
Treatment Facilities (PRTFs), assisted living facilities, group homes 
for individuals with developmental disabilities and board-and-care 
facilities.\3\
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    \3\ https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html.
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    As the health care community implements and updates recommended 
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 health 
care community infection prevention and treatment practices. Based on 
the current and projected increases in the incidence rate of COVID-19 
in the US, observed fatalities in the older adult population, and the 
impact on health care workers at increased risk due to treating special 
populations, CMS \4\ is reviewing and revising regulations, as 
appropriate, to offer states, providers, suppliers, and group health 
plans and health insurance issuers additional flexibilities in 
furnishing and providing services to combat the PHE for COVID-19 and to 
address and minimize the unique impact of the PHE for COVID-19 on other 
regulatory provisions.
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    \4\ Throughout this IFC, unless otherwise specified, ``we'' and 
``our'' refer to CMS only.
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    CMS addressed additional policies in three 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, 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. The ``Medicare and Medicaid Programs, Clinical 
Laboratory Improvement Amendments, and Patient Protection and 
Affordable Care Act: Additional Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency'' IFC appeared in the 
September 2, 2020 Federal Register (85 FR 54820) with an effective date 
of September 2, 2020.
    This IFC implements a number of measures intended to further the 
Administration's commitment to ensure every American has timely access 
to a COVID-19 vaccine without any out-of-pocket expenses, no matter 
their source of coverage, or whether they are covered at all.

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    In this IFC, CMS discusses Section 3713 of the Coronavirus Aid, 
Relief, and Economic Security (CARES) Act which added the COVID-19 
vaccine and its administration to section 1861(s)(10)(A) of the Social 
Security Act (the Act) in the same subparagraph as the flu and 
pneumococcal vaccines and their administration. It also specified that 
under Medicare Part B, beneficiaries can receive a COVID-19 vaccination 
(vaccine and administration) with no cost sharing (deductible or 
copayment).
    In this IFC, HHS and the Departments of Labor and the Treasury 
(referred to collectively as ``the Departments'') clarify certain 
aspects of coverage of preventive services without cost sharing under 
the current regulations implementing section 2713 of the Public Health 
Service (PHS) Act, as added by PPACA and incorporated into the Employee 
Retirement Income Security Act of 1974 (ERISA) by section 715 of ERISA 
and into the Internal Revenue Code (the Code) by section 9815 of the 
Code. The Departments also amend those regulations to implement the 
unique requirements related to rapid coverage of qualifying coronavirus 
preventive services under section 3203 of the CARES Act. Specifically, 
this IFC clarifies that plans and issuers subject to section 2713 of 
the PHS Act must cover without cost sharing recommended immunizations 
as well as the administration of such immunizations, regardless of how 
the administration is billed. This IFC also defines qualifying 
coronavirus preventive services consistent with the definition provided 
in section 3203 of the CARES Act and clarifies that plans and issuers 
subject to section 2713 of the PHS Act must cover recommended 
immunizations for COVID-19 that are qualifying coronavirus preventive 
services, even if not listed for routine use on the Immunization 
Schedules of the CDC. Due to the urgent need to ensure coverage of and 
access to qualifying coronavirus preventive services, and to ensure 
that participants, beneficiaries, and enrollees can access qualifying 
coronavirus preventive services on the expedited basis specified by 
statute, this IFC also provides that during the PHE for COVID-19, plans 
and issuers must cover, without cost sharing, qualifying coronavirus 
preventive services, regardless of whether such services are delivered 
by an in-network or out-of-network provider. This coverage is required 
to be provided within 15 business days after the date the United States 
Preventive Services Task Force (USPSTF) or the Advisory Committee on 
Immunization Practices of the CDC (ACIP) makes an applicable 
recommendation relating to a qualifying coronavirus preventive service.
    Section 3202(b) of the CARES Act establishes a requirement to 
publicize cash prices for COVID-19 diagnostic testing during the PHE. 
For purposes of implementing section 3202(b) of the CARES Act, this IFC 
adds a new 45 CFR part 182, including (1) definitions of ``provider of 
a diagnostic test for COVID-19'' (or ``provider''), ``COVID-19 
diagnostic test,'' and ``cash price,'' and (2) requirements for posting 
cash price information on the internet, or upon request and through 
signage (if applicable) if the provider does not have its own website. 
This IFC gives CMS discretion to take any of the following actions, 
which generally, but not necessarily, will occur in the following order 
if CMS determines the provider is noncompliant with section 3202(b)(1) 
of the CARES Act and the requirements of Sec.  182.40:
     Provide a written warning notice to the provider of the 
specific violation(s).
     Request that a provider submit and comply with a 
corrective action plan (CAP) under Sec.  182.60 if its noncompliance is 
not corrected after a warning notice.
     Impose a civil monetary penalty (CMP) on the provider if 
the provider fails to respond to CMS' request to submit a CAP or to 
comply with the requirements of a CAP approved by CMS.
    This IFC creates a New COVID-19 Treatments Add-on Payment (NCTAP) 
under the Inpatient Prospective Payment System (IPPS) for COVID-19 
cases that meet certain criteria. We believe that as drugs and 
biological products become available and are authorized or approved by 
FDA for the treatment of COVID-19 in the inpatient setting, it is 
appropriate to increase the current IPPS payment amounts to mitigate 
any potential financial disincentives for hospitals to provide new 
COVID-19 treatments during the PHE. Therefore, effective for discharges 
occurring on or after the effective date of this rule and until the end 
of the PHE for COVID-19, this IFC establishes the NCTAP to pay 
hospitals the lesser of (1) 65 percent of the operating outlier 
threshold for the claim or (2) 65 percent of the amount by which the 
costs of the case exceed the standard DRG payment, including the 
adjustment to the relative weight under section 3710 of the CARES Act, 
for certain cases that include the use of a drug or biological product 
currently authorized or approved for treating COVID-19. The NCTAP will 
not be included as part of the calculation of the operating outlier 
payments.
    This IFC provides for separate payment for New COVID-19 Treatments 
under the Outpatient Prospective Payment System (OPPS) for the 
remainder of the PHE for COVID-19 when these treatments are provided at 
the same time as a Comprehensive Ambulatory Payment Classification (C-
APC) service. Although we do not expect that many beneficiaries would 
both receive a primary C-APC service and a drug or biological for 
treating COVID-19 on the same claim, we nonetheless believe that as 
drugs or biologicals become available and are authorized or approved 
for the treatment of COVID-19 in the outpatient setting, it would be 
appropriate to mitigate any potential financial disincentives for 
hospitals to provide these new treatments during the PHE for COVID-19. 
Therefore, effective for services furnished on or after the effective 
date of this rule and until the end of the PHE, CMS is creating an 
exception to its OPPS C-APC policy to ensure separate payment for new 
COVID-19 treatments that meet certain criteria.
    This IFC adds a new subpart G, Temporary FMAP Increase During the 
Public Health Emergency for COVID-19, to 42 CFR part 433, including a 
new Sec.  433.400. This new provision interprets and implements section 
6008(b)(3) of the FFCRA to require states, as a condition for receiving 
the temporary FMAP increase described at section 6008(a) of the FFCRA, 
to maintain beneficiary enrollment with specified protections. The 
terms of new Sec.  433.400 are effective immediately upon display of 
this rule. CMS' previous interpretation, described in this preamble and 
in the FAQs cited therein, continues to apply up to the date this rule 
is effective.
    This IFC modifies policies of the Comprehensive Care for Joint 
Replacement (CJR) model and adds technical changes to accommodate these 
policy changes. Specifically, we are extending Performance Year (PY) 5 
an additional 6 months, creating an episode-based extreme and 
uncontrollable circumstances COVID-19 policy, providing two 
reconciliation periods for PY 5, and adding DRGs 521 and 522 for hip 
and knee procedures.
    This IFC provides for flexibilities in the public notice 
requirements for a State Innovation Waiver (also referred to as a 
section 1332 waiver) described in section 1332 of PPACA that apply 
during the PHE for COVID-19. Specifically, this IFC gives the Secretary 
of HHS and the Secretary of the Treasury the authority to modify, in 
part, the public notice procedures to

[[Page 71145]]

expedite a decision on a proposed waiver request that is submitted or 
would otherwise become due during the PHE for COVID-19. This IFC also 
gives these Secretaries the authority to modify, in part, the post-
award public notice requirements for an approved waiver request that 
would otherwise take place or become due during the PHE for COVID-19.

II. Provisions of the Interim Final Rule--Department of Health and 
Human Services

A. Medicare Coding and Payment for COVID-19 Vaccine

1. Summary
    This section of this IFC discusses CMS's implementation of section 
3713 of the CARES Act, which established Medicare Part B coverage and 
payment for a COVID-19 vaccine and its administration. While section 
3713(e) of the CARES Act authorizes CMS to implement section 3713 via 
``program instruction or otherwise,'' we believe it is important to 
clarify in this IFC our interpretation of Section 3713 and ensure the 
public is aware of our plans to ensure timely Medicare Part B coverage 
and payment for COVID-19 vaccine and its administration.
2. Background on Medicare Part B Coverage, Payment, Coding and Billing 
for Vaccines
    As required under section 1842(o)(1)(A)(iv) of the Act, the 
Medicare Part B payment allowance limits for influenza, pneumococcal, 
and hepatitis B virus (HBV) vaccines are 95 percent of the Average 
Wholesale Price (AWP) as reflected in the published compendia except 
where the vaccine is furnished in a hospital outpatient department, 
Rural Health Clinic (RHC), or Federally Qualified Health Center (FQHC), 
skilled nursing facility, and home health. Where the vaccine is 
furnished in these settings, payment for the vaccine is based on 
reasonable cost.
    For preventive vaccines described in section 1861(s)(10) of the 
Act, Medicare pays for both the vaccine and its administration. Under 
sections 1833(a)(1)(B), annual Part B deductible and coinsurance 
amounts do not apply for these vaccinations. In 2020, payment for 
vaccines is based on the 95 percent of the AWP for a particular vaccine 
product except where furnished in the settings for which payment is 
based on reasonable cost. For example, for the 2020-2021 influenza 
season, payment limits for adult flu vaccines range from about $19 to 
$61 per adult dose.\5\
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    \5\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/VaccinesPricing, accessed 
September 29, 2020.
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    We note that in the Calendar Year 2021 Physician Fee Schedule 
Proposed Rule (85 FR 50162-50163), CMS proposed to increase the 
Medicare payment rate for administration of the flu, pneumococcal or 
HBV vaccine furnished by a physician, non-physician practitioner, or 
other supplier. CMS will address public comments on the proposal and 
establish payment rates for administration of these vaccines by a 
physician, non-physician practitioner, or other supplier in the 
Calendar Year 2021 Physician Fee Schedule Final Rule, which will be 
issued later this year. Note that the payment rates for administration 
of these preventive vaccines established in the CY 2021 Physician Fee 
Schedule final rule do not apply when the vaccine is furnished by the 
providers and suppliers paid for administration under reasonable cost. 
Under the CY 2021 OPPS proposed rule, CMS proposed to assign the HCPCS 
codes for administration of the influenza, pneumococcal, and hepatitis 
B vaccines to APC 5691, Level 1 Drug Administration. See Addendum C to 
the CY 2021 OPPS/ASC proposed rule. Payment amounts for these 
preventive vaccines and their administration are not adjusted based on 
product-specific factors.
    Generally, providers and suppliers bill for the vaccine and the 
vaccine administration separately using different codes. For example, 
many vaccine products are identified by AMA CPT codes in the 90000 
series, while others are identified by Level II HCPCS codes, usually 
beginning with the letter Q. Vaccine administration services are 
described by the types of codes used to describe professional and/or 
hospital outpatient services, and are typically identified by a G code 
for Medicare billing, or by a different AMA CPT code in the 90000 
series.
    Many providers, professionals, and other suppliers can bill 
Medicare for the preventive vaccines and vaccine administration they 
furnish using claims rules similar to those that apply to the other 
Medicare covered items and services. Additionally, certain entities can 
enroll under Medicare as mass immunizers to offer and bill Medicare for 
flu vaccinations, pneumococcal vaccinations, or both to large groups of 
Medicare beneficiaries under roster billing. A mass immunizer may be 
enrolled in Medicare as another type of provider or supplier such as a 
physician, non-physician practitioner, hospital outpatient department, 
home health agency or skilled nursing facility. An entity or individual 
that does not otherwise qualify as a Medicare provider or supplier but 
wishes to furnish mass immunization services may be eligible to enroll 
in Medicare as a ``Mass Immunization Roster Biller'' via the Form CMS-
855 enrollment application (Medicare Enrollment Application: Clinics/
Group Practices and Certain Other Suppliers; OMB Control No.: 0938-
0685; Expires 12/21). Aside from meeting all applicable enrollment 
requirements in 42 CFR part 424, subpart P (and as outlined in CMS Pub. 
100-08 (Program Integrity Manual), chapter 10, section 10.2.4), a party 
enrolled only as a mass immunization roster biller must comply with the 
following: (1) May not bill Medicare for any services other than 
pneumococcal pneumonia vaccines (PPVs), influenza virus vaccines, and 
their administration; (2) must submit claims through the roster biller 
or centralized biller process; and (3) the enrolled entity or 
individual must meet all applicable state and local licensure or 
certification requirements. In other words, an enrolled mass immunizer 
roster biller may only roster bill Medicare for the services described 
in the previous sentence. (For more information on the enrollment 
process for mass immunization roster billers, see https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/Become-a-Medicare-Provider-or-Supplier and/or contact your local Part A/B Medicare 
Administrative Contractor.)
    For entities that are already enrolled Medicare providers and 
suppliers, these entities would contact their MAC if they plan to 
submit claims as a mass immunizer. Mass immunizers may submit claims 
for immunizations (vaccine and administration) on roster bills that 
include a limited set of information on each beneficiary and the 
vaccine(s) they were given. We note that HBV vaccinations require an 
assessment of a patient's risk of contracting hepatitis B; they require 
a physician's order and cannot be roster billed by mass immunizers.
3. Provisions of the CARES Act
    Section 3713 of the CARES Act provides for coverage of the COVID-19 
vaccine under Part B of the Medicare program without any beneficiary 
cost sharing. Specifically, section 3713 amended section 1861(s)(10)(A) 
of the Act to include COVID-19 vaccine and its administration. The 
amendments made are effective on the date of

[[Page 71146]]

enactment and apply to a COVID-19 vaccine beginning on the date that 
such vaccine is licensed under section 351 of the PHS Act (42 U.S.C. 
262). Section 3713(e) of the CARES Act further states that the 
Secretary may implement the provisions of, and the amendments made by, 
this section by program instruction or otherwise.
    Under section 564 of the Federal Food, Drug, and Cosmetic Act (FD&C 
Act), the Commissioner of Food and Drugs, as delegated authority by the 
Secretary, may authorize, during the effective period of a declaration 
of emergency or threat justifying emergency authorized use, the 
introduction into interstate commerce of unapproved medical products or 
unapproved uses of approved medical products to diagnose, treat, or 
prevent serious or life-threatening diseases or conditions caused by 
chemical, biological, radiological and nuclear defense (CBRN) threat 
agents when there are no adequate, approved, and available 
alternatives. On March 27, 2020, on the basis of his determination of a 
PHE that has a significant potential to affect national security or the 
health and security of United States citizens living abroad involving 
COVID-19, the Secretary declared that circumstances exist justifying 
the authorization of emergency use of drugs and biological products 
during the COVID-19 pandemic (85 FR 18250). Pursuant to this 
declaration, the Commissioner of Food and Drugs, as delegated authority 
by the Secretary, may issue an emergency use authorization (EUA) for a 
drug or biological product if, after consultation with officials such 
as the Director of the CDC and the Director of the NIH, to the extent 
feasible and appropriate, the Commissioner reasonably concludes that, 
among other criteria, based on the totality of available scientific 
evidence, the product may be effective in diagnosing, treating or 
preventing such disease or condition, and the product's known and 
potential benefits when used to diagnose, prevent, or treat such 
disease or condition, outweigh its known and potential risks.
    FDA's June 2020 guidance to industry titled ``Development and 
Licensure of Vaccines to Prevent COVID-19'' \6\ and October 2020 
guidance to industry titled ``Emergency Use Authorization for Vaccines 
to Prevent COVID-19'' \7\ state that issuance of an EUA may be 
appropriate for a COVID-19 vaccine, for which there is adequate 
manufacturing information, once studies have demonstrated the safety 
and effectiveness of the vaccine in a clear and compelling manner, but 
before the submission and/or formal review of the biologics license 
application for the vaccine. These guidance documents state that in the 
case of vaccines being developed for the prevention of COVID-19, any 
assessment regarding an EUA would be made on a case by case basis 
considering the target population, the characteristics of the product, 
the preclinical and human clinical study data on the product, and the 
totality of the relevant available scientific evidence. The FDA has 
made clear in its October 2020 guidance to industry that for a COVID-19 
vaccine for which there is adequate information to ensure its quality 
and consistency, issuance of an EUA would require a determination by 
FDA that the vaccine's benefits outweigh its risks based on data from 
at least one well-designed Phase 3 clinical trial that demonstrates the 
vaccine's safety and efficacy in a clear and compelling manner. Because 
the vaccine would be intended for administration to healthy people as a 
prophylactic measure, there must be a higher degree of certainty about 
the risks and benefits of the product than needed for EUAs for medical 
products intended for treatment of sick patients.
---------------------------------------------------------------------------

    \6\ Available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/development-and-licensure-vaccines-prevent-covid-19, accessed September 30, 2020.
    \7\ Available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/emergency-use-authorization-vaccines-prevent-covid-19, accessed October 9, 2020.
---------------------------------------------------------------------------

    There are no historical examples in which Medicare has covered 
vaccines for which an EUA was issued by FDA. We recall that during the 
PHE involving the 2009 H1N1 flu outbreak,\8\ Influenza A (H1N1) 2009 
Monovalent Vaccine was approved by the FDA on September 15, 2009 on the 
basis of a supplement to the applicant's biologics license application 
(BLA) for influenza virus vaccine.\9\ In our review of PHEs, there are 
no circumstances in which a vaccine product authorized for emergency 
use has been covered or paid for by Medicare.
---------------------------------------------------------------------------

    \8\ Available at https://www.phe.gov/emergency/news/healthactions/phe/Pages/h1n1.aspx, accessed on October 14, 2020.
    \9\ Available at https://www.fda.gov/vaccines-blood-biologics/vaccines/influenza-h1n1-2009-monovalent-vaccine-novartis-vaccines-and-diagnostics-limited, accessed October 14, 2020.
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    As discussed previously, the CDC recognizes that the categories of 
people at higher risk of severe illness from COVID-19 include older 
adults (with risk increasing by age), people with chronic conditions 
such as cardiovascular disease or diabetes, and residents of long-term 
care facilities.\10\ The Medicare population includes many 
beneficiaries who are in these higher-risk categories, primarily 
because most, (over 85 percent) \11\ Medicare beneficiaries are over 65 
years old. Given the high risk nature of the Medicare population, the 
circumstances of this nationwide pandemic, and FDA's guidance that an 
EUA may be appropriate for a COVID-19 vaccine prior to its licensure if 
there is a demonstration of safety and efficacy in a clear and 
compelling manner from at least one Phase 3 clinical trial, we believe 
it is appropriate for Medicare to consider any EUA under section 564 of 
the FD&C Act issued for a COVID-19 vaccine during the PHE to be 
tantamount to a license under section 351 of the PHS Act for the sole 
purpose of considering such a vaccine to be described in section 
1861(s)(10)(A) of the Act. That is, even though section 3713 of the 
CARES Act refers to a COVID-19 vaccine ``licensed under section 351 of 
the PHS Act,'' CMS could consider any vaccine for which FDA issued an 
EUA during the PHE, when furnished consistent with terms of the EUA, to 
be eligible for Medicare coverage and payment. We consider our 
interpretation of section 3713(d) of the CARES Act to be consistent 
with Congress' intent to provide for Medicare coverage without 
deductible or coinsurance of any COVID-19 vaccine (and its 
administration) that FDA has authorized to be introduced into 
interstate commerce, which would be the case both for a vaccine for 
which emergency use is authorized under section 564 of the FD&C Act and 
for a vaccine that is licensed under section 351 of the PHS Act. Our 
interpretation also would be consistent with Congress' general intent 
in the CARES Act and other recent legislation to provide for rapid 
coverage of COVID-19 vaccines.
---------------------------------------------------------------------------

    \10\ https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/index.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fneed-extra-precautions%2Fpeople-at-increased-risk.html.
    \11\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Beneficiary-Snapshot/Downloads/Bene_Snaphot.pdf.
---------------------------------------------------------------------------

    We note that section 3713(e) of the CARES Act permits CMS to 
implement the changes made by that section through ``program 
instruction or otherwise,'' and we intend to issue any necessary 
instructions for Medicare providers and suppliers expediently in order 
to ensure beneficiary access to COVID-19 vaccines as quickly as 
possible.

[[Page 71147]]

4. Implementation and Methods of Coding and Payment for COVID-19 
Vaccine and Administration
    Section 3713 of the CARES Act added the COVID-19 vaccine and its 
administration to section 1861(s)(10)(A) of the Act in the same 
subparagraph as the flu and pneumococcal vaccines and their 
administration. As such, the Medicare allowed amount for the COVID-19 
vaccine will also be 95 percent of the average wholesale price (or 
reasonable cost, for example under OPPS).
    Because COVID-19 vaccines are being developed rapidly and systems 
to operationalize payment of administration will need to be implemented 
quickly to ensure beneficiary access, we also recognize the need to 
establish coding and payment for COVID-19 vaccine and administration 
under Medicare Part B. Because there are many product-specific factors 
that are still unknown, including the possibility of differential costs 
associated with each COVID-19 vaccine product and storage and 
administration requirements, we anticipate establishing a unique 
administration code for each COVID-19 vaccine product. We believe it is 
imperative that coding and payment be in place as soon as possible 
after COVID-19 vaccines become available. We anticipate establishing 
specific coding and payment rates through technical direction to the 
MACs, including instructions to make this information available to the 
public. We also anticipate posting information on coding, payment, and 
billing for COVID-19 vaccines and vaccine administration on the CMS 
website. This approach will maintain public transparency while allowing 
CMS to pay appropriately for particular vaccines and vaccine 
administration as quickly as practicable once they are authorized or 
licensed for use by FDA. We anticipate that payment rates for the 
administration of other Part B preventive vaccines and related 
services, such as the flu and pneumococcal vaccines, would serve to 
inform the payment rates for administration of COVID-19 vaccines.
    CMS ordinarily establishes Medicare payment rates for particular 
items and services, through notice-and-comment rulemaking. Because of 
the unique circumstances of the PHE for COVID-19 pandemic and the 
anticipated, specific conditions for the entry of COVID-19 vaccine 
products into the marketplace, we believe it is necessary to initially 
dispense with the rulemaking process in order to make Medicare payment 
available in a timely manner to ensure widespread access to the new 
vaccines. Therefore, as soon as practicable after the authorization or 
licensure of each COVID-19 vaccine product by FDA, we will announce the 
interim coding and a payment rate for its administration (or, in the 
case of the OPPS, an APC assignment for each vaccine product's 
administration code), taking into consideration any product-specific 
costs or considerations involved in furnishing the service. Such 
consideration may be necessary, specifically for COVID-19 vaccines in 
the context of the pandemic, in order to ensure that health care 
providers can offer prompt access to vaccination for a large number of 
people as quickly as possible. We then anticipate addressing coding and 
payment rates for administration of the COVID-19 vaccine products 
through future notice-and-comment rulemaking. In other words, the 
approach to payment and coding described in this IFC will ensure 
efficient and timely beneficiary access to COVID-19 vaccine products, 
that for public health purposes may need to be administered to a large 
number of people during a compressed period of time, until further 
rulemaking, such as annual rulemaking under the Medicare Physician Fee 
Schedule, is possible.
    Given that the COVID-19 vaccine and administration was added to the 
same subparagraph as the flu and pneumococcal vaccines and 
administration under section 1861(s)(10)(A) of the Act, we believe it 
would be appropriate to use billing processes for COVID-19 vaccinations 
that are similar to those in place for flu and pneumococcal 
vaccinations. With the pressing need to ensure broad access to a COVID-
19 vaccine, it would be appropriate to allow COVID-19 vaccinations to 
be provided through the mass immunization and roster billing process 
that is in place for flu and pneumococcal vaccinations. We recognize 
that, at this time, there is very limited detailed information on 
COVID-19 vaccines and their administration and that information on 
these vaccines is likely to evolve as they reach the market and then 
experience with them is gained. At this time, we believe that the 
COVID-19 vaccines will be administered as one or two parenteral doses, 
thus we believe that using the Part B influenza vaccination approach 
that permits certain providers and mass immunization to bill for the 
product strikes a balance between the need to vaccinate many millions 
of Medicare patients promptly and the lack of detailed information 
about particular COVID-19 vaccine products. Although influenza 
vaccination is generally only given once each flu season, CMS has 
contemplated how to respond to pandemics where payment for additional 
doses of an influenza vaccine during a season may be required. Thus, a 
two dose initial COVID-19 vaccination schedule can be accommodated 
under this general approach. Also, the CARES Act permits the Secretary 
to implement the provisions of, and the amendments made by, section 
3713 by program instruction or otherwise. As information about vaccine 
products becomes available, we anticipate that updated information, for 
example information concerning additional doses after initial 
vaccination, applicability of specific vaccine products to subsets of 
our beneficiary population, or updates about billing would be 
disseminated primarily by program instruction.
    As part of this IFC, we are updating the following regulations:
     At Sec.  410.57, Pneumococcal vaccine and flu vaccine, we 
are amending the section heading and adding a new paragraph to 
reference COVID-19 vaccine.
     At Sec.  410.152, Amounts of payment, we are amending 
Sec.  410.152(l)(1) to include the COVID-19 vaccine in the list of 
vaccines for which Medicare Part B pays 100 percent of the Medicare 
payment amount.
     At Sec.  410.160, Part B annual deductible, we are 
amending Sec.  410.160(b)(2) to include the COVID-19 vaccine in the 
list of vaccines that are not subject to the Part B annual deductible 
and do not count toward meeting that deductible.
     At Sec.  411.15, Particular services excluded from 
coverage, we are amending Sec.  411.15(e) to add an exception for 
COVID-19 vaccinations to the general exclusion of coverage for 
immunizations.
     At Sec.  414.701, Purpose, we are amending the list of 
statutorily covered drugs to include the COVID-19 vaccine.
     At Sec.  414.707, Basis of Payment, we are amending Sec.  
414.707(a)(2)(iii) to include the COVID-19 vaccine in the list of 
vaccines with a payment limit calculated using 95 percent of the 
average wholesale price.
     At Sec.  414.900, Basis and scope, we are amending Sec.  
414.900(b)(3) to include the COVID-19 vaccine in the list of 
statutorily covered drugs.
     At Sec.  414.904, Average sales price as the basis for 
payment, we are amending Sec.  414.904(e)(1) to include the COVID-19 
vaccine in the list of vaccines with payment limits calculated using 95 
percent of the average wholesale price.

[[Page 71148]]

5. Medicare Advantage and Cost Plans
    Under sections 1852(a)(1) and 1876(c)(2) of the Act, Medicare 
Advantage (MA) plans and cost plan organizations must cover all 
benefits covered under Part A and Part B of Original Medicare, subject 
to limited exclusions. Therefore, all MA plans and cost plans must 
cover a COVID-19 vaccine and its administration described in section 
1861(s)(10)(A) of the Act. As described previously, the interpretation 
of section 3713 of the CARES Act adopted in this rule will result in 
Part B coverage of a COVID-19 vaccine for which FDA issues an EUA 
during the PHE, and administration of that vaccine when furnished 
consistent with terms of such EUA. As amended by section 3713 of the 
CARES Act, section 1852(a)(1)(B)(iv)(VI) of the Act prohibits MA plans 
from using cost sharing that exceeds the cost sharing imposed under 
original Medicare for a COVID-19 vaccine and its administration when MA 
coverage is provided because they are covered under Part B under 
section 1861(s)(10)(A) of the Act.
    Section 1852(a)(5) of the Act and 42 CFR 422.109 provide that when 
a National Coverage Determination (NCD) or legislative change in 
benefits, such as the addition of Part B coverage of a COVID-19 vaccine 
and its administration, results in significant costs that have not been 
included in the capitation payments made to MA plans, coverage of the 
new benefit will be provided through the Medicare FFS program until the 
capitation payments take the new significant costs into account. The 
payment rates for MA organizations for contract years 2020 and 2021 
have been set without including the costs for a COVID-19 vaccine and 
its administration. Therefore, if coverage of a COVID-19 vaccine and 
its administration during that period results in significant costs, 
section 1852(a)(5) of the Act and Sec.  422.109 will apply to require 
Medicare FFS coverage of the vaccine and its administration.
    The cost projection used for the determination whether the 
legislative change results in significant costs is based on an analysis 
by the Chief Actuary of CMS of the actuarial costs associated with a 
NCD or the legislative change in benefits and compared to the 
thresholds specified in the regulation at Sec.  422.109. This analysis 
is generally performed once a Medicare FFS payment rate is determined 
for the service. If the estimated cost of an NCD or legislative change 
represents at least 0.1 percent of the national average per capita 
costs or the average cost of furnishing a single service exceeds the 
cost threshold established in using the formula in Sec.  422.109(a), it 
is considered a significant cost and the FFS Medicare program provides 
coverage for the service until the costs are factored into Medicare 
Advantage payments. Therefore, this legislative change would be subject 
to an analysis whether the new benefit results in significant costs. 
The significant cost threshold will be met assuming that the projected 
cost per-beneficiary-per-year is greater than approximately $13, which 
is 0.1 percent of the national average per capita costs. If the 
threshold is reached, Medicare beneficiaries enrolled in MA plans will 
receive coverage of the COVID-19 vaccine and its administration through 
the Medicare FFS program and would be able to access the COVID-19 
vaccine, without cost sharing, at any FFS provider or supplier that 
participates in Medicare and is eligible to bill under Part B for 
vaccine administration, including those enrolled in Medicare as a mass 
immunizer or a physician, non-physician practitioner, hospital, clinic, 
or group practice.
    Section 3713 of the CARES Act added Medicare Part B coverage for a 
COVID-19 vaccine and its administration and provides that MA plans must 
cover the new benefit without cost sharing. While section 1876(c)(2) of 
the Act ensures that enrollees in Medicare cost plans will have 
coverage of a COVID-19 vaccine and its administration, section 3713 of 
the CARES Act did not amend section 1876 of the Act to provide similar 
cost-sharing protections for enrollees in cost plans who receive the 
vaccine from an in-network provider. Nor is there a provision 
affirmatively relieving cost plans of the obligation to cover the new 
Part B benefit. Because the Medicare FFS program covers Part A and Part 
B items and services furnished to cost plan enrollees by out-of-network 
health care providers that participate in the Medicare FFS program, 
cost plan enrollees will receive the COVID-19 vaccine and its 
administration without cost sharing when they go to a health care 
provider that is out of the cost plan's network. See 42 CFR 
417.436(a)(5) and 417.448. However, there is no requirement for cost 
plans to cover the COVID-19 vaccine and its administration without cost 
sharing (that is, with cost sharing that is the same as original 
Medicare) when the vaccine is furnished by an in-network health care 
provider. Many enrollees may seek the COVID-19 vaccine from the health 
care provider they usually see or from whom they receive most of their 
health care; that provider is likely to be in-network with the cost 
plan. CMS believes that it is necessary and appropriate to ensure that 
cost plan enrollees, like other Medicare beneficiaries, are provided 
access to the COVID-19 vaccine and its administration without cost 
sharing. Section 1876(i)(3)(D) of the Act authorizes us to impose 
``other terms and conditions not inconsistent with [section 1876]'' 
that are deemed ``necessary and appropriate.'' Requiring cost plans to 
comply with the same cost sharing protections available to Medicare 
beneficiaries in the FFS program and enrolled in Medicare Advantage 
plans is necessary and appropriate, so that cost is not a barrier for 
beneficiaries to get the vaccine, particularly during the public health 
emergency when ensuring access is of paramount importance. To ensure 
that cost plan enrollees also do not pay cost sharing for the COVID-19 
vaccine and its administration when received from an in-network 
provider at least until the end of the public health emergency for 
COVID-19, we are adding a new paragraph (e)(4) to Sec.  417.454 to 
require section 1876 cost plans to cover without cost sharing the 
COVID-19 vaccine and its administration described in section 
1861(s)(10)(A) of the Act without cost sharing for the duration of the 
PHE for the COVID-19 pandemic, specifically the end of the emergency 
period defined in paragraph (1)(B) of section 1135(g) of the Act, which 
is the PHE declared by the Secretary on January 31, 2020 and any 
renewals thereof.

B. COVID-19 Vaccine Coverage for Medicaid, CHIP, and BHP Beneficiaries

    Under section 6008 of the FFCRA, states' and territories' Medicaid 
programs may receive a temporary 6.2 percentage point increase in the 
Federal Medical Assistance Percentage (FMAP). Under section 6008(b)(4) 
of the FFCRA, to receive that increase, a state or territory must cover 
COVID-19 testing services and treatments, including vaccines and the 
administration of such vaccines, for Medicaid enrollees without cost 
sharing. That coverage is required during any quarter for which the 
state or territory claims the temporary FMAP increase under FFCRA 
section 6008, and the FMAP increase is available through the end of the 
quarter in which the PHE for COVID-19 ends. CMS is not aware of any 
states or territories not currently claiming this temporary FMAP 
increase, or of any state or territory that intends to cease claiming 
it. Accordingly, Medicaid coverage of a COVID-19 vaccine and its 
administration, without cost-sharing, is expected to be available for 
most

[[Page 71149]]

Medicaid beneficiaries through the end of the quarter in which the PHE 
for COVID-19 ends. For the remainder of this section of preamble, 
references to ``state'' or ``states'' in discussions of Medicaid policy 
also include the territories.
    To meet the requirement in FFCRA section 6008(b)(4) to cover a 
COVID-19 vaccine and its administration without cost sharing, states 
must compensate Medicaid providers with a vaccine administration fee or 
reimbursement for a provider visit during which a vaccine dose is 
administered, even if the vaccine dose is furnished to the provider at 
no cost.
    There are some very limited circumstances in which the FFCRA 
section 6008(b)(4) coverage requirements would not apply. CMS has not 
interpreted section 6008(b)(4) of the FFCRA to require that state 
Medicaid programs cover the services described in that provision for 
individuals whose Medicaid eligibility is limited by statute to only a 
narrow range of benefits that would not otherwise include these 
services. FFCRA section 6008(b)(4) did not amend the varying benefits 
packages that are required for different Medicaid eligibility groups 
under section 1902(a)(10) of the Act. In some cases, beneficiaries' 
coverage is limited by statute to a very narrow range of benefits and 
services that typically would not include services described in FFCRA 
section 6008(b)(4), such as COVID-19 vaccines or their administration 
(see, e.g., the limitations described in the matter following section 
1902(a)(10)(G) of the Act for some Medicaid eligibility groups). Nor 
did FFCRA section 6008(b)(4) direct states to amend existing 
demonstration projects under section 1115(a) of the Act, through which 
states may offer eligibility to groups not otherwise eligible under 
title XIX of the Act, and can opt to provide these groups with limited 
benefits. Moreover, after FFCRA was enacted, in section 3716 of the 
CARES Act (Pub. L. 116-136), Congress defined eligibility for the 
COVID-19 testing-only optional Medicaid eligibility group described in 
section 1902(a)(10)(A)(ii)(XXIII) of the Act in a manner that 
recognized that certain limited-benefit Medicaid eligibility groups are 
``uninsured,'' and therefore eligible to receive coverage for COVID-19 
testing under that provision, without referring to or acknowledging the 
FFCRA section 6008(b)(4) COVID-19 testing coverage requirement. See 
section 1902(ss) of the Act. Accordingly, CMS does not interpret FFCRA 
section 6008(b)(4) to require states to provide COVID-19 testing and 
treatment services without cost-sharing, including vaccines and their 
administration, to eligibility groups whose coverage is limited by 
statute or under an existing section 1115 demonstration to a narrow 
range of benefits that would not ordinarily include this coverage, such 
as groups that receive Medicaid coverage only for COVID-19 testing, 
family planning services and supplies, or tuberculosis-related 
services. The COVID-19 Claims Reimbursement to Health Care Providers 
and Facilities for Testing and Treatment of the Uninsured Program 
(COVID-19 Claims Reimbursement program) administered by the Health 
Resources and Services Administration (HRSA) is available for 
reimbursement of a COVID-19 vaccine and vaccine administration costs 
for individuals who would not receive Medicaid coverage for a COVID-19 
vaccine or its administration because their Medicaid coverage is for 
limited benefit packages only.
    After the requirements in section 6008(b)(4) of FFCRA are no longer 
in effect in a state, the state must cover COVID-19 vaccines 
recommended by the ACIP, and their administration, for several 
populations under existing statutory and regulatory authority. All 
Medicaid-enrolled children under the age of 21 eligible for the Early 
and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit must 
receive ACIP-recommended vaccines pursuant to section 1905(r)(1)(A)(i) 
and (B)(iii) of the Act.\12\ Coverage of ACIP-recommended vaccines 
without cost-sharing is required for any adult populations who receive 
coverage through Alternative Benefit Plans (ABPs), including the adult 
expansion population described at section 1902(a)(10)(A)(i)(VIII) of 
the Act, pursuant to section 1937(b)(5) of the Act, 42 CFR 440.347(a), 
and 45 CFR 156.115(a)(4) and 147.130. Some states may also elect to 
receive a 1 percentage point FMAP increase for their expenditures on 
certain services, in return for covering ACIP-recommended vaccines and 
their administration without cost-sharing for adults under section 
1905(a)(13) of the Act, pursuant to section 4106 of PPACA (as codified 
in section 1905(b) of the Act). Children through age 18 who are 
eligible for Medicaid (funded through both titles XIX and XXI), as well 
as children who are uninsured, who are not insured with respect to the 
vaccine and who are administered pediatric vaccines by a federally 
qualified health center (FQHC) or rural health clinic, or who are 
Indians (as defined in section 4 of the Indian Health Care Improvement 
Act) receive ACIP-recommended vaccinations through the Vaccines for 
Children (VFC) program, described at section 1928 of the Act. The 
Centers for Disease Control and Prevention (CDC) will determine if 
COVID-19 vaccines will be included in the VFC program. Coverage of the 
administration of a VFC-covered vaccine for Medicaid-eligible children 
would be provided by the state Medicaid program.
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    \12\ Medicaid enrolled children up to the age of 18 are 
generally exempt from cost sharing. For children age 19 or 20 cost 
sharing for an ACIP-recommended vaccine may apply, outside of an 
Alternative Benefit Plan.
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    After the FFCRA section 6008(b)(4) requirements are no longer in 
effect in a state, the state also has the option to cover a COVID-19 
vaccine and its administration for other eligibility groups. Such 
groups include the parent/caretaker relative eligibility group at 42 
CFR 435.110, eligibility groups for individuals who are age 65 or older 
or who are eligible on the basis of blindness or a disability, and 
pregnant women enrolled under 42 CFR 435.116 who are eligible for full 
state plan benefits. If a state elects to cover a COVID-19 vaccine and 
its administration for any one of these groups, it must do so for all 
of them, except that with respect to the pregnant women group described 
in 42 CFR 435.116, per 42 CFR 440.250(p) states can cover a vaccine and 
its administration as a pregnancy-related service while not providing 
the same coverage for the other eligibility groups. Outside of the 
period in which FFCRA section 6008(b)(4) applies to a state, the state 
has the option to apply cost sharing to coverage of a COVID-19 vaccine 
or its administration unless the beneficiary is in an eligibility group 
that is exempt from cost-sharing under section 1916 or section 1916A of 
the Act and regulations at 42 CFR 447.56 (for example, most children 
under age 18, most pregnant women, most children in foster care, 
individuals receiving services in an institution that already had their 
medical assistance reduced by their income, individuals receiving 
hospice care, and Indians who are currently receiving or have ever 
received an item or service furnished by an Indian health care provider 
or through referral under contract health services).
    After the FFCRA section 6008(b)(4) requirements are no longer in 
effect in a state, a COVID-19 vaccine and its administration could also 
be a covered service for many Medicaid eligibility groups when 
furnished by a participating provider under certain Medicaid benefits 
that are mandatory for many Medicaid eligibility groups,

[[Page 71150]]

depending on how the state has defined the amount, duration, and scope 
parameters of the benefit. Because inpatient and outpatient hospital 
services, physician services, and Federally Qualified Health Center and 
Rural Health Clinic services are mandatory Medicaid benefits for the 
categorically needy populations, COVID-19 vaccine administration could 
be a covered service for many Medicaid beneficiaries when provided by 
these participating providers, at state option. States might also cover 
COVID-19 vaccine administration for beneficiaries under various 
optional state plan benefits, such as the ``other licensed 
practitioner'' benefit described in section 1905(a)(6) of the Act and 
42 CFR 440.60, or the ``preventive services'' benefit described in 
section 1905(a)(13) of the Act and 42 CFR 440.130(c). However, states 
would generally not have the option to cover a COVID-19 vaccine or its 
administration for any group whose coverage is limited by statute or 
under a current section 1115 demonstration to a narrow range of 
benefits that would not ordinarily include vaccine coverage. As 
described above, the COVID-19 Claims Reimbursement program administered 
by HRSA may be used to cover COVID-19 treatment, including the 
administration of vaccines, for such limited-benefit beneficiaries. In 
addition, a state might have the option, subject to Federal approval, 
to propose or amend a section 1115 demonstration to include this 
coverage for a group that would not otherwise be entitled to receive it 
under the statute or under current section 1115 authority.
    The FFCRA section 6008(b)(4) requirement does not apply to separate 
CHIPs.\13\ In separate CHIPs, states must cover ACIP-recommended 
vaccines and their administration for all children under age 19 with no 
cost sharing. See section 2103(c)(1)(D) and (e)(2) of the Act, and 42 
CFR 457.410(b)(2) and 457.520(b)(4). Coverage of uninsured pregnant 
women in a separate CHIP is optional. Currently, the states that cover 
pregnant women in a separate CHIP include all ACIP-recommended vaccines 
with no cost sharing in this coverage. However, current CMS 
interpretation is that this vaccine coverage is not required.
---------------------------------------------------------------------------

    \13\ In states that use title XXI funding to expand Medicaid 
eligibility for children, the FFCRA section 6008(b)(4) requirements 
apply to these title XXI funded Medicaid beneficiaries in the same 
way that they do to all other Medicaid beneficiaries.
---------------------------------------------------------------------------

    The FFCRA section 6008(b)(4) requirement also does not apply to the 
Basic Health Program (BHP). Minnesota and New York are the only states 
that currently operate a BHP. BHP coverage must include benefits in at 
least the ten essential health benefits described in section 1302(b) of 
the PPACA and must comply with the Exchange's cost-sharing 
protections,\14\ which includes providing all ACIP recommended vaccines 
without cost sharing. See sections 1331(a)(1), (a)(2)(B) and (b)(2) of 
PPACA, and 42 CFR 600.405(a) and 600.510(b).
---------------------------------------------------------------------------

    \14\ As explained in rulemaking, this includes the prohibition 
on cost sharing for preventive health services. See the Basic Health 
Program: State Administration of Basic Health Programs; Eligibility 
and Enrollment in Standard Health Plans; Essential Health Benefits 
in Standard Health Plans; Performance Standards for Basic Health 
Programs; Premium and Cost Sharing for Basic Health Programs; 
Federal Funding Process; Trust Fund and Financial Integrity; Final 
Rule. 79 FR 14111 at 14128 (March 12, 2014).
---------------------------------------------------------------------------

    Section 600.510(b) cross-references 45 CFR 147.130, which 
establishes requirements related to the coverage of preventive health 
services for BHP. For ABPs, 42 CFR 440.347 cross-references 45 CFR part 
156, which incorporates 45 CFR 147.130, which establishes requirements 
related to the coverage of preventive health services. Consistent with 
the changes to 45 CFR 147.130 made through this rulemaking, during the 
COVID-19 public health emergency BHP plans and Medicaid ABPs must 
provide coverage for and must not impose any cost-sharing for 
``qualifying coronavirus preventive services,'' including a COVID 
vaccine, regardless of whether the vaccine is delivered by an in-
network or out-of-network provider. For details on the coverage 
requirements for ``qualifying coronavirus preventive services'' and the 
updates to 45 CFR 147.130 see section III of this IFC.
    Lastly, we note that CMS intends this section only to be a 
description of current policy and existing law, with the exception 
noted directly above for BHP and Medicaid ABPs, and that CMS is not 
making any changes to its current policy or regulatory requirements in 
this rule.

C. Price Transparency for COVID-19 Diagnostic Tests

1. Introduction
    Robust COVID-19 diagnostic testing is fundamental to the Federal 
Government's strategy for controlling the spread of COVID-19.\15\ In 
recognition of the importance of COVID-19 diagnostic testing, the 
Federal Government has taken several steps to reduce financial barriers 
to testing for both insured and uninsured individuals, including the 
following:
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    \15\ The White House, CDC and FDA document: Testing Overview, 
Opening Up America Again. Available at: https://www.whitehouse.gov/wp-content/uploads/2020/04/Testing-Overview-Final.pdf.
---------------------------------------------------------------------------

     The FFCRA was enacted on March 18, 2020. Section 6001 of 
the FFCRA generally requires group health plans and health insurance 
issuers offering group or individual health insurance coverage to 
provide coverage for certain items and services, including in vitro 
diagnostic testing products for the detection of SARS-CoV-2, the virus 
that causes COVID-19, or the diagnosis of COVID-19 (referred to herein 
collectively as COVID-19 diagnostic tests) when those items or services 
are furnished on or after March 18, 2020, and during the PHE for COVID-
19. Plans and issuers must provide this coverage without imposing any 
cost-sharing requirements (including deductibles, copayments, and 
coinsurance) or prior authorization or other medical management 
requirements. Related items and services include those provided during 
urgent care center visits, in-person and telehealth office visits, and 
emergency room visits that result in an order for or administration of 
an in vitro diagnostic product, to the extent that such items and 
services relate to the furnishing or administration of a COVID-19 
diagnostic test, or to the evaluation of an individual for purposes of 
determining the need of the individual for a COVID-19 diagnostic test. 
Section 3201 of the CARES Act, enacted on March 27, 2020, amended 
section 6001 of the FFCRA to include a broader range of diagnostic 
tests that plans and issuers must cover without any cost-sharing 
requirements or prior authorization or other medical management 
requirements.
     The COVID-19 Claims Reimbursement to Health Care Providers 
and Facilities for Testing and Treatment of the Uninsured Program 
provides reimbursements on a rolling basis directly to eligible 
providers for claims that are attributed to the testing and treatment 
of COVID-19 for certain uninsured individuals. The program is funded 
via (1) the FFCRA Relief Fund, which includes funds received from the 
Public Health and Social Services Emergency Fund, as appropriated in 
the FFCRA and the Paycheck Protection Program and Health Care 
Enhancement Act (PPPHCEA) (Pub. L. 116-139), which each appropriated 
funding to reimburse providers for conducting COVID-19 testing for the 
uninsured, and (2) the Provider Relief Fund, as appropriated in the 
CARES Act and the PPPHCEA.\16\
---------------------------------------------------------------------------

    \16\ FAQs for COVID-19 Claims Reimbursement to Health Care 
Providers and Facilities for Testing and Treatment of the Uninsured. 
Available at https://www.hrsa.gov/coviduninsuredclaim/frequently-asked-questions.

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[[Page 71151]]

     HHS has partnered with pharmacies, retail companies, and 
health centers nationwide to make no-cost COVID-19 diagnostic testing 
available to Americans in communities across the country.\17\
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    \17\ Information on Community-Based Testing Sites for COVID-19 
can be found at https://www.hhs.gov/coronavirus/community-based-testing-sites/index.html.
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    Congress has also taken steps to facilitate the reimbursement for 
COVID-19 diagnostic testing and to ensure that pricing for performance 
of such testing is publicly available. Specifically, section 3202(a) of 
the CARES Act requires group health plans and issuers providing 
coverage for items and services described in section 6001(a) of the 
FFCRA to reimburse any provider of a COVID-19 diagnostic test an amount 
that equals the negotiated rate, or, if the plan or issuer does not 
have a negotiated rate with the provider, the cash price for such 
service that is listed by the provider on a public website. The plan or 
issuer may also negotiate a rate with the provider that is lower than 
the cash price. More information related to health insurance issuer and 
group health plan coverage and reimbursement for COVID-19 diagnostic 
testing is available at https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf and https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf. Specifically, the Departments note that the reimbursement 
requirements under CARES Act 3202(a) will apply to COVID-19 diagnostic 
testing, as defined in this IFC.
    Section 3202(b) of the CARES Act establishes a requirement for each 
provider of a diagnostic test for COVID-19 to publicize cash prices for 
such COVID-19 diagnostic testing. Specifically, section 3202(b)(1) of 
the CARES Act requires each provider of a diagnostic test for COVID-19 
to make public the cash price for such test on a public internet 
website of such provider during the emergency period declared under 
section 319 of the PHS Act. Section 3202(b)(2) of the CARES Act 
authorizes the Secretary to impose a civil monetary penalty (CMP) on 
any provider of a diagnostic test for COVID-19 that does not make 
public its cash price for such test in compliance with section 
3202(b)(1) of the CARES Act and that has not completed a corrective 
action plan (CAP) to comply with that section. The statute states that 
the amount of the CMP must not exceed $300 per day that the violation 
is ongoing.
    We believe that cash price posting by providers of diagnostic tests 
for COVID-19 is important for not only for plans and issuers that must 
comply under section 3202(a) of the CARES Act but also for individuals 
who seek COVID-19 diagnostic testing.
    Therefore, we are adopting in this IFC policies that implement the 
requirement in section 3202(b) of the CARES Act that providers of 
diagnostic tests for COVID-19 make public their cash price for such 
tests on the internet. Specifically, we are finalizing the following: 
(1) Definitions of ``provider of a diagnostic test for COVID-19'' 
(herein referred to as ``provider''), ``diagnostic test for COVID-19'' 
(herein referred to as ``COVID-19 diagnostic test''), and ``cash 
price''; (2) requirements for making public cash prices; and (3) 
penalties for non-compliance with the cash price posting requirements.
2. Requirement That Providers of COVID-19 Diagnostic Tests Make Public 
Cash Prices for COVID-19 Diagnostic Tests
    The rapid expansion of COVID-19 related diagnostic testing capacity 
is a top priority in HHS' strategy to combat the pandemic. COVID-19 
diagnostic testing is generally performed by laboratories located in a 
variety of sites, including for example: Government labs; hospital-run 
labs; clinician offices; stand-alone labs; urgent care centers; and 
pharmacies. There are several types of COVID-19 tests designed to 
detect SARS-CoV-2 or to diagnose a possible case of COVID-19, including 
molecular (RT-PCR) tests, which are used to detect the virus's genetic 
material, and antigen tests, which are used to detect specific proteins 
on the surface of the virus and serology testing, which is used to look 
for the presence of antibodies produced by the body in response to 
infections.
    For purposes of implementing section 3202(b) of the CARES Act, we 
are adopting a new 45 CFR part 182, ``Price Transparency for COVID-19 
Diagnostic Tests,'' that will implement price transparency requirements 
for making public cash prices for performance of a COVID-19 diagnostic 
test. Section 182.10 states that part 182 implements section 3202(b) of 
the CARES Act.
    For purposes of section 6001(a)(1) of the FFCRA, as amended by 
section 3201 of the CARES Act, and as explained in guidance issued by 
the Departments, COVID-19 diagnostic tests include all in vitro 
diagnostic tests, which include molecular, antigen, and serological 
tests. Specifically, section 6001(a) of the FFCRA, as amended by 
section 3201 of the CARES Act, requires plans and issuers to provide 
coverage for an in vitro diagnostic test, as defined in 21 CFR 809.3(a) 
(or its successor regulations), for the detection of SARS-CoV-2 or 
diagnosis of COVID-19, and the administration of such a test that: (1) 
Is approved, cleared, or authorized under section 510(k), 513, 515, or 
564 of the FD&C Act (21 U.S.C. 360(k), 360c, 360e, 360bbb-3); (2) the 
developer has requested, or intends to request, emergency use 
authorization under section 564 of the FD&C Act (21 U.S.C. 360bbb-3), 
unless and until the emergency use authorization request under such 
section 564 has been denied or the developer of such test does not 
submit a request under such section within a reasonable timeframe; (3) 
is developed in and authorized by a state that has notified the 
Secretary of HHS of its intention to review tests intended to diagnose 
COVID-19; or (4) other tests that the Secretary of HHS determines 
appropriate in guidance.\18\ We are therefore at Sec.  182.20 defining 
a ``diagnostic test for COVID-19'' (also referred to as a ``COVID-19 
diagnostic test'') as a COVID-19 in vitro diagnostic test described in 
section 6001 of the FFCRA, as amended by section 3201 of the CARES Act. 
Such COVID-19 diagnostic tests are currently billed by providers using 
HCPCS and CPT codes including, but not limited to: CPT codes 86408, 
86409, 87635, 87426, 86328, and 86769 and HCPCS codes U0001 through 
U0004. We intend this list of billing codes to be illustrative, 
however, not exhaustive. Therefore, as noted previously, a ``COVID-19 
diagnostic test'' is defined as a COVID-19 in vitro diagnostic test 
described in section 6001 of the FFCRA, as amended by section 3201 of 
the CARES Act, even if a particular COVID-19 diagnostic test or its 
billing code is not included on this list. Codes continue to be created 
to address new and proprietary tests as they are developed. We 
therefore anticipate updating this list in guidance as new tests and 
codes are developed.
---------------------------------------------------------------------------

    \18\ See Q3 of FAQs About Families First Coronavirus Response 
Act and Coronavirus Aid, Relief, And Economic Security Act 
Implementation Part 42 available at: https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.
---------------------------------------------------------------------------

    Obtaining a diagnostic test for COVID-19 generally can involve up 
to three separate health care services for an individual including 
evaluation by a practitioner of the need for such testing, and, once 
the provider determines the need for a COVID-19 diagnostic test, 
specimen collection and laboratory analysis of the specimen, that is, 
actual performance of a COVID-19 diagnostic

[[Page 71152]]

test. For purposes of implementing section 3202(b), we are defining 
``provider of a diagnostic test for COVID-19'' (herein referred to as 
``provider'') as any facility that performs one or more COVID-19 
diagnostic tests. CMS regulates all laboratory testing performed on 
humans for the purposes of diagnosis, prevention, or treatment in the 
U.S. through the Clinical Laboratory Improvement Amendments CLIA 
program (42 U.S.C. 263a). In order to perform COVID-19 testing, a 
facility (whether that be a primary care provider's office, urgent care 
center, outpatient hospital site or stand-alone laboratory) is required 
to hold a CLIA certificate based on the complexity of the testing 
performed by the facility. Therefore, we expect that any ``provider of 
a diagnostic test for COVID-19'' would either hold or have submitted a 
CLIA application necessary to obtain a CLIA certificate (including a 
certificate of waiver, as applicable) and that such testing would occur 
in facilities ranging from primary care provider offices to urgent care 
centers to stand-alone national laboratories.
    At Sec.  182.20, we are defining ``cash price'' as the charge that 
applies to an individual who pays in cash (or cash equivalent) for a 
COVID-19 diagnostic test. We believe this definition will provide a 
clear point of reference not only for individuals who seek such tests, 
but also for payers who wish to negotiate reimbursement rates with 
providers of diagnostic tests for COVID-19, or who wish to help direct 
their members to providers of diagnostic tests for COVID-19 who charge 
cash prices that payers believe to be reasonable. The ``cash price'' is 
generally analogous to the ``discounted cash price'' as defined at 45 
CFR 180.20 for purposes of the Hospital Price Transparency final rule. 
As we explained in that rule, providers often offer discounts off their 
gross charges or make other concessions to individuals who pay for 
their own care (referred to as self-pay individuals) (84 FR 65524). We 
also stated that the discounted cash price may be generally analogous 
to the ``walk-in'' rate that would apply to all self-pay individuals, 
regardless of insurance status, who pay in cash at the time of the 
service, and that such charges are often lower than the rate the 
hospital negotiates with third party payers because billing self-pay 
individuals would not require many of the administrative functions that 
exist for hospitals to seek payment from third party payers (for 
example, prior authorization and billing 
functions).19 20 21 22 It is therefore our expectation that 
the ``cash price'' established by the provider will be generally 
similar to, or lower than, rates negotiated with in-network plans and 
insurers. If a provider has not established a ``cash price'' for a 
COVID-19 diagnostic test that is lower than its gross charge or retail 
rate, the provider must make public the undiscounted gross or retail 
rate found in its master price list (which is analogous to the 
hospital's chargemaster). We do not believe that posting a ``cash 
price'' should prevent a provider of a diagnostic test for COVID-19 
from offering testing for free to individuals as charity care or in an 
effort to combat the public health crisis, rather, the ``cash price'' 
would be the maximum charge that may apply to a self-pay individual 
paying out-of-pocket. We solicit comment on this approach and whether 
any additional standards should be implemented to address any potential 
abuse.
---------------------------------------------------------------------------

    \19\ Rosato D. How Paying Your Doctor in Cash Could Save You 
Money. Consumer Reports. May 4, 2018. Available at: https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/.
    \20\ David Lazarus. Insured price: $2,758. Cash price: $521. 
Could our Healthcare System by any Dumber? Los Angeles Times. July 
30, 2019. Available at: https://www.latimes.com/business/story/2019-07-29/column-could-our-healthcare-system-be-any-dumber.
    \21\ Beck M. How to Cut Your Health-Care Bill: Pay Cash. The 
Wall Street Journal. February 15, 2016. Available at: https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.
    \22\ Dr. Steven Goldstein. Patients Can Save Money When They Pay 
Their Doctor In Cash. Houston Healthcare Initiative. August 10, 
2020. Available at: https://houstonhealthcareinitiative.org/patients-can-save-money-when-they-pay-their-doctor-in-cash/.
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    Under new Sec.  182.30(a) and (b), these requirements apply to a 
``provider of a diagnostic test for COVID-19'' as defined at Sec.  
182.20 and are applicable during the PHE for COVID-19 determined to 
exist nationwide as of January 27, 2020, by the HHS Secretary under 
section 319 of the PHS on January 31, 2020, as a result of confirmed 
cases of COVID-19, including any subsequent renewals.
    Finally, section 3202(b)(1) of the CARES Act states that each 
provider of a diagnostic test for COVID-19 shall make public the cash 
price for such test on a public internet website of such provider. We 
interpret this to mean that providers must make public the cash prices 
for performing COVID-19 diagnostic tests on the provider's internet 
website. Specifically, as discussed below, Sec.  182.40(a)(1) and (2) 
require that each provider of a COVID-19 diagnostic test that has a 
website make public the cash price information described in Sec.  
182.40(c) electronically, and that the information itself, or a link to 
a web page that contains such information, must appear in a conspicuous 
location on a searchable homepage on the provider's website. We 
recognize that some providers of a COVID-19 diagnostic test, for 
example, small or rural providers, may not have websites. Therefore, in 
the event that a provider does not have a website on which to post this 
cash price information, we are finalizing a policy at Sec.  182.40(b) 
to require the provider to make public its cash price information in 
writing upon request within two business days and by posting signage 
prominently at the location where the provider offers a COVID-19 
diagnostic test in a place likely to be viewed by members of the public 
seeking to obtain and pay for such testing. If the provider does not 
have its own website or a publicly accessible location then, upon 
request and within two business days, the provider will be required to 
make public its cash price information in writing to the requestor but 
will not be required to post signage at the location where it performs 
the COVID-19 diagnostic test. For purposes of complying with the 
requirement that the cash price information be made public in writing, 
we will consider email correspondence to the requester to be an 
acceptable written format. We believe these policies will help ensure 
that the public (including individuals, issuers, health plans, and 
others) has access to every provider's COVID-19 diagnostic test cash 
prices, including those providers who do not perform COVID-19 
diagnostic tests at publicly accessible locations. We seek comment on 
these issues, including the frequency by which providers may not have 
websites.
    Furthermore, at Sec.  182.40(a)(3), we are requiring that providers 
of a COVID-19 diagnostic test display their cash price information in 
an easily accessible manner, without barriers, including, but not 
limited to, ensuring the information is accessible: Free of charge; 
without having to establish a user account or password; and without 
having to submit personal identifiable information (PII). In addition, 
we are requiring at Sec.  182.40(a)(4) that the provider's homepage 
contain certain keywords that we believe will increase the likelihood 
that the public will be able to locate the information using a search 
engine. Specifically, Sec.  182.40(a)(4) requires that all of the 
following terms be included on the provider's homepage: The provider's 
name; ``price''; ``cost''; ``test''; ``COVID''; and ``coronavirus.'' We 
seek

[[Page 71153]]

comment on whether providers should have flexibility to select between 
using ``COVID'' or ``coronavirus'' and between ``cost'' and ``price'' 
if the provider is linking to the information from its homepage.
    Finally, we believe that it is important for the provider to 
include certain standardized information so that the public can 
understand the relationship between the posted cash price and the 
COVID-19 diagnostic test(s) offered by the provider. Therefore, at 
Sec.  182.40(c)(1) through (4), we are requiring all providers to make 
public, along with the cash price for each COVID-19 diagnostic test(s) 
that they offer, information that, at minimum, includes a plain 
language description of each COVID-19 diagnostic test, the 
corresponding cash price, the billing code(s) for each such test(s), 
and any additional information as may be necessary for the public to be 
certain of the cash price for a particular COVID-19 diagnostic test. 
For example, if the provider offers the same test at a different cash 
price that is dependent on location or some other factor, then on its 
website listing of cash prices, the provider must indicate all the cash 
prices that apply to the test and relevant distinguishing information 
as to when each different cash price applies. We believe that this 
information is necessary for the public, including group health plans 
and health insurance issuers offering group or individual health 
insurance coverage that must provide reimbursement for COVID-19 
diagnostic testing pursuant to the requirements of section 3202(a) of 
the CARES Act. This requirement applies to cash price information 
posted on the provider's website, made available upon request and, 
where applicable, on signage.
    These requirements are applicable immediately; however, we seek 
comment on these requirements and may, as a result of public comment, 
revise these requirements or finalize additional requirements. We also 
specifically seek comment on the definition of ``diagnostic test for 
COVID-19'' as solely a COVID-19 in vitro diagnostic test described in 
section 6001 of FFCRA.
    We seek comment on the definition of ``provider of a COVID-19 
diagnostic test''. We seek comment on whether consumers may benefit 
from knowing the total cost of care for receiving a COVID-19 test, 
including the doctor's visit and specimen collection, in order to 
protect themselves against potential unexpected health care costs and 
make a more informed health care purchasing decision and therefore 
whether we should adopt a more inclusive definition of a provider of a 
diagnostic test for purposes of this requirement. Specifically, we seek 
comment on whether a ``provider of a diagnostic test for COVID-19'' 
should be expanded to include providers that perform additional 
services related to the performance of a COVID-19 diagnostic test, such 
as for specimen collection or mileage fees that may be billed as part 
of or in conjunction with the specimen collection, if applicable. We 
are particularly interested in submissions from stakeholders that 
include data, both anecdotal and claims-based, on the ways in which 
consumers request and receive COVID-19 diagnostic testing, including 
the site of care, frequency, and type of provider.
    We seek comment on the definition of ``cash price''. We have heard 
concerns from stakeholders that certain providers may use the posting 
of a ``cash price'' as an opportunity to ``price 
gouge''.23 24 25 We therefore specifically seek comment on 
whether this definition or some other definition would help to mitigate 
concerns for price gouging by out-of-network providers. We seek comment 
on whether there are additional authorities and safeguards that could 
be used to mitigate concerns for price gouging both for group health 
plans and issuers and for consumers receiving a COVID-19 diagnostic 
test.
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    \23\ Morgan Haefner. Out-of-network Providers Price Gouging 
COVID-19 tests, AHIP says. Becker's Hospital Review Newsletter. 
August 28, 2020. Available at: https://www.beckershospitalreview.com/payer-issues/out-of-network-providers-price-gouging-covid-19-tests-ahip-says.html.
    \24\ Susannah Luthi. The $7,000 COVID Test: Why States are 
Stepping in to Shield Consumers. POLITICO. June 8, 2020. Available 
at: https://www.politico.com/news/2020/06/08/coronavirus-test-costs-304058.
    \25\ Ken Alltucker. `I was floored': Coronavirus test prices 
charged by some hospitals and labs stun consumers, spur questions. 
USA Today. September 15, 2020. Available at: https://www.usatoday.com/story/news/health/2020/09/15/covid-test-prices-hospitals-scrutiny-congress-insurers-consumers/3472304001/.
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    We seek comment regarding whether these requirements are sufficient 
to inform consumers of the cash price for a COVID-19 diagnostic test in 
advance of receiving one and what, if any, additional requirements or 
safeguards should be considered to avoid consumer confusion or prevent 
unintended consequences (for example, balance billing). Specifically, 
we seek comment regarding how providers should post cash prices so that 
they do not inadvertently deter consumers from seeking a test that 
would normally result in no out-of-pocket cost to the consumer.
    Finally, we seek comment on an approach that balances priorities to 
further price transparency for consumers and other stakeholders and 
reduce barriers to COVID-19 testing. We recognize that these final 
policies become effective as of the date of display of this IFC and are 
applicable only until the end of the PHE. Even so, we seek comment 
whether and to what extent these final policies and the alternatives 
about which we are seeking comment (for instance, expansion of the 
definition of ``provider'') may lead to:
     Potential cost shifting from providers or participants, 
beneficiaries, and enrollees to group health plans or issuers, if the 
group health plan and issuer reimbursement obligation for COVID-19 
diagnostic testing is expanded to cover such testing without cost-
sharing (including deductibles, co-pays, and co-insurance) and as 
payment in full for items and services that were not previously covered 
in such a manner by group health plans or issuers.
     Potential for group health plans or issuers to negotiate 
rates that are lower than the cash price with out-of-network providers 
with whom they do not have established negotiated rates.
     Price gouging or other anti-competitive behavior (under 
both the policies and the alternatives for which we seek comment) by 
providers as well as any potential negative impact on premiums in the 
future that have not already been accounted for in 2021 rates. Please 
provide empirical evidence, if any, including based on claims data 
during the PHE for COVID-19.
     Potential savings to issuers and plans from insured 
consumers seeking out COVID-19 diagnostic testing from in-network 
providers, as opposed to the provider of their choice, as a result of 
these increased price transparency requirements.
     Price sensitivity by consumers covered by group health 
plans or issuers in their choice of provider, and awareness of any 
potential cost-shifting to group health plans or issuers, or to 
consumers themselves through balance billing, as a result of these 
increased price transparency requirements.
     Transparency benefits for the uninsured, who may already 
have an incentive to find the lowest price.
     Group health plans or issuers taking on new consumer 
education or other potential costs, for example, costs associated with 
incentivizing consumers covered by group health plans or issuers to 
stay in network or seek care from lower cost providers.

[[Page 71154]]

3. Monitoring and Enforcement of Requirements To Publicize Cash Prices 
for COVID-19 Diagnostic Tests

    Section 3202(b)(2) of the CARES Act authorizes and provides the 
Secretary discretion to impose a CMP on any provider of a diagnostic 
test for COVID-19 that is not in compliance with section 3202(b)(1) of 
the CARES Act and has not completed a CAP to comply with the 
requirements of such paragraph, in an amount not to exceed $300 per day 
that the violation is ongoing. In this IFC, we are adopting mechanisms 
to monitor the requirement that a provider of a diagnostic test for 
COVID-19 publicize the cash price for diagnostic testing and enforce 
these requirements, as necessary.
a. Monitoring for Noncompliance and Pre-Penalty Actions
    Section 3202(b)(1) of the CARES Act does not prescribe monitoring 
procedures or the factors we should consider in imposing penalties on 
providers for noncompliance. We anticipate relying predominantly on 
complaints made to CMS by the public, including individuals, as well as 
issuers and plans, regarding providers' potential noncompliance. 
Specifically, in response to such complaints, we may investigate and 
evaluate whether a provider has complied with the requirements 
discussed above. The monitoring methods for determining a provider's 
compliance with the requirements for publicizing the cash price for a 
COVID-19 diagnostic test may include, but are not limited to, the 
following, as appropriate:
     CMS' evaluation of complaints made to CMS.
     CMS' review of an individual's or entity's analysis of 
noncompliance as stated in the complaint.
     CMS' review of providers' websites or, where a provider 
does not have a website, its written notice and signage.
    The IFC includes these monitoring methods in the regulations at 
Sec.  182.50(a).
    Additionally, at Sec.  182.50(b), we are finalizing discretion for 
CMS to take any of the following actions if CMS determines the provider 
is noncompliant with the requirements of Sec.  182.40:
     Provide a written warning notice to the provider of the 
specific violation(s).
     Request that a provider submit and comply with a CAP under 
Sec.  182.60.
     Impose a CMP on the provider if the provider fails to 
respond to CMS' request to submit a CAP or to comply with the 
requirements of a CAP approved by CMS.
    A provider that CMS identifies as noncompliant and to which it 
offers an opportunity to take corrective action to come into compliance 
may be notified via a warning notice of its deficiencies. In response 
to the warning letter, a provider may choose, but is not required, to 
submit documentation for CMS to review to determine compliance. CMS 
will review any documentation a provider may submit and, where 
applicable, a provider's website or other form of written notice, to 
determine if the provider's noncompliance has been corrected. In the 
event that a provider does not have its own website on which to post 
the cash price, CMS will require documentation that the provider has 
the cash price in written form timely upon request and, where 
applicable, has posted signage at the provider's facility.
    At Sec.  182.60, we specify the requirements for CAPs. 
Specifically, Sec.  182.60(a) states that a provider may be required to 
submit a CAP if CMS determines a provider is noncompliant or the 
provider's noncompliance continues after a warning notice. A violation 
may include, but is not limited to, a provider's failure to make public 
its cash price information for COVID-19 diagnostic testing required by 
Sec.  182.40 and a provider's failure to make public its cash price 
information in the form and manner required under Sec.  180.40.
    Section 182.60(b) states that CMS may request that a provider 
submit and comply with a CAP, specified in a notice of violation issued 
by CMS to a provider. Additionally, in Sec.  182.60(c), we specify the 
following provisions related to CAPs:
     A provider required to submit a CAP must do so, in the 
form and manner, and by the deadline, specified in the notice of 
violation issued by CMS to the provider, and must comply with the 
requirements of the CAP approved by CMS.
     A provider's CAP must specify elements including, but not 
limited to, the corrective actions or processes the provider will take 
to address the deficiency or deficiencies identified by CMS, and the 
timeframe by which the provider will complete the corrective action.
     A CAP is subject to CMS review and approval. After CMS' 
review and approval of a provider's CAP, CMS may monitor and evaluate 
the provider's compliance with the corrective actions specified in the 
CAP.
    Section 182.60(d) outlines the following provisions for identifying 
a provider's noncompliance with CAP requests and requirements:
     A provider's failure to respond to CMS' request to submit 
a CAP includes failure to submit a CAP in the form, manner, or by the 
deadline, specified in a notice of violation issued by CMS to the 
provider.
     A provider's failure to comply with the requirements of a 
CAP includes failure to correct violation(s) within the specified 
timeframes.
    We seek comment on this approach for monitoring providers of COVID-
19 diagnostic testing for compliance with these requirements. 
Specifically, we seek comments on relying predominantly on complaints 
to determine a provider's potential noncompliance. We further seek 
comments on issuing warning letters and requesting CAPs for violations 
related to making public cash prices for COVID-19 diagnostic testing. 
Additionally, we seek comments on the length of time we should specify 
in warning notices to allow corrections of violations before issuance 
of a request for CAP, and the length of time we should specify for 
providers to complete and return a CAP to CMS.
b. Civil Monetary Penalties
    Under section 3202(b)(2) of the CARES Act, CMS may impose a CMP on 
a provider that we identify as noncompliant. At Sec.  182.70, we are 
finalizing requirements related to imposition of CMPs. At Sec.  
182.70(a), we finalize a policy that CMS may impose a CMP on a provider 
that we identify as noncompliant with any of the requirements of Sec.  
182.40, and that fails to respond to CMS' request to submit a CAP or to 
comply with the requirements of a CAP approved by CMS described in 
Sec.  182.60(d).
    Under the statute, the maximum daily dollar amount for a CMP to 
which a provider may be subject is $300, even if the provider is in 
violation of multiple discrete requirements of Sec.  182.40. The 
maximum daily amount of the CMP will be adjusted annually using the 
multiplier determined by the Office of Management and Budget (OMB) for 
annually adjusting CMP amounts under 45 CFR part 102. CMS will provide 
a written notice of imposition of a CMP to the provider via certified 
mail or another form of traceable carrier. The elements of this notice 
to the provider will include but are not limited to the following:
     The basis for the provider's noncompliance, including, but 
not limited to, the following: CMS' determination as to which 
requirement(s) the provider has violated; and the provider's failure to 
respond to CMS' request to submit a

[[Page 71155]]

CAP or comply with the requirements of a CAP.
     CMS' determination as to the effective date for the 
violation(s).
     The amount of the penalty as of the date of the notice.
     A statement that a CMP may continue to be imposed for 
continuing violation(s).
     Payment instructions.
     A statement of the provider's right to a hearing according 
to Sec.  182.90 of subpart D.
     A statement that the provider's failure to request a 
hearing within 30 calendar days of the issuance of the notice permits 
the imposition of the penalty, and any subsequent penalties pursuant to 
continuing violations, without right of appeal.
    CMS may issue subsequent notice(s) of imposition of a CMP, 
according to the aforementioned requirements (in short, where 
investigation reveals there is continuing justification), that result 
from the same instance(s) of noncompliance. A provider must pay the CMP 
in full within 60 calendar days after the date of the notice of 
imposition of a CMP from CMS. In the event a provider requests a 
hearing, under subpart D of 45 CFR part 182, the provider must pay the 
amount in full within 60 calendar days after the date of a final and 
binding decision to uphold, in whole or in part, the CMP. If the 60th 
calendar day is a weekend or a Federal holiday, then the timeframe is 
extended until the end of the next business day. Should a provider 
elect to appeal the CMP, and where the CMP is upheld only in part by a 
final and binding decision, CMS will issue a modified notice of 
imposition of a CMP, to conform to the adjudicated finding as specified 
in Sec.  182.70.
    In the event a CMP is not paid in full within 60 days, CMS will 
follow the collections activities set forth in 45 CFR part 30. 
Generally, CMS will issue a written demand for payment no later than 30 
days after a debt is delinquent. For debts not paid by the date 
specified in the written demand, interest, charged at a rate 
established by the Secretary of the Treasury, shall accrue from the 
date of delinquency. CMS will transfer debts 180 days or more 
delinquent to the Department of Treasury for collection.
    We seek comment on the approach we are establishing for imposing a 
CMP on a provider noncompliant with the regulations set forth in Sec.  
182.40. Specifically, we seek comments on the length of time allowed 
between issuance of the request for CAP and the imposition of a CMP. In 
addition, we seek comments on the amount of the CMP imposed per day up 
to the statutory maximum daily amount that would be applicable to all 
noncompliant providers.
c. Appeals Process
    We believe it is important to establish a fair administrative 
process by which providers may appeal CMS' decisions to impose 
penalties under the requirements established by Sec.  182.40. Through 
various programs, we have gained experience with administrative 
hearings and other processes to review CMS' determinations. That 
experience includes the processes we recently finalized in the CY 2020 
Hospital Outpatient Prospective Payment System (OPPS) Price 
Transparency Final Rule (84 FR 65524) and corresponding regulations at 
45 CFR part 180, which requires price transparency for hospitals, and 
we are aligning the procedures for the appeals process here with those 
procedures. Therefore, a provider upon which CMS has imposed a penalty 
under Sec.  182.70 may appeal that penalty in accordance with 
Sec. Sec.  180.100 and 180.110, subpart D, with conforming edits.
    Generally, under this approach, a provider upon which CMS has 
imposed a penalty may request a hearing of that penalty before an 
Administrative Law Judge (ALJ). The CMS Administrator, at his or her 
discretion, may review in whole or in part the ALJ's decision. A 
provider against which a final order imposing a CMP is entered may 
obtain judicial review.
    We specify at Sec.  182.80 the procedures for a provider to appeal 
the CMP imposed by CMS for its noncompliance with the requirements of 
Sec.  182.40 to an ALJ, and for the CMS Administrator, at his or her 
discretion, to review in whole or in part the ALJ's decision. In so 
doing, we apply the following conforming modifications to the text:
     References to ``hospital'' are replaced by the term 
``provider.'' We note that the term ``provider,'' as defined at new 45 
CFR 182.20 in this rule, may also include hospitals.
     References to ``standard charge'' are replaced by the term 
``cash price.''
    We seek comment on the approach we are establishing for appeals.
    We also set forth in Sec.  182.90 the consequences for failure of a 
provider to request a hearing. If a provider does not request a hearing 
within 30 calendar days of the issuance of the notice of imposition of 
a CMP described in Sec.  182.70(b), CMS may impose the CMP indicated in 
such notice and may impose additional penalties under continuing 
violations according to Sec.  182.70(e) without right of appeal. If the 
30th calendar day is a weekend or a Federal holiday, then the timeframe 
is extended until the end of the next business day. The provider has no 
right to appeal a penalty with respect to which it has not requested a 
hearing in accordance with 45 CFR 150.405, unless the provider can show 
good cause, as determined at Sec.  150.405(b), for failing to timely 
exercise its right to a hearing.

D. Medicare Inpatient Prospective Payment System (IPPS) New COVID-19 
Treatments Add-On Payment (NCTAP) for the Remainder of the Public 
Health Emergency (PHE)

1. Section 3710 of the CARES Act IPPS Add-On Payment for COVID-19 
Patients During the PHE
    Section 3710 of the CARES Act amended section 1886(d)(4)(C) of the 
Act to provide for an increase in the weighting factor of the assigned 
Diagnosis-Related Group (DRG) by 20 percent for an individual diagnosed 
with COVID-19 discharged during the period of the PHE for COVID-19. To 
implement this temporary adjustment, Medicare's claims processing 
systems apply an adjustment factor to increase the Medicare Severity-
DRG (MS-DRG) relative weight that would otherwise be applied by 20 
percent when determining IPPS operating payments. For additional 
information regarding this add-on payment, including which claims are 
eligible for the 20 percent increase in the MS-DRG weighting factor, 
please see the Medicare Learning Network (MLN) Matters article ``New 
COVID-19 Policies for Inpatient Prospective Payment System (IPPS) 
Hospitals, Long-Term Care Hospitals (LTCHs), and Inpatient 
Rehabilitation Facilities (IRFs) due to Provisions of the CARES Act'' 
available on the CMS website at https://www.cms.gov/files/document/se20015.pdf.
2. Overview of IPPS New Technology Add-On Payment
    The new medical service or technology add-on payment policy under 
the IPPS provides additional payments for cases with relatively high 
costs involving eligible new medical services or technologies, while 
preserving some of the incentives inherent under an average-based 
prospective payment system. The payment mechanism is based on the cost 
to hospitals for the new medical service or technology. Sections 
1886(d)(5)(K) and (L) of the Act establish a process of identifying and 
ensuring adequate payment for new medical services and technologies 
(sometimes collectively referred to in this section as ``new 
technologies'')

[[Page 71156]]

under the IPPS. The regulations at 42 CFR 412.87 and 412.88 implement 
these provisions.
    As set forth in Sec.  412.88(b)(2), for a new technology other than 
certain antimicrobial products (for which the maximum add-on payment is 
75 percent), if the costs of a discharge involving a new technology 
exceed the full DRG payment (including payments for Indirect Medical 
Education (IME) and Disproportionate Share Hospital (DSH), but 
excluding outlier payments)), Medicare will make a new technology add-
on payment equal to the lesser of: (1) 65 percent of the costs of the 
new technology; or (2) 65 percent of the amount by which the costs of 
the case exceed the standard DRG payment.
    For additional information regarding IPPS new technology add-on 
payments please see the FY 2021 IPPS/LTCH PPS final rule (85 FR 58602 
through 58608).
3. Overview of the Food and Drug Administration (FDA) Coronavirus 
Treatment Acceleration Program
    The FDA has created a special emergency program for possible 
coronavirus therapies, the Coronavirus Treatment Acceleration Program. 
The program uses every available method to move new treatments to 
patients as quickly as possible, while at the same time finding out 
whether they are helpful or harmful. The FDA continues to support 
clinical trials that are testing new treatments for COVID-19 so that 
valuable knowledge about their safety and effectiveness can be gained. 
Additional information regarding this program is available on the FDA 
website at https://www.fda.gov/drugs/coronavirus-covid-19-drugs/coronavirus-treatment-acceleration-program-ctap.
    One aspect of the program is the issuance by the FDA of EUAs during 
the PHE for COVID-19. On February 4, 2020, pursuant to Section 
564(b)(1)(C) of the FD&C Act, the Secretary of the Department of Health 
and Human Services (HHS) determined that there is a PHE that has a 
significant potential to affect national security or the health and 
security of United States citizens living abroad, and that involves the 
virus that causes COVID-19.\26\ On the basis of such determination, the 
Secretary of HHS on March 27, 2020, declared that circumstances exist 
justifying the authorization of emergency use of drugs and biological 
products during the COVID-19 pandemic, pursuant to section 564 of the 
FD&C Act, subject to terms of any authorization issued under that 
section.\27\
---------------------------------------------------------------------------

    \26\ U.S. Department of Health and Human Services, Determination 
of a Public Health Emergency and Declaration that Circumstances 
Exist Justifying Authorizations Pursuant to Section 564(b) of the 
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3. February 
4, 2020.
    \27\ U.S. Department of Health and Human Services, Declaration 
that Circumstances Exist Justifying Authorizations Pursuant to 
Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21 
U.S.C. 360bbb-3, 85 FR 18250 (April 1, 2020).
---------------------------------------------------------------------------

    There are currently five drug and biological products with EUAs 
issued during the PHE for COVID-19. In section ``I. Criteria for 
Issuance of Authorization'' of the current letters of authorization for 
these drug and biological products, the letters for two of the products 
state that based on the totality of scientific evidence available to 
FDA, it is reasonable to believe that the product may be effective in 
treating COVID-19, and that, when used under the conditions described 
in the authorization, the known and potential benefits of the product 
when used to treat COVID-19 outweigh the known and potential risks of 
such products.\28\\[1]\ Those two drug and biological products are 
COVID-19 convalescent plasma and Veklury (remdesivir).
---------------------------------------------------------------------------

    \28\ EUA for COVID-19 convalescent plasma: https://www.fda.gov/media/141477/download; EUA for remdesivir: https://www.fda.gov/media/137564/download.
---------------------------------------------------------------------------

    The current letters of authorization for the other three products 
used in patients with suspected or confirmed COVID-19 do not indicate 
that those products are treating COVID-19 and instead treat a disease 
or condition caused or exacerbated by COVID-19.\29\ Specifically, the 
letter of authorization for REGIOCIT indicates its use as a replacement 
solution in adult patients in a critical care setting who are being 
treated with Continuous Renal Replacement Therapy (CRRT) and for whom 
regional citrate anticoagulation (RCA) is appropriate; the letter of 
authorization for Fresenius Propoven 2 percent Emulsion indicates its 
use to maintain sedation via continuous infusion in patients greater 
than 16 years old who require mechanical ventilation in an ICU setting; 
and the letter of authorization for multiFiltrate PRO System and 
multiBic/multiPlus Solutions indicates its use in delivering CRRT in an 
acute care environment.
---------------------------------------------------------------------------

    \29\ EUA for REGIOCIT: https://www.fda.gov/media/141168/download; EUA for Fresenius Propoven 2 percent Emulsion https://www.fda.gov/media/137888/download; EUA for multiFiltrate PRO System 
and multiBic/multiPlus Solutions: https://www.fda.gov/media/137520/download.
---------------------------------------------------------------------------

    While COVID-19 convalescent plasma has received an EUA for treating 
COVID-19 in hospitalized patients, Veklury (remdesivir), as of October 
22, 2020, is the only drug or biological product approved by FDA for 
treating COVID-19.\30\ In order for an item or service to be considered 
for coverage under Medicare Part A or Part B, the item or service must 
fall within at least one benefit category established in the Act. Drugs 
and biologicals are included within several such benefit categories. In 
general, section 1861(t)(1) of the Act defines drugs and biologicals to 
include drugs or biologicals approved for inclusion in certain 
compendia (except for any drugs and biologicals unfavorably evaluated 
therein) or that are approved by the pharmacy and drug therapeutics 
committee (or equivalent committee) of the medical staff of a hospital 
furnishing that drug or biological for use in that hospital. CMS has 
determined that it is appropriate for CMS to consider drug and 
biological products which are authorized for emergency use for COVID-
19, with letters of authorization, and are used to treat COVID-19 
disease, to fall within the drugs and biologicals definition in section 
1861(t)(1) of the Act for Medicare purposes if they are included or 
approved for inclusion in the applicable compendia, or when furnished 
by a specific hospital if approved for use in that hospital by the 
pharmacy and drug therapeutics committee (or equivalent committee) of 
the medical staff of that hospital.
---------------------------------------------------------------------------

    \30\ FDA approval for remdesivir: https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/214787Orig1s000ltr.pdf.
---------------------------------------------------------------------------

    More information regarding EUAs for drug and biological products 
during the PHE for COVID-19 is available on the FDA website at https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs.
4. Overview of IPPS Outlier Payments
    Section 1886(d)(5)(A) of the Act provides for payments in addition 
to the basic prospective payments for ``outlier'' cases involving 
extraordinarily high costs. To qualify for outlier payments, one 
criterion is that a case must have costs greater than the sum of the 
prospective payment rate for the MS-DRG, any IME and DSH payments, 
uncompensated care payments, any new technology add-on payments, and 
the ``outlier threshold'' or ``fixed-loss'' amount (a dollar amount by 
which the costs of a case must exceed payments in order to qualify for 
an outlier payment). We refer to the sum of the prospective payment 
rate for the MS-DRG (including the Section 3710 of the CARES Act add-on 
payment if applicable), any IME and DSH payments, uncompensated care

[[Page 71157]]

payments, any new technology add-on payments, and the outlier threshold 
as the outlier ``fixed-loss cost threshold.'' Payments for eligible 
cases are then made based on a marginal cost factor, which is a 
percentage of the estimated costs above the fixed-loss cost threshold. 
The marginal cost factor is 80 percent for all MS-DRGs except the burn 
MS-DRGs, where the marginal cost factor is 90 percent. For the complete 
formula for how an outlier payment is computed, we refer the reader to 
the FY 2021 IPPS/LTCH PPS final rule (85 FR 59043 through 59044). We 
note, for each claim, per the formula in the FY 2021 IPPS/LTCH PPS 
final rule, in determining whether the claim is eligible for an 
operating outlier payment and/or a capital outlier payment, an 
``operating outlier threshold'' and a ``capital outlier threshold'' are 
computed, including application of a geographic adjustment to account 
for local cost variation. If the case is eligible, an ``operating 
outlier payment'' and/or ``capital outlier payment'' will be made for 
an individual claim. For additional information regarding IPPS outlier 
payments please see the FY 2021 IPPS/LTCH PPS final rule (85 FR 59034 
through 59041).
5. Eligibility Criteria for an IPPS New COVID-19 Treatments Add-on 
Payment (NCTAP) for the Remainder of the PHE
    We believe that as drugs or biological products become available 
and are authorized or approved by FDA for the treatment of COVID-19 in 
the inpatient setting, it would be appropriate to increase the current 
IPPS payment amounts to mitigate any potential financial disincentives 
for hospitals to provide these new treatments during the PHE. 
Therefore, effective for discharges occurring on or after the effective 
date of this rule and until the end of the public health emergency, CMS 
is using the exceptions and adjustment authority under section 
1886(d)(5)(I) of the Act to create a New COVID-19 Treatments Add-on 
Payment (NCTAP) under the IPPS for COVID-19 cases that meet certain 
criteria.
    First, the case must include the use of a drug or biological 
product authorized to treat COVID-19 as indicated in section ``I. 
Criteria for Issuance of Authorization'' of the current letter of 
authorization for the drug or biological product, or the drug or 
biological product must be approved by the FDA for treating COVID-19. 
Because the purpose of the NCTAP is to mitigate potential financial 
disincentives for hospitals to provide new COVID-19 treatments, this 
criterion expeditiously provides assurance in the context of the 
urgency of the PHE that a treatment is new and is used to treat COVID-
19 during the PHE. Currently, there are only two drug or biological 
products that meet this criterion: Veklury (remdesivir) and COVID-19 
convalescent plasma. However, as additional drug and biological 
products become available that meet this criterion, cases that use 
those products would become eligible for the NCTAP if the remaining 
criteria are met.
    Second, the case must also be eligible for the 20 percent increase 
in the weighting factor for the assigned MS-DRG for an individual 
diagnosed with COVID-19 discharged during the period of the PHE for 
COVID-19 under section 3710 of the CARES Act. The primary purposes of 
this criterion are to help appropriately identify COVID-19 cases to 
potentially receive the NCTAP, and ensure for program integrity reasons 
that there is a positive COVID-19 laboratory test documented in the 
patient's medical record. CMS may conduct post-payment medical review 
to confirm the presence of a positive COVID-19 laboratory test and, if 
no such test is contained in the medical record, the NCTAP will be 
recouped.
    Third, the operating cost of the case must exceed the operating 
Federal payment under the IPPS, including the add-on payment under 
section 3710 of the CARES Act. The primary purpose of this criterion is 
to ensure that the NCTAP is made only when needed. The cost of the case 
is determined by multiplying the covered charges by the operating cost-
to-charge ratio, the same way it is determined for new technology add-
on payments and operating outlier payments.
    We note that all generally applicable statutory and regulatory 
requirements during the PHE for Medicare payment for a particular case 
must continue to be met, and that the NCTAP will only be available to 
the extent that the new COVID-19 treatment meets all coverage 
requirements under Medicare, including that the use of a drug or 
biological product is medically reasonable and necessary for that case. 
No applicable Medicare requirements during the PHE are being waived by 
the creation of the NCTAP policy.
6. Determination of the IPPS NCTAP Amount for the Remainder of the PHE
    As indicated earlier, the goal of the NCTAP is to mitigate 
potential financial disincentives for hospitals to provide new COVID-19 
treatments. These potential financial disincentives are already 
mitigated in part by the IPPS outlier payment, but we recognize that 
the costs of a case must exceed payments by the ``outlier threshold'' 
or ``fixed-loss'' amount before outlier payments are made. For FY 2021, 
the outlier threshold is approximately $30,000. As discussed 
previously, the outlier threshold is adjusted to account for local cost 
variation in determining whether an individual claim is eligible for 
outlier payments. As a simplified example for purposes of illustration, 
if the operating costs of a case using a new COVID-19 treatment exceed 
the operating IPPS payment by $10,000, there are no Medicare outlier 
payments made for this case because the costs are less than the outlier 
threshold.
    We believe that in order to further mitigate any potential 
financial disincentives for hospitals to provide new COVID-19 
treatments, the NCTAP, when needed, should function to partially offset 
costs that exceed the Medicare payment, but are less than the outlier 
threshold. By partially rather than fully offsetting these costs, we 
believe that the NCTAP, similar to the new technology add-on payment 
policy under the IPPS, preserves some of the incentives inherent under 
an average-based prospective payment system. One way in which the new 
technology add-on payment policy accomplishes this goal is by making 
the new technology add-on payment equal to the lesser of: (1) 65 
percent of the costs of the new technology; or (2) 65 percent of the 
amount by which the costs of the case exceed the standard DRG payment.
    We believe that the new technology add-on payment calculation 
provides an appropriate conceptual framework for the NCTAP calculation. 
In the context of the urgency of the PHE for COVID-19, however, and the 
practical and operational challenges of individually tailoring the 
payment calculation to each new treatment, we believe the NCTAP 
calculation should take into account 65 percent of the amount by which 
the costs of the case exceed the standard DRG payment, without 
comparison to 65 percent of the costs of the new treatment itself. As 
part of the approval process for the new technology add-on payment for 
a given new technology, the claims processing system is modified and 
tailored to apply the new technology add-on payment for that technology 
using cost and coding information according to the ``lesser of'' policy 
described above. In order to more expeditiously provide payment for 
cases meeting the previously described criteria in the context of the 
urgency of the PHE, we believe the NCTAP calculation should take into 
account 65 percent of the amount by which the costs of the case exceed 
the standard DRG payment for all cases that qualify

[[Page 71158]]

for the NCTAP, without comparison to the costs of the new treatment as 
under the ``lesser of'' policy applicable for the new technology add-on 
payment.
    We note that a hospital should not seek additional payment on the 
claim for drugs or biologicals procured or provided by a governmental 
entity to a provider at no cost to the provider to diagnose or treat 
patients with known or suspected COVID-19, as described in the CMS 
Medicare Claims Processing Manual, Pub. 100-04, Chapter 32, Section 67.
    CMS will use ICD-10-PCS procedure codes XW033E5 (Introduction of 
Remdesivir Anti-infective into Peripheral Vein, Percutaneous Approach, 
New Technology Group 5) and XW043E5 (Introduction of Remdesivir Anti-
infective into Central Vein, Percutaneous Approach, New Technology 
Group 5) to identify cases using remdesivir and ICD-10-PCS procedure 
codes XW13325 (Transfusion of Convalescent Plasma (Nonautologous) into 
Peripheral Vein, Percutaneous Approach, New Technology Group 5) and 
XW14325 (Transfusion of Convalescent Plasma (Nonautologous) into 
Central Vein, Percutaneous Approach, New Technology Group 5) to 
identify cases using convalescent plasma. More information on the new 
procedure codes implemented into the International Classification of 
Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) in 
response to the PHE for COVID-19 is available on the CMS website at 
https://www.cms.gov/files/document/icd-10-ms-drgs-version-372-effective-august-01-2020.pdf. CMS will issue additional operational 
instructions on how eligible cases will be identified, including any 
new treatments that may become available.
    We also considered in the determination of the NCTAP amount that we 
did not want to inadvertently reduce the IPPS operating outlier 
payments that the hospital would have otherwise received for a costly 
COVID-19 case given that these outlier payments already help to 
mitigate potential financial disincentives for hospitals to provide new 
COVID-19 treatments. Therefore, we do not believe the calculation of 
the operating outlier payments should be impacted by the NCTAP.
    Taking these factors into account, CMS is setting the NCTAP amount 
for a case that meets the NCTAP eligibility criteria equal to the 
lesser of: (1) 65 percent of the operating outlier threshold for the 
claim or (2) 65 percent of the amount by which the costs of the case 
exceed the standard DRG payment, including the adjustment to the 
relative weight under section 3710 of the CARES Act. As with the new 
technology add-on payment and outlier payments, the costs of the case 
are determined by multiplying the covered charges by the operating 
cost-to-charge ratio. In addition, the NCTAP will not be included as 
part of the calculation of the operating outlier payments.
    Returning to our simplified example, if the cost of a case using a 
new COVID-19 treatment exceeds the operating IPPS payment by $10,000 
and the operating outlier threshold for the case is for purposes of 
illustration $30,000, the NCTAP would be $6,500 (= $10,000 excess cost 
x 0.65). There would be no outlier payments because the excess cost of 
the case ($10,000) does not exceed the operating outlier threshold for 
the case ($30,000).
    As a simplified example of a case that qualifies for an operating 
outlier payment, if the cost of a case using a new COVID-19 treatment 
exceeds the operating IPPS payment by $100,000, the NCTAP would be 
equal to the maximum NCTAP amount of 65 percent of the operating 
outlier threshold for the case. In this illustrative example, if the 
applicable operating outlier threshold for the claim is $30,000, that 
amount is $19,500 (equals first $30,000 of the excess cost before the 
operating outlier threshold for the claim is reached x 0.65). In 
addition, the case would receive an outlier payment that is calculated 
the same way it is currently calculated in the absence of the $19,500 
NCTAP, that is, $56,000 (= ($100,000 excess cost-$30,000 outlier 
threshold for the case) * the 0.80 outlier marginal cost factor). The 
combined NCTAP and outlier payment would be $75,500 (equals the $19,500 
enhanced payment + the $56,000 outlier payment).

E. Medicare Outpatient Prospective Payment System (OPPS) Separate 
Payment for New COVID-19 Treatments Policy for the Remainder of the 
Public Health Emergency (PHE)

1. FDA Coronavirus Treatment Acceleration Program
    The FDA has created a special emergency program to facilitate the 
development of coronavirus therapies, the Coronavirus Treatment 
Acceleration Program. One aspect of the program is the issuance by the 
FDA of EUAs during the PHE for COVID-19. On February 4, 2020, pursuant 
to Section 564(b)(1)(C) of the FD&C Act, the Secretary of the 
Department of Health and Human Services (HHS) determined that there is 
a PHE that has a significant potential to affect national security or 
the health and security of United States citizens living abroad, and 
that involves the virus that causes COVID-19.\31\ On the basis of such 
determination, the Secretary of HHS on March 27, 2020, declared that 
circumstances exist justifying the authorization of emergency use of 
drugs and biologics during the COVID-19 public health emergency, 
pursuant to section 564 of the FD&C Act, subject to terms of any 
authorization issued under that section.\32\ Readers should refer to 
Section D.3 of this interim final rule with comment period for a full 
discussion of the Coronavirus Treatment Acceleration Program.
---------------------------------------------------------------------------

    \31\ U.S. Department of Health and Human Services, Determination 
of a Public Health Emergency and Declaration that Circumstances 
Exist Justifying Authorizations Pursuant to Section 564(b) of the 
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 360bbb-3. February 
4, 2020.
    \32\ U.S. Department of Health and Human Services, Declaration 
that Circumstances Exist Justifying Authorizations Pursuant to 
Section 564(b) of the Federal Food, Drug, and Cosmetic Act, 21 
U.S.C. 360bbb-3, 85 FR 18250 (April 1, 2020).
---------------------------------------------------------------------------

    There are currently five drug and biological products with EUAs 
issued during the PHE for COVID-19. In section ``I. Criteria for 
Issuance of Authorization'' of the current letters of authorization for 
these drug and biological products, the letters for two of the products 
state that based on the totality of scientific evidence available to 
FDA, it is reasonable to believe that the product may be effective in 
treating COVID-19, and that, when used under the conditions described 
in the authorization, the known and potential benefits of the product 
when used to treat COVID-19 outweigh the known and potential risks of 
such products.\33\ Those drug and biological products are COVID-19 
convalescent plasma and Veklury (remdesivir).
---------------------------------------------------------------------------

    \33\ EUA for remdesivir: https://www.fda.gov/media/137564/download; EUA for COVID-19 convalescent plasma: https://www.fda.gov/media/141477/download.
---------------------------------------------------------------------------

    While COVID-19 convalescent plasma has received an EUA for treating 
COVID-19 in hospitalized patients, Veklury (remdesivir), as of October 
22, 2020, is the only drug or biological product approved by FDA for 
treating COVID-19. As discussed in Section II.D.3 of this interim final 
rule with comment period, in order for an item or service to be 
considered for coverage under Medicare Part A or Part B, the item or 
service must fall within at least one benefit category established in 
the Act. Drugs and biologicals are included within several such benefit 
categories. In general, section 1861(t)(1) of the Act defines drugs and 
biologicals to include drugs or biologicals approved for inclusion in 
certain compendia (except

[[Page 71159]]

for any drugs and biologicals unfavorably evaluated therein) or that 
are approved by the pharmacy and drug therapeutics committee (or 
equivalent committee) of the medical staff of a hospital furnishing 
that drug or biological for use in that hospital. CMS has determined 
that it is appropriate for CMS to consider drug and biological products 
which are authorized for emergency use for COVID-19, with letters of 
authorization, and are used to treat COVID-19 disease, to fall within 
the drugs and biologicals definition in 1861(t)(1) of the Act for 
Medicare purposes if they are included or approved for inclusion in the 
applicable compendia, or when furnished by a specific hospital if 
approved for use in that hospital by the pharmacy and drug therapeutics 
committee (or equivalent committee) of the medical staff of that 
hospital.
2. OPPS Comprehensive-Ambulatory Payment Classification (C-APC) Policy
    To date, no drug or biological product has an EUA for the treatment 
of patients with COVID-19 in the outpatient setting. However, because 
treatment of COVID-19 is rapidly evolving, we believe it is important 
to ensure that separate payment is available under the OPPS for new 
drug and biological products (including blood products) that receive an 
EUA for treating COVID-19 in the outpatient setting or are approved by 
the FDA for treating COVID-19 in the outpatient setting, or where a 
drug or biological product approved under an existing EUA is authorized 
for use in settings other than the inpatient setting. As part of that 
process, we expect to include the addition of new codes describing 
those treatments as soon as practicable, after their availability, to 
ensure efficient and timely beneficiary access to those treatments. We 
anticipate that most drugs and biological products authorized for use 
in treating COVID-19 in the outpatient setting would be separately paid 
under our standard OPPS payment policy because drugs and biological 
products are typically assigned separate Ambulatory Payment 
Classification payment status indicators in the OPPS unless they meet 
one of the criteria for packaging, which, with the exception of drug or 
biological products billed with a Comprehensive Ambulatory Payment 
Classification (C-APC) service, we do not anticipate that drugs or 
biological products approved or authorized to treat COVID-19 would 
meet. However, these products could be packaged into a C-APC when 
provided on the same claim as a C-APC service, in which case separate 
payment would not be made for these products.
    Under our C-APC policy, which we adopted beginning in CY 2015, we 
designate a service described by a HCPCS code assigned to a C-APC as 
the primary service when the service is identified by OPPS status 
indicator ``J1''. When such a primary service is reported on a hospital 
outpatient claim, with certain exceptions, we make payment for all 
other items and services reported on the hospital outpatient claim as 
being integral, ancillary, supportive, dependent, and adjunctive to the 
primary service (hereinafter collectively referred to as ``adjunctive 
services'') and representing components of a complete comprehensive 
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services 
are packaged into the payments for the primary services. This results 
in a single prospective payment for each of the primary, comprehensive 
services based on the costs of all reported services at the claim 
level. Items included in the packaged payment provided in conjunction 
with the primary service also include all drugs, biologicals, and 
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and self-administered drugs, unless they 
function as packaged supplies (78 FR 74868 through 74869 and 74909 and 
79 FR 66800). Thus, under our current policy, payment for drugs or 
biological products with an emergency authorization or approved to 
treat COVID-19 in the outpatient setting would be packaged into payment 
for a primary C-APC service when billed on the same claim as that 
service.
    Currently, there are 67 C-APCs in the CY 2020 OPPS, with payments 
ranging from approximately $1,000 to $37,000. Most C-APCs are for 
surgical or other intensive procedures, which we would expect most 
hospital outpatient departments would not perform on a patient that has 
an active case of COVID-19. However, observation services can also be 
paid through the ``Comprehensive Observation Services'' C-APC (C-APC 
8011), which packages payment for qualifying extended assessment and 
management encounters. It is possible that future COVID treatments that 
are authorized or approved for use in the outpatient setting might be 
administered to patients under observation while the provider 
determines if the patient needs to be admitted to the hospital for 
COVID-19.
3. Separate Payment Under the OPPS for New COVID-19 Treatments for the 
Remainder of the PHE for COVID-19
    Although we do not expect that many beneficiaries would both 
receive a primary C-APC service and a drug or biological for treating 
COVID-19, we nonetheless believe that as drugs or biologicals become 
available and are authorized or approved for the treatment of COVID-19 
in the outpatient setting, it would be appropriate to mitigate any 
potential financial disincentives for hospitals to provide these new 
treatments during the PHE for COVID-19. Therefore, effective for 
services furnished on or after the effective date of this rule and 
until the end of the PHE for COVID-19, CMS is creating an exception to 
its OPPS C-APC policy to ensure separate payment for new COVID-19 
treatments that meet certain criteria. Under this exception, any new 
COVID-19 treatment that meets the two criteria below will, for the 
remainder of the PHE for COVID-19, always be separately paid and will 
not be packaged into a C-APC when it is provided on the same claim as 
the primary C-APC service. Note that this separate payment will result 
in an additional copayment of 20 percent of the cost of the new COVID-
19 treatment, up to the amount of the inpatient deductible.
    CMS has identified two criteria for COVID-19 treatments to receive 
this exception. First, the treatment must be a drug or biological 
product (which could include a blood product) authorized to treat 
COVID-19, as indicated in section ``I. Criteria for Issuance of 
Authorization'' of the letter of authorization for the drug or 
biological product, or the drug or biological product must be approved 
by the FDA for treating COVID-19. Because the purpose of this exception 
is to mitigate potential financial disincentives for hospitals to 
provide new COVID-19 treatments, this criterion expeditiously provides 
assurance in the context of the urgency of the PHE for COVID-19 that a 
treatment is new and is used to treat COVID-19 disease during the PHE 
for COVID-19.
    Second, the EUA for the drug or biological product (which could 
include a blood product) must authorize the use of the product in the 
outpatient setting or not limit its use to the inpatient setting, or 
the product must be approved by the FDA to treat COVID-19 disease and 
not limit its use to the inpatient setting.
    We note that during the PHE for COVID-19 this new exception to the 
C-

[[Page 71160]]

APC packaging policy would apply to all drug and biological products 
that meet both of these criteria. As of the date of issuance of this 
interim final rule there are two drug or biological products that meet 
the first criterion (Veklury (remdesivir) and COVID-19 convalescent 
plasma), but neither of these products is authorized or approved for 
use in the outpatient setting and, as a result, no product meets the 
second criterion.
    We also note that all generally applicable statutory and regulatory 
requirements for Medicare payment under the OPPS must continue to be 
met, and that OPPS payment will only be available to the extent that 
the new COVID-19 treatment meets all coverage requirements under 
Medicare, including that the use of a drug or biological product is 
medically reasonable and necessary for the patient. No applicable 
Medicare requirements during the PHE are being waived by the creation 
of this C-APC exception.
4. Effects of This Exception on the OPPS Budget Neutrality Calculation
    As we noted in Section II.E.2, we believe it would be a fairly rare 
occurrence that an outpatient department would perform a C-APC 
procedure on a beneficiary being treated for COVID-19 because most C-
APCs are for surgical or other intensive procedures and we would expect 
most hospital outpatients departments would not perform outpatient 
surgery on a patient that has an active case of COVID-19. While it is 
possible that future COVID-19 treatments that are authorized or 
approved for use in the outpatient setting might be administered to 
patients under observation while the provider determines if the patient 
needs to be admitted to the hospital for COVID-19, it is our 
expectation that this hypothetical situation would not happen 
frequently. Because we believe a new COVID-19 treatment will rarely be 
provided on the same claim as a primary C-APC service, we believe new 
COVID-19 treatments used in the outpatient setting will be separately 
paid under current policy the vast majority of the time. As a result, 
we do not believe it is necessary that we make an adjustment to OPPS 
budget neutrality calculations at this time to account for this new 
exception, as any budgetary effect of this new exception is likely to 
be de minimis. If, once new COVID-19 treatments are being provided in 
the outpatient setting, the claims data indicates that these treatments 
are being provided on the same claim as a C-APC more frequently than we 
expected, we can make a prospective adjustment to the OPPS budget 
neutrality calculations through future rulemaking.

F. Temporary Increase in Federal Medicaid Funding

1. Background
    Section 6008 of the FFCRA, as amended by section 3720 of the CARES 
Act, provides a temporary 6.2 percentage point increase to each 
qualifying state and territory's Federal Medical Assistance Percentage 
(FMAP) under section 1905(b) of the Act (``temporary FMAP increase''). 
This temporary FMAP increase is effective beginning January 1, 2020 and 
could extend through the last day of the calendar quarter in which the 
PHE for COVID-19, including any extensions, terminates, if the state 
claims the FMAP increase in that quarter (we refer herein to the entire 
period where the FMAP increase is potentially applicable as the 
``increased FMAP period'').
    To qualify for the temporary FMAP increase in a given quarter, 
states must meet the four conditions described in subsection (b) of 
section 6008 of the FFCRA during that quarter. Three of these 
conditions (described at section 6008(b)(1), (2), and (4) of the FFCRA) 
could extend through the end of the increased FMAP period, if the state 
claims the increased FMAP through the end of the quarter in which the 
PHE for COVID-19 ends. They are: (a) The state must maintain 
eligibility standards, methodologies, or procedures that are no more 
restrictive than what the state had in place as of January 1, 2020; (b) 
the state may not charge premiums that exceed those that were in place 
as of January 1, 2020; \34\ and (c) the state must cover, without the 
imposition of cost sharing, testing services and treatments for COVID-
19, including vaccines, specialized equipment, and therapies.
---------------------------------------------------------------------------

    \34\ Section 3720 of the CARES Act added a new subsection (d) to 
section 6008 of the FFCRA in order to provide states which have 
increased premiums for any Medicaid beneficiaries above the amounts 
in effect on January 1, 2020, with a 30-day grace period to restore 
premiums to amounts no greater than those in effect as of January 1 
without jeopardizing the state's eligibility for the temporary 6.2 
percentage point FMAP increase.
---------------------------------------------------------------------------

    The fourth condition, which is described at section 6008(b)(3) of 
the FFCRA, extends through the last day of the month in which the PHE 
for COVID-19 ends. This condition provides that a state may not receive 
the temporary FMAP increase if ``the [s]tate fails to provide that an 
individual who is enrolled for benefits under [the Medicaid state] plan 
(or waiver) as of the date of enactment of this section [March 18, 
2020] or enrolls for benefits under such plan (or waiver) during the 
period beginning on such date of enactment [March 18, 2020] and ending 
the last day of the month in which the [PHE for COVID-19] ends shall be 
treated as eligible for such benefits through the end of the month in 
which such emergency period ends unless the individual requests a 
voluntary termination of eligibility or the individual ceases to be a 
resident of the State[.]''
    The language in section 6008(b)(3) of the FFCRA is somewhat 
ambiguous. CMS issued guidance on this condition through frequently 
asked questions (FAQs) posted on Medicaid.gov on April 13, 2020, May 5, 
2020, and June 30, 2020.\35\ However, our existing interpretation 
(discussed in section II.F.2 of this preamble) is not the only possible 
interpretation that could be made. As the PHE for COVID-19 continued, 
and states requested increased flexibility for managing their programs, 
we revisited our existing interpretation. Seeking to balance the 
beneficiary protections in our existing interpretation with the state 
flexibility that could be afforded through an alternative 
interpretation, this IFC establishes a blended approach as discussed 
below.
---------------------------------------------------------------------------

    \35\ See:
     COVID-19 Frequently Asked Questions (FAQs) for State 
Medicaid and Children's Health Insurance Program (CHIP) Agencies, 
available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf (Updated June 30, 2020)
     Families First Coronavirus Response Act--Increased FMAP 
FAQs available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf (Updated April 13, 2020)
     Families First Coronavirus Response Act (FFCRA), Public 
Law 116-127 Coronavirus Aid, Relief, and Economic Security (CARES) 
Act, Public Law 116-136 Frequently Asked Questions (FAQs) available 
at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-CARES-faqs.pdf (Posted April 13, 2020)
---------------------------------------------------------------------------

2. CMS's Existing Interpretation of Section 6008(b)(3) of the FFCRA
    CMS first provided an interpretation of section 6008(b)(3) for 
implementation by states through FAQs issued in April 2020. Our most 
recent interpretation provided that to receive the increased FMAP under 
the FFCRA, a state must keep beneficiaries enrolled in Medicaid, if 
they were enrolled on or after March 18, 2020, with the same amount, 
duration, and scope of benefits. It also provided that states could not 
subject such beneficiaries to any increase in cost sharing or 
beneficiary liability for institutional services or other long-term 
services and supports (LTSS) during this time period. This 
interpretation

[[Page 71161]]

protects both beneficiary eligibility and access to medically necessary 
services.
    Under this interpretation, if a state receives information about a 
beneficiary's change in circumstances that would make the beneficiary 
ineligible for Medicaid, the state may not terminate that beneficiary's 
eligibility until the end of the month in which the PHE for COVID-19 
ends, except in cases where the beneficiary voluntarily disenrolls or 
is no longer a resident of the state. Further, if the state receives 
information that would make a beneficiary eligible for a different 
eligibility group with lesser benefits, greater cost sharing, or 
increased beneficiary liability, the state may not transition that 
beneficiary to the new eligibility group but must maintain the 
beneficiary's enrollment in the current eligibility group until the end 
of the month in which the PHE for COVID-19 ends.\36\
---------------------------------------------------------------------------

    \36\ See Question B.12 of the Families First Coronavirus 
Response Act--Increased FMAP FAQs available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-faqs.pdf; Question F.27 of the Families First Coronavirus 
Response Act (FFCRA), Public Law 116-127 Coronavirus Aid, Relief, 
and Economic Security (CARES) Act, Public Law 116-136 Frequently 
Asked Questions posted on April 13, 2020, available at https://www.medicaid.gov/state-resource-center/downloads/covid-19-section-6008-CARES-faqs.pdf; and Questions relating to Continuing Coverage 
under Section 6008 of the Families First Coronavirus Response Act in 
the COVID-19 Frequently Asked Questions (FAQs) for State Medicaid 
and Children's Health Insurance Program (CHIP) Agencies available at 
https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf
---------------------------------------------------------------------------

    In protecting access to medically necessary services pursuant to 
this interpretation, states must maintain current coverage in the state 
plan, including alternative benefit plans (ABPs), and must also 
maintain current coverage under any waivers and section 1115 
demonstrations. For example, states may not implement any new 
restrictions such as a reduction in the number of covered visits or a 
prior authorization requirement. Beneficiary coverage may not be 
reduced on an individual basis either. For example, if a beneficiary 
has reached age 21 and would no longer be eligible for the Early and 
Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, the 
state must continue to provide EPSDT services to the beneficiary when 
medically necessary, through the end of the month in which the PHE for 
COVID-19 ends. Further, if a beneficiary is enrolled in a home and 
community-based services (HCBS) waiver program authorized under section 
1915(c) of the Act, and the individual is determined to no longer meet 
the level-of-care requirements or other requirements for that waiver, 
the state must maintain the beneficiary's enrollment in the HCBS 
waiver. Under this interpretation, states are not required to provide 
services that do not meet the state plan amount, duration, and scope 
criteria for a benefit (such as medical necessity). However, as a 
condition for receiving the temporary FMAP increase, the state must 
ensure that a beneficiary can continue to access the benefits package 
that was available to that beneficiary as of March 18, 2020 (or a later 
date within the PHE) through the end of the month in which the PHE for 
COVID-19 ends.
    States have expressed concern that our existing interpretation of 
section 6008(b)(3) of the FFCRA makes it challenging for them to manage 
their programs effectively and still qualify for the increased Federal 
financial participation, in frustration of one purpose of section 6008 
of the FFCRA to provide additional support to state Medicaid programs 
in their response to the COVID-19 pandemic. States made clear to CMS 
that this interpretation, coupled with the prohibition on adopting more 
restrictive eligibility standards, methodologies, or procedures under 
section 6008(b)(1) of the FFCRA, would impede the routine, orderly 
transition of beneficiaries between eligibility groups, and could lead 
to significant backlogs in redeterminations and appeals after the PHE 
for COVID-19 ends.
    States also noted that our existing interpretation severely limits 
state flexibility to control program costs in the face of growing 
budgetary constraints and developing fiscal challenges during the 
emergency period. For example, it freezes post-eligibility treatment-
of-income (PETI) calculations for institutionalized beneficiaries 
regardless of changes in circumstances. States have pointed out that a 
beneficiary receiving HCBS through a waiver approved under section 
1915(c) of the Act who is subject to the PETI rules and who 
subsequently moves into an institution would be entitled to retain the 
higher personal needs allowance allowed for individuals participating 
in the relevant waiver, even though the beneficiary's personal needs 
would be far lower once in the institution. The aggregate effects of 
this interpretation could result in a substantial increase in the state 
Medicaid program's cost for the needed institutional services as 
beneficiaries are not contributing as much toward the cost of their 
care as they would be in the absence of the FFCRA 6008(b)(3) 
requirement.
    In practice, the only cost-controlling measure available to states 
under our existing interpretation is reducing provider rates to the 
minimum level permitted under section 1902(a)(30)(A) of the Act. Such 
rate cuts, combined with a substantially lower volume of visits since 
the beginning of the pandemic,\37\ could put some providers out of 
business. This could undermine the solvency of critical provider 
networks and their ability to serve beneficiaries in the future, 
particularly in rural areas where health care workforce shortages may 
already exist.
---------------------------------------------------------------------------

    \37\ Source: Ateev Mehrotra et al., The Impact of the COVID-19 
Pandemic on Outpatient Visits: Practices Are Adapting to the New 
Normal (Commonwealth Fund, June 2020). https://doi.org/10.26099/2v5t-9y63
---------------------------------------------------------------------------

3. Alternative Interpretation of Section 6008(b)(3) of the FFCRA
    CMS's existing interpretation of section 6008(b)(3) of the FFCRA is 
not the only possible, reasonable interpretation of that provision. The 
language in this section could also reasonably be interpreted to mean 
only that states must maintain the enrollment of beneficiaries who 
enrolled in the state's Medicaid program as of or after March 18, 2020, 
through the end of the month in which the PHE ends, but not the 
specific benefits package they were receiving at that time. In other 
words, under this alternative interpretation, to fulfill the 
requirement in section 6008(b)(3) of the FFCRA with respect to a 
beneficiary who becomes ineligible for enrollment in his current 
Medicaid eligibility group, states would either (a) transition the 
beneficiary to another group for which he is eligible and enroll him 
for the benefits provided to that eligibility group, or (b) retain the 
beneficiary's enrollment in the original eligibility group, if he did 
not meet the eligibility criteria for any other group, and maintain the 
benefits provided to that group. Under this alternative interpretation, 
a state would be required to move a beneficiary who becomes eligible 
for another Medicaid eligibility group during the period in which 
section 6008(b)(3) of the FFCRA applies into that new group, no matter 
how limited the benefits package is for the new group. We refer to this 
alternative interpretation as the ``enrollment interpretation.''
    Under the enrollment interpretation, states claiming the 6.2 
percentage point temporary FMAP increase would be permitted to make 
programmatic changes, such as changes to the medical necessity criteria 
or utilization control procedures in determining coverage for benefits; 
elimination of optional benefits

[[Page 71162]]

coverage; increases in cost-sharing responsibilities (except with 
respect to testing services and treatments for COVID-19 per section 
6008(b)(4) of the FFCRA); or changes to the PETI methodology. For 
example, states would be permitted to establish a limit on the number 
of visits permitted for a given service and to require a copayment for 
a service in accordance with Medicaid statute and regulations. These 
programmatic changes would not jeopardize the state's receipt of the 
temporary FMAP increase.
    In considering this interpretation, we note that Congress expressly 
conditioned receipt of the temporary FMAP increase on a state's 
temporarily not implementing ``more restrictive'' ``eligibility 
standards, methodologies, or procedures'' in section 6008(b)(1), on 
temporarily not imposing higher premiums in section 6008(b)(2), and on 
covering COVID-19 testing and treatment services without cost-sharing 
in section 6008(b)(4). However, Congress did not legislate with the 
same express clarity in section 6008(b)(3) with respect to states' 
ability or inability to reduce the amount, duration, and scope of 
benefits other than COVID-19 testing and treatment services or to 
eliminate optional benefits. Further, while Congress expressly 
prohibited states from imposing cost sharing on testing services and 
treatments for COVID-19 in section 6008(b)(4) of the FFCRA, Congress 
did not expressly provide in section 6008(b)(3) for any limitation on 
cost sharing, or on states' ability to modify cost sharing or 
beneficiaries' liability for the cost of other services (e.g., in 
accordance with the PETI rules set forth in 42 CFR part 435, subpart H, 
and 42 CFR 435.832 for beneficiaries receiving institutional services 
or other long-term services and supports who are subject to the PETI 
rules).
    Under the enrollment interpretation, states would be required to 
make individual beneficiary eligibility changes short of disenrollment 
from Medicaid entirely. For example, states would be required to make 
changes to a beneficiary's eligibility to reflect a change in income, 
or a change related to age, pregnancy status, need for LTSS or other 
eligibility factors. A change of service, such as moving from 
participation in an HCBS waiver authorized under section 1915(c) of the 
Act into an institution or vice versa, would also require a change in 
eligibility for a beneficiary enrolled in an eligibility group specific 
to HCBS recipients, such as the group described at 42 CFR 435.217, or 
an eligibility group for individuals living in an institution like the 
special income level group described at 42 CFR 435.236.
    The enrollment interpretation would require states to move a 
beneficiary who loses eligibility under one Medicaid eligibility group 
and becomes eligible in a second Medicaid eligibility group into the 
second eligibility group, even if the second eligibility group confers 
lesser benefits or results in increased financial liability for the 
beneficiary. However, as with our existing interpretation, under the 
enrollment interpretation states would not be permitted to terminate a 
beneficiary's eligibility unless the individual requested such 
termination or was no longer a state resident. If a beneficiary loses 
eligibility under one Medicaid eligibility group and is not eligible 
for another group, in order to claim the temporary FMAP increase, the 
state must maintain the beneficiary's enrollment in the current group 
until the end of the month in which the PHE for COVID-19 ends. Like the 
programmatic changes discussed previously, individual beneficiary 
eligibility changes would not jeopardize receipt of the temporary FMAP 
increase.
    In most cases, transferring a beneficiary from one eligibility 
group to another would not result in a significant change in available 
benefits. With a few exceptions, Medicaid is considered to be minimum 
essential coverage (MEC) as defined in section 5000A(f) of the Internal 
Revenue Code of 1986 (``Code'') and implementing regulations at 26 CFR 
1.5000A-2. Certain Medicaid eligibility groups, however, such as the 
optional eligibility group for individuals infected with tuberculosis 
(described at 42 CFR 435.215), provide only limited benefits pursuant 
to the matter following section 1902(a)(10)(G) of the Act. This 
optional coverage of tuberculosis and tuberculosis-related services is 
excepted from the definition of MEC at 26 CFR 1.5000A-2(b)(2)(ii) and 
transferring a beneficiary from an eligibility group that provides MEC 
to the eligibility group for individuals infected with tuberculosis 
would result in a significant reduction in available benefits.
    Another example of non-MEC coverage available through Medicaid is 
the optional eligibility group limited to family planning and related 
services at 42 CFR 435.214, which also provides only a limited benefits 
package pursuant to the matter following section 1902(a)(10)(G) of the 
Act, and which is excluded from MEC at 26 CFR 1.5000A-2(b)(2)(i). If 
the enrollment interpretation was adopted, following the postpartum 
period for coverage of pregnant women at 42 CFR 435.116, states that 
cover the optional family planning group (or that provide family 
planning-only coverage through a section 1115 demonstration) would be 
required to transfer women who do not qualify for a full-benefit 
Medicaid eligibility group into family planning-only coverage if they 
meet the eligibility requirements for the family planning-only group or 
demonstration.
    The enrollment interpretation of section 6008(b)(3) of the FFCRA 
would make it more challenging for some beneficiaries to access 
medically necessary services, including services related to the COVID-
19 pandemic. A beneficiary transferred to the family planning group 
following the end of her postpartum period would continue to have 
access to provider visits for family planning and outpatient drugs and 
supplies related to those visits, but she would no longer have access 
to testing services and treatment for COVID-19, pursuant to CMS's 
interpretation of section 6008(b)(4) of the FFCRA, which is discussed 
above in section II.B. In addition, she would lose access to inpatient 
and outpatient hospital services, prescription drugs, and other 
Medicaid-covered services that are unrelated to family planning.
    Beneficiaries with certain chronic conditions like diabetes and 
sickle cell disease are at higher risk for severe illness from the 
virus that causes COVID-19.\38\ Under the enrollment interpretation, 
individuals who lose eligibility for a group that offers MEC may be 
transitioned to a limited benefit eligibility group, in a state that 
offers such coverage, in which they would no longer have access to the 
benefits needed to manage their chronic conditions. Not only would this 
negatively impact the beneficiary who loses comprehensive Medicaid 
coverage as a result of this interpretation, but it could also 
undermine states' COVID-19 response efforts during the public health 
emergency.
---------------------------------------------------------------------------

    \38\ Centers for Disease Control and Prevention, Coronavirus 
Disease 2019 (COVID-19); People with Certain Medical Conditions; 
accessed 10/08/2020 at https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/people-with-medical-conditions.html.
---------------------------------------------------------------------------

4. Adopting a Blended Approach
    As we considered changing our interpretation of section 6008(b)(3) 
of the FFCRA, CMS examined the implications of both the existing and 
alternative interpretations on each of the major Medicaid stakeholder 
groups. Based on that analysis, this IFC adopts a blended approach. It 
is intended to balance the interests of states, providers, and 
beneficiaries, without materially undermining their ability to address 
the challenges presented by COVID-19.

[[Page 71163]]

    Looking first at states, the circumstances facing each state during 
the PHE for COVID-19 are different. States have sent a strong message 
to CMS that they need more flexibility to make choices that meet their 
unique needs. They have made clear that our existing interpretation of 
section 6008(b)(3) of the FFCRA has interfered with their ability to 
implement cost-saving decisions in the face of increasing beneficiary 
enrollment and declining state revenues. The enrollment interpretation 
would allow states to impose coverage limitations that reduce spending 
and allow for better management of state programs during the PHE for 
COVID-19. More flexibility in managing their programs could help states 
to stretch scarce financial resources over the long term, including 
after the PHE for COVID-19 ends, and that could ultimately benefit both 
providers and beneficiaries. Supporting states and providers fighting 
the pandemic is consistent with the protections and the various 
provider relief funds established by Congress in the FFCRA, the CARES 
Act, and the PPPHCEA.
    While the enrollment interpretation of section 6008(b)(3) of the 
FFCRA may be the preferred option for states, we recognize that it 
could negatively impact certain provider types. Under the enrollment 
interpretation, states could eliminate optional benefits. For example, 
a state could cut its optional dental benefit, and dentists in that 
state would lose Medicaid reimbursement. CMS's existing interpretation, 
however, leaves states with little ability to manage program costs 
other than by cutting provider rates to the fullest extent permitted 
under section 1902(a)(30)(A) of the Act. We believe such rate cuts 
represent a far more significant threat to providers and their 
continued availability to beneficiaries. Under the enrollment 
interpretation, states may be less likely to reduce provider rates, 
which could benefit both providers and beneficiaries.
    Considering the impact on beneficiaries, our existing 
interpretation provided the strongest protections for beneficiary 
access to medically necessary care during the PHE. It ensured that 
beneficiaries remained enrolled in Medicaid and that no new coverage 
restrictions were imposed. Every Medicaid beneficiary who had access to 
MEC and to testing services and treatment for COVID-19 as of or after 
March 18, 2020 would continue to have access to these services under 
the existing interpretation. The enrollment interpretation would also 
protect beneficiary enrollment in Medicaid. At the same time, it would 
expand state flexibility to make cost-saving decisions that could 
reduce beneficiaries' coverage below what they had access to as of or 
after March 18, 2020. Under the enrollment interpretation, some 
beneficiaries would be transitioned from MEC to non-MEC coverage, which 
may not include testing services and treatment for COVID-19 pursuant to 
CMS's interpretation of FFCRA section 6008(b)(4). Ensuring access to 
testing and treatment, along with care for the chronic health 
conditions that place beneficiaries at higher risk for COVID-19, is 
important for fighting the pandemic.
    Seeking to balance the needs of each stakeholder group, both in 
fighting the pandemic and ensuring long-term program sustainability, 
this IFC adopts a blended approach to interpreting section 6008(b)(3) 
of the FFCRA. This blended approach adopts the state flexibility 
available through the enrollment interpretation--allowing states to 
make programmatic changes to benefits and cost sharing and to 
transition individual beneficiaries between eligibility groups with 
differing benefit packages--while also establishing parameters to 
prevent beneficiaries from losing access to comprehensive coverage, 
consistent with our existing interpretation, through the end of the 
month in which the PHE for COVID-19 ends.
    This blended approach is expected to give states more flexibility, 
beyond what is available under our existing interpretation, to manage 
their Medicaid programs. This is consistent with section 1902(a)(4) of 
the Act, which requires the state plan to provide for such methods of 
administration as are necessary for the proper and efficient operation 
of the plan. CMS is also exercising its general rulemaking authority 
under sections 1102 and 1902(a)(19) of the Act to establish parameters 
under which states must operate when they exercise the flexibility that 
CMS is providing with respect to compliance with section 6008(b)(3) of 
the FFCRA.
    The parameters established by this IFC will help to ensure that 
states are determining eligibility, and providing care and services, in 
a manner that is consistent with the simplicity of administration, as 
described in section 1902(a)(19) of the Act. Under this blended 
approach, CMS is giving states a wider degree of flexibility to 
effectuate enrollment transitions during the PHE for COVID-19, which 
could decrease backlogs in redeterminations and appeals following the 
PHE for COVID-19, thereby simplifying state implementation of the 
conditions in FFCRA section 6008(b)(3) and administration of the state 
plan. These parameters are also expected to help ensure that states are 
determining eligibility, and providing care and services, in a manner 
that is consistent with the best interests of beneficiaries, as 
described in section 1902(a)(19) of the Act. That is because CMS is 
giving states less flexibility to reduce beneficiaries' coverage under 
this blended approach than might be available to states under the 
enrollment interpretation, in an effort to help protect beneficiaries' 
access to potentially necessary medical care during the period in which 
the FFCRA 6008(b)(3) requirement applies. We therefore believe this 
blended approach balances the interests of all stakeholders consistent 
with the statute.
    This IFC adds a new subpart G, Temporary FMAP Increase During the 
Public Health Emergency for COVID-19, to 42 CFR part 433, including a 
new Sec.  433.400. Section 433.400(a) describes the statutory basis for 
this provision, while Sec.  433.400(b) provides definitions specific to 
this subpart. As described in detail below, Sec.  433.400(c) requires 
states, as a condition for receiving the temporary FMAP increase, to 
maintain beneficiary enrollment in an eligibility group that provides 
one of three tiers of coverage through the end of the month in which 
the PHE for COVID-19 ends, except under the circumstances specified in 
paragraph (d). This provision generally does not require states to 
provide the exact same (or greater) amount, duration, and scope of 
medical assistance, or maintain the cost-sharing or PETI liability for 
a particular beneficiary at the same (or lower) level that was 
applicable to the beneficiary as of March 18, 2020 or subsequent date 
of initial enrollment during the PHE. Section 433.400 is effective 
immediately upon display of this rule. CMS' previous interpretation, as 
described in section II.F.2. of this preamble, continues to apply from 
the beginning of the quarter up to the date that this IFC is displayed.
5. Maintaining Enrollment in the Same Tier of Coverage
    As discussed, we believe that interpreting FFCRA section 6008(b)(3) 
only to require continued enrollment in a state's Medicaid program 
(even if benefits are strictly limited), could have significant 
negative consequences for both beneficiaries and efforts to combat the 
COVID-19 pandemic. Some beneficiaries may transition from medical 
assistance that qualifies as MEC to non-MEC coverage, and some may even 
lose access to COVID-19 testing

[[Page 71164]]

services and treatment. CMS has not interpreted section 6008(b)(4) of 
the FFCRA to require state Medicaid programs to cover COVID-19 testing 
services and treatment for beneficiaries whose Medicaid eligibility is 
limited by statute or under existing section 1115 demonstration 
authority to coverage for care and services that are for a specific 
(non-COVID-19-related) condition, disease or purpose and that would not 
otherwise include COVID-19 testing and treatment services.
    Consistent with the blended approach to interpreting section 
6008(b)(3) of the FFCRA that is described above, and consistent with 
section 1902(a)(4) and (a)(19) of the Act, we are requiring states to 
ensure that beneficiaries who were validly enrolled for benefits as of 
or after March 18, 2020 with access to minimum essential coverage 
retain access to minimum essential coverage, and to ensure that 
beneficiaries with access to testing services and treatment for COVID-
19 maintain access to those services.
    We believe it is reasonable to interpret the term ``enrolled for 
benefits'' in section 6008(b)(3) to mean validly enrolled, such that 
those who were erroneously enrolled are not to be considered ``enrolled 
for benefits'' for purposes of FFCRA section 6008. Therefore, we define 
``validly enrolled'' at Sec.  433.400(b) to mean that the beneficiary 
was enrolled in Medicaid based on a determination of eligibility, 
including during the retroactive eligibility period, and that the 
beneficiary was not erroneously granted eligibility at the point of 
application or last redetermination (if such last redetermination was 
completed prior to March 18, 2020) because of: (1) Agency error; or (2) 
fraud (as evidenced by a fraud conviction) or abuse (as determined 
following the completion of an investigation pursuant to 42 CFR 455.15 
and 455.16) attributed to the beneficiary or the beneficiary's 
representative which was material to the determination of eligibility. 
Terminating the eligibility of beneficiaries who are not validly 
enrolled as defined at Sec.  433.400(b) will not impact a state's 
ability to claim the temporary FMAP increase. We note that prior to 
termination, however, the state must complete a redetermination 
consistent with 42 CFR 435.916 and provide the beneficiary with advance 
notice and the opportunity for a fair hearing consistent with 42 CFR 
part 431, subpart E. Additionally, individuals receiving medical 
assistance during a presumptive eligibility period in accordance with 
section 1902(a)(47) of the Act and 42 CFR part 435, subpart L, have not 
received a determination of eligibility by the state under the state 
plan and therefore are not considered to be validly enrolled for 
continuous coverage under section 6008(b)(3) of the FFCRA.
    In order to receive the temporary FMAP increase (defined at Sec.  
433.400(b)) for any quarter in which it is available, a state must meet 
the requirements described in paragraph (c). As described in Sec.  
433.400(c)(1)(i), for the quarter in which this rule becomes effective, 
states would be expected to meet the requirements described in Sec.  
433.400(c)(2) and (3) only from the date of display through the end of 
the quarter. CMS' previous interpretation, as described in section 
II.F.2. of this preamble and in the FAQs cited therein, continues to 
apply from the beginning of the quarter up to the date this rule is 
effective. For all quarters following the effective date of this rule, 
states would be expected to meet the requirements of Sec.  433.400(c) 
for the entirety of the quarter in order to claim the temporary FMAP 
increase.
    Section 433.400(c)(2) requires states to maintain the enrollment of 
all beneficiaries who were validly enrolled on or after March 18, 2020. 
Paragraphs (c)(2)(i), (ii), and (iii) of 433.400 establish safeguards 
for the maintenance of enrollment. For beneficiaries who were not 
validly enrolled during this period, and whom the state is therefore 
permitted to disenroll, the state must provide advance notice of 
termination and fair hearing rights in accordance with 42 CFR 435.917 
and 42 CFR part 431, subpart E, when terminating coverage.
    Consistent with the Secretary's rulemaking authority under section 
1102 of the Act and section 1902(a)(19) of the Act, which provides for 
such safeguards as are needed to ensure that care and services are 
provided in a manner consistent with the best interests of 
beneficiaries, Sec.  433.400(c)(2) establishes three tiers of Medicaid 
coverage. These coverage tiers will help to ensure that beneficiaries 
protected under section 6008(b)(3) of the FFCRA in states claiming the 
temporary FMAP increase, who no longer meet eligibility requirements 
for the initial eligibility group in which they are enrolled but who 
become eligible under a different eligibility group or who lose 
Medicaid eligibility entirely, do not experience a reduction in covered 
benefits that would be inconsistent with section 1902(a)(19) of the 
Act, or with our interpretation of sections 6008(b)(3) and (4) of the 
FFCRA.
    The first tier of coverage, under paragraph (c)(2)(i) of Sec.  
433.400, consists of Medicaid coverage that meets the definition of 
MEC, as defined in section 5000A(f) of the Code and implementing 
regulations at regulation at 26 CFR 1.5000A-2. Under Sec.  
433.400(c)(2)(i)(A), for beneficiaries whose Medicaid coverage as of or 
after March 18, 2020 meets the definition of MEC, the state must 
generally continue to provide Medicaid coverage that meets the 
definition of MEC throughout the period in which this rule applies. 
This means that if a state determines a beneficiary ineligible for the 
group in which he or she is currently enrolled, which provides MEC, and 
finds the beneficiary eligible for another group that also provides 
MEC, the state would transition the beneficiary to the new eligibility 
group. In contrast, if the beneficiary lost eligibility for a group 
that provides MEC, but gained eligibility for coverage that does not 
meet the definition of MEC, the state may not move the beneficiary to 
the new group or demonstration but must instead maintain the 
beneficiary's access to coverage meeting the definition of MEC during 
the period in which the rule applies, except as discussed below.
    For example, the state must transition a beneficiary enrolled in 
the eligibility group for children under age 19 at 42 CFR 435.118 to 
the adult group described at 42 CFR 435.119 when the beneficiary 
reaches age 19, provided that the state covers this group and the 
beneficiary meets the eligibility requirements of the group. That is 
because the medical assistance provided under the eligibility group for 
children under age 19 includes full state plan benefits with no cost 
sharing, which meets the definition of MEC, and the medical assistance 
offered under the adult group may include a somewhat different set of 
benefits through the state's ABP, and may include cost sharing for 
certain services, but it also meets the definition of MEC. This 
transition would therefore be permissible under Sec.  433.400(c)(2)(i).
    In contrast, a state may not transition a beneficiary from the 
eligibility group for children under age 19 or the adult group, both of 
which provide MEC, to a limited benefit group that does not provide 
MEC, such as the family planning group at 42 CFR 435.214, which covers 
only family planning and family planning-related services. As described 
further in Sec.  433.400(c)(2)(iv), if a beneficiary receiving tier 1 
coverage no longer meets the eligibility requirements for the original 
group in which he or she was enrolled, and the beneficiary does not 
meet the requirements for any other eligibility groups with tier 1 
coverage, the state

[[Page 71165]]

must continue to provide the medical assistance offered under the 
eligibility group in which the beneficiary was eligible on or after 
March 18, 2020.
    At Sec.  433.400(c)(2)(i)(B), we establish a variation on this 
requirement for beneficiaries who have coverage meeting the definition 
of MEC as of or after March 18, 2020, and whom the state subsequently 
determines are eligible for coverage under a Medicare Savings Program 
eligibility group. The Medicare Savings Program is defined at Sec.  
433.400(b) to include the eligibility groups described at section 
1902(a)(10)(E)(i), (iii), and (iv) of the Act. For such beneficiaries, 
the state satisfies the requirement described in paragraph (c)(2) of 
this section if it furnishes the medical assistance available through 
the Medicare Savings Program, because the coverage that beneficiary 
receives under the Medicare program qualifies as MEC. Thus, for 
example, a beneficiary enrolled in the adult group as of or after March 
18, 2020, may be transitioned to a Medicare Savings Program eligibility 
group, such as the qualified Medicare beneficiaries (QMB) group 
described at section 1902(a)(10)(E)(i) of the Act, when the beneficiary 
reaches age 65, if the beneficiary meets the eligibility requirements 
of the QMB group. Such a beneficiary would receive Medicaid coverage of 
Medicare premiums and Medicare-related cost sharing through the QMB 
group. However, unless that beneficiary was also eligible for another 
full-benefit Medicaid eligibility group, all of the beneficiary's 
health care services would be provided through Medicare and the 
beneficiary would not receive any other Medicaid covered services. 
While the medical assistance provided under the adult group differs 
from the medical assistance provided under the QMB group, the 
beneficiary maintains access to MEC. Therefore, the state may 
transition the beneficiary from the adult group to a Medicare Savings 
Program group.
    The second tier of coverage, which is described at Sec.  
433.400(c)(2)(ii), consists of coverage that is not defined as MEC but 
that is robust enough to include access to coverage of both testing 
services and treatment for COVID-19 under CMS's interpretation of FFCRA 
section 6008(b)(4). Not all Medicaid coverage qualifies as MEC, and the 
non-MEC coverage provided to beneficiaries can vary greatly. As noted 
previously, some beneficiaries' coverage is limited by statute or 
existing section 1115 demonstration authority to a very narrow range of 
services that would not include COVID-19 testing or treatment services, 
and CMS has not interpreted section 6008(b)(4) of the FFCRA to require 
states to cover COVID-19 testing and treatment services for those 
beneficiaries. However, other Medicaid beneficiaries receive a 
relatively robust set of benefits, such as pregnancy-related services 
described in the matter following section 1902(a)(10)(G) of the Act, 
which would include testing services and treatment for COVID-19, 
including vaccines, specialized equipment, and therapies, during the 
period when FFCRA section 6008(b)(4) applies in a state, but which does 
not qualify as MEC in all states.
    Section 433.400(c)(2)(ii) of this IFC provides that states must 
continue to provide Medicaid coverage that includes coverage of COVID-
19 testing services and treatments, including vaccines, specialized 
equipment, and therapies, to beneficiaries who had access to coverage 
in tier 2 as of or after March 18, 2020. Thus, states must transition 
beneficiaries who lose eligibility for tier 2 coverage but gain access 
to MEC coverage in tier 1 or to other coverage in tier 2 to the new 
eligibility group or demonstration, but they may not transition such 
beneficiaries to coverage that does not include access to testing 
services and treatment for COVID-19. This interpretation is consistent 
with the requirement for states claiming the temporary FMAP increase to 
provide coverage for testing services and treatments for COVID-19, as 
described at section 6008(b)(4), and with CMS's interpretation of that 
requirement.
    Consistent with Sec.  433.400(c)(2)(ii), a state must transition a 
beneficiary from tier 2 coverage to tier 1 coverage if that beneficiary 
becomes eligible for coverage that qualifies as MEC. For example, a 
state must transition a woman receiving tier 2 postpartum coverage 
under the pregnant women group described at 42 CFR 435.116 (in a state 
in which such coverage is not considered MEC) to the adult group 
described at 42 CFR 435.119 at the end of the postpartum period, 
because coverage under the adult group qualifies as MEC and is 
therefore included in tier 1. If this postpartum beneficiary was not 
eligible for any eligibility groups with tier 1 coverage, such as in a 
state that does not cover the adult group, but was eligible for tier 2 
coverage, such as through a limited benefit section 1115 demonstration 
providing non-MEC coverage that includes access to testing services and 
treatment for COVID-19, the state must move her to that coverage. If 
such a beneficiary is not eligible for any other tier 1 or tier 2 
coverage, the state must continue to provide the medical assistance 
available through the pregnant women group until the end of the month 
in which the PHE for COVID-19 ends, in order to qualify for the 
temporary FMAP increase, as described at Sec.  433.400(c)(2)(iv). For 
example, a woman receiving non-MEC pregnancy related coverage that 
includes coverage of testing services and treatments for COVID-19 could 
not be transitioned to coverage of only family planning services at the 
end of the postpartum period.
    The third tier, described at Sec.  433.400(c)(2)(iii), includes 
coverage that is not MEC and that also does not cover testing services 
and treatment for COVID-19, including vaccines, specialized equipment, 
and therapies, under CMS's interpretation of FFCRA section 6008(b)(4). 
Coverage under tier 3 may include coverage for the eligibility group 
limited to family planning described at 42 CFR 435.214 or the 
eligibility group for individuals with tuberculosis described at 42 CFR 
435.215. Coverage through an existing family planning demonstration or 
other limited benefit section 1115 demonstration may also be included 
in tier 3 if it does not cover COVID-19 testing and treatment. If a 
beneficiary loses eligibility for coverage meeting the tier 3 
description during the period in which the FFCRA section 6008(b)(3) 
requirement applies, and the beneficiary gains eligibility for a group 
that provides coverage in tier 1 or tier 2, then, under Sec.  
433.400(c)(2)(iii), the state must transfer the beneficiary into that 
new eligibility group as coverage in those tiers is more robust than 
coverage in tier 3.
    The coverage in tier 3 differs from the coverage in tier 1, which 
is always considered MEC and the coverage in tier 2, which always 
includes testing services and treatment for COVID-19. The coverage 
available to a beneficiary in tier 3 is more limited and may vary 
widely from one group or demonstration to the next. Coverage limited to 
family planning and family planning-related services is significantly 
different from coverage in a limited-benefit section 1115 demonstration 
that focuses, for example, on preventing the progression of a specific 
disease. Therefore, the requirement in Sec.  433.400(c)(2)(iii) for 
tier 3 coverage differs somewhat from the requirements in Sec.  
433.400(c)(2)(i) and (ii) for tiers 1 and 2. If a beneficiary becomes 
ineligible for the tier 3 eligibility group or demonstration in which 
he or she is enrolled and becomes eligible for another eligibility 
group or demonstration with coverage that is also within tier 3, the 
state must continue to provide the coverage

[[Page 71166]]

available through the eligibility group or demonstration for which the 
beneficiary was eligible as of or after March 18, 2020, unless the 
beneficiary requests a voluntary termination to transition to the new 
eligibility group or demonstration, as discussed below. Transitioning a 
beneficiary from one eligibility group offering tier 3 coverage to 
another eligibility group offering tier 3 coverage would not satisfy 
the requirement in Sec.  433.400(c)(2)(iii).
    We note that beneficiaries enrolled in certain limited-benefit 
state plan eligibility groups may be eligible for coverage in the 
optional COVID-19 testing group authorized under section 
1902(a)(10)(A)(ii)(XXIII), and such individuals can be enrolled in both 
limited benefit groups. Section 3716 of the CARES Act amended section 
1902(ss) of the Act to establish that individuals eligible for certain 
optional eligibility groups, such as the eligibility group limited to 
family planning and related services described at 
1902(a)(10)(A)(ii)(XXI) of the Act, are considered ``uninsured'' for 
purposes of eligibility under the optional COVID-19 testing group and 
therefore may obtain COVID-19 testing coverage under that group in 
addition to coverage under the other optional eligibility group.
    In addition, beneficiaries in each benefit tier retain the right to 
request a voluntary transition to a different eligibility group 
(provided that they meet the applicable eligibility requirements), even 
if such transition results in a change in the individual's benefit 
package that would not otherwise satisfy the conditions of this rule, 
such as a transition from an eligibility group with coverage in tier 1 
to an eligibility group with coverage in tier 3 or a transition from 
one tier 3 group to another tier 3 group. Such a transition is 
permissible under the exception at Sec.  433.400(d)(1)(i), as described 
at Sec.  433.400(d)(3)(i), in which a beneficiary may request a 
voluntary termination of eligibility, and would not impact the state's 
ability to claim the temporary FMAP increase.
    Section 42 CFR 430.400(c)(2)(iv) specifies that for any beneficiary 
who is validly enrolled and receiving medical assistance on or after 
March 18, 2020, and who is determined ineligible for Medicaid prior to 
the last day of the month in which the PHE for COVID-19 ends, except as 
provided in paragraph (d), a state meets the requirements of Sec.  
430.400(c)(2)(i), (ii), or (iii) by continuing the provide the same 
coverage that the individual would have received absent the 
determination of ineligibility. For example, if a beneficiary is 
enrolled in the age and disability-related poverty level group 
described at section 1902(a)(10)(A)(ii)(X) of the Act, and the 
beneficiary reports a change in resources that would result in 
ineligibility for this group, if the beneficiary is not eligible for 
coverage in any other Medicaid eligibility group, the state would 
continue to provide that individual with the coverage available to 
beneficiaries enrolled in the age and disability-related poverty level 
group.
    The requirement at Sec.  430.400(c)(2)(iv) also applies in cases 
where a state finds a beneficiary ineligible on a procedural basis, 
such as a failure to respond to a request for additional information, 
with an exception related to residency described at Sec.  
430.400(d)(3). For example, if a state receives information from 
quarterly wage data, which indicates that a child's household income 
exceeds the income standard for the eligibility group for children 
under age 19 (described at 42 CFR 435.118), the child is not eligible 
on another basis, and the beneficiary's family does not respond to a 
request from the state for additional information, the child may be 
determined ineligible on a procedural basis. In this case, through the 
end of the month in which the PHE for COVID-19 ends, the state would 
continue to provide the child with the same coverage provided to 
beneficiaries enrolled in the eligibility group for children under age 
19. If the beneficiary is subsequently determined eligible for a 
different eligibility group that provides the same tier of coverage, in 
this case tier 1, the state would transfer the beneficiary to the new 
eligibility group.
    CMS is available for technical assistance to help states ensure 
that all beneficiaries retain coverage in either the same tier or in a 
more robust tier of coverage when their eligibility changes in a manner 
that would ordinarily result in a transition between eligibility 
groups.
6. Changes to Benefits, Cost Sharing, and PETI
    Section 433.400 of this IFC allows states, during the period when 
section 6008(b)(3) of the FFCRA applies, to move a beneficiary from one 
eligibility group to another when the beneficiary becomes ineligible 
for one group and eligible for another group, as long as the coverage 
provided under the new group is within the same tier of coverage 
(applicable to tier 1 and tier 2 coverage only) or a beneficiary may 
also be moved to a more generous tier of coverage than the coverage 
available to the beneficiary on or after March 18, 2020. Section 
433.400(c)(3) specifies that states may make programmatic changes to 
coverage, cost sharing, and beneficiary liability without violating the 
requirements for receiving the temporary FMAP increase, provided that 
such changes do not violate the individual beneficiary protections at 
Sec.  433.400(c)(2) or the requirements under section 6008(b)(4) of the 
FFCRA to cover COVID-19 testing and treatment services without cost-
sharing.
    As described at Sec.  433.400(c)(3), states may generally make 
changes to benefits offered under the state plan (as allowed under 
relevant provisions of the Act) or a section 1115 demonstration. For 
example, section 6008(b)(3) of the FFCRA does not prohibit a state from 
eliminating an optional benefit from its state plan. Therefore, a state 
could eliminate dental services for individuals age 21 and above, and 
still comply with section 6008(b)(3) of the FFCRA. Note that under 
section 1905(r)(5) of the Act, as part of the mandatory EPSDT benefit, 
states must provide beneficiaries under age 21 with all necessary 
health care, diagnostic services, treatment, and other measures 
described in section 1905(a) of the Act, to correct or ameliorate 
defects and physical and mental illnesses and conditions discovered by 
EPSDT screening services, whether or not such services are covered 
under the state plan. However, states need not maintain EPSDT benefits 
for beneficiaries who turn 21 in order to comply with the terms of 
section 6008(b)(3) of the FFCRA.
    Additionally, states are permitted to change the scope of benefits 
provided to beneficiaries without violating the requirements of section 
6008(b)(3) for claiming the temporary FMAP increase, as long as they 
comply with otherwise applicable Medicaid law, including section 
6008(b)(4) of the FFCRA. For example, section 6008(b)(3) of the FFCRA 
does not prohibit states from applying service authorization criteria, 
including for services authorized under section 1915(c) of the Act, in 
determining the amount, duration, or scope of coverage a beneficiary is 
entitled to receive under the state's program. Section 440.230(b) still 
applies as a limit on state flexibility. That regulation requires that 
each Medicaid service must be sufficient in amount, duration, and scope 
to reasonably achieve its purpose.
    In considering optional changes to coverage, states may wish to 
avoid service authorization changes that lead to more individuals being 
placed in institutional or congregate settings, as these settings have 
had a disproportionate share of COVID-19 cases and deaths. We also note 
that

[[Page 71167]]

regardless of the flexibility provided at Sec.  433.400(c)(3), states 
retain their obligations to provide services and supports in the ``most 
integrated setting'' under the integration mandate of Title II of the 
Americans with Disabilities Act (ADA), as interpreted by the Supreme 
Court in Olmstead v. L.C., 527 U.S. 581 (1999) (hereafter 
``Olmstead''),\39\ to avoid unjustified institutionalization or 
segregation. If the elimination of an optional benefit results in or 
places an individual with a disability at risk of unjustified 
institutionalization or segregation, it may be a violation of the 
state's obligations under the ADA and Olmstead.\40\ States' Olmstead 
obligations do not confer Medicaid authority or create Medicaid 
obligations where they do not otherwise exist; states may choose to 
(and in some cases would be required to) use funds outside of or in 
addition to Medicaid to comply with Olmstead responsibilities.
---------------------------------------------------------------------------

    \39\ Under title II of the ADA and Olmstead, the unjustified 
isolation of individuals with disabilities constitutes unlawful 
discrimination. States are required to provide community-based 
treatment where such treatment would be appropriate, the affected 
person does not oppose such treatment, and the treatment can be 
reasonably accommodated.
    \40\ See DOJ's Statement of the Department of Justice on 
Enforcement of the Integration Mandate of Title II of the Americans 
with Disabilities Act and Olmstead v. L.C., Question 9, updated 
February 25, 2020, available at: https://www.ada.gov/olmstead/q&a_olmstead.htm.
---------------------------------------------------------------------------

    Finally, states may generally establish or increase cost sharing 
(consistent with sections 1916 and 1916A of the Act, implementing 
regulations at 42 CFR 447.50 through 447.90, and the state plan), and 
increase beneficiary obligations under the PETI rules, and still comply 
with FFCRA section 6008(b)(3). However, states should also comply with 
FFCRA 6008(b)(4) if they are claiming the temporary FMAP increase. For 
example, a state may increase the liability of individuals receiving 
Medicaid coverage for institutional services under the state plan 
through otherwise permissible reductions in their standard personal 
needs allowances or family allowances. In addition, they may transfer a 
beneficiary from one program furnishing HCBS (for example, a waiver 
program authorized under section 1915(c) of the Act) to another as a 
beneficiary's health status and level of care changes.
    Prior to reducing benefits or increasing cost sharing or 
beneficiary liability a state must provide proper advance notice and 
comply with other applicable statutory and regulatory requirements. In 
particular, the advance notice requirements that apply under 42 CFR 
431.211 preclude states from reducing benefits or increasing cost 
sharing or beneficiary liability retroactively. Additionally, 42 CFR 
440.230(b) limits states' flexibility to reduce the amount, duration, 
or scope of benefits; that regulation requires that each Medicaid 
service must be sufficient in amount, duration, and scope to reasonably 
achieve its purpose.
7. Exceptions to Maintaining Enrollment
    Section 433.400(d) of this IFC describes the exceptions to the 
continuous enrollment requirement in Sec.  433.400(c)(2). Section 
6008(b)(3) of the FFCRA specifies that a beneficiary's Medicaid 
enrollment may be terminated if the beneficiary requests a voluntary 
termination of eligibility or the beneficiary is no longer a resident 
of the state. These exceptions are described in Sec.  433.400(d)(1)(i) 
and (ii). Because a beneficiary who dies is no longer a state resident, 
Sec.  433.400(d)(1)(iii) also provides an exception for deceased 
beneficiaries.
    Section 433.400(d)(2) provides that states that have elected the 
option under section 1903(v)(4) of the Act to provide coverage to 
certain lawfully residing children and/or pregnant women, must limit 
the provision of services for these beneficiaries to services necessary 
for treatment of an emergency medical condition, as defined in section 
1903(v)(3) of the Act, when they no longer meet the criteria at section 
1903(v)(4) of the Act. This is because section 1903(v) of the Act 
prohibits the provision of FFP for otherwise eligible non-citizens who 
are not in a satisfactory immigration status, except as provided under 
paragraphs (2) (authorizing FFP for services necessary to treat an 
emergency medical condition) and (4) (relating to coverage of certain 
lawfully residing children and/or pregnant women) of section 1903(v) of 
the Act.
    Finally, Sec.  433.400(d)(3) clarifies the exceptions at Sec.  
433.400(d)(1). As noted above, Sec.  433.400(d)(1)(i) provides an 
exception for beneficiaries who request a voluntary termination. 
Section 433.400(d)(3)(i) provides that this exception applies not only 
to beneficiaries who request that their Medicaid coverage be terminated 
in its entirety, but also to beneficiaries who request a voluntary 
transition to a different eligibility group (provided that they meet 
the applicable eligibility requirements), even if such transition 
results in a change in the individual's benefit package that would not 
otherwise satisfy the conditions of Sec.  433.400(c)(2). For example, a 
state may transition a beneficiary from an eligibility group with 
coverage in tier 1 to an eligibility group with coverage in tier 3, at 
the beneficiary's request. Such a transition would not impact the 
state's ability to claim the temporary FMAP increase because the change 
resulted from a beneficiary request for voluntary termination from the 
original eligibility group.
    Additionally, as described at Sec.  433.400(d)(3)(ii), individuals 
who are identified as receiving benefits in more than one state via a 
data match with the Public Assistance Reporting Information System 
(PARIS) interstate matching service in accordance with Sec.  435.945(d) 
and who fail to respond to a request for information to verify their 
residency in the reasonable period permitted by the state, consistent 
with Sec.  435.952(c)(2)(iii), are generally considered to no longer be 
residents of the state for purposes of section 6008(b)(3) of the FFCRA, 
provided that the state takes all available reasonable measures to 
determine state residency prior to termination. These measures include, 
but are not limited to, reviewing existing information in the 
beneficiary's record to validate state residency, checking available 
state electronic data sources such as the Department of Motor Vehicles 
records or other state benefit programs, and coordinating with agencies 
in the other state(s) in which the PARIS interstate match identified 
the beneficiary as receiving benefits to determine the state in which 
the individual is a resident for purposes of Medicaid eligibility. If 
the state is unable to verify the beneficiary's continued residency in 
the state because the beneficiary fails to respond to requests for 
additional information and the state's alternative efforts cannot 
verify the beneficiary's continued residency in the state through other 
sources, that beneficiary's Medicaid enrollment may be terminated in 
accordance with Sec.  435.400(d)(1)(ii). Such an individual will be 
considered a non-resident for purposes of section 6008(b)(3) of the 
FFCRA until such time as the state has information verifying residency. 
If, after termination, the state obtains information that verifies 
residency, the state must reinstate the individual's eligibility back 
to the date of termination.

G. Updates to the Comprehensive Care for Joint Replacement (CJR) Model, 
Performance Year (PY) 5 During the COVID-19 Public Health Emergency 
(PHE)

1. Background
    Under the authority of section 1115A of the Act, through notice-
and-comment

[[Page 71168]]

rulemaking, the Innovation Center established the CJR model in a final 
rule titled ``Medicare Program; Comprehensive Care for Joint 
Replacement Payment Model for Acute Care Hospitals Furnishing Lower 
Extremity Joint Replacement Services'' published in the November 24, 
2015 Federal Register (80 FR 73274) (referred to as the ``November 2015 
final rule''). The CJR model, which was implemented on April 1, 2016, 
aims to support better and more efficient care for beneficiaries 
undergoing the most common inpatient surgeries for Medicare 
beneficiaries: Hip and knee replacements (also called lower extremity 
joint replacements or LEJR). This model tests bundled payment and 
quality measurement for an episode of care associated with hip and knee 
replacements to encourage hospitals, physicians, and post-acute care 
providers to work together to improve the quality and coordination of 
care from the initial hospitalization through recovery. All related 
care covered by Medicare Parts A and B within 90 days of hospital 
discharge from the LEJR procedure is included in the episode of care. 
During the first CJR model performance period, the CJR model required 
hospitals located in the 67 MSAs selected participation to participate 
in the model through December 31, 2020 unless the hospital was an 
episode initiator for an LEJR episode in the risk-bearing phase of 
Models 2 or 4 of the Bundled Payments for Care Improvement (BPCI) 
initiative. Hospitals located in one of the 67 MSAs that participated 
in Model 1 of the BPCI initiative, which ended on December 31, 2016, 
were required to begin participating in the CJR model when their 
participation in the BPCI model ended.
    In the December 1, 2017 Federal Register, we published another 
final rule (82 FR 57066), titled ``Medicare Program; Cancellation of 
Advancing Care Coordination Through Episode Payment and Cardiac 
Rehabilitation Incentive Payment Models; Changes to Comprehensive Care 
for Joint Replacement Payment Model: Extreme and Uncontrollable 
Circumstances Policy for the Comprehensive Care for Joint Replacement 
Payment Model'' (referred to as the ``December 2017 final rule''), that 
implemented revisions to the CJR model, including giving rural and low 
volume hospitals selected for participation in the CJR model as well as 
those hospitals located in 33 of the 67 metropolitan statistical areas 
(MSAs) \41\ a one-time option to choose whether to continue their 
participation in the model through December 31, 2020 (that is, continue 
their participation through PY5). An interim final rule with comment 
period was also issued in conjunction with the December 2017 final rule 
(82 FR 57092) in order to address the need for a policy to provide some 
flexibility in the determination of episode costs for providers located 
in areas impacted by extreme and uncontrollable circumstances. This 
extreme and uncontrollable circumstances policy was adopted as final in 
the final rule (83 FR 26604) we published in the June 8, 2018 Federal 
Register, titled ``Medicare Program; Changes to the Comprehensive Care 
for Joint Replacement Payment Model (CJR): Extreme and Uncontrollable 
Circumstances Policy for the CJR Model.''
---------------------------------------------------------------------------

    \41\ Metropolitan Statistical Area (MSA) means a core-based 
statistical area associated with at least one urbanized area that 
has a population of at least 50,000. MSAs included in the CJR model 
are available in the December 2017 final rule available at https://www.federalregister.gov/documents/2017/12/01/2017-25979/medicare-program-cancellation-of-advancing-care-coordination-through-episode-payment-and-cardiac.
---------------------------------------------------------------------------

    In the February 24, 2020 Federal Register (85 FR 10516), we 
published the proposed rule titled ``Medicare Program: Comprehensive 
Care for Joint Replacement Model Three-Year Extension and Changes to 
Episode Definition and Pricing'' (hereinafter referred to as the 
``February 2020 proposed rule''). Among other changes, this proposed 
rule proposed to add three additional performance years to the CJR 
model (i.e., performance years 6 through 8).
    In the April 6, 2020 Federal Register (85 FR 19230), we published 
an interim final rule with comment period (IFC) titled ``Medicare and 
Medicaid Programs; Policy and Regulatory Revisions in Response to the 
COVID-19 Public Health Emergency'' (hereinafter referred to as the 
``April 2020 IFC''). In the April 2020 IFC, to account for the impact 
of the PHE for COVID-19 on CJR participant hospitals, we extended PY5 
through March 31, 2021, and adjusted the extreme and uncontrollable 
circumstances policy to account for COVID-19 by specifying that all 
episodes with a date of admission to the anchor hospitalization that is 
on or within 30 days before the date that the emergency period (as 
defined in section 1135(g) of the Act) begins or that occurs through 
the termination of the emergency period (as described in section 
1135(e) of the Act), actual episode payments are capped at the target 
price determined for that episode under Sec.  510.300.
    Additionally, in the May 29, 2020 Federal Register (85 FR 32460), 
CMS published a proposed rule titled ``Medicare Program; Hospital 
Inpatient Prospective Payment Systems for Acute Care Hospitals and the 
Long-Term Care Hospital Prospective Payment System and Proposed Policy 
Changes and Fiscal Year 2021 Rates; Quality Reporting and Medicare and 
Medicaid Promotion Interoperability Programs Requirements for Eligible 
Hospitals and Critical Access Hospitals: (hereinafter referred to as 
the FY 2021 IPPS/LTCH proposed rule). In the FY 2021 IPPS/LTCH proposed 
rule (85 FR 32510), we solicited comment on the effect of the proposal 
to create new MS-DRG 521 and MS-DRG 522, the effect this proposal would 
have on the CJR model and whether to incorporate MS-DRG 521 and MS-DRG 
522, if finalized, into the CJR model's proposed extension to December 
31, 2023.
    Through this IFC we are implementing four changes to the CJR model. 
These are: (1) Extending performance year 5 an additional 6 months to 
provide for continuity of model operations with the same scope while we 
continue to consider comments received on our proposal to extend the 
model to performance years 6 through 8 and adopt other changes to the 
model; (2) making changes to the reconciliation process for PY5 to 
allow for two periods and to enable more frequent receipt of 
reconciliation reports by participants; (3) making a technical change, 
retroactive to October 1, 2020, to ensure that the model continues to 
include the same inpatient Lower Extremity Joint Replacement (LEJR) 
procedures, despite the adoption of new MS-DRGs to describe those 
procedures; and (4) making changes to the extreme and uncontrollable 
circumstances policy for COVID-19 to adapt to an increase in CJR 
episode volume and renewal of the PHE, while providing protection 
against financial consequences of COVID-19 after the extreme and 
uncontrollable circumstances policy no longer applies.
2. Extension of Performance Year 5 to September 30, 2021
    We are implementing a 6-month extension to CJR performance year 
(PY) 5 such that the model will now end on September 30, 2021. In the 
February 2020 proposed rule, we proposed to extend the CJR model by 
adding three performance years (PY6 through 8), from January 1, 2021 to 
December 31, 2023, to revise target prices, to change the definition of 
an episode of care to

[[Page 71169]]

include outpatient procedures for Total Knee Arthroplasty and Total Hip 
Arthroplasty, as well as to revise other sections of 42 CFR part 
510.\42\ In response to the PHE for COVID-19, in the April 2020 IFC we 
extended PY 5 an additional 3 months to end on March 31, 2021 rather 
than on December 31, 2020 as finalized in November 2015 final rule.
---------------------------------------------------------------------------

    \42\ For proposed changes to the CJR Model in ``Medicare 
Program: Comprehensive Care for Joint Replacement Model Three Year 
Extension and Changes to Episode Definition and Pricing'' See 85 FR 
10516.
---------------------------------------------------------------------------

    While we continue to consider the addition of performance years to 
the model and other changes proposed in the February 2020 proposed 
rule, we also do not want to create a disruption to the model by 
allowing the model to end on March 31, 2021, which could be disruptive 
to hospitals and patient care during the PHE if it is still ongoing at 
that time. Implementing an additional six months of PY5, so that PY5 
now ends on September 30, 2021, provides participant hospitals 
additional relief and stability in model operations. In the event the 
three-year extension is finalized, participant hospitals would be in a 
worse position if PY 5 was not extended to September 30, 2021 because 
participant hospitals would have made operational choices in reliance 
on the model ending on March 31, 2021 and then have to adjust to model 
changes on top of the significant burden of managing COVID-19 treatment 
and under COVID-19 safety protocols and utilization changes. Overall, 
this means a nine-month extension from the original conclusion of the 
model as finalized in the November 2015 final rule (80 FR 73274), which 
had established that the model would end on December 31, 2020 with no 
new episodes initiating after October 4, 2020.
    We received several comments on the April 2020 IFC supporting the 
policy to extend PY5 an additional three months and asking that we 
extend PY5 by 12 months instead, not just the 3 months in the April 
2020 IFC. In addition, commenters noted that though state and local 
guidelines have laid out a process for regions and facilities to 
determine when to re-open elective procedures, the progression of 
COVID-19 could impact elective procedures well into 2021. We appreciate 
commenters' request to extend PY 5 by 12 additional months because of 
the impact COVID-19 has had on LEJR procedures. We observe that COVID-
19 has had an impact on CJR procedures from February 2020 to August 
2020. Table 1 depicts recent Medicare claims data comparing February to 
August of 2019 and February to August of 2020. These numbers reflect 
episode volume for each month, accounting for any CJR episode that 
began within that month.

                                                         Table 1--CJR Episode Volume Comparison
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             February          March           April            May            June            July           August
--------------------------------------------------------------------------------------------------------------------------------------------------------
2019                                                6214            6174            6515            6019            5836            6060            5838
2020                                                5245            3374             876            2242            4036            3838            3090
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In light of these data, we believe providing an additional 6 months 
beyond what we adopted in the April 2020 IFC provides participant 
hospitals relief from COVID-19 challenges. Therefore, we are 
implementing an additional 6-month extension of CJR PY 5 and amending 
the provisions at 42 CFR 510.2 and 510.200(a) to reflect this 
extension.
    We note that in our February 2020 proposed rule to extend and 
modify the CJR model through PYs 6 to 8 (CMS-5529-P), we proposed PY 6 
would comprise all CJR episodes ending on or after January 1, 2021 and 
on or before December 31, 2021. However, since we are amending PY 5 
such that it comprises all CJR episodes ending on or after January 1, 
2020 and on or before September 30, 2021, we seek comment on the 
duration of PY 6, if finalized. In particular, we seek comment on the 
potential for PYs 6 through 8 to remain 12-month performance years and 
each begin with episodes ending on or after October 1 each year. We 
also seek comment on increasing the duration of proposed PY 6 to 15 
months. Under this alternative, PY 6 would comprise all CJR episodes 
ending on or after October 1, 2021 and on or before December 31, 2022; 
PY 7 and PY 8 would remain 12 months and each begin with episodes 
ending on or after January 1, 2023 or January 1, 2024, respectively.
3. Additional Reconciliations for Performance Year 5
    Currently, following the end of each performance year, CMS 
determines actual episode payments and calculates the amount of a 
reconciliation payment or repayment amount, as described in 42 CFR 
510.305. Each performance year is reconciled twice. The first 
reconciliation calculation process begins after a 2-month period of 
claims runout, while the final reconciliation calculation process 
begins after a 14-month period of claims runout. The initial 
reconciliation of a given performance year is conducted concurrently 
with the final reconciliation of the previous performance year, and the 
resulting amounts are netted against one another for one annual 
reconciliation payment or repayment amount, as set forth in 42 CFR 
510.305. The initial reconciliation process typically begins in late 
February of the calendar year following the performance year, with 
reports and reconciliation amounts issued in June. Final reconciliation 
for the performance year is issued the following June.
    Absent modification to the reconciliation process, the extension of 
PY 5 to a total of 21 months, from January 1, 2020 through September 
30, 2021 would mean that participant hospitals would experience a 21-
month gap between the PY4 final reconciliation in June of 2020 and 
initial PY 5 reconciliation in early 2022. We believe this significant 
gap is problematic because participant hospitals gain important 
feedback from their annual reconciliation reports that they can use to 
gauge their quality performance and efforts at cost-savings. These 
annual reports also facilitate the relationships that participant 
hospitals have established with clinicians and other entities with whom 
they coordinate care and/or have gainsharing arrangements. Further, not 
having an initial reconciliation for PY5 until early 2022 is not 
consistent with the model design goal of reconciling one time a year 
and netting against final reconciliation amounts from the prior year. 
Therefore, we believe there is good cause to conduct two initial, and 
two final, reconciliations of PY5. The first initial reconciliation 
will apply to the first 12 months of PY5 in order to maintain 
consistency with the 12 month reconciliation cycles for previous PYs 2-
4 (we note that PY 1 was 9 months rather than 12 months), and the 
second initial reconciliation will apply to the

[[Page 71170]]

remaining 9 months of PY5. To minimize confusion, we will refer to 
these two subsets of PY5 as performance year subset 5.1and 5.2, 
respectively.
    The initial reconciliation of performance year subset 5.1 will 
occur fourteen months after the start of PY5, which is the same 
timeline as would have occurred PY5 under the December 2017 final rule. 
After the usual 2-month period of claims runout, the initial 
reconciliation for performance year subset 5.1 episodes will begin in 
late February of 2021 using 12 months of claims from CY 2020 to 
calculate reconciliation payments, with the resulting amounts netted 
against the results of the concurrent PY4 final reconciliation 
calculation when we issue reports and reconciliation amounts to 
participants in June 2021. Participants can expect to receive their 
2021 reconciliation reports on approximately the same schedule as in 
previous model years.
    The nine additional months of PY 5 (performance year subset 5.2) 
will be reconciled one full calendar year after the reconciliation of 
PY 4 final/performance year subset 5.1 initial. We will use claims data 
for the initial reconciliation of performance year subset 5.2 that 
reflect a 2-month period of claims runout (as set forth in 42 CFR 
510.305(e)(1)(i)), as we have for PY 1-4 and performance year subset 
5.1. In short, performance year subset 5.2 will run from January 1, 
2021 through September 30, 2021. Consistent with using two months of 
claims run out, we will pull claims for the initial reconciliation in 
December 2021. However, we will not reconcile performance year subset 
5.2 until late February 2022 along with the final reconciliation for 
performance year subset 5.1. This means that we will not begin 
reconciliation calculation for performance year subset 5.2 until five 
months after the end of performance year subset 5.2 in order to align 
the initial reconciliation calculation for performance year subset 5.2 
with the timing of the subsequent reconciliation calculation for 
performance year subset 5.1. While alignment with the performance year 
subset 5.1 subsequent reconciliation calculation is the primary reason 
for this delay in the performance year subset 5.2 initial 
reconciliation, it is also necessary to allow time to receive certain 
input files to perform the initial reconciliation calculation, 
including standardized claims files and quality data. These data are 
generally not available more than a few weeks prior to the usual 
reconciliation process start date in late February. Therefore, the 
reconciliation process will occur on the same schedule as PY 1 through 
4 and performance year subset 5.1, with the reconciliation report 
available one year after the reports from the previous year's 
reconciliation.
    We note that, as part of the separate reconciliation calculation 
processes for performance year subsets 5.1 and 5.2, we will calculate a 
separate Composite Quality Score (CQS) for each of performance year 
subsets 5.1 and 5.2, including a separate set of quality improvement 
points and quality performance points for each performance year subset. 
In order to conduct separate CQS calculations for each time period, we 
are amending 42 CFR 510.400 to indicate that the required data 
submissions that previously applied to PY 5 will now apply to 
performance year subset 5.1, and we are adding a required data 
submission for performance year subset 5.2. These additional 
requirements will reflect the timeframe of performance year subset 5.2, 
but will otherwise parallel the requirements for performance year 
subset 5.1, and will not require an increased amount of data for 
performance year subset 5.2 as compared to performance year subset 5.1. 
We recognize that some of the timeframe for both performance year 
subsets 5.1 and 5.2 quality data collection overlap with the effective 
dates of the COVID-19 waiver \43\ that provided reporting exemptions 
for hospitals participating in quality reporting programs, so we will 
use quality data reported before and after the effective dates of the 
COVID-19 waiver, for those quality measures to which the waiver 
applied.
---------------------------------------------------------------------------

    \43\ https://www.cms.gov/files/document/covid-ifc-3-8-25-20.pdf.
---------------------------------------------------------------------------

    The final reconciliation calculation for performance year subset 
5.2 will occur one year after the initial reconciliation of performance 
year subset 5.2. Although we will use claims data that were available 
14 months after the end of performance year subset 5.2 for the 
subsequent reconciliation (as set forth in 42 CFR 510.305(i)(1)), as 
with the initial reconciliation, we will not begin the subsequent 
reconciliation calculation process until 17 months after the end of 
performance year subset 5.2. We would begin the final reconciliation 
calculation for performance year subset 5.2 in late February 2023 with 
reconciliation payment amounts and reports issued in June, because 
input files that are required for the final reconciliation will not be 
available until 17 months after the end of performance year subset 5.2. 
In particular, we need to receive the reconciliation results from 
Accountable Care Organizations (ACOs) that overlap with CJR in order to 
conduct the ACO overlap calculation. Since we cannot state with 
confidence that we will have access to those data prior to the normal 
reconciliation process start date in late February 2023, we will 
perform the reconciliation calculation at the same time of year that we 
have performed previous reconciliations. As noted above, we will 
conduct the final reconciliation of performance year subset 5.2 
independently. Table 2 illustrates the timelines for performance year 
subsets 5.1 and 5.2.

                                Table 2--Timelines for Performance Years 4 and 5
----------------------------------------------------------------------------------------------------------------
                                                            Initial           Subsequent
      Performance year (PY)       Performance period    reconciliation      reconciliation      Reconciliation
                                                       calculation start   calculation start     amount (+/-)
----------------------------------------------------------------------------------------------------------------
4...............................  01/01/2019 to 12/   2 months after 12/  14 months after 12/ Net PY3 and PY4
                                   31/2019.            31/2019: Late       31/2019: Late       reconciliation
                                                       February 2020.      February 2021.      amounts.
5 (two periods).................  01/01/2020 to 09/
                                   30/2021.
Subset 5.1......................  01/01/2020 to 12/   2 months after 12/  14 months after 12/ Net PY4 and PY5.1
                                   31/2021.            31/2020: Late       31/2020: Late       reconciliation
                                                       February 2021.      February 2022.      amounts.

[[Page 71171]]

 
Subset 5.2......................  01/01/2021 to 09/   5 months after 09/  17 months after 09/ Net PY5.1 and
                                   30/2021.            30/2021: Late       30/2021: Late       PY5.2
                                                       February 2022.      February 2023.      reconciliation.
----------------------------------------------------------------------------------------------------------------

    In order to reflect the changes in reconciliation timing and other 
changes associated with additional reconciliations in PY5, we are 
amending the following provisions: 42 CFR 510.2, 42 CFR 510.200, 42 CFR 
510.305(b), (d)(1), (e), (i)(1) and (2), and (j)(1) and (2), and 42 CFR 
510.400(b)(3)(v), and adding 42 CFR 510.400(b)(3)(vi).
4. DRG 521 and DRG 522
    In this IFC we are amending our regulations at Sec.  510.300(a) to 
specify that, as of October 1, 2020, the CJR model includes episodes 
when the MS-DRG assigned at discharge for an anchor hospitalization is 
one of two new MS-DRGs we adopted in the FY 2021 IPPS/LTCH final rule 
(85 FR 58432): MS-DRG 521 (Hip Replacement with Principal Diagnosis of 
Hip Fracture with Major Complications and Comorbidities (MCC)) and MS-
DRG 522 (Hip Replacement with Principal Diagnosis of Hip Fracture, 
without MCC). As indicated in 42 CFR 510.300(a)(1), the CJR model 
episode definition historically included MS-DRG 469 (Major Hip and Knee 
Joint Replacement or Reattachment of Lower Extremity with MCC) and MS-
DRG 470 (Major Hip and Knee Joint Replacement or Reattachment of Lower 
Extremity without MCC). For purposes of calculating quality adjusted 
target prices, we further subdivided episodes within each MS-DRG based 
on the presence or absence of a primary hip fracture. In the FY 2021 
IPPS/LTCH final rule, we stated that because the CJR model would 
continue until at least March 31, 2021, we intended to adopt a policy 
in the CJR final rule that incorporates these new MS-DRGs into the CJR 
model as of October 1, 2020 to avoid disruption to the model for the 
remainder of PY5 (as extended) and thereafter, if our proposal to 
extend the CJR model through PY8 were finalized (85 FR 58502). To this 
end, we are adopting the change in this IFC, with retroactive effect to 
October 1, 2020. This change ensures that hip replacements with a 
principal diagnosis of hip fracture, with and without MCC, will 
continue to trigger CJR model episodes even though they are now 
assigned to these new DRGs rather than MS-DRGs 469 and 470.
    As background, in the FY 2021 IPPS/LTCH proposed rule (85 FR 
32510), CMS proposed the creation of two new MS-DRGs, 521 and 522 (Hip 
Replacement with primary hip fracture, with and without major 
complications and comorbidities, respectively). Because the FY2021 
IPPS/LTCH proposed rule was published after the CJR February 2020 
proposed rule, the new MS-DRGs 521 and 522 were not addressed in the 
February 2020 proposed rule. We solicited comment in the FY2021 IPPS/
LTCH proposed rule on the effect this proposal would have on the CJR 
model and whether to incorporate MS-DRG 521 and MS-DRG 522, if 
finalized, into the CJR model's proposed extension to December 31, 
2023. The public also had the opportunity to address this issue in 
comments responding to the CJR February 2020 proposed rule, as the 
comment period for that rule had been extended.
    We received three comments in response to the February 2020 
proposed rule and 20 comments in response to the FY2021 IPPS/LTCH 
proposed rule addressing the effects of the proposed new MS-DRGs on the 
CJR model. Most commenters agreed that MS-DRGs 521 and 522 should be 
included in the definition of a CJR model episode, noting their 
assumption that this would have a neutral economic impact on the model 
and participants, as the CJR model already provides for separate 
quality adjusted target prices for hip fracture cases for MS-DRGs 469 
and 470. Multiple commenters stated their belief that there is value in 
maintaining hip fracture cases in the CJR model, including that it is 
administratively simpler and that maintaining hip fractures in the CJR 
model would mean those procedures remain subject to the value-based 
care incentives of the CJR model. Some commenters suggested that 
quality adjusted target prices for episodes previously triggered by MS-
DRG 469 and MS-DRG 470 with hip fracture could apply to episodes 
triggered by the new MS-DRGs. Others noted that if the DRGs were added 
retroactively, they would not want the new DRGs to retroactively impact 
quality adjusted target prices.
    As of October 1, 2020, MS-DRGs 521 and 522 separately identify a 
subset of LEJR procedures that were previously grouped to MS-DRGs 469 
and 470, and if the definition of a CJR model episode is not revised to 
accommodate this technical change the LEJR procedures associated with 
these new codes will no longer be part of the CJR model. This result 
would be highly disruptive to the CJR model, because it would remove a 
significant number of episodes midway through a performance year. 
Therefore, we believe there is good cause for this rulemaking to change 
the definition of a CJR model episode to include MS-DRGs 521 and 522. 
Indeed, it would be contrary to the public interest to undertake 
traditional notice and comment rulemaking to adopt these regulatory 
changes because they are intended to preserve the model's scope in 
light of underlying technical changes in the IPPS. Based on the public 
comments previously described, we believe that including DRGs 521 and 
522 in the CJR episode definition is less disruptive to participant 
hospitals than the alternative, which would be to allow hip 
replacements with a primary hip fracture to drop abruptly out of the 
model (or to drop out of the model until we were able to undertake full 
notice and comment rulemaking to add them back at a later point). We 
believe that failure to retroactively incorporate MS-DRGs 521 and 522 
into the CJR model as of October 1, 2020 would be contrary to the 
public interest because it would result in approximately 20-25% of all 
LEJR episodes to be dropped from the CJR model. The categories of 
episodes that would be dropped tend to be associated with emergent 
surgeries, high-costs, and complex post-acute care needs. Dropping 
these episodes from the model would create confusion, increase 
administrative burden for participant hospitals, and remove the 
opportunity for participant hospitals to earn reconciliation payments 
by coordinating care for these complex, high-cost episodes.
    Operationally, this is a seamless transition for participant 
hospitals, which have continued to bill Medicare

[[Page 71172]]

FFS as usual for hip replacements with hip fractures. Beginning on 
October 1, 2020, the Medicare IPPS grouper began to assign those 
hospitalizations to one of the new MS-DRGs, with no billing changes 
required of participant hospitals. The new MS-DRGs will be incorporated 
into the CJR episode reconciliation data system, and will be included 
in participant hospitals' monthly data feeds going forward. Participant 
hospitals were notified of their quality adjusted target prices for 
episodes beginning on October 1, 2020 for MS-DRGs 469 and 470, with and 
without hip fracture. As of October 1, 2020, the quality adjusted 
target prices for MS-DRGs 469 and 470 with hip fracture will apply to 
episodes initiated by the new MS-DRGs 521 and 522, respectively, for 
the remainder of PY5 (including both performance year subsets 5.1 and 
5.2).
    Given that the CJR model currently provides separate quality 
adjusted target prices for episodes with and without a hip fracture, 
incorporating the new DRGs would have minimal financial impact on the 
model. The PY5 quality adjusted target price calculation methodology 
includes the application of update factors (80 FR 73342-73346), which 
incorporate annual changes to each CMS payment system (for example, 
IPPS, OPPS, and SNF). The update factor is calculated and applied twice 
per year, in order to incorporate both fiscal year and calendar year 
payment system updates. The MS-DRG weights assigned to the new MS-DRGs 
521 and 522 in the FY 2021 IPPS/LTCH final rule (84 FR 42044) will be 
incorporated into the IPPS update factor as part of the calculation of 
the quality adjusted target prices for episodes beginning between 
October 1, 2020 and December 31, 2020. These FY 2021 MS-DRG weights 
will continue in the quality adjusted target prices for episodes that 
begin between January 1, 2021 and September 30, 2021, which will 
incorporate CY 2021 payment system updates. As a result, baseline 
prices for hip replacements with primary hip fracture, which would have 
been assigned the MS-DRGs 469 and 470 and stratified by hip fracture 
status, are comparable to those same episodes in the performance period 
that are assigned to MS-DRGs 521 and 522, respectively. For the 
remainder of PY5, we will calculate quality adjusted target prices for 
episodes initiated by MS-DRGs 521 and 522 using baseline episodes 
initiated by MS-DRG 469 with fracture and MS-DRG 470 with fracture, 
respectively, but updated to include the MS-DRG weights assigned to MS-
DRGs 521 and 522 for FY 2021.
    In this IFC we are incorporating the new MS-DRGs 521 and 522 into 
the CJR model episode definition as of October 1, 2020, updating 
quality adjusted target prices to reflect the applicable MS-DRG 
weights, and amending the provisions at 42 CFR 510.300(a)(1)(i) and 
(iii) to reflect these changes.
5. Changes to Extreme and Uncontrollable Circumstances Policy for the 
PHE for COVID-19
    We are also modifying the extreme and uncontrollable circumstances 
adjustment for COVID-19 in Sec.  510.300(k)(4) to expire on March 31, 
2021 or the last day of the emergency period, whichever is earlier. In 
addition, we are adopting a more targeted adjustment, which will apply 
after March 31, 2021 or the last day of emergency period (whichever is 
earlier), so that financial safeguards continue to apply for CJR 
episodes during which a CJR beneficiary receives a positive COVID-19 
diagnosis.
    Currently, the extreme and uncontrollable circumstances adjustment 
for COVID-19 provides financial safeguards for participant hospitals 
that have a CCN primary address that is located in an emergency area 
during an emergency period, as those terms are defined in section 
1135(g) of the Act, for which the Secretary issued a waiver or 
modification of requirements under section 1135 of the Act on March 13, 
2020, effectively applying the financial safeguards to all participant 
hospitals. These financial safeguards, wherein actual episode payments 
are capped at the target price determined for that episode, apply to 
fracture or non-fracture episode with a date of admission to the anchor 
hospitalization that is on or within 30 days before the date that the 
emergency period (as defined in section 1135(g) of the Act) begins or 
that occurs through the termination of the emergency period (as 
described in section 1135(e) of the Act). In the April 2020 IFC we 
explained this extreme and uncontrollable circumstances adjustment, 
noting that the previous CJR model policy for extreme and 
uncontrollable circumstances was not applicable to the PHE for the 
COVID-19 pandemic. We also indicated that we did not expect many new 
CJR episodes to initiate in light of the COVID-19 virus and the related 
guidance to avoid elective surgeries. We further stated that we wanted 
to avoid inadvertently creating incentives to place cost considerations 
above patient safety within the CJR model, given the challenges to the 
health care delivery system in responding to COVID-19 cases and the 
expenses associated with treating the virus.
    We received comments on both the April 2020 IFC and the CJR 
February 2020 proposed rule about the extreme and uncontrollable 
circumstances adjustment. Commenters favored the extreme and 
uncontrollable circumstances policy for COVID-19 and commended CMS for 
providing relief to participant hospitals. Some commenters questioned 
what steps CMS would take once the PHE ends and noted the uncertainty 
in the current policy since there is not a concrete end date for the 
PHE. A commenter recommended CMS hold participant hospitals harmless 
from performance-related penalties for the 2020 performance year and 
urged CMS to make appropriate adjustments for the 2020 and 2021 
performance years and to address the impact of COVID-19 on financial 
expenditures, performance scores and risk adjustment.
    We appreciate commenters' positive feedback on the April 2020 IFC 
and our decision to provide relief to participant hospitals. At the 
onset on the PHE, we quickly developed financial safeguards in the 
April 2020 IFC due to the mandatory nature of the model and the 
location of all 471-participant hospitals in MSAs where COVID-19 was 
most prevalent. For example, there are 98 participant hospitals in the 
New York/New Jersey Metropolitan Area, which was the epicenter for 
COVID-19.\44\ Further, at that time, we did not possess data that 
allowed CMS to determine the COVID-19 virus's effect on the CJR model, 
and believed it was most prudent to waive downside risk for all 
episodes thorough the duration of the PHE.
---------------------------------------------------------------------------

    \44\ ``New York City Region Is Now an Epicenter of the 
Coronavirus Pandemic'' March 22, 2020. Available at https://www.nytimes.com/2020/03/22/nyregion/Coronavirus-new-York-epicenter.html.
---------------------------------------------------------------------------

    Since publishing the April 2020 IFC, we reviewed Medicare claims 
data and observe a steep decline in the initiation of episodes in April 
2020 (See Table 1). Post April 2020, CJR episodes are increasing, and 
though not at normal utilization as compared to 2019 Medicare claims 
data, the data reflects a continual initiation of CJR episodes despite 
the ongoing PHE. In addition, related Federal guidance to avoid 
elective surgeries has expired, which allows certain participant 
hospitals to initiate elective LEJR procedures.\45\ The continual 
initiation of CJR episodes during the PHE is contrary to our assumption 
in the April 2020 IFC, that

[[Page 71173]]

is, we did not expect many new CJR episodes to initiate during the PHE.
---------------------------------------------------------------------------

    \45\ https://www.cms.gov/files/document/covid-flexibility-reopen-essential-non-covid-services.pdf.
---------------------------------------------------------------------------

    Absent a change to specify an end date, the current extreme and 
uncontrollable adjustment in 42 CFR 510.300(k)(4) would continue as 
long as the PHE. Unfortunately, the combination of CJR episode volume 
increasing to levels we did not anticipate during the PHE and the 
continued renewal of the PHE threatens the ability of the CJR model to 
generate any savings over the course of the model. With greater 
surgical volume, we do not believe such a broad extreme and 
uncontrollable circumstances policy for COVID-19 remains necessary.
    For these reasons, we are implementing an end date to the extreme 
and uncontrollable circumstances adjustment for COVID-19. Specifically, 
for a fracture or non-fracture episode with a date of admission to the 
anchor hospitalization that is on or within 30 days before the date 
that the emergency period (as defined in section 1135(g) of the Act) 
begins or that occurs on or before March 31, 2021 or the last day of 
such emergency period, whichever is earlier, actual episode payments 
are capped at the quality adjusted target price determined for that 
episode under Sec.  510.300. We are amending the provisions at 42 CFR 
510.305(k)(4) to reflect this change.
    In addition, in order to account for CJR beneficiaries with a 
positive COVID-19 diagnosis during a CJR episode that initiates after 
the adjustments for extreme and uncontrollable circumstances specified 
in Sec.  510.305(k)(4) end, we are amending our regulations at Sec.  
510.305(e)(1)(i) to cap actual episode payments at the quality adjusted 
target price for the episode, effectively waiving downside risk for all 
episodes with actual episode payments that include a claim with a 
COVID-19 diagnosis code. This policy will apply after March 31, 2021 or 
the last day of the PHE, whichever occurs earlier.
    In response to commenters' questions about how the CJR model will 
alleviate financial risk associated with COVID-19 once the PHE expires, 
we explored the flexibilities provided by other CMMI models and found 
them to be consistent with a targeted, episode-based approach to 
providing financial relief from COVID-19. In order to be responsible 
stewards of the Medicare Trust Fund, we are adopting a policy to 
provide participant hospitals continuing financial protection from the 
effect of COVID-19 on the CJR model that may continue beyond the end of 
the PHE for COVID-19 or March 31, 2021 (whichever is earlier). 
Specifically, at the initial and subsequent reconciliations of 
performance year subset 5.2, which will include episodes subject to 
this new adjustment policy, we will identify episodes with actual 
episode payments with any claim containing a COVID-19 diagnosis and 
costs for those episodes will be capped at the quality adjusted target 
price, effectively waiving downside risk for that episode. A COVID-19 
diagnosis is identified by the following ICD-10-CM diagnosis codes: 
B97.29; U07.1; or any other ICD-10-CM diagnosis code that is 
recommended by the Centers for Disease Control and Prevention for the 
coding of a confirmed case of COVID-19.\46\ We understand that ICD-10 
diagnosis codes B97.29 (which was used for dates of service on or after 
January 27, 2020 through March 31, 2020) and U07.1 (which was used for 
dates of service on or after April 1, 2020 through September 30, 2020) 
might not be used for dates of service to which our new adjustment 
policy will apply. Nevertheless, given the potential for uncertainty as 
to whether either of these codes will be used for dates of service 
after September 30, 2020, we are including them in the definition of 
``COVID-19 diagnosis code'' that we are adding to Sec.  510.2 for 
completeness.
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    \46\ https://www.cdc.gov/nchs/data/icd/ICD-10-CM-Official-Coding-Gudance-Interim-Advice-coronavirus-feb-20-2020.pdf?fbclid=IwAR2c9LrGMAhum_Ogu-LrxPJ-S4u_j4wGW1615I_fmoiDB5AA0wKHKitjoXo.
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    In order to provide participant hospitals continuing financial 
protection from the effect of COVID-19 on the CJR model that may 
continue beyond the end of the PHE for COVID-19 or March 31, 2021, 
whichever occurs earlier, we are implementing that actual episode 
payments are capped at the quality adjusted target price determined for 
that episode under Sec.  510.300 for episodes with actual episode 
payments that include a claim with a COVID-19 diagnosis code and 
initiate after the earlier of March 31, 2021 or the last day of the 
emergency period.

III. Provisions of the Interim Final Rule--Departments of the Treasury, 
Labor and Health and Human Services

A. Rapid Coverage of Preventive Services for Coronavirus

1. Background
    In addition to the steps Congress took to ensure coverage of COVID-
19 diagnostic testing, in section 3203 of the CARES Act, Congress 
required group health plans and health insurance issuers offering group 
or individual health insurance coverage to cover, without cost sharing, 
qualifying coronavirus preventive services. This coverage is required 
to be provided ``pursuant to section 2713(a) of the [PHS] Act,'' 
including its implementing regulations or any successor regulations.
    Section 2713 of the PHS Act was added by section 1001 of PPACA and 
incorporated by reference into ERISA by section 715 of ERISA and into 
the Code by section 9815 of the Code. Section 2713 of the PHS Act and 
the regulations implementing section 2713 of the PHS Act require non-
grandfathered group health plans and health insurance issuers offering 
non-grandfathered group or individual health insurance coverage to 
provide coverage of certain specified preventive items and services 
without cost sharing. These services include:
     Evidence-based items or services that have in effect a 
rating of ``A'' or ``B'' in the current recommendations of the USPSTF 
with respect to the individual involved.
     Immunizations for routine use in children, adolescents, 
and adults that have in effect a recommendation from ACIP with respect 
to the individual involved. A recommendation of ACIP is considered to 
be ``in effect'' after it has been adopted by the Director of the CDC. 
A recommendation is considered to be for ``routine use'' if it appears 
on the Immunization Schedules of the CDC.
     With respect to infants, children, and adolescents, 
evidence-informed preventive care and screenings provided for in the 
comprehensive guidelines supported by the Health Resources and Services 
Administration (HRSA).
     With respect to women, preventive care and screenings 
provided for in comprehensive guidelines supported by HRSA (not 
otherwise addressed by the recommendations of the USPSTF), subject to 
certain exemptions and accommodations (see 45 CFR 147.131 through 
147.133).
    The Departments' current regulations (herein referred to as the 
2015 Final Regulations) under section 2713 of the PHS Act at 26 CFR 
54.9815-2713; 29 CFR 2590.715-2713; and 45 CFR 147.130 require that 
plans and issuers provide coverage of recommended preventive services 
for plan years that begin on or after September 23, 2010, or, if later, 
for plan years that begin on or after the date that is one year after 
the date the recommendation or guideline is issued.
    Under the 2015 Final Regulations, if a recommended preventive 
service is billed separately (or is tracked as individual encounter 
data separately) from an office visit, then a plan or issuer

[[Page 71174]]

may impose cost-sharing requirements with respect to the office visit. 
However, if a preventive service is not billed separately (or is not 
tracked as individual encounter data separately) from an office visit 
and the primary purpose of the office visit is the delivery of such an 
item or service, then a plan or issuer may not impose cost-sharing 
requirements with respect to the office visit.
    The 2015 Final Regulations generally do not require a plan and 
issuer that has a network of providers to provide benefits for 
applicable preventive items or services that are delivered by an out-
of-network provider. Moreover, the 2015 Final Regulations generally do 
not preclude a plan or issuer that has a network of providers from 
imposing cost-sharing requirements for preventive services that are 
delivered by an out-of-network provider. However, if a plan or issuer 
does not have in its network a provider who can provide a preventive 
service, then the plan or issuer must cover the recommended preventive 
service when performed by an out-of-network provider and may not impose 
cost sharing with respect to the recommended preventive service.
    Many items and services required to be covered under section 2713 
of the PHS Act typically are provided as part of the usual course of 
preventive care, often according to regularly scheduled intervals. 
Examples include immunizations provided according to schedules 
established by the CDC and other annual screenings or counseling. 
Therefore, the 2015 Final Regulations require coverage without cost 
sharing for applicable immunizations that are recommended by ACIP for 
routine use, and state that a recommendation is considered to be for 
``routine use'' if it appears on the Immunization Schedules of the CDC.
    Section 3203 of the CARES Act establishes a more accelerated 
timeline for required coverage of qualifying coronavirus preventive 
services than other recommended preventive services under PHS Act 
section 2713. As stated above, coverage of qualifying coronavirus 
preventive services must be provided no later than 15 business days 
following an applicable recommendation. In addition, it is possible 
that items, services, and immunizations used to prevent or mitigate 
COVID-19 will not, in the immediate future, be recommended as part of a 
usual course of preventive care, but rather for more urgent use. As 
reflected by the expedited timeline for coverage Congress established 
in section 3203 of the CARES Act, the need to provide coverage of 
qualifying coronavirus preventive services is urgent. Therefore, as 
discussed below, this IFC requires coverage of COVID-19 immunizations 
within 15 business days after the immunization has been recommended by 
ACIP and adopted by the CDC, regardless of whether it appears on the 
Immunization Schedules of the CDC for routine use.
    Additionally, in light of the current PHE for COVID-19, it is 
imperative that group health plans and health insurance issuers provide 
full coverage for these items and services, including costs for the 
administration of vaccines, and ensure timely access to coverage as 
Congress intended. Accordingly, in this IFC, the Departments provide 
certain clarifications previously made with respect to the 2015 Final 
Regulations and amend those regulations to implement unique 
requirements related to covering qualifying coronavirus preventive 
services.\47\
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    \47\ The 2015 Final Regulations address the obligation to 
continue to provide coverage for recommended preventive services 
that are in effect on the first day of a plan or policy year when 
there are changes in recommendations or guidelines. See 26 CFR 
54.9815-2713(b)(2)(i) and (ii); 29 CFR 2590.715-2713(b)(2)(i) and 
(ii); 45 CFR 147.130(b)(2)(i) and (ii). Given the expedited timeline 
for coverage under section 3203 of the CARES Act, this IFC amends 
the 2015 Final Regulations to make clear that these paragraphs apply 
to recommended preventive services that are covered on the first day 
of the plan or policy year or, with respect to qualifying 
coronavirus preventive services, ``as otherwise specified in 
paragraph (b)(3) of this section.''
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2. Scope of Requirement To Cover Certain Recommended Preventive 
Services Under Section 2713 of the Public Health Service Act
a. Related Items and Services
    In implementing section 2713 of the PHS Act, the 2015 Final 
Regulations addressed whether office visit charges associated with 
certain recommended preventive services must be covered without cost 
sharing. Specifically, Example 1 in the 2015 Final Regulations 
illustrates how the requirements apply in situations where a provider 
bills a plan for an office visit where a preventive screening for 
cholesterol abnormalities (which has in effect a rating of A or B from 
the USPSTF) is conducted and for the laboratory work of the cholesterol 
screening test. In that example, the plan may not impose any cost-
sharing requirements with respect to the separately billed laboratory 
work of the cholesterol screening test. Because the office visit is 
billed separately from the cholesterol screening test, the 2015 Final 
Regulations provide that the plan may impose cost-sharing requirements 
for the office visit.
    Prior to the publication of the 2015 Final Regulations, the 
Departments received questions from stakeholders regarding discrete 
coverage issues related to certain recommended preventive services. In 
particular, with respect to colonoscopies, stakeholders asked whether 
certain related services (such as the cost of polyp removal or 
anesthesia) must also be covered without cost sharing. The Departments 
clarified in subregulatory guidance that a plan or issuer may not 
impose cost sharing for polyp removal during a preventive screening 
colonoscopy, as such service is an integral part of a colonoscopy, and 
also stated that anesthesia provided in connection with a preventive 
colonoscopy must be covered without cost sharing.\48\
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    \48\ See FAQs About Affordable Care Act Implementation Part 12, 
Q5 (Feb. 20, 2013), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xii.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs12 and FAQs About Affordable Care Act 
Implementation Part XXVI, Q7 (May 11, 2015), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/aca_implementation_faqs26.pdf.
---------------------------------------------------------------------------

    Consistent with the examples provided in the 2015 Final Regulations 
and subregulatory guidance cited in the preamble to the rulemaking 
promulgating the 2015 Final Regulations, the Departments further 
clarify that under the 2015 Final Regulations and this IFC, plans and 
issuers subject to section 2713 of the PHS Act must cover, without cost 
sharing, items and services that are integral to the furnishing of the 
recommended preventive service, regardless of whether the item or 
service is billed separately. For example, several of the recommended 
preventive services involve screenings for the presence of certain 
health conditions, such as diabetes, or a variety of sexually 
transmitted infections. These recommended screenings, typically 
performed by laboratories, cannot be conducted without first collecting 
a specimen. Accordingly, plans and issuers subject to section 2713 of 
the PHS Act must cover without cost sharing both the specimen 
collection and the recommended preventive service, regardless of how 
the specimen collection is billed. Similarly, a recommended 
immunization generally cannot be furnished without being administered 
by a medical professional. As qualifying coronavirus preventive 
services are expected to include immunizations, plans and issuers 
subject to section 2713 of the PHS Act

[[Page 71175]]

must cover without cost sharing such an immunization and its 
administration, regardless of how the administration is billed, and 
regardless of whether a COVID-19 vaccine or any other immunization 
requires the administration of multiple doses in order to be considered 
a complete vaccination. This includes coverage without cost sharing of 
the administration of a required preventive immunization in instances 
where a third party, such as the Federal Government, pays for the 
preventive immunization. Further, if a COVID-19 immunization is not 
billed separately (or is not tracked as individual encounter data 
separately) from an office visit and the primary purpose of the visit 
is the delivery of the recommended COVID-19 immunization, then 
consistent with the 2015 Final Regulations, the plan or issuer may not 
impose cost-sharing requirements with respect to the office visit. The 
Departments seek comment on this clarification.
b. Out-of-Network Coverage During the PHE for COVID-19
    The 2015 Final Regulations permit a group health plan or issuer 
that has a network of providers to omit coverage or to impose cost-
sharing requirements for recommended preventive services when such 
services are provided by an out-of-network provider, unless the plan or 
issuer does not have in its network a provider who can provide the 
service.\49\ This approach reflects that, as noted earlier in this 
section of the preamble, recommended preventive services generally are 
obtained as part of a regular course of preventive care, so 
participants, beneficiaries, and enrollees typically have the 
opportunity to seek such care from an in-network provider. By contrast, 
in the immediate term, newly developed qualifying coronavirus 
preventive services might be available from a narrower range of 
providers than other, more established recommended preventive services. 
To help ensure full access to and the widespread use of qualifying 
coronavirus preventive services to mitigate the effect of the PHE for 
COVID-19 and slow transmission of the virus, it is critical that 
individuals be able to receive such services from any provider 
authorized to provide the service. Therefore, this IFC amends the 2015 
Final Regulations to require that plans and issuers subject to section 
2713 of the PHS Act must cover without cost sharing a qualifying 
coronavirus preventive service, regardless of whether such service is 
delivered by an in-network or out-of-network provider. This is based on 
the Departments' view that participants, beneficiaries, and enrollees 
may not be able to locate in-network providers consistently during the 
emergency period.
---------------------------------------------------------------------------

    \49\ 26 CFR 54.9815-2713(a)(3); 29 CFR 2590.715-2713(a)(3); 45 
CFR 147.130(a)(3).
---------------------------------------------------------------------------

    To satisfy this requirement, the Departments are of the view that 
plans and issuers must administer this out-of-network coverage 
requirement in such a way that makes receiving out-of-network services 
for qualifying coronavirus preventive services a meaningful benefit for 
participants, beneficiaries, and enrollees. To be a meaningful benefit, 
the Departments are of the view that plans and issuers must administer 
this out-of-network coverage requirement in a way that ensures that 
participants, beneficiaries, and enrollees have access to a variety of 
out-of-network providers for such services. To the extent plans and 
issuers reimburse out-of-network providers an unreasonably low amount 
for qualifying coronavirus preventive services, including for 
administration of a COVID-19 vaccine, this approach could severely 
limit the number of such providers that are willing to provide the 
service, which would contravene the purpose of the requirement to 
provide out-of-network coverage without cost sharing of qualifying 
coronavirus preventive services. Therefore, this IFC provides that with 
respect to a qualifying coronavirus preventive service and a provider 
with whom the plan or issuer does not have a negotiated rate for such 
service (such as an out-of-network provider), the plan or issuer must 
reimburse the provider for such service in an amount that is 
reasonable, as determined in comparison to prevailing market rates for 
such service. The Departments will consider the amount of payment to be 
reasonable, for example, if the plan or issuer pays the provider the 
amount that would be paid under Medicare for the item or service. In 
the Departments' view, these minimum payment standards are necessary 
and appropriate because providers that participate in the CDC COVID-19 
Vaccination Program contractually agree to administer a COVID-19 
vaccine regardless of an individual's ability to pay and regardless of 
their coverage status, and also may not seek any reimbursement, 
including through balance billing, from a vaccine recipient.
    The Departments request comment on all aspects of this approach. 
The Departments request comment on the issue of network adequacy and 
whether and, if so, how long provider networks are expected to be 
inadequate. The Departments also request comment on the safeguards in 
this IFC to ensure that out-of-network reimbursement rates are 
reasonable and that providers administering a publicly funded COVID-19 
vaccine are reimbursed by group health plans and issuers prevailing 
market rates in the absence of a negotiated rate, and whether other 
examples of reasonable reimbursement rates, in addition to Medicare 
rates, would be useful.
3. Definition of Qualifying Coronavirus Preventive Services
    Section 3203(b)(1) of the CARES Act defines ``qualifying 
coronavirus preventive service'' as an item, service, or immunization 
that is intended to prevent or mitigate COVID-19 and that is--(A) an 
evidence-based item or service that has in effect a rating of `A' or 
`B' in the current recommendations of the USPSTF; or (B) an 
immunization that has in effect a recommendation from ACIP with respect 
to the individual involved. The statutory provisions describing USPSTF 
and ACIP recommendations in this definition are substantively identical 
to the ones at section 2713(a)(1) and (2) of the PHS Act. However, as 
stated above, under the 2015 Final Regulations, only ``immunizations 
for routine use in children, adolescents, and adults'' that are 
recommended by ACIP must be covered without cost sharing.\50\ A 
recommendation is considered to be for routine use if it is listed on 
the CDC's Immunization Schedules.\51\
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    \50\ See 75 FR 41726, 41728 (July 19, 2010), codified at 26 CFR 
54.9815-2713(a)(1)(ii); 29 CFR 2590.715-2713(a)(1)(ii); 45 CFR 
147.130(a)(1)(ii).
    \51\ Id.
---------------------------------------------------------------------------

    This IFC provides a definition of qualifying coronavirus preventive 
services that is consistent with the statutory definition in section 
3203 of the CARES Act. However, the Departments note that unlike the 
other preventive service immunizations required to be covered without 
cost sharing under section 2713 of the PHS Act and the 2015 Final 
Regulations, this definition and related coverage requirement are not 
limited to COVID-19 immunizations recommended by ACIP for ``routine 
use.'' While other preventive items and services may be recommended for 
routine use, for reasons described elsewhere in this section of the 
preamble, the PHE for COVID-19 presents unique circumstances and 
qualifying coronavirus preventive services might not, in the immediate 
term, be recommended for routine use, according to specified schedules. 
Rather, the

[[Page 71176]]

Departments generally expect consumers should receive an immunization 
for COVID-19 as soon as it becomes available to the general public, or 
as soon as it becomes available to them based on their status as part 
of a high-risk or high-priority population, as recommended by ACIP. 
Plans and issuers subject to section 2713 of the PHS Act must cover, 
without cost sharing, COVID-19 immunizations that are recommended by 
ACIP and adopted by the Director of CDC, even if not listed for routine 
use on the CDC Immunization Schedules, pursuant to 26 CFR 54.9815-
2713T(a); 29 CFR 2590.715-2713(a); and 45 CFR 147.130(a), and subject 
to the additional changes described later in this section of the 
preamble.\52\
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    \52\ HHS reminds states that the HHS Office for Civil Rights 
enforces applicable Federal civil rights laws as described above, as 
well as laws protecting the exercise of conscience and religious 
freedom, including the Religious Freedom Restoration Act (42 U.S.C. 
2000bb through 2000bb-4). HHS's requirements are subject to these 
laws, and states may have obligations under these laws to protect 
conscience, prohibit coercion, and to ensure the free exercise of 
religion. U.S. Department of Health & Human Services, Office for 
Civil Rights, Conscience and Religious Freedom, https://www.hhs.gov/conscience/index.html (last visited Aug. 20, 2020).
---------------------------------------------------------------------------

4. Qualifying Coronavirus Preventive Services--Timing Requirement
    Section 2713 of the PHS Act and the 2015 Final Regulations require 
plans and issuers to cover recommended preventive items and services 
beginning with the first plan year (or in the individual market, policy 
year) that is one year after the date the recommendation or guideline 
is issued. Section 3203 of the CARES Act accelerates the timeline for 
coverage of qualifying coronavirus preventive services without cost 
sharing, requiring coverage to be provided within 15 business days 
after the date on which a recommendation is made relating to such 
service. This IFC codifies these timing requirements at 26 CFR 54.9815-
2713T(b)(3); 29 CFR 2590.715-2713(b)(3); and 45 CFR 147.130(b)(3).
    In addition, the IFC adds a sunset provision at 26 CFR 54.9815-
2713T(e); 29 CFR 2590.715-2713(e); and 45 CFR 147.130(e), under which 
the amendments made to the regulations will not apply with respect to 
qualifying coronavirus preventive services furnished on or after the 
expiration of the PHE for COVID-19. The Departments note, however, that 
coverage under section 3203 of the CARES Act is not limited to the 
duration of the PHE for COVID-19 and therefore the statutory provisions 
will continue to apply.

B. Diagnostic Testing for COVID-19

    Section 6001 of the FFCRA generally requires group health plans and 
health insurance issuers offering group or individual health insurance 
coverage to provide benefits for COVID-19 diagnostic tests and certain 
items and services related to diagnostic testing for COVID-19 when 
those items or services are furnished on or after March 18, 2020, and 
during the duration of the PHE for COVID-19. Under the FFCRA, plans and 
issuers must provide this coverage without imposing any cost-sharing 
requirements (including deductibles, copayments, and coinsurance) or 
prior authorization or other medical management requirements. Section 
3201 of the CARES Act, enacted on March 27, 2020, amended section 6001 
of the FFCRA to include a broader range of diagnostic tests that plans 
and issuers must cover without any cost-sharing requirements or prior 
authorization or other medical management requirements.
    Section 3202(a) of the CARES Act provides that a plan or issuer 
providing coverage of items or services described in section 6001(a) of 
the FFCRA shall reimburse the provider of the diagnostic testing at a 
rate negotiated with the provider, or if there is no negotiated rate, 
at an amount that equals the cash price for such service as listed by 
the provider on a public internet website. As previously articulated in 
guidance, the Departments interpret the requirement to provide coverage 
without cost sharing in section 6001 of the FFCRA, together with 
section 3202(a) of the CARES Act, as establishing a process for setting 
reimbursement rates and protecting participants, beneficiaries, and 
enrollees from being balance billed for an applicable COVID-19 
test.\53\ These provisions help ensure consumers can be tested for 
COVID-19 without barriers related to cost, and are critical to the 
ability to detect the virus and stop its spread. However, testing 
efforts have continued to be hampered by challenges, such as delays in 
obtaining results, issues with test accuracy, and supply shortages.\54\
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    \53\ FAQs About Families First Coronavirus Response Act and 
Coronavirus Aid, Relief, and Economic Security Act Implementation 
Part 43 (June 23, 2020), available at https://www.cms.gov/files/document/FFCRA-Part-43-FAQs.pdf and https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-43.pdf.
    \54\ American Society for Microbiology, ``Supply Shortages 
Impacting COVID-19 and Non-COVID Testing'' (Oct. 15, 2020), 
available at https://asm.org/Articles/2020/September/Clinical-Microbiology-Supply-Shortage-Collecti-1.
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    The Departments encourage group health plans and issuers of group 
or individual health insurance coverage to consider market-driven 
approaches to addressing these continued challenges surrounding COVID-
19 diagnostic testing. The Departments encourage plans and issuers to 
explore using payment arrangements that create incentives for providers 
to reduce the time it takes to provide results for diagnostic testing 
for COVID-19, while maintaining the accuracy rates of their test 
results in instances where it is within the ability of providers to 
address a delay.
    At certain points in this PHE, there have been wide variations in 
the time it takes providers to make test results available to 
consumers. These delays in obtaining test results increase the risk 
that infected individuals may unknowingly infect others. These delays 
could be caused by large volumes of tests to process and/or inadequate 
resources. Pay-for-performance arrangements, where reimbursement rates 
are based on the time it takes to make test results available, could 
encourage innovative approaches by providers to reduce the turnaround 
time. The Departments encourage group health plans and issuers of group 
or individual health insurance coverage to consider developing such 
arrangements with providers, and strongly encourage plans and issuers 
that do so to incorporate safeguards to ensure that the payment 
arrangements are not structured in a way that prioritizes speed over 
accuracy or that result in unintended consequences, such as reduction 
in access to COVID-19 diagnostic testing or non-compliance with balance 
billing restrictions.

IV. Provisions of the Interim Final Rule Regarding State Innovation 
Waivers--Department of the Treasury and Health and Human Services

A. State Innovation Waivers Policy and Regulatory Revisions in Response 
to the PHE for COVID-19 Public Health Emergency

1. Background
    Section 1332 of the PPACA permits states to apply for a State 
Innovation Waiver (also referred to as ``section 1332 waivers'' or 
``State Relief and Empowerment Waivers'') to pursue innovative 
strategies for providing their residents with access to higher value, 
more affordable health coverage. The overarching goal of section 1332 
waivers is to give all Americans the opportunity to obtain high value 
and affordable health coverage regardless of income, geography, age, 
sex, or health status,

[[Page 71177]]

while simultaneously empowering states to develop health coverage 
strategies that best meet the needs of their residents. Section 1332 
waivers provide states an opportunity to promote a stable health 
insurance market that offers more choice and affordability to their 
residents. Under section 1332 of the PPACA, a State Innovation Waiver 
can be approved by HHS and the Department of the Treasury if it 
provides access to quality health coverage that is at least as 
comprehensive and affordable as would be provided absent the waiver, 
provides coverage to a comparable number of residents of the state as 
would be provided coverage absent a waiver, and does not increase the 
Federal deficit. To date, HHS and the Department of the Treasury have 
approved 15 state waiver requests, 14 of which implement state-based 
reinsurance programs.\55\ As noted in a recent data brief issued by 
CMS, section 1332 state-based reinsurance waivers have resulted in a 
statewide average premium reduction ranging from four to 37 percent in 
calendar year 2020 for residents in states with approved waivers.\56\ 
Reinsurance provides a direct benefit to consumers by paying a portion 
of provider claims that would otherwise be paid by consumers through 
higher premiums and lowering premiums for people in the individual 
health insurance market. HHS and the Department of the Treasury 
continue to encourage states to take advantage of the flexibilities 
available through section 1332 waivers in order to pursue solutions to 
help lower costs and increase coverage choices for Americans faced with 
unaffordable premiums and reduced competition in the insurance market 
both during and after the PHE for COVID-19.
---------------------------------------------------------------------------

    \55\ More information on section 1332 waivers that are approved 
is available online: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Section_1332_State_Innovation_Waivers-.
    \56\ CCIIO Data Brief Series: State Relief and Empowerment 
Waives: State-based Reinsurance Programs. June 2020. Available 
online: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-Data-Brief-June2020.pdf.
---------------------------------------------------------------------------

    Section 1332(a)(4)(B) of the PPACA requires the Secretary of HHS 
and the Secretary of the Treasury (the Secretaries) to issue 
regulations regarding procedures for State Innovation Waivers. On March 
14, 2011, HHS and the Department of the Treasury published the 
``Application, Review, and Reporting Process for Waivers for State 
Innovation'' proposed rule (76 FR 13553) to implement section 
1332(a)(4)(B) of the PPACA.\57\ On February 27, 2012, HHS and the 
Department of the Treasury published the ``Application, Review, and 
Reporting Process for Waivers for State Innovation'' final rule (77 FR 
11700) (hereinafter referred to as the ``2012 Final Rule'').\58\ On 
October 24, 2018, HHS and the Department of the Treasury issued the 
``State Relief and Empowerment Waivers'' guidance (83 FR 53575) 
(hereinafter referred to as the ``2018 Guidance''), which superseded 
the previous guidance published on December 16, 2015 (80 FR 78131), and 
provided additional information about the requirements that states must 
meet regarding section 1332 waiver proposals, the Secretaries' 
application review procedures, pass-through funding determinations, 
certain analytical requirements, and operational 
considerations.59 60
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    \57\ https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf.
    \58\ https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
    \59\ https://www.govinfo.gov/content/pkg/FR-2018-10-24/pdf/2018-23182.pdf.
    \60\ https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.
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    Section 1332(a)(4)(B) of the PPACA also directs HHS and the 
Department of the Treasury to issue regulations that provide for state 
and Federal public notice and comment sufficient to ensure a meaningful 
level of public input regarding a state's section 1332 waiver plan, 
both during the application process and after a waiver is implemented. 
Current regulations and guidance address how states may apply for a 
waiver, information states must include in an application, public 
notice and comment requirements, and HHS' and the Department of the 
Treasury's monitoring and compliance activities, including state 
reporting requirements (collectively referred to as public notice 
procedures).
    The Secretaries are setting forth a process for states to request 
modifications to the public notice procedures during the PHE for COVID-
19 prior to and after approval of a section 1332 waiver that continue 
to meet the statutory and regulatory requirements that the public has 
an opportunity to provide meaningful input. Further the Secretaries are 
promulgating this rule so that HHS and the Department of the Treasury 
do not impose requirements that are unreasonable or unnecessarily 
burdensome regarding state compliance consistent with section 
1332(a)(4)(B)(iii) of the PPACA during the PHE for COVID 19. This IFC 
promulgates rules to establish a framework for the Secretaries to 
modify some of the existing regulatory public notice procedures to 
expedite a decision on a proposed waiver request during the PHE for 
COVID-19 when a delay would undermine or compromise the purpose of the 
proposed waiver request and be contrary to the interests of consumers. 
The Secretaries will also make available such flexibility regarding 
public notice procedures should any state with an approved section 1332 
waiver request an extension or amendment of an approved section 1332 
waiver during the PHE for COVID-19.
    Similarly, this IFC also establishes a framework for the 
Secretaries to modify, in part, post award public notice procedures for 
an approved waiver request that would otherwise take place or become 
due during the PHE for COVID-19. The Secretaries will also make 
available such flexibility for post award public notice procedures for 
approved waiver extensions, amendments, or phase-out for a waiver 
should those otherwise take place or become due during the PHE for 
COVID-19. HHS and the Department of the Treasury are of the view that 
section 1332 waivers are a critical tool for states to ensure patients 
have stable access to health care coverage, including during the PHE 
for COVID-19. These interim final provisions are effective immediately 
for the duration of the PHE for COVID-19. HHS and the Department of the 
Treasury note that existing threats to consumers' access to health 
coverage or care--such as in geographic areas in which issuer 
participation has been low for some time--would not be considered 
emergency situations for purposes of applying the flexibilities adopted 
in this rulemaking.
2. Public Notice Procedures and Approval Processes During the PHE (31 
CFR 33.118 and 45 CFR 155.1318)
    Section 1332(a)(4)(B) of the PPACA provides that the Secretary of 
HHS and the Secretary of the Treasury shall issue regulations providing 
a process for public notice and comment at the state level, including 
public hearings, and a process for providing public notice and comment 
after the application is received by the Secretaries, that are both 
sufficient to ensure a meaningful level of public input. Current 
regulations at Sec. Sec.  33.112 and 155.1312 specify state public 
notice and participation requirements for proposed waiver requests, and 
Sec. Sec.  33.116(b) and 155.1316(b) specify the accompanying public 
notice and comment period requirements under the Federal public notice 
and approval process.

[[Page 71178]]

    Under the current regulations at Sec. Sec.  33.112 and 155.1312, 
states are required to provide a public notice and comment period prior 
to submitting an application for a new section 1332 waiver. The notice 
must include a comprehensive description of the section 1332 waiver 
application; information about where the application is available for 
public review; where the written comments may be submitted; and the 
location, date, and time of public hearings that will be convened by 
the state to seek public input on the application for a section 1332 
waiver.\61\ After issuing the public notice and prior to submitting an 
application for a section 1332 waiver, the state must hold public 
hearings to allow the public to learn about and comment on the state's 
application, and must publish the date, time, and location of the 
hearings in a prominent location on the state's public website.\62\ As 
set forth in Sec. Sec.  33.112(a)(2) and 155.1312(a)(2), as part of the 
public notice and comment period, a state with one or more federally 
recognized tribes must conduct a separate process for meaningful 
consultation with such tribes, if applicable. As HHS and the Department 
of the Treasury explained in the 2012 Final Rule preamble, this tribal 
consultation must be conducted in accordance with Executive Order 
(E.O.) 13175, and, as E.O. 13175 also applies to Medicaid, a state may 
use a Medicaid consultation process to satisfy the consultation needed 
for a section 1332 waiver (77 FR 11700, 11706). Furthermore, the state 
should include in its section 1332 waiver application a description of 
issues raised and comments received.
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    \61\ 31 CFR 33.112(b); 45 CFR 155.1312(b).
    \62\ In response to a question from a commenter, the 2012 Final 
Rule states that ``hearings,'' as used in 31 CFR 33.112(c)(1) and 45 
CFR 155.1312(c)(1), means no less than two hearings. (77 FR 11700, 
11706). The HHS and the Department of Treasury continue to interpret 
the regulatory requirement that a State shall hold ``hearings'' to 
refer to at least two hearings, except as otherwise provided by the 
amendments made in this IFC. The existing regulation does not 
expressly rely on the statutory requirement that the Secretaries of 
HHS and Treasury establish ``a process for public notice and comment 
at the State level, including public hearings . . . '' and HHS and 
the Department of the Treasury are of the view that language, by 
itself, does not require a particular state to hold more than one 
hearing. Rather, the statutory language describes a process 
applicable across multiple states, which will, in the aggregate, 
necessarily involve multiple hearings.
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    In addition, under section 1332(a)(4)(B)(iii) of the PPACA and the 
existing implementing regulations at Sec. Sec.  33.116(b) and 
155.1316(b), the Secretary of HHS and the Secretary of the Treasury are 
required to provide a Federal public notice and comment period 
following their preliminary determination that a state's section 1332 
waiver application is complete.
    Section 1332 waivers may vary significantly in their complexity and 
breadth. The existing regulations generally provide states and the 
Federal Government flexibility in determining and/or extending the 
length of the comment periods. Both the state and the Federal public 
notice and comment periods must be sufficient to ensure a meaningful 
level of public input. The 2018 Guidance \63\ further specifies that 
the state comment period should be no less than 30 days, and explains 
that consistent with HHS regulations, waiver applications must be 
posted online in a manner that meets technical standards for website 
accessibility similar to applicable national standards \64\ to ensure 
access for individuals with disabilities.
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    \63\ 83 FR 53575 (https://www.govinfo.gov/content/pkg/FR-2018-10-24/pdf/2018-23182.pdf).
    \64\ ``National standards'' refers to standards issued by the 
Architectural and Transportation Barriers Compliance Board (often 
referred to as ``section 508'' standards), or alternatively, the 
World Wide Web Consortium's Web Content Accessibility Guidelines 
(WCAG) 2.0 Level AA standards. See 83 FR 53575, 53583 (Oct. 24, 
2018).
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    HHS and the Department of the Treasury recognize that the current 
section 1332 regulations regarding state and Federal public notice 
procedures and comment period requirements may impose barriers for 
states pursuing a proposed waiver request during the PHE for COVID-
19.\65\ It is the mission of HHS to enhance and protect the health and 
well-being of all Americans. As such, HHS and the Department of the 
Treasury are issuing this guidance to protect public health and to 
prevent the spread of COVID-19 by limiting the need for in-person 
gatherings related to section 1332 waivers during the PHE. 
Additionally, states may face uncertainty as to whether their waiver 
request will be approved in time, given the state and Federal public 
notice procedures or other public participation requirement associated 
with state procedures that would otherwise require an in-person 
gathering, to expeditiously reform their health insurance markets and 
to protect consumers from the effects of the PHE for COVID-19. Some 
states may not consider more robust changes because they are concerned 
that the current section 1332 waiver application requirements are too 
time-consuming or burdensome to pursue during the PHE for COVID-19. 
Therefore, HHS and the Department of the Treasury are of the view that 
having the flexibility to modify certain public notice procedures and 
participation requirements during the PHE for COVID-19 will protect 
public health and health insurance markets, and will increase 
flexibility and reduce burdens for states seeking to use section 1332 
waivers as a means of innovation for providing coverage, lowering 
premiums, and improving their health care markets.
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    \65\ During the PHE for COVID-19, under the Secretaries' 
discretion, HHS and the Department of the Treasury have allowed 
states to conduct their public forums virtually, both prior to 
application submission and post award. For example, following the 
scheduling and notice of the hearings, and in consultation with CMS, 
the New Hampshire Insurance Department rescheduled planned in-person 
public hearings to an online webinar format in response to social 
distancing guidance provided by New Hampshire Governor Chris Sununu 
and the Federal government. (https://www.nh.gov/insurance/lah/documents/nh-section-1332-waiver-draft.pdf). Georgia also offered 
public hearings virtually because of public health concerns 
regarding large, in-person gatherings during the COVID-19 pandemic. 
In addition, as of July 13, 2020, several states with approved 
waivers conducted their post award forum virtually due to COVID-19, 
including Alaska, Colorado, Delaware, Maine, Maryland, Minnesota, 
Montana, Oregon, North Dakota, Rhode Island, and Wisconsin. In this 
IFC, the Secretaries expand and build upon this approach by 
providing more flexibility to allow HHS and the Department of the 
Treasury to expedite a decision on a proposed waiver request. 
(https://medicaid.georgia.gov/document/document/georgia1332waiverapplicationfinal07312020vfpdf/download).
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    Section 1332 waivers are a critical tool for states to ensure 
patients across the country have access to health care coverage. About 
10.7 million individuals on average rely on the Exchanges to purchase 
individual health insurance coverage throughout the 
year.66 67 Although recently there have been positive 
premium stabilization and insurer participation trends, the COVID-19 
pandemic has introduced new uncertainties in the individual and small 
group markets such that past trends resulting in limited access and 
affordability may return in some areas. For example, in response to the 
uncertainty created by the PHE for COVID-19 regarding health care 
utilization rates and claims costs, such as those associated with 
testing and treatment for COVID-19, premiums may increase and issuers 
may reduce their presence or coverage options in the individual and 
small group markets. Additionally, due to the PHE for COVID-19, some 
issuers may have difficulty predicting the composition of their risk 
pools given uncertainty about

[[Page 71179]]

the risk profiles of many new enrollees coming from employer-sponsored 
coverage and the potential transition of other enrollees to Medicaid 
due to income loss. Therefore, HHS and the Department of the Treasury 
are concerned that past trends that threaten the stability of the 
individual market risk pool may return, leading some issuers to cease 
offering coverage on the Exchanges in some states and counties and 
leading other issuers to increase their rates, leaving some geographic 
areas with limited or no affordable Exchange coverage options. 
Permitting the Secretary of HHS and the Secretary of the Treasury to 
modify the public notice procedures, in part, will help states seeking 
section 1332 waivers to address such circumstances more quickly and 
develop innovative ways to ensure consumers have access to affordable 
health care coverage. As such, HHS and the Department of the Treasury 
are of the view that, if certain safeguards are met, it is in the best 
interest of the public to provide states applying for section 1332 
waivers with the option to request to modify public notice procedures 
during the PHE for COVID-19.
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    \66\ American Health Benefit Exchanges, or ``Exchanges,'' are 
entities established under PPACA through which qualified individuals 
and qualified employers can purchase health insurance coverage in 
qualified health plans (QHPs).
    \67\ First Half of 2020 Average Effectuated Enrollment Data, 
available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Early-2020-2019-Effectuated-Enrollment-Report.pdf.
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    This IFC adds the new Sec. Sec.  33.118 and 155.1318 and provides 
that the Secretary of HHS and the Secretary of the Treasury may modify, 
in part, the state public notice requirements specified in Sec. Sec.  
33.112 and 155.1312 and the Federal public notice requirements 
specified at Sec. Sec.  33.116(b) and 155.1316(b) to expedite a 
decision on a proposed waiver request during the PHE for COVID-19 when 
a delay would undermine or compromise the purpose of the proposed 
waiver request and be contrary to the interests of consumers. Examples 
of the public notice procedures that currently apply under the 
aforementioned regulations that a state may seek to have waived or 
modified include the requirement that states notify the public and hold 
hearings prior to submitting an application, that the state hold more 
than one public hearing in more than one location and that HHS and the 
Department of the Treasury provide for public notice and comment after 
an application is determined to be complete. States may also seek to 
modify the state and/or Federal comment periods to be less than 30 days 
and to host public hearings virtually rather than in-person.
    For a state to qualify for modification of the state or Federal 
public notice requirements to expedite a decision on a proposed waiver 
request during the PHE for COVID-19, a delay must undermine or 
compromise the purpose of the proposed waiver request and be contrary 
to the interests of consumers. During the PHE for COVID-19, the 
Secretary of HHS and the Secretary of the Treasury (the Secretaries) 
may modify the Federal and/or state public notice procedures, in part, 
if the state meets all of the following:
     The state requests a modification in the form and manner 
specified by the Secretaries.
     The state acted in good faith, and in a diligent, timely, 
and prudent manner in the preparation of the request for the 
modification for the waiver, and the waiver application request.
     The state details in its request for a modification, as 
applicable, the reason(s) the state seeks a modification from the state 
public notice procedures, describes how the state meets the 
modification criteria, and describes the alternative public notice 
procedures it proposes to implement at the state level, including 
public hearings, that are designed to provide the greatest opportunity 
and level of meaningful public input from impacted stakeholders that is 
practicable given the emergency circumstances underlying the state's 
request for a modification.
     The state details in its request for a modification, as 
applicable, the justification for the request and the alternative 
public notice procedures it requests to be implemented at the Federal 
level.
     The state must, as applicable, implement the alternative 
public notice procedures at the state level if the state's modification 
request is approved and, if required, amend the waiver application to 
specify that it is the state's intent to comply with those alternative 
public notice procedures in the state's modification request.
    Any state submitting a proposed waiver request during the PHE for 
COVID-19 can submit a request to the Secretary of HHS and the Secretary 
of the Treasury for this modification from the state and/or Federal 
public notice procedures or include such a request in its section 1332 
waiver application request.
    The Secretary of HHS and the Secretary of the Treasury's review and 
consideration of a modification request will vary based on the state's 
circumstances, its modification request, and the complexity and breadth 
of the state's proposed section 1332 waiver request. For example, 
during the PHE for COVID-19, many states are prohibiting in-person 
public gatherings or establishing stay-at-home orders due to the public 
health threat.\68\ States seeking new section 1332 waiver(s) that have 
such prohibitions in effect at the time they would have otherwise have 
to conduct public notice would most likely be unable to comply with the 
public notice requirements to hold two in-person public hearings prior 
to submission of their section 1332 waiver applications in accordance 
with the 2018 Guidance addressing requirements under Sec. Sec.  
33.112(b) and 155.1312(b). In such cases, this IFC will allow the 
Secretaries to grant the state's request to hold the two public 
hearings virtually, rather than in-person, or to hold one public 
hearing at the state level, rather than two public hearings at the 
state level. As another example, the Secretaries may agree with a state 
that, due to emergency circumstances that have arisen related to the 
PHE for COVID-19, there is insufficient time for the state to provide 
public notice and hold any public hearings at the state level prior to 
submitting its section 1332 waiver application as required by 
Sec. Sec.  33.112(a) and 155.1312(a), and grant the state's request to 
provide public notice and hold public hearings at the state level after 
the state submits its section 1332 waiver application.
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    \68\ https://khn.org/morning-breakout/states-declare-emergencies-ban-large-gatherings-as-coronavirus-sweeps-the-nation/. 
https://www.axios.com/states-shelter-in-place-coronavirus-66e9987a-a674-42bc-8d3f-070a1c0ee1a9.html.
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    In situations where HHS and the Department of the Treasury 
determine that public notice and hearings are warranted on a different 
timeframe and may occur after the submission of a state's waiver 
application request, the state will be required to amend the 
application request as necessary to reflect public comments or other 
relevant feedback received during the alternative public notice 
procedures. HHS and the Department of the Treasury will evaluate a 
state's request for a modification and issue their modification 
determination within approximately 15 calendar days after the request 
is received. In assessing whether a state acted in good faith, and in a 
diligent, timely, and prudent manner in the preparation of the 
modification request for the waiver, and for the waiver application, 
HHS and the Department of the Treasury will evaluate whether the 
relevant circumstances constitute an emergency.
    HHS and the Department of the Treasury remind states that any 
public participation processes must continue to comply with applicable 
Federal civil rights laws, including taking reasonable steps to provide 
meaningful access for individuals with limited English

[[Page 71180]]

proficiency and taking appropriate steps to ensure effective 
communication with individuals with disabilities, including 
accessibility of information and communication technology. Please note 
that virtual meetings may present additional accessibility challenges 
for people with communications and mobility disabilities, as well as to 
those who lack broadband access. Ensuring effective communication may 
include providing American Sign Language interpretation and real-time 
captioning, and ensuring that the platform is interoperable with 
assistive technology for those with mobility difficulties. HHS and the 
Department of the Treasury especially encourage states to strive to 
obtain meaningful input from potentially affected populations, 
including low-income residents, residents with high expected health 
care costs, persons less likely to have access to care, and members of 
federally-recognized tribes, if applicable, as part of any alternative 
public participation process.\69\
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    \69\ As noted above, the HHS Office for Civil Rights enforces 
applicable Federal civil rights laws as described above, as well as 
laws protecting the exercise of conscience and religious freedom, 
including the Religious Freedom Restoration Act (42 U.S.C. 2000bb 
through 2000bb-4). HHS's requirements are subject to these laws, and 
states may have obligations under these laws to protect conscience, 
prohibit coercion, and to ensure the free exercise of religion. U.S. 
Department of Health & Human Services, Office for Civil Rights, 
Conscience and Religious Freedom, https://www.hhs.gov/conscience/index.html (last visited Aug. 20, 2020).
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    The Secretary of HHS will publish on the CMS website any 
modification determinations within 15 calendar days of the Secretary of 
HHS and the Secretary of the Treasury making such a determination, as 
well as the approved revised timeline for public comment at the state 
and Federal level, as applicable. In addition, under the new Sec. Sec.  
33.118 and 155.1318, the state will be required to publish on its 
website any modification requests and determinations within 15 calendar 
days of receipt of the determination, as well as the approved revised 
timeline for public comment at the state and Federal level, as 
applicable.
3. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)
    As section 1332 waivers are likely to a have a significant impact 
on individuals, states, and the Federal Government, the 2012 Final Rule 
established processes and methodologies to ensure that the Secretary of 
HHS and the Secretary of the Treasury receive adequate and appropriate 
information regarding section 1332 waivers (consistent with section 
1332(a)(4)(B)(iv) of the PPACA). Under Sec. Sec.  33.120(c) and 
155.1320(c), to ensure continued public input within at least 6 months 
after the implementation date, and annually thereafter, states are 
required to hold a public forum at which members of the public have an 
opportunity to provide comments on the progress of the program 
authorized by the section 1332 waiver and to provide a summary of this 
forum to the Secretary of HHS as part of the quarterly and annual 
reports required under Sec. Sec.  33.124 and 155.1324. Under Sec. Sec.  
33.120(c)(1) and 155.1320(c)(1), states are required to publish the 
date, time, and location of the public forum in a prominent location on 
the state's public website at least 30 days prior to the date of the 
planned public forum.
    This IFC adds new Sec. Sec.  33.120(c)(2) and 155.1320(c)(2), which 
provide that the Secretary of HHS and the Secretary of the Treasury 
(the Secretaries) may waive, in part, post award public notice 
requirements for an approved waiver outlined in Sec. Sec.  33.120(c) 
and 155.1320(c) during the PHE for COVID-19 when the application of the 
post award public notice procedures would be contrary to the interests 
of consumers during the PHE for COVID-19.
    The Secretaries may modify the post award public notice procedures, 
in part, when the state meets all of the following:
     The state requests a modification in the form and manner 
specified by the Secretaries.
     The state acts in good faith, and in a diligent, timely, 
and prudent manner to comply with the monitoring and compliance 
requirements under the regulations and specific terms and conditions of 
the waiver and to submit and prepare the request for a modification.
     The state details in its request for a modification the 
reason(s) the state seeks a modification from the state post award 
public notice procedures, describes how the state meets the 
modification criteria, and describes the alternative post award public 
notice procedures it proposes to implement at the state level, 
including public hearings, that are designed to provide the greatest 
opportunity and level of meaningful public input from impacted 
stakeholders that is practicable given the emergency circumstances 
underlying the state's request for a modification.
    As part of HHS and the Department of the Treasury's monitoring and 
oversight of approved section 1332 waivers, the Secretary of HHS and 
the Secretary of the Treasury, at their discretion, monitor the state's 
compliance with the specific terms and conditions of the waiver 
including, but not limited to, compliance with the guardrails, 
reporting requirements, and the post award forum requirements. Under 
the flexibilities provided in this IFC, the Secretaries may, for 
example, allow the public forum for an approved waiver that would take 
place or become due during the PHE for COVID-19 to be held virtually 
rather than as an in person gathering. HHS and the Department of the 
Treasury will work closely with states that have these approved 
flexibilities through oversight and monitoring activities to ensure 
open communication with states during the PHE for COVID-19. HHS and the 
Department of the Treasury also will remain focused on ensuring the 
public is informed about the implementation of programs authorized by 
section 1332 waivers and have a meaningful opportunity to comment on 
the implementation.
    The Secretary of HHS and the Secretary of the Treasury will 
evaluate a state's request for a modification and issue their 
modification determination within approximately 15 calendar days after 
the request is received. The state is required to publish on its 
website any modification requests and determinations by HHS and the 
Department of the Treasury within 15 calendar days of receipt of the 
determination, as well as information on the approved revised timeline 
for the state's post award public notice procedures, as applicable. 
Since the state is already required to post materials as part of post 
award annual reporting requirements, such as the notice for the public 
forum and annual report, states will be responsible for ensuring that 
the public is aware of the determination to modify the public notice 
procedures and must include this information along with the information 
required under Sec. Sec.  33.120(c)(1) and 155.1320(c)(1) in a 
prominent location on the state's public website.
    HHS and the Department of the Treasury are of the view that post 
award forums are critical to ensure that the public has a regular 
opportunity to learn about and comment on the progress of section 1332 
waivers. States that receive approval, to modify, in part, these post 
award public notice procedures would still need to meet all other 
requirements specified in Sec. Sec.  33.112(b) and 155.1312(b). For 
example, should the state receive a modification approval that permits 
it to hold the post award public forum virtually instead of in person, 
the state must still publish the notice of its post award public notice 
on

[[Page 71181]]

the state's public website and use other effective means to communicate 
the required information to the public. The public notice must include 
the website, date, and time of the public forum that will be convened 
by the state, information related to the timeframe for comments, and 
how comments from the public on the section 1332 waiver must be 
submitted. HHS and the Department of the Treasury remind states that 
they still must also comply with Federal civil rights requirements, 
including laws pertaining to accessibility, if the Secretary of HHS and 
the Secretary of the Treasury approve a modification from all or a 
portion of the post award public notice procedures. In such a 
circumstance, the state would need to ensure these virtual public 
hearings are as accessible as possible during the PHE for COVID-19 so 
members of the public can participate and submit comments. The state 
should also track how many people are attending these forums, if 
possible.

V. Waiver of Proposed Rulemaking

    Section 553(b) of the APA 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. Section 553(c) further 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. 
Section 553(b)(B) authorizes the agency to waive these procedures, 
however, if the agency finds good cause 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(d) 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 agency finds good cause to support an earlier effective date. 
Finally, the Congressional Review Act (CRA) 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).
    As noted earlier in this preamble, on January 30, 2020, the 
International Health Regulations Emergency Committee of the WHO 
declared the outbreak a ``Public Health Emergency of international 
concern.'' On January 31, 2020, pursuant to section 319 of the PHS, the 
HHS Secretary determined that a PHE exists for the United States to aid 
the nation's health care 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 October 23, 2020, the HHS Secretary renewed the 
January 31, 2020 determination, which was previously renewed on April 
21, 2020 and July 25, 2020, that a PHE exists and has existed since 
January 27, 2020. This declaration, along with the HHS Secretary's 
January 30, 2020 declaration of a PHE, conferred on the HHS Secretary 
certain waiver authorities under section 1135 of the Act. On March 13, 
2020, the HHS Secretary authorized waivers under section 1135 of the 
Act, effective March 1, 2020.\70\
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    \70\ https://www.phe.gov/emergency/news/healthactions/section1135/Pages/covid19-13March20.aspx.
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    It is critically important that the Departments implement the 
policies in this IFC as quickly as possible. As the United States is in 
the midst of the PHE for COVID-19, the Departments find good cause to 
waive notice of proposed rulemaking under the APA, 5 U.S.C. 553(b)(B). 
For those same reasons, as authorized by section 808(2) of the CRA, the 
Departments find it is impracticable and contrary to the public 
interest not to waive the delay in effective date of this IFC under 
section 801 of the CRA. Therefore, the Departments find there is good 
cause to waive the CRA's delay in effective date pursuant to section 
808(2) of the CRA. Thus, the Departments find good cause to waive the 
applicable delays in the effective date and, moreover, to establish 
these policies in this IFC applicable as of the date of display at the 
Office of the Federal Register.
    In this IFC, consistent with section 1902(a)(4) and (a)(19) of the 
Act, the Department adds a new subpart G to 42 CFR part 433 to provide 
states with more flexibility, subject to certain safeguards, in 
implementing the requirement in section 6008(b)(3) of the FFCRA that 
states maintain Medicaid beneficiary enrollment in order to receive the 
temporary increase in Federal funding in the FFCRA. This temporary 
funding increase is effective beginning January 1, 2020 and could 
extend through the last day of the calendar quarter in which the PHE 
for COVID-19, including any extensions, terminates, if the state claims 
the temporary funding increase in that quarter. This provision of the 
IFC is immediately necessary to ensure that states can determine 
eligibility and provide care and services during the PHE in a manner 
that is consistent with simplicity of administration and the best 
interests of beneficiaries and also claim the temporary funding 
increase.
    In this IFC, HHS and the Department of the Treasury are setting 
forth flexibilities in the public notice and post award public 
participation requirements for a State Innovation Waiver described in 
section 1332 of PPACA during the PHE for COVID-19. HHS and the 
Department of the Treasury recognize that following the normal state 
and Federal public notice procedures and the state post award 
requirements for section 1332 waivers may impose barriers for states 
pursuing a proposed waiver request during the PHE for COVID-19. This 
guidance is intended to protect public health and prevent the spread of 
COVID-19 by limiting the need for in-person gatherings related to a 
section 1332 waiver. Additionally, states may face uncertainty as to 
whether their waiver requests will be approved in time to expeditiously 
reform their health insurance markets and to protect consumers from the 
effects of the PHE for COVID-19. Some states may not consider more 
robust changes because they were concerned that the current section 
1332 waiver application requirements are too time-consuming or 
burdensome to be helpful during the PHE for COVID-19. HHS and the 
Department of the Treasury are of the view that the flexibility to 
modify certain public notice procedures and participation requirements 
will increase flexibility and reduce burden for states seeking to use 
section 1332 waivers as a means of innovation for providing coverage, 
lowering premiums, and improving their health care markets during the 
PHE for COVID-19. As such, these flexibilities are immediately 
necessary to provide states applying for a section 1332 waiver or 
during the post award period with the option to request a modification 
from the state and/or Federal public notice requirements when a delay 
would undermine or compromise the purpose of the waiver and be contrary 
to the interests of consumers. HHS and the Department of the Treasury 
are of the view that it could be contrary to the public interest to 
require full notice and comment during the current PHE for COVID-19 
because following the normal timeframes and requirements could result 
in waiver approvals for

[[Page 71182]]

innovative waivers taking effect after issuers have already made their 
decisions regarding issuer participation in the individual market and 
after rates for the upcoming plan year have been submitted. A 
modification from the public participation requirements would be 
beneficial to the public interest by providing states and the Federal 
Government the flexibilities necessary to review and approve, as 
appropriate, section 1332 waivers that expand access to coverage on a 
faster timeframe.
    In this IFC, the Departments amend the regulations under section 
2713 of the PHS Act to implement the requirement in section 3203 of the 
CARES Act that non-grandfathered group health plans and health 
insurance issuers offering non-grandfathered group or individual health 
insurance coverage provide coverage without cost sharing for qualifying 
coronavirus preventive services. This coverage must be provided within 
15 business days after the date on which a recommendation is made by 
the USPSTF or ACIP. The Departments also establish in this IFC that 
this coverage must be provided regardless of whether the service is 
delivered by an in-network or out-of-network provider.
    The Departments are issuing these amendments under the authority of 
section 9833 of the Code, section 734 of ERISA, and section 2792 of the 
PHS Act. These sections authorize the Secretaries of the Treasury, 
Labor, and HHS to promulgate any interim final rules that the 
Secretaries determine are appropriate to carry out the provisions of 
chapter 100 of the Code, part 7 of subtitle B of title I of ERISA, and 
part A of title XXVII of the PHS Act, which include PHS Act sections 
2701 through 2728 and the incorporation of those sections into ERISA 
section 715 and Code section 9815. In addition, section 7805(e) of the 
Code restricts any temporary regulation issued by Treasury and the IRS 
under the Code, such as interim final regulations, to a duration of 3 
years.
    Several COVID-19 vaccine candidates are currently in late-stage 
development. Once a vaccine is authorized or approved by FDA, the 
Departments expect that ACIP may move expeditiously to recommend the 
immunization. In addition, unlike other preventive items and services 
typically provided according to regularly scheduled intervals, items 
and services intended to prevent or mitigate COVID-19 will not, in the 
immediate future, be provided as part of a usual course of preventive 
care. Instead, the Departments expect consumers to receive these 
services once they are recommended for the general public or specific 
high-risk or high-priority populations. To help ensure full access to 
and the widespread use of qualifying coronavirus preventive services to 
mitigate the PHE for COVID 19, it is critical that individuals be able 
to receive such services from any provider authorized to provide the 
service. This is consistent with the objectives of Operation Warp 
Speed, which, as mentioned above, is a partnership among components of 
the Federal Government that engages with private firms to accelerate 
the development, manufacture, and distribution of a COVID-19 vaccine to 
the American people.
    The provisions of this IFC therefore are immediately necessary to 
ensure group health plan and group and individual health insurance 
coverage of these items and services is prompt and broad, to ensure 
timely access to combat the pandemic. In this IFC, the Department adds 
a requirement at Sec.  417.454 to require section 1876 cost plans to 
cover without cost sharing the COVID 19 vaccine and its administration 
described in section 1861(s)(10)(A) of the Act without cost sharing for 
the duration of the PHE for the COVID-19 pandemic, specifically the end 
of the emergency period defined in paragraph (1)(B) of section 1135(g) 
of the Act, which is the PHE declared by the Secretary on January 31, 
2020 and any renewals thereof. While section 1876(c)(2) of the Act 
ensures that enrollees in Medicare cost plans will have coverage of a 
COVID-19 vaccine and its administration, section 3713 of the CARES Act 
did not amend section 1876 of the Act to provide similar cost-sharing 
protections for enrollees in cost plans who receive the vaccine from an 
in-network provider. Currently, there is no requirement for cost plans 
to cover the COVID-19 vaccine and its administration without cost 
sharing (that is, with cost sharing that is the same as original 
Medicare) when the vaccine is furnished by an in-network health care 
provider. This provision of the IFC is immediately necessary to ensure 
that cost plan enrollees, like other Medicare beneficiaries, are 
provided access to the COVID-19 vaccine and its administration without 
cost sharing. This immediate action will ensure that cost is not a 
barrier for beneficiaries to get the vaccine, particularly during the 
public health emergency when ensuring access is paramount importance. 
The delay necessary for notice and comment rulemaking is both contrary 
to the public interest and impractical here as it would delay access to 
a COVID-19 vaccine without cost sharing and be contrary to the need to 
ensure access to a COVID-19 vaccine for enrollees in cost plans on the 
same basis as is ensured for other Medicare beneficiaries.
    Further, as underscored by the timeline for coverage Congress 
established in section 3203 of the CARES Act, the need to provide 
coverage of qualifying coronavirus preventive services is urgent. 
Following a recommendation of the USPTF or ACIP, the requirement to 
provide coverage without cost sharing of qualifying coronavirus 
preventive services, which are expected to include immunizations, takes 
effect within 15 business days. Plans and issuers need immediate 
guidance to understand their obligations under section 3203 of the 
CARES Act and to take steps that will enable them to comply with those 
requirements as soon as the coverage requirement goes into effect. 
Delaying these provisions would likewise delay plans' and issuers' 
ability to prepare for the availability of a COVID-19 vaccine, 
resulting in barriers in access to coverage of these critical services 
during the PHE for COVID-19. As of the date of display of this 
regulation, there are not any coronavirus preventive services including 
vaccines for coronavirus that are required to be covered. However, 
because emergency use authorization or approval of a COVID-19 vaccine 
may be imminent, the Departments are of the view it is critical that 
these regulations under section 2713 of the PHS Act be issued and 
effective prior to such authorization or approval. The Departments are 
of the view that it would be impracticable and contrary to the public 
interest to undertake normal notice and comment rulemaking procedures 
in light of the urgent need to ensure coverage of and access to 
qualifying coronavirus preventive services to protect the public health 
as well as the health and safety of individuals and communities to 
prevent the spread of COVID-19. For these same reasons, the Departments 
are of the view a delayed effective date would also be contrary to the 
public interest. Ensuring individuals have access to a COVID-19 vaccine 
as soon as it becomes available is critical to ending the PHE for 
COVID-19, and therefore it is imperative that these regulations are in 
effect on the date such a vaccine becomes available and recommended by 
ACIP. Undertaking the standard rulemaking process of publishing a 
proposed rule, seeking public comment, carefully

[[Page 71183]]

analyzing those public comments, and subsequently publishing a final 
rule would possibly and perhaps likely jeopardize such an effective 
date.
    The Departments are of the view that it would be impracticable and 
contrary to the public interest to undertake normal notice and comment 
procedures and to thereby delay the effective date of this IFC. The 
Departments find good cause to waive notice of proposed rulemaking 
under the APA, 5 U.S.C. 553(b)(B). For those same reasons, as 
authorized by section 808(2) of the CRA, the Departments find it is 
impracticable and contrary to the public interest not to waive the 
delay in effective date of this IFC under section 801 of the CRA. 
Therefore, the Departments find there is good cause to waive the CRA's 
delay in effective date pursuant to section 808(2) of the CRA. The 
provisions in this IFC will go into effect on the date of display.
    This IFC implements the requirement that providers of diagnostic 
tests for COVID-19 make public their cash prices for COVID-19 
diagnostic tests and specifies the COVID-19 diagnostic tests to which 
this requirement applies. This IFC further defines ``provider of a 
diagnostic test for COVID-19'' (referred to as ``provider'') as any 
facility that performs one or more COVID-19 diagnostic tests. In 
addition, this IFC defines ``cash price'' as the charge that applies to 
an individual who pays cash (or cash equivalent) for a COVID-19 
diagnostic test. This IFC gives CMS discretion to take any of the 
following actions if CMS determines a provider is noncompliant with the 
requirements of new 45 CFR 182.50:
     Provide a written warning notice to the provider of the 
specific violation(s).
     Request that a provider submit and comply with a CAP.
     Impose a CMP on the provider if the provider fails to 
respond to CMS' request to submit a CAP or to comply with the 
requirements of a CAP approved by CMS.
    As indicated above, these requirements are applicable during the 
PHE for COVID-19 (and any extensions to the PHE for COVID-19); 
therefore, it is critically important that we implement the policies in 
this IFC as quickly as possible in order for stakeholders to know with 
certainty during the PHE for COVID-19 how to comply with the law and 
what penalties they will face for noncompliance during the PHE for 
COVID-19. Moreover, these rules are necessary for CMS to enforce 
section 3202(b) of the CARES Act and to ensure plans, issuers, and 
consumers know in advance the price for a diagnostic test for COVID-19 
during the PHE for COVID-19. For these reasons, we believe it would be 
impracticable and contrary to the public interest to undertake normal 
notice and comment rulemaking procedures and to delay the effective 
date of the new requirements being adopted at 45 CFR part 182.
    In this IFC, the Department creates a New COVID-19 Treatments Add-
on Payment (NCTAP) under the Inpatient Prospective Payment System 
(IPPS) for COVID-19 cases that meet certain criteria. The Department is 
of the view that it would be impracticable and contrary to the public 
interest to undertake normal notice and comment procedures and to 
thereby delay the effective date of this IFC. As drug and biological 
products become available and are authorized or approved by FDA for the 
treatment of COVID-19 in the inpatient setting, there may be potential 
financial disincentives for hospitals to provide these new COVID-19 
treatments to Medicare inpatients during the PHE because the costs of 
these new treatments are not yet reflected in Medicare payment rates 
and there are no new technology add-on payments for these treatments. 
The delay necessary for notice and comment rulemaking is both contrary 
to the public interest and impracticable because of the urgency in 
ensuring there are not financial disincentives for hospitals to provide 
COVID-19 treatments to beneficiaries during the PHE. We expect that 
increasing the current IPPS payment amounts for sufficiently costly 
cases to mitigate potential financial disincentives for hospitals to 
provide new COVID-19 treatments during the PHE will potentially improve 
and speed access to these treatments for Medicare patients. We also 
believe that the establishment of the NCTAP provides greater 
transparency and predictability to the public, including innovators 
that are developing new COVID-19 treatments, as to how Medicare 
payments for cases involving these treatments will be determined when 
those treatments become available.
    In this IFC, the Department assures separate payment for new COVID-
19 treatments provided in the outpatient setting for the remainder of 
the Public Health Emergency for COVID-19. The Department is of the view 
that it would be impracticable and contrary to the public interest to 
undertake normal notice and comment procedures and to thereby delay the 
effective date of this IFC. We anticipate that most drugs and 
biological products authorized or approved for use in treating COVID-19 
in the outpatient setting would be separately paid under our standard 
OPPS payment policy; however, these products could be packaged into a 
Comprehensive Ambulatory Payment Classification (C-APC) payment when 
provided on the same claim as a C-APC service, in which case separate 
payment would not be made for these products. Although we do not expect 
that many beneficiaries would both receive a primary C-APC service and 
a drug or biological for treating COVID-19, we nonetheless believe that 
as drugs or biologicals become available and are authorized or approved 
for the treatment of COVID-19 in the outpatient setting, it would be 
appropriate to mitigate any potential financial disincentives for 
hospitals to provide these new treatments during the PHE for COVID-19. 
The delay necessary for notice and comment rulemaking to address this 
issue is both contrary to the public interest and impracticable because 
of the urgency in ensuring there are not financial disincentives for 
hospitals to provide COVID-19 treatments to beneficiaries. Therefore, 
effective for services furnished on or after the effective date of this 
rule and until the end of the PHE for COVID-19, CMS is creating an 
exception to its OPPS C-APC policy to ensure separate payment for new 
COVID-19 treatments that meet certain criteria.
    In this IFC, the Department adds changes to the CJR model that are 
immediately necessary to continue the CJR model consistent with model 
goals to, cover inpatient major lower joint replacements without 
interruption, and to reduce operational and financial uncertainty for 
CJR hospital participants during and beyond the PHE. Ending on March 
31, 2021 would be disruptive to hospitals and patient care during the 
PHE. The end date of March 31, 2021, means hospitals stop initiating 
episodes under the model after January 2, 2021, before the end of the 
public health emergency as renewed on October 23, 2020.\71\ Extending 
the model through an additional six months of performance year (PY) 5, 
so that PY 5 now ends on September 30, 2021, provides participant 
hospitals with greater certainty in model operations during the 
remainder of the PHE.
---------------------------------------------------------------------------

    \71\ https://www.phe.gov/emergency/news/healthactions/phe/Pages/covid19-2Oct2020.aspx
---------------------------------------------------------------------------

    Through this IFC we are implementing four changes to the CJR model 
needed to extend PY 5. These are: (1) Extending PY 5 an additional 6 
months to provide for continuity of model operations with the same 
scope while we continue to consider comments received on our proposal 
to extend the model to PYs 6 through 8 and adopt other changes to the 
model

[[Page 71184]]

(42 CFR 510.2 and 510.200(a)); (2) making changes to the reconciliation 
process for PY 5 to allow for two periods and to enable more frequent 
receipt of reconciliation reports by participants (42 CFR 510.2, 42 CFR 
510.200, 42 CFR 510.305(b), (d)(1), (e), (i)(1) and (2), and (j)(1) and 
(2), and 42 CFR 510.400(b)(3)(v), and adding 42 CFR 510.400(b)(3)(vi)); 
(3) making a technical change, retroactive to October 1, 2020, to 
ensure that the model continues to include the same inpatient Lower 
Extremity Joint Replacement (LEJR) procedures, despite the adoption of 
new MS-DRGs to describe those procedures (42 CFR 510.300(a)(1)(i) and 
(iii)); and (4) making changes to the extreme and uncontrollable 
circumstances policy for COVID-19 to adapt to an increase in CJR 
episode volume and renewal of the PHE, while providing protection 
against financial consequences of COVID-19 after the extreme and 
uncontrollable circumstances policy no longer applies (42 CFR 510.300).
    Implementing an additional six months of PY 5, so that PY 5 now 
ends on September 30, 2021 (hospitals stop initiating new episodes 
under the model after July 2, 2021) provides participant hospitals 
additional relief and stability in model operations while the end of 
the PHE remains unknown. We have modified the reconciliation process to 
provide payments consistent with the current annual reconciliation 
schedule for hospitals for greater stability. Absent modification to 
the reconciliation process, the extension of PY 5 to a total of 21 
months, from January 1, 2020 through September 30, 2021 would mean that 
participant hospitals would experience a 21-month gap between the PY4 
final reconciliation in June of 2020 and initial PY 5 reconciliation in 
early 2022. In the FY 2021 IPPS/LTCH final rule, we stated that because 
the CJR model would continue until at least March 31, 2021, we intended 
to adopt a policy in the CJR final rule that incorporates new MS-DRGs 
for the same procedures currently included in the CJR model, under 
prior MS-DRGs, as of their effective date to avoid disruption to the 
model for the remainder of PY5 (as extended) and thereafter, if our 
proposal to extend the CJR model through PY8 were finalized (85 FR 
58502). We are adopting the change in this IFC, retroactive to October 
1, 2020 because without a change the model ceases to continue as a 
comprehensive joint replacement model. Not making this change would 
have a significant impact on operational stability. Finally, this 
interim final rule with comment specifies an end for the current 
extreme and uncontrollable adjustment in 42 CFR 510.300(k)(4). In order 
to provide participant hospitals continuing financial protection from 
the effect of COVID-19 on the CJR model that may continue beyond the 
end of the PHE for COVID-19 or March 31, 2021, whichever occurs 
earlier, we are implementing that actual episode payments are capped at 
the quality adjusted target price determined for that episode under 
Sec.  510.300 for episodes with actual episode payments that include a 
claim with a COVID-19 diagnosis code and initiate after the earlier of 
March 31, 2021 or the last day of the emergency period. This policy is 
consistent with flexibilities and protections for impact of COVID-19 in 
other Innovation Center models. For all of these revisions, we believe 
it is contrary to the public interest to undertake traditional notice 
and comment rulemaking to adopt these regulatory changes because they 
preserve the model's scope and operations at current levels, fostering 
model stability now and in the future for hospital operations during 
and beyond the PHE.

VI. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, the Departments are 
required to provide 30-day notice in the Federal Register and solicit 
public comment before a collection of information requirement is 
submitted to 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 the Departments solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of the agency.
     The accuracy of the 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.
    The Departments 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 will be 
submitted to under OMB Control Number 0938-NEW.

A. ICRs for Price Transparency for COVID-19 Diagnostic Tests

    As discussed in section II.C of this IFC, section 3202(b) of the 
CARES Act establishes a requirement to publicize cash prices for COVID-
19 diagnostic tests during the PHE. For purposes of implementing 
section 3202(b) of the CARES Act, we are adding new 45 CFR part 182, 
``Price Transparency for COVID-19 Diagnostic Tests,'' that will codify 
price transparency requirements for the performance of a COVID-19 
diagnostic test.
    There are several types of COVID-19 tests designed to detect SARS-
CoV-2 or to diagnose a possible case of COVID-19, including: molecular 
(RT-PCR) tests, which are used to detect the virus's genetic material; 
antigen tests, which are used to detect specific proteins on the 
surface of the virus; and serology testing, which is used to look for 
the presence of antibodies produced by the body in response to 
infections.
    For purposes of 45 CFR part 182, we are defining ``provider of a 
diagnostic test for COVID-19'' as any facility that performs one or 
more COVID-19 diagnostic tests. In order to perform a diagnostic test 
for COVID-19 and report patient-specific results, a facility (whether 
that be a primary care provider's office, urgent care center, 
outpatient hospital site or stand-alone laboratory) is required to hold 
a CLIA certificate based on the complexity of the testing performed by 
the facility. Therefore, we expect that any ``provider of a COVID-19 
diagnostic test'' would hold a CLIA certificate (including a 
certificate of waiver or certificate of registration) and that such 
testing would occur in facilities ranging from primary care provider 
offices to urgent care centers to stand-alone national laboratories.
    As explained in section VIII.B of this IFC, we estimate that 
approximately 83,309 CLIA providers could potentially be performing 
COVID-19 diagnostic tests and need to publicize their cash prices. For 
purposes of this IFC, we are estimating it will take a business 
operations specialist (13-1000), on average 1 hour for a total of 
83,309 burden hours to compile and make public the cash prices for 
COVID-19 diagnostic tests, at an hourly wage of $36.31 as published by 
the BLS in 2019.\72\ We estimate the overhead and fringe benefit cost 
to be 100 percent of wages. Therefore, we estimate a one-time cost per 
provider to be $72.62

[[Page 71185]]

($36.31 x 2) and the total cost estimated to be $6,049,900 (83,309 
hours x $72.62) to collect, compile and post the required information.
---------------------------------------------------------------------------

    \72\ Bureau of Labor Statistics. National Occupational 
Employment and Wage Estimates, May 2019. Available at: https://www.bls.gov/oes/current/oes_nat.htm#13-0000.
---------------------------------------------------------------------------

B. ICRs for State Innovation Waivers Policy and Regulatory Revision in 
Response to COVID-19 Public Health Emergency

    This IFC provides that states are required to submit modification 
requests to the Secretary of HHS and the Secretary of the Treasury in 
order to obtain approval for the modifications made available by this 
IFC. Any state can submit a request to the Secretaries for a 
modification from the state and/or Federal public notice procedures or 
include such a request in their section 1332 waiver application if the 
waiver application is submitted during the PHE for COVID-19. The 
request must describe the reason the state seeks a modification from 
the state public notice procedures, describe how the state meets the 
modification criteria, describe the alternative public notice 
procedures it proposes to implement at the state level, including 
public hearings, that are designed to provide the greatest opportunity 
and level of meaningful public input from impacted stakeholders that is 
practicable given the emergency circumstances underlying the state's 
request for a modification. The request must describe the reason the 
state seeks a modification from the Federal public notice procedures 
and the alternative public notice procedures it requests to be 
implemented at the Federal level, as applicable.
    A state with an approved section 1332 waiver can submit a request 
to HHS and the Department of Treasury for a modification from post 
award public notice procedures. The request must specify the reason the 
state seeks a modification from the post award public notice 
procedures, describe how the state meets the modification criteria, and 
describe the alternative procedures it proposes to implement at the 
state level, including public hearings, that are designed to provide 
the greatest opportunity and level of meaningful public input from 
impacted stakeholders that is practicable given the emergency 
circumstances underlying the state's request for a modification.
    While HHS and the Department of Treasury do not have data available 
to predict the number of states that will likely request a modification 
of either the waiver application or the post award public notice 
procedures, HHS and the Department of Treasury estimate it will take a 
senior manager 1 hour to prepare a state's request, with an equivalent 
cost of approximately $118.\73\ In addition, if HHS and the Department 
of Treasury approve a state's modification request, the state will have 
to post the determination on their website within 15 days of the 
approval. HHS and the Department of Treasury estimate that for each 
state, it will take a network and computer systems administrator 15 
minutes to post the approval with an equivalent cost of approximately 
$21.\74\ Assuming that approximately 15 states will submit a 
modification request, the total burden hours for all states will be 15 
hours, with an equivalent cost of approximately $1,775. HHS and the 
Department of Treasury have assumed that 15 states will submit a 
request because, as of display of this IFC, 15 states have an approved 
1332 waiver. This is an upper bound, since some states may not need to 
request the available modification for their waivers, and therefore, 
will incur no burden. Furthermore, assuming that approximately 15 
states receive approval of the modification request and then must post 
the approval, the total burden hours for all states will be 
approximately 3.75 hours, with an equivalent cost of approximately 
$319. This is an upper bound, since some states may not receive 
approval, and therefore, will incur a lower (or no) burden. The total 
estimated burden hours assuming approximately 15 states apply for and 
receive approval of the modification request is 18.75 hours, with an 
equivalent cost of approximately $2,094.
---------------------------------------------------------------------------

    \73\ Using data from the Bureau of Labor Statistics (BLS) for 
General and Operations Managers (Code 11-1020), we estimate that the 
average hourly labor cost will be $118.30, including 100 percent 
increase for overhead and fringe benefits. https://www.bls.gov/oes/current/oes_stru.htm.
    \74\ Using data from the BLS for Network and Computer Systems 
Administrators (Code 15-1244), we estimate that the average hourly 
labor cost will be $85.02, including 100 percent increase for 
overhead and fringe benefits. https://www.bls.gov/oes/current/oes_stru.htm.

                             Table 3--Estimated Cost and Burden Hours per Respondent
----------------------------------------------------------------------------------------------------------------
                                                                  Average burden
                                                                     hour per       Hourly wage   Total cost per
                         BLS occupation                           respondent (in       rates        respondent
                                                                      hours)
----------------------------------------------------------------------------------------------------------------
Senior Manager..................................................               1         $118.30         $118.30
Network and Computer Systems Administrator......................            0.25           85.02           21.26
                                                                 -----------------------------------------------
    Total.......................................................            1.25  ..............          139.56
----------------------------------------------------------------------------------------------------------------


                          Table 4--Estimated Total Cost and Burden for all Respondents
----------------------------------------------------------------------------------------------------------------
                                     Number of       Number of     Burden hours    Total burden
                                    respondents      responses    per respondent       hours        Total cost
----------------------------------------------------------------------------------------------------------------
Modification Request............              15              15               1              15          $1,775
Posting modification approval...              15              15            0.25            3.75             319
                                 -------------------------------------------------------------------------------
    Total.......................              15  ..............            1.25           18.75           2,094
----------------------------------------------------------------------------------------------------------------


[[Page 71186]]

C. ICRs Regarding the Comprehensive Joint Replacement (CJR) Model

    Section 1115A(d)(3) of the Social Security Act exempts the Center 
for Medicare and Medicaid Innovation (CMMI) model tests and expansions, 
from the PRA. The section provides that Chapter 35 of title 44, United 
States Code, which includes such provisions as the PRA, shall not apply 
to the testing and evaluation of CMMI models or expansion of such 
models.

D. ICRs Regarding Enrollment as Mass Immunization Roster Biller

    As discussed in section II.A.1. of this IFC, a mass immunizer may 
be enrolled in Medicare as another type of provider or supplier such as 
a physician, non-physician practitioner, hospital outpatient 
department, home health agency, or skilled nursing facility. However, 
an entity that does not otherwise qualify as a Medicare provider or 
supplier but wishes to furnish mass immunization services may be 
eligible to enroll in Medicare as a ``Mass Immunization Roster Biller'' 
via the Form CMS-855B enrollment application (Medicare Enrollment 
Application: Clinics/Group Practices and Certain Other Suppliers; OMB 
Control No.: 0938-0685; Expires 12/21).
    This section discusses our burden estimates for the enrollment of 
mass immunization roster billers via the Form CMS-855B application as 
well as the PRA exemption we are claiming for the appeals process.
1. Cost of Completing Form CMS-855B
    Using our internal data, we generally estimate that approximately 
60,000 entities (the preponderance of which will be pharmacies) will 
seek to enroll as mass immunization roster billers pursuant to the IFC, 
all of whom will attempt enrollment in the 12-month period following 
the IFC's display. According to the most recent wage data provided by 
the Bureau of Labor Statistics (BLS) for May 2019 (see http://www.bls.gov/oes/current/oes_nat.htm), the mean hourly wages for the 
following categories are:

                          Table 5--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                    Occupation      Mean hourly    benefits and      Adjusted
                Occupation title                       code         wage ($/hr)    overhead ($/   hourly wage ($/
                                                                                        hr)             hr)
----------------------------------------------------------------------------------------------------------------
Healthcare Diagnosing or Treating Practitioners.         29-1000           49.26           49.26           98.52
Medical Secretaries and Administrative                   43-6013           18.31           18.31           36.62
 Assistants.....................................
----------------------------------------------------------------------------------------------------------------

    Consistent with Form CMS-855B projections made in recent rulemaking 
efforts, it will take each entity an average of 2.5 hours to obtain and 
furnish the information on the Form CMS-855B. Per our experience, the 
entity's medical secretary will secure and report this data, a task 
that would take approximately 2 hours. Additionally, a health 
diagnosing and treating practitioner of the entity will review and sign 
the form, a process we estimate takes 30 minutes. We therefore project 
a total burden of 150,000 hours (60,000 suppliers x 2.5 hrs) at a cost 
of $7,350,000 (60,000 suppliers x ((2 hrs x $36.62/hr) + (0.5 hrs x 
$98.52/hr)). When averaged over the typical 3-year OMB approval period, 
we estimate an annual burden of 50,000 hours (150,000 hrs/3) at a cost 
of $2,450,000 ($7,350,000/3).
2. Appeals
    Pursuant to 42 CFR part 498, a mass immunization roster biller may 
appeal the denial or revocation of its enrollment. While there are 
information collection requirements associated with the appeals 
process, we believe they are exempt from the PRA. In accordance with 
the implementing regulations of the PRA at 5 CFR 1320.4(a)(2), the 
information collection requirements associated with the appeals process 
are subsequent to an administrative action (specifically, the denial or 
revocation of a mass immunization roster biller's enrollment). 
Therefore, we have not developed burden estimates. We also believe that 
any costs associated with mass immunization roster biller enrollment 
will, in any event, be de minimis; this is because we anticipate, based 
on past experience, there would be comparatively few denials and 
revocations of such enrollments.

Response to Comments

    Because of the large number of public comments normally received on 
Federal Register documents, the Departments are not able to acknowledge 
or respond to them individually. All comments received by the date and 
time specified in the DATES section of this preamble will be 
considered, and, when the Departments proceed with a subsequent 
document, the Departments will respond to the comments in the preamble 
to that document.

Regulatory Impact Analysis

A. Statement of Need

    The flexibilities and changes contained within this IFC are 
responsive to the PHE for COVID-19. The policies implemented in this 
IFC will provide flexibilities, during the PHE for COVID-19, to states 
pursuing waivers under section 1332 of the PPACA and to states with 
approved section 1332 waivers. Additionally, the policies and 
regulatory updates implemented in this IFC will increase the 
affordability with regards to section 1332 waiver applications and 
support continuity of health insurance coverage for consumers in the 
individual and small group (or merged) market during the PHE for COVID-
19. This IFC also implements section 3202(b) of the CARES Act, which 
requires that providers of COVID-19 diagnostic tests make public their 
cash prices for those tests and establishes an enforcement scheme to 
enforce those requirements during the PHE for COVID-19.
    In section 3203 of the CARES Act, Congress required group health 
plans and issuers of group or individual health insurance coverage to 
cover without cost sharing qualifying coronavirus preventive services, 
and required such coverage to be provided within 15 business days after 
the date on which an applicable recommendation is made relating to such 
service. The Departments codify these requirements in this IFC, and 
finalize amendments to the regulations implementing section 2713 of the 
PHS Act at 26 CFR 54.9815-2713; 29 CFR 2590.715-2713; and 45 CFR 
147.130 that are intended to help ensure full access to and the 
widespread use of qualifying coronavirus preventive services to 
mitigate the public health emergency.

B. Overall Impact

    The Departments 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

[[Page 71187]]

Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96 354), section 1102(b) of the 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 one 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.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any one 
year), and a ``significant'' regulatory action is subject to review by 
the OMB. The Departments have determined that these rules are likely to 
have economic impacts of $100 million or more in at least one year, and 
thus, meet the definition of ``economically significant'' under 
Executive Order 12866 and a major rule under the Congressional Review 
Act. Therefore, the Departments have provided an assessment of the 
potential costs, benefits, and transfers associated with this rule. In 
accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by OMB.

C. Detailed Economic Analysis

1. Effect of Price Transparency for COVID-19 Diagnostic Tests During 
the PHE
    As discussed in section II.C of this IFC, Section 3202(b) of the 
CARES Act establishes a requirement to publicize cash prices for COVID-
19 diagnostic tests during the PHE. For purposes of implementing 
section 3202(b) of the CARES Act, we are adding new 45 CFR part 182, 
``Price Transparency for COVID-19 Diagnostic Tests,'' that will codify 
price transparency requirements for the actual performance of a COVID-
19 diagnostic test. At Sec.  182.20, we are defining a ``COVID-19 
diagnostic test'' as a COVID-19 in vitro diagnostic test described in 
section 6001 of the FFCRA, as amended by section 3201 of the CARES Act.
    This IFC defines a ``provider of a diagnostic test for COVID-19'' 
(referred to as ``provider'') as any facility that performs one or more 
COVID-19 diagnostic tests. In order to perform a COVID-19 diagnostic 
tests and report patient-specific results, a facility is required to 
hold a CLIA certificate based on the complexity of the testing 
performed by the facility. This IFC requires providers of COVID-19 
diagnostic tests to make public the cash price for such tests on a 
public internet website of such provider during the emergency period 
declared under section 319 of the PHS Act. In the event that a provider 
does not have its own website on which to post this cash price 
information, Sec.  182.40(b) states that the provider would be required 
to make public its cash price information in writing, within two 
business days upon request, and by posting signage prominently at the 
provider's COVID-19 diagnostic testing location, if such location is 
accessible to the public.
    We anticipate that price transparency has potential beneficial 
marketplace benefits generally, as discussed in detail in the CY 2020 
Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory 
Surgical Center Payment System Policy Changes and Payment Rates, Price 
Transparency Requirements for Hospitals To Make Standard Charges Public 
Final Rule (84 FR 65524) and the Transparency in Coverage Proposed Rule 
(84 FR 65464). As noted in section II.C of this IFC, section 3202 of 
the CARES Act addresses reimbursement of COVID-19 diagnostic tests. 
Section 3202(a) of the CARES Act requires group health plans and 
issuers that provide coverage for items and services described in 
section 6001(a) of the FFCRA to reimburse any provider of a COVID-19 
diagnostic test an amount that equals the negotiated rate, or, if the 
plan or issuer does not have a negotiated rate with the provider, the 
cash price for such service that is listed by the provider on a public 
website. We anticipate that price transparency in COVID-19 diagnostic 
testing, in particular, will help improve clarity for consumers and the 
plans and issuers that are required to cover the cost of performing a 
COVID-19 diagnostic test when there is no negotiated rate between the 
plan or issuer and the provider. For individuals without insurance and 
for health plans and health insurance issuers attempting to negotiate a 
rate for performance of a COVID-19 diagnostic test with a provider that 
has posted its cash price, that cash price could provide some context 
and a baseline against which those negotiations can occur. Moreover, 
price transparency in COVID-19 diagnostic tests will assist the 
uninsured in determining the cash price at various providers when price 
shopping for COVID-19 diagnostic tests.
    Assessments of broader transparency policies yield per-capita 
estimates of annual expenditure reductions ranging from between $3 and 
$5 (= $2.8 million + $1.3 million + $7.0 million + $2.3 million two-
year savings, across 1.3 million California public employees and their 
family members, per Boynton and Robinson (2015)), to $6.50 (= $7.9 
million + $36 million five-year savings found by Brown (2018), divided 
across the 1.36 million residents of New Hampshire), to $17 (= $13.2 
million three-year savings across 0.26 million beneficiaries, per 
Rhoads (2019)).\75\ If the $6.50 median result is extrapolated from the 
context of general health spending--which is approximately $10,000 per 
capita in the United States--to a range of between $60 and $1,200 in 
COVID-19 diagnostic testing (= $60 per test, across between one and 20 
tests), the estimate of rule-induced reductions in annual consumer 
expenditures could range from $13 million to $254 million. (This 
expenditure change combines transfers (to patients or insurers from 
providers)

[[Page 71188]]

with potential societal resource cost savings; only the latter portion 
should be compared against estimates of the provision's administrative 
and paperwork costs.) We note, however, that this estimate is based on 
annual expenditure reductions; because this requirement is only 
applicable for the remainder of the PHE, which may be less than a year, 
the saving impact is likely to be lower.
---------------------------------------------------------------------------

    \75\ Boynton, A., and Robinson, J. ``Appropriate Use of 
Reference Pricing Can Increase Value.'' Health Affairs Blog. July 7, 
2015. Available at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/. Brown, Z. Y. ``Equilibrium Effects of 
Health Care Price Information.'' 100 Rev. of Econ. and Stat. 1. July 
16, 2018. Available at: http://www-personal.umich.edu/~zachb/
zbrown_eqm_effects_price_transparency.pdf. Rhoads, J. ``Right to 
Shop for Public Employees: How health care incentives are saving 
money in Kentucky.'' The Dartmouth Institute for Health Policy and 
Clinical Practice. March 8, 2019. Available at: https://thefga.org/wp-content/uploads/2019/03/RTS-Kentucky-HealthCareIncentivesSavingMoney-DRAFT8.pdf.
---------------------------------------------------------------------------

    To comply with the regulatory updates in this IFC, providers would 
need to review their billing practices and determine their ``cash 
price'' for COVID-19 diagnostic tests. They would further need to 
publicly post the cash prices for all COVID-19 diagnostic tests along 
with associated plain language descriptions and HCPCS or CPT billing 
codes. The provider would be required to make all of this information 
public on the provider's internet website. As discussed in section 
VI.C, we estimate it would take a Business Operations Specialist, on 
average 1 hour to compile and make public the cash prices for the 
COVID-19 diagnostic tests that the facility offers at an hourly wage of 
$36.31 as published by the 2019 Bureau of Labor Statistics.\76\ We 
estimate the overhead and fringe benefit cost to be 100 percent of 
wages. Therefore, we estimate a one-time cost per provider to be $72.62 
(36.31 x 2).
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    \76\ Bureau of Labor Statistics. National Occupational 
Employment and Wage Estimates, May 2019. Available at: https://www.bls.gov/oes/current/oes_nat.htm#13-0000.
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    We expect that approximately 30 percent \77\ (n = 83,309) of the 
total CLIA-certified laboratories (n = 277,699 \78\) could potentially 
be performing COVID-19 diagnostic tests and need to publicize their 
cash prices in such form and manner as prescribed in new 45 CFR part 
182 during the PHE for COVID-19, including any subsequent renewals. The 
total cost is estimated to be $ $6,049,900 (83,309 hours x $72.62) to 
collect, compile and post the required information.
---------------------------------------------------------------------------

    \77\ Consistent with the percent of laboratories required to 
report COVID-19 diagnostic test results in CMS-3401-IFC.
    \78\ As of October 11, 2020, according to the Certification and 
Survey Provider Enhanced Reporting system this includes Certificate 
of Waiver (210,669), Certificate of Provider-Performed Microscopy 
(31,992), Certificate of Compliance (19,044) and Certificate of 
Accreditation (15,994). Available at: https://qcor.cms.gov/CLIA_wizard.jsp?which=4&report=active_CLIA.jsp.
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    We seek comment on the burden estimate for providers of a 
diagnostic test for COVID-19, specifically the number of burden hours 
estimated to post their cash price for COVID-19 diagnostic test.
2. Effects of Medicare Inpatient Prospective Payment System (IPPS) New 
COVID-19 Treatments Add-on Payment (NCTAP) for the Remainder of the 
Public Health Emergency (PHE)
    As drug and biological products become available and are authorized 
or approved by FDA for the treatment of COVID-19 in the inpatient 
setting, there may be potential financial disincentives for hospitals 
to provide these new COVID-19 treatments to Medicare inpatients during 
the PHE because the costs of these new treatments are not yet reflected 
in Medicare payment rates and there are no new technology add-on 
payments for these treatments. We expect that increasing the current 
IPPS payment amounts for sufficiently costly cases to mitigate 
potential financial disincentives for hospitals to provide new COVID-19 
treatments during the PHE will potentially improve and speed access to 
these treatments for Medicare patients. We also believe that the 
establishment of the NCTAP provides greater transparency and 
predictability to the public, including innovators that are developing 
new COVID-19 treatments, as to how Medicare payments for cases 
involving these treatments will be determined when those treatments 
become available.
    Given it is unknown what the cost and utilization of inpatient 
stays using these new treatments will be, the net overall cost of the 
NCTAP policy is not estimable. On one extreme, if all of the new COVID-
19 treatments decrease the net cost of hospitalizations (for example, 
due to shortened lengths of stay), including the cost of the new 
treatment, below the Medicare payment as increased by section 3710 of 
the CARES Act then there would be no NCTAP payments made and no 
additional cost to the Medicare program as a result of this policy. On 
the other extreme, if all of the new COVID-19 treatments result in the 
net cost of hospitalizations that exceed the outlier threshold (for 
example, due to the cost of the new treatment), the cost to the 
Medicare program would be the sum over all NCTAP cases of 0.65 times 
the outlier threshold for each case.
3. Effects of the Medicare Outpatient Prospective Payment System (OPPS) 
Separate Payment for New COVID-19 Treatments Policy for the Remainder 
of the Public Health Emergency (PHE) for COVID-19
    This IFC provides for separate payment for New COVID-19 Treatments 
under the Outpatient Prospective Payment System (OPPS) for the 
remainder of the PHE for COVID-19 when these treatments are provided at 
the same time as a Comprehensive Ambulatory Payment Classification (C-
APC) service. As we noted in Section II.E.2, we believe it would be a 
fairly rare occurrence that an outpatient department would perform a C-
APC procedure on a beneficiary being treated for COVID-19 because most 
C-APCs are for surgical or other intensive procedures and we would 
expect most hospital outpatients departments would not perform 
outpatient surgery on a patient that has an active case of COVID-19. 
While it is possible that future COVID-19 treatments that are 
authorized or approved for use in the outpatient setting might be 
administered to patients under observation while the provider 
determines if the patient needs to be admitted to the hospital for 
COVID-19, it is our expectation that this hypothetical situation would 
not happen frequently. Because we believe a new COVID-19 treatment will 
rarely be provided on the same claim as a primary C-APC service, we 
believe new COVID-19 treatments used in the outpatient setting will be 
separately paid under current policy the vast majority of the time. As 
a result, we believe any budgetary effect of this new exception is 
likely to be de minimis.
4. Effects of Temporary Increase in Federal Medicaid Funding
    This IFC interprets the requirement in section 6008(b)(3) of the 
FFCRA that states maintain Medicaid beneficiary enrollment as a 
condition of receiving the temporary FMAP increase described at section 
6008(a) of the FFCRA. This IFC provides states with greater flexibility 
than current CMS guidance to transition beneficiaries between 
eligibility groups, to modify the amount, duration, and scope of 
coverage available to beneficiaries, and to make changes to applicable 
cost sharing and beneficiary liability. At the same time, this IFC 
protects beneficiary access to medical assistance by requiring states 
to maintain each beneficiary's coverage in one of three tiers, thereby 
protecting access to the basic coverage a beneficiary was receiving as 
of or after March 18, 2020.
    We anticipate that this IFC will result in lessened financial 
burden on state Medicaid agencies and the Federal Government as 
compared to CMS's existing interpretation of the FFCRA 6008(b)(3) 
requirement. It would be highly challenging to estimate specific cost 
savings resulting from this IFC because such an estimate would be 
almost entirely dependent on state behavior under the unique 
circumstances of the PHE for COVID-

[[Page 71189]]

19. First, we believe that some savings may result from transitioning 
beneficiaries to different eligibility groups with greater cost sharing 
or beneficiary liability. However, we know that states have faced both 
system and operational constraints that may prevent them from 
processing routine actions, such as transitioning a beneficiary from 
one group to another following a change in circumstances. A state that 
has been processing eligibility renewals and redeterminations during 
the PHE may be able to make such transitions relatively quickly, while 
a state that has been unable to process changes without violating the 
requirements for receiving the temporary FMAP increase may need more 
time to begin transferring beneficiaries between groups.
    Second, we anticipate that states will implement the new 
flexibilities offered by this rule in a variety of ways and to 
different degrees. States may, for example, look for cost savings 
through the elimination of an optional benefit, establishing new 
copayments for services that are unrelated to the PHE, or increasing 
beneficiary liability for institutional care through a reduction to the 
personal needs allowance. Because each state's financial situation is 
unique and the characteristics of each Medicaid program are different, 
it is difficult to predict how states will respond to this IFC. While 
one state may elect to implement just one cost saving flexibility, 
another state may utilize all available options, and yet another state 
may elect not to make any program changes. Based on the recent feedback 
we have received from states, we do anticipate that some states will 
implement some of these cost saving measures, which will result in 
decreased financial burden for states and cost savings for the Federal 
Government.
    While our current interpretation of section 6008(b)(3) of the FFCRA 
provides the strongest protections for beneficiary access to coverage, 
the safeguards established by this IFC will ensure that all 
beneficiaries maintain the same basic level of access to coverage that 
they were receiving as of or after March 18, 2020. All beneficiaries 
who had access to minimum essential coverage will maintain access to 
such coverage, and every beneficiary who had access to testing services 
and treatment for COVID-19, including vaccines, will retain such 
access. Individual beneficiaries may be required to pay cost sharing 
that they were not previously charged (except with respect to testing 
and treatment services related to COVID-19, which states cannot charge 
under section 6008(b)(4) of the FFCRA if they are claiming the 
temporary FMAP increase), or they may need to meet additional prior 
authorization or medical necessity requirements.
5. Effects of Updates to the Comprehensive Care for Joint Replacement 
(CJR) Model, Performance Year (PY) 5 During the PHE
    The evolving impact of the PHE for the COVID-19 has created 
difficulties in forecasting the state of the LEJR market for 2021. For 
example, Table 1 indicates CJR episode volume increasing and moving 
back toward traditional levels from April to June, but then decreasing 
again in July and August. It is difficult to predict the impact of 
extending PY 5 an additional 6 months with the amended policies 
described above because there exists a potential for variation between 
PY 5 target prices and PY 5 actual episode costs (as a result of COVID-
19) which creates uncertainty in calculating anticipated net 
reconciliation amounts for PY 5. As a result, the Office of the Actuary 
was unable create projections regarding Medicare program spending in 
2021 for MS-DRGs 469, 470, 521, or 522 or discrete impact estimates 
regarding the effect of extending CJR PY 5 an additional 6 months with 
the amended policies described above. In assessing the potential cost 
or savings for this extension, CMMI internal analysis considered the 
following data points. First, the Second Annual CJR Evaluation 
Report,\79\ indicates participant hospitals reduced spending by 3.7 
percent (difference in claims) during the first 2 years of the CJR 
model. Additionally, if the episode definition policy were not amended 
to include the new MS-DRGs and fracture episodes were no longer 
included in the CJR episode definition October 1, 2020--March 31, 2021, 
episode volume would decrease significantly and the cost saving effect 
of the CJR model would be limited to only non-fracture episodes, which 
are generally the less costly episodes. We also know that while the CJR 
model achieves program savings, this observation is not net of 
reconciliation payments and administrative costs. Further, our February 
2020 proposed rule (85 FR 10516) proposes payment methodology revisions 
to the target price methodology to improve payment accuracy as the 
current methodology tends to excessive payment. Given the confluence of 
factors affecting payments, including episode volume, actual episode 
costs, and even target prices, we cannot confidently estimate cost or 
savings associated with the CJR model changes in this final rule, 
specifically, the provisions: to add reconciliation periods to PY 5, to 
add MS-DRGs 521 and 522 to the episode definition, to change the 
extreme and uncontrollable circumstances policy, and to extend PY5 6 
months. We will continue to refine this analysis. If the February 2020 
proposed rule is finalized after review and response to comment, we 
will strive to provide a more detailed estimate for future model 
performance years.
---------------------------------------------------------------------------

    \79\ CMS Comprehensive Care for Joint Replacement Model: 
Performance Year 2 Evaluation Report Available at https://innovation.cms.gov/files/reports/cjr-secondannrpt.pdf.
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6. Effects of Rapid Coverage of Preventative Services for Coronavirus
    This IFC requires that non-grandfathered group health plans and 
health insurance issuers offering non-grandfathered group or individual 
health insurance coverage provide coverage for qualifying coronavirus 
preventive services, including recommended COVID-19 immunizations and 
their administration, without any cost sharing. It also requires plans 
and issuers to provide coverage within 15 business days after the date 
on which an applicable recommendation is made by USPSTF or ACIP 
relating to such a service. In addition, it requires that during the 
PHE for COVID-19 a group health plan or issuer that has a network of 
providers to provide coverage without cost sharing regardless of 
whether the service is delivered by an in-network or out-of-network 
provider. Making these qualifying coronavirus preventive services, 
including COVID-19 immunizations, available without any delay is in the 
interest of public health, as making these services available as 
quickly as possible may encourage individuals to take advantage of 
these services and therefore may slow the transmission of COVID-19. 
Access to qualifying coronavirus preventive services without cost 
sharing will encourage more individuals to obtain them. Increased use 
of qualifying coronavirus preventive services may reduce the 
transmission and spread of the disease and thus potentially result in 
better overall health outcomes. In the immediate term, newly developed 
qualifying coronavirus preventive services might be available from a 
narrower range of providers than other, more established recommended 
preventive items and services. If COVID-19 immunizations require 
specialized storage and administration services, only a limited number 
of

[[Page 71190]]

providers may be able to offer them at first. If consumers have to 
incur additional burdens, long wait times, and increased travel times 
to find an in-network provider that can provide such services, it will 
limit access and discourage them from obtaining such services. 
Therefore, the Departments are of the view that requiring out-of-
network coverage without cost sharing for qualifying coronavirus 
preventive services will help ensure that consumers are able to obtain 
the preventive services without cost sharing as soon as possible.
    Plans and issuers will incur the cost of the qualifying coronavirus 
preventive services and administration of such services. Providing 
coverage within 15 business days after a recommendation is made 
relating to such services is likely to impose significant 
administrative costs on issuers, group health plans, and other service 
providers to update systems to include billing codes for the preventive 
services, negotiate prices with network providers, determine 
reimbursements for out-of-network providers, and conduct outreach to 
providers, participants, beneficiaries, and enrollees in a very short 
time period. Depending on the magnitude of the costs of qualifying 
coronavirus preventive services and administration of such services 
relative to the potential cost of treatment for the disease, this may 
have an impact on premiums. There are uncertainties regarding the price 
of potential qualifying coronavirus preventive services, including 
COVID-19 immunizations. If the prices are high and there is widespread 
use of such services, premiums may increase. If the timing of 
availability of the preventive services is such that plans and issuers 
are unable to take them into account when setting premiums, it may 
result in lower profits or losses for plans and issuers. The costs to 
plans and issuers will be lower if a third party, such as the Federal 
Government, covers the cost of the immunizations. In addition, the 
costs associated with providing coverage for qualifying coronavirus 
preventive services may be offset by savings from avoidance of 
treatment for COVID-19.
    During the PHE for COVID-19, costs to group health plans or issuers 
that have networks of providers will be higher if a significant number 
of participants, beneficiaries, or enrollees go to out-of-network 
providers, and the issuers and plans reimburse those out-of-network 
providers at higher levels than their negotiated rate with in-network 
providers. However, if consumers can obtain the qualifying coronavirus 
preventive services where they usually obtain health care services, 
consumers are likely to receive the services from an in-network 
provider. Plans and issuers may also wish to educate participants, 
beneficiaries, or enrollees about the availability of the services from 
in-network providers and encourage them to obtain these services from 
their usual providers. This approach could limit the number of 
participants, beneficiaries, or enrollees going to out-of-network 
providers instead of staying in network, but there will be associated 
administrative burdens and costs.
    The total cost to plans and issuers related to qualifying 
coronavirus preventive services that are immunizations will depend on 
the cost and number of required immunization doses to be administered, 
the number of people who will choose to get immunized against COVID-19 
and which providers will be able to provide the preventive services. 
For the 2018-19 influenza season, 62.6 percent of children 6 months 
through 17 years and 45.3 percent of adults 18 years and older obtained 
the influenza vaccine.\80\ Given the severity of COVID-19, the 
Departments anticipate the immunization rates for COVID-19 are likely 
to ultimately be higher than for influenza, although initial rates may 
be lower until an adequate supply is available. Total costs to plans 
and issuers will depend on the cost of covering qualifying coronavirus 
preventive services, the number of people choosing to obtain such 
services, and whether a third party such as the Federal Government 
covers the costs of any immunizations.
---------------------------------------------------------------------------

    \80\ See Flu Vaccination Coverage, United States, 2018-19 
Influenza Season. Center for Disease Control and Prevention, 
available at https://www.cdc.gov/flu/fluvaxview/coverage-1819estimates.htm.
---------------------------------------------------------------------------

    The Departments seek comment on any potential costs and burdens 
that may be incurred by plans and issuers due to the requirements to 
cover the costs and administration of such qualifying coronavirus 
preventive services without any cost sharing regardless of whether the 
service is delivered by an in-network or out-of-network provider. The 
Departments also seek comment on the potential effects and costs 
consumers may face as a result of this provision.
7. Effects of Changes to State Innovation Waivers Policy and Regulatory 
Revisions in Response to the COVID-19 Public Health Emergency
    This IFC establishes a framework for states to request the 
Secretary of HHS and the Secretary of the Treasury to modify, in part, 
the public notice procedures outlined in 31 CFR 33.112 and 33.116 and 
45 CFR 155.1312 and 155.1316 to expedite a decision on a proposed 
section 1332 waiver request during the PHE for COVID-19. Regulations at 
Sec. Sec.  33.112 and 155.1312 require a state to provide a public 
notice and comment period at the state level prior to submitting an 
application for a section 1332 waiver. The regulations at Sec. Sec.  
33.116 and 155.1316 establish Federal public notice requirements for 
state section 1332 waiver applications. This IFC also establishes a 
framework at the new 31 CFR 33.120(c)(2) and 45 CFR 155.1320(c)(2) for 
states to request the Secretaries to modify, in part, the post award 
public notice procedures outlined in Sec. Sec.  33.120(c) and 
155.1320(c) for an approved waiver that would otherwise take place or 
become due during the PHE for COVID-19. As stated above, HHS and the 
Department of the Treasury are of the view that requiring states that 
meet the criteria outlined in this IFC to comply with the full public 
notice procedures during the PHE for COVID-19 could cause undue harm to 
the public. Allowing the Secretaries to modify, in part, these 
requirements will enable states to request and receive approval for 
waiver requests more quickly and also implement changes that will 
provide consumers with access to affordable health insurance coverage 
during the current PHE for COVID-19. States that request modifications 
from the public notice procedures will incur some burden, as discussed 
in the Collection of Information Requirements section. For a state that 
requests and receives a modification of the public notice procedures, 
we acknowledge that consumers may receive less prior notice than would 
occur without the modification. Through this IFC, the HHS and the 
Department of Treasury intend to provide an appropriate balance and 
permit flexibility where a state can ensure a sufficient opportunity 
for meaningful public input given the circumstances in the PHE for 
COVID-19 while also ensuring the safety of the public. If a state's 
modification request is approved there may be a shorter comment period 
at the state or Federal level, or the comment periods may be the same 
number of days (for example 30 days) but perhaps on a different 
timeframe. For example, a state may conduct the state public comment 
period concurrently with the Federal public comment period instead of 
before. States with approved modification requests may experience a 
reduction in costs related to post award public notice procedures. 
However, if

[[Page 71191]]

the state's modification request is approved, the state must also 
implement alternative public notice procedures and, if required, amend 
the waiver application to specify that it is the state's intent to 
comply with those alternative public notice requirements in the state's 
modification request. States may also need to employ additional 
technologies to host virtual hearings instead of in person gatherings. 
In this case, there may be no reduction in costs related to public 
notice procedures.
    HHS and the Department of the Treasury seek comment on any 
potential costs and burdens that may be incurred by states due to the 
flexibilities afforded in this IFC. HHS and the Department of the 
Treasury also seek comment on the potential effects and costs consumers 
may face as a result of a state's action taken as a result of the 
flexibilities in this IFC.
8. Effects of Medicare Coding and Payment for COVID-19 Vaccine
    This IFC discusses CMS's implementation of section 3713 of the 
CARES Act (Pub. L. 116-136), which established Medicare Part B coverage 
and payment for a COVID-19 vaccine and its administration. This IFC 
requires that Medicare provide coverage for qualifying COVID-19 
vaccines administration, without any cost sharing. Making COVID-19 
vaccines, available without any delay is in the interest of public 
health, as making these services available as quickly as possible may 
encourage individuals to take advantage of these services and therefore 
may slow the transmission of COVID-19. Access to COVID-19 vaccines 
without cost sharing will encourage more individuals to obtain them. In 
the immediate term, any newly developed COVID-19 vaccines might be 
available from a narrower range of providers than other, more 
established recommended preventive items and services. If COVID-19 
vaccines require specialized storage and administration services, only 
a limited number of providers may be able to offer them at first. If 
beneficiaries have to incur additional burdens, long wait times, and 
increased travel times to find Medicare providers and suppliers that 
can provide such services, it will limit access and discourage them 
from obtaining such services. Medicare providers and suppliers will 
incur costs for providing COVID-19 vaccines and administration of such 
services. There are uncertainties regarding the cost to the Medicare 
program for COVID-19 vaccines and administration at this time. The 
total cost to Medicare related to COVID-19 vaccines and administration 
cost are dependent on and the number of required immunization doses to 
be administered, the number of people who will choose to get immunized 
against COVID-19 and which providers and suppliers will be able to 
provide the preventive services.
9. Effects of Application Fee as Part of Form CMS-855B Enrollment as 
Mass Immunization Roster Biller
    Consistent with Sec.  424.514, an entity enrolling in Medicare as a 
mass immunization roster biller via the Form CMS-855B must pay an 
application fee at the time of enrollment. The application fees for 
each of the past 3 calendar years were or are $569 (CY 2018), $586, (CY 
2019), and $595 (CY 2020). The differing fee amounts are predicated on 
changes/increases in the Consumer Price Index (CPI) for all urban 
consumers (all items; United State city average, CPI-U) for the 12-
month period ending on June 30 of the previous year. Although we cannot 
predict future changes to the CPI, the fee amounts between 2018 and 
2020 increased by an average of $13 per year. We believe this is a 
reasonable barometer with which to establish a CY 2021 fee estimate 
(strictly for purposes of this IFC) of $608.
    Applying this prospective fee amount to the previously mentioned 
60,000 projected mass immunization roster biller applicants in the 
first year of this rule, we estimate a total application fee cost to 
enrollees of $36,400,000 (or 60,000 x $608). This represents a transfer 
from mass immunizer suppliers to the Federal Government.

D. Regulatory Alternatives Considered

    The Department considered not implementing the changes to the CJR 
model but determined the effect of the changes, particularly relief 
from financial risk for COVID-19 cases and stability in model 
operations, to be very important for participant hospitals during the 
PHE. Further, if the three-year extension of the CJR model is 
finalized, it would be much more difficult for participant hospitals to 
stop model value-based operations, and then restart value operations 
when hospitals already have significant burden managing COVID-19 
treatment and under COVID-19 safety protocols and utilization changes.
    The Departments considered not requiring plans and issuers to 
provide coverage for qualifying coronavirus preventive services without 
cost sharing from out-of-network providers. However, in the near term, 
newly developed qualifying coronavirus preventive services might be 
available from a narrower range of providers than other, more 
established recommended preventive services because of specialized 
storage and administration requirements. If there are only a limited 
number of in-network providers that can administer these services, 
consumers may incur additional burden related to travel and long wait 
times to obtain these services, which can result in lower utilization. 
The Departments are concerned that allowing plans and issuers to impose 
cost sharing for COVID-19 immunizations provided by out-of-network 
providers would discourage individuals from seeking immunization, 
potentially leading to reduced administration of any COVID-19 vaccine 
and prolonging the PHE for COVID-19, contrary to the intent of the 
CARES Act. In order to ensure that the immunization services will be 
available to all consumers enrolled in non-grandfathered group health 
plans and non-grandfathered group and individual health insurance 
coverage, the Departments are therefore requiring such plans and 
issuers to cover without cost sharing a qualifying coronavirus 
preventive service, regardless of whether such service is delivered by 
an in-network or out-of-network provider. The Departments anticipate 
that as such services become more widely available over time, consumers 
will be able to obtain them more easily from in-network providers.
    HHS and the Department of the Treasury considered providing states 
with the flexibility to waive all of the public notice procedures 
outlined in 31 CFR 33.112 and 33.116 and 45 CFR 155.1312 and 155.1316 
to expedite a decision on a proposed section 1332 waiver request during 
the PHE for COVID-19. This approach would have allowed a state to 
request to completely eliminate a public notice or reporting 
requirement pre- or post-award. However, HHS and the Department of the 
Treasury were concerned that that this would violate the statutory 
requirements regarding a meaningful level of input from the public. In 
addition, HHS and the Department of Treasury are committed to 
transparency and value public input on waiver proposals and value 
public feedback to ensure consumers are aware of waiver proposals that 
may affect them. HHS and the Department of the Treasury anticipate 
working with states on their modification request to ensure the public 
is provided the opportunity to provide feedback on waiver proposals and 
the progress of the program authorized by the section 1332 waiver.

[[Page 71192]]

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act, (5 U.S.C. 601, et seq.), requires 
agencies to analyze options for regulatory relief of small entities to 
prepare an initial regulatory flexibility analysis to describe the 
impact of the proposed rule on small entities, unless the head of the 
agency can certify that the rule will not have a significant economic 
impact on a substantial number of small entities. The RFA generally 
defines a ``small entity'' as (1) a proprietary firm meeting the size 
standards of the Small Business Administration (SBA), (2) a not-for-
profit organization that is not dominant in its field, or (3) a small 
government jurisdiction with a population of less than 50,000. States 
and individuals are not included in the definition of ``small entity.'' 
HHS uses a change in revenues of more than 3 to 5 percent as its 
measure of significant economic impact on a substantial number of small 
entities. For purposes of the RFA, small entities include small 
businesses, nonprofit organizations, and small governmental 
jurisdictions. Individuals and states are not included in the 
definition of a small entity. This IFC is not preceded by a general 
notice of proposed rulemaking, and thus the requirements of RFA do not 
apply.
    In addition, section 1102(b)(2) of the Act provides that whenever 
the Secretaries promulgate a final version of a rule or regulation with 
respect to which an initial regulatory impact analysis is required, the 
Secretaries shall prepare a final regulatory impact analysis with 
respect to the final version of such rule or regulation. Such analysis 
is required to set forth, with respect to small rural hospitals, the 
matters required under section 604 of title 5, United States Code, to 
be set forth with respect to small entities. The Departments are not 
required to prepare a final regulatory impact analysis, because this 
regulatory action is being issued as an interim final rule without 
being preceded by a general notice of proposed rulemaking.

F. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits and take 
certain other actions before issuing any proposed rule or any final 
rule for which a general notice of proposed rulemaking was published 
that includes any Federal mandate that may result in expenditures in 
any 1 year by a state, local, or Tribal governments, in the aggregate, 
or by the private sector, of $100 million in 1995 dollars, updated 
annually for inflation. In 2020, that threshold is approximately $156 
million. This IFC was not preceded by a general notice of proposed 
rulemaking, and thus the requirements of UMRA do not apply.

G. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this rule aims to alleviate burden on State and 
local governments, the requirements of Executive Order 13132 are not 
applicable.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit the policy making discretion of the states, the 
Departments have engaged in efforts to consult with and work 
cooperatively with affected states, including participating in 
conference calls with and attending conferences of the NAIC, and 
consulting with state insurance officials on an individual basis.
    While developing this rule, the Departments attempted to balance 
the states' interests in regulating health insurance issuers with the 
need to ensure market stability. By doing so, the Departments complied 
with the requirements of Executive Order 13132.

H. Reducing Regulation and Controlling Regulatory Costs

    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.

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

    Employee benefit plans, Health care, Health insurance, Penalties, 
Pensions, Privacy, Reporting and recordkeeping requirements.

31 CFR Part 33

    Health care, Health insurance, Reporting and recordkeeping 
requirements.

42 CFR Part 410

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

42 CFR Part 411

    Diseases, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 414

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

42 CFR Part 417

    Administrative practice and procedure, Grant programs-health, 
Health care, Health insurance, Health maintenance organizations (HMO), 
Loan programs-health, Medicare, Reporting and recordkeeping 
requirements.

42 CFR Part 433

    Administrative practice and procedure, Child support, Claims, Grant 
programs-health, Medicaid, Reporting and recordkeeping requirements.

42 CFR Part 510

    Administrative practice and procedure, Health facilities, Medicare, 
Reporting and recordkeeping requirement.

45 CFR Part 147

    Age discrimination, Citizenship and naturalization, Civil rights, 
Health care, Health insurance, Individuals with disabilities, 
Intergovernmental relations, Reporting and recordkeeping requirements, 
Sex discrimination.

45 CFR Part 155

    Administrative practice and procedure, Advertising, Brokers, 
Conflict of interests, Consumer protection, Grant programs-health, 
Grants administration, Health care, Health insurance, Health 
maintenance organizations (HMO), Health records, Hospitals, Indians, 
Individuals with disabilities, Intergovernmental relations, Loan 
programs-health, Medicaid, Organization and functions (Government 
agencies), Public assistance programs, Reporting and recordkeeping 
requirements, State flexibility, Technical assistance, Women and youth.

[[Page 71193]]

45 CFR Part 182

    COVID-19 diagnostic testing, Reporting and recordkeeping 
requirements.

    Dated: October 21, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: October 26, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
Sunita Lough,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
    Approved: October 28, 2020.
David J. Kautter,
Assistant Secretary of the Treasury (Tax Policy).
    Signed at Washington DC, this 29th day of October, 2020.
Jeanne Klinefelter Wilson,
Acting Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

Amendments to the Regulations

    For the reasons set forth in the preamble, the Department of the 
Treasury amends 26 CFR part 54 as set forth below:

PART 54--PENSION EXCISE TAXES

0
Par. 1. The authority citation for part 54 continues to read in part as 
follows:

    Authority:  26 U.S.C. 7805, unless otherwise noted.
* * * * *
    Section 54.9815-2713T also issued under 26 U.S.C. 9833.
* * * * *

0
2. Section 54.9815-2713T is added to read as follows:


Sec.  54.9815-2713T  Coverage of preventive health services 
(temporary).

    (a) Services--(1) In general. Beginning at the time described in 
paragraph (b) of this section and subject to Sec.  54.9815-2713A, a 
group health plan, or a health insurance issuer offering group health 
insurance coverage, must provide coverage for and must not impose any 
cost-sharing requirements (such as a copayment, coinsurance, or a 
deductible) for--
    (i) Evidence-based items or services that have in effect a rating 
of A or B in the current recommendations of the United States 
Preventive Services Task Force with respect to the individual involved 
(except as otherwise provided in paragraph (c) of this section);
    (ii) Immunizations for routine use in children, adolescents, and 
adults that have in effect a recommendation from the Advisory Committee 
on Immunization Practices of the Centers for Disease Control and 
Prevention with respect to the individual involved (for purposes of 
this paragraph (a)(1)(ii), a recommendation from the Advisory Committee 
on Immunization Practices of the Centers for Disease Control and 
Prevention is considered in effect after it has been adopted by the 
Director of the Centers for Disease Control and Prevention, and a 
recommendation is considered to be for routine use if it is listed on 
the Immunization Schedules of the Centers for Disease Control and 
Prevention);
    (iii) With respect to infants, children, and adolescents, evidence-
informed preventive care and screenings provided for in comprehensive 
guidelines supported by the Health Resources and Services 
Administration;
    (iv) With respect to women, such additional preventive care and 
screenings not described in paragraph (a)(1)(i) of this section as 
provided for in comprehensive guidelines supported by the Health 
Resources and Services Administration for purposes of section 
2713(a)(4) of the Public Health Service Act, subject to 45 CFR 147.131, 
147.132, and 147.133; and
    (v) Any qualifying coronavirus preventive service, which means an 
item, service, or immunization that is intended to prevent or mitigate 
coronavirus disease 2019 (COVID-19) and that is, with respect to the 
individual involved--
    (A) An evidence-based item or service that has in effect a rating 
of A or B in the current recommendations of the United States 
Preventive Services Task Force; or
    (B) An immunization that has in effect a recommendation from the 
Advisory Committee on Immunization Practices of the Centers for Disease 
Control and Prevention (regardless of whether the immunization is 
recommended for routine use). For purposes of this paragraph 
(a)(1)(v)(B), a recommendation from the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention is considered in effect after it has been adopted by the 
Director of the Centers for Disease Control and Prevention.
    (2) Office visits. (i) If an item or service described in paragraph 
(a)(1) of this section is billed separately (or is tracked as 
individual encounter data separately) from an office visit, then a plan 
or issuer may impose cost-sharing requirements with respect to the 
office visit.
    (ii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is the delivery of such an item or service, then a 
plan or issuer may not impose cost-sharing requirements with respect to 
the office visit.
    (iii) If an item or service described in paragraph (a)(1) of this 
section is not billed separately (or is not tracked as individual 
encounter data separately) from an office visit and the primary purpose 
of the office visit is not the delivery of such an item or service, 
then a plan or issuer may impose cost-sharing requirements with respect 
to the office visit.
    (iv) The rules of this paragraph (a)(2) are illustrated by the 
following examples:
    (A) Example 1--(1) Facts. An individual covered by a group health 
plan visits an in-network health care provider. While visiting the 
provider, the individual is screened for cholesterol abnormalities, 
which has in effect a rating of A or B in the current recommendations 
of the United States Preventive Services Task Force with respect to the 
individual. The provider bills the plan for an office visit and for the 
laboratory work of the cholesterol screening test.
    (2) Conclusion. In paragraph (a)(2)(iv)(A)(1) of this section, the 
plan may not impose any cost-sharing requirements with respect to the 
separately-billed laboratory work of the cholesterol screening test. 
Because the office visit is billed separately from the cholesterol 
screening test, the plan may impose cost-sharing requirements for the 
office visit.
    (B) Example 2--(1) Facts. Same facts as in paragraph 
(a)(2)(iv)(A)(1) of this section (Example 1). As the result of the 
screening, the individual is diagnosed with hyperlipidemia and is 
prescribed a course of treatment that is not included in the 
recommendations under paragraph (a)(1) of this section.
    (2) Conclusion. In paragraph (a)(2)(iv)(B)(1) of this section, 
because the treatment is not included in the recommendations under 
paragraph (a)(1) of this section, the plan is not prohibited from 
imposing cost-sharing requirements with respect to the treatment.
    (C) Example 3--(1) Facts. An individual covered by a group health 
plan visits an in-network health care provider to discuss recurring 
abdominal pain. During the visit, the individual

[[Page 71194]]

has a blood pressure screening, which has in effect a rating of A or B 
in the current recommendations of the United States Preventive Services 
Task Force with respect to the individual. The provider bills the plan 
for an office visit.
    (2) Conclusion. In paragraph (a)(2)(iv)(C)(1) of this section, the 
blood pressure screening is provided as part of an office visit for 
which the primary purpose was not to deliver items or services 
described in paragraph (a)(1) of this section. Therefore, the plan may 
impose a cost-sharing requirement for the office visit charge.
    (D) Example 4--(1) Facts. A child covered by a group health plan 
visits an in-network pediatrician to receive an annual physical exam 
described as part of the comprehensive guidelines supported by the 
Health Resources and Services Administration. During the office visit, 
the child receives additional items and services that are not described 
in the comprehensive guidelines supported by the Health Resources and 
Services Administration, nor otherwise described in paragraph (a)(1) of 
this section. The provider bills the plan for an office visit.
    (2) Conclusion. In paragraph (a)(2)(iv)(D)(1) of this section, the 
service was not billed as a separate charge and was billed as part of 
an office visit. Moreover, the primary purpose for the visit was to 
deliver items and services described as part of the comprehensive 
guidelines supported by the Health Resources and Services 
Administration. Therefore, the plan may not impose a cost-sharing 
requirement with respect to the office visit.
    (3) Out-of-network providers. (i) Subject to paragraphs (a)(3)(ii) 
and (iii) of this section, nothing in this section requires a plan or 
issuer that has a network of providers to provide benefits for items or 
services described in paragraph (a)(1) of this section that are 
delivered by an out-of-network provider, or precludes a plan or issuer 
that has a network of providers from imposing cost-sharing requirements 
for items or services described in paragraph (a)(1) of this section 
that are delivered by an out-of-network provider.
    (ii) If a plan or issuer does not have in its network a provider 
who can provide an item or service described in paragraph (a)(1) of 
this section, the plan or issuer must cover the item or service when 
performed by an out-of-network provider, and may not impose cost-
sharing with respect to the item or service.
    (iii) A plan or issuer must provide coverage for and must not 
impose any cost-sharing requirements (such as a copayment, coinsurance, 
or a deductible) for any qualifying coronavirus preventive service 
described in paragraph (a)(1)(v) of this section, regardless of whether 
such service is delivered by an in-network or out-of-network provider. 
For purposes of this paragraph (a)(3)(iii), with respect to a 
qualifying coronavirus preventive service and a provider with whom the 
plan or issuer does not have a negotiated rate for such service (such 
as an out-of-network provider), the plan or issuer must reimburse the 
provider for such service in an amount that is reasonable, as 
determined in comparison to prevailing market rates for such service.
    (4) Reasonable medical management. Nothing prevents a plan or 
issuer from using reasonable medical management techniques to determine 
the frequency, method, treatment, or setting for an item or service 
described in paragraph (a)(1) of this section to the extent not 
specified in the relevant recommendation or guideline. To the extent 
not specified in a recommendation or guideline, a plan or issuer may 
rely on the relevant clinical evidence base and established reasonable 
medical management techniques to determine the frequency, method, 
treatment, or setting for coverage of a recommended preventive health 
service.
    (5) Services not described. Nothing in this section prohibits a 
plan or issuer from providing coverage for items and services in 
addition to those recommended by the United States Preventive Services 
Task Force or the Advisory Committee on Immunization Practices of the 
Centers for Disease Control and Prevention, or provided for by 
guidelines supported by the Health Resources and Services 
Administration, or from denying coverage for items and services that 
are not recommended by that task force or that advisory committee, or 
under those guidelines. A plan or issuer may impose cost-sharing 
requirements for a treatment not described in paragraph (a)(1) of this 
section, even if the treatment results from an item or service 
described in paragraph (a)(1) of this section.
    (b) Timing--(1) In general. A plan or issuer must provide coverage 
pursuant to paragraph (a)(1) of this section for plan years that begin 
on or after September 23, 2010, or, if later, for plan years that begin 
on or after the date that is one year after the date the recommendation 
or guideline is issued, except as provided in paragraph (b)(3) of this 
section.
    (2) Changes in recommendations or guidelines. (i) A plan or issuer 
that is required to provide coverage for any items and services 
specified in any recommendation or guideline described in paragraph 
(a)(1) of this section on the first day of a plan year, or as otherwise 
provided in paragraph (b)(3) of this section, must provide coverage 
through the last day of the plan or policy year, even if the 
recommendation or guideline changes or is no longer described in 
paragraph (a)(1) of this section, during the applicable plan or policy 
year.
    (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the 
extent a recommendation or guideline described in paragraph (a)(1)(i) 
of this section that was in effect on the first day of a plan year, or 
as otherwise provided in paragraph (b)(3) of this section, is 
downgraded to a ``D'' rating, or any item or service associated with 
any recommendation or guideline specified in paragraph (a)(1) of this 
section is subject to a safety recall or is otherwise determined to 
pose a significant safety concern by a Federal agency authorized to 
regulate the item or service during a plan or policy year, there is no 
requirement under this section to cover these items and services 
through the last day of the applicable plan or policy year.
    (3) Rapid coverage of preventive services for coronavirus. In the 
case of a qualifying coronavirus preventive service described in 
paragraph (a)(1)(v) of this section, a plan or issuer must provide 
coverage for such item, service, or immunization in accordance with 
this section by the date that is 15 business days after the date on 
which a recommendation specified in paragraph (a)(1)(v)(A) or (B) of 
this section is made relating to such item, service, or immunization.
    (c) Recommendations not current. For purposes of paragraph 
(a)(1)(i) of this section, and for purposes of any other provision of 
law, recommendations of the United States Preventive Services Task 
Force regarding breast cancer screening, mammography, and prevention 
issued in or around November 2009 are not considered to be current.
    (d) Applicability date. The provisions of paragraphs (a)(1)(i) 
through (iv), (a)(2), (a)(3)(i) and (ii), (a)(4) through (5), (b)(1) 
and (2), and (c) of this section are applicable as of April 16, 2012.
    (e) Sunset date. The provisions of paragraphs (a)(1)(v), 
(a)(3)(iii), and (b)(3) of this section will not apply with respect to 
a qualifying coronavirus preventive service furnished on or after the 
expiration of the public health emergency determined on January 31, 
2020, to exist nationwide as of January 27, 2020, by the Secretary of 
Health and

[[Page 71195]]

Human Services pursuant to section 319 of the Public Health Service 
Act, as a result of COVID-19, including any subsequent renewals of that 
determination.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

    For the reasons set forth in the preamble, the Department of Labor 
amends 29 CFR part 2590 as set forth below:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
3. The authority citation for part 2590 continues to read as follows:

    Authority:  29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; 
sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 
110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029; 
Division M, Pub. L. 113-235, 128 Stat. 2130; Secretary of Labor's 
Order 1-2011, 77 FR 1088 (Jan. 9, 2012).


0
4. Section 2590.715-2713 is amended--
0
a. In paragraph (a)(1)(iii) by removing ``and'' after the semicolon;
0
b. In paragraph (a)(1)(iv) by removing the period at the end of the 
paragraph and adding ``; and'' in its place;
0
c. By adding paragraph (a)(1)(v);
0
d. By revising paragraph (a)(3)(i);
0
e. By adding paragraph (a)(3)(iii);
0
f. By revising paragraphs (b)(1) and (b)(2)(i) and (ii); and
0
g. By adding paragraphs (b)(3) and (e).
    The revisions and additions read as follows:


Sec.  2590.715-2713  Coverage of preventive health services.

    (a) * * *
    (1) * * *
    (v) Any qualifying coronavirus preventive service, which means an 
item, service, or immunization that is intended to prevent or mitigate 
coronavirus disease 2019 (COVID-19) and that is, with respect to the 
individual involved--
    (A) An evidence-based item or service that has in effect a rating 
of A or B in the current recommendations of the United States 
Preventive Services Task Force; or
    (B) An immunization that has in effect a recommendation from the 
Advisory Committee on Immunization Practices of the Centers for Disease 
Control and Prevention (regardless of whether the immunization is 
recommended for routine use). For purposes of this paragraph 
(a)(1)(v)(B), a recommendation from the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention is considered in effect after it has been adopted by the 
Director of the Centers for Disease Control and Prevention.
* * * * *
    (3) * * *
    (i) Subject to paragraphs (a)(3)(ii) and (iii) of this section, 
nothing in this section requires a plan or issuer that has a network of 
providers to provide benefits for items or services described in 
paragraph (a)(1) of this section that are delivered by an out-of-
network provider, or precludes a plan or issuer that has a network of 
providers from imposing cost-sharing requirements for items or services 
described in paragraph (a)(1) of this section that are delivered by an 
out-of-network provider.
* * * * *
    (iii) A plan or issuer must provide coverage for and must not 
impose any cost-sharing requirements (such as a copayment, coinsurance, 
or a deductible) for any qualifying coronavirus preventive service 
described in paragraph (a)(1)(v) of this section, regardless of whether 
such service is delivered by an in-network or out-of-network provider. 
For purposes of this paragraph (a)(3)(iii), with respect to a 
qualifying coronavirus preventive service and a provider with whom the 
plan or issuer does not have a negotiated rate for such service (such 
as an out-of-network provider), the plan or issuer must reimburse the 
provider for such service in an amount that is reasonable, as 
determined in comparison to prevailing market rates for such service.
* * * * *
    (b) * * *
    (1) In general. A plan or issuer must provide coverage pursuant to 
paragraph (a)(1) of this section for plan years that begin on or after 
September 23, 2010, or, if later, for plan years that begin on or after 
the date that is one year after the date the recommendation or 
guideline is issued, except as provided in paragraph (b)(3) of this 
section.
    (2) * * *
    (i) A plan or issuer that is required to provide coverage for any 
items and services specified in any recommendation or guideline 
described in paragraph (a)(1) of this section on the first day of a 
plan year, or as otherwise provided in paragraph (b)(3) of this 
section, must provide coverage through the last day of the plan or 
policy year, even if the recommendation or guideline changes or is no 
longer described in paragraph (a)(1) of this section, during the 
applicable plan or policy year.
    (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the 
extent a recommendation or guideline described in paragraph (a)(1)(i) 
of this section that was in effect on the first day of a plan year, or 
as otherwise provided in paragraph (b)(3) of this section, is 
downgraded to a ``D'' rating, or any item or service associated with 
any recommendation or guideline specified in paragraph (a)(1) of this 
section is subject to a safety recall or is otherwise determined to 
pose a significant safety concern by a Federal agency authorized to 
regulate the item or service during a plan or policy year, there is no 
requirement under this section to cover these items and services 
through the last day of the applicable plan or policy year.
    (3) Rapid coverage of preventive services for coronavirus. In the 
case of a qualifying coronavirus preventive service described in 
paragraph (a)(1)(v) of this section, a plan or issuer must provide 
coverage for such item, service, or immunization in accordance with 
this section by the date that is 15 business days after the date on 
which a recommendation specified in paragraph (a)(1)(v)(A) or (B) of 
this section is made relating to such item, service, or immunization.
* * * * *
    (e) Sunset date. The provisions of paragraphs (a)(1)(v), 
(a)(3)(iii), and (b)(3) of this section will not apply with respect to 
a qualifying coronavirus preventive service furnished on or after the 
expiration of the public health emergency determined on January 31, 
2020, to exist nationwide as of January 27, 2020, by the Secretary of 
Health and Human Services pursuant to section 319 of the Public Health 
Service Act, as a result of COVID-19, including any subsequent renewals 
of that determination.

DEPARTMENT OF THE TREASURY

Office of the Secretary

Amendments to the Regulations

    For the reasons set forth in the preamble, the Department of 
Treasury amends 31 CFR part 33 as set forth below:

PART 33--WAIVERS FOR STATE INNOVATION

0
5. The authority citation for part 33 continues to read as follows:


[[Page 71196]]


    Authority:  Sec. 1332, Pub. L. 111-148, 124 Stat. 119.

0
6. Section 33.118 is added to read as follows:


Sec.  33.118  Modification from the normal public notice requirements 
during the public health emergency.

    (a) The Secretary and the Secretary of Health and Human Services 
may modify, in part, the State public notice requirements under Sec.  
33.112 and the Federal public notice procedures under Sec.  33.116 to 
expedite a decision on a proposed waiver request during the public 
health emergency for COVID-19, as defined in 42 CFR 400.200, when a 
delay would undermine or compromise the purpose of the proposed waiver 
request and be contrary to the interests of consumers. These 
flexibilities are limited to event-triggered, emergent situations, and 
the flexibilities outlined in this section will not be available for 
States seeking to address a threat to consumers' access to health 
coverage or care that existed prior to the public health emergency for 
COVID-19.
    (b) A State must meet all of the following criteria to request a 
modification under paragraph (a) of this section:
    (1) The State must request a modification under paragraph (a) of 
this section, in the form and manner specified by the Secretaries.
    (2) The State must have acted in good faith, and in a diligent, 
timely, and prudent manner in the preparation of the request for a 
modification under paragraph (a) of this section, and the waiver 
application request, as applicable.
    (3) The State must, as applicable, detail in its request for a 
modification from State-level notice procedures under paragraph (a) of 
this section the justification for the request and the alternative 
public notice procedures it proposes to implement at the State level, 
including public hearings, that are designed to provide the greatest 
opportunity and level of meaningful public input from impacted 
stakeholders that is practicable given the emergency circumstances 
underlying the State's request for a modification. As a condition of 
receiving a modification approval, a State must implement public notice 
procedures, including public hearings, at the State level and, if 
required, amend the waiver application request.
    (4) The State must, as applicable, detail in its request for a 
modification from Federal-level notice procedures under paragraph (a) 
of this section the justification for the request as it relates to the 
public health emergency and the alternative public notice procedures it 
requests to be implemented at the Federal level.
    (c) The Secretary and the Secretary of Health and Human Services 
will evaluate a State's request for a modification under paragraph (a) 
of this section and issue their exemption determination within 
approximately 15 calendar days after the request is received.
    (d) The Secretary of Health and Human Services will publish on the 
Centers for Medicare and Medicaid Services (CMS) website any 
modification determinations within 15 calendar days of the Secretary 
and the Secretary of Health and Human Services making such a 
determination, as well as the approved revised timeline for public 
comment under the approved alternative State or Federal public notice 
procedures, as applicable.
    (e) The State must publish on its website any modification requests 
and determinations within 15 calendar days of receipt of the 
determination, as well as the approved revised timeline for public 
comment under the alternative State or Federal public notice 
procedures, as applicable.
    (f) The State must, as applicable, implement the alternative public 
notice procedures at the State level if the State's exemption request 
is approved and, if required, amend the waiver application request.

0
7. Section 33.120 is amended--
0
a. In paragraph (c)(1) by adding a paragraph heading; and
0
b. By adding paragraph (c)(2).
    The additions read as follows:


Sec.  33.120  Monitoring and compliance.

* * * * *
    (c) * * *
    (1) Notification requirements for public forum. * * *
    (2) Modification from the normal post-award requirements during the 
public health emergency. (i) The Secretary and the Secretary of Health 
and Human Services may modify, in part, State post-award requirements 
under this paragraph (c)(2) for an approved waiver request during the 
public health emergency for COVID-19, as defined in 42 CFR 400.200, 
when the application of the post award public notice requirements would 
be contrary to the interests of consumers during the public health 
emergency. These flexibilities are limited to event-triggered, emergent 
situations, and the flexibilities outlined in this section will not be 
available for States seeking to address a threat to consumers' access 
to health coverage or care that existed prior to the public health 
emergency for COVID-19.
    (ii) A State must meet all of the following criteria to request a 
modification under paragraph (c) of this section:
    (A) The State must request a modification under this paragraph 
(c)(2), in the form and manner specified by the Secretaries.
    (B) The State must have acted in good faith, and in a diligent, 
timely, and prudent manner to comply with the monitoring and compliance 
requirement under the waiver and the terms and conditions of the 
agreement between the Secretary and the Secretary of Health and Human 
Services, as applicable, and the State to implement a section 1332 
waiver and to submit and prepare the request for a modification under 
this paragraph (c)(2).
    (C) The State must detail in its request for a modification under 
this paragraph (c)(2) the alternative post award public notice 
procedures it proposes to implement at the State level, including 
public hearings, that are designed to provide the greatest opportunity 
and level of meaningful public input from impacted stakeholders that is 
practicable given the emergency circumstances underlying the State's 
request for a modification.
    (D) The Secretary and the Secretary of Health and Human Services 
will evaluate a State's request for a modification under this paragraph 
(c)(2) and issue their modification determination within approximately 
15 calendar days after the request is received.
    (E) The State must publish on its website any modification requests 
and determinations within 15 calendar days of the receipt of the 
determination as well as information on the approved revised timeline 
for the state's post award public notice procedures, as applicable.
* * * * *

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

    For the reasons stated 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
8. The authority citation part 414 continues to read as follows:

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

[[Page 71197]]


0
9. Section 410.57 is amended by adding paragraph (c) to read as 
follows:


Sec.  410.57  Pneumococcal vaccine, flu vaccine, and COVID-19 vaccine.

* * * * *
    (c) Medicare Part B pays for the COVID-19 vaccine and its 
administration.

0
10. Section 410.152 is amended by revising paragraph (l)(1) to read as 
follows:


Sec.  410.152  Amounts of payment.

* * * * *
    (l) * * *
    (1) Pneumococcal (as specified in paragraph (h) of this section), 
influenza, hepatitis B, and COVID-19 vaccine and administration.
* * * * *

0
11. Section 410.160 is amended by revising paragraph (b)(2) to read as 
follows:


Sec.  410.160  Part B annual deductible.

* * * * *
    (b) * * *
    (2) Pneumococcal, influenza, and hepatitis b, and COVID-19 vaccines 
and their administration.
* * * * *

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 
PAYMENT

0
12. The authority citation part 411 continues to read as follows:

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

0
13. Section 411.15 is amended by:
0
a. Removing ``and'' at the end of paragraph (e)(3);
0
b. Removing the period at the end of paragraph (e)(4) and adding ``; 
and'' in its place; and
0
c. Adding paragraph (e)(5).
    The addition reads as follows:


Sec.  411.15  Particular services excluded from coverage.

* * * * *
    (e) * * *
    (5) COVID-19 vaccinations that are reasonable and necessary for the 
prevention of illness.
* * * * *

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

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

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

0
15. Section 414.701 is revised to read as follows:


Sec.  414.701  Purpose.

    This subpart implements section 1842(o) of the Act by specifying 
the methodology for determining the payment allowance limit for drugs 
and biologicals covered under Part B of Title XVIII of the Act 
(hereafter in this subpart referred to as the ``program'') that are not 
paid on a cost or prospective payment system basis. Examples of drugs 
that are subject to the rules contained in this subpart are: Drugs 
furnished incident to a physician's service; durable medical equipment 
(DME) drugs; separately billable drugs at independent dialysis 
facilities not under the ESRD composite rate; statutorily covered 
drugs, for example, influenza, pneumococcal, hepatitis, and COVID-19 
vaccines, antigens, hemophilia blood clotting factor, immunosuppressive 
drugs and certain oral anti-cancer drugs.

0
16. Section 414.707 is amended by revising paragraph (a)(2)(iii) to 
read as follows:


Sec.  414.707  Basis of payment.

    (a) * * *
    (2) * * *
    (iii) Pneumococcal, influenza, and COVID-19 vaccines as well as 
hepatitis B vaccine that is furnished to individuals at high or 
intermediate risk of contracting hepatitis B (as determined by the 
Secretary).
* * * * *

0
17. Section 414.900 is amended by revising paragraph (b)(3)(ii) to read 
as follows:


Sec.  414.900  Basis and scope.

* * * * *
    (b) * * *
    (3) * * *
    (ii) Pneumococcal, Hepatitis B, and COVID-19 vaccines.
* * * * *

0
18. Section 414.904 is amended by revising paragraph (e)(1) to read as 
follows:


Sec.  414.904  Average sales price as the basis for payment.

* * * * *
    (e) * * *
    (1) Vaccines. The payment limits for hepatitis B vaccine furnished 
to individuals at high or intermediate risk of contracting hepatitis B 
(as determined by the Secretary), pneumococcal vaccine, influenza 
vaccine, and COVID-19 vaccine are calculated using 95 percent of the 
average wholesale price.
* * * * *

PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL 
PLANS, AND HEALTH CARE PREPAYMENT PLANS

0
19. The authority citation for part 417 is revised to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh, and 300e, 300e-5, and 
300e-9, and 31 U.S.C. 9701.

0
20. Section 417.454 is amended by adding paragraph (e)(4) to read as 
follows:


Sec.  417.454 Charges to  Medicare enrollees.

* * * * *
    (e) * * *
    (4) A COVID-19 vaccine and its administration described in section 
1861(s)(10)(A) for the duration of the emergency period defined in 
paragraph (1)(B) of section 1135(g) of the Act.

PART 433--STATE FISCAL ADMINISTRATION

0
21. The authority citation for part 433 continues to read as follows:

    Authority:  Sec. 1102 of the Social Security Act, (42 U.S.C. 
1302).

0
22. Subpart G, consisting of Sec.  433.400, is added to read as 
follows:

Subpart G--Temporary FMAP Increase During the Public Health 
Emergency for COVID-19


Sec.  433.400  Continued Enrollment for Temporary FMAP Increase.

    (a) Statutory basis. This subpart interprets and implements section 
6008(b)(3) of the Families First Coronavirus Response Act (FFCRA) and 
section 1902(a)(4) and (a)(19) of the Social Security Act.
    (b) Definitions. For purposes of this subpart--
    COVID-19 means Coronavirus Disease 2019.
    Medicare Savings Program means the coverage of Medicare premiums 
and cost sharing furnished to individuals described in, and determined 
by the state to be eligible under, section 1902(a)(10)(E)(i), 
1902(a)(10)(E)(iii), or 1902(a)(10)(E)(iv) of the Act.
    Minimum essential coverage (MEC) has the meaning provided under 
section 5000A(f)(1) of the Internal Revenue Code and implementing 
regulations at 26 CFR 1.5000A-2 and includes minimum essential coverage 
determined by the Secretary under 26 CFR 1.5000A-2(f).
    Public Health Emergency for COVID-19 has the same definition 
provided in Sec.  400.200 of this chapter.
    Temporary FMAP increase means the 6.2 percentage point increase in 
the

[[Page 71198]]

State's Federal medical assistance percentage (FMAP) that is authorized 
under section 6008(a) of the FFCRA through the end of the fiscal 
quarter in which the Public Health Emergency for COVID-19 ends.
    Validly enrolled means that the beneficiary was enrolled in 
Medicaid based on a determination of eligibility. A beneficiary is not 
validly enrolled if the agency determines the eligibility was 
erroneously granted at the most recent determination, redetermination, 
or renewal of eligibility (if such last redetermination or renewal was 
completed prior to March 18, 2020) because of agency error or fraud (as 
evidenced by a fraud conviction) or abuse (as determined following the 
completion of an investigation pursuant to Sec. Sec.  455.15 and 455.16 
of this chapter) attributed to the beneficiary or the beneficiary's 
representative, which was material to the determination of eligibility. 
Individuals receiving medical assistance during a presumptive 
eligibility period in accordance with part 435, subpart L, of this 
chapter have not received a determination of eligibility by the state 
under the state plan and are not considered validly enrolled 
beneficiaries for purposes of this section.
    (c) General requirements. (1) In order to claim the temporary FMAP 
increase for:
    (i) The quarter in which November 2, 2020, falls, a state must meet 
the requirements described in paragraph (c)(2) of this section from 
November 2, 2020, through the end of the quarter.
    (ii) Any quarter beginning after November 2, 2020, through the 
quarter in which the public health emergency for COVID-19, including 
any extensions, ends, a state must meet the requirements described in 
paragraphs (c)(2) of this section.
    (2) Except as provided in paragraph (d) of this section, for all 
beneficiaries validly enrolled for benefits under the state plan, a 
waiver of such plan, or a demonstration project under section 1115(a) 
of the Act as of or after March 18, 2020, the state must maintain the 
beneficiary's enrollment as follows, through the end of the month in 
which the public health emergency for COVID-19 ends:
    (i)(A) For beneficiaries whose Medicaid coverage meets the 
definition of MEC in paragraph (b) of this section as of or after March 
18, 2020, the state must continue to provide Medicaid coverage that 
meets the definition of MEC, except as provided in paragraph 
(c)(2)(i)(B) of this section.
    (B) For beneficiaries described in paragraph (c)(2)(i)(A) whom the 
state subsequently determines are eligible for coverage under a 
Medicare Savings Program eligibility group, the state satisfies the 
requirement described in paragraph (c)(2) of this section if it 
furnishes the medical assistance available through the Medicare Savings 
Program.
    (ii) For beneficiaries whose Medicaid coverage as of or after March 
18, 2020 does not meet the definition of MEC in paragraph (b) of this 
section but does include coverage for testing services and treatments 
for COVID-19, including vaccines, specialized equipment, and therapies, 
the state must continue to provide Medicaid coverage that includes such 
testing services and treatments.
    (iii) For beneficiaries not described in paragraph (c)(2)(i) or 
(ii) of this section, the state must continue to provide at least the 
same level of medical assistance as was provided as of or after March 
18, 2020.
    (iv) If a state determines that a validly enrolled beneficiary is 
no longer eligible for Medicaid, including on a procedural basis, the 
state meets the requirements described in paragraph (c)(2)(i), (ii), or 
(iii) of this section by continuing to provide the same Medicaid 
coverage that the beneficiary would have received absent the 
determination of ineligibility.
    (3) Otherwise permissible changes to beneficiary coverage, cost 
sharing, and post-eligibility treatment of income, including both 
changes affecting an individual beneficiary and approved changes to the 
state plan, a section 1115 demonstration and/or a waiver authorized 
under section 1915 of the Act impacting multiple beneficiaries, will 
not impact a state's ability to claim the temporary FMAP increase 
provided that any such changes do not violate the requirement to 
maintain beneficiary enrollment described at paragraph (c)(2) of this 
section or the requirement in section 6008(b)(4) of the FFCRA.
    (d) Exceptions. (1) Consistent with the condition to claim the 
temporary FMAP increase described in paragraph (c)(2) of this section, 
a state may terminate a beneficiary's Medicaid enrollment prior to the 
first day of the month after the public health emergency for COVID-19 
ends in the following circumstances:
    (i) The beneficiary or the beneficiary's representative requests a 
voluntary termination of eligibility;
    (ii) The beneficiary ceases to be a resident of the state; or
    (iii) The beneficiary dies.
    (2) States which have elected the option under section 1903(v)(4) 
of the Act to provide full benefits to lawfully residing children or 
pregnant women must limit coverage for such beneficiaries if they no 
longer meet the definition of a lawfully residing child or pregnant 
woman under such section to services necessary for treatment of an 
emergency medical condition, as defined in section 1903(v)(3) of the 
Act.
    (3)(i) For purposes of paragraph (d)(1)(i) of this section, a 
beneficiary may request a voluntary termination of eligibility from the 
Medicaid coverage in which the beneficiary is enrolled to transition to 
other Medicaid coverage for which the beneficiary is eligible, even if 
the transition to the new Medicaid coverage would not be consistent 
with paragraph (c)(2) of this section.
    (ii) For purposes of paragraph (d)(1)(ii) of this section, 
beneficiaries who were identified through a data match with the Public 
Assistance Reporting Information System in accordance with Sec.  
435.945(d) of this chapter indicating simultaneous enrollment in two or 
more states, and who fail to respond to a request for information to 
verify their residency, may be treated as not being a state resident 
for purposes of paragraph (d)(1)(ii) of this section, provided that the 
state takes all reasonably available measures to attempt to verify the 
beneficiary's state residency. If a beneficiary's enrollment is 
terminated under the exception at paragraph (d)(1)(ii) of this section 
based on a PARIS data match and the state subsequently obtains 
information verifying residency, the state must reinstate the 
beneficiary's Medicaid enrollment retroactive to the date of 
termination.

PART 510--COMPREHENSIVE CARE FOR JOINT REPLACEMENT MODEL

0
23. The authority citation for part 510 is revised to read as follows:

    Authority:  42 U.S.C. 1302, 1315(a), and 1395hh.

0
24. Section 510.2 is amended by--
0
a. Adding a definition for ``COVID-19 Diagnosis Code'' in alphabetical 
order; and
0
b. Revising the definitions for ``Lower-extremity joint replacement 
(LEJR)'', ``Performance year'', and ``Quality improvement points''.
    The addition and revisions read as follows:


Sec.  510.2  Definitions.

* * * * *
    COVID-19 Diagnosis Code means any of the following ICD-10-CM 
diagnosis codes:

[[Page 71199]]

    (1) B97.29;
    (2) U07.1; or
    (3) Any other ICD-10-CM diagnosis code that is recommended by the 
Centers for Disease Control and Prevention for the coding of a 
confirmed case of COVID-19.
* * * * *
    Lower-extremity joint replacement (LEJR) means any procedure that 
is within MS-DRG 469 or 470, or, on or after October 1, 2020, MS-DRG 
521 or 522, including lower-extremity joint replacement procedures or 
reattachment of a lower extremity.
* * * * *
    Performance year means one of the years in which the CJR model is 
being tested. Performance years for the model correlate to calendar 
years with the exceptions of performance year 1, which is April 1, 2016 
through December 31, 2016 and performance year 5, which is January 1, 
2020 through September 30, 2021. For reconciliation purposes, 
performance year 5 is divided into two subsets, performance year subset 
5.1 (January 1, 2020 through December 31, 2020) and performance year 
subset 5.2 (January 1, 2021 through September 30, 2021).
* * * * *
    Quality improvement points are points that CMS adds to a 
participant hospital's composite quality score for a measure if the 
hospital's performance percentile on an individual quality measure for 
performance years 2 through 4 and for performance year subsets 5.1 and 
5.2, increases from the previous performance year or performance year 
subset by at least 2 deciles on the performance percentile scale, as 
described in Sec.  510.315(d). For performance year 1, CMS adds quality 
improvement points to a participant hospital's composite quality score 
for a measure if the hospital's performance percentile on an individual 
quality measure increases from the corresponding time period in the 
previous year by at least 2 deciles on the performance percentile 
scale, as described in Sec.  510.315(d).
* * * * *

0
25. Section 510.200 is amended by revising paragraphs (a) and (d)(6) to 
read as follows:


Sec.  510.200  Time periods, included and excluded services, and 
attribution.

    (a) Time periods. All episodes must begin on or after April 1, 2016 
and end on or before September 30, 2021.
* * * * *
    (d) * * *
    (6) For performance years 1 through 4 and for performance year 
subsets 5.1 and 5.2, payments for otherwise included items and services 
in excess of 2 standard deviations above the mean regional episode 
payment in accordance with Sec.  510.300(b)(5).
* * * * *

0
26. Section 510.300 is amended by revising paragraphs (a) introductory 
text, (a)(1)(i), (a)(1)(iii), (a)(2) and (3), (b)(1)(iii), (b)(2)(iii), 
(b)(8), (c)(1) and (2), and (c)(3)(iii) to read as follows:


Sec.  510.300  Determination of episode quality-adjusted target prices.

    (a) General. CMS establishes episode quality-adjusted target prices 
for participant hospitals for each performance year or performance year 
subset of the model as specified in this section. Episode quality-
adjusted target prices are established according to the following:
    (1) * * *
    (i)(A) MS-DRG 469 with hip fracture; or
    (B) For episodes beginning on or after October 1, 2020, MS-DRG 521;
* * * * *
    (iii)(A) MS-DRG 470 with hip fracture; or
    (B) For episodes beginning on or after October 1, 2020, MS-DRG 522; 
or
* * * * *
    (2) Applicable time period for performance year or performance year 
subset episode quality-adjusted target prices. Episode quality-adjusted 
target prices are updated to account for Medicare payment updates no 
less than 2 times per year, for updated quality-adjusted target prices 
effective October 1 and January 1, and at other intervals if necessary.
    (3) Episodes that straddle performance years or performance year 
subsets or payment updates. The quality-adjusted target price that 
applies to the type of episode as of the date of admission for the 
anchor hospitalization is the quality-adjusted target price that 
applies to the episode.
* * * * *
    (b) * * *
    (1) * * *
    (iii) Episodes beginning in 2016 through 2018 for each of 
performance year subsets 5.1 and 5.2.
    (2) * * *
    (iii) Regional historical episode payments for performance year 4 
and each of performance year subsets 5.1 and 5.2.
* * * * *
    (8) Inclusion of reconciliation payments and repayments. For 
performance years 3, 4, and each of performance year subsets 5.1 and 
5.2 only, reconciliation payments and repayment amounts under Sec.  
510.305(f)(2) and (3) and from LEJR episodes included in the BPCI 
initiative are included in historical episode payments.
    (c) * * *
    (1) Discount factors affected by the quality incentive payments and 
the composite quality score. In all performance years and performance 
year subsets, the discount factor may be affected by the quality 
incentive payment and composite quality score as provided in Sec.  
510.315 to create the effective discount factor or applicable discount 
factor used for calculating reconciliation payments and repayment 
amounts. The quality-adjusted target prices incorporate the effective 
or applicable discount factor at reconciliation.
    (2) Discount factor for reconciliation payments. The discount 
factor for reconciliation payments in all performance years and 
performance year subsets is 3.0 percent.
    (3) * * *
    (iii) In performance year 4 and each of performance year subsets 
5.1 and 5.2, 3.0 percent.
* * * * *

0
27. Section 510.305 is amended by revising paragraphs (b), (d)(1) 
introductory text, (e) introductory text, (e)(1) introductory text, 
(e)(1)(i), (ii), and (iii), (e)(1)(v)(A) introductory text, 
(e)(1)(v)(A)(3), (e)(1)(v)(B) introductory text, (e)(1)(v)(B)(3), 
(e)(1)(v)(C), (f)(1)(ii), (g)(1) and (3), (h) introductory text, (h)(5) 
and (6), (i), (j), and (k)(4) to read as follows:


Sec.  510.305  Determination of the NPRA and reconciliation process.

* * * * *
    (b) Reconciliation. CMS uses a series of reconciliation processes, 
which CMS performs as described in paragraphs (d) and (f) of this 
section, after the end of each performance year 1 through 4 to 
establish final payment amounts to participant hospitals for CJR 
episodes for a given performance year. Following the end of each 
performance year 1 through 4, CMS determines actual episode payments 
for each episode for the performance year (other than episodes that 
have been canceled in accordance with Sec.  510.210(b)), and determines 
the amount of a reconciliation payment or repayment amount. Within 
performance year 5, CMS separately performs the reconciliation 
processes described in paragraphs (d) and (f) of this section for 
performance year subsets 5.1 and 5.2 and following the end of each 
performance year subset 5.1 and 5.2, CMS separately determines the 
actual

[[Page 71200]]

episode payment for each episode for the subset of the performance year 
(other than episodes that have been canceled in accordance with Sec.  
510.210(b)) and determines the amount of a reconciliation payment or 
repayment for each of performance year subsets 5.1 and 5.2.
* * * * *
    (d) * * *
    (1) Beginning 2 months after the end of each of performance years 1 
through 4 and performance year subset 5.1 and 5 months after the end of 
performance year subset 5.2, CMS does all of the following:
* * * * *
    (e) Calculation of the NPRA. By comparing the quality-adjusted 
target prices described in Sec.  510.300 and the participant hospital's 
actual episode spending for each of performance years 1 through 4 and 
each of performance year subsets 5.1 and 5.2 and applying the 
adjustments in paragraph (e)(1)(v) of this section, CMS establishes an 
NPRA for each participant hospital for each such performance year or 
performance year subset.
    (1) Initial calculation. In calculating the NPRA for each 
participant hospital for each of performance years 1 through 4 and each 
of performance year subsets 5.1 and 5.2, CMS does the following:
    (i) Determines actual episode payments for each episode included in 
the performance year or performance year subset (other than episodes 
that have been canceled in accordance with Sec.  510.210(b)) using 
claims data that is available 2 months after the end of the performance 
year or performance year subset. Actual episode payments are capped, as 
applicable, at the amount determined in accordance with Sec.  
510.300(b)(5) for the performance year or performance year subset at 
the amount determined in paragraph (k) of this section for episodes 
affected by extreme and uncontrollable circumstances, or at the quality 
adjusted target price determined for that episode under Sec.  510.300 
for an episode with actual episode payments that include a claim with a 
COVID-19 diagnosis code and initiate after the earlier of March 31, 
2021 or the last day of the emergency period described in paragraph 
(k)(4) of this section.
    (ii) Multiplies each episode quality-adjusted target price by the 
number of episodes included in the performance year or performance year 
subset (other than episodes that have been canceled in accordance with 
Sec.  510.210(b)) to which that episode quality-adjusted target price 
applies.
    (iii) Aggregates the amounts computed in paragraph (e)(1)(ii) of 
this section for all episodes included in the performance year or 
performance year subset (other than episodes that have been canceled in 
accordance with Sec.  510.210(b)).
* * * * *
    (v) * * *
    (A) Limitation on loss. Except as provided in paragraph 
(e)(1)(v)(C) of this section, the total amount of the NPRA and 
subsequent reconciliation calculation for a performance year or 
performance year subset cannot exceed the following:
* * * * *
    (3) For performance year 4 and each of performance year subsets 5.1 
and 5.2, 20 percent of the amount calculated in paragraph (e)(1)(iii) 
of this section for the performance year or performance year subset.
* * * * *
    (B) Limitation on gain. The total amount of the NPRA and subsequent 
reconciliation calculation for a performance year or performance year 
subset cannot exceed the following:
* * * * *
    (3) For performance year 4 and each of performance year subsets 5.1 
and 5.2, 20 percent of the amount calculated in paragraph (e)(1)(iii) 
of this section for the performance year or performance year subset.
* * * * *
    (C) Financial loss limits for rural hospitals, SCHs, MDHs, and 
RRCs. If a participant hospital is a rural hospital, SCH, MDH, or RRC, 
then for performance year 2, the total repayment amount for which the 
participant hospital is responsible due to the NPRA and subsequent 
reconciliation calculation cannot exceed 3 percent of the amount 
calculated in paragraph (e)(1)(iii) of this section. For performance 
years 3 and 4 and for performance year subsets 5.1 and 5.2, the amount 
cannot exceed 5 percent of the amount calculated in paragraph 
(e)(1)(iii) of this section.
    (f) * * *
    (1) * * *
    (ii) Subject to paragraph (f)(1)(iii) of this section, for 
performance years 2 through 4 and for each of performance year subsets 
5.1 and 5.2, results from the subsequent reconciliation calculation for 
a prior year's reconciliation as described in paragraph (i) of this 
section and the post-episode spending and ACO overlap calculations as 
described in paragraph (j) of this section are added to the current 
year's NPRA in order to determine the reconciliation payment or 
repayment amount.
* * * * *
    (g) * * *
    (1) CMS assesses each participant hospital's performance on quality 
metrics, as described in Sec.  510.315, to determine whether the 
participant hospital is eligible to receive a reconciliation payment 
for a performance year or performance year subset.
* * * * *
    (3) If the hospital's composite quality score described in Sec.  
510.315 is below acceptable, defined as less than 4.00 for a 
performance year or performance year subset, the hospital is not 
eligible for a reconciliation payment.
* * * * *
    (h) Reconciliation report. CMS issues each participant hospital a 
CJR reconciliation report for the performance year or performance year 
subset. Each CJR reconciliation report contains the following:
* * * * *
    (5) As applicable, the NPRA and subsequent reconciliation 
calculation amount for the previous performance year or performance 
year subset.
    (6) As applicable, the post-episode spending amount and ACO overlap 
calculation for the previous performance year or performance year 
subset.
* * * * *
    (i) Subsequent reconciliation calculation. (1) Fourteen months 
after the end of each of performance years 1 through 4 and performance 
year subset 5.1 and seventeen months after the end of performance year 
subset 5.2, CMS performs an additional calculation, using claims data 
available at that time, to account for final claims run-out and any 
additional episode cancelations due to overlap between the CJR model 
and other CMS models and programs, or for other reasons as specified in 
Sec.  510.210(b).
    (2) The subsequent calculation for each of performance years 1 
through 4 and performance year subset 5.1 occurs concurrently with the 
first reconciliation process for the following performance year (or in 
the case of performance year subset 5.1, with the first reconciliation 
of performance year subset 5.2) . If the result of the subsequent 
calculation is different than zero, CMS applies the stop-loss and stop-
gain limits in paragraph (e) of this section to the aggregate 
calculation of the amounts described in paragraphs (e)(1)(iv) and 
(i)(1) of this section for that performance year or performance year 
subset (the initial reconciliation

[[Page 71201]]

and the subsequent reconciliation calculation) to ensure such amount 
does not exceed the applicable stop-loss or stop-gain limits. The 
subsequent reconciliation calculation for performance year subset 5.2 
will occur independently in 2023.
    (j) Additional adjustments to the reconciliation payment or 
repayment amount. (1) In order to account for shared savings payments, 
CMS will reduce the reconciliation payment or increase the repayment 
amount for the subsequent performance year (for performance years 1 
through 4 and performance year subset 5.1) by the amount of the 
participant hospital's discount percentage that is paid to the ACO in 
the prior performance year as shared savings. (This amount will be 
assessed independently for performance year subset 5.2 in 2023.) This 
adjustment is made only when the participant hospital is a participant 
or provider/supplier in the ACO and the beneficiary in the CJR episode 
is assigned to one of the following ACO models or programs:
    (i) The Pioneer ACO model.
    (ii) The Medicare Shared Savings Program (excluding Track 3 for CJR 
episodes that initiate on or after July 1, 2017).
    (iii) The Comprehensive ESRD Care Initiative (excluding a track 
with downside risk for CJR episodes that initiate after July 1, 2017).
    (iv) The Next Generation ACO model (excluding CJR episodes that 
initiate on or after July 1, 2017).
    (2) If the average post-episode Medicare Parts A and B payments for 
a participant hospital in the prior performance year or performance 
year subset is greater than 3 standard deviations above the regional 
average post-episode payments for the same performance year or 
performance year subset, then the spending amount exceeding 3 standard 
deviations above the regional average post-episode payments for the 
same performance year or performance year subset is subtracted from the 
net reconciliation or added to the repayment amount for the subsequent 
performance year for years 1 through 4 and performance year subset 5.1, 
and assessed independently for performance year subset 5.2.
    (k) * * *
    (4) For a fracture or non-fracture episode with a date of admission 
to the anchor hospitalization that is on or within 30 days before the 
date that the emergency period (as defined in section 1135(g) of the 
Act) begins or that occurs on or before March 31, 2021 or the last day 
of such emergency period, whichever is earlier, actual episode payments 
are capped at the quality adjusted target price determined for that 
episode under Sec.  510.300.

0
28. Section 510.315 is amended by revising paragraphs (a), (b) 
introductory text, and (d) to read as follows:


Sec.  510.315  Composite quality scores for determining reconciliation 
payment eligibility and quality incentive payments.

    (a) General. A participant hospital's eligibility for a 
reconciliation payment under Sec.  510.305(g), and the determination of 
quality incentive payments under paragraph (f) of this section, for a 
performance year or performance year subset depend on the hospital's 
composite quality score (including any quality performance points and 
quality improvement points earned) for that performance year or 
performance year subset.
    (b) Composite quality score. CMS calculates a composite quality 
score for each participant hospital for each performance year or 
performance year subset which equals the sum of the following:
* * * * *
    (d) Quality improvement points. For performance year 1, if a 
participant hospital's quality performance percentile on an individual 
measure described in Sec.  510.400(a) increases from the corresponding 
time period in the previous year by at least 2 deciles on the 
performance percentile scale, then the hospital is eligible to receive 
quality improvement points equal to 10 percent of the total available 
point for that individual measure up to a maximum composite quality 
score of 20 points. For each of performance years 2 through 4 and for 
each of performance year subsets 5.1 and 5.2, if a participant 
hospital's quality performance percentile on an individual measure 
described in Sec.  510.400(a) increases from the previous performance 
year or performance year subset by at least 2 deciles on the 
performance percentile scale, then the hospitals is eligible to receive 
quality improvement points equal to 10 percent of the total available 
point for that individual measure up to a maximum composite quality 
score of 20 points.
* * * * *

0
29. Section 510.400 is amended by--
0
a. Revising paragraphs (a) introductory text, (b)(2) introductory text, 
(b)(2)(i), (b)(2)(ii) introductory text, and (b)(3)(v) introductory 
text; and
0
b. By adding paragraph (b)(3)(vi).
    The revisions and addition read as follows:


Sec.  510.400  Quality measures and reporting.

    (a) Reporting of quality measures. The following quality measures 
are used for public reporting, for determining whether a participant 
hospital is eligible for reconciliation payments under Sec.  
510.305(g), and whether a participant hospital is eligible for quality 
incentive payments under Sec.  510.315(f) in the performance year or 
performance year subset:
* * * * *
    (b) * * *
    (2) Hospitals must also submit the amount of requested THA/TKA 
patient-reported outcomes data required for each performance year or 
performance year subset of the model in order to be considered 
successful in submitting voluntary data.
    (i) The amount of requested THA/TKA patient-reported outcomes data 
to submit, in order to be considered successful will increase each 
subsequent year of the model over the 5 years of the model (with the 
exception of performance year subset 5.2, for which CMS will request 
the same amount of THA/TKA patient-reported outcomes data as 
performance year subset 5.1, updated to reflect the timeframe 
applicable to performance year subset 5.2).
    (ii) A phase-in approach that determines the amount of requested 
THA/TKA patient-reported outcomes data to submit over performance years 
1 through 4 and performance year subset 5.1 (with the exception of 
performance year subset 5.2, for which CMS will request the same amount 
of THA/TKA patient-reported outcomes as performance year subset 5.1, 
updated to reflect the timeframe applicable to performance year subset 
5.2) of the program will be applied so that in year 1 successful 
submission of data would mean CMS received all requested THA/TKA 
patient-reported outcomes and limited risk variable data on both of the 
following:
* * * * *
    (3) * * *
    (v) Year 5 (subset 5.1, January 1, 2020-December 31, 2020). 
Submit--
* * * * *
    (vi) Year 5 (subset 5.2, January 1, 2021-September 30, 2021). 
Submit--
    (A) Post-operative data on primary elective THA/TKA procedures for 
>=80% or >=200 procedures performed between July 1, 2019 and June 30, 
2020; and
    (B) Pre-operative data on primary elective THA/TKA procedures for 
>=80% or >=200 procedures performed between July 1, 2020 and June 30, 
2021, unless CMS requests a more limited data set, in

[[Page 71202]]

which case, submit all requested data elements.
* * * * *

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

    For the reasons set forth in the preamble, the Department of Health 
and Human Services amends 45 CFR parts 147, 155, and 182 as set forth 
below:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
30. The authority citation for part 147 is revised to read as follows:

    Authority:  42 U.S.C. 300gg through 300gg-63, 300gg-91, and 
300gg-92, as amended, and section 3203, Pub. L. 116-136, 134 Stat. 
281.

0
31. Section 147.130 is amended--
0
a. In paragraph (a)(1)(iii) by removing ``and'' after the semicolon;
0
b. In paragraph (a)(1)(iv) by removing the period at the end of the 
paragraph and adding ``; and'' in its place;
0
c. By adding paragraph (a)(1)(v);
0
d. By revising paragraph (a)(3)(i);
0
e. By adding paragraph (a)(3)(iii);
0
f. By revising paragraphs (b)(1) and (b)(2)(i) and (ii); and
0
g. By adding paragraphs (b)(3) and (e).
    The revisions and additions read as follows:


Sec.  147.130  Coverage of preventive health services.

    (a) * * *
    (1) * * *
    (v) Any qualifying coronavirus preventive service, which means an 
item, service, or immunization that is intended to prevent or mitigate 
coronavirus disease 2019 (COVID-19) and that is, with respect to the 
individual involved--
    (A) An evidence-based item or service that has in effect a rating 
of A or B in the current recommendations of the United States 
Preventive Services Task Force; or
    (B) An immunization that has in effect a recommendation from the 
Advisory Committee on Immunization Practices of the Centers for Disease 
Control and Prevention (regardless of whether the immunization is 
recommended for routine use). For purposes of this paragraph 
(a)(1)(v)(B), a recommendation from the Advisory Committee on 
Immunization Practices of the Centers for Disease Control and 
Prevention is considered in effect after it has been adopted by the 
Director of the Centers for Disease Control and Prevention.
* * * * *
    (3) * * *
    (i) Subject to paragraphs (a)(3)(ii) and (iii) of this section, 
nothing in this section requires a plan or issuer that has a network of 
providers to provide benefits for items or services described in 
paragraph (a)(1) of this section that are delivered by an out-of-
network provider, or precludes a plan or issuer that has a network of 
providers from imposing cost-sharing requirements for items or services 
described in paragraph (a)(1) of this section that are delivered by an 
out-of-network provider.
* * * * *
    (iii) A plan or issuer must provide coverage for and must not 
impose any cost-sharing requirements (such as a copayment, coinsurance, 
or a deductible) for any qualifying coronavirus preventive service 
described in paragraph (a)(1)(v) of this section, regardless of whether 
such service is delivered by an in-network or out-of-network provider. 
For purposes of this paragraph (a)(3)(iii), with respect to a 
qualifying coronavirus preventive service and a provider with whom the 
plan or issuer does not have a negotiated rate for such service (such 
as an out-of-network provider), the plan or issuer must reimburse the 
provider for such service in an amount that is reasonable, as 
determined in comparison to prevailing market rates for such service.
* * * * *
    (b) * * *
    (1) In general. A plan or issuer must provide coverage pursuant to 
paragraph (a)(1) of this section for plan years (in the individual 
market, policy years) that begin on or after September 23, 2010, or, if 
later, for plan years (in the individual market, policy years) that 
begin on or after the date that is one year after the date the 
recommendation or guideline is issued, except as provided in paragraph 
(b)(3) of this section.
    (2) * * *
    (i) A plan or issuer that is required to provide coverage for any 
items and services specified in any recommendation or guideline 
described in paragraph (a)(1) of this section on the first day of a 
plan year (in the individual market, policy year), or as otherwise 
provided in paragraph (b)(3) of this section, must provide coverage 
through the last day of the plan or policy year, even if the 
recommendation or guideline changes or is no longer described in 
paragraph (a)(1) of this section, during the applicable plan or policy 
year.
    (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the 
extent a recommendation or guideline described in paragraph (a)(1)(i) 
of this section that was in effect on the first day of a plan year (in 
the individual market, policy year), or as otherwise provided in 
paragraph (b)(3) of this section, is downgraded to a ``D'' rating, or 
any item or service associated with any recommendation or guideline 
specified in paragraph (a)(1) of this section is subject to a safety 
recall or is otherwise determined to pose a significant safety concern 
by a Federal agency authorized to regulate the item or service during a 
plan or policy year, there is no requirement under this section to 
cover these items and services through the last day of the applicable 
plan or policy year.
    (3) Rapid coverage of preventive services for coronavirus. In the 
case of a qualifying coronavirus preventive service described in 
paragraph (a)(1)(v) of this section, a plan or issuer must provide 
coverage for such item, service, or immunization in accordance with 
this section by the date that is 15 business days after the date on 
which a recommendation specified in paragraph (a)(1)(v)(A) or (B) of 
this section is made relating to such item, service, or immunization.
* * * * *
    (e) Sunset date. The provisions of paragraphs (a)(1)(v), 
(a)(3)(iii), and (b)(3) of this section will not apply with respect to 
a qualifying coronavirus preventive service furnished on or after the 
expiration of the public health emergency determined on January 31, 
2020, to exist nationwide as of January 27, 2020, by the Secretary of 
Health and Human Services pursuant to section 319 of the Public Health 
Service Act, as a result of COVID-19, including any subsequent renewals 
of that determination.

PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED 
STANDARDS UNDER THE AFFORDABLE CARE ACT

0
32. The authority citation for part 155 continues to read as follows:

    Authority:  42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 
18051, 18054, 18071, and 18081-18083.

0
33. Section 155.1318 is added to read as follows:


Sec.  155.1318  Modification from the normal public notice requirements 
during the public health emergency.

    (a) The Secretary and the Secretary of the Treasury may modify, in 
part, the State public notice requirements under

[[Page 71203]]

Sec.  155.1312 and the Federal public notice procedures under Sec.  
155.1316 to expedite a decision on a proposed waiver request during the 
public health emergency, as defined in 42 CFR 400.200, when a delay 
would undermine or compromise the purpose of the proposed waiver 
request and be contrary to the interests of consumers. These 
flexibilities are limited to event-triggered, emergent situations, and 
the flexibilities outlined in this section will not be available for 
States seeking to address a threat to consumers' access to health 
coverage or care that existed prior to the public health emergency for 
COVID-19.
    (b) A State must meet all of the following criteria to request a 
modification under paragraph (a) of this section:
    (1) The State must request a modification under paragraph (a) of 
this section, in the form and manner specified by the Secretaries.
    (2) The State must have acted in good faith, and in a diligent, 
timely, and prudent manner in the preparation of the request for a 
modification under paragraph (a) of this section, and the waiver 
application request, as applicable.
    (3) The State must, as applicable, detail in its request for a 
modification from State-level notice procedures under paragraph (a) of 
this section the justification for the request as it relates to the 
public health emergency and the alternative public notice procedures it 
proposes to implement at the State level, including public hearings, 
that are designed to provide the greatest opportunity and level of 
meaningful public input from impacted stakeholders that is practicable 
given the emergency circumstances underlying the State's request for a 
modification.
    (4) The State must, as applicable, detail in its request for a 
modification from Federal-level notice procedures under paragraph (a) 
of this section the justification for the request and the alternative 
public notice procedures it requests to be implemented at the Federal 
level.
    (c) The Secretary and the Secretary of the Treasury will evaluate a 
State's request for a modification under paragraph (a) of this section 
and issue their modification determination within approximately 15 
calendar days after the request is received.
    (d) The Secretary will publish on the CMS website any modification 
determinations within 15 calendar days of the Secretary and the 
Secretary of the Treasury making such a determination, as well as the 
approved revised timeline for public comment under the approved 
alternative State or Federal public notice procedures, as applicable.
    (e) The State must publish on its website any modification requests 
and determinations within 15 calendar days of receipt of the 
determination, as well as the approved revised timeline for public 
comment under the alternative State or Federal public notice 
procedures, as applicable.
    (f) The State must, as applicable, implement the alternative public 
notice procedures at the State level if the State's modification 
request is approved and, if required, amend the waiver application 
request.

0
34. Section 155.1320 is amended--
0
a. In paragraph (c)(1) by adding a paragraph heading; and
0
b. By adding paragraph (c)(2).
    The additions read as follows:


Sec.  155.1320  Monitoring and compliance.

* * * * *
    (c) * * *
    (1) Notification requirements for public forum. * * *
    (2) Modification from the normal post award requirements during the 
public health emergency. (i) The Secretary and the Secretary of the 
Treasury may modify, in part, State post award requirements under this 
paragraph (c)(2) for an approved waiver request during the public 
health emergency, as defined in 42 CFR 400.200, when the application of 
the post award public notice requirements would be contrary to the 
interests of consumers during the public health emergency. These 
flexibilities are limited to event-triggered, emergent situations, and 
the flexibilities outlined in this section will not be available for 
States seeking to address a threat to consumers' access to health 
coverage or care that existed prior to the public health emergency for 
COVID-19.
    (ii) A State must meet all of the following criteria to request a 
modification under paragraph (c) of this section:
    (A) The State must request a modification under paragraph (c)(2) of 
this section, in the form and manner specified by the Secretaries.
    (B) The State must have acted in good faith, and in a diligent, 
timely, and prudent manner to comply with the monitoring and compliance 
requirement under the waiver and the terms and conditions of the 
agreement between the Secretary and the Secretary of the Treasury, as 
applicable, and the State to implement a section 1332 waiver and to 
submit and prepare the request for a modification under paragraph 
(c)(2) of this section.
    (C) The State must detail in its request for a modification under 
paragraph (c)(2) of this section the alternative post award public 
notice procedures it proposes to implement at the State level, 
including public hearings, that are designed to provide the greatest 
opportunity and level of meaningful public input from impacted 
stakeholders that is practicable given the emergency circumstances 
underlying the State's request for a modification.
    (D) The Secretary and the Secretary of the Treasury will evaluate a 
State's request for a modification under paragraph (c)(2) of this 
section and issue their modification determination within approximately 
15 calendar days after the request is received.
    (E) The State must publish on its website any modification requests 
and determinations within 15 calendar days of receipt of the 
determination, as well as information on the approved revised timeline 
for the State's post award public notice procedures, as applicable.
* * * * *

0
35. Subchapter E-T, consisting of part 182, is added to subtitle A to 
read as follows:

Subchapter E-T--Price Transparency

PART 182--PRICE TRANSPARENCY FOR COVID-19 DIAGNOSTIC TESTS

Subpart A--General Provisions
Sec.
182.10 Basis and scope.
182.20 Definitions.
182.30 Applicability.
Subpart B--Public Disclosure Requirements
182.40 Requirements for making public cash prices for a diagnostic 
test for COVID-19.
Subpart C--Monitoring and Penalties for Noncompliance
182.50 Monitoring and enforcement.
182.60 Corrective action plans.
182.70 Civil monetary penalties.
Subpart D--Appeals of Civil Monetary Penalties
182.80 Appeal of penalty.
182.90 Failure to request a hearing.

    Authority:  Section 3202(b), Pub. L. 116-136, 134 Stat. 281.

Subpart A--General Provisions


Sec.  182.10  Basis and scope.

    This part implements section 3202(b)(1) of the Coronavirus Aid, 
Relief, and Economic Security Act (Pub. L. 116-136, March 27, 2020) 
(CARES Act), which requires that during the emergency period declared 
under section 319 of the PHS Act (42 U.S.C.

[[Page 71204]]

247d), providers of diagnostic tests for COVID-19 make public the cash 
price for such tests on a public internet website of such provider. 
This part also implements section 3202(b)(2) of the CARES Act, which 
authorizes the Secretary to impose a civil monetary penalty (CMP) on 
any provider of a diagnostic test for COVID-19 that does not comply 
with section 3202(b)(1) of the CARES Act and that has not completed a 
corrective action plan to comply with that section, in an amount that 
does not exceed $300 per day that the violation is ongoing.


Sec.  182.20  Definitions.

    The following definitions and abbreviated terms apply to this part:
    Cash price means the charge that applies to an individual who pays 
cash (or cash equivalent) for a COVID-19 diagnostic test.
    COVID-19 for purposes of this part is the abbreviated term for the 
virus called SARS-CoV-2 and the disease it causes, called coronavirus 
disease 2019.
    Diagnostic test for COVID-19 (``COVID-19 diagnostic test'') means a 
COVID-19 in vitro diagnostic test described in section 6001 of the 
Families First Coronavirus Response Act (Pub. L. 116-127, March 18, 
2020), as amended by section 3201 of the CARES Act (Pub. L. 116-136, 
March 27, 2020).
    Provider of a diagnostic test for COVID-19 (``provider'') means any 
facility that performs one or more COVID-19 diagnostic tests.


Sec.  182.30  Applicability.

    (a) General applicability. The requirements of this part apply to 
each provider of a diagnostic test for COVID-19 as defined at Sec.  
182.20.
    (b) Duration of requirements. The requirements of this part are 
applicable during the public health emergency (PHE) determined to exist 
nationwide as of January 27, 2020, by the Secretary of Health and Human 
Services pursuant to section 319 of the PHS Act on January 31, 2020, as 
a result of confirmed cases of COVID-19, including any subsequent 
renewals.

Subpart B--Public Disclosure Requirements


Sec.  182.40  Requirements for making public cash prices for a 
diagnostic test for COVID-19.

    (a) General rules. (1) Except as provided under paragraph (b) of 
this section, a provider of a COVID-19 diagnostic test must make public 
the information described in paragraph (c) of this section 
electronically via the internet.
    (2) The information described in paragraph (c) of this section, or 
a link to such information, must appear in a conspicuous location on a 
searchable homepage of the provider's website.
    (3) The information described in paragraph (c) of this section must 
be displayed in a manner that is easily accessible, without barriers, 
and ensures that the information is accessible:
    (i) Free of charge;
    (ii) Without having to establish a user account or password; and
    (iii) Without having to submit personal identifiable information 
(PII).
    (4) The provider must include all of the following terms on its 
homepage:
    (i) The provider's name;
    (ii) The term ``price'';
    (iii) The term ``cost'';
    (iv) The term ``test'';
    (v) The term ``COVID''; and
    (vi) The term ``coronavirus''.
    (b) Exception. A provider of a COVID-19 diagnostic test that does 
not have its own website must make public the information described in 
paragraph (c) of this section:
    (1) In writing, within two business days upon request; and
    (2) On a sign posted prominently at the location where the provider 
offers a COVID-19 diagnostic test, if such location is accessible to 
the public.
    (c) Required information. For purposes of paragraphs (a) and (b) of 
this section, the provider must make public the following information:
    (1) A plain-language description of each COVID-19 diagnostic test 
that is offered by the provider;
    (2) The billing code used for each COVID-19 diagnostic test;
    (3) The provider's cash price for each such COVID-19 diagnostic 
test; and
    (4) Any additional information as may be necessary for the public 
to have certainty of the cash price that applies to each COVID-19 
diagnostic test.

Subpart C--Monitoring and Penalties for Noncompliance


Sec.  182.50  Monitoring and enforcement.

    (a) Monitoring. (1) CMS may evaluate whether a provider has 
complied with the requirements under Sec.  182.40.
    (2) CMS may use methods to monitor and assess provider compliance 
with the requirements under this part, including, but not limited to, 
the following, as appropriate:
    (i) CMS' evaluation of complaints made to CMS.
    (ii) CMS review of an individual's or entity's analysis of 
noncompliance as stated in the complaint.
    (iii) CMS review of providers' websites.
    (b) Actions to address provider noncompliance. If CMS concludes 
that the provider is noncompliant with one or more of the requirements 
of Sec.  182.40, CMS may take any of the following actions:
    (1) Provide a written warning notice to the provider of the 
specific violation(s).
    (2) Request that the provider submit and comply with a corrective 
action plan under Sec.  182.60.
    (3) Impose a civil monetary penalty on the provider if the provider 
fails to respond to CMS' request to submit a corrective action plan or 
to comply with the requirements of a corrective action plan approved by 
CMS.


Sec.  182.60  Corrective action plans.

    (a) Violations requiring a corrective action plan. If CMS 
determines a provider's noncompliance with the requirements of this 
part continues after a warning notice, a corrective action plan may be 
required. A violation may include, but is not limited to, the 
following:
    (1) A provider's failure to make public its cash price information 
required by Sec.  182.40.
    (2) A provider's failure to make public its cash price information 
in the form and manner required under Sec.  182.40.
    (b) Notice of violation. CMS may request that a provider submit and 
comply with a corrective action plan, specified in a notice of 
violation issued by CMS to a provider.
    (c) Compliance with corrective action plan requests and corrective 
actions. (1) A provider required to submit a corrective action plan 
must do so, in the form and manner, and by the deadline, specified in 
the notice of violation issued by CMS to the provider, and must comply 
with the requirements of the corrective action plan approved by CMS.
    (2) A provider's corrective action plan must specify elements 
including, but not limited to:
    (i) The corrective actions or processes the provider will take to 
address the deficiency or deficiencies identified by CMS.
    (ii) The timeframe by which the provider will complete the 
corrective action.
    (3) A corrective action plan is subject to CMS review and approval.
    (4) After CMS' review and approval of a provider's corrective 
action plan, CMS may monitor and evaluate the provider's compliance 
with the corrective actions specified in the corrective action plan.
    (d) Noncompliance with corrective action plan requests and 
requirements. (1) A provider's failure to respond to

[[Page 71205]]

CMS' request to submit a corrective action plan includes failure to 
submit a corrective action plan in the form, manner, or by the 
deadline, specified in a notice of violation issued by CMS to the 
provider.
    (2) A provider's failure to comply with the requirements of a 
corrective action plan includes failure to correct violation(s) within 
the specified timeframes.


Sec.  182.70  Civil monetary penalties.

    (a) Basis for imposing civil monetary penalties. CMS may impose a 
civil monetary penalty on a provider identified by CMS as noncompliant 
according to Sec.  182.50, and that fails to respond to CMS' request to 
submit a corrective action plan or to comply with the requirements of a 
corrective action plan approved by CMS as described in Sec.  182.60(d).
    (b) Notice of imposition of a civil monetary penalty. (1) If CMS 
imposes a penalty in accordance with this part, CMS will provide a 
written notice of imposition of a civil monetary penalty to the 
provider via certified mail or another form of traceable carrier.
    (2) This notice to the provider may include, but is not limited to, 
the following:
    (i) The basis for the provider's noncompliance, including, but not 
limited to, the following:
    (A) CMS' determination as to which requirement(s) the provider has 
violated.
    (B) The provider's failure to respond to CMS' request to submit a 
corrective action plan or comply with the requirements of a corrective 
action plan, as described in Sec.  182.60(d).
    (ii) CMS' determination as to the effective date for the 
violation(s). This date is the latest date of the following:
    (A) The first day the provider is required to meet the requirements 
of this part.
    (B) A date determined by CMS, such as one resulting from monitoring 
activities specified in Sec.  182.50, or development of a corrective 
action plan as specified in Sec.  182.60.
    (iii) The amount of the penalty as of the date of the notice.
    (iv) A statement that a civil monetary penalty may continue to be 
imposed for continuing violation(s).
    (v) Payment instructions.
    (vi) A statement of the provider's right to a hearing according to 
subpart D of this part.
    (vii) A statement that the provider's failure to request a hearing 
within 30 calendar days of the issuance of the notice permits the 
imposition of the penalty, and any subsequent penalties pursuant to 
continuing violations, without right of appeal in accordance with Sec.  
182.90.
    (3) If the civil monetary penalty is upheld, in part, by a final 
and binding decision according to subpart D of this part, CMS will 
issue a modified notice of imposition of a civil monetary penalty, to 
conform to the adjudicated finding.
    (c) Amount of the civil monetary penalty. (1) CMS may impose a 
civil monetary penalty upon a provider for a violation of each 
requirement of this part.
    (2) The maximum daily dollar amount for a civil monetary penalty to 
which a provider may be subject is $300. Even if the provider is in 
violation of multiple discrete requirements of this part, the maximum 
total sum that a single provider may be assessed per day is $300.
    (3) The maximum daily amount of the civil monetary penalty will be 
adjusted annually using the multiplier determined by the Office of 
Management and Budget for annually adjusting civil monetary penalty 
amounts under part 102 of this title.
    (d) Timing of payment of civil monetary penalty. (1) A provider 
must pay the civil monetary penalty in full within 60 calendar days 
after the date of the notice of imposition of a civil monetary penalty 
from CMS under paragraph (b) of this section.
    (2) In the event a provider requests a hearing, pursuant to subpart 
D of this part, the provider must pay the amount in full within 60 
calendar days after the date of a final and binding decision, according 
to subpart D of this part, to uphold, in whole or in part, the civil 
monetary penalty.
    (3) If the 60th calendar day described in paragraphs (d)(1) and (2) 
of this section is a weekend or a Federal holiday, then the timeframe 
is extended until the end of the next business day.
    (4) In the event a civil money penalty is not paid in full within 
60 days, CMS will follow the collections activities set forth in 45 CFR 
part 30.
    (e) Continuing violations. CMS may issue subsequent notice(s) of 
imposition of a civil monetary penalty, according to paragraph (b) of 
this section, that result from the same instance(s) of noncompliance.

Subpart D--Appeals of Civil Monetary Penalties


Sec.  182.80  Appeal of penalty.

    (a) A provider upon which CMS has imposed a penalty under this part 
may appeal that penalty in accordance with subpart D of part 150 of 
this title, except as specified in paragraph (b) of this section.
    (b) For purposes of applying subpart D of part 150 of this title to 
appeals of civil monetary penalties under this part:
    (1) ``Respondent'' means a provider, as defined in Sec.  182.20 
that received a notice of imposition of a civil monetary penalty 
according to Sec.  182.70(b).
    (2) In deciding whether the amount of a civil money penalty is 
reasonable, the administrative law judge (ALJ) may only consider 
evidence of record relating to the following:
    (i) The provider's posting(s) of its cash price information, if 
available.
    (ii) Material the provider timely previously submitted to CMS 
(including with respect to corrective actions and corrective action 
plans).
    (iii) Material CMS used to monitor and assess the provider's 
compliance according to Sec.  182.70(a)(2).
    (3) The ALJ's consideration of evidence of acts other than those at 
issue in the instant case under Sec.  150.445(g) of this title does not 
apply.


Sec.  182.90  Failure to request a hearing.

    (a) If a provider does not request a hearing within 30 calendar 
days of the issuance of the notice of imposition of a civil monetary 
penalty described in Sec.  182.70(b), CMS may impose the civil monetary 
penalty indicated in such notice without right of appeal in accordance 
with this part.
    (1) If the 30th calendar day described paragraph (a) of this 
section is a weekend or a Federal holiday, then the timeframe is 
extended until the end of the next business day.
    (2) [Reserved]
    (b) The provider has no right to appeal a penalty with respect to 
which it has not requested a hearing in accordance with Sec.  150.405 
of this title, unless the provider can show good cause, as determined 
at Sec.  150.405(b) of this title, for failing to timely exercise its 
right to a hearing.

PART 182 [Transferred to Subchapter E]

0
36. Effective January 1, 2021, transfer part 182 from subchapter E-T to 
subchapter E.

Subchapter E-T [Removed]

0
37. Effective January 1, 2021, remove subchapter E-T.

[FR Doc. 2020-24332 Filed 11-2-20; 4:15 pm]
BILLING CODE 4120-01-P