[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Proposed Rules]
[Pages 79452-79749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26956]
[[Page 79451]]
Vol. 87
Tuesday,
No. 247
December 27, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 401, 405, 417, et al.
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Office of the Secretary
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45 CFR Part 170
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Medicare Program; Contract Year 2024 Policy and Technical Changes to
the Medicare Advantage Program, Medicare Prescription Drug Benefit
Program, Medicare Cost Plan Program, Medicare Parts A, B, C, and D
Overpayment Provisions of the Affordable Care Act and Programs of All-
Inclusive Care for the Elderly; Health Information Technology Standards
and Implementation Specifications; Proposed Rule
Federal Register / Vol. 87 , No. 247 / Tuesday, December 27, 2022 /
Proposed Rules
[[Page 79452]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 401, 405, 417, 422, 423, 455, and 460
Office of the Secretary
45 CFR Part 170
[CMS-4201-P]
RIN 0938-AU96
Medicare Program; Contract Year 2024 Policy and Technical Changes
to the Medicare Advantage Program, Medicare Prescription Drug Benefit
Program, Medicare Cost Plan Program, Medicare Parts A, B, C, and D
Overpayment Provisions of the Affordable Care Act and Programs of All-
Inclusive Care for the Elderly; Health Information Technology Standards
and Implementation Specifications
AGENCY: Centers for Medicare & Medicaid Services (CMS), Office of the
National Coordinator for Health Information Technology, Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would revise the Medicare Advantage (Part
C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan,
and Programs of All-Inclusive Care for the Elderly (PACE) regulations
to implement changes related to Star Ratings, medication therapy
management, marketing and communications, health equity, provider
directories, coverage criteria, prior authorization, passive
enrollment, network adequacy, identification of overpayments, formulary
changes, and other programmatic areas. This proposed rule would also
codify regulations implementing section 118 of Division CC of the
Consolidated Appropriations Act, 2021, section 11404 of the Inflation
Reduction Act, and includes a large number of provisions that would
codify existing sub-regulatory guidance in the Part C, Part D, and PACE
programs. This proposed rule would also amend the existing regulations
for Medicare Parts A, B, C, and D regarding the standard for an
identified overpayment.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on February 13,
2023.
ADDRESSES: In commenting, please refer to file code CMS-4201-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
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-4201-P, P.O. Box 8013,
Baltimore, MD 21244.
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-4201-
P, 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:
Catherine Gardiner, (410) 786-7638--General Questions.
Katie Parker, (410) 786-0537--Parts A and B Overpayment Provision.
Carly Medosch, (410) 786-8633--Part C and Cost Plan Issues.
Lucia Patrone, (410) 786-8621- Part D Issues.
Nathan Jessen, (608) 520-1837--Part D Issues.
Kristy Nishimoto, (206) 615-2367--Beneficiary Enrollment and
Appeals Issues.
Kelley Ordonio, (410) 786-3453--Parts C and D Payment Issues; Parts
C and D Overpayment Provisions.
Hunter Coohill, (720) 853-2804--Enforcement Issues.
Lauren Brandow, (410) 786-9765--PACE Issues.
Melissa Seeley, (212) 616-2329--D-SNP Issues.
Alexander Baker, (202) 260-2048--Health IT Standards.
[email protected]--Parts C and D Star Ratings
Issues.
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://www.regulations.gov. Follow the search instructions on that website to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Executive Summary
A. Purpose
The primary purpose of this proposed rule is to amend the
regulations for the Medicare Advantage (Part C), Medicare Cost Plan,
and Medicare Prescription Drug Benefit (Part D) programs, and Programs
of All-Inclusive Care for the Elderly (PACE). This proposed rule
includes a number of new policies that would improve these programs as
well as codify existing Part C and Part D sub-regulatory guidance. This
proposed rule would also amend the existing regulations for Medicare
Parts A, B, C, and D regarding the standard for an identified
overpayment.
Additionally, this rule implements certain sections of the
following Federal laws related to the Parts C and D programs:
The Inflation Reduction Act (IRA) of 2022.
The Consolidated Appropriations Act (CAA), 2021.
The Bipartisan Budget Act (BBA) of 2018.
The Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment (SUPPORT) for Patients and Communities Act of
2018.
B. Summary of the Major Provisions
1. Medicare Advantage/Part C and Part D Prescription Drug Plan Quality
Rating System (Sec. Sec. 422.162, 422.164, 422.166, 422.260, 423.182,
423.184, and 423.186)
In this rule, we are proposing a health equity index (HEI) reward
for the 2027 Star Ratings to further incentivize Parts C and D plans to
focus on improving care for enrollees with social risk factors (SRFs);
as part of this change, we are also proposing to remove the current
reward factor. This proposal supports CMS efforts to ensure attainment
of the highest level of health for all people. We are proposing to
reduce the weight of
[[Page 79453]]
patient experience/complaints and access measures to further align
efforts with other CMS quality programs and the current CMS Quality
Strategy, as well as to better balance the contribution of the
different types of measures in the Star Ratings program. We are also
proposing to remove the Part C Diabetes Care--Kidney Disease Monitoring
and the stand-alone Medication Reconciliation Post-discharge measures;
add the Part C Kidney Health Evaluation for Patients with Diabetes and
the updated Colorectal Cancer Screening and Care for Older Adults--
Functional Status Assessment measures; add the Part D Concurrent Use of
Opioids and Benzodiazepines, Polypharmacy Use of Multiple
Anticholinergic Medications in Older Adults, and Polypharmacy Use of
Multiple Central Nervous System Active Medications in Older Adults
measures; and update the Part D Medication Adherence for Diabetes
Medications, Medication Adherence for Hypertension (RAS Antagonists),
and Medication Adherence for Cholesterol (Statins) measures. We are
proposing to remove guardrails (that is, bi-directional caps that
restrict upward and downward movement of a measure's cut points for the
current year's measure-level Star Ratings compared to the prior year's
measure-threshold specific cut points) when determining measure-
specific-thresholds for non-Consumer Assessment of Healthcare Providers
and Systems (CAHPS) measures; modify the Improvement Measure hold
harmless policy; add a rule for the removal of Star Ratings measures;
and remove the 60 percent rule that is part of the adjustment for
extreme and uncontrollable circumstances (also called the disaster
adjustment). We are also proposing a series of technical clarifications
related to the disaster adjustment, Quality Bonus Payment (QBP) appeals
processes, treatment of ratings for contracts after consolidation,
weighting of measures with a substantive specification change, and
addressing the codification error related to use of Tukey outlier
deletion. These changes would apply (that is, data would be collected
and performance measured) for the 2024 measurement period and the 2026
Star Ratings, except for the removal of the Part C Diabetes Care--
Kidney Disease Monitoring measure, which would apply for the 2022
measurement period and the 2024 Star Ratings; the HEI reward, which
would include data from the 2024 and 2025 measurement periods and apply
for the 2027 Star Ratings; and the risk adjustment based on
sociodemographic status characteristics to the three adherence
measures, which would be implemented for the 2026 measurement period
and the 2028 Star Ratings.
2. Medication Therapy Management (MTM) Program (Sec. 423.153)
Section 1860D-4(c)(2) of the Act requires all Part D sponsors to
have an MTM program designed to assure, with respect to targeted
beneficiaries, that covered Part D drugs are appropriately used to
optimize therapeutic outcomes through improved medication use, and to
reduce the risk of adverse events, including adverse drug interactions.
Section 1860D-4(c)(2)(A)(ii) of the Act requires Part D sponsors to
target those Part D enrollees who have multiple chronic diseases, are
taking multiple Part D drugs, and are likely to meet a cost threshold
for covered Part D drugs established by the Secretary. CMS codified the
MTM targeting criteria at Sec. 423.153(d)(2).
Part D sponsors currently have significant flexibility in
establishing their MTM eligibility criteria within the established
framework. CMS has observed decreasing eligibility rates and near-
universal convergence among Part D sponsors to the most restrictive
criteria currently permitted. Due to the increasing cost threshold and
variations in the targeting criteria implemented by sponsors, Part D
enrollees with more complex drug regimens who would benefit most from
MTM services are often not eligible. In addition, enrollees with
equivalent patient profiles may or may not be eligible for MTM
depending on the criteria their plan requires.
After an extensive analysis to identify potential disparities in
MTM program eligibility and access, CMS is proposing changes to the MTM
targeting criteria at Sec. 423.153(d)(2) to promote consistent,
equitable, and expanded access to MTM services. The combination of
proposed changes includes: (1) requiring plan sponsors to target all
core chronic diseases identified by CMS, codifying the current 9 core
chronic diseases \1\ in regulation, and adding HIV/AIDS for a total of
10 core chronic diseases; (2) lowering the maximum number of covered
Part D drugs a sponsor may require from 8 to 5 drugs and requiring
sponsors to include all Part D maintenance drugs in their targeting
criteria; and (3) revising the methodology for calculating the cost
threshold ($4,935 in 2023) to be commensurate with the average annual
cost of 5 generic drugs ($1,004 in 2020). The proposed changes would
reduce eligibility gaps so that more Part D enrollees with complex drug
regimens at increased risk of medication therapy problems would be
eligible for MTM services. They would also better align MTM eligibility
criteria with statutory goals to reduce medication errors and optimize
therapeutic outcomes for beneficiaries with multiple chronic conditions
and taking multiple Part D drugs, while maintaining a reasonable cost
criterion.
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\1\ The current core chronic diseases are: diabetes*,
hypertension*, dyslipidemia*, chronic congestive heart failure*,
Alzheimer's disease, end stage renal disease (ESRD), respiratory
disease (including asthma*, chronic obstructive pulmonary disease
(COPD), and other chronic lung disorders), bone disease-arthritis
(osteoporosis, osteoarthritis, and rheumatoid arthritis), and mental
health (including depression, schizophrenia, bipolar disorder, and
other chronic/disabling mental health conditions). Enumerated in
statute (*).
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In this rule, we are also proposing to codify longstanding CMS
guidance that a beneficiary is unable to accept an offer to participate
in the comprehensive medication review (CMR) only when the beneficiary
is cognitively impaired and cannot make decisions regarding their
medical needs. We are also proposing other technical changes to clarify
that the CMR must include an interactive consultation that is conducted
in real-time, regardless of whether it is done in person or via
telehealth.
3. Strengthening Translation and Accessible Format Requirements for
Medicare Advantage, Part D, and D-SNP Enrollee Marketing and
Communication Materials (Sec. Sec. 422.2267 and 423.2267)
Sections Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2) require MA
organizations, cost plans, and Part D sponsors to translate required
materials into any non-English language that is the primary language of
at least 5 percent of individuals in a plan benefit package service
area. In addition, 45 CFR 92.102(b) requires plans to provide
appropriate auxiliary aids and services, including interpreters and
information in alternate formats, to individuals with impaired sensory,
manual, or speaking skills, where necessary to afford such persons an
equal opportunity to benefit from the service in question. However, CMS
has learned from oversight activities, enrollee complaints, and
stakeholder feedback that enrollees often must make a separate request
each time they would like a material in an alternate language or need
auxiliary aids or services.
In addition, an increasing number of dually eligible individuals
are enrolled in managed care plans where the same plan covers both
Medicare and Medicaid services. In some cases, Medicaid standards for
Medicaid managed care plans require translation of plan materials into
a language not
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captured by the Medicare Advantage requirements.
We are proposing to specify in Medicare regulations that MA
organizations, cost plans, and Part D sponsors must provide materials
to enrollees on a standing basis in any non-English language that is
the primary language of at least 5 percent of the individuals in a plan
benefit package service area or accessible format using auxiliary aids
and services upon receiving a request for the materials or otherwise
learning of the enrollee's preferred language and/or need for an
accessible format using auxiliary aids and services. We are also
proposing at Sec. Sec. 422.2267(a)(3) and 423.2267(a)(3) to extend
this requirement to individualized plans of care for special needs
plans. We are also proposing to require that fully integrated dual
eligible special needs plans (FIDE SNPs), highly integrated dual
eligible special needs plans (HIDE SNPs), and applicable integrated
plans (AIPs) as defined at Sec. 422.561, translate required materials
into any languages required by the Medicare translation standard at
Sec. 422.2267(a) plus any additional languages required by the
Medicaid translation standard as specified through their Medicaid
capitated contracts.
4. Health Equity in Medicare Advantage (MA) (Sec. Sec. 422.111 and
422.112)
CMS is working to achieve policy goals that advance health equity
across its programs and pursue a comprehensive approach to advancing
health equity for all, including those who have been historically
underserved, marginalized, and adversely affected by persistent poverty
and inequality.\2\ To that end, we are proposing the following
regulatory updates.
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\2\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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First, current regulations require MA organizations to ensure that
services are provided in a culturally competent manner. The regulation
provides examples of populations that may require consideration
specific to their needs. In this proposed rule, we propose to further
clarify the broad application of our policy. Specifically, we propose
to amend the list of populations to include people: (1) with limited
English proficiency or reading skills; (2) of ethnic, cultural, racial,
or religious minorities; (3) with disabilities; (4) who identify as
lesbian, gay, bisexual, or other diverse sexual orientations; (5) who
identify as transgender, nonbinary, and other diverse gender
identities, or people who were born intersex; (6) who live in rural
areas and other areas with high levels of deprivation; and (7)
otherwise adversely affected by persistent poverty or inequality.
Next, CMS currently provides best practices for organizations to
use in developing their provider directories, including incorporating
non-English languages spoken by each provider and provider/location
accessibility for people with physical disabilities. In this rule, we
propose to codify these best practices by requiring organizations to
include providers' cultural and linguistic capabilities (including
American Sign Language, ASL) in their provider directories. If
finalized, this change would improve the quality and usability of
provider directories, particularly for non-English speakers, limited
English proficient individuals, and enrollees who use ASL. We are also
proposing to require organizations to identify certain providers waived
to treat patients with medications for opioid use disorder (MOUD) in
their provider directories.
In addition, as the use of telehealth becomes more prevalent, there
is evidence of disparities in telehealth access due in part to low
digital health literacy, especially among populations who already
experience health disparities. Low digital health literacy is one of
the most significant obstacles in achieving telehealth equity, and many
older adults with low digital health literacy experience gaps in access
to the health care they need. This is concerning for the MA program
because its enrollee population includes older adults who are age 65 or
older, which is why we are proposing to address the issue by requiring
MA organizations to develop and maintain procedures to identify and
offer digital health education to enrollees with low digital health
literacy to assist with accessing any medically necessary covered
telehealth benefits.
Finally, MA organizations' existing quality improvement (QI)
programs are an optimal vehicle to develop and implement strategies and
policies designed to reduce disparities in health and health care, and
advance equity in the health and health care of MA enrollee
populations, especially those that are underserved. To support these
efforts, we propose to require MA organizations to incorporate one or
more activities into their overall QI program that reduce disparities
in health and health care among their enrollees. MA organizations may
implement activities such as improving communication, developing and
using linguistically and culturally appropriate materials (to
distribute to enrollees or use in communicating with enrollees), hiring
bilingual staff, community outreach, or similar activities. We believe
adopting this proposed requirement for MA organizations as part of
their required QI programs will align with health equity efforts across
CMS policies and programs.
5. Utilization Management Requirements: Clarifications of Coverage
Criteria for Basic Benefits and Use of Prior Authorization, Additional
Continuity of Care Requirements, and Annual Review of Utilization
Management Tools (Sec. Sec. 422.101, 422.112, 422.137, 422.138, and
422.202)
In recent years, CMS has received numerous inquiries regarding MA
organizations' use of prior authorization and its effect on beneficiary
access to care. We are proposing several regulatory changes to address
these concerns regarding prior authorization. First, we propose that
prior authorization policies for coordinated care plans may only be
used to confirm the presence of diagnoses or other medical criteria
and/or ensure that an item or service is medically necessary based on
standards specified in this rule. Second, we propose that an approval
granted through prior authorization processes be valid for the duration
of the approved course of treatment and that plans provide a minimum
90-day transition period when an enrollee who is currently undergoing
treatment switches to a new MA plan. Third, we propose that MA plans
must comply with national coverage determinations (NCD), local coverage
determinations (LCD), and general coverage and benefit conditions
included in Traditional Medicare statutes and regulations as
interpreted by CMS. Further, we propose that MA plans cannot deny
coverage of a Medicare covered item or service based on internal,
proprietary, or external clinical criteria not found in Traditional
Medicare coverage policies. We propose that when there is no applicable
coverage criteria in Medicare statute, regulation, NCD, or LCD, MA
organizations may create internal coverage criteria that are based on
current evidence in widely used treatment guidelines or clinical
literature that is made publicly available to CMS, enrollees, and
providers.
Finally, to ensure prior authorization is being used appropriately,
we propose to require that all MA plans establish a Utilization
Management Committee to review all utilization management, including
prior authorization, policies
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annually and ensure they are consistent with current, traditional
Medicare's national and local coverage decisions and guidelines. These
proposed changes will help ensure enrollees have consistent access to
medically necessary care, without unreasonable barriers or
interruptions.
6. Medicare Advantage (MA) and Part D Marketing (Subpart V of Parts 422
and 423)
In accordance with our statutory authority to review marketing
materials and application forms and to develop marketing standards
under sections 1851(h), 1851(j), 1860D-1(b)(1)(vi), and 1860D-4(l) of
the Act, as well as the statutory requirements in sections 1852(c) and
1860D-4(a) of the Act requiring MA organizations and Part D sponsors
disclose specific types of information to enrollees, we are proposing
several changes to 42 CFR parts 422 and 423, subpart V, to strengthen
beneficiary protections and improve MA and Part D marketing. These
changes include: notifying enrollees annually, in writing, of the
ability to opt out of phone calls regarding MA and Part D plan
business; requiring agents to explain the effect of an enrollee's
enrollment choice on their current coverage whenever the enrollee makes
an enrollment decision; requiring agents to share key pre-enrollment
information with potential enrollees when processing telephonic
enrollments; simplifying plan comparisons by requiring medical benefits
be in a specific order and listed at the top of a plan's Summary of
Benefits; limiting the time that a sales agent can call a potential
enrollee to no more than six months following the date that the
enrollee first asked for information; limiting the requirement to
record calls between third-party marketing organizations (TPMOs) and
beneficiaries to marketing (sales) and enrollment calls; clarifying
that the prohibition on door-to-door contact without a prior
appointment still applies after collection of a business reply card
(BRC) or scope of appointment (SOA); prohibiting marketing of benefits
in a service area where those benefits are not available, prohibiting
the marketing of information about savings available to potential
enrollees that are based on a comparison of typical expenses borne by
uninsured individuals, unpaid costs of dually eligible beneficiaries,
or other unrealized costs of a Medicare beneficiary; requiring TPMOs to
list or mention all of the MA organization or Part D sponsors that they
sell; requiring MA organizations and Part D sponsors to have an
oversight plan that monitors agent/broker activities and reports agent/
broker non-compliance to CMS; modifying the TPMO disclaimer to add
SHIPs as an option for beneficiaries to obtain additional help; placing
discrete limits around the use of the Medicare name, logo, and Medicare
card; prohibit the use of superlatives (for example, words like
``best'' or ``most'') in marketing unless the material provides
documentation to support the statement, and the documentation is for
the current or prior year; and, clarifying the requirement to record
calls between TPMOs and beneficiaries, such that it is clear that the
requirement includes virtual connections such as video conferencing and
other virtual telepresence methods.
7. Behavioral Health in Medicare Advantage (MA) (Sec. Sec. 422.112 and
422.116)
As part of the Medicare Program; Contract Year 2023 Policy and
Technical Changes to the Medicare Advantage and Medicare Prescription
Drug Benefit Programs Proposed Rule, which appeared in the January 12,
2022 Federal Register (87 FR 1842) (hereinafter referred to as the
January 2022 proposed rule), we solicited comments from stakeholders
regarding challenges in building MA behavioral health networks and
opportunities for improving access to services. Stakeholders commented
on the importance of ensuring adequate access to behavioral health
services for enrollees and suggested expanding network adequacy
requirements to include additional behavioral health specialty types.
To strengthen our network adequacy requirements and reaffirm MA
organizations' responsibilities to provide behavioral health services,
we propose to: (1) add Clinical Psychology Licensed Clinical Social
Worker, and Prescribers of Medication for Opioid Use Disorder as
specialty types that will be evaluated as part of the network adequacy
reviews under Sec. 422.116, and make these new specialty types
eligible for the 10-percentage point telehealth credit as allowed under
Sec. 422.116(d)(5); (2) amend our general access to services standards
in Sec. 422.112 to include explicitly behavioral health services; (3)
codify, from existing guidance on reasonable wait times for primary
care visits, standards for wait times that apply to both primary care
and behavioral health services; (4) clarify that some behavioral health
services may qualify as emergency services and, therefore, must not be
subject to prior authorization; and (5) extend current requirements for
MA organizations to establish programs to coordinate covered services
with community and social services to behavioral health services
programs to close equity gaps in treatment between physical health and
behavioral health.
8. Enrollee Notification Requirements for Medicare Advantage (MA)
Provider Contract Terminations (Sec. Sec. 422.111 and 422.2267)
CMS requires notification to MA enrollees when a provider network
participation contract terminates. CMS is proposing to revise Sec.
422.111(e) by establishing specific enrollee notification requirements
for no-cause and for-cause provider contract terminations and adding
specific and more stringent enrollee notification requirements when
primary care and behavioral health provider contract terminations
occur. CMS is also proposing to revise Sec. 422.2267(e)(12) to specify
the requirements for the content of the notification to enrollees about
a provider contract termination.
9. Transitional Coverage and Retroactive Medicare Part D Coverage for
Certain Low-Income Beneficiaries Through the Limited Income Newly
Eligible Transition (LI NET) Program (Sec. Sec. 423.2500-423.2536)
CMS has operated the LI NET demonstration since 2010. The LI NET
demonstration provides transitional, point-of-sale coverage for low-
income beneficiaries who demonstrate an immediate need for
prescriptions, but who have not yet enrolled in a Part D plan, or whose
enrollment is not yet effective. LI NET also provides retroactive and/
or temporary prospective coverage for beneficiaries determined to be
eligible for the Part D low-income subsidy (LIS) by the Social Security
Administration (SSA) or a State. In this proposed rule, we propose
regulations to make the LI NET program a permanent part of Medicare
Part D, as required by the Consolidated Appropriations Act, 2021 (CAA).
10. Medicare Parts A, B, C, and D Overpayment Provisions of the
Affordable Care Act (Sec. Sec. 401.305(a)(2), 422.326(c), and
423.360(c))
The proposed regulatory provisions would amend the existing
regulations for Medicare Parts A, B, C, and D regarding the standard
for an ``identified overpayment'' and will align the regulations with
the statutory language in section 1128J(d)(4)(A) of the Act, which
provides that the terms ``knowing'' and ``knowingly'' have the meaning
given those terms in the False
[[Page 79456]]
Claims Act at 31 U.S.C. 3729(b)(1)(A). Specifically, in this regulation
we propose to remove the existing ``reasonable diligence'' standard and
adopt by reference the False Claims Act definition of ``knowing'' and
``knowingly'' as set forth at 31 U.S.C. 3729(b)(1)(A). Under the
proposed rule, an MA organization, Part D sponsor, provider or supplier
has identified an overpayment if it has actual knowledge of the
existence of the overpayment, or acts in reckless disregard or
deliberate ignorance of the overpayment.
11. Changes to an Approved Part D Formulary--Immediate Substitutions
(Sec. Sec. 423.4, 423.100, 423.104, 423.120, and 423.128)
Current regulations permit Part D sponsors to immediately remove
from the formulary a brand name drug and substitute its newly released
generic equivalent. Part D sponsors meeting the requirements can
provide notice of specific changes, including direct notice to affected
beneficiaries, after they take place; do not need to provide a
transition supply of the substituted drug; and can make these changes
at any time including in advance of the plan year. Consistent with
these requirements, we propose to permit Part D sponsors to immediately
substitute: (i) a new interchangeable biological product for its
corresponding reference product; (ii) a new unbranded biological
product for its corresponding brand name biological product; and (iii)
a new authorized generic for its corresponding brand name equivalent.
12. Expanding Eligibility for Low-Income Subsidies (LIS) Under Part D
of the Medicare Program (Sec. Sec. 423.773 and 423.780)
Section 11404 of the IRA amended section 1860D-14 of the Act to
expand eligibility for the full LIS to individuals with incomes up to
150 percent of the Federal poverty level (FPL) beginning on or after
January 1, 2024. In addition, the IRA allows for individuals to qualify
for the full subsidy based on the higher resource requirements
currently applicable to the partial LIS group. This change will provide
the full LIS subsidy for those who currently qualify for the partial
subsidy, and we are proposing to implement this change in this
regulation.
C. Summary of Costs and Benefits
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP27DE22.004
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[GRAPHIC] [TIFF OMITTED] TP27DE22.005
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[GRAPHIC] [TIFF OMITTED] TP27DE22.006
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[GRAPHIC] [TIFF OMITTED] TP27DE22.007
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BILLING CODE 4120-01-C
II. Implementation of Certain Provisions of the Bipartisan Budget Act
of 2018, the Consolidated Appropriations Act, 2021, and the Inflation
Reduction Act of 2022
A. Applying D-SNP Look-Alike Requirements to Plan Benefit Package
Segments (Sec. Sec. 422.503(e), 422.504, 422.510 and 422.514)
In the final rule titled ``Medicare Program; Contract Year 2021
Policy and Technical Changes to the Medicare Advantage Program,
Medicare Prescription Drug Benefit Program, and Medicare Cost Plan
Program'' which appeared in the Federal Register on June 2, 2020 (85 FR
33796) (hereinafter referred to as the June 2020 final rule), CMS
finalized the contracting limitations for D-SNP look-alikes at Sec.
422.514(d) and the associated authority and procedures for
transitioning enrollees from a D-SNP look-alike at Sec. 422.514(e).
For plan year 2022 and subsequent years, as provided in Sec.
422.514(d)(1), CMS will not enter into a contract for a new non-SNP MA
plan that projects, in its bid submitted under Sec. 422.254, that 80
percent or more of the plan's total enrollment are enrollees entitled
to medical assistance under a State plan under Title XIX. For plan year
2023 and subsequent years, as provided in Sec. 422.514(d)(2), CMS will
not renew a contract with a non-SNP MA plan that has actual enrollment,
as determined by CMS using the January enrollment of the current year,
consisting of 80 percent or more of enrollees who are entitled to
medical assistance under a State plan under Title XIX, unless the MA
plan has been active for less than 1 year and has enrollment of 200 or
fewer individuals at the time of such determination.
We established these contract limitations to address the
proliferation and growth of D-SNP look-alikes, which raised concerns
related to effective implementation of requirements for D-SNPs
established by section 1859 of the Act (including amendments made by
the Medicare Improvements for Patients and Providers Act of 2008 (Pub.
L. 110-275) and the Bipartisan Budget Act of 2018 (Pub. L. 115-123)).
We adopted the regulation to ensure full implementation of requirements
for D-SNPs, such as contracts with State Medicaid agencies; a minimum
integration of Medicare and Medicaid benefits; care coordination
through health risk assessments (HRAs); evidence-based models of care.
In addition, we noted how limiting these D-SNP look-alikes would
address beneficiary confusion stemming from misleading marketing
practices by brokers and agents that misrepresent to dually eligible
individuals the characteristics of D-SNP look-alikes. For a more
detailed discussion of D-SNP look-alikes and their impact on the
implementation of D-SNP Medicare and Medicaid integration, we direct
readers to the June 2020 final rule (85 FR 33805 through 33820) and the
Medicare and Medicaid Programs; Contract Year 2021 and 2022 Policy and
Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly (85 FR 9018
through 9021) (also known as the February 2020 proposed rule). We are
proposing amendments to close unforeseen loopholes in the scope of the
regulation adopted to prohibit D-SNP look-alikes.
1. Applying Contracting Limitations for D-SNP Look-Alikes to MA Plan
Segments
As written at Sec. 422.514(d) and (e), the contracting limitations
for D-SNP look-alikes are based on analysis at the MA plan level.
Section 1854(h) of the Act authorizes MA organizations to segment an MA
plan and apply the uniformity requirements for MA plans at the segment
level, provided that the segments are comprised of one or more MA
payment areas. As implemented in Sec. Sec. 422.2 (defining ``MA
plan''), 422.100(d), 422.254, and 422.262, MA plans may include
multiple segments in an MA plan in which different benefit designs,
cost-sharing, and premiums are available; bids are submitted at the
segment level if an MA plan is segmented and evaluation of compliance
with MA requirements is done at the segment level where appropriate.
See Sec. 422.100(f)(6) providing for evaluation of cost-sharing at the
segment level for segmented plans. In effect, each segment of an MA
plan is like a plan itself. We discussed in the Medicare Program;
Medicare+Choice Program (65 FR 40170, 40204 through 40205) final rule,
which appeared in the Federal Register on June 29, 2000 (also known as
the June 2000 final rule) how the authority in section 1854(h) of the
Act for an MA organization to segment an MA plan has practical
implications that are similar to offering multiple plans. One or more
segments can be part of the same MA plan even though the Medicare Part
C benefits, cost-sharing, premiums, and marketing materials can differ.
For example, MA plan benefit package H1234-567 could offer multiple
segments distinguished by three additional digits, such as H1234-567-
001, H1234-567-002, and H1234-567-003. Since adopting Sec. 422.514(d),
we have seen MA plans where a specific segment looks like a D-SNP look-
alike and would be subject to the contracting prohibitions in Sec.
422.514(d) if the segment were treated as an MA plan. As finalized,
Sec. 422.514(d) does not clearly apply to a segment within an MA plan.
However, we believe that by applying the D-SNP look-alike contracting
limitations only at the MA plan level without applying it to segments
of plans, our existing regulation has an unintended and unforeseen
loophole through which D-SNP look-alikes could persist, contrary to the
stated objectives in our prior rulemaking.
Based on January 2022 Monthly Membership Report (MMR) data, we
identified 47 non-SNP MA plans that meet the criteria outlined at Sec.
422.514(d)(2) when we performed our analysis at the plan level. If we
were to apply the Sec. 422.514(d)(2) criteria at the MA plan segment
level, segments of three additional non-SNP MA plans would be
identified as D-SNP look-alikes. The segments in those three plans
collectively have approximately 3,000 enrollees. While the number of
non-SNP MA plans at the segment level is currently small, this number
could grow in the future and provide an opportunity for MA
organizations to circumvent the D-SNP look-alike contracting
limitations at Sec. 422.514(d). For example, in our analysis of
proposed D-SNP look-alike transitions for contract year 2023, two D-SNP
look-alikes in contract year 2022 are proposing to transition a
combined total of approximately 7,800 D-SNP look-alike enrollees into
two new non-SNP MA plan segments, which could create two new D-SNP
look-alike segments for contract year 2023.
We propose adding a new paragraph at 42 CFR 422.514(g) to provide
that Sec. 422.514(d) through (f) apply to segments of the MA plan in
the same way that those provisions apply to MA plans. As a result, CMS
will not contract with or renew a contract with a plan segment where
the MA plan or segment is not a D-SNP and the enrollment thresholds in
paragraph (d)(1) or (d)(2) are met. This proposal, to treat a segment
of an MA plan as an MA plan, would be consistent with CMS' annual
review of MA plan bids and Medicare cost-sharing, in which each MA plan
segment submits a separate bid pricing tool and plan benefit package
like an unsegmented MA plan and CMS separately evaluates these
submissions for compliance with MA requirements.
[[Page 79466]]
As discussed in the June 2020 final rule, CMS implements the
contracting prohibition in Sec. 422.514 at the plan level. Where an MA
plan is one of several offered under a single MA contract and the MA
organization does not voluntarily non-renew the D-SNP look-alike, CMS
will sever the D-SNP look-alike from the overall contract using its
authority under Sec. 422.503(e) to sever a specific MA plan from a
contract and terminate the deemed contract for the look-alike plan (85
FR 33812). However, CMS does not currently have clear regulatory
authority to sever a segment from an MA plan to terminate a contract
that has only a segment of an MA plan. CMS adopted the severability
regulation at Sec. 422.503(e) in the Medicare Program; Establishment
of the Medicare+Choice Program interim final rule (63 FR 35103,
hereafter known as the June 1998 interim final rule) as part of
implementing the statutory authority for MA contracts to cover more
than one MA plan. Without amending Sec. 422.503(e), CMS would need to
sever the entire MA plan that has the D-SNP look-alike segment such
that other segments in that MA plan would be subject to the contracting
prohibition and not renewed under Sec. 422.514(d) as proposed to be
amended here if the MA organization failed to comply with Sec.
422.514(d). Instead, we propose to amend Sec. 422.503(e) to allow for
CMS to sever a segment from an MA plan and allow the remaining segments
of that MA plan to continue along with any other MA plans offered under
the same contract. We propose to rely on our authority to adopt MA
standards under section 1856(b)(1) of the Act and our authority to
adopt additional contract terms when necessary and appropriate, and not
inconsistent with the MA statute, under section 1857(e)(1) of the Act.
Our primary impetus for this proposal relates to D-SNP look-alikes, but
our proposal at Sec. 422.503(e) is not specific to D-SNP look-alikes;
because each segment of an MA plan is like a plan itself, we believe
severability should apply similarly at the plan and segment level. We
also propose to amend Sec. 422.504(a)(19) to adopt a new contract term
that MA organizations agree not to segment an MA plan in a way that
results in a D-SNP look-alike. In conjunction with the proposed
amendments to Sec. 422.514(g) to apply the prohibitions on contracting
with D-SNP look-alikes to segments of an MA plan, the amendments to
Sec. 422.503(e) would allow CMS to eliminate existing D-SNP look-alike
segments and the amendments to Sec. 422.504(a)(19) would allow CMS to
prevent new D-SNP look-alikes.
2. Applying Contracting Limitations for D-SNP Look-Alikes to Existing
MA Plans
We identified a second loophole during our analysis of contract
year 2023 MA plan bids to identify any new MA plans that meet the
contract limitation at Sec. 422.514(d)(1). An existing (that is,
renewing) MA plan that did not meet the criteria in Sec. 422.514(d)(2)
(using January 2022 MMR data as provided in paragraph (e)(3)) projected
in its contract year 2023 bid that the MA plan would have 80 percent or
higher enrollment of dually eligible individuals in 2023. Because this
MA plan is not a new MA plan for contract year 2023, the contract
prohibition in Sec. 422.514(d)(1) did not apply. To prohibit similar
situations in the future, we propose to amend Sec. 422.514(d)(1) to
apply it to both new and existing (that is, renewing) MA plans that are
not D-SNPs and submit bids with projected enrollment of 80 percent or
more enrollees of the plan's total enrollment that are dually eligible
for Medicare and Medicaid. We propose to revise paragraph (d)(1) to
provide that CMS does not enter into or renew an MA contract for plan
year 2024 and subsequent years when the criteria in paragraphs
(d)(1)(i) and (ii) are met. We are proposing to begin this prohibition
with 2024 because we expect that 2024 will be the first plan year after
the final rule adopting this proposal. Pending finalization of this
proposal, Sec. 422.514(d)(1) will continue to prohibit contracts with
new MA plans that meet the criteria. As contracts for 2022 and 2023
have been awarded as of the time this proposed rule is issued, the
earliest our proposed revision to expand the scope of Sec.
422.514(d)(1) can apply is 2024.
3. Contract Limitations for D-SNP Look-Alikes as a Basis for MA
Contract Termination (Sec. 422.510(a)(4))
Finally, we propose an amendment to Sec. 422.510(a)(4), which
outlines the bases for termination of an MA contract. Specifically, we
propose to add language at Sec. 422.510(a)(4) to add a new paragraph
(a)(4)(xvi) that permits CMS to terminate an MA contract when the MA
organization meets the criteria in Sec. 422.514(d)(1) or (d)(2). This
proposed amendment is consistent with how Sec. 422.514(d) provides
that CMS will not enter into or renew an MA contract in certain
circumstances. In our view, Sec. 422.514(d) is sufficient authority
for the non-renewal, that is termination, of MA contracts when Sec.
422.514(d) applies. However, we believe that adopting a specific
provision in Sec. 422.510(a)(4) will avoid any inadvertent ambiguity
on this topic and make it clear that the procedures outlined in Sec.
422.510, including notices, timeframes, and appeal rights, apply when
CMS does not renew an MA contract based on application of Sec.
422.514(d).
B. Part D Special Enrollment Period Change Based on CAA Medicare
Enrollment Changes (Sec. 423.38)
Section 101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L 108-173) established a Part D--
Voluntary Prescription Drug Benefit program for Medicare-eligible
individuals. The MMA added section 1860D-1(b)(3)(C) of the Act, which
authorized the Secretary to establish Part D special enrollment periods
(SEP) for Medicare-eligible individuals to enroll in a Part D plan
based on exceptional circumstances--that is, an individual may elect a
plan or change his or her current plan election when the individual
meets an exceptional condition as determined by the Secretary.
The SEPs for exceptional conditions were historically included in
our manual instructions rather than through regulation. In 2020, we
codified a number of SEPs that we had adopted and implemented through
subregulatory guidance as exceptional circumstance SEPs, including the
SEP for Individuals Who Enroll in Part B During the Part B General
Enrollment Period (GEP) (85 FR 33909). This SEP, as codified at Sec.
423.38(c)(16), allowed individuals who are not entitled to premium-free
Part A and who enroll in Part B during the GEP for Part B (January-
March) to enroll in a Part D plan. This SEP begins April 1st and ends
June 30th, with a Part D plan enrollment effective date of July 1st.
This SEP effective date aligns with the entitlement date for Part B for
individuals who enroll in Part B during the GEP.
Currently, when an individual enrolls in Part B during the GEP,
their Part B enrollment entitlement date is July 1st, regardless of
when during the GEP they enrolled. Division CC, title I, subtitle B,
section 120 of the Consolidated Appropriations Act, 2021 (CAA) Pub. L
116-260 modified section 1838(a)(2) of the Act, to address the
beginning of the entitlement for individuals enrolling during their GEP
pursuant to section 1837(e) of the Act. As added by the CAA, section
1838(a)(2)(D)(ii) of the Act requires that, for an individual who
enrolls in Part B during the GEP on or
[[Page 79467]]
after January 1, 2023, entitlement begins the first day of the month
following the month in which the individual enrolled. For example, if
an individual enrolls in Part B in February 2023 (during the GEP),
their Part B coverage will begin on March 1st.
Based on Medicare enrollment statutory changes made by the CAA
described previously, we are proposing to revise the start and end date
for the SEP for Individuals Who Enroll in Part B During the Part B GEP
to align with the Part B entitlement dates for someone who enrolls in
Part B using the GEP that starts January 1, 2023. Accordingly, we are
also proposing to revise the effective date of the individual's Part D
plan enrollment, which is always July 1st under the current parameters
of this Part D SEP. That is, we are proposing to modify Sec.
423.38(c)(16) to provide that on or after January 1, 2023, an
individual who is not entitled to premium-free Part A and who enrolls
in Part B during the GEP is eligible to use the SEP for Individuals Who
Enroll in Part B During the Part B GEP to request enrollment in a Part
D plan, and that this SEP will begin when the individual submits the
application for Part B, and will continue for the first 2 months of
enrollment in Part B. Further, we propose to modify Sec. 438.38(c)(16)
to provide that where an individual uses this Part D SEP to request
enrollment in a Part D plan, the Part D plan enrollment would be
effective the first of the month following the month the Part D plan
sponsor receives the enrollment request. For example, an individual who
enrolls in Part B on February 10th for a Part B entitlement date of
March 1st can use the Part D SEP to request enrollment in a Part D plan
during the period from February 10th to April 30th. If the individual
submitted an enrollment request for a Part D plan on February 10th and
the enrollment is accepted, the effective date of their Part D coverage
would be March 1st. Note that an individual's Part D enrollment
effective date cannot be prior to the Part A and/or Part B entitlement
date, and the individual must also meet other Part D plan eligibility
criteria as described in Sec. 423.30(a). Per current practice, the
Part D plan would need to confirm that the individual had enrolled in
Part B (or Part B and premium Part A) prior to the individual's Part D
enrollment effective date. The Social Security Administration (SSA)
will have to first process the individual's Part B application and
submit that information into SSA systems, which, in turn, would be
populated in the CMS enrollment systems, for a Part D plan to have
access to that entitlement information.
We expect this proposed change in enrollment and effective dates
using this Part D SEP would simplify the enrollment process and reduce
the potential for gaps in prescription drug coverage. Also, we believe
it will be easier for beneficiaries to understand the effective date of
their Medicare coverage using this Part D SEP, as we are proposing that
the Part D effective date will be the first of the month following the
month the beneficiary submits an enrollment request, which aligns with
most Part D enrollment and SEP timeframes. Although the current SEP for
Individuals Who Enroll in Part B During the Part B GEP lasts for 3
calendar months, and the proposed timeframe for use of this SEP would
be shorter, the proposed timeframe aligns with most of our other Part D
SEPs. In addition, this proposed timeframe would provide the individual
the opportunity for a Part D plan enrollment effective date that is
within 63 days of the Part B entitlement. For individuals who have
maintained creditable drug coverage prior to enrolling in Part B, this
proposed SEP timeframe will help to ensure that an individual would not
incur a Part D late enrollment penalty (LEP). For example, if an
individual enrolls in Part B in February and is entitled to Part B
effective March 1st, they could enroll in a Part D plan for an
effective date of March 1st, April 1st or May 1st, depending on whether
the Part D plan sponsor received the enrollment request in February,
March or April, respectively. Any of these Part D plan effective dates
would provide Part D coverage to an individual who maintained
creditable coverage prior to enrolling in Part B in February within the
63-day timeframe to avoid the penalty. Proposing this exceptional
condition SEP also supports President Biden's April 5, 2022 Executive
Order on Continuing to Strengthen Americans' Access to Affordable,
Quality Health Coverage, which, among other things, requires agencies
to examine policies or practices that make it easier for all consumers
to enroll in and retain coverage, understand their coverage options,
and select appropriate coverage, and also examine policies or practices
that strengthen benefits and improve access to healthcare providers.
This proposal would revise the timeframes for use of the Part D SEP
described in Sec. 423.38(c)(16) based on the change in effective date
for GEP enrollments made by section 120 of the CAA. These proposed
revisions are needed to align the timeframe for use of this Part D SEP
based on new Part B GEP enrollment effective date parameters.
Because an individual may elect a Part D plan only during an
election period, Medicare Part D sponsors already have procedures in
place to determine the election period(s) for which an applicant is
eligible. Our proposal would not add to existing enrollment processes,
so we believe any burden associated with this aspect of enrollment
processing would remain unchanged from the current practice, and would
not impose any new requirements or burden.
All information impacts of this provision have already been
accounted for under OMB control number 0938-1378 (CMS-10718). We do not
believe the proposed changes will adversely impact individuals
requesting enrollment in Medicare plans, the plans themselves, or their
current enrollees. Similarly, we do not believe the proposed changes
would have any impact to the Medicare Trust Funds.
C. Alignment of Part C and Part D Special Enrollment Periods With
Medicare Exceptional Condition Enrollment (Sec. Sec. 422.62 and
423.38)
Section 1851(e)(4)(D) of the Act authorizes the Secretary to create
special enrollment periods (SEPs) for an individual to disenroll from
an MA plan or elect another MA plan if the individual meets an
exceptional condition provided by the Secretary. This authority was
originally codified at Sec. 422.62(b)(4) in the June 1998 interim
final rule as a general SEP for CMS to apply on an ad hoc basis. (63 FR
35073)
As noted previously, section 1860D-1(b)(3)(C) of the Act authorizes
the Secretary to establish Part D SEPs for Medicare-eligible
individuals to enroll in a Part D plan if they meet certain exceptional
circumstances. This authority was originally codified at Sec.
423.38(c)(8)(ii) (70 FR 4529). The MMA also added section 1860D-
1(b)(1)(B) of the Act which provides that in adopting the Part D
enrollment process, the Secretary ``shall use rules similar to (and
coordinated with) the rules for enrollment, disenrollment, termination,
and change of enrollment with an MA-PD plan under the following
provisions of section 1851.''
Historically, we had included in our regulations those MA and Part
D SEPs that have been specifically named in the statute, and
established SEPs for exceptional conditions in our subregulatory
guidance. In the June 2020 final rule, we codified, at Sec. Sec.
422.62(b) and 423.38(c), respectively, the MA and Part D SEPs that we
had adopted and implemented through
[[Page 79468]]
subregulatory guidance as exceptional condition SEPs (85 FR 33796).
Codifying these SEPs provided transparency and stability to the MA and
Part D programs by ensuring that these SEPs are known to plans and
beneficiaries.
As required by section 1851(a)(3) of the Act (for the MA program)
and section 1860D-1(a)(3)(A) of the Act (for the Part D program) and
described in Sec. Sec. 422.50(a)(1) and 423.30(a)(1)(i), eligibility
for MA or Part D plan enrollment requires that an individual first have
Medicare Parts A and B for MA eligibility and either Part A or B for
Part D eligibility. Individuals who are entitled to premium-free Part A
are generally auto-enrolled when they are first eligible, if they are
already receiving retirement or disability benefits from the SSA or
Railroad Retirement Board, or they may submit an application to enroll
in premium-free Part A at any time after meeting the requirements for
entitlement. Under normal conditions, individuals who want to enroll in
premium Part A, Part B, or both, must submit a timely enrollment
request during their Initial Enrollment Period (IEP), the GEP, or an
existing SEP for which they are eligible. Those who fail to enroll
during their IEP may face a lengthy penalty for late enrollment (life-
long for Part B) and a potential gap in coverage. Prior to the
enactment of the Consolidated Appropriations Act, 2021 (CAA) (Pub. L
116-260), CMS did not have broad authority to create SEPs based on
exceptional conditions for enrollment into Medicare Parts A and B.
However, Division CC, title I, subtitle B, Section 120 of the CAA
established section 1837(m) of the Act to authorize the Secretary to
establish Part B SEPs for individuals who are eligible to enroll in
Medicare and meet such exceptional conditions as the Secretary
provides. Per section 1818(c) of the Act, the provisions of section
1837 of the Act, excluding subsection (f) thereof, applies to the
premium Part A program. This authority to adopt exceptional conditions
SEPs for premium Part A and Part B is effective January 1, 2023. The
ability to grant SEPs for exceptional conditions is an important tool
that will allow CMS to provide relief to individuals who missed an
opportunity to enroll in Medicare due to circumstances that were
outside of their control, ensure continuous health coverage, and avoid
late enrollment penalties on the premium Part A or Part B premiums. CMS
finalized new exceptional condition SEPs under section 1837(m) of the
Act in 42 CFR 406.27 and 407.23 for Medicare parts A and B,
respectively, in a final rule that was published in the Federal
Register on November 3, 2022, titled ``Medicare Program; Implementing
Certain Provisions of the Consolidated Appropriations Act, 2021 and
Other Revisions to Medicare Enrollment and Eligibility Rules'' (87 FR
66454). These SEPs would be available to individuals who have missed an
enrollment period due to an exceptional condition that is specified in
the final rule. Specifically, individuals who miss an IEP, GEP, or
another SEP, such as the Group Health Plan SEP, due to a specified
exceptional condition, would be eligible to enroll in Medicare premium
Part A or Part B using the new SEPs.
Based on Medicare enrollment changes made by the CAA described
previously, we are proposing to add corresponding exceptional condition
SEPs for MA and Part D enrollment, as authorized under sections
1851(e)(4)(D) and 1860D-1(b)(3)(C) of the Act, to align with the new
Medicare premium Part A and B exceptional condition SEPs that CMS has
finalized in 42 CFR 406.27 and 407.23. These new Medicare Part C and D
SEPs would be based on an individual's use of a Medicare premium Part A
or Part B exceptional conditions SEP. That is, individuals who use an
exceptional condition SEP to enroll in premium Part A and/or Part B
will be provided an opportunity to enroll in a MA or Part D plan,
provided that the individual meets applicable eligibility requirements
for the plan.
We are proposing at Sec. 422.62(b) to redesignate current
paragraphs (26) as (27) and add a new paragraph (26) to provide an SEP
for individuals to enroll in a MA plan or MA plan that includes Part D
benefits (MA-PD plan), when they use a Medicare exceptional condition
SEP to enroll in premium Part A and/or Part B. We are also proposing at
Sec. 423.38(c) to redesignate current paragraph (34) as (35) and add
new paragraph (34) to provide an SEP for individuals to enroll in a
stand-alone Part D prescription drug plan (PDP) when they use a
Medicare exceptional condition SEP to enroll in premium Part A or Part
B.
The proposed new MA SEP would begin when the individual submits the
application for premium Part A and Part B, or only Part B, and would
continue for the first 2 months of enrollment in Part A (premium or
premium-free) and Part B. Similarly, the proposed new Part D SEP would
begin when the individual submits their premium Part A or Part B
application and would continue for the first 2 months of enrollment in
premium Part A or Part B. The MA or Part D plan enrollment would be
effective the first of the month following the month the MA or Part D
plan receives the enrollment request. For example, an individual who
enrolls in premium Part A or Part B using an exceptional conditions
SEP, as codified in 42 CFR 406.27 and 407.23, on July 10th for an
entitlement ate of August 1st, can use the MA or Part D exceptional
circumstance SEP to request enrollment in a MA or Part D plan during
the period from July 10th to September 30th. If the individual
submitted an enrollment request for an MA or Part D plan on July 10th
and the enrollment is accepted, the effective date of their MA or Part
D coverage would be August 1st.
An individual's MA or Part D plan enrollment effective date cannot
be prior to the Part A and/or Part B enrollment date, and the
individual must also meet other MA or Part D plan eligibility criteria
as described in Sec. Sec. 422.50(a) or 423.30(a), respectively, in
order to use the new MA or Part D SEP we are proposing. Per current
practice, the MA or Part D plan would need to confirm that the
individual had enrolled in premium Part A and/or Part B, as applicable,
using one of the new SEPs for exceptional conditions prior to the
individual's MA or Part D enrollment effective date. The SSA will have
to first process the individual's premium Part A and/or Part B
application and submit that information into SSA systems, which, in
turn, would be populated in the CMS enrollment systems, for an MA or
Part D plan to have access to that enrollment information.
Providing an opportunity for Part D enrollment at the time of
Medicare premium Part A or Part B enrollment using an exceptional
condition SEP will help ensure that an individual will have timely
access to Part D drugs, within the timeframe of 63 days \3\ established
in regulation at Sec. 423.46(a), to prevent a Part D late enrollment
penalty from being assessed. For example, if an individual enrolls in
premium Part A or Part B using an exceptional condition SEP in July and
is entitled to premium Part A and/or Part B effective August 1st, they
could enroll in a Part D plan
[[Page 79469]]
for an effective date of August 1st, September 1st, or October 1st,
depending on whether the Part D plan sponsor received the enrollment
request in July, August, or September respectively. Any of these Part D
plan effective dates would provide an individual with Part D coverage
within the 63-day timeframe of Medicare eligibility to avoid the
penalty. This is an important beneficiary protection, especially for
those individuals who have to bear the cost of paying a premium for
Part A.
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\3\ 42 CFR 423.46(a) states that, a Part D eligible individual
must pay the late penalty described under Sec. 423.286(d)(3),
except as described at Sec. 423.780(e), if there is a continuous
period of 63 days or longer at any time after the end of the
individual's initial enrollment period during which the individual
meets all of the following conditions:
(1) The individual was eligible to enroll in a Part D plan.
(2) The individual was not covered under any creditable
prescription drug coverage.
(3) The individual was not enrolled in a Part D plan.
---------------------------------------------------------------------------
This proposed MA exceptional condition SEP will allow beneficiaries
who are enrolled in premium Part A and in Part B to exercise their
option to receive their healthcare from an MA plan, instead of Original
Medicare, as soon as the individual is enrolled in both Parts A and B,
without waiting for the annual coordinated election period. Proposing
exceptional condition SEPs for MA and Part D also supports President
Biden's April 5, 2022 E.O. on Continuing to Strengthen Americans'
Access to Affordable, Quality Health Coverage, which, among other
things, requires agencies to examine policies or practices that make it
easier for all consumers to enroll in and retain coverage, understand
their coverage options, and select appropriate coverage, and also
examine policies or practices that strengthen benefits and improve
access to healthcare providers.
Because an individual may elect an MA or Part D plan only during an
election period, MA organizations and Part D sponsors already have
procedures in place to determine the election period(s) for which an
applicant is eligible. Our proposal would not add to existing
enrollment processes, so we believe any burden associated with this
aspect of enrollment processing would remain unchanged from the current
practice, and would not impose any new requirements or burden.
Consequently, this provision will not have added impact. All burden
impacts of these provisions have already been accounted for under OMB
control number 0938-1378 (CMS-10718). We do not believe the proposed
changes will adversely impact individuals requesting enrollment in
Medicare plans, the plans themselves, or their current enrollees.
Similarly, we do not believe the proposed changes would have any impact
to the Medicare Trust Funds.
D. Transitional Coverage and Retroactive Medicare Part D Coverage for
Certain Low-Income Beneficiaries Through the Limited Income Newly
Eligible Transition (LI NET) Program (Sec. Sec. 423.2500 through
423.2536)
1. Background on the LI NET Demonstration and Introduction to the
Proposals
a. Background on the LI NET Demonstration
The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) established the Medicare Part D prescription drug
benefit, which became effective on January 1, 2006. Prior to 2006,
beneficiaries who were eligible for both Medicaid and Medicare (dual
eligible) received prescription drug benefits through Medicaid. When
the MMA went into effect, dual eligible beneficiaries began receiving
their prescription drug benefits through Medicare Part D.
From the beginning of Part D, CMS recognized the need to provide
both immediate and retroactive coverage for full benefit dual eligible
(FBDE) beneficiaries who were newly identified by either CMS or a
State. Prior to 2010, CMS automatically enrolled newly identified
beneficiaries eligible for the Part D low-income subsidy (LIS) into a
Part D plan with a premium at or below the low-income benchmark
(``benchmark'' plans), which have no or reduced premiums for LIS-
eligible beneficiaries. Each benchmark plan receiving these
beneficiaries was required to grant retroactive coverage to the
beginning of a beneficiary's LIS-eligible status or their last
uncovered month, whichever date was later. At the time, there were
around 300 Part D benchmark plans, and each needed to develop the
capacity to provide transitional and retroactive coverage for these
beneficiaries. Conducting retroactive claims adjudication and providing
point-of-sale coverage was not efficient for Part D sponsors and
accordingly, in 2010, CMS established the Medicare Part D Demonstration
for Retroactive and Point of Sale Coverage for Certain Low-Income
Beneficiaries, also known as Medicare's Limited Income Newly Eligible
Transition (LI NET demonstration). The LI NET demonstration
consolidates administration of transitional and retroactive Part D
coverage for eligible beneficiaries to a single Part D sponsor.
Part D coverage under the LI NET demonstration differs from
coverage under traditional Part D plans in that the LI NET
demonstration provides point-of-sale coverage for beneficiaries who
demonstrate an immediate need for prescriptions, and also provides
retroactive and/or temporary coverage for beneficiaries determined to
be eligible, or likely to be eligible, for the Part D LIS by the Social
Security Administration (SSA) or a State. The LI NET demonstration
provides temporary, transitional Part D prescription drug coverage for
LIS-eligible beneficiaries, including beneficiaries who are eligible
for the Part D LIS but who are not yet enrolled in a Part D drug plan,
or are enrolled in a plan but for whom coverage has not yet taken
effect.
The purposes of the demonstration are to provide the following:
More efficient prescription drug coverage and claims
reimbursement for newly eligible low-income beneficiaries, including
periods of retroactive eligibility;
More efficient prescription drug coverage and claims
reimbursement for individuals who are not enrolled in a PDP and whose
LIS status is not yet established in CMS' systems, but who arrive at a
pharmacy with an immediate need for their prescription. This may occur,
for instance, when a State has determined that a beneficiary is
eligible for Medicaid but that information does not yet appear in CMS'
systems;
A seamless transition for LIS-eligible beneficiaries from
LI NET into a qualifying PDP with basic prescription drug coverage
absent a beneficiary's choice otherwise; and
More efficient prescription drug coverage and claims
reimbursement for LIS-eligible beneficiaries who are losing existing
coverage in a PDP. For example, a beneficiary could be terminated for
moving out of the service area of their current PDP. The beneficiary
would be automatically enrolled into LI NET for that month and the
following month, with enrollment into a qualifying PDP with basic
prescription drug coverage that would become effective at the end of
the LI NET enrollment absent the beneficiary's choice otherwise.
b. Introduction to the Proposals To Implement LI NET as a Permanent
Program
Division CC, title I, subtitle B, section 118 of the Consolidated
Appropriations Act 2021 (CAA) (Pub. L. 116-260) modified section 1860D-
14 of the Act by redesignating subsection (e) of section 1860D-14 as
subsection (f) and by establishing a new subsection (e) Limited Income
Newly Eligible Transition Program. New subsection (e)(1) requires the
Secretary to ``carry out a program to provide transitional coverage for
covered Part D drugs for LI NET eligible individuals. . .'' no later
[[Page 79470]]
than January 1, 2024. This directive in section 118 of the CAA makes LI
NET a permanent program within Part D, beginning in 2024.
The proposed rulemaking to establish the LI NET program is
consistent with President Biden's Executive Order 13985 on Advancing
Racial Equity and Support for Underserved Communities Through the
Federal Government (January 20, 2021) and Executive Order 14085 on
Transforming Federal Customer Experience and Service Delivery to
Rebuild Trust in Government (December 13, 2021). LI NET ensures that
low-income beneficiaries transitioning from Medicaid to Medicare do not
experience a gap in coverage for their prescription medications.
Executive Order 14085 calls for the Federal Government to design and
deliver services with ``a focus on the actual experience of the people
whom it is meant to serve'' and ``deliver services more equitably and
effectively, especially for those who have been historically
underserved.'' We have designed the proposed LI NET program with
beneficiary needs foremost in mind, ensuring continuous drug coverage
and access for eligible low-income individuals.
LI NET policies, infrastructure, and operations have evolved over
the past 12 years to balance providing needed coverage with responsible
stewardship of taxpayer dollars and efficiency in administering the
program. The LI NET demonstration has proven successful in providing
low-income individuals transitional Part D coverage. Approximately 8
million low-income individuals received the benefits of the LI NET
program under the demonstration, with over 100,000 beneficiaries
enrolled in LI NET in any given month. It has become a program that
beneficiary advocacy groups rely on when supporting low-income
individuals and connecting them with services. LI NET works directly
with over a dozen advocacy groups and 51 State Health Insurance
Assistance Programs (SHIPs), which collectively work with LIS
beneficiaries to remove access barriers and provide health insurance
counseling.
We believe the LI NET demonstration has become a reliable, stable
program that has been successful in providing transitional and
retroactive Part D coverage to millions of beneficiaries. In developing
our proposals for implementing the permanent LI NET program, we have
taken into consideration our experience under the LI NET demonstration.
Where appropriate, we discuss the policies and practices under the LI
NET demonstration that inform our proposals for how to implement
aspects of the LI NET program that are not directly specified by the
statute.
We rely on the premise that Part D regulations apply to the LI NET
program and to the LI NET sponsor as part of the Part D program and as
a type of Part D sponsor, except for when the statute requires us to
deviate or when existing regulations would not apply. For example, as
discussed further in this proposed rule, because the LI NET sponsor is
required to have an open formulary, existing Part D requirements on
formulary development would not be applicable.
Our proposals to make LI NET a permanent program start with Sec.
423.2500. In Sec. 423.2500(a), we propose the basis of the LI NET
program would be based on section 1860D-14 of the Act. We propose in
Sec. 423.2500(b) the scope of the LI NET program, which would begin no
later than January 1, 2024. Under this program, eligible individuals
would be provided transitional coverage for part D drugs. Section Sec.
423.2504 sets forth the LI NET eligibility and enrollment proposals and
Sec. 423.2508 proposes LI NET benefits and beneficiary protections.
Next, we propose in Sec. 423.2512 the requirements to be an LI NET
sponsor and Sec. 423.2516 proposes how the Part D sponsor
administering LI NET in partnership with CMS will be selected and the
requirements set forth in the LI NET contract to provide services and
coverage. Section 423.2518 provides a proposal for intermediate
sanctions in the event of contract violations. Section 423.2520
proposes how an LI NET contract would be non-renewed or terminated.
Section 423.2524 lays out our proposals for bidding and determining the
LI NET payment rate. Finally, Sec. 423.2536 enumerates the Part D
requirements we propose waiving for LI NET.
We propose to align sunsetting the demonstration seamlessly with
the start of the LI NET program under this section. Specifically, the
LI NET demonstration would continue to operate until December 31, 2023,
and the LI NET program would start to operate on January 1, 2024
according to the regulations that we finalize.
2. Eligibility and Enrollment
a. Eligibility
Section 1860D-14(e)(2) of the Act provides that an individual is
eligible for LI NET coverage if they: (A) meet the requirements of
section 1860D-14(a)(3)(A)(ii) and (iii) of the Act; and (B) have not
yet enrolled in a prescription drug plan or an MA-PD plan, or, who have
so enrolled, but with respect to whom coverage under such plan has not
yet taken effect. This means that to be eligible, the individual would
need to be a full-benefit dual-eligible individual or low-income
subsidy (LIS) eligible individual as defined at Sec. 423.773 and--
Not yet be enrolled in a prescription drug plan or an MA-
PD plan; or
Be enrolled but their coverage has not yet taken effect.
Under these requirements, LI NET would be available to all
categories of individuals who are LIS-eligible, including:
Full Subsidy-Full Benefit Dual Eligible (FBDE)
individuals, including institutionalized beneficiaries and
beneficiaries receiving home and community-based services;
Full Subsidy-Non-FBDE Individuals, including those who
have applied or are eligible for QMB/SLMB/QI or SSI, with income and
resource thresholds at or below the amounts set by CMS each year; and
Partial Subsidy Individuals, including those who have
applied and have income and resource amounts below the thresholds set
by CMS each year.
We propose to codify at Subpart Y the LI NET eligibility
requirements set forth in section 1860D-14(e)(2) of the Act. We propose
to establish in paragraph (a) of new Sec. 423.2504 two categories of
individuals eligible to enroll in LI NET that encompass the previously
noted categories of low-income individuals recognized by Part D. The
first category, which we term ``LIS-eligible'' in proposed paragraph
(a)(1), would be composed of individuals whose low-income status has
been confirmed either through CMS's data in our system of record or
because the individual can demonstrate their current or future low-
income status. The second category, which we term ``immediate need'' in
proposed paragraph (a)(2), would consist of individuals whose low-
income status has not been confirmed, because CMS's data do not yet
reflect the individual's low-income status, but the individual has
indicated that they are eligible for the LIS.
We refer to the individuals in the category established in proposed
paragraph (a)(2) as ``immediate need'' because they present at a
pharmacy or to the LI NET sponsor in immediate need of a prescription
and have no Part D coverage. Ideally, these beneficiaries would be able
to show documentation of their pending LIS status, such as a letter
received from the State showing the beneficiary's LIS status. However,
[[Page 79471]]
we do not believe an absence of documentation in hand at the point-of-
sale should be a barrier to entry to LI NET for immediate need
individuals. This is because our experience in the demonstration is
that 80 percent of immediate need individuals do have their eligibility
confirmed,\4\ and we would not want to turn away these individuals who
imminently require access to their prescription drugs. Under the LI NET
demonstration, individuals can indicate the likelihood of their low-
income status by providing the evidence they have, which can include
verbal explanations of why they consider themselves eligible.
---------------------------------------------------------------------------
\4\ Of the 80 percent of immediate need LI NET beneficiaries
whose LIS status is ultimately confirmed, for 89 percent
confirmation was within 10 days, and for 97 percent confirmation was
within 21 days. In the demonstration, beneficiaries whose LIS status
is not able to be confirmed within 21 days continue to be enrolled
in LI NET for two months, but they can no longer fill prescriptions
after 21 days.
---------------------------------------------------------------------------
We propose in Sec. 423.2504(a)(2) to grant immediate access to
covered Part D drugs at the point-of-sale for individuals whose
eligibility as defined at Sec. 423.773 cannot be confirmed at the
point-of-sale. Under proposed paragraph (a)(2)(i), immediate need
individuals may provide documentation to the LI NET sponsor to confirm
LIS eligibility. Documentation could include, but would not be limited
to--
A copy of the beneficiary's Medicaid card that includes
their name and eligibility date;
A copy of a letter from the State or SSA showing LIS
status;
The date that a verification call was made to the State
Medicaid Agency, the name and telephone number of the State staff
person who verified the Medicaid period, and the Medicaid eligibility
dates confirmed on the call;
A copy of a State document that confirms active Medicaid
status;
A screen-print from the State's Medicaid systems showing
Medicaid status; or
Evidence at point-of-sale of recent Medicaid billing and
payment in the pharmacy's patient profile.
Under proposed paragraph (a)(2)(ii), if an immediate need
individual's LIS status cannot be confirmed within a period of 2
months, that individual would not be automatically enrolled into a Part
D plan. This is the same as current practice under the LI NET
demonstration. We solicit comment on the proposal to align the 2 months
of enrollment with the ability to fill prescriptions for these
immediate need beneficiaries.
We propose in Sec. 423.2504(a)(2)(i) that immediate need
beneficiaries whose eligibility cannot be confirmed can continue to
fill prescriptions throughout their 2-month enrollment in LI NET. We
believe this ensures access to LI NET benefits and is an
administratively simple approach as compared with alternative ideas,
such as the approach under the demonstration of keeping immediate need
beneficiaries with uncertain eligibility enrolled in LI NET but unable
to fill prescriptions. We propose in Sec. 423.2504(a)(2)(ii) that if,
by the end of an immediate need individual's enrollment in LI NET,
neither CMS's systems nor the beneficiary's provision of documentation
confirms low-income status, then that individual would not be auto-
enrolled into a qualifying standalone Part D plan following their LI
NET coverage.
b. Enrollment
Section 1860D-14(e) of the Act does not specify a process for
enrollment into the LI NET program. Therefore, in forming our proposed
enrollment process, we look to the process used in the demonstration.
Under the LI NET demonstration, there are four ways for eligible
individuals to be enrolled into the demonstration. They are as follows:
Automatic enrollment. Individuals who are LIS-eligible but do not
yet have Part D coverage, and those individuals who have selected a
Part D plan but whose enrollment has not taken effect, are enrolled by
CMS into the LI NET demonstration unless the beneficiary has
affirmatively declined enrollment in Part D.
Point of sale enrollment. Immediate need individuals whose claims
are submitted by the pharmacy at the point-of-sale and billed to LI NET
are enrolled into the LI NET demonstration by the LI NET sponsor.
Direct reimbursement request. Individuals who are LIS-eligible and
who submit receipts for reimbursement for claims paid out of pocket are
retroactively enrolled into the LI NET demonstration by the LI NET
sponsor, with 36-month retroactive coverage for full dual eligible
individuals and those who receive supplemental security income (SSI)
benefits.
LI NET application form. Beneficiaries who are not enrolled into LI
NET through auto-enrollment, point-of-sale enrollment or via an
approved direct reimbursement request may submit an application form to
the LI NET sponsor with supporting documentation demonstrating their
LIS status. The LI NET sponsor will periodically check for eligibility
and enroll applicants once eligibility is confirmed.
The majority of LI NET beneficiaries are enrolled into the LI NET
demonstration automatically by CMS; about 90 to 95 percent of LI NET
beneficiaries are those we identify in our systems and enroll into the
demonstration. To do this, CMS ``sweeps'' our data monthly to identify
all beneficiaries who are--
Eligible for LIS;
Eligible for Part D;
Not enrolled in a Part D plan or receiving the Retiree
Drug Subsidy (RDS) or coverage through Veterans Affairs;
Have not opted-out of Part D enrollment for any reason
(for example, because they declined it);
Not incarcerated, are lawfully present in the US, and do
not live in another country; and
Are not enrolled in a Part C plan that disallows
concurrent enrollment in a Part D plan.
Beneficiaries identified in the monthly sweep are automatically
enrolled into the LI NET demonstration for that month and the following
month. CMS then prospectively enrolls the beneficiary into a
traditional Part D plan, with coverage under that plan taking effect
immediately after the LI NET coverage ends. This population of
beneficiaries includes those who may be gaining Part D eligibility or
LIS status but have not made an election into a Part D plan.
A smaller number of beneficiaries, about five to ten percent of LI
NET beneficiaries, enroll in the LI NET demonstration outside of the
sweeps process. Some enroll at the point-of-sale, as described
previously. An even smaller number of beneficiaries contact the LI NET
sponsor directly to enroll in the LI NET demonstration. Individuals can
submit a request for reimbursement to the LI NET sponsor. If the person
is LIS-eligible, the LI NET sponsor enrolls them into the LI NET
demonstration and reimburses them for out-of-pocket costs during the
duration of their retroactive enrollment. As with an individual who is
enrolled at the point-of-sale, the start date of LI NET enrollment
would be the first of the month the request is received. There may be
individuals who do not have an immediate need for medication and
believe they are eligible for LI NET. These individuals can fill out an
application form, which allows the LI NET sponsor to periodically check
their eligibility and enroll them into LI NET if they become eligible.
Consistent with the enrollment processes under the demonstration,
we propose in Sec. 423.2504(b) to codify the ways in which individuals
can be enrolled into LI NET: auto-enrollment,
[[Page 79472]]
point-of-sale for immediate need individuals, direct reimbursement, and
LI NET enrollment form.
In Sec. 423.2504(b)(1), we propose that individuals who are LIS-
eligible and whose auto-enrollment into a Part D plan (as outlined in
Sec. 423.34(d)(1)) has not taken effect will be automatically enrolled
by CMS into the LI NET program unless they have affirmatively declined
enrollment in Part D per Sec. 423.34(e). LIS-eligible beneficiaries
who have made the decision to opt out of enrollment in Part D must take
a proactive step to contact CMS for us to record that decision in our
systems by placing a flag on the beneficiary's record. Beneficiaries
may opt out of Part D enrollment if they have other insurance or do not
want to participate as a matter of principle. We assume that a
beneficiary who opts out of Part D enrollment would also want to opt
out of transitional coverage under the LI NET program. Therefore,
proposed Sec. 423.2504(b)(1) would provide that when a beneficiary
affirmatively declines enrollment in Part D per Sec. 423.34(e), that
would also entail opting out of LI NET enrollment.
In defining ``transitional coverage'' for LI NET, the statute sets
forth requirements for the duration of LI NET coverage under section
1860D-14(e)(3). Section 1860D-14(e)(3)(A) of the Act establishes that
``immediate access to covered part D drugs at the point of sale during
the period that begins on the first day of the month such individual is
determined to meet the requirements of clauses (ii) and (iii) of
subsection (a)(3)(A) and ends on the date that coverage under a
prescription drug plan or MA-PD plan takes effect with respect to such
individual.'' The starting point of enrollment into LI NET for these
types of LIS-eligible beneficiaries, whether they are automatically
enrolled or immediate need individuals, is required by statute but the
duration of time they prospectively remain enrolled in LI NET is not
specified. Under the demonstration, we have typically capped non-
retroactive coverage in LI NET to 2 months. Consistent with the statute
and with our operations under the demonstration, in Sec. 423.2504(c),
we propose that LI NET enrollment begins on the first day of the month
an individual is identified as eligible under Sec. 423.2504 and ends
after 2 months.
Section 1860D-14(e)(3)(B) of the Act sets a limit on how far back
retroactive LI NET coverage can extend. Full-benefit dual eligible
individuals (as defined in section 1935(c)(6)) and recipients of
supplemental security income (SSI) benefits under title XVI) are
eligible for up to 36 months of retroactive coverage. In proposed Sec.
423.2504(c)(2), retroactive LI NET coverage would begin on the date an
individual is identified as full-benefit dual or an SSI benefit
recipient, or 36 months prior to the date such individual enrolls in
(or opts out of) Part D coverage, whichever is later. This duration of
time is similar to retroactive coverage under the demonstration, which
provides for a maximum retroactive period of 36 months for Full Subsidy
LIS eligible individuals.\5\ As with LI NET beneficiaries without
retroactive coverage, we propose that LI NET coverage would end with
enrollment into a Part D plan or opting out of Part D coverage.
---------------------------------------------------------------------------
\5\ The LI NET demonstration provides an exception to the 36-
month maximum period of retroactive enrollment if there is a
Medicaid determination within the last 90 days that confers Medicaid
eligibility going back further than 36 months. In these situations,
LI NET enrollment under the demonstration goes back to the start of
Medicaid eligibility. We are not proposing an exception to the 36-
month limit on retroactive coverage in this rulemaking as the
statute does not provide for such an exception.
---------------------------------------------------------------------------
We propose in Sec. 423.2504(d) that enrollment in LI NET would end
on the date that coverage under Part D takes effect, consistent with
section 1860D-14(e)(3) of the Act. In the case of immediate need
beneficiaries for whom LIS-eligibility is not confirmed and who are not
enrolled into a PDP, enrollment would end 2 months after the immediate
need enrollment begins. No matter the method of enrollment, we propose
that the minimum duration of LI NET enrollment is 2 months unless the
beneficiary elects to disenroll from LI NET or to enroll in a Part D
plan. For example, an individual whom we auto-assign into LI NET
starting April 1, 2024 would remain in LI NET for April and May 2024
before being enrolled into an appropriate Part D plan starting June 1,
2024.
We provide two beneficiary examples to further explain how LI NET
enrollment and disenrollment would work under our proposals:
Example 1: Beneficiary Kristy is a full-benefit dual eligible and
arrives at a pharmacy on May 5, 2024, with documentation showing that
her LIS application is pending. She would have immediate coverage in LI
NET for May and June 2024. If, in the course of adjudicating her LIS
application, it is discovered that she was actually LIS-eligible dating
back to January 2016, Kristy would be retroactively enrolled in LI NET
as of July 1, 2021, which is the later of 36 months prior to the date
she is enrolled in a Part D plan or the date she was first LIS eligible
(since January 2016 is more than 36 months prior to her Part D plan
enrollment, her retroactive coverage under LI NET is capped at 36
months prior to such enrollment). Kristy's LI NET coverage would end
June 30, 2024, upon her enrollment into a benchmark PDP starting July
1, 2024, unless she makes the choice to opt-out.
Example 2: The Social Security Administration notifies CMS in
February 2024 that Beneficiary Ravi was eligible for both Medicare and
SSI starting in November 2022. CMS provides Ravi retroactive Medicare
drug coverage from November 2022, which is the later of 36 months prior
to enrollment in a Part D plan or the date Ravi was first LIS eligible,
through March 2024. After March 2024, if Ravi does not actively enroll
in a plan of their choosing, CMS would randomly enroll them into a
benchmark PDP with an April 1, 2024 effective date.
As noted previously, our goal in the proposals is to match current
eligibility and enrollment policy in effect in the demonstration and
the Part D program, to the extent the statute permits. We seek comment
on whether revised or additional regulations are required to achieve
accurate, streamlined, and beneficiary friendly eligibility
determinations and enrollment in the LI NET program.
3. Benefits and Beneficiary Protections
Section 1860D-14(e)(4)(B)(i) of the Act requires the LI NET program
to provide eligible beneficiaries with access to all Part D drugs under
an open formulary. The statute, at clauses (ii) and (iii) of section
1860D-14(e)(4)(B) of the Act, also requires the LI NET program to
permit all pharmacies that are determined by the Secretary to be in
good standing to process claims under the program, and to be consistent
with such requirements as the Secretary considers necessary to improve
patient safety and ensure appropriate dispensing of medication. These
requirements are consistent with how the LI NET demonstration has
operated, and we propose to codify the requirement that the LI NET
program provide access to all Part D drugs under an open formulary in
Sec. 423.2508(a). We propose in Sec. 423.2508(b) to require the LI
NET sponsor to permit all pharmacies that CMS determines to be in good
standing to process claims under the program, whether or not the
pharmacy is a network or out-of-network (OON) pharmacy for the LI NET
sponsor. Under the demonstration, we consider a pharmacy, including
retail, mail-order, and institutional pharmacies, to be ``in good
standing'' when it is licensed and does not have a fraud, waste, or
abuse
[[Page 79473]]
determination against it. For the permanent LI NET program, we propose
that a pharmacy would be in good standing if it is licensed, has not
been revoked from Medicare under Sec. 424.535, does not appear on the
Office of Inspector General's list of entities excluded from Federally
funded health care programs pursuant to section 1128 of the Act and
from Medicare under section 1156 of the Act (unless the OIG waives the
exclusion, which the OIG has authority to do in certain specified
circumstances), and does not appear on the preclusion list as defined
in Sec. 423.100. A pharmacy will appear on the preclusion list if it:
Is currently revoked from Medicare, is under an active
reenrollment bar, and CMS has determined that the underlying conduct
that led to the revocation is detrimental to the best interests of the
Medicare program, including LI NET;
Has engaged in behavior for which CMS could have revoked
the entity to the extent applicable if they had been enrolled in
Medicare, and CMS determines that the underlying conduct that would
have led to the revocation is detrimental to the best interests of the
Medicare program, including LI NET; or
Has been convicted of a felony under Federal or State law
within the previous 10 years that CMS deems detrimental to the best
interests of the Medicare program, including LI NET.
In Sec. 423.2508(c), we propose requirements we consider necessary
to improve patient safety and ensure appropriate dispensing of
medication consistent with subpart D of the Part D regulations.
Existing Part D requirements related to appropriate dispensing, patient
safety, electronic dispensing, quality improvement organization (QIO)
activities, compliance, and accreditation would improve patient safety
and appropriate dispensing. Specifically, we propose to apply the
following provisions to the LI NET program and LI NET sponsor, as
appropriate:
Sec. 423.153(b) and (c) for dispensing and point-of-sale
safety edits.
Sec. 423.154 for appropriate dispensing of prescription
drugs in long-term care facilities.
Sec. 423.159, requiring an electronic prescription drug
program.
Sec. 423.160, excepting the requirements pertaining to
formulary standards in Sec. 423.160(b)(5), setting forth standards for
electronic prescribing.
Sec. 423.162, for quality improvement organization (QIO)
activities.
Sec. 423.165, regarding compliance deemed on the basis of
accreditation.
We solicit comment on whether any of these provisions would not be
compatible with the LI NET program proposed in this rulemaking.
Section 1860D-14(e)(4)(B)(iv) of the Act provides the Secretary the
authority to establish requirements for the LI NET coverage provided to
LI NET eligible individuals. We draw upon our experience under the
demonstration to propose cost sharing and appeals policy for LI NET in
sections Sec. 423.2508(d) and (e), respectively.
We propose in Sec. 423.2508(d)(1) that LI NET beneficiaries under
Sec. 423.2504(a)(1) (that is, beneficiaries whose LIS-eligibility is
established and who have not yet enrolled in a prescription drug plan
or MA-PD plan, or who have enrolled in a prescription drug or MA-PD
plan but coverage under such plan has not yet taken effect) would pay
the applicable cost sharing for their low-income category as
established in the yearly Announcement of Calendar Year Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment Policies
(the Rate Announcement publication specified in Sec. 422.312). Under
the demonstration, LI NET beneficiaries pay the reduced cost-sharing
aligned with the LIS categories defined in the Part D program. Because
there is already the existing statutory requirement for CMS to update
the parameters for the LIS benefit each year using statutory indexing
methods, and because CMS and pharmacy systems are already set up to
reflect the appropriate cost-sharing based on the LIS category of the
individual, we believe it is reasonable to calculate and charge cost-
sharing in alignment with the Part D LIS categories. For immediate need
beneficiaries, we propose in Sec. 423.2508(d)(2) these individuals
would by default pay the cost-sharing associated with the category of
non-institutionalized FBDE individuals with incomes above 100 percent
of the Federal poverty level and full-subsidy-non-FBDE individuals
(that is, Category Code 1). Of the four LIS eligibility categories,
this category has the highest level of cost-sharing. Proposed Sec.
423.2508(d)(2) would further provide that if the beneficiary is later
confirmed to belong to a different LIS category, the beneficiary would
be refunded by the LI NET sponsor for the difference between the cost
sharing they paid versus what they would have paid in their confirmed
LIS category. This approach allows for the least government liability
for individuals whose LIS eligibility is unable to be confirmed while
still allowing prescription drug access for immediate need individuals.
We propose in Sec. 423.2508(e) that LI NET enrollees have rights
with respect to Part D grievances, coverage determinations, and appeals
processes set out in subpart M of the Part D regulations. The
established processes would adequately adjudicate LI NET beneficiary
concerns. This approach of using existing processes avoids needing to
devote resources to establishing separate grievance, coverage
determinations. Furthermore, consistency with other Part D contracts as
it relates to grievances, coverage determinations, and appeals would be
simplest for LI NET sponsors.
4. LI NET Sponsor Requirements
Section 1860D-14(e)(4)(A) of the Act specifies that, as determined
appropriate by the Secretary, the LI NET program is to be administered
through a contract with a single administrator. Since the beginning of
the demonstration, CMS has had one Part D sponsor serve as the sole
contractor for administering the program. We have found that this
approach supports our goal of administrative simplicity by making it
unnecessary for each individual plan sponsor to check eligibility and
conduct a retroactive enrollment/reimbursement process. In our
experience, the benefits of having a single Part D sponsor administer
LI NET include the following:
Providing a single point of contact for beneficiaries and
pharmacies attempting to have their claims paid.
Providing a single point of contact for State Medicaid
agencies submitting Medicaid eligibility and attempting to reconcile
and coordinate claims.
Simplifying the filing of retroactive beneficiary claims.
There may be circumstances in which CMS may want to consider
contracting with more than one Part D sponsor to administer LI NET.
Though we have had stability in LI NET in terms of only having the
single LI NET sponsor for the duration of the demonstration, we
recognize the need for some protections should it become necessary for
another entity to take over as LI NET sponsor and assume responsibility
for providing LI NET coverage. The downside of consolidating LI NET
functions into a single sponsor is the potential for beneficiary impact
should there be a reason that the single LI NET sponsor no longer
continues its functions. We believe that this potential of beneficiary
impact is mitigated by our proposals to non-renew or terminate the LI
NET contract, which are discussed in greater detail in section II.D.5.
of this proposed rule, titled ``Contractor Selection and Contracting
Guidelines.'' Accordingly,
[[Page 79474]]
while we propose at new Sec. 423.2512 that the program will be
operated by ``one or more'' Part D sponsors, we intend to initially
continue with the current practice of operating the program through a
single sponsor because we determined the benefits outweigh potential
beneficiary impacts, which have not come to bear since the start of the
demonstration in 2010.
We propose to establish at Sec. 423.2512 the requirements the LI
NET sponsor must meet when administering the LI NET program.
Because LI NET may enroll beneficiaries from across the
nation, we propose to specify at Sec. 423.2512(a)(1) that the LI NET
sponsor(s) would be selected from among the Part D sponsors with a
national presence, with an established contracted pharmacy network in
all geographic areas of the United States in which LIS is available,
which as of the date of this proposed rule is the 50 States and the
District of Columbia. Because LIS is not available in the territories,
CMS would not require the LI NET sponsor to have network pharmacies in
territories. LI NET beneficiaries could still access LI NET benefits
while in the territories if needed, however, through out-of-network
pharmacies.
We find that some experience as a Part D sponsor should be
a pre-requisite for being an LI NET sponsor, and propose at Sec.
423.2512(b) that any candidates to be an LI NET sponsor have a minimum
of 2 consecutive years contracting with CMS as a Part D sponsor.
We propose at Sec. 423.2512(c) some technical and
operational requirements of the LI NET sponsor. In Sec. 423.2512(c)(1)
and (c)(2) we propose that the LI NET sponsor have the technical
capability and the infrastructure to provide immediate, current, and
retroactive coverage for LI NET enrollees and the technical capability
to develop the infrastructure necessary for verifying Medicaid dual
eligibility status for presumed eligible LI NET enrollees. In Sec.
423.2512(c)(3), we propose requiring the LI NET sponsor to identify,
develop, and implement outreach plans in consultation with CMS
targeting key stakeholders to inform them about the LI NET program.
Under the demonstration, CMS enrolls over 90 percent of LI NET
beneficiaries into the LI NET plan and we expect CMS would continue to
be responsible for most enrollees in a permanent LI NET program. For
the beneficiaries who are not auto-enrolled, outreach is important so
that stakeholders like the states, SHIPs, and pharmacies to have
awareness and knowledge about the LI NET program. Under the
demonstration, the LI NET sponsor routinely conducts outreach in
consultation with CMS to inform stakeholders about the program. We
propose to adopt this approach for the permanent LI NET program.
As discussed further in this section of this rule, we propose to
waive requirements under Sec. Sec. 423.128(d)(2)(ii),
423.128(d)(2)(iii), and 423.128(d)(4). We also propose in Sec.
423.2512(c)(4) that the LI NET sponsor be required to establish and
manage a toll-free customer service telephone line and fax line that
can be accessed by pharmacy providers and beneficiaries, or others
acting on their behalf, for purposes that include but are not limited
to: handling inquiries about services under the LI NET program,
providing the status of eligibility or claims, and having the ability
to accept documentation for evidence of eligibility.
Reimbursement to beneficiaries with retroactive coverage is
provided for in section 1860D-14(e)(3)(B) of the Act, as the ``amounts
that would have been paid under this Part had such individual been
enrolled in a prescription drug plan or MA-PD plan.'' This entails
establishing a process for beneficiaries to request and receive such
reimbursement. In the demonstration we provide a means for
beneficiaries who receive retroactive coverage to submit a direct
member out-of-pocket reimbursement request for Part D covered drugs for
any past month(s) in which they were entitled to retroactive coverage
under LI NET. The LI NET sponsor provides reimbursement to eligible
beneficiaries based on the submitted cost minus any applicable
copayments. Once the LI NET sponsor receives a written reimbursement
request, they follow timeframes that are consistent with those Part D
sponsors are already accustomed to in Sec. 423.636(a)(2) when they
authorize payment for a benefit due to a reversal in their coverage
determination. That is, under the demonstration, the LI NET sponsor has
14 calendar days to reply with whether the claim is eligible for
reimbursement, including the reason for denying the request if
applicable. If the request for reimbursement is granted, the LI NET
sponsor issues the reimbursement no later than 30 days after it
determines the claim is eligible for reimbursement. As these timelines
have proved workable under the demonstration, we propose in Sec.
423.2512(c)(5) that the LI NET sponsor meet these deadlines related to
direct reimbursement in the permanent LI NET program.
In Sec. 423.2512(c)(6), we propose requiring the LI NET sponsor to
adjudicate claims from out-of-network pharmacies according to the LI
NET sponsor's standard reimbursement for their network pharmacies. As
the LI NET sponsor must provide access to all Part D drugs under an
open formulary, we believe there is the need for some protection
against unreasonably high drug costs for OON claims in LI NET. Other
Part D sponsors have the option to deny such claims, or to pay OON
claims according to their standard reimbursement for their network
pharmacies (with beneficiaries paying any difference between the cost
of the OON claim the negotiated price). Because this restraint on
unreasonable drug costs borne by the Medicare Trust Funds would not
otherwise be present for LI NET, we believe a limit on how much the LI
NET sponsor can be reimbursed for OON claims is needed.
5. Selection of LI NET Sponsor and Contracting Provisions
Section 1860D-14(e)(6) of the Act authorizes us to implement LI NET
without regard to laws relating to the making, performance, amendment,
or modification of contracts of the United States as we may determine
to be inconsistent with the furtherance of the purpose of Title XVIII.
Thus, CMS is not required to follow the Federal Acquisition Regulation
(FAR) or the contracting authority used under the Part D program.
Neither is CMS required to contract with every qualified plan sponsor
to provide LI NET Part D coverage, as we are required to do for
qualified plan sponsors providing non-LI NET Part D coverage. If we
followed the same approach for LI NET, we could have many points of
contact for beneficiaries and pharmacies attempting to have their
retroactive claims paid and multiple points of contact for State
Medicaid agencies submitting Medicaid eligibility and attempting to
reconcile and coordinate claims. This approach would not serve the
purpose of providing smooth, transitional coverage for Part D drugs for
LI NET eligible individuals through the LI NET program, which is a Part
D program under Medicare in Title XVIII.
Using the authority in section 1860D-14(e)(6) of the Act, we
propose to follow the contracting approach set forth in proposed Sec.
423.2516 to select the LI NET sponsor for the 2024 plan year and
onwards.
In Sec. 423.2516(a), we propose that CMS would appoint a Part D
sponsor that meets the requirements at Sec. 423.2512 to serve as the
LI NET sponsor. To determine this appointment, we propose that CMS may
choose to conduct discussions with potentially eligible
[[Page 79475]]
entities to establish mutual interest and ability to administer the
program. This circumstance could arise if, for example, CMS needs
additional information in any particular year to learn more about a
Part D sponsor's ability to administer the LI NET program. Under the
demonstration, there is a multi-year contract approved by the Office of
Management and Budget, and each year CMS and the LI NET sponsor have
executed an addendum to the contract that included such information as
the payment rates and risk corridors as determined in the final bid. As
we consider options for establishing regulations to implement the
permanent LI NET program, we find it is appropriate that we bring the
LI NET contractor into closer alignment with other contracts in the
Part D program by executing an LI NET contract with a Part D plan
sponsor each plan year that contains, among other information, payment
information for that year. Our expectation is that unless circumstances
shift to prompt a change, the existing LI NET sponsor would continue in
that role in the succeeding year. Therefore, in Sec. 423.2516(b), we
propose selection criteria CMS may use in appointing an LI NET sponsor
based on some features of the LI NET program that are related to a Part
D sponsor's ability to successfully administer the program. These are--
Experience covering low-income beneficiaries, including
but not limited to enrolling and providing coverage to low-income
subsidy individuals as defined in Sec. 423.34;
Pharmacy access as outlined in Sec. 423.120;
Past performance consistent with Sec. 423.503(b),
including Star Ratings (as detailed in Sec. 423.186), and previous
intermediate sanctions (as detailed in Sec. 423.750); and
Ability to meet the requirements listed in Sec. 423.505
that are not waived under Sec. 423.2536.
As we are proposing that Part D requirements apply to the LI NET
program unless waived, we intend for Sec. 423.505 to apply to LI NET,
with the exception of Sec. 423.505(k)(6), which we propose to waive in
proposed Sec. 423.2536(g). For example, the contract between the LI
NET sponsor and CMS would be required to contain provisions in which
the LI NET sponsor agrees to accept new enrollments, make enrollments
effective, process voluntary disenrollments, and limit involuntary
disenrollments (see Sec. 423.505(a) and (b)(2)). As another example,
consistent with Sec. 423.505(b)(22), the LI NET contract would be
required to include a provision in which the LI NET sponsor agrees to
use the CMS complaint tracking system to address and resolve complaints
received by CMS against the sponsor. Per Sec. 423.505(k), the LI NET
contract would also require the LI NET sponsor to submit certifications
of data that determine payment as applicable, such as for enrollment
and payment information, claims data, bid submission information, DIR
data, and overpayments. The only certification the LI NET sponsor would
not submit is the one pertaining to data for price comparison under
Sec. 423.505(k)(6); we believe this certification is unnecessary given
that the LI NET plan is not one for which beneficiaries shop and thus
would not be comparing against other plan options based on price
considerations. We intend to exclude LI NET from Medicare Plan Finder,
consistent with past practice under the demonstration. Therefore, it
would not make sense to require certification to data for price
comparison purposes, and we propose to waive this requirement in Sec.
423.2536(g).
In Sec. 423.2516(c), we propose that the term of the appointment
will be ongoing provided mutual agreement between CMS and the selected
party, subject to an annual contracting and bid process (per proposed
Sec. 423.2524(c)) to determine payment rates for the upcoming year.
This approach has worked well during the demonstration and we see no
reason to propose a different approach for the permanent program.
If the LI NET sponsor violates its contract, we propose in Sec.
423.2518 that CMS would have the authority to impose intermediate
sanctions as outlined in subpart O of the Part D regulations, just as
we would for any other Part D sponsor.
In Sec. 423.2520(a) we propose that if the LI NET sponsor decides
for any reason to non-renew its existing contract, it must notify CMS
by January 1 of the year before the next contract year. Except as
provided in paragraph (c) of this section, if CMS decides for any
reason to non-renew the existing contract with the incumbent LI NET
sponsor, CMS would notify the LI NET sponsor by January 1 of the year
before the next contract year. We propose that CMS could non-renew for
any reason, without cause, and the LI NET sponsor would not have a
right to appeal the non-renewal. To provide CMS the authority to non-
renew the LI NET contract with that particular sponsor for any reason
with no appeal, we propose in Sec. 423.2536(e) waiving the appeals
requirements in Subpart N except for those relevant to a contract
termination. As there has only been a single LI NET sponsor for the
duration of the demonstration, and we are anticipating a single LI NET
sponsor for the permanent LI NET program, we do not want to assume the
risk of the appeals process not providing finality by the time an LI
NET sponsor would need to begin preparing the LI NET bid. Even if we
required the appeals process to be complete by the April timeframe and
while the appeal was pending moved forward with selection process, we
would be cutting into or needing to forgo entirely the transition time
of 3 months we propose in Sec. 423.2520(b) to ensure seamless
transition of the LI NET program. Proposing to assume these risks would
not further the purpose of the LI NET program being ready and available
to provide immediate, current, and retroactive coverage for LI NET
enrollees. We note that non-renewal, whether at the election of CMS or
the LI NET sponsor, would not have an impact on the sponsor's
eligibility to be selected as the LI NET sponsor in future years. As
discussed in section II.D.4. of this proposed rule, we intend to
initially contract with a single Part D sponsor to administer the LI
NET program. Unlike beneficiaries in traditional Part D plans,
beneficiaries enrolled in LI NET would not have the option of simply
choosing to enroll in LI NET under a different sponsor. For these
reasons, ample notice is needed if the LI NET sponsor does not intend
to continue as the LI NET sponsor in the following year. We anticipate
that CMS would be able to provide the same amount of notice to the LI
NET sponsor if we were contemplating changing the LI NET sponsor for
the following year. A decision to non-renew the LI NET contract with a
particular Part D sponsor would not bar or prohibit that sponsor from
being considered to be the LI NET sponsor in a future year. Any CMS
decisions regarding LI NET sponsor selection would have no bearing on a
Part D sponsor proceeding with the application process for other, non-
LI NET, Medicare prescription drug plans.
In Sec. 423.2520(b), we propose that after a notice of non-
renewal, CMS would select a successor LI NET sponsor from among the
other eligible entities (as detailed in proposed Sec. 423.2516).
Similar to how our multi-year contracts with our contractors require an
outgoing contractor to coordinate with any successor contractor during
a transition period, proposed Sec. 423.2520(b) would require the
outgoing LI NET sponsor to coordinate with the successor LI NET sponsor
appointed by CMS for a period of no less than 3 months to ensure
seamless transition for LI NET enrollees,
[[Page 79476]]
including timely transfer of any data or files. All data, files,
written materials, and LI NET work products would be considered CMS's
property. During the transition period, the outgoing and incoming LI
NET sponsors would work together to develop a transition plan,
including setting up a training schedule and a schedule of events for a
smooth changeover.
There may be exigent circumstances of risk to beneficiaries in
which a more immediate termination is warranted. Referencing portions
of CMS's immediate termination authority in Sec. 423.509, we propose
to establish in Sec. 423.2520(c) that CMS may terminate the LI NET
contract immediately if:
CMS determinates that a delay in termination, resulting
from non-compliance with the procedures provided in this Part prior to
termination, would pose an imminent and serious risk to the health of
the individuals enrolled with the LI NET sponsor, per Sec.
423.509(b)(2)(i)(A);
The LI NET sponsor has experienced financial difficulties
so severe that its ability to make necessary health services available
is impaired to the point of posing an imminent and serious risk to
beneficiary health, or otherwise fails to make services available to
the extent that such a risk to health exists per Sec.
423.509(b)(2)(i)(B); or
The LI NET sponsor has had one or more of the issues
enumerated in paragraphs (a)(4)(i) and (xii) of Sec. 423.509.
Proposed Sec. 423.2520(d) would provide that if CMS intends to
terminate the contract under proposed Sec. 423.2520(c), CMS provides
written notice to the LI NET sponsor informing it of its termination
appeal rights in accordance with subpart N of this Part.
We expect to identify the LI NET contract as X0001, and advance the
plan benefit package number by one each year so that we can update the
payment rates in our systems for the new payment year. If the LI NET
contract with a particular LI NET sponsor is terminated, we would not
discontinue use of the contract number X0001. Instead, we would
terminate the relationship with that specific LI NET sponsor to provide
LI NET coverage, and continue to allow enrollment under contract X0001.
6. Bidding and Payments to the LI NET Sponsor
Section 1860D-14(e) of the Act does not specify how CMS is to
determine the amounts that it pays to the LI NET sponsor under the
contract or how payments are to be made. We propose to establish the
methodology and formulas that we would use to determine the amounts we
pay to the LI NET sponsor under the contract. We use our payment
policies under the demonstration, including the bidding requirements,
as the basis for the proposed LI NET payment policies in this rule. We
do so because LI NET payment activities bear many similarities to those
of typical Part D plans, because the infrastructure to pay in this
manner is already established, and because we are proposing that the LI
NET sponsor must be a Part D sponsor who would be familiar with these
payment activities already, in this proposed rule.
We propose in Sec. 423.2524(a) that CMS payments for the LI NET
program would be made from the Medicare Prescription Drug Account, as
payments are made to other Part D sponsors.
In Sec. 423.2524(b) we propose requirements related to the LI NET
bid. Because most of the provisions in Subpart F would not be
applicable to LI NET, we propose to waive Subpart F except for those
provisions we propose to apply to LI NET.
Section 423.2524(b)(1) proposes that the submission of LI NET bids
and related information will follow the requirements and limitations in
Part 423, Subpart F, Sec. Sec. 423.265(b), (c), (d)(1), (d)(2)(i),
(d)(2)(ii), (d)(2)(iv), (d)(2)(v), (d)(4), (d)(6), and (e). This
proposal would require the LI NET sponsor to submit a bid and
supplemental information in a format specified by CMS, with the same
deadline as other Part D bids of no later than the first Monday of June
each year. It also gives CMS the ability to request additional
information from the LI NET sponsor to support bid amounts, and the
ability to require revisions to the submitted LI NET bid before it is
accepted. As with other Part D bids, a qualified actuary, whether
internal or external to the plan sponsor, would certify the LI NET
sponsor's actuarial valuation (which may be prepared by others under
the qualified actuary's direction or review). The qualified actuary
would need to be a member of the American Academy of Actuaries.
We propose in Sec. 423.2524(b)(2) that the following provisions
would apply in the review, negotiation, and approval of the LI NET bid:
Sec. 423.272(a), (b)(1), and (b)(4). This would allow CMS to review
the LI NET bid, conduct negotiations regarding the terms and conditions
of the proposed bid, and approve it only if the bidding LI NET sponsor
and the LI NET plan comply with all applicable CMS Part D requirements.
As in typical Part D bid reviews, CMS would be able to decline the LI
NET bid if it proposes significant increases in cost sharing (Sec.
423.272(b)(4)). This approach follows the bid process under the
demonstration, in which the LI NET sponsor submits a bid that estimates
their costs and includes assumptions for enrollment and utilization
based on prior experience. Starting with PY2021, the LI NET sponsor
began using an LI NET Bid Pricing Tool (BPT) and accompanying
instructions that were adapted from the traditional Part D BPT and
instructions. Once the LI NET bid is accepted, we update this
information in our systems for the new payment year for the LI NET
demonstration. Each year, we advance by one the number designating the
current plan benefit package. For example, the contract-PBP was X0001-
011 for plan year 2021 and X0001-012 for plan year 2022.
Proposed Sec. 423.2524(b)(3) specifies the basic rule and major
components of the LI NET bid, which are the LI NET sponsor's estimate
of its revenue needs for Payment Rates A and B, which are discussed in
greater detail in proposing Sec. 423.2524(d).
In Sec. 423.2524(c) we propose that CMS would provide advance
monthly LI NET payments, on a per-member, per-month (PMPM) basis, equal
to the sum of Payment Rates A and B as established in the LI NET
sponsor's approved bid submitted annually under paragraph (b) of this
proposed section. Paying on a PMPM basis would align with other Part D
payments and with our operations under the LI NET demonstration in
which we provide a capitated PMPM amount established by the bid for
each beneficiary enrolled in the demonstration. Unlike typical Part D
monthly payments, the monthly LI NET payment under the demonstration is
a PMPM amount that represents the sum of Payment Rates A and B, as
determined by the LI NET bid. The bid represents the LI NET sponsor's
total expected cost, minus any beneficiary co-pays, and with a
reasonable margin that represents the LI NET sponsor's profit. Also,
unlike other Part D payments, payments under the LI NET demonstration
would not be risk adjusted. Because payments under the LI NET
demonstration are cost reconciled (with the exception of risk
corridors) and there is no concern about the LI NET sponsor cherry-
picking beneficiaries, we use a simpler payment methodology that does
not include risk adjustment.
We propose in Sec. 423.2524(c)(1) that Payment Rate A would be a
monthly payment for projected administrative costs, constrained by an
annual percentage cap set as part of the bid
[[Page 79477]]
review and negotiation under Sec. 423.272(a). Payment Rate A would
include two elements, as it does under the demonstration. The first
would be the LI NET sponsor's estimated administrative costs, which
would represent the administrative costs to run the LI NET program
inclusive of an amount for the margin, which represents the LI NET
sponsor's profit. The second element in Payment Rate A would be the LI
NET sponsor's estimated costs to pay pharmacy claims for prescriptions
filled by immediate need individuals, for which the LI NET sponsor may
not be able to submit a prescription drug event (PDE) record to CMS due
to the individual's unconfirmed LIS status. We expect that these are
generally the ``immediate need'' beneficiaries discussed in section
II.D.2.a. of this proposed rule (under the heading ``Eligibility and
Enrollment'') who are not confirmed to be LIS-eligible. We propose in
Sec. 423.2524(c)(1)(i) that for the 2024 plan year, the LI NET sponsor
includes in its bid the assumption that Payment Rate A cannot exceed a
2 percent increase from the prior year's Payment A, which is a figure
CMS will provide to the LI NET sponsor. For the 2025 plan going
forward, we propose in Sec. 423.2524(c)(1)(ii) the LI NET sponsor will
specify their assumption for any increase needed to the prior year's
Payment Rate A, submitting justification to CMS in its bid if the cap
exceeds 2 percent. Any proposed increase in Payment Rate A from year-
to-year would not be able to exceed the percentage cap. Similar to how
CMS determines reasonableness in evaluating a plan's anticipated profit
in the bid, we would use the same reasonableness standard in setting
and negotiating the cap on Payment Rate A in the bid.
In Sec. 423.2524(c)(2), we propose that Payment Rate B would
reflect the projected net costs of the Part D drugs dispensed to
individuals who receive the LI NET benefit. Payment Rate B would be the
estimated actual drug costs minus direct and indirect remuneration
(DIR). In the demonstration, we apply risk corridors to Payment Rate B
so that excess gains and losses are shared between CMS and the LI NET
sponsor. These risk corridors are symmetrical in sharing upside and
downside risk, but are narrower than the risk corridors provided for
under section 1860D-15(e) of the Act and applicable to other Part D
plans. Because the risk corridors in the demonstration are so narrow,
the LI NET sponsor has not assumed as much risk for LI NET as
traditional Part D plans assume. CMS has not shared risk on Payment
Rate A, in keeping with typical Part D plans for which CMS does not
share risk on margin or administrative costs. In 2012, CMS revised the
risk corridors under the LI NET demonstration to limit payment
adjustments on Payment Rate B. For the portion of a plan's cost for
drugs that is between the target amount and the threshold upper limit
(101 percent of the target amount), the LI NET sponsor pays 100 percent
of this amount. For the portion of the plan's cost for drugs that
exceeds the threshold upper limit, the government pays 99.9 percent and
the plan pays 0.1 percent. Similarly, if a plan's cost for drugs is
between the target amount and the threshold lower limit (99 percent of
the target amount), the LI NET sponsor keeps 100 percent of the
difference between the drug cost and the target amount. If a plan's
cost for drugs is lower than the threshold lower limit, the government
keeps 99.9 percent and the plan keeps 0.1 percent of the difference
between the plan's drug cost and the threshold lower limit.
Both under the demonstration and for other Part D plans, after a
payment year is over and the deadline for submitting payment data for
that payment year has passed, we reconcile the payments for the year.
This allows us to narrow the gap between what predicted and actual
costs were in a given year, as well as share risk with plan sponsor in
gains and losses. To provide for payment reconciliation and risk
sharing in the LI NET program, we propose in Sec. 423.2524(d) to
establish the payment policies for reconciliation and risk corridors,
including adopting targeted provisions of existing risk sharing
requirements. Proposed Sec. 423.2524(d)(1) provides that CMS would
conduct LI NET payment reconciliation each year for Payment Rates A and
B after the annual PDE data submission deadline has passed and make the
resulting payment adjustment consistent with Sec. 423.343(a).
In Sec. 423.2524(d)(2), we propose to establish the same risk
corridors for Payment Rate B that apply under the demonstration: no
risk sharing within 1 percent of the target amount and symmetrical 0.1
percent risk sharing beyond the 1 percent corridor. To carry out risk
sharing as part of reconciliation, we propose to have Sec. 423.336(c)
apply to LI NET, which requires a plan sponsor to provide necessary
cost data information to CMS and authorizes CMS to make either lump-sum
payments or adjustments based on the risk corridor calculations.
Proposed Sec. 423.2524(e) would establish that the LI NET contract
is subject to the existing provision at Sec. 423.346 pertaining to
payment reopenings. Per Sec. 423.346, CMS may reopen and revise an
initial or reconsidered final payment determination for up to 5 payment
years. Under the demonstration, each LI NET reconciliation has been in
alignment with Sec. 423.346 and included the prior 5 years of PDEs.
The most recently completed payment year gets reconciled for the first
time along with reopening the prior 4 years. For example, in 2019, PBP
008 for payment year 2018 was reconciled for the first time while PBPs
004-007 (for payment years 2014 through 2017) were reopened.
Sequestration is not used or accounted for in reconciliation,
consistent with how we apply sequestration for other Part D plans.
Under the demonstration, we maintain consistency between LI NET's PDE
and DIR reporting deadlines and the reporting deadlines that apply to
Part D plans (for example, the yearly deadline for data used for
payment year reconciliation is June 30th). Enrollment, risk adjustment,
and PDE certifications (attestations) are collected under the LI NET
demonstration just like other contracts, and we propose to adopt the
requirements in Sec. 423.505(k)(1) through (5), except for certifying
to reinsurance data because LI NET does not receive a reinsurance
subsidy. This proposal would require the LI NET sponsor to certify to
the accuracy, completeness, and truthfulness of all data related to
payment.
As noted earlier in this section of this proposed rule, as a
general matter, all payment rights and responsibilities under Part D
that otherwise apply and are not explicitly waived in proposed Sec.
423.2536 would apply to the LI NET program, as appropriate. Proposed
Sec. 423.2524(f) would provide that the LI NET sponsor could appeal
the payment calculation under Sec. 423.350. Proposed Sec. 423.2524(g)
would establish that the LI NET contractor is subject to the ``report
and return'' overpayment requirements under Sec. 423.360.
7. Part D Program Waivers
Because the LI NET sponsor is a Part D sponsor and the LI NET
contract is a PDP contract, many existing provisions in Part 423 apply
to LI NET. The exceptions are those provisions waived by the statute,
those provisions that are inapplicable to LI NET, and the requirements
we propose to waive through this rulemaking.
The LI NET statute at section 1860D-14(e)(5)(A) of the Act provides
that paragraphs (1) and (3)(B) of section 1860D-4(a) of the Act,
subparagraphs
[[Page 79478]]
(A) and (B) of section 1860D-4(b)(3) of the Act, and paragraphs (1)(C)
and (2) of section 1860D-4(c) of the Act do not apply to the LI NET
program; thus, requirements relating to dissemination of general
information and the provision of formulary information, formulary
requirements, and medication therapy management (MTM) program
requirements do not apply to LI NET. For this reason, we propose to
waive formulary requirements in Sec. Sec. 423.120(b), 423.128(e)(5),
and 423.128(e)(6) and MTM program requirements in Sec. 423.153.
Section 1860D-14(e)(5)(B) of the Act contains broad waiver
authority to ``waive such other requirements of title XI and this title
as may be necessary to carry out the purposes of the program
established under this subsection''. We also propose to waive for LI
NET some of the cost control and quality improvement requirements in
Part 423 Subpart D, except for the provisions we explicitly propose to
adopt in Sec. 423.2508(d)(1) through (d)(5) that relate to appropriate
dispensing, patient safety, electronic dispensing, QIO activities,
compliance, and accreditation. This proposal would waive requirements
that would not make sense in the context of temporary coverage with
access to an open formulary. The requirements we propose to waive
pertain to drug utilization management programs, medication therapy
management programs, and consumer satisfaction surveys.
We solicit comment on whether we should waive any additional
regulatory provisions related to paragraphs (1) and (3)(B) of section
1860D-4(a) of the Act and subparagraphs (A) and (B) of section 1860D-
4(b)(3) of the Act.
As discussed in section II.D.4. of this proposed rule, we are
proposing that the LI NET sponsor submit most of the certifications
listed in Sec. 423.505(k), with the exception that we are waiving the
certification of accuracy of data for price comparison in paragraph
(k)(6), given that the LI NET plan is not one for which beneficiaries
shop.
Part D beneficiaries receiving a low-income subsidy are not
eligible for the coverage gap discount program, and under the
demonstration LI NET was not subject to coverage gap discount
requirements under subpart W of Part 423. Thus, we propose in Sec.
423.2536(i) to waive subpart W in full for LI NET.
We propose in Sec. 423.2536(j) to waive the MLR requirements in
subpart X of Part 423.
Section 1857 as incorporated into 1860D-14(e) of the Act does not
speak to MLR requirements for LI NET. Under the LI NET demonstration,
CMS does not require the LI NET sponsor to meet the minimum medical
loss ratio (MLR) requirement or to report the MLR for the LI NET
contract as it does for other Part D contracts. This is due to the
unique payment structure for the contract. Under Part D, a sponsor
submits a single bid including estimated administrative costs, returns
on investment, and drug costs, which are risk-adjusted. After a payment
year concludes, Part D sponsors are required under subpart X of Part
423 to report the MLR for each contract, and if the MLR for a contract
is below 85 percent, the sponsor is required to remit payment to CMS.
Enrollment sanctions are applied to contracts that fail to meet the
minimum MLR requirement for three3 consecutive years, and contracts
that fail to meet the requirement for 5 consecutive years are subject
to termination. The minimum MLR requirement is intended to create
incentives for Part D sponsors to reduce administrative costs such as
marketing costs, profits, and other such uses of plan revenues, and to
help ensure that taxpayers and enrolled beneficiaries receive value
from Medicare health plans. Because of the limits we are proposing to
place on how much administrative costs in LI NET under Payment Rate A
can increase year over year and because of the differing payment
structure, we do not believe MLR reporting should be applicable to LI
NET.
The Affordable Care Act amended section 1893(h) of the Act to
expand the use of Recovery Audit Contractors (RACs) to include the MA
and Part D programs. Section 1893(h)(9) of the Act specifies that,
under contracts with the Secretary, Part D RACs are required to ensure
that each PDP has an anti-fraud plan in effect and to review the
effectiveness of each such anti-fraud plan, to examine claims for
reinsurance payments to determine whether PDPs submitting such claims
incurred costs in excess of the costs allowed, and to review estimates
submitted by PDPs with respect to the enrollment of high-cost
beneficiaries and compare such estimates with the numbers of such
beneficiaries actually enrolled by such plans. Because the LI NET
sponsor must enroll every eligible LI NET beneficiary, and because LI
NET does not receive reinsurance, a Part D RAC's review or examination
of LI NET claims would likely be extremely limited in scope. As other
audit, oversight, and compliance requirements would continue to apply
to the LI NET program, the other program integrity safeguards we have
proposed for the LI NET program would be adequate, and we therefore
propose to waive application of the RAC requirements in subpart Z of
Part 423.
In surveying the items under Part 423 for the Voluntary Medicare
Prescription Drug Benefit, we attempted to categorize existing
requirements as applicable, inapplicable, or a candidate for waiver. We
solicit comment on whether there are additional provisions in part 423
that we have not mentioned in this proposed rule and that we should
address for LI NET.
8. Technical Corrections
In the course of this rulemaking, we noticed the need for a
technical correction in Sec. 423.505(b)(22), which requires Part D
sponsors to address and resolve complaints received by CMS against the
Part D sponsor. The regulation text currently refers to MA organization
when it should refer to Part D sponsor, and thus we propose to make the
correction.
We also propose to make a technical correction in the header of
subpart Z of Part 423. The header in regulation text currently is
``Recovery Audit Contractor Part C Appeals Process'' when it should be
referring to Part D. Thus, we propose to make the technical correction
so the header correctly reads, ``Recovery Audit Contractor Part D
Appeals Process.''
E. Expanding Eligibility for Low-Income Subsidies Under Part D of the
Medicare Program (Sec. Sec. 423.773 and 423.780)
The Part D low income subsidy (LIS) helps people with Medicare who
meet certain statutory income and resource criteria pay for
prescription drugs and lowers the costs of prescription drug coverage.
Individuals who qualify for the full LIS receive assistance to pay
their full premiums and deductibles (in certain Part D plans) and have
reduced cost sharing. Individuals who qualify for the partial LIS pay
reduced premiums (on a sliding scale based on their income) and also
have reduced deductibles and cost sharing.
Currently, in order to qualify for the full subsidy, an individual
must live in 1 of the 50 States or the District of Columbia and meet
the income and resource standards established in at section 1860D-
14(a)(3)(D) of the Act and codified at Sec. 423.773. To be eligible
for the full subsidy, individuals must have countable income below 135
percent of the Federal poverty level (FPL) for the individual's family
size. In addition, an individual must have resources that do not exceed
three times the resource limit under section 1613 for applicants for
Supplemental Security Income (SSI) under title XVI. The resource limit
increases annually by
[[Page 79479]]
the percentage increase in the Consumer Price Index (CPI, all items,
U.S. city average) as of September for the year before and is rounded
to the nearest multiple of $10. The resource limits in 2006 (at the
start of the Part D benefit) were $6,000 for a beneficiary who was
single or $9,000 if the beneficiary was married, and in 2022 the
amounts are $8,400, if single, or $12,600, if married.
Individuals who are not eligible for the full LIS subsidy may be
eligible for the partial LIS subsidy if they live in 1 of the 50 States
or the District of Columbia and have incomes below 150 percent of the
FPL for their family size and have resources that do not exceed the
amounts specified in section 1860D-14(a)(3)(E)(I) of the Act. Similar
to the resource limits for the full subsidy group, these amounts are
increased annually by the percentage increase in the CPI as of
September for the year before and rounded to the nearest multiple of
$10. The resource limits for the partial subsidy in 2006 were $10,000
for a beneficiary who was single or $20,000 if the beneficiary was
married, and the limits in 2022 are $14,010, if single, or $27,950, if
married.
Section 11404 of the Inflation Reduction Act (IRA) (Pub. L. 117-
169), enacted on August 16, 2022, amended section 1860D-14 of the Act
to expand eligibility for the full LIS subsidy group to individuals
with incomes below 150 percent of the FPL and who meet either the
resource standard in paragraph (3)(D) or paragraph (3)(E) of section
1860D-14(a) of the Act, beginning on or after January 1, 2024. This
change will provide the full LIS subsidy for those who currently
qualify for the partial subsidy.
To implement the changes to the LIS income requirements, we propose
to amend Sec. 423.773(b)(1) to add that to be eligible for the full
subsidy for plan years beginning on or after January 1, 2024, an
individual must have an income below 150 percent of the FPL. To
coordinate with this change, we are also proposing to amend Sec.
423.773(d) to specify that the requirement that an individual have an
income below 150 percent of the FPL to be eligible for the partial
subsidy applies only to plan years beginning before January 1, 2024.
This latter change will effectively sunset the partial subsidy income
requirements after 2023.
To implement the changes to the resource limits, we propose to
amend Sec. 423.773 to state that the current resource limits
applicable for the full subsidy at paragraph (b)(2)(ii) apply to years
2007 through 2023. We also propose to add a new Sec.
423.773(b)(2)(iii) to state that for years beginning on or after
January 1, 2024, the resource limits at paragraph (d)(2) of Sec.
423.773--the resource standards currently applicable for the partial
subsidy--would apply to full subsidy eligible individuals.
Lastly, we propose to amend Sec. 423.780(d) to specify that the
sliding scale premium amounts currently applicable for individuals with
the partial subsidy apply with respect to plan years beginning before
January 1, 2024. These individuals who have incomes between 135 and 150
percent of the FPL and who meet the resource requirements will now
qualify for the full subsidy beginning in 2024, and will be entitled to
a premium subsidy of 100 percent of the premium subsidy amount, as
outlined in Sec. 423.780(a).
III. Enhancements to the Medicare Advantage and Medicare Prescription
Drug Benefit Programs
A. Health Equity in Medicare Advantage (MA) (Sec. Sec. 422.111,
422.112, and 422.152)
1. Introduction
On January 20, 2021, President Biden issued Executive Order (E.O.)
13985: ``Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government,'' (hereinafter referred to
as E.O. 13985).\6\ E.O. 13985 describes the Administration's policy
goals to advance equity across Federal programs and directs Federal
agencies to pursue a comprehensive approach to advancing equity for
all, including those who have been historically underserved,
marginalized, and adversely affected by persistent poverty and
inequality. In response, CMS announced its 2022 CMS Strategic Plan, and
``Advance Equity'' is the first pillar of that Strategic Plan.\7\ This
pillar emphasizes the importance of advancing health equity by
addressing the health disparities that impact our health system. CMS
defines health equity as ``the attainment of the highest level of
health for all people, where everyone has a fair and just opportunity
to attain their optimal health regardless of race, ethnicity,
disability, sexual orientation, gender identity, socioeconomic status,
geography, preferred language, or other factors that affect access to
care and health outcomes.'' \8\ This is the definition of health equity
that we use for all health equity provisions in this proposed rule.
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\6\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
\7\ https://www.cms.gov/cms-strategic-plan.
\8\ https://www.cms.gov/pillar/health-equity.
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CMS continues to work diligently to identify regulatory actions
that can help support CMS's goal to advance health equity or that
already address health equity topics but should be expanded in order to
meet the increasingly diverse needs of enrollees served by MA
organizations. In order to support the Administration's goal of
advancing equity for all, it is imperative that we ensure our
regulations address topics that enable disadvantaged populations to
fully access the care that the regulations already allow them to
receive. Consequently, we are proposing several regulatory updates in
the MA program related to health equity. These proposals include
requirements intended to ensure equitable access to MA services, ensure
MA provider directories reflect providers' cultural and linguistic
capabilities and notate MOUD-waivered providers, ensure MA enrollees
with low digital health literacy are identified and offered digital
health education to assist them in accessing any medically necessary
covered telehealth benefits, and ensure MA organizations incorporate
one or more activities into their overall quality improvement program
that reduce disparities in health and health care among their
enrollees. CMS believes that the proposed changes included in this
proposed rule would address health disparities in the MA program and
could be essential to more broadly supporting other equity-focused
efforts across CMS policies and programs.
2. Ensuring Equitable Access to Medicare Advantage (MA) Services (Sec.
422.112)
As discussed extensively in section III.A.1. of this proposed rule,
E.O. 13985 describes the Administration's policy goals to advance
equity across the Federal Government. Currently, Sec. 422.112(a)(8)
requires MA organizations that offer coordinated care plans to ensure
that services are provided in a culturally competent manner to all
enrollees, including those with limited English proficiency or reading
skills, and diverse cultural and ethnic backgrounds.
As discussed in the interim final rule with comment period titled,
``Medicare Program; Establishment of the Medicare+Choice Program,''
which appeared in the Federal Register on June 26, 1998 (63 FR 34968,
34989) (the June 1998 IFC), the goal of this regulatory requirement was
to ensure that enrollees with limited English proficiency, limited
education, or other socioeconomic disadvantages receive the health care
to which they are entitled. This requirement was part of
[[Page 79480]]
several provisions implementing and setting standards for ensuring
access to covered services. CMS later finalized the provision in the
final rule titled Medicare Program; Medicare+Choice Program, which
appeared in the Federal Register on June 29, 2000 (65 FR 40170) (the
June 2000 final rule) with a somewhat detailed discussion of the
objectives served by this provision (65 FR 40217 through 40218). The
principle objective underlying the current requirement to provide
services in a culturally competent manner is to address unique racial
and ethnically-related health care concerns. However, the regulation
explicitly applies to all enrollees and does not include an exception
for any enrollees; therefore, this consideration must be part of an MA
organization's work in ensuring that all covered benefits are available
and accessible to all enrollees. The regulation applies to ``all
enrollees'' even though specific populations are mentioned as examples
of enrollees to whom services must be provided in a culturally
competent manner.
In the June 2000 final rule (65 FR 40217), CMS discussed that
appropriate care delivery should accommodate the unique health-related
beliefs, attitudes, practices, and communication patterns of
beneficiaries and their caregivers to improve services, strengthen
programs, increase community participation and eliminate disparities in
health status among diverse population groups; CMS also emphasized the
importance for health care providers and administrative staff to
possess a set of attitudes, skills, behaviors, and policies that
enables the organization to effectively provide services to diverse
population groups. While Sec. 422.112(a)(8) already applies to all
enrollees, CMS believes that amendments to the current regulatory text
would better reflect the broad scope of underserved populations that MA
organizations must ensure have access to services provided in a
culturally competent manner. As the populations that CMS serves become
increasingly diverse, it is imperative to keep regulations updated to
ensure broad protections are available that minimize the potential for
discriminatory barriers, including any electronic tools that use
discriminatory algorithms, to surface. Thus, CMS is proposing the
following changes and additions to the regulatory language at Sec.
422.112(a)(8) with an intention to clarify the scope of the existing
requirements, consistent with the direction and goals of E.O. 13985.
CMS notes that the requirements at Sec. 422.112(a)(8) were originally
codified using our authority in section 1852(d) of the Act (concerning
access to services) as well as our authority in section 1856(b)(1) of
the Act to establish standards under Part C; the intent of this
proposal is to update the regulatory language at Sec. 422.112(a)(8)
for clarification purposes rather than to make actual changes in
requirements. We continue to rely on sections 1852(d) and 1856(b)(1) of
the Act as the basis for Sec. 422.112, including these changes,
consistent with the June 1998 IFC and finalization in a February 1999
final rule (64 FR 7981) of these existing requirements.
The current paragraph heading at Sec. 422.112(a)(8), which
precedes the existing equitable access provisions, is titled ``Cultural
considerations.'' CMS acknowledges that the term ``cultural
considerations'' could create the misconception that the protections of
the provisions apply only to some populations and not others. CMS is
proposing to revise this heading to ``Ensuring Equitable Access to
Medicare Advantage (MA) Services.'' The term ``equitable access'' is a
broader and more suitable description for the paragraph, as it does not
suggest an emphasis on protecting access to care for one population
over another. We believe these changes will more clearly reflect the
inclusive nature of the protections MA organizations must guarantee for
all enrollees under these provisions.
Additionally, the current regulatory language describes some
underserved groups as examples of populations that may require
accommodations that are specific to their needs--those with limited
English proficiency or reading skills, and diverse cultural and ethnic
backgrounds. Amending the text to identify additional types of
underserved groups will provide clarity with regard to the populations
MA organizations must accommodate in order to meet requirements for
access to services. At Sec. 422.112(a)(8), CMS proposes to replace the
phrase ``those with limited English proficiency or reading skills, and
diverse cultural and ethnic backgrounds'' after the word ``including''
and to add in its place additional paragraphs listing more examples of
underserved populations to whom an MA organization must ensure that
services are provided in a culturally competent manner and promote
equitable access to services in order to satisfy the existing
requirement. The proposed new list would be as follows: (i) people with
limited English proficiency or reading skills; (ii) people of ethnic,
cultural, racial, or religious minorities; (iii) people with
disabilities; (iv) people who identify as lesbian, gay, bisexual, or
other diverse sexual orientations; (v) people who identify as
transgender, nonbinary, and other diverse gender identities, or people
who were born intersex; (vi) people who live in rural areas and other
areas with high levels of deprivation; and (vii) people otherwise
adversely affected by persistent poverty or inequality. CMS notes that
MA organizations must provide all enrollees, without exception,
accommodations to equitably access services according to applicable
statutory, regulatory, and other guidance. These provisions should not
be construed to mean that accommodations are required only for
enrollees who belong to the groups listed herein.
CMS believes these clarifications are necessary and are consistent
with the Administration's goal of ensuring equity across Federal
programs, consistent with E.O. 13985. CMS welcomes public comment in
response to this proposal.
3. Medicare Advantage (MA) Provider Directories (Sec. 422.111)
Section 1852(c)(1) of the Act requires an MA organization to
disclose, among other things, the number, mix, and distribution of plan
providers in a clear, accurate, and standardized form to each enrollee
in an MA plan offered by the MA organization at the time of enrollment
and at least annually thereafter. We implemented this requirement in a
regulation at Sec. 422.111(a) and (b)(3)(i), requiring that an MA
organization must disclose the number, mix, and distribution
(addresses) of providers from whom enrollees may reasonably be expected
to obtain services, in the manner specified by CMS, to each enrollee
electing an MA plan it offers; in a clear, accurate, and standardized
form; and at the time of enrollment and at least annually thereafter,
by the first day of the annual coordinated election period. In
addition, under Sec. 417.427, the MA disclosure requirements at Sec.
422.111 also apply to section 1876 cost plans.
CMS has historically interpreted the disclosure requirement at
Sec. 422.111(b)(3)(i)--``the number, mix, and distribution (addresses)
of providers from whom enrollees may reasonably be expected to obtain
services''--as referring to the provider directory. CMS developed the
MA and Section 1876 Cost Plan Provider Directory Model,\9\ a model
material created as an example of how to convey the required
information
[[Page 79481]]
to enrollees. In accordance with Sec. 422.2267(c), when drafting their
provider directories based on CMS's model, organizations must
accurately convey the required information and follow the order of
content specified by CMS.
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\9\ The current MA and Section 1876 Cost Plan Provider Directory
Model is located at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial.
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The current provider directory model contains an array of specific
required information based on Sec. 422.111(b)(3)(i); we refer to this
information collectively as required provider directory data elements.
For example, organizations must list only the office or practice
location(s) where the provider regularly practices, must clearly
identify the capacity in which the provider is serving (that is,
specialty type), and must clearly identify whether or not a provider is
accepting new patients or provide a notice directing beneficiaries to
contact a provider to determine if he or she is accepting new patients.
Other examples of required provider directory data elements include up-
to-date provider practice names and notations next to providers'
listings indicating any restrictions on access. Several of these data
elements are tied to how Sec. 422.111(b)(3)(i) requires the
organization to disclose information about providers from whom
enrollees may reasonably be expected to obtain services; issues of
access, including whether the provider is accepting new patients, are
integral to whether an enrollee may reasonably be expected to obtain
covered services from that provider. In addition, some of these
provider directory data elements (for example, restrictions on access
notations, accepting new patients indicator) contain important
information that organizations should be taking into account to verify
that their networks are truly adequate. This enables the organization
to ensure that all covered services are available and accessible under
the plan, as required by section 1852 of the Act and Sec. 422.112(a).
In addition to the required provider directory data elements, CMS
guidance addresses best practices for provider directories, including
encouraging organizations to identify non-English languages spoken by
each provider and provider/location accessibility for people with
physical disabilities. CMS proposes to codify these two best practices
(the latter in terms of deaf or hard of hearing individuals) as a
regulatory requirement at Sec. 422.111(b)(3)(i). Specifically, we
propose to mirror the Medicaid provider directory requirements at Sec.
438.10(h)(1)(vii) by adding the phrase ``each provider's cultural and
linguistic capabilities, including languages (including American Sign
Language) offered by the provider or a skilled medical interpreter at
the provider's office'' to paragraph (b)(3)(i). This would change these
two best practices to required data elements that all organizations
must include in their provider directories. Currently, the Medicaid
managed care regulation at Sec. 438.10(h)(1)(vii) requires that
provider directories for Medicaid managed care plans include
information on the provider's cultural and linguistic capabilities,
including languages (including American Sign Language (ASL)) offered by
the provider or a skilled medical interpreter at the provider's office
as well as other information identifying the provider's location,
contact information, specialty, and other information important for
beneficiaries in selecting a healthcare provider. The proposal here
makes use of the precedent established by the Medicaid program and
helps move the agency closer to its goal of aligning the various CMS
program requirements.
We note that the phrase ``cultural and linguistic capabilities'' as
proposed here for Sec. 422.111(b)(3)(i) refers to the capabilities of
a provider (or skilled medical interpreter at the provider's office) to
deliver culturally and linguistically appropriate services (CLAS),
which are defined by the HHS Office of Minority Health as ``services
that are respectful of and responsive to individual cultural health
beliefs and practices, preferred languages, health literacy levels, and
communication needs.'' \10\ As indicated by several research studies,
language concordance between providers and limited English proficient
individuals is associated with better health outcomes, and so better
matching patients with providers who speak the same language is
expected to improve quality of care and reduce disparities.\11\ CMS
believes this important proposed regulatory change would enhance the
quality and usability of provider directories, particularly for non-
English speaking enrollees searching for providers who speak their
preferred language, for limited English proficient individuals, and for
those enrollees seeking providers who use ASL themselves or have an ASL
interpreter available in their office.
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\10\ https://www.minorityhealth.hhs.gov/Assets/PDF/TCH%20Resource%20Library_CLAS%20CLC%20CH.pdf.
\11\ https://pubmed.ncbi.nlm.nih.gov/20878497/; https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2599011;
https://link.springer.com/article/10.1007/s11606-019-04847-5.
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This proposal does not implement, take the place of, or supersede
an organization's or provider's obligations to take reasonable steps to
ensure meaningful access to such programs or activities by limited
English proficient individuals and appropriate steps to ensure that
communications with individuals with disabilities are as effective as
communications with others in such programs or activities, including
the provision of oral language assistance services and/or auxiliary
aids and services when required by applicable law (section 1557 of the
Patient Protection and Affordable Care Act (PPACA) and 45 CFR part 92).
We are proposing this new requirement for MA provider directories as a
standard for implementing and ensuring compliance with section
1852(c)(1)(C) of the Act and as a necessary and appropriate standard to
ensure that MA enrollees have the information they need in order to
access covered services from an MA plan.
This proposal is also consistent with the health equity objectives
of CMS's first strategic pillar ``Advance Equity'' under the 2022 CMS
Strategic Plan.\12\ It supports current CMS efforts to advance health
equity by giving enrollees a fair and just opportunity to access health
care services regardless of preferred language. Please refer to
sections III.A.1. and III.A.2. of this proposed rule for more extensive
discussion of health equity issues in the MA program.
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\12\ https://www.cms.gov/cms-strategic-plan.
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To further enhance our requirements for MA provider directories in
the area of behavioral health, we also propose to add a new required
provider directory data element for certain providers who offer
medications for opioid use disorder (MOUD). Access to MOUD can be life-
saving, but too often, patients do not know how to access this type of
care. MA enrollees may have little insight as to which providers can
provide MOUD. This problem is especially urgent, as overdose deaths
from opioids have skyrocketed during the COVID-19 pandemic.\13\
Therefore, we propose to require organizations to identify certain
providers in their provider directories who have obtained a waiver
under section 303(g)(2) of the Controlled Substances Act (CSA) (21
U.S.C. 823(g)(2)(B)(i)-(ii)) from the Substance Abuse and Mental Health
Services Administration (SAMHSA) and the Drug Enforcement
Administration (DEA) to treat patients with MOUD (for example,
methadone, buprenorphine, naltrexone, naloxone, or Suboxone) and who
are listed on SAMHSA's
[[Page 79482]]
Buprenorphine Practitioner Locator (BPL).\14\
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\13\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
\14\ https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator.
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Specifically, we propose to include this new regulatory requirement
at Sec. 422.111(b)(3)(i) by adding the phrase ``notations for MOUD-
Waivered Providers as defined in Sec. 422.116(b)(1)(xxx) who are
listed on the Substance Abuse and Mental Health Services
Administration's Buprenorphine Practitioner Locator'' to paragraph (i).
We are using the term ``MOUD-Waivered Providers'' as section III.B.2.
of this proposed rule is proposing to define this term at proposed
Sec. 422.116(b)(1)(xxx) as ``providers who are waived by the Substance
Abuse and Mental Health Services Administration and the Drug
Enforcement Agency to administer, dispense, or prescribe narcotic drugs
in schedule III, IV, or V or combinations of such drugs to patients for
maintenance or detoxification treatment for opioid use disorder in
accordance with section 303(g)(2) of the Controlled Substances Act.''
Thus, to avoid duplication and ensure consistency in application of the
term, at proposed Sec. 422.111(b)(3)(i), we cross-reference the
definition at proposed Sec. 422.116(b)(1)(xxx). This proposed change
to the content requirements for provider directories would allow MA
enrollees to use their provider directories to search for the providers
that have special training to provide MOUD and are allowed to
administer, dispense, or prescribe the medications in an office
setting.
In order for the organization to flag the provider in its provider
directory, the provider must: (1) possess a waiver currently approved
by SAMHSA and the DEA; (2) have a valid and active ``X-number'' from
the DEA in order to administer, dispense, or prescribe MOUD; and (3) be
listed on SAMHSA's BPL (have allowed their practice location to be
disclosed publicly).\15\ For more information on how providers can
become MOUD-waivered providers, see the SAMHSA website.\16\ This
proposal would require organizations to identify such providers in
their provider directories by including notations next to the
providers' listings indicating that the providers are able to treat
patients with MOUD. No reference to the actual waiver in the provider
directory is necessary to provide the necessary notices to the
enrollee; however, the organization would need to determine which
providers in their network currently have the waiver, have the valid
and active ``X-number,'' and are listed in SAMHSA's BPL in order to
know which providers to flag in the provider directory as able to treat
patients with MOUD. The provider directory would need to include
language to indicate the meaning of the MOUD-waivered providers
notation, which is that these providers have completed the training so
that they may administer, dispense, or prescribe MOUD in an office
setting and have agreed to be publicly identified, but that such
notations are not inclusive of all providers who may do so.
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\15\ https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator.
\16\ https://www.samhsa.gov/medication-assisted-treatment/become-buprenorphine-waivered-practitioner.
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We believe that this new proposed MA provider directory data
element is important and necessary for ensuring access to behavioral
health services for MA enrollees. It supports both national and CMS
efforts related to behavioral health priorities and strategies, as
described in section III.B.1. of this proposed rule. This proposal will
help MA enrollees struggling with OUD find providers who can treat them
by prescribing MOUD, moving them further along the path towards long-
term recovery.
If finalized, CMS intends to monitor organization compliance with
the proposed new requirements described here through periodic online
provider directory reviews, as CMS deems necessary, and other
activities that are consistent with CMS's existing compliance
monitoring regarding provider directory requirements.
These proposals to amend Sec. 422.111(b)(3)(i) both codify as new
requirements certain existing guidance on best practices and introduce
a new provider directory data element. Organizations that do not
currently collect data on their contracted providers' cultural and
linguistic capabilities or their status as a MOUD-waivered provider may
do so by using the same means and methods by which they already collect
other information from contracted providers for inclusion in provider
directories. Also, organizations would use SAMHSA's BPL to identify
approved providers who have allowed their practice location to be
disclosed. We expect this proposed provision to impose an additional
minimal amount of information collection requirements (that is,
reporting, recordkeeping, or third-party disclosure requirements) on
organizations in terms of the updating of their existing processes
related to provider directories, such as a template, related software,
and the added data points for providers. However, we believe this
burden does not need to be submitted to the Office of Management and
Budget (OMB) based on the currently approved control number 0938-0753
(CMS-R-267), which states: ``The additional burden of translating this
network into a directory which is posted on the plan website as well as
the update and maintenance of this directory is part of the usual and
customary normal business activities and as such is exempt from PRA by
5 CFR 1320.3(b)(2).'' Consequently, there is no need for review by OMB
under the authority of the Paperwork Reduction Act (PRA) of 1995 (44
U.S.C. 3501 et seq.). In addition, this provision is not expected to
have any economic impact on the Medicare Trust Fund.
In summary, CMS is proposing to add two new requirements to Sec.
422.111(b)(3)(i) that organizations must include providers' cultural
and linguistic capabilities and identify certain providers waived to
treat patients with MOUD in their provider directories. We solicit
comment on these proposed improvements to the content of MA provider
directories. We also refer readers to section III.B.2. of this proposed
rule for our proposal to add prescribers of MOUD as a new specialty
type to be subject to MA network adequacy evaluation.
4. Digital Health Education for Medicare Advantage (MA) Enrollees Using
Telehealth (Sec. 422.112)
Telehealth has become increasingly popular and essential to
providing access to health care, especially during the COVID-19 Public
Health Emergency (PHE). For the purposes of this section of this
proposed rule, we are using the term ``telehealth benefits'' very
broadly to encompass covered services that are furnished to the
enrollee (that is, the patient) in a different location than where the
provider is located; there are multiple categories of covered benefits
where this circumstance is present, with additional criteria or
requirements applying to different categories of covered benefits when
the enrollee and provider are not in the same place at the time the
service is furnished. Under the MA program, there are various
requirements and options for coverage of telehealth benefits. When
original Medicare covers telehealth benefits, such as services
described in section 1834(m) of the Act and Sec. 411.78, MA
organizations must cover those telehealth benefits as basic benefits,
as defined in Sec. 422.100(c). If an MA organization wishes to offer
telehealth benefits that go beyond the scope of the original Medicare
telehealth benefits
[[Page 79483]]
that must be covered by every MA plan, MA organizations have the option
to offer ``Additional Telehealth Benefits'' (ATBs) and/or supplemental
telehealth benefits. Section 1852(m) of the Act and Sec. 422.135
outline the requirements for ATBs, which are generally services for
which benefits are available under Medicare Part B but which are not
payable under section 1834(m) of the Act, and the services are
furnished when the patient and the physician or practitioner are not in
the same location. If an MA organization wishes to offer telehealth
benefits that are not covered by original Medicare and are not within
the scope of Sec. 422.135, then the MA organization may choose to
offer them as supplemental benefits. The requirements for MA
supplemental benefits are set forth at section 1852(a)(3) of the Act
and Sec. Sec. 422.100(c) and 422.102. An MA organization's bid must
accurately reflect the covered telehealth service, whether it is
covered as an ATB or a supplemental benefit. In addition, during the
COVID-19 PHE, MA organizations have been required to take into account
the various waivers, amendments to regulations, and other guidance
published by CMS, with regard to telehealth benefits. In using the term
``telehealth benefits'' here, we mean to include all of these various
categories of covered benefits. In the regulation text we are proposing
here, we use the phrase ``covered benefits that are furnished when the
enrollee and the provider are not in the same location using electronic
exchange, as defined in Sec. 422.135'' as a means to encompass all of
the potential covered benefits included in our broad use of the term
``telehealth benefits.'' As defined in Sec. 422.135, electronic
exchange means electronic information and telecommunications
technology, which we believe is broad enough to include
telecommunications and technologies permitted for covered Part B
services under section 1834(m) of the Act and implementing regulations
as well as MA ATBs and other supplemental benefits.
In recent years, CMS has seen a significant boost in the offering
of telehealth benefits in the MA program. Almost 99 percent of MA plans
offered some form of telehealth benefits in contract year 2022, either
in the form of ATBs or supplemental telehealth benefits. This is a 16
percent increase since contract year 2018 and a 9 percent increase
since contract year 2020, which was the first year MA organizations
were permitted to offer ATBs. ATB offerings alone have increased by
approximately 39 percent since their inception 2 years ago. The total
number of MA enrollees who have access to MA telehealth benefits of any
kind has risen from approximately 89 percent in contract year 2018 to
nearly 100 percent in contract year 2022.
While the supply and demand of telehealth has clearly grown in
recent years, there is evidence that barriers to accessing telehealth
leave room to improve health equity in telehealth. The regulatory
change we are proposing here is an attempt to improve health equity in
telehealth and is consistent with both E.O. 13985 and CMS's first
strategic pillar ``Advance Equity'' under the 2022 CMS Strategic
Plan.17 18 For purposes of this provision, we are using
CMS's definition of health equity, which is included in section
III.A.1. of this proposed rule.\19\ In developing this proposal, we are
also guided by HHS's definition of ``health equity in telehealth'' as
meaning the ``opportunity for everyone to receive the health care they
need and deserve, regardless of social or economic status. Providing
health equity in telehealth means making changes in digital literacy,
technology, and analytics, which will help telehealth providers reach
the underserved communities that need it the most.'' \20\
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\17\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
\18\ https://www.cms.gov/cms-strategic-plan.
\19\ https://www.cms.gov/pillar/health-equity.
\20\ https://telehealth.hhs.gov/providers/health-equity-in-telehealth/.
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Health equity in telehealth is difficult to attain due to barriers
to telehealth access, which may include: lack of video sharing
technology (for example, a smartphone, tablet, or computer), spotty or
no internet access, lack of housing or private space to participate in
virtual visits, few local providers who offer telehealth practices,
language barriers (including oral, written, and signed language), the
inability to incorporate third party auxiliary aids and services such
as live captioners, telehealth software, apps, and websites that are
accessible and usable by people with disabilities, and lack of adaptive
equipment for people with disabilities along with incompatibility with
external assistive technologies used by people with disabilities.\21\
These barriers are especially burdensome on populations that may
already experience health disparities, such as those who are adversely
affected by persistent poverty and inequality, those who live in rural
areas, people from some racial and ethnic groups, immigrants, people
who identify as LGBTQI+, people with disabilities, older people,
limited English proficient individuals, people with limited digital
literacy, and people who are underinsured or uninsured. Such
underserved communities often lack equitable access to health care,
leading to consequences such as: higher mortality and disease rates,
more severe disease and illness, higher medical costs, lack of access
to treatment, and lack of access to health insurance.\22\
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\21\ Valdez R.S., Rogers C.C., Claypool H., Trieshmann L., Frye
O., Wellbeloved-Stone C., Kushalnagar P. Ensuring full participation
of people with disabilities in an era of telehealth. J Am Med Inform
Assoc. 2021 Feb 15;28(2):389-392. doi: 10.1093/jamia/ocaa297. PMID:
33325524; PMCID: PMC7717308.
Annaswamy TM, Verduzco-Gutierrez M, Frieden L. Telemedicine
barriers and challenges for persons with disabilities: COVID-19 and
beyond. Disabil Health J. 2020;13(4):100973. doi:10.1016/
j.dhjo.2020.100973.
\22\ https://telehealth.hhs.gov/providers/health-equity-in-telehealth/.
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The existence of communities with low digital health literacy who
in turn cannot access telehealth represents a significant obstacle in
achieving health equity in telehealth. The World Health Organization
defines digital health literacy as ``the ability to seek, find,
understand, and appraise health information from electronic sources and
apply the knowledge gained to addressing or solving a health problem.
Examples of digital health literacy include accessing your electronic
health record, communicating electronically with your health care team,
ability to discern reliable online health information, and using health
and wellness apps.'' \23\ Low digital health literacy can impact an
individual's access to or quality of telehealth visits.\24\ Evidence
shows that those with low digital health literacy tend to be older,
lower income, less educated, and Black or Hispanic.\25\
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\23\ https://nnlm.gov/guides/intro-health-literacy.
\24\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8464820/.
\25\ https://nces.ed.gov/pubs2018/2018161.pdf.
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Many older adults with low digital health literacy experience gaps
in access to the health care they need, and this is concerning for the
MA program, whose enrollee population includes individuals age 65 and
older (as well as individuals under age 65 with disabilities). For
example, the American Association of Retired Persons (AARP) annual
technology survey found that more than half of older adults (age 50 and
older) in 2021 indicated they need more digital education, while more
than one in three said they lacked confidence when using
technology.\26\ Of the 32
[[Page 79484]]
million Americans who cannot use a computer, approximately one-third
are seniors.\27\ Further, less than one-third of Medicare beneficiaries
over 65 have at-home digital access, and those over age 75 and with
less than high school-level education are less likely to use
telehealth.\28\ For people with disabilities, 15 percent reported not
using the internet as opposed to 5 percent in the general population in
a Pew Foundation Survey, while 62 percent of people with disabilities
as opposed to 81 percent of the general population own their own
desktop or laptop computer.\29\ Other studies have confirmed a
significant gap in digital literacy among people with disabilities.\30\
Another survey found that Black, Latino, and Filipino seniors and those
75 years and older are significantly less likely to own devices like
computers and smartphones compared to non-Hispanic whites, Chinese, and
younger seniors (ages 65-69); this was also true in terms of these
groups' respective use of the internet and email, as well as their
ability and willingness to use technology for telehealth purposes.\31\
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\26\ Kakulla, Brittne. 2021 Tech Trends and the 50-Plus: Top 10
Biggest Trends. Washington, DC: AARP Research, April 2021. https://doi.org/10.26419/res.00420.001.
\27\ https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html.
\28\ Shah M.K., Gibbs A.C., Ali M.K., Narayan K.M.V., Islam N.
Overcoming the Digital Divide in the Post-COVID-19 ``Reset'':
Enhancing Group Virtual Visits with Community Health Workers J Med
internet Res 2021;23(7):e27682 doi: 10.2196/27682.
\29\ Andrew Perrin and Sara Atske, Americans with disabilities
less likely than those without to own some digital devices, Pew
Research, September 10, 2021, online at https://www.pewresearch.org/fact-tank/2021/09/10/americans-with-disabilities-less-likely-than-those-without-to-own-some-digital-devices/.
\30\ Eun Ji Kim, MS, MD, Yiyang Yuan, MS, MPH, Jane Liebschutz,
MPH, MD, Howard Cabral, MPH, Ph.D.,\4\ and Lewis Kazis, ScD,
Understanding the Digital Gap Among US Adults With Disability:
Cross-Sectional Analysis of the Health Information National Trends
Survey 2013, JMIR Rehabil Assist Technol. 2018 Jan-Jun; 5(1): e3.
Online at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/.
\31\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/.
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As outlined here, research indicates that older adults, people with
disabilities, people from some racial and ethnic groups, rural
communities, underserved populations, and those adversely affected by
persistent poverty and inequality are all disadvantaged by limited
access to modern information and communications technology (sometimes
referred to as a digital divide).\32\ Individuals with a higher degree
of digital health literacy receive more healthcare information, are
better equipped to evaluate the quality of information regarding their
healthcare, and report higher telehealth usage.\33\ Further,
individuals with chronic diseases also benefit from digital health
literacy; when such individuals possess digital health literacy, they
tend to monitor and manage their diseases more competently, are more
satisfied with the telemedicine services, and respond faster to changes
that might adversely affect their situation, thereby improving their
overall health.\34\ This is significant because individuals with two or
more chronic diseases are more likely to be individuals 65 and
over.\35\
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\32\ https://academic.oup.com/jamia/article/27/12/1949/5899728.
\33\ https://jamanetwork.com/journals/jama/article-abstract/2426088.
\34\ https://www.sciencedirect.com/science/article/pii/S0738399114001876.
\35\ https://www.cdc.gov/pcd/issues/2020/20_0130.htm.
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CMS does not currently have requirements for MA organizations in
the area of digital health literacy. Given the need to increase digital
health literacy in many communities with MA enrollees and the goal to
achieve health equity in telehealth, we believe it is necessary to
implement regulations addressing digital health literacy in the MA
program. CMS expects that these digital health literacy proposals, if
finalized, would help underserved communities in need of assistance to
improve their digital health literacy and help advance the goal of
achieving health equity in telehealth.\36\
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\36\ https://telehealth.hhs.gov/providers/health-equity-in-telehealth/.
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We propose to add requirements for MA organizations to develop and
maintain procedures to identify and offer digital health education to
enrollees with low digital health literacy to assist them with
accessing any medically necessary covered telehealth benefits.
Specifically, we propose to amend current continuity of care
requirements for MA organizations offering coordinated care plans to
``ensure continuity of care and integration of services through
arrangements with contracted providers'' at Sec. 422.112(b), by adding
a new paragraph (9). The new proposed paragraph would require MA
organizations to develop and maintain procedures to identify and offer
digital health education to enrollees with low digital health literacy
to assist with accessing any medically necessary covered benefits that
are furnished when the enrollee and the provider are not in the same
location using electronic exchange; we use the term ``electronic
exchange'' as it is broadly defined in Sec. 422.135. This proposed new
continuity of care requirement would apply to all MA organizations
offering coordinated care plans (that is, HMOs, PPOs, HMO-POSs, and
SNPs) and would be relevant for all types of covered telehealth
benefits, including basic telehealth benefits, ATBs, and supplemental
telehealth benefits offered by MA coordinated care plans. We solicit
comment on whether to amend Sec. 422.100 instead of Sec. 422.112(b)
in order to apply this new requirement to all MA plans and not just
coordinated care plans. This proposed additional standard is intended
to ensure that MA enrollees are able to access covered benefits and
that MA organizations meet their obligations under section 1852(d) of
the Act to make covered benefits available and accessible to enrollees
in the plan. Section 1856(b) of the Act authorizes the adoption of
standards that are consistent with and to carry out the Part C statute.
As telehealth benefits become more prevalent in the MA program, taking
steps to provide enrollees with digital health education will ensure
that these telehealth benefits are truly accessible and available to
enrollees.
This proposal would be a first step for MA organizations to assess
the landscape of health equity in telehealth in their plans and help
enrollees navigate telehealth. Under this proposal, CMS would provide a
degree of discretion for MA organizations in the procedures developed
and used to identify enrollees with low digital health literacy and the
digital health education services the MA organization provides for
those enrollees. In order to comply with the proposed new regulation,
MA organizations would necessarily have to introduce a digital health
literacy screening program or other similar procedure to identify
current enrollees with low digital health literacy, however, MA
organizations would have flexibility to design their own screening
program or procedure. Some experts recommend such an assessment should
examine patient-level barriers such as telehealth readiness, broadband
access, and inaccessible or unusable information and communication
technologies by individuals with disabilities that limit patient use of
telehealth.\37\ Others recommend considering certain digital foundation
skills based on a specific framework.\38\ CMS encourages MA
organizations to research current trends and successes in the field
when developing their own methods to identify enrollees with low
digital
[[Page 79485]]
health literacy. CMS anticipates that some MA organizations could ask
enrollees, for example, if they have internet access and reliable
connectivity, if they have a device that meets appropriate telehealth
system requirements, if they use email, if they can download a mobile
app, or if they can change applicable settings on a device (for
example, browser or camera settings), as a means to identify which
enrollees have low digital heath literacy.\39\
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\37\ https://link.springer.com/content/pdf/10.1007/s00520-021-06629-4.pdf.
\38\ https://www.digitalinclusion.org/definitions/.
\39\ https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html.
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Once the MA organization determines which enrollees experience low
digital health literacy, the MA organization would then have to
implement a digital health education program to offer to these
enrollees. CMS is not proposing to identify explicit parameters for
this digital health education requirement, rather, we have chosen to
keep it flexible and allow for innovation in this area by MA
organizations. Depending on the specific enrollment in an MA plan, the
procedures to identify enrollees and the mechanisms and content of the
digital health education could vary. However, some examples of digital
health education designs include: distributing educational materials
about how to access certain telehealth technologies in multiple
languages, including sign language, and in alternative formats; holding
digital health literacy workshops; integrating digital health coaching;
offering enrollees in-person digital health navigators; and partnering
with local libraries and/or community centers that offer digital health
education services and supports.
As a best practice, CMS encourages MA organizations to ensure that
there are no system requirements (for example, online portal
enrollment) that could act as barriers to accessing covered telehealth
benefits, or the proposed digital health education for enrollees with
low digital health literacy, so as to promote ease of access in the
simplest way possible. In addition, if an MA organization offers
enrollees assistance with any necessary telehealth technology--for
instance, if they provide limited use smartphones/tablets or cellular
data plans as supplemental benefits in order to aid in the use of
telehealth services--then the MA organization must comply with
applicable laws about those benefits and make enrollees aware of these
available benefits per section 1852(c)(1)(F) of the Act and Sec.
422.111(b)(6). This disclosure is especially important for enrollees
identified as having low digital health literacy. Smartphones and
tablets (or other similar equipment) must only be used for primarily
health related purposes (and cellular data plans can only be provided
if use of these plans is locked and limited to health-related
activities), such as when the device is locked except for remote
monitoring or to enable engagement with health care providers, in order
for these items and services to be permissible supplemental benefits
under Sec. 422.100(c)(2)(ii). However, furnishing or covering a
cellular data plan without limitations might be permissible (under
section 1852(a)(3)(D) of the Act and Sec. 422.102(f)) as a non-
primarily health related special supplemental benefit for the
chronically ill (SSBCI) when the benefit is limited to a chronically
ill enrollee and has a reasonable expectation of improving or
maintaining the health or overall function of the chronically ill
enrollee. For more information on SSBCI, please see the June 2020 final
rule and the Medicare and Medicaid Programs; Contract Year 2022 Policy
and Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly final rule
which appeared in the Federal Register on January 19, 2021 (86 FR 5864)
(hereinafter referred to as the January 2021 final rule). CMS
encourages MA organizations whose plans have a high number of enrollees
with low digital health literacy to consider offering the
aforementioned supplemental benefits and pairing an appropriate digital
health education program with the provision of such devices to
enrollees, where permitted by applicable law.
To further emphasize the importance of health equity and health
equity in telehealth specifically, CMS reminds MA organizations that
Sec. 422.112(a)(8) as it currently reads requires MA organizations
offering coordinated care plans to ensure that services are provided in
a culturally competent manner to all enrollees, including limited
English proficient individuals or those with limited reading skills,
and those with diverse cultural and ethnic backgrounds. CMS is
proposing, in section III.A.2. of this proposed rule, to amend Sec.
422.112(a)(8) to better reflect the broad scope of potentially
underserved populations and to emphasize how MA plans must ensure
equitable access to services. As adopted and with our proposed
revisions, Sec. 422.112(a)(8) requires MA organizations to ensure that
services are provided in an equitable manner to all enrollees. MA
organizations must take into account these additional obligations, as
applicable, when developing and maintaining the digital health
education programs they would be required to implement under this
proposal. Furthermore, the HHS Office for Civil Rights and the U.S.
Department of Justice (DOJ) Civil Rights Division recently published
new guidance providing clarity on how Federal nondiscrimination laws
require accessibility for people with disabilities and limited English
proficient individuals in health care provided via telehealth.\40\
These Federal civil rights laws--including the Americans with
Disabilities Act of 1990, section 504 of the Rehabilitation Act of
1973, title VI of the Civil Rights Act of 1964, and section 1557 of the
PPACA--require that telehealth be accessible to people with
disabilities and limited English proficient individuals. CMS strongly
encourages MA organizations and their contracted providers to review
this new guidance issued by HHS and DOJ to ensure compliance with
Federal civil rights laws pertaining to telehealth.
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\40\ https://www.hhs.gov/sites/default/files/guidance-on-nondiscrimination-in-telehealth.pdf.
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In order to monitor the impact of our new proposed requirement for
digital health literacy screening and digital health education
programs--on MA organizations, providers, enrollees, and the MA program
as a whole--we are also proposing to require MA organizations to make
information about these programs available to CMS upon request, per
proposed Sec. 422.112(b)(9)(i). We propose that this requested
information may include, but is not limited to, statistics on the
number of enrollees identified with low digital health literacy and
receiving digital health education, manner(s) or method of digital
health literacy screening and digital health education, financial
impact of the programs on the MA organization, evaluations of
effectiveness of digital health literacy interventions, and
demonstration of compliance with the requirements of Sec.
422.112(b)(9). The purpose of requiring MA organizations to make such
information available to CMS upon request would be to identify best
practices for improving digital health literacy amongst MA enrollees
and to determine whether CMS should make improvements to the regulation
and/or guidance regarding this requirement. We note that the regulation
text at proposed Sec. 422.112(b)(9)(i) includes the language ``upon
request,'' which we intend here to communicate that CMS
[[Page 79486]]
does not intend to establish uniform data collection from all MA
organizations at this time, but instead reserves the right to ask for
this information from individual MA organizations. However, we note
that our proposed Sec. 422.112(b)(9)(i) would not limit CMS's audit
access when program audits review the performance of MA organizations.
We solicit comment on this aspect of our proposal and whether we should
require regular reporting of data of this type from all MA
organizations alongside other Part C reporting requirements.
This proposal to amend Sec. 422.112(b) would impact MA
organizations in terms of the burden required to both identify
enrollees with low digital health literacy and to develop digital
health education programs for these enrollees. However, our estimated
analysis of these impacts is qualitative in nature as we are proposing
to provide MA organizations flexibility in determining how they wish to
implement these proposed CMS requirements. CMS does not currently
collect data regarding digital health literacy among MA enrollees and
therefore, we have no way of knowing or estimating the extent of low
digital health literacy specifically among MA organizations' enrollees,
how MA organizations would approach digital health literacy screening
and digital health education, how much spending they would engage in
related to these efforts, how much savings they would encounter (due to
improved enrollee health outcomes because of improved digital health
literacy), for example, how much time they would spend on these
efforts, or how the MA program would grow as we see the effects of the
proposed regulation. We estimate the direct qualitative burden consists
of MA organization staff hours spent, resources purchased, and any
digital health education for enrollees performed. MA organizations may
also differ in how their spending for the proposed requirements evolves
over time as they test strategies and redevelop their approaches to
complying with the regulation. Thus, the proposed provision would
impose an unknown amount of information collection requirements (that
is, reporting, recordkeeping, or third-party disclosure requirements)
because burden cannot be quantified. We solicit comment from MA
organizations on how much burden they expect this proposed provision
might add. Regarding the impact of the proposed requirement for the MA
organization to make information about its digital health literacy
screening and digital health education programs available to CMS upon
request, we do not anticipate requesting this information from more
than nine MA organizations in a given year. However, we believe it is
important to reserve the right to ask for this information if necessary
and have structured the proposed regulation text accordingly. Since we
estimate fewer than ten respondents, the information collection
requirement is exempt (5 CFR 1320.3(c)) from the requirements of the
PRA of 1995 (44 U.S.C. 3501 et seq.). Consequently, there is no need
for review by OMB under the authority of the PRA.
In terms of economic impact on the Medicare Trust Fund, we do
expect that improved digital health literacy would increase telehealth
visits, which in turn would increase prevention of MA enrollee illness,
both of which affect Medicare Trust Fund spending. Yet we have no way
of knowing or estimating how much of an increase in telehealth visits
there would be, for what specific services they would increase, or the
effects of prevented future illnesses among MA enrollees. Thus, this
provision is expected to have an unknown economic impact on the
Medicare Trust Fund.
In summary, CMS is proposing to add a new requirement at Sec.
422.112(b)(9) that MA organizations must have procedures to identify
enrollees with low digital health literacy and offer them digital
health education to assist with accessing any medically necessary
covered benefits that are furnished when the enrollee and the provider
are not in the same location using electronic exchange, as defined in
Sec. 422.135. In addition, the proposal includes a requirement that MA
organizations make information about these programs available to CMS
upon request. We solicit comment on this proposal.
5. Quality Improvement Program (Sec. 422.152)
In accordance with section 1852(e) of the Act, all MA organizations
must have an ongoing Quality Improvement (QI) Program for the purpose
of improving the quality of care provided to enrollees. Per Sec.
422.152(a), MA organizations must develop a QI plan that sufficiently
outlines the QI program elements; have a chronic care improvement
program (CCIP) that meets the requirements at Sec. 422.152(c) and
addresses populations identified by CMS based on a review of current
quality performance; and, encourage its providers to participate in CMS
and HHS quality improvement initiatives.
Section 422.152(c) provides that CCIPs must include methods for
identifying MA enrollees with multiple or sufficiently severe chronic
conditions that would benefit from participating in a CCIP; mechanisms
for monitoring MA enrollees that are participating in the CCIP and
evaluating participant outcomes, such as changes in health status;
performance assessments that use quality indicators that are objective,
clearly and unambiguously defined, and based on current clinical
knowledge or research, and systematic and ongoing follow-up on the
effect of the CCIP. Organizations must report the status and results of
each program to CMS as requested. The intent of the CCIPs is to promote
effective chronic disease management and improve care and health
outcomes for enrollees with chronic conditions. Furthermore, CCIPs
should support the CMS Quality Strategy; include interventions that
surpass MA organizations' inherent care coordination role and overall
management of enrollees; engage enrollees as partners in their care;
promote utilization of preventive services; facilitate development of
targeted goals, specific interventions, and quantifiable, measurable
outcomes; guard against potential health disparities; and produce best
practices.\41\
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\41\ https://www.cms.gov/Medicare/Health-Plans/Medicare-Advantage-Quality-Improvement-Program/5CCIP.
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In accordance with 1852(e) of the Act, MA organizations are
required to report quality performance data to CMS. MA organizations
generally report such data through the Healthcare Effectiveness Data
and Information Set (HEDIS), Health Outcomes Survey (HOS), Consumer
Assessment of Healthcare Providers and Systems (CAHPS), and other
related data collection tools. As codified at Sec. 422.152(b)(3) and
(5), MA coordinated care plans are required to report on quality
performance data which CMS can use to help beneficiaries compare plans;
MA local and regional PPO plans must similarly report under Sec.
422.152(e)(2)(i). The areas of measurement include outcomes, patient
experience, access, and process measures. In addition, CMS uses this
information to develop and publicly post a 5-star rating system for MA
plans based on its authority to disseminate comparative information,
including about quality, to beneficiaries under sections 1851(d) and
1860D-1(c) of the Act.
Lastly, to meet the needs of their enrolled special needs
populations, MA special needs plans (SNPs) have
[[Page 79487]]
additional QI program requirements, including the implementation of an
approved model of care (MOC), which serves as the framework for meeting
the individual needs of SNP enrollees, and the infrastructure to
promote care management and care coordination (see Sec. 422.152(g)).
As part of the initial MA SNP application and renewal requirements and
through MOC submissions, SNPs provide to CMS a detailed profile of the
medical, social, cognitive, and environmental aspects, the living
conditions, and the co-morbidities associated with the SNP population,
including information about health conditions impacting SNP enrollees
along with other characteristics that affect health, such as population
demographics (for example, average age, sex, gender, ethnicity), and
potential health disparities associated with specific groups (for
example, language barriers, deficits in health literacy, poor
socioeconomic status, cultural beliefs/barriers, caregiver
considerations, or other). SNPs must also capture limitations and
barriers that pose potential challenges for accessing care and/or
maintaining and improving SNP enrollee health status.
Additionally, through health risk assessments (HRAs), SNPs identify
the medical, functional, cognitive, psychosocial, and mental health
needs of their enrollees, who are all special needs individuals, and
address those needs in an individualized care plan for each enrollee.
In the final rule titled ``Medicare Program; Contract Year 2023 Policy
and Technical Changes to the Medicare Advantage and Medicare
Prescription Drug Benefit Programs; Policy and Regulatory Revisions in
Response to the COVID-19 Public Health Emergency; Additional Policy and
Regulatory Revisions in Response to the COVID-19 Public Health
Emergency'' which appeared in the Federal Register May 9, 2022 (87 FR
27704), CMS finalized a new requirement for SNPs at Sec.
422.101(f)(1)(i), requiring the HRA tool to include one or more
questions from a list of screening instruments specified by CMS in sub-
regulatory guidance on the domains of housing stability, food security,
and access to transportation beginning in 2024. We expect that this
data collection would also provide information to MA organizations
about potential health disparities among their enrollees.
Persistent inequities in health care outcomes exist in the United
States, including among populations enrolled in MA organizations.\42\
Belonging to a racial or ethnic minority group, living with a
disability, being a member of the LGBTQI+ community, having limited
English proficiency, living in a rural area, or being near or below the
poverty level, is often associated with worse health
outcomes.43 44 45 46 47 48 49 Such disparities in health
outcomes are the result of a number of factors and exist regardless of
health insurance coverage type. Although not the sole determinant, poor
health care access and provision of lower quality health care
contribute to health disparities. Research has shown that the expansion
of health insurance coverage, for example through Medicaid expansion
under the ACA, and the resulting increased access to health care, is
linked to reductions in disparities in health insurance coverage as
well as reductions in disparities in health outcomes.\50\
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\42\ Disparities in Health Care in Medicare Advantage by Race,
Ethnicity and Sex, April 2022.
\43\ Lindenauer, P.K., Lagu, T., Rothberg, M.B., Avrunin, J.,
Pekow, P.S., Wang, Y., Krumholz, H., & Hines, H. (2013). Income
Inequality and 30-Day Outcomes After Acute Myocardial Infarction,
Heart Failure, and Pneumonia: Retrospective Cohort Study. British
Medical Journal.
\44\ Trivedi, A.N., Nsa, W., Hausmann, L.R.M., Lee, J., Ma, A.,
Bratzler, D., Mor, M., Baus, K., Larbi, F., & Fine, M. (2014).
Quality and Equity of Care in U.S. Hospitals. New England Journal of
Medicine. 371(24):2298-2308.
\45\ Polyakova, M., Udalova, V., Kocks, G., Genadek, K., Finlay,
K., & Finkelstein, A.N. (2021). Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied
Substantially Across States. Health affairs (Project Hope), 40 (2),
307-316. https://doi.org/10.1377/hlthaff.2020.02142.
\46\ Rural Communities: Age, Income, and Health Status. Rural
Health Research Recap. (2018). Rural Health Research Gateway.
https://www.ruralhealthresearch.org/recaps/5.
\47\ 2020 Update on the Action Plan to Reduce Racial and Ethnic
Health Disparities. (2020). HHS Office of Minority Health. https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
\48\ Sexual Orientation Disparities in Risk Factors for Adverse
COVID-19-Related Outcomes, by Race/Ethnicity. (2021, February 5).
CDC. www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
\49\ Poteat, T.C., Reisner, S.L., Miller, M., & Wirtz, A.L.
(2020). COVID-19 Vulnerability of Transgender Women With and Without
HIV Infection in the Eastern and Southern U.S. medRxiv: The preprint
server for health sciences, 2020.07.21.20159327. https://doi.org/10.1101/2020.07.21.20159327.
\50\ Guth, M., Garfield, R., & Rudowitz, R. (2020). The Effects
of Medicaid Expansion Under the ACA: Studies from January 2014 to
January 2020. Kaiser Family Foundation. https://www.kff.org/medicaid/report/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review/.
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In the final rule titled ``Patient Protection and Affordable Care
Act; HHS Notice of Benefit and Payment Parameters for 2023'', which
appeared in the Federal Register May 6, 2022 (87 FR 27208), CMS
finalized a proposal to update the quality improvement strategy (QIS)
standards for qualified health plan (QHP) issuers, requiring them to
address health and health care disparities as a specific topic area
within their QIS beginning in 2023. Examples of QIS activities that
fall under the health and health care disparities topic area for QHPs
can include language services, community outreach, cultural competency
trainings, social needs-sensitive self-management recommendations, and
increased demographic and disparities-related data collection; see the
QIS Technical Guidance and User Guide for the 2023 Plan Year for more
information. CMS is committed to advancing health equity for MA
enrollees. Based on CMS' definition of health equity and in alignment
with similar CMS programs, we believe that MA organizations' QI
programs are an optimal vehicle to develop and implement strategies and
policies designed to reduce disparities in health and health care, and
advance equity in the health and health care of MA enrollee
populations, especially those that are underserved.
MA organizations have long focused on addressing health disparities
through QI program requirements. By assessing cultural, language,
health literacy, financial, psychosocial & family support, community
networks, and transportation needs, etc., and addressing those needs
through a variety of QI program activities across their enrollee
populations, MA organizations gain insight into their enrollee
populations. Some of the specific QI activities include addressing
barriers to health care, for example assisting enrollees with
transportation to follow-up primary care visits post-hospitalization,
linking enrollees to community resources, and improving care
coordination and case management, especially for vulnerable and/or
underserved enrollees. In addition to implementing QI activities for
the broader enrollee populations, we are aware that some MA
organizations have focused their QI activities on underserved groups.
For example, to better serve these groups, several MA organizations
have made efforts to improve their communication by providing cultural
trainings for their staff, tailoring enrollee materials to ensure they
are linguistically and culturally appropriate, and hiring plan staff
and establishing contracts with providers who are bilingual. Some MA
organizations have implemented specific interventions that target blood
pressure control, or improved rates for various cancer screenings in
targeted groups. These types of activities can
[[Page 79488]]
improve the health of and healthcare for MA enrollees.
To improve the quality of care and health outcomes for MA enrollees
and support the first pillar in the 2022 CMS strategic plan for
advancing health equity, CMS proposes to amend the MA QI program
regulations at Sec. 422.152(a). Specifically, we propose to amend
Sec. 422.152 by adding a new paragraph (a)(5), to require MA
organizations to incorporate one or more activities into their overall
QI program that reduce disparities in health and health care among
their enrollees. As previously described, we believe that many MA
organizations are already addressing disparities and gaps in care for
underserved populations through a variety of quality initiatives.
Rather than limit these activities to specific QI program requirements
such as the CCIPs, we are proposing that MA organizations would be
required to incorporate one or more activities that reduce disparities
in health and health care across the broad spectrum of QI program
requirements. CMS expects that MA organizations may implement
activities such as improving communication, developing and using
linguistically and culturally appropriate materials (to distribute to
enrollees or use in communicating with enrollees), hiring bilingual
staff, community outreach, or similar activities. MA organizations
should tailor these activities to meet the needs of their enrollees,
and therefore CMS is generally not proposing to be prescriptive in the
types of activities MA organizations must implement to meet this
proposed new requirement. However, MA organizations must ensure that
these activities are broadly accessible irrespective of race,
ethnicity, national origin, religion, sex, or gender. These activities
may be based upon health status and health needs, geography, or factors
not listed in the previous sentence only as appropriate to address the
relevant disparity in health or health care. Furthermore, we believe
adopting this proposed requirement for MA organizations as part of
their required QI programs will align with health equity efforts across
CMS policies and programs. CMS believes that several organizations have
already incorporated these activities into their QI programs, thereby
meeting the proposed requirement.
B. Behavioral Health in Medicare Advantage (MA) (Sec. Sec. 422.112,
422.113, and 422.116)
1. Introduction
On March 1, 2022, President Biden announced a national strategy
regarding behavioral health to strengthen system capacity and connect
more individuals to care by ensuring that the nation's health and
social services infrastructure addresses mental health holistically and
equitably.\51\ Further, the 2022 CMS Strategic Framework describes CMS'
broad goals to expand coverage and enhance access to equitable health
care services for those covered under CMS programs.\52\ CMS is also
prioritizing, as part of the agency's many cross-cutting initiatives,
to improve access to behavioral health services and outcomes for people
with behavioral health care needs.
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\51\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/31/fact-sheet-biden-harris-administration-highlights-strategy-to-address-the-national-mental-health-crisis/.
\52\ https://www.cms.gov/files/document/2022-cms-strategic-framework.pdf.
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According to the Health Resources and Services Administration
(HRSA), more than one-third of Americans live in designated Mental
Health Professional Shortage Areas,\53\ meaning these communities do
not have enough providers to meet the needs of their population.
Furthermore, according to the results from the 2020 National Survey on
Drug Use and Health, published by SAMHSA, while overall 65 percent of
people with serious mental illnesses (SMI) receive treatment,\54\
people of color with SMI receive care at significantly lower rates.
More specifically, while approximately 69 percent of white people with
SMI received mental health care, for Black, Hispanic, and Asian people
with SMI the rates were 55 percent, 56 percent, and 44 percent
respectively.\55\ The 2020 National Survey results also indicate that
common reasons for not receiving treatment for SMI include: inability
to afford the cost of treatment, not knowing where to go to receive
services, and health insurance not covering services.\56\ CMS recently
included a request for information (RFI) in the proposed rule titled
``Medicare Program; Contract Year 2023 Policy and Technical Changes to
the Medicare Advantage and Medicare Prescription Drug Benefit
Programs'' published in the Federal Register January 12, 2022 (87 FR
1842) (hereinafter referred to as the January 2022 proposed rule), to
solicit public comment regarding the challenges that exist with
accessing behavioral health providers within MA plans. We sought
stakeholders' input concerning a range of topics, including the
challenges related to building behavioral health networks for MA plans,
accessing behavioral health providers for MA enrollees, and requesting
suggestions on how to address issues with building adequate behavioral
health networks within MA plans. We received a number of comments from
stakeholders, some of which are discussed later in this preamble in
connection with specific proposals.
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\53\ https://data.hrsa.gov/topics/health-workforce/shortage-areas.
\54\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35325/NSDUHFFRPDFWHTMLFiles2020/2020NSDUHFFR1PDFW102121.pdf.
\55\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35324/2021NSDUHMHChartbook102221B.pdf.
\56\ https://www.apa.org/monitor/2020/07/datapoint-care.
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CMS continues to evaluate and seek ways to enhance our behavioral
health policies to address the healthcare needs of those we serve. In
order to support these goals, we are proposing regulatory changes that
focus on ensuring access to behavioral health services for MA
enrollees.
We welcome comment on our proposals.
2. Behavioral Health Specialties in Medicare Advantage (MA) Networks
(Sec. Sec. 422.112 and 422.116)
Section 1852(d)(1) of the Act permits an MA organization to select
the providers from which an enrollee may receive covered benefits,
provided that the MA organization, in addition to meeting other
requirements, makes such benefits available and accessible in the
service area with promptness and in a manner which assures continuity
in the provision of benefits. To implement and adopt related standards
for this, CMS codified, with some modifications, network adequacy
criteria and access standards that were previously outlined in sub-
regulatory guidance in the ``Medicare Program; Contract Year 2021
Policy and Technical Changes to the Medicare Advantage Program,
Medicare Prescription Drug Benefit Program, and Medicare Cost Plan
Program'' final rule, which appeared in the Federal Register on June 2,
2020 (85 FR 33796), hereinafter referred to as the June 2020 final
rule. In that final rule, we codified, at Sec. 422.116(b), the list of
27 provider specialty types and 13 facility specialty types subject to
CMS network adequacy standards. Although Sec. 422.116(b)(3) authorizes
removal of a specialty or facility type from the network evaluation
criteria for a specific year without rulemaking, CMS did not adopt
[[Page 79489]]
in Sec. 422.116 a mechanism to add new provider types without
rulemaking. We are proposing to add to the list of provider specialties
here to address access to behavioral health services more broadly than
the current regulation.
Currently, MA organizations are required to demonstrate that they
meet network adequacy for two behavioral health specialty types,
psychiatry and inpatient psychiatric facility services, under Sec.
422.116(b). Further, the regulation at Sec. 422.112 includes a number
of requirements to ensure that MA enrollees have adequate access to
covered services. Of note, Sec. 422.112(a)(1) requires MA
organizations to maintain and monitor a network of appropriate
providers that provides access to typically used services including,
primary care providers, specialists, hospitals, skilled nursing
facilities, home health agencies, ambulatory clinics and other
providers.
In response to the RFI in the January 2022 proposed rule, we
received comments emphasizing the importance of network adequacy and
ensuring adequate access to behavioral health providers in MA plans.
Stakeholders suggested that CMS expand the network adequacy time and
distance standards for MA plans beyond those that we currently review
through our network adequacy evaluations. Commenters suggested that we
expand the standards to add other outpatient behavioral health
physicians and health professionals, including those that treat
substance use disorders (SUDs), that can meet MA enrollees needs in
accessing behavioral healthcare.
Even though over one million Medicare beneficiaries had a diagnosis
of Opioid Use Disorder (OUD) and more than fifty thousand experienced
an overdose in 2021, fewer than 1 in 5 of these Medicare beneficiaries
with a diagnosis of OUD receive treatment for their OUD.\57\ Current
standards of care for OUD include treatment through three Food and Drug
Administration (FDA) approved medications (buprenorphine, naltrexone
and methadone), along with other services to provide the best approach
to treating SUD. Enrollees can access Medications for Opioid Use
Disorder (MOUD) in various settings including in Opioid Treatment
Programs (OTPs) and through qualified practitioners (physicians, nurse
practitioners, physician assistants, etc.) who have obtained a waiver
through SAMHSA to dispense these medications in office settings.
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\57\ https://oig.hhs.gov/oei/reports/OEI-02-22-00390.pdf.
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CMS is committed to ensuring that MA enrollees have access to
provider networks sufficient to provide covered services, including
access to behavioral health service providers. Medicare fee-for-service
claims data for 2020 shows that for certain outpatient behavioral
health services, the top provider specialty types to provide services
to beneficiaries included psychiatrists, clinical social workers, nurse
practitioners, and clinical psychologists. OTPs had the largest number
of claims for SUD in this same time period. Therefore, we propose to
strengthen our network adequacy requirements for MA plans as it relates
to behavioral health in three ways.
First, we propose to add three new provider specialty types to the
list at Sec. 422.116(b)(1), requiring these new specialty types to be
subject to network adequacy evaluation. The three new specialty types
we propose to add are: (1) clinical psychology, (2) clinical social
work, and (3) one category called Prescribers of Medication for Opioid
Use Disorder that includes two specialty types: providers with a waiver
under section 303(g)(2) of the Controlled Substances Act (CSA) and
OTPs. Most of these new specialty types are defined the same way as
they are used for the original Medicare program in section 1861(hh) of
the Act (defining ``clinical social worker''), Sec. 410.71(d)
(defining ``clinical psychologist''), and section 1861(jjj)(2) of the
Act (defining ``Opioid Treatment Program''). Section 303(g)(2)of the
CSA (21 U.S.C. 823(g)(2)(G)(ii)) establishes which providers have a
waiver and we do not believe a definition in the MA regulations at 42
CFR part 422 is necessary.
Our current regulations, at Sec. 422.116(a)(2) specify that an MA
plan must meet maximum time and distance standards and contract with a
specified minimum number of each provider and facility-specialty type.
Therefore, as part of the proposed changes to our list of provider
specialty types under Sec. 422.116(b)(1), we are proposing base time
and distance standards and minimum number of in-person providers in
each county type for each new specialty type as follows:
Maximum Time and Distance Standards:
[GRAPHIC] [TIFF OMITTED] TP27DE22.008
Minimum Ratios:
[[Page 79490]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.009
In the proposed rule titled ``Medicare and Medicaid Programs;
Contract Year 2021 and 2022 Policy and Technical Changes to the
Medicare Advantage Program, Medicare Prescription Drug Benefit Program,
Medicaid Program, Medicare Cost Plan Program, and Programs of All-
Inclusive Care for the Elderly'' proposed rule which appeared in the
Federal Register on February 18, 2020 (85 FR 9002) (hereinafter
referred to as the February 2020 proposed rule), we explained how CMS
developed the base time and distance standards and the minimum provider
requirements used in Sec. 422.116 (85 FR 9094 through 9103). CMS
established the current base time and distance standards for the
provider and facility types listed in Sec. 422.116 by mapping the
various specialty types' practice locations from the National Provider
and Plan Enumeration System (NPPES) National Provider Identifier (NPI)
file compared with Medicare beneficiary locations from CMS enrollment
data. We further explained that we then tested different options for
combinations of beneficiary coverage percentages and maximum travel
distances to determine what was feasible and practical for the majority
of counties given the trade-off between beneficiary coverage and travel
distance. The travel time standards were calculated according to the
average driving speeds in each of the ZIP code types (urban, suburban,
rural) that beneficiaries would traverse between their homes and the
provider locations (85 FR 9097). Other than the use of the different
and more recent data sources that are identified in this preamble, we
followed the same analysis and steps to develop the time and distance
standards that we propose to apply to the new behavioral health
specialty types.
Further, we explained in the February 2020 proposed rule that CMS
determines the minimum number requirement for all provider specialty
types by multiplying the ``minimum ratio'' by the ``number of
beneficiaries required to cover,'' dividing the resulting product by
1,000, and rounding up to the next whole number. This is reflected in
Sec. 422.116(e)(2)(i) and (e)(3); the current regulation text
addresses how the number of beneficiaries required to cover is
calculated and will apply to the proposed new provider specialty types.
The minimum ratio is the number of providers required per 1,000
beneficiaries. We developed the minimum ratios that currently appear in
Sec. 422.116 using various data sources, including, Medicare fee for-
service claims data, American Medical Association (AMA) and American
Osteopathic Association (AOA) physician workforce data, US Census
population data, National Ambulatory Medical Care Survey data, and AMA
data on physician productivity. In developing the proposal here to add
new specialty types subject to network adequacy evaluation, we
conducted additional research to inform appropriate minimum ratio
requirements. We reviewed utilization data among FFS Medicare
beneficiaries for the proposed specialty types for 2019 through 2021.
We reviewed literature on the prevalence of behavioral health disorders
among Medicare beneficiaries and existing models for projecting the
needed behavioral health workforce such as the Health Resources and
Services Administration's (HRSA) Health Workforce Simulation Model,\58\
to inform estimates of the potential demand for behavioral health
services. We also reviewed data on the potential supply of behavioral
health providers, that is, Medicare-enrolled providers in the Provider
Enrollment, Chain, and Ownership System (PECOS),\59\ the list of
practitioners waivered to provide buprenorphine for the treatment of
OUD published by the Substance Abuse and Mental Health Services
Administration (SAMHSA),\60\ and the list of OTP providers enrolled in
Medicare published by CMS.\61\ We also sought clinical consultation
regarding the types of behavioral health providers that treat Medicare
beneficiaries, the service locations in which beneficiaries typically
use behavioral health care, and typical patterns of care for accessing
medication treatment for opioid use disorder, that is, the use of
office-based and OTP-based care. Other than the use of different and
more recent data sources as identified in this preamble, we followed
the same analysis and steps to develop the proposed minimum provider
ratios for these new specialty types.
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\58\ https://bhw.hrsa.gov/data-research/projecting-health-workforce-supply-demand/behavioral-health.
\59\ https://pecos.cms.hhs.gov/pecos/login.do#headingLv1.
\60\ https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator.
\61\ https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/opioid-treatment-program-providers.
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Second, in order to reinforce regulatory requirements for MA plans
on their responsibility to provide access to critical behavioral health
care services, we propose to amend the list of health care providers in
the existing access to services standards at Sec. 422.112(a)(1)(i) to
include that the network must also include providers that specialize in
behavioral health services.
Finally, to encourage increased access to telehealth providers in
contracted MA networks, Sec. 422.116(d)(5) provides that for certain
specialties, MA plans may receive a 10-percentage point credit towards
the percentage of beneficiaries that reside within published time and
distance standards when the plan includes one or more telehealth
providers of that specialty type that provide additional telehealth
benefits, as defined in Sec. 422.135, in its contracted network.
Medicare FFS claims data shows that telehealth was the second most
common place of service for claims with a primary behavioral health
diagnosis in 2020. As noted previously, the top provider specialty
types to provide certain outpatient behavioral services to
beneficiaries in that year included psychiatrists, clinical social
workers, nurse practitioners, and clinical psychologists. Additionally,
previous input from stakeholders discussed the importance of access to
telehealth services specific to behavioral health in expanding access
to care.
[[Page 79491]]
Based on these considerations, we also propose to add all the new
behavioral health specialty types to the list at Sec. 422.116(d)(5) of
the specialty types that that will receive the credit if the MA
organization's contracted network of providers includes one or more
telehealth providers of that specialty type that provide additional
telehealth benefits, as defined in Sec. 422.135, for covered services.
We welcome comment on this proposal.
3. Behavioral Health Services in Medicare Advantage (MA) (Sec. Sec.
422.112 and 422.113)
In addition to ensuring that there are specific types of providers
in behavioral health specialties accessible within certain parameters
in an MA organization's network of providers, it is important to ensure
that access to these services is available for enrollees as part of
overall delivery and coordination of services. CMS recognizes that
knowing where to go to receive behavioral health care services is key
to ensuring accessibility to those services. While CMS requires MA
organizations to maintain publicly available resources, such as the
provider directory, in order to help enrollees access care, we
acknowledge that such resources may not always be sufficient to connect
enrollees with the services to which they are entitled.
CMS also acknowledges that situations may arise when a behavioral
health services provider and an enrollee are not a good fit, and the
enrollee needs assistance finding a different provider. Further, when a
provider leaves the network, enrollees could experience an interruption
in services. Timely provision of care is important with respect to
behavioral health outcomes, and with the following proposals, we seek
to ensure that enrollees who need behavioral health services are able
to access them in a timely manner.
Section 1852(d)(1)(A) of the Act requires MA organizations to make
benefits under the plan available and accessible to each individual
electing the plan within the plan service area with reasonable
promptness and in a manner which assures continuity in the provision of
benefits. To ensure MA enrollees have access to their services that is
consistent with the requirements of the statute, CMS proposes to use
our authority under section 1856(b)(1) of the Act to adopt standards to
implement section 1852(d)(1)(A) of the Act to ensure that access to
behavioral health services is prioritized appropriately in the Part C
program. CMS proposes to advance this goal by adding behavioral health
services to the types of services for which MA organizations must have
programs in place to ensure continuity of care and integration of
services at Sec. 422.112(b)(3). First, we propose to revise Sec.
422.112(b)(3) to include behavioral health services by adding the
phrase, ``and behavioral health services'' after the words ``community-
based services'' at the end of Sec. 422.112(b)(3). CMS believes that
this proposed change to include behavioral health care services among
the services for which MA organizations must have a care coordination
program in place will help close the equity gap for enrollees in
coordinated care plans. This proposed change would ensure that
behavioral health care services are included as part of the enrollee's
care coordination.
Next, CMS proposes to codify the agency's interpretation of section
1852(d)(3)(B) of the Act which is used to determine a condition that
qualifies as an ``emergency medical condition'' for purposes of
carrying out the requirements of section 1852(d)(1)(E) of the Act.
Section 1852(d)(1)(E) of the Act requires MA organizations to reimburse
a provider for emergency services without regard to prior authorization
or the emergency care provider's contractual relationship with the MA
organization.
Currently, under Sec. 422.113(b)(1)(i), an ``emergency medical
condition'' is defined as a medical condition manifesting itself by
acute symptoms of sufficient severity (including severe pain) such that
a prudent layperson, with an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to
result in serious jeopardy to the health of the individual or their
unborn child, serious impairment to bodily function, or serious
dysfunction of any bodily organ or part; this regulatory definition
generally mirrors the statutory definition in section 1852(d)(3)(B) of
the Act. However, the definition does not explicitly address that its
criteria extends to conditions both physical and mental. CMS interprets
the scope of the definition to pertain to both physical and behavioral
health conditions when those conditions meet the prudent layperson
standard discussed in Sec. 422.113(b)(1)(i), consistent with the
statute.
For example, one could reasonably be expected to cause serious
injury (or death) to oneself if one's behavioral health condition
results in a suicide plan, attempt, other suicidal behavior, or other
forms of serious self-harm; CMS believes such cases are sufficient to
satisfy the prudent layperson standard, therefore immediate emergency
medical intervention must be provided without regard to prior
authorization or the emergency care provider's contractual relationship
with the organization, consistent with the requirements of section
1852(d)(1)(E) of the Act.
It is important to ensure that MA organizations and affected
stakeholders interpret the definition of ``emergency medical
condition'' found in Sec. 422.113(b)(1)(i) in the same manner as CMS.
Therefore, in an effort to mitigate the possibility that an applicable
emergency medical condition, such a qualifying mental health condition,
could be inadvertently excluded from the requirements and enrollee
protections in Sec. 422.113 due to misinterpretation by an MA
organization or entities acting on its behalf, CMS proposes to add
language to our regulations that will definitively clarify that an
emergency medical condition can be physical or mental in nature. This
interpretation and position on what Sec. 422.113 means and requires
will guide our enforcement of the regulation. MA organizations,
providers and enrollees must comply with this interpretation of the
regulation and doing so will assure that MA enrollees receive medically
necessary services in a medical emergency.
At Sec. 422.113(b)(1)(i), CMS proposes to amend the regulation by
inserting, ``mental or physical,'' after the word ``condition'' and
before the word ``manifesting.'' This proposed revision would ensure
that emergency medical conditions are easily interpreted as such,
thereby prohibiting the use of prior authorization when required and
guaranteeing that coverage is provided by the MA organization,
consistent with the statute. This will ensure that enrollees have
access to emergency behavioral health services in parity with access to
other medical emergency services.
We solicit comment on this proposal, and thank commenters in
advance for their input on our proposed regulatory revisions.
4. Medicare Advantage (MA) Access to Services: Appointment Wait Time
Standards (Sec. 422.112)
CMS solicited public comment through the RFI that appeared in the
January 2022 proposed rule regarding the challenges that exist with
accessing behavioral health providers for MA enrollees and how to
resolve issues with building adequate behavioral health networks within
MA plans. The responses to this RFI included requests that CMS consider
strengthening network adequacy standards and improving access to care
and services
[[Page 79492]]
for enrollees by establishing requirements for appointment wait times
for behavioral health services. We also heard that beneficiaries
experience barriers to treatment for behavioral health conditions,
including opioid use disorder.
Section 1852(d) of the Act requires MA plans that use provider
networks, make covered benefits available and accessible to enrollees
in the plan service area with reasonable promptness and in a manner
which assures continuity in the provision of benefits, and that
medically necessary care must be available and accessible 24 hours a
day and 7 days a week. The MA regulation at Sec. 422.112 includes
requirements and standards to ensure that MA organizations that offer
coordinated care plans, which generally use networks of providers, meet
the statutory requirements. Under these rules, MA organizations must
ensure that all covered services are made available and accessible to
enrollees by the plan's designated provider network. Furthermore, MA
organizations are required under Sec. 422.112(a)(6)(i) to maintain
written standards that require timely access to care for enrollees
which meet or exceed those established by CMS. Timely access to care
and member services within a plan's provider network must be
continuously monitored to ensure compliance with these standards, and
the MA organization must take corrective action as necessary. CMS has
provided guidelines for MA organizations in the Medicare Managed Care
Manual (MMCM), Chapter 4, ``Benefits and Beneficiary Protections,''
section 110.1.1,\62\ regarding provider network standards. That
guidance includes directions that MA organizations make their
timeliness standards known to network providers (which is necessary in
order to ensure that providers in the network comply with MA plan's
written standards) and that the MA organization should consider an
enrollee's need for the services and common waiting times in the
community. In particular, the Manual provides examples of appointment
wait times for certain primary care services, based on the type of
services and level of need: (1) urgently needed services or emergency--
immediately; (2) services that are not emergency or urgently needed,
but requires medical attention--within 1 week; and (3) routine and
preventive care--within 30 days.
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\62\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
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The 2022 CMS Behavioral Health Strategy \63\ describes CMS' goals
to increase and enhance access to equitable behavioral health care
services for people with behavioral health care needs. To support these
goals, CMS is committed to strengthening our requirements for MA
organizations to ensure beneficiaries can access needed behavioral
health care services similar to how they access needed physical health
services. Therefore, we propose to codify appointment wait times as
standards for primary care services that are the same as the
appointment wait times described in the Manual and to extend those
standards to behavioral health services. These new minimum appointment
wait time standards would be added to the existing requirement that MA
organizations establish written policies for the timeliness of access
to care and member services so that MA organizations must have
appointment wait times that meet or exceed the standards we propose
here.
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\63\ https://www.cms.gov/cms-behavioral-health-strategy.
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Behavioral health services include both mental health services and
substance use disorder services. We remind MA organizations that
substance use disorder services include medications for opioid use
disorder (MOUD), which is particularly important as opioid-related
overdose deaths have spiked during the pandemic,\64\ and we have heard
from commenters that beneficiaries have experienced barriers to
behavioral health treatment. Proposing to codify these wait time
standards as discussed by commenters through our RFI, should reduce
access barriers to behavioral health treatment for those who need it;
and help ensure access to a robust array of practitioners furnishing
behavioral health services, including Opioid Treatment Providers who
prescribe medications for opioid use disorder.
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\64\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
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In addition, the proposal to codify wait time standards for primary
care is consistent with the goal to increase access to primary care
articulated in HHS' Initiative to Strengthen Primary Care.\65\ The
National Academies for Science, Engineering, and Medicine (NASEM)
Report outlined the importance of ensuring that high-quality primary
care is available to every individual and family in every community,
particularly those that are underserved. After all, access to primary
care practitioners, as opposed to any other practitioner type, is
associated with decreased mortality.\66\
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\65\ https://www.hhs.gov/about/news/2022/06/27/fact-sheet-hhs-initiative-to-strengthen-primary-health-care-seeking-public-comment.html.
\66\ https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2724393.
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We are also seeking comment on alternative specific appointment
wait times standards to apply to MA organizations. For example, we are
considering, as suggested by a commenter on our RFI, establishing
appointment wait time standards that align with those established for
qualified health plans, (QHPs) as outlined by CMS in the ``2023 Final
Letter to Issuers in the Federally-facilitated Exchanges.'' \67\ The
appointment wait time standards for QHPs include: Behavioral health
appointments must be available within 10 business days, Primary care
(routine) must be available within 15 business days; and Specialty care
(non-urgent) must be available within 30 business days. Under our
proposal, the wait time requirements,, would be applicable to primary
care and behavioral health specialty types. We solicit comment whether
a more flexible approach would be appropriate, such as requiring MA
organizations have these specific appointment wait time standards in
their written internal policies but that CMS require MA plans to meet
the specific appointment wait time limits for routine or non-emergency
services only for a significant portion (for example, 95 percent) of
appointments.
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\67\ https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2023-Letter-to-Issuers.pdf.
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This proposed additional requirement to specify maximum wait times
for MA enrollees is intended to ensure that MA enrollees are able to
access covered services and that MA organizations meet their
obligations under section 1852(d) of the Act to make covered benefits
available and accessible to enrollees in the plan. Section 1856(b) of
the Act authorizes the adoption of standards that are consistent with
and to carry out the Part C statute.
We are also considering requiring new and expanding service area
applicants to attest to their ability to provide timely access to care
consistent with the CMS appointment wait time standards we would add to
Sec. 422.112(a)(6)(i). We would implement a new application
requirement by adding a new attestation to our ``Part C--Medicare
Advantage and 1876 Cost Plan Expansion Application'' that specifically
addresses requirements at Sec. 422.112(a)(6)(i). Such an attestation
would not be reflected in a specific regulation, however, because
[[Page 79493]]
we believe that the requirement at Sec. 422.501(c)(2), that an
applicant thoroughly describe how the entity and MA plan meet, or will
meet, all the requirements described in this part, permits CMS to use
an attestation to support the ability of an MA organization to comply
with performance requirements. Adequate access to services for MA
enrollees is a key consideration.
We solicit comment on our proposal, including whether one or more
of the previously described sets of wait time standards would more
effectively address our goals of ensuring that MA organizations are
meeting timely access standards for primary care and behavioral health
services for enrollees, supporting parity between behavioral health and
physical health services, and strengthening our requirements for MA
organizations to ensure beneficiary protections in access to care. In
addition, we solicit comment on whether a specific appointment wait
time limit for emergency or urgently needed services is duplicative of
the mandatory coverage and access requirements in Sec. 422.113.
C. Medicare Advantage (MA) Network Adequacy: Access to Services (Sec.
422.112)
Section 1852(d)(1)(A) of the Act establishes that an MA
organization offering an MA plan may select the providers from whom the
benefits under the plan are provided so long as the organization makes
such benefits available and accessible to each individual electing the
plan within the plan service area with reasonable promptness and in a
manner which assures continuity in the provision of benefits. This is
generally implemented at Sec. 422.112(a), which provides that an MA
organization that offers an MA coordinated care plan may specify the
networks of providers from whom enrollees may obtain services if the MA
organization ensures that all covered services are available and
accessible under the plan. The regulation also includes specific
additional requirements for MA organizations offering coordinated care
plans related to the availability and accessibility of coverage. In
addition, the statute and regulation apply these requirements to all
benefits covered by the plan, including both basic and supplemental
benefits.
More specifically, section 1852(d)(1)(D) of the Act requires an MA
organization to provide access to appropriate providers, including
credentialed specialists, for medically necessary treatment and
services, as a condition of the MA organization limiting coverage to a
specified network of providers. CMS implemented this statutory
requirement at Sec. 422.112(a)(1)(i), which provides that the MA
organization offering a coordinated care plan must maintain and monitor
a network of appropriate providers that is supported by written
agreements and is sufficient to provide adequate access to covered
services to meet the needs of the population served. In addition, Sec.
422.112(a)(3) requires that the MA organization provide or arrange for
necessary specialty care and arrange for specialty care outside of the
plan's provider network when network providers are unavailable or
inadequate to meet an enrollee's medical needs.
Historically, CMS has interpreted these statutory and regulatory
requirements to mean that in the event an in-network provider or
service is unavailable or inadequate to meet an enrollee's medical
needs, the MA organization must arrange for any medically necessary
covered benefit outside of the plan provider network at in-network cost
sharing for the enrollee. For example, if an enrollee needs OTP
services but there is no in-network OTP available, then the MA
organization must arrange for the enrollee to go to an out-of-network
OTP at in-network cost sharing. In our view, furnishing access out of
network with higher cost sharing when the MA plan's network is
inadequate or otherwise does not address the medically necessary
benefit required by an enrollee is not consistent with section
1852(d)(1) of the Act. Enrollees should not bear a financial burden
because of the inadequacy of the MA plan's network. This interpretation
is reflected in CMS guidance in section 110.1.1 of Chapter 4 of the
MMCM,\68\ and CMS has routinely emphasized this interpretation to MA
organizations about their obligations whenever the need arises, for
example, when an MA organization is undergoing a network change due to
a provider termination. Therefore, MA organizations are familiar with
the policy and should be applying it in the routine course of
operations within their MA plans. It is important that MA organizations
ensure adequate access to medically necessary covered benefits for
enrollees when the plan network is not sufficient by both arranging or
covering the out-of-network benefits and only charging in-network cost
sharing for those out-of-network benefits. To reflect this important
and well-established enrollee protection in the MA program, we are
proposing to amend Sec. 422.112(a)(1) and (a)(3) to more clearly state
the scope of the MA organization's obligation to ensure adequate access
to medically necessary covered benefits.
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Currently, the regulation text at Sec. 422.112(a)(3) does not
fully account for the scope of an MA organization's obligations when
medically necessary benefits are only accessible out of network in two
key ways. First, the regulation text refers to specialty care only, not
all medically necessary covered benefits. This oversight does not align
with the statutory requirement at section 1852(d)(1)(D) of the Act,
which states broadly that the organization must provide access to
``appropriate providers, including credentialed specialists,'' and does
not limit the requirement to specialists only. Second, the aspect of
maintaining in-network cost sharing when the MA organization arranges
for the benefit outside of the network is not clearly stated in Sec.
422.112(a)(3). Therefore, CMS proposes to amend Sec. 422.112 to align
more closely with current subregulatory policy and our implementation
of section 1852(d) of the Act.
CMS proposes to codify this policy by revising Sec. 422.112(a)(3)
and adding new regulatory text to Sec. 422.112(a)(1) to reflect the
longstanding policy. Specifically, we propose to move the sentence
requiring the MA organization to arrange for out-of-network care
currently in paragraph (a)(3) to a new proposed paragraph (a)(1)(iii)
and revise and supplement it with additional text to better state the
full scope of the current policy. Proposed paragraph (a)(1)(iii) would
require MA organizations offering coordinated care plans to arrange for
any medically necessary covered benefit outside of the plan provider
network, but at in-network cost sharing, when an in-network provider or
benefit is unavailable or inadequate to meet an enrollee's medical
needs.
CMS currently monitors MA organization compliance with this
existing policy through account management activities, complaint
tracking and reporting, and auditing activities. These oversight
operations alert CMS to any issues with access to care, and CMS may
require MA organizations to address these matters if they arise. If
finalized, CMS intends to continue these oversight operations to ensure
MA organizations' compliance with the proposed regulation.
This proposal to amend Sec. 422.112 codifies the agency's existing
interpretation of applicable law and
[[Page 79494]]
longstanding guidance. CMS has not been made aware of any issues of MA
organization non-compliance with this policy and, as such, believes
that MA organizations have been complying with this longstanding
guidance. Therefore, the proposed amendment to Sec. 422.112 would not
impose new information collection requirements (that is, reporting,
recordkeeping, or third-party disclosure requirements), and we have not
provided burden estimates in the Collection of Information section of
this proposed rule. In addition, this provision is not expected to have
any economic impact on the Medicare Trust Fund.
We solicit comment on this proposal, including on the accuracy of
our assumptions regarding information collection requirements and
regulatory impact.
D. Enrollee Notification Requirements for Medicare Advantage (MA)
Provider Contract Terminations (Sec. Sec. 422.111 and 422.2267)
As provided in section 1852(d) of the Act and discussed in section
110.1.2.1 of Chapter 4 of the MMCM, MA organizations have considerable
discretion to select the providers with whom to contract in order to
build high-performing, cost effective provider networks.\69\ This
flexibility is also apparent in how CMS is prohibited by section
1854(a)(6)(B)(iii) of the Act from requiring MA organizations to
contract with a particular provider. Under our current regulations, MA
organizations are able to make changes to these networks at any time
during the contract year, as long as they continue to furnish all
Medicare-covered services in a non-discriminatory manner, meet
established access and availability standards and timely notice
requirements, and ensure continuity of care for enrollees. Thus, an MA
organization may terminate providers from its network during the plan
year, which could impact enrollees who are patients of those providers.
CMS requires notification to MA enrollees when a provider network
participation contract terminates. Most notably, CMS's disclosure
regulations at Sec. 422.111(e) require MA organizations to make a good
faith effort to provide written notice of a termination of a contracted
provider at least 30 calendar days before the termination effective
date to all enrollees who are patients seen on a regular basis by the
provider whose contract is terminating, irrespective of whether the
termination was for cause or without cause. Additionally, Sec.
422.111(e) requires that when a contract termination involves a primary
care professional, all enrollees who are patients of that primary care
professional must be notified. CMS established these enrollee
notification requirements at Sec. 422.111(e) over 22 years ago in the
``Medicare Program; Medicare+Choice Program'' final rule with comment
period, which appeared in the Federal Register on June 29, 2000 (65 FR
40170) (hereinafter referred to as the June 2000 final rule). The MA
program and its policies have evolved considerably since the inception
of Sec. 422.111(e). Therefore, CMS is proposing to revise this
particular disclosure requirement by establishing specific enrollee
notification requirements for no-cause and for-cause provider contract
terminations and adding specific and more stringent enrollee
notification requirements when primary care and behavioral health
provider contract terminations occur. CMS is also proposing to revise
Sec. 422.2267(e)(12) to specify the requirements for the content of
the notification to enrollees about a provider contract termination.
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\69\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
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First, we propose to clarify the regulatory text at Sec.
422.111(e) regarding whether the provider contract termination was for
cause or without cause. The regulation currently requires that the MA
organization must make a good faith effort to notify enrollees at least
30 calendar days before the termination effective date, irrespective of
whether the termination was for cause or without cause. This last
clause does not consider Sec. 422.202(d)(4), which outlines the
timeframe requirement for suspension or termination of an MA
organization's contract with a provider. An MA organization and a
contracted provider are required by Sec. 422.202(d)(4) to provide at
least 60 days written notice to each other before terminating the
contract without cause. Consequently, because MA organizations are
provided at least a 60-day notice of any no-cause provider contract
termination, MA organizations should be able to timely meet a CMS
established enrollee notification requirement that provides the MA
organization a period of time that is less than 60 days to notify
enrollees of the no-cause provider contract termination. Provider
contract terminations that are for-cause, however, do not have an
equivalent notification requirement as exists at Sec. 422.202(d)(4)
for MA organizations and contracted providers, which means that for-
cause provider contract terminations could potentially occur with
little notice or without any notice at all. In this case, it may not
always be possible for the MA organization to notify enrollees in a
reasonable amount of time before the provider contract termination
effective date. Thus, we will preserve the phrase ``good faith effort''
for enrollee notifications for for-cause provider contract terminations
regarding the proposed timeframes. Under our proposal, the ``good faith
effort'' standard would apply to the timing component for for-cause
provider contract terminations. However, we propose to remove ``good
faith effort'' for no-cause provider contract terminations. We believe
that when an MA organization's contracted provider network changes,
these enrollee notifications are essential for updating enrollees who
are patients of the terminating providers. If an enrollee's provider is
dropped from their network during the contract year, the enrollee must
be notified so that they can decide how to proceed with the care they
are receiving from that provider. By limiting the ``good faith effort''
standard to the timing of for-cause provider contract terminations, we
make it clear that issuing the notification to enrollees is a
requirement that all MA organizations must follow without exception,
but in the case of for-cause provider contract terminations, MA
organizations must make a good faith effort to notify enrollees of the
termination within the proposed timeframes.
Next, we propose to add new provisions to Sec. 422.111(e) to
address provider contract terminations that involve behavioral health
providers. For purposes of this proposal, CMS considers various
specialty types (both providers and facilities) as fitting the category
of behavioral health providers so long as the treatment they furnish to
enrollees is about behavioral health; these include but are not limited
to psychiatrists, clinical social workers, clinical psychologists,
inpatient psychiatric facilities, outpatient behavioral health clinics,
OTPs, and MOUD-waivered providers approved by SAMHSA/FDA. As noted in
section III.B.1. of this proposed rule, behavioral health is a top
priority of both CMS and the broader administration. Specifically,
CMS's goal is to improve access to behavioral health services and
improve outcomes for people with behavioral health care needs. The CMS
Behavioral Health Strategy seeks to remove barriers to care and
services.\70\ To support these
[[Page 79495]]
policy goals, using a behavioral health perspective, we have reexamined
the MA enrollee notification requirements when a provider contract
termination occurs at Sec. 422.111(e).
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\70\ https://www.cms.gov/cms-behavioral-health-strategy.
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According to a recent study, because of the ongoing nature of
patient/provider relationships, when a provider leaves a plan's
network, there is a potential disruption to the patient's treatment
plan; this disruption could be especially problematic in the case of
behavioral health treatment because this treatment may be longer in
duration than that of physical health, and providers and patients are
likely to need more time to develop mutual trust.\71\ Trusting
relationships and continuity in the relationship between the patient
and provider have shown to be central for behavioral health recovery,
therefore, breaks in these relationships tend to cause patient stress,
anxiety, and generally less opportunity to contribute to their
treatment plan.\72\ Thus, ensuring continuity of care in these
situations becomes even more critical. As a consequence, sufficient
enrollee notification is needed when a behavioral health provider
leaves an MA network. We believe that affected enrollees need ample
time to make decisions that may determine the trajectory of their
behavioral health treatment. They may wish to continue seeing the
terminated provider with whom they have already established a secure,
comfortable relationship (potentially with higher out-of-network cost
sharing), they may switch to a new provider in the network (forcing
them to start a new relationship), or they may choose to stop treatment
altogether (which could be detrimental to their health or perhaps fatal
in the case of patients with suicidal ideation). Regardless of what
action the enrollee takes, however, the enrollee needs to know that
their behavioral health provider is leaving their plan's network prior
to the contract termination date.
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\71\ https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2785383.
\72\ https://bmchealthservres.biomedcentral.com/articles/10.1186/s12913-017-2719-9.
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A similar case is made for terminating primary care providers both
due to the fact that behavioral health services are often offered by
primary care providers and the foundational role primary care providers
play in an individual's overall health. According to the American
Academy of Family Physicians, up to 75 percent of primary care visits
include aspects of behavioral health.\73\ Primary care is foundational
because it integrates services to meet the patient's health needs
throughout a lifetime, including key elements such as health promotion,
disease prevention, treatment, rehabilitation, and palliative care.\74\
Furthermore, CMS believes that the importance of a patient's
relationship with their primary care provider is likely higher in
managed care situations, such as MA, where referrals to specialists are
often dependent on the primary care provider. Therefore, similar to
behavioral health, continuity of care is essential, and sufficient
enrollee notification is needed when a primary care provider leaves an
MA network. For these reasons, we are proposing more stringent enrollee
notification requirements when primary care and behavioral health
provider contract terminations occur. We expect positive impacts
associated with improving communication about provider terminations
from MA networks, including providing more time to MA enrollees with
behavioral health conditions to make informed decisions about the
future of their behavioral health treatment after their provider leaves
their network. Enrollee benefits would result from increased enrollee
protections when unexpected primary care and behavioral health network
changes occur, and we would also expect to see benefits for providers
and facilities who keep their patients informed if they are leaving
their MA plan's network.
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\73\ https://www.aafp.org/pubs/fpm/issues/2021/0500/p3.html#fpm20210500p3-b1.
\74\ https://www.who.int/health-topics/primary-health-care#tab=tab_1.
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To address the aforementioned concerns surrounding unexpected
changes in MA primary care and behavioral health provider networks, we
are proposing to add specific enrollee notification requirements for
these types of provider contract terminations. Our proposal has three
key aspects. We first propose to add behavioral health providers to the
current requirement at Sec. 422.111(e) that all enrollees who are
patients of a terminating primary care provider must be notified (not
just those enrollees who are patients seen on a regular basis by the
terminating provider, which is the case for all other specialty types),
and expand the scope of this requirement to refer to all enrollees who
have ever been patients of these terminating primary care or behavioral
health providers (not just current patients). This addition would be
reflected at proposed new paragraph (e)(1)(iii). Next, at proposed new
paragraph (e)(1)(ii), we propose to require MA organizations to provide
notice to enrollees at least 45 calendar days before the termination
effective date for contract terminations that involve a primary care or
behavioral health provider, which is longer than the 30-day standard
for all other specialty types. Finally, we propose to require both
written and telephonic notice for contract terminations that involve a
primary care or behavioral health provider at new proposed paragraph
(e)(1)(i), while only written notice is required for all other
specialty types. We are proposing that both types of notice need to be
provided at least 45 calendar days before the termination effective
date. For the telephonic notice, we propose that the first telephone
call be made to the enrollee at least 45 calendar days in advance.
Under our proposal here, the MA organization would be required to
continue attempting to reach the enrollee by telephone to provide
notice of the termination of the provider from the network. We are not
proposing a specific number of attempts required by the MA organization
when they reach out to the enrollee by telephone and the call goes
unanswered, but we are soliciting comment from MA organizations on how
many telephonic attempts they believe are reasonable in this
circumstance (for example, 1-5, 6-10, 11-15). To help inform our
proposal, we are requesting qualitative feedback based on any MA
organization's actual experience providing enrollees telephonic notice
of primary care and behavioral health provider contract terminations.
These new proposed requirements for MA organizations providing
enrollees notice of primary care and behavioral health provider
contract terminations are intended to raise the standards for the
stability of enrollees' primary care and behavioral health treatment.
If finalized, these requirements would require MA organizations to
notify all current enrollees who have ever been patients of the primary
care or behavioral health provider or providers leaving their plan's
network (regardless of whether these enrollees are patients currently
seen on a regular basis, as that standard is established in proposed
new paragraph (e)(2)(iii)), give enrollees more notice (and therefore
more time) to decide how to proceed with their course of treatment, and
provide enrollees with two different means by which they receive the
notice from their MA organization. These strengthened enrollee
notification requirements for primary care and behavioral health
provider contract terminations would generally increase enrollee
protections when MA network changes occur. As discussed earlier,
continuity of care is essential for both primary care and
[[Page 79496]]
behavioral health, and consequently, adequate communication to
enrollees is vital when network changes occur, so that patients of any
terminating primary care or behavioral health providers can decide how
to proceed with their course of treatment. By receiving adequate notice
of the terminations, enrollees will be able to make an informed
decision on how to proceed with their care and have more time to
potentially locate and establish a relationship with a new provider.
Thus, enrollees are protected from any undue harm that may result from
an unexpected provider contract termination involving their primary
care or behavioral health provider (for example, sudden lack of
medication, psychotic episodes, suicide). The proposed enrollee
notification requirements are a positive step in the context of our
policy for MA provider contact terminations.
Under our proposal, MA organizations will continue to be required
to provide written notice at least 30 days before the termination
effective date of a termination of a contracted provider that is not a
primary care or behavioral health provider to all enrollees who are
patients seen on a regular basis by the terminating provider. We also
propose to codify at Sec. 422.111(e)(2)(iii) a definition of the
phrase ``enrollees who are patients seen on a regular basis by the
provider whose contract is terminating.'' CMS currently has sub-
regulatory guidance in section 110.1.2.3 of Chapter 4 of the MMCM that
defines this term as enrollees who are assigned to, currently receiving
care from, or have received care within the past three months from a
provider or facility being terminated, also called ``affected
enrollees.'' \75\ As this guidance has been in place since 2016, and
based on various MA organization inquiries we have received asking how
CMS defines ``regular basis,'' we believe the majority of MA
organizations have come to adopt this CMS standard and use it routinely
as they determine which enrollees to notify when provider contract
terminations occur, in order to comply with Sec. 422.111(e).
Therefore, we propose to codify this definition at proposed Sec.
422.111(e)(2)(iii).
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\75\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
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The requirements for contract terminations that involve specialty
types other than primary care or behavioral health (written notice
only, at least 30 calendar days before the termination effective date,
and to all enrollees who are patients seen on a regular basis by the
provider whose contract is terminating) would be set forth at new
proposed Sec. 422.111(e)(2). This provides a clear distinction for MA
organizations between CMS's enrollee notification requirements for
contract terminations that involve a primary care or behavioral health
provider (at new proposed paragraph (e)(1)) and all other provider
contract terminations. We reiterate that the beginning proposed revised
regulatory text at Sec. 422.111(e) also distinguishes between no-cause
and for-cause provider contract terminations, with the former scenario
prompting a requirement for MA organizations to provide the enrollee
notifications and the latter requiring MA organizations to make a good
faith effort to notify enrollees within the required timeframes.
Regardless, whenever an MA organization notifies enrollees about a
provider contract termination (whether it is with or without cause),
CMS proposes that MA organizations must follow these new requirements
outlined at proposed paragraphs (e)(1) and (2).
Finally, regarding the content of the provider termination notice,
CMS's regulation at Sec. 422.2267(e)(12) currently provides that the
Provider Termination Notice is a required model communications material
through which MA organizations must provide the information required
under Sec. 422.111(e). CMS has provided additional guidance regarding
the content of the provider termination notice in section 110.1.2.3 of
Chapter 4 of the MMCM.\76\ Similar to the definition of ``affected
enrollees,'' these best practices have been in our guidance since 2016,
thus we believe the majority of MA organizations likely already follow
them as they develop the content of their provider termination notices.
Therefore, we propose to codify the best practices for provider
termination notices at Sec. 422.2267(e)(12). Specifically, we propose
to make these requirements for the content of MA organizations'
provider termination notices and also require MA organizations to
include additional pieces of information in the notice.
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First, at proposed Sec. 422.2267(e)(12)(ii)(A), we are proposing
that the provider termination notice must inform the enrollee that the
provider will no longer be in the network and the date the provider
will leave the network. We have modeled this proposed regulatory text
after the established precedent for the equivalent notice requirement
for the Non-renewal Notice model communications material as provided at
Sec. 422.2267(e)(10)(ii)(A) (we refer readers to section III.P. of
this proposed rule for our proposal to amend paragraph (e)(10) to make
the Non-renewal Notice a standardized communications material). Next,
we propose to codify a requirement to include the information currently
described in the best practices guidance in Chapter 4 of the MMCM at
proposed Sec. 422.2267(e)(12)(ii)(B), (C), and (E), specifically:
names and phone numbers of in-network providers that the enrollee may
access for continued care (this information may be supplemented with
information for accessing a current provider directory, including both
online and direct mail options) (at proposed paragraph (e)(12)(ii)(B));
how the enrollee may request a continuation of ongoing medical
treatment or therapies with their current provider (at proposed
paragraph (e)(12)(ii)(C)); and the MA organization's call center
telephone number, TTY number, and hours and days of operation (at
proposed paragraph (e)(12)(ii)(E)). For proposed paragraph
(e)(12)(ii)(B) and (C), we are proposing to use the same description
for the relevant content that is currently found in CMS's guidance in
Chapter 4 of the MMCM. However, for proposed paragraph (e)(12)(ii)(E),
instead of using the existing Chapter 4 language (``customer service
number(s) where answers to questions about the network changes will be
available''), we have chosen to model the proposed regulatory text
after the established precedent of a requirement for the Non-renewal
Notice at Sec. 422.2267(e)(10)(ii)(H). We believe that the proposed
new language of ``call center telephone number, TTY number, and hours
and days of operation'' is more inclusive as it encompasses not just
the customer service number but also the TTY number and operation
times.
In addition, at proposed Sec. 422.2267(e)(12)(ii)(D), we are
proposing that the provider termination notice must provide information
about the Annual Coordinated Election Period (AEP) and the MA Open
Enrollment Period (MA-OEP) and must explain that an enrollee who is
impacted by the provider termination may contact 1-800-MEDICARE to
request assistance in identifying and switching to other coverage, or
to request consideration for a special election period (SEP), as
specified in Sec. 422.62(b)(26), based on the individual's unique
circumstances and consistent with existing parameters for this SEP. We
solicit comment on our proposal to consider an enrollee who is
[[Page 79497]]
impacted by a provider contract termination to be someone who is
experiencing an exceptional condition, as specified in Sec.
422.62(b)(26), and therefore eligible for this SEP. We also solicit
comment on alternative approaches; specifically, the adoption of a new
SEP for this type of provider contract termination, with explicit
standards for when termination of a provider from the network should
serve as a basis for SEP eligibility.
The last proposal we are making regarding the provider termination
notice requirements at Sec. 422.2267(e)(12) concerns CMS's
requirements for the telephonic notice that we are proposing MA
organizations must provide to enrollees at least 45 days in advance of
a primary care or behavioral health provider contract termination.
Specifically, at proposed Sec. 422.2267(e)(12)(iii), we propose that
the telephonic notice of provider termination specified in proposed
Sec. 422.111(e)(1)(i) must relay the same information as the written
provider termination notice as described in paragraph (e)(12)(ii) of
Sec. 422.2267. We believe that requiring the MA organization to
communicate the same information on the primary care or behavioral
health provider contract termination through two different channels--a
written letter and a telephone call--will ensure that affected
enrollees receive the information they need to decide how to proceed
with their current course of treatment. The telephonic communication
will reiterate the change occurring in the plan's network and the
options the enrollee has moving forward in the absence of their current
provider.
The provider termination notice is a model communications material
which, per Sec. 422.2267(c), is created by CMS as an example of how to
convey enrollee information. When drafting this required communications
material, MA organizations must: (1) accurately convey the vital
information in the required material to the enrollee, although the MA
organization is not required to use the CMS model material verbatim;
and (2) follow CMS's order of content, when specified (see Sec.
422.2267(c)(1) and (2)). While the regulation currently identifies the
provider termination notice as a model communications material, CMS has
not yet developed the model document for MA organizations to use.
Rather, MA organizations have been expected to follow the current
guidance in section 110.1.2.3 of Chapter 4 of the MMCM.\77\ Given that
we are now proposing new regulatory requirements for the content of
these provider termination notices (including codifying existing best
practices provided in CMS's guidance), CMS intends to create a model
document for the provider termination notice that contains the
requirements at proposed Sec. 422.2267(e)(12), if finalized. We
believe that this model document would be welcomed by MA organizations
as it will provide a useful template that MA organizations may follow
when developing their own provider termination notices. Our proposal
for Sec. 422.2267(e)(12) specifies the required information, and the
model document that CMS intends to develop would reflect this
information as well. In addition, when developing provider termination
notices, all MA organizations must follow the general communications
materials and activities requirements outlined at Sec. 422.2262 and
the standards for required materials and content at Sec. 422.2267(a).
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\77\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
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Regarding compliance monitoring for the regulatory amendments
proposed here, CMS currently monitors MA organization compliance with
the existing policies at Sec. Sec. 422.111(e) and 422.2267(e)(12)
through account management activities, complaint tracking and
reporting, and auditing activities. These oversight operations alert
CMS to any issues with enrollees that did not receive adequate notice
of a provider contract termination, and CMS may require MA
organizations to address these matters if they arise. If finalized, CMS
intends to continue these oversight operations to ensure MA
organizations' compliance with the proposed regulation. In accordance
with Sec. 422.2261(c)(2), CMS may require submission or submission and
approval of communications materials prior to use if additional
oversight is warranted as determined by CMS based on feedback such as
complaints or data gathered through reviews. This is to ensure the
information being received by enrollees is accurate. Furthermore, Sec.
422.2261(d)(1) and (3) establish that CMS reviews materials to ensure
compliance with all applicable requirements under Sec. Sec. 422.2260
through 422.2267 and that CMS may determine, upon review of such
materials (either prospective or retrospective), that the materials
must be modified, or may no longer be used. Therefore, CMS reserves the
right to review any MA organization's provider termination notice if we
receive complaints or other information signifying that the notice
warrants additional oversight to ensure compliance with CMS regulations
for provider termination notices at Sec. Sec. 422.111(e) and
422.2267(e)(12). If CMS does exercise its authority under Sec.
422.2261(c) to review an MA organization's provider termination notice,
per Sec. 422.2261(d)(1) and (3), CMS will review the notice to ensure
compliance with the applicable regulations and, as a result, may
require the MA organization to modify the notice or no longer use it.
In summary, CMS is proposing to revise: (1) Sec. 422.111(e) by
establishing specific enrollee notification requirements for no-cause
and for-cause provider contract terminations and adding specific and
more stringent enrollee notification requirements when primary care and
behavioral health provider contract terminations occur; and (2) Sec.
422.2267(e)(12) to specify the requirements for the content of the
notification to enrollees about a provider contract termination. We
solicit comment on these proposals.
E. Utilization Management Requirements: Clarifications of Coverage
Criteria for Basic Benefits and Use of Prior Authorization, Additional
Continuity of Care Requirements, and Annual Review of Utilization
Management Tools (Sec. Sec. 422.101, 422.112, 422.137, and 422.138)
1. Introduction
A majority of MA plans are coordinated care plans, which is defined
at Sec. 422.4(a) as a plan that includes a network of providers that
are under contract or arrangement with an MA organization to deliver
the benefit package approved by CMS. CMS regulations at Sec.
422.202(b) require that each MA organization consult with network
providers on the organization's medical policy, quality improvement
programs, medical management procedures, and ensure that certain
standards are met. For example, coordinated care plans must ensure that
practice guidelines and utilization management guidelines are based on
reasonable medical evidence or a consensus of health care professionals
in the particular field; consider the needs of the enrolled population;
are developed in consultation with contracting physicians; and are
reviewed and updated periodically. Further, these guidelines must be
communicated to providers and, as appropriate, to enrollees.
Coordinated care plans are designed to manage cost, service
utilization, and
[[Page 79498]]
quality by ensuring that only medically necessary care is provided.
This is done in part through the use of utilization management tools,
including prior authorization, expressly referenced at section
1852(c)(1)(G) and (c)(2)(B) of the Act. These tools are designed to
help MA plans determine the medical necessity of services and minimize
the furnishing of unnecessary services, thereby helping to contain
costs and protect beneficiaries from receiving unnecessary care.
Additionally, section 1852(g)(1)(A) of the Act states that MA plans
shall have a procedure for making determinations regarding whether an
enrollee is entitled to receive a health care service and that such
determinations must be made on a timely basis; that provision applies
to both prior authorization determinations and to post-service
decisions about coverage and payment.
In addition, CMS regulations at Sec. 422.101(a) and (b) require
that MA plans provide coverage of all basic benefits (that is, services
covered under Medicare Parts A and B, except hospice care and the cost
of kidney acquisitions for transplant) and that MA plans must comply
with Traditional Medicare national coverage determinations (NCDs) and
local coverage determinations (LCDs) applicable in the MA plan's
service area.\78\ In recent years, CMS has received feedback from
various stakeholders, including patient groups, consumer advocates,
providers and provider trade associations that utilization management
in MA, especially prior authorization, can sometimes create a barrier
to patients accessing medically necessary care. Stakeholder feedback
has included concerns about the quality of MA plans' prior
authorization decisions (for example, coverage denials being made by
plan clinicians who do not have expertise in the field of medicine
applicable to the requested service) and process challenges (for
example, repetitive prior approvals for needed services for enrollees
that have a previously-approved plan of care).
---------------------------------------------------------------------------
\78\ The terms ``Traditional Medicare'' and ``Original
Medicare'' are used interchangeably throughout this section and both
mean the Medicare Fee-For-Service program.
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In addition, in April 2022, the Office of the Inspector General
(OIG) released a report \79\ titled, ``Some Medicare Advantage
Organization Denials of Prior Authorization Requests Raise Concerns
About Beneficiary Access to Medically Necessary Care,'' which
summarized the results of a study by the OIG of MA plan denials of
requests for prior authorization of services. The OIG found that some
prior authorization requests were denied by MA plans, even though the
requested services met Medicare coverage guidelines. In other cases,
the OIG found that prior authorization requests were inappropriately
denied due to errors that were likely preventable through process or
system changes by MA organizations. Citing a concern that such
inappropriate denials may prevent or delay beneficiaries from receiving
medically necessary care, the OIG recommended that CMS: (1) issue new
guidance on the appropriate use of MA organization clinical criteria in
medical necessity reviews; (2) update its audit protocols to address
the issues related to MA organizations' use of clinical criteria and/or
examining particular service types; and (3) direct MA organizations to
take steps to identify and address vulnerabilities that can lead to
manual review errors and system errors.\80\
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\79\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
\80\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf, pg. 3.
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CMS understands that utilization management tools are an important
means to coordinate care, reduce inappropriate utilization, and promote
cost-efficient care. In light of the feedback we have received from
stakeholders and the findings in the OIG report, however, we have
concluded that certain guardrails are needed to ensure that utilization
management tools are used, and associated coverage decisions are made,
in ways that ensure timely and appropriate access to medically
necessary care for beneficiaries enrolled in MA plans. We propose to
clarify requirements for the coverage criteria that MA plans use when
making medical necessity determinations. We are also proposing
additional beneficiary protection requirements in order to improve care
continuity and integration of health care services and to increase plan
compliance responsibilities with regards to utilization management
policies. Our proposals here would interpret and implement the
requirements in section 1852 regarding the provision and coverage of
services by MA plans and are therefore proposed under our authority in
section 1856 of the Act to adopt standards to carry out the Part C
statute and MA program.
As originally stated in the June 2000 final rule (65 FR 40207), MA
organizations must cover all Part A and B benefits, excluding hospice
services and the cost of kidney acquisitions for transplant, on the
same conditions that items and services are furnished in Traditional
Medicare. This means that MA organizations may not limit coverage
through the adoption of policies and procedures--whether those policies
and procedures are called utilization management and prior
authorization or the standards and criteria that the MA organization
uses to assess and evaluate medical necessity--when those policies and
procedures result in denials of coverage or payment where the
Traditional Medicare program would cover and pay for the item or
service furnished to the beneficiary. In addition, this means that
limits or conditions on payment and coverage in the Traditional
Medicare program--such as who may deliver a service and in what setting
a service may be provided, the criteria adopted in relevant NCDs and
LCDs, and other substantive conditions--apply to set the scope of basic
benefits as defined in Sec. 422.100(c).
MA organizations have flexibility to furnish and cover services
without meeting all substantive conditions of coverage in Traditional
Medicare, but that flexibility is limited to and in the form of
supplemental benefits. As stated in the June 2000 final rule, MA
organizations' flexibility to deliver care using cost-effective
approaches should not be construed to mean that Medicare coverage
policies do not apply to the MA program. If Traditional Medicare covers
a service only when certain conditions are met, these conditions must
be met in order for the service to be considered part of the
Traditional Medicare benefits (that is, basic benefits) component of an
MA plan. MA organizations may cover the same service when the
conditions are not met, but these benefits would then be defined as
supplemental benefits within the scope of Sec. Sec. 422.100(c)(2) and
422.102 and must be included in the supplemental benefits portion of
the MA plan's bid. For example, when services are furnished by a type
of provider other than the type of provider who may furnish the service
in Traditional Medicare, those services are supplemental benefits. In
this rule, we are proposing policies that would provide less
flexibility for MA organizations to deny or limit coverage of basic
benefits than provided in the 2000 final rule. However, as provided by
section 1852(a)(3) of the Act and reflected in Sec. Sec. 422.100(c)(2)
and 422.102, MA plans may cover benefits beyond what is covered (and
when it is covered) under Traditional Medicare by offering supplemental
benefits. Our proposal is primarily directed at ensuring that minimum
coverage
[[Page 79499]]
requirements are met and that MA plans do not deny or limit coverage of
basic benefits; we are not proposing to limit the scope of permissible
supplemental benefits, but our proposal would apply certain
requirements for the use of utilization management (UM) for all covered
benefits as discussed in section III.E. of this proposed rule.
In this proposed rule, we clarify acceptable cost-effective
utilization management approaches for MA organizations to use in the
context of the new proposed requirements. These clarifications aim to
ensure access to medically necessary care while maintaining MA
organizations' ability to apply utilization management that ensures
clinically appropriate care. Additionally, our proposals address
substantive rules regarding clinical coverage criteria for basic
benefits and how they interact with utilization management policies,
including revisions to existing regulations and adopting new
regulations to ensure that MA enrollees receive the basic benefits
coverage to which they are entitled and to ensure appropriate treatment
of a benefit as a basic benefit or supplemental benefit for purposes of
the bid under Sec. 422.254. We solicit comment on whether our proposed
regulatory provisions sufficiently address the requirements and limits
that we describe in the preamble.
2. Coverage Criteria for Basic Benefits
In interpreting requirements involving coverage criteria, whether
used for prior authorization or post-service payment, CMS has a
longstanding policy, discussed in sub-regulatory guidance (section
10.16 of Chapter 4 of the MMCM), that MA plans must make medical
necessity determinations based on internal policies, which include
coverage criteria that are no more restrictive than Traditional
Medicare's national and local coverage policies and approved by a
plan's medical director. In light of the previously discussed feedback
and the OIG recommendation that we issue new guidance on the
appropriate use of MA organization clinical criteria in medical
necessity reviews, we propose to codify standards for coverage criteria
to ensure that basic benefits coverage for MA enrollees is no more
restrictive than Traditional Medicare. Section 1862 of the Act requires
original Medicare benefits to be reasonable and necessary for the
diagnosis or treatment of illness or injury or to improve the
functioning of a malformed body member. Thus, in order to meet the
statutory requirements at section 1852(a)(1) of the Act, which requires
MA plans to cover A and B services, MA plan coverage criteria must do
the same. We also are proposing to amend Sec. 422.101(b) and (c) to
clarify the obligations and responsibilities for MA plans in covering
basic benefits.
Section 1852(a)(1) of the Act and CMS regulations at Sec.
422.101(a) and (b) require all MA organizations to provide coverage of,
by furnishing, arranging for, or making payment for, all items and
services that are covered by Part A and Part B of Medicare and that are
available to beneficiaries residing in the plan's service area. Section
422.101 requires MA organizations to comply with all NCDs; LCDs written
by Medicare Administrative Contractors (MACs) with jurisdiction for
Medicare claims in the MA organization or plan's service area; and
coverage instructions and guidance in Medicare manuals, instructions
and other guidance documents unless those materials are superseded by
regulations in part 422.
We propose to amend Sec. 422.101(b)(2) by removing the reference
to ``original Medicare manuals and instructions'' and clarify that MA
organizations must comply with general coverage and benefit conditions
included in Traditional Medicare laws, unless superseded by laws
applicable to MA plans, when making coverage decisions. Our proposal is
designed to prohibit MA organizations from limiting or denying coverage
when the item or service would be covered under Traditional Medicare
and continue the existing policies that permit MA organizations to
cover items and services more broadly than original Medicare by using
supplemental benefits. In proposing this change to Sec. 422.101(b)(2),
we are reiterating that limits or conditions on payment and coverage in
the Traditional Medicare program--such as who may deliver a service and
in what setting a service may be provided, the criteria adopted in
relevant NCDs and LCDs, and other substantive conditions--apply to
define the scope of basic benefits. By removing the reference to
``original Medicare manuals and instructions,'' we are not diminishing
the content and value that these manuals and instructions provide in
interpreting and defining the scope of Part A and Part B benefits. MA
organizations should follow and comply with CMS's interpretation of
Medicare laws and coverage requirements as reflected in the manuals,
guidance and instructions issued by CMS, which is the agency with the
applicable expertise and authority for Medicare. The proposed revision
to Sec. 422.101(b)(2) clarifies that statutes and regulations that set
the scope of coverage in the Traditional Medicare program are
applicable to MA organizations in setting the scope of basic benefits
that must be covered by MA plans. We also propose to refer in Sec.
422.101(b)(2) to specific Medicare regulations that include coverage
criteria for Part A inpatient admissions, Skilled Nursing Facility
(SNF) care, Home Health Services and Inpatient Rehabilitation
Facilities (IRF) as examples of general coverage and benefit conditions
in Traditional Medicare that apply to basic benefits in the MA program.
The list of Medicare regulations referred to is not exhaustive and
provides examples of substantive coverage and benefit conditions that
apply to MA. In addition, we are also proposing to revise the current
provision that states that Traditional Medicare coverage rules apply
unless superseded by regulations in this part. We propose to revise
that aspect of Sec. 422.101(b)(2) to refer to laws applicable to MA
plans in order to avoid implying that a Part 422 regulation could
supersede an applicable statute.
The existing rule at Sec. 422.101(c), which states that MA
organizations may elect to furnish, as part of their Medicare covered
benefits, coverage of post-hospital SNF care in the absence of the
prior qualifying hospital stay is an example of a special rule in MA
that deviates from coverage criteria articulated in Traditional
Medicare. The regulation is based on section 1812(f) of the Act, which
authorizes CMS to permit coverage of SNF care without the 3 day
qualifying hospital stay in limited circumstances. (68 FR 50847-50848)
This rule provides MA organizations the flexibility to cover SNF stays
for MA enrollees that would not be otherwise coverable in Traditional
Medicare, if the beneficiary had not met the prior qualifying hospital
stay of 3 days prior to admission in the SNF. This special rule
continues to apply in the MA program; however, we propose to
redesignate this rule to paragraph (c)(2) of Sec. 422.101 as part of
our proposal to add a heading to Sec. 422.101(c) and to expand the
scope of the paragraph. We propose to add the heading ``Medical
Necessity Determinations and Special Coverage Provisions'' to Sec.
422.101(c). As such, we propose to reassign the special rule for
coverage of posthospital SNF in the absence of the prior qualifying
hospital stay as Sec. 422.101(c)(2).The proposed new heading for Sec.
422.101(c), ``Medical Necessity Determinations and Special
Provisions,'' signals that paragraph (c) will address medical necessity
criteria and special rules that apply to MA basic benefits that do not
necessarily conform to coverage rules in Traditional Medicare.
[[Page 79500]]
We propose to codify at Sec. 422.101(c)(1)(A) that MA
organizations must make medical necessity determinations based on
coverage and benefit criteria as specified at Sec. 422.101(b) and (c)
and may not deny coverage for basic benefits based on coverage criteria
that are not specified in Sec. 422.101(b) or (c). This means that when
an MA organization is making a coverage determination on a Medicare
covered item or service, the MA organization cannot deny coverage of
the item or service based on internal, proprietary, or external
clinical criteria not found in Traditional Medicare coverage policies.
It is our interpretation that certain utilization management processes,
such as clinical treatment guidelines that require another item or
service be furnished prior to receiving the requested item or service,
would violate the proposed requirements at Sec. 422.101(b) and (c),
and thus, would be prohibited under this proposal unless it is
specified within the applicable NCD or LCD or Medicare statute or
regulation. We note that we are not proposing to revise Sec. 422.136,
which authorizes MA plans to use step therapy policies for Part B drugs
under certain circumstances; in the next paragraph, we discuss the
basis for authorizing step therapy for Part B drugs in Sec. 422.136 in
more detail. Clinical criteria that restrict access to a Medicare
covered item or service unless another item or service is furnished
first, when not specifically required in NCD or LCD, would be
considered additional internal coverage criteria that are prohibited
under this proposal. When MA plans are allowed to create internal
coverage criteria as specified at proposed Sec. 422.101(b)(6), the
current evidence in widely used treatment guidelines or clinical
literature relied upon to make the coverage determination may recommend
clinical treatment guidelines that require another item or service
first. As long as the supporting widely used treatment guidelines or
clinical literature recommend another item or service first, this would
be acceptable under our proposed policy. We discuss the proposal to add
Sec. 422.101(b)(6) later in this section of the proposed rule.
In a HPMS memo released August 7, 2018, CMS announced that under
certain conditions beginning in contract year 2019, MA plans may use
utilization management tools such as step therapy for Part B drugs. In
a May 2019 final rule (84 FR 23832), we codified MA organizations'
ability to use step therapy for Part B drugs under certain conditions
that protect beneficiaries and acknowledged that utilization management
tools, such as step therapy, can provide the means for MA plans to
better manage and negotiate the costs of providing Part B drugs.
We clarified that, with respect to clinical concerns and
interference with provider care, step therapy or other utilization
management policies may not be used as unreasonable means to deny
coverage of medically necessary services or to eliminate access to
medically necessary Part B covered drugs. (84 FR 23856) The
requirements in the 2019 rule, in combination with current MA program
regulations, ensure access to Part B drugs and limit the potential for
step therapy policies to interfere with medically necessary care.
Organizations have been and remain subject to the MA regulations and
must comply with national and applicable local coverage determinations.
Step therapy protocols cannot be stricter than an NCD or LCD with
specified step therapy requirements. Thus, this proposal remains
consistent with the 2019 rule in that plans must still comply with NCDs
and LCDs when developing step therapy programs for Part B drugs.
Finally, in the May 2019 final rule, we did not authorize step
therapy practices for Part A or Part B (non-drug) items or services and
our proposal here will limit the ability of MA organizations to use
such UM policies in connection with non-drug covered items or services
that are basic benefits. There are a number of differences with step
therapy for Part B drugs and step therapy for non-drug items and
services. From a clinical standpoint, there tends to be more than one
drug that has demonstrated success in treating a certain disease or
condition, and also there are generic alternatives, which is somewhat
different than other Part A and B services. Often, there are not head-
to-head comparisons between drugs in a certain class of medications,
because a non-inferiority study \81\ was conducted in order to bring
the drug to market. This means that it is not always obvious what the
clinically superior drug is for certain diseases or conditions, while
there may be a significant difference in pricing. Furthermore, there
are several studies \82\ demonstrating how increased cost sharing for
medications can, in and of itself, reduce patient adherence to those
medications.
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\81\ https://www.fda.gov/media/78504/download.
\82\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3278192/.
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In addition, the manner in which Part B drugs are purchased and
furnished is somewhat different from coverage of non-drug healthcare
items and services. Generally, MA organizations pay the provider for
both the service of administering a Part B drug and the cost of the
drug, but do not directly pay drug manufacturers or suppliers for the
cost of the drug. MA organizations may negotiate pricing discounts or
rebates with the manufacturer, who is not the entity that directly
furnishes the Part B drug to enrollees and who is not ordinarily paid
directly by the MA organization for what is furnished to enrollees. As
we explained in the May 2019 final rule (84 FR 23858, 23863, and
23869), we believe that Sec. 422.136 can put MA organizations in a
stronger position to negotiate lower pharmaceutical prices with drug
manufacturers, reducing the cost sharing for the beneficiary.
Furthermore, as mentioned previously, studies have demonstrated that
increased cost sharing for medications can reduce patient adherence to
those medications. Therefore, we are not proposing to revise our
current regulations regarding Part B step therapy at this time.
Similar to MACs in Traditional Medicare, we expect MA organizations
to make medical necessity decisions by using NCDs, LCDs, and other
applicable coverage criteria in Medicare statutes and regulations to
determine if an item or service is reasonable, necessary and coverable
under Medicare Part A or Part B. In some circumstances, NCDs or LCDs
expressly include flexibility that allows coverage in circumstances
beyond the specific coverage or non-coverage indications that are
listed in the NCD or LCD. For example, an NCD or LCD may state that the
item or service can be covered when reasonable and necessary for the
individual patient. When deciding whether an item or service is
reasonable and necessary for an individual patient, we expect MA
organizations to make medically necessary decisions in a manner that
most favorably provides access to services for beneficiaries and aligns
with CMS's definition of reasonable and necessary in the Medicare
Program Integrity Manual, Chapter 13, section 13.5.4. This expectation
applies to coverage determinations made before the item or service is
provided (pre-certification/prior authorization), during treatment
(case management), or after the item or service has been provided
(claim for payment). As recommended by the OIG, this proposal clarifies
the limited clinical coverage criteria can be applied to basic benefits
and reinforces our longstanding policy that MA organizations may only
apply coverage criteria that are no more restrictive than
[[Page 79501]]
Traditional Medicare coverage criteria found in NCDs, LCDs, and
Medicare laws. We reiterate that this proposal also applies to
substantive coverage criteria and benefit conditions found in
Traditional Medicare regulations, such as those governing inpatient
admissions and transfers to post-acute care settings, which are not
governed by NCD or LCD. Therefore, MAOs may only deny a request for
Medicare-covered post-acute care services in a particular setting, if
the MAO determines that the Traditional Medicare coverage criteria for
the services cannot be satisfied in that particular setting. As we will
discuss in section III.E.3 in this proposal, this does not restrict an
MA organization's ability to use certain utilization management
processes, like prior authorization or post claim review, to ensure
items and services meet Medicare coverage rules; it simply limits the
coverage criteria that an MA organization can apply to deny an item or
service during those reviews. We solicit comment about the specificity
of the coverage conditions in Traditional Medicare regulations and
whether we should consider, and under what circumstances, allowing MA
organizations to have internal coverage criteria in addition to
requirements in current regulations.
We recognize that there are some Part A or Part B benefits that do
not have applicable Medicare NCDs, LCDs, or specific traditional
Medicare coverage criteria in regulation for MA plans to follow when
making medical necessity determinations. Therefore, we propose at Sec.
422.101(b)(6) that when coverage criteria are not fully established in
applicable Medicare statute, regulation, NCD or LCD, an MA plan may
create internal coverage criteria that are based on current evidence in
widely used treatment guidelines or clinical literature that is made
publicly available. In creating these internal policies, we propose
that MA organizations must follow similar rules that CMS and MACs must
follow when creating NCDs or LCDs. Specifically, MA organizations must
provide publicly available information that discusses the factors the
MA organization considered in making coverage criteria for medical
necessity determinations.
Section 1862(l) of the Act requires the Secretary to issue publicly
a discussion and explanation of the factors considered in making NCDs,
after following a process that affords the public an opportunity to
comment prior to implementation. We propose at Sec. 422.101(b)(6) that
MA organizations must follow a somewhat similar process when creating
internal plan coverage criteria by providing a publicly accessible
summary of evidence that was considered during the development of the
internal coverage criteria used to make medical necessity
determinations, a list of the sources of such evidence, and include an
explanation of the rationale that supports the adoption of the coverage
criteria used to make a medical necessity determination. We are not
proposing that MA organizations must provide a pre-determination
explanation and opportunity for the public to comment on the MA
organization's coverage criteria; however, providing a publicly
accessible summary of the evidence, a list of the sources of evidence,
and an explanation of the rationale for the internal coverage criteria
will protect beneficiaries by ensuring that coverage criteria are
rational and supportable by current, widely used treatment guidelines
and clinical literature. This requirement provides further transparency
into MA organizations' medical necessity decision making and is
consistent with CMS's expectation that MA organizations develop and use
coverage criteria in a way that aligns with Traditional Medicare.
We are also proposing at Sec. 422.101(b)(6) a requirement that an
MA organization's internal clinical criteria must be based on current
evidence in widely used treatment guidelines or clinical literature.
Current, widely-used treatment guidelines are those developed by
organizations representing clinical medical specialties, and refers to
guidelines for the treatment of specific diseases or conditions (such
as referring to the Infectious Diseases Society of America for the
Treatment of Clostridium Difficile \83\) or to determine appropriate
level of care (such as the American Society of Addiction Medicine
Criteria for placement,\84\ continued stay, and transfer or discharge
of patients with addiction and co-occurring conditions). Clinical
literature that CMS considers to be of high enough quality for the
justification of internal coverage criteria include large, randomized
controlled trials or cohort studies or all-or-none studies with clear
results, published in a peer-reviewed journal, and specifically
designed to answer the relevant clinical question, or large systematic
reviews or meta-analyses summarizing the literature of the specific
clinical question published in a peer-reviewed journal with clear and
consistent results. Evidence that is unpublished, is a case series or
report, or derived solely from internal analyses within the MA
organization, or that does not comply with the standards, as previously
described, would not represent proper justification for instituting
internal coverage guidelines that would restrict access to care. This
evidentiary standard is overall consistent with published frameworks
\85\ that rank the reliability of different types of studies in the
clinical literature. CMS solicits comment on the definition of widely
used treatment guidelines and clinical literature that would justify
internal coverage criteria used in the absence of NCDs, LCDs, or
Traditional Medicare statutes or regulations along with the other
requirements proposed in new Sec. 422.101(b)(6)
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\83\ Reference: https://www.idsociety.org/practice-guideline/clostridium-difficile/.
\84\ https://www.asam.org/asam-criteria.
\85\ (for example, Oxford Centre for Evidence-Based Medicine
levels of evidence https://www.cebm.ox.ac.uk/resources/levels-of-evidence/oxford-centre-for-evidence-based-medicine-levels-of-evidence-march-2009andStrengthofRecommendationTaxonomyhttps://www.jabfm.org/content/17/1/59#F1).
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Medical Necessity Determinations
CMS has longstanding guidance interpreting the obligations of MA
organizations when making medical necessity determinations. Per CMS
regulations at Sec. 422.112(a)(6)(ii), MA plans must have policies and
procedures that allow for individual medical necessity determinations.
As a result, an MA organization's coverage rules, practice guidelines,
payment policies, and utilization management policies should be applied
to make individual medical necessity determinations based on the
individual circumstances for the enrollee and item or benefit to be
covered. Chapter 4 of the MMCM, section 10.16, provides that MA
organizations make coverage determinations that are based on: (1) the
medical necessity of plan-covered services based on coverage policies
(this includes coverage criteria no more restrictive than traditional
Medicare described previously and proposed at Sec. 422.101(b)(6)); (2)
where appropriate, involvement of the plan's medical director per Sec.
422.562(a)(4); and (3) the enrollee's medical history (for example,
diagnoses, conditions, functional status)), physician recommendations,
and clinical notes. We are proposing to codify these existing standards
for medical necessity decision making at Sec. 422.101(c)(1)(i) and
propose some new requirements to connect medical necessity
determinations to our new requirements at Sec. 422.101(b). Therefore,
as previously mentioned, we are proposing to codify at Sec.
422.101(c)(1)(i)(A) that MA
[[Page 79502]]
organizations must make medical necessity determinations based on
coverage and benefit criteria as defined at Sec. 422.101(b) and (c)
and may not deny coverage for basic benefits based on coverage criteria
not found in those sources. Second, we propose at Sec.
422.101(c)(1)(i)(B) to require MA organizations to consider whether the
item or service is reasonable and necessary under 1862(a)(1) of the
Act. We note that this has been a longstanding policy in MA based on
how section 1852 of the Act requires MA plans to cover items and
services for which benefits are available under original Medicare,
however we believe it is important to acknowledge this in the context
of MA organization decisions involving medical necessity. Third, we
propose to codify existing policy at Sec. 422.101(c)(1)(i)(C) that MA
organizations consider the enrollee's medical history (for example,
diagnoses, conditions, functional status), physician recommendations,
and clinical notes. Finally, consistent with current requirements at
Sec. 422.562(a)(4), we propose at Sec. 422.101(c)(1)(i)(D) that MA
organizations' medical directors be involved in ensuring the clinical
accuracy of medical necessity decisions where appropriate. We solicit
comments on when it would be appropriate for the MA organization's
medical director to be involved, in light of how Sec. 422.562(a)(4)
requires the medical director to be responsible for ensuring the
clinical accuracy of all organization determinations and
reconsiderations involving medical necessity.
Authority for MA organizations to use utilization management
policies with regard to basic benefits is subject to the mandate in
section 1852(a)(1) of the Act that MA plans cover Medicare Part A and
Part B benefits (subject to specific, limited statutory exclusions)
and, thus, to CMS's authority under section 1856(b) of the Act to adopt
standards to carry out the MA provisions. We believe these proposals
will further implement the requirements set forth in section 1852 of
the Act and Sec. Sec. 422.100 and 422.101, which require MA
organizations to furnish all reasonable and necessary Part A and B
benefits. These proposed requirements for how MA organizations make
coverage decisions will ensure that MA organizations provide equal
access to Part A and Part B benefits as provided in the Traditional
Medicare program; overall our proposals mean that MA organizations will
not be able to deny coverage for basic benefits using coverage criteria
that is not consistent with coverage criteria in Medicare statutes,
regulations, NCDs and LCDs or that is not consistent with the
limitations proposed in Sec. 422.101(b)(6).
We affirm that coordinated care plans may continue to include
mechanisms to control utilization, such as prior authorization,
referrals from a gatekeeper for an enrollee to receive services within
the plan, and, subject to the rules on physician incentive plans at
Sec. Sec. 422.208 and 422.210, financial arrangements that offer
incentives to providers to furnish high quality and cost-effective care
in addition to the coverage criteria that comply with Sec. 422.101(b).
We affirm that MA organizations may furnish a given service using a
defined network of providers, some of whom may not see patients in
Traditional Medicare. Further, we affirm that MA organizations may
encourage patients to see more cost-effective provider types than would
be the typical pattern in Traditional Medicare (as long as those
providers are working within the scope of practice for which they are
licensed to provide care and comply with the provider
antidiscrimination rules set forth under Sec. 422.205). For instance,
MA organizations may offer more favorable cost sharing for certain
provider types within their network.
We also stated in the June 2000 final rule that when a health care
service can be Medicare-covered and delivered in more than one way, or
by more than one type of practitioner, that an MA plan could choose how
the covered services will be provided. We are proposing a narrower
policy that permits MA organizations to continue to choose who provides
Part A and Part B benefits through the creation of their contracted
networks, but limits MA organizations' ability to limit when and how
covered benefits are furnished when Traditional Medicare will cover
different provider types or settings. As a result of the proposal at
Sec. 422.101(c)(1)(i), when care can be delivered in more than one way
or in more than one type of setting, and a contracted provider has
ordered or requested Medicare covered items or services for an MA
enrollee, the MA organization may only deny coverage of the services or
setting on the basis of the ordered services failing to meet the
criteria outlined in Sec. 422.101(c)(1)(i). (We are proposing to
reserve paragraph (c)(1)(ii) to provide flexibility in modifying the
limits on MA medical necessity policies in the future.) For example, if
an MA patient is being discharged from an acute care hospital and the
attending physician orders post-acute care at a SNF because the patient
requires skilled nursing care on a daily basis in an institutional
setting, the MA organization cannot deny coverage for the SNF care and
redirect the patient to home health care services unless the patient
does not meet the coverage criteria required for SNF care in Sec. Sec.
409.30-409.36 and proposed Sec. 422.101(b) and (c).
In order to demonstrate how these policies will apply to actual
cases, we discuss these proposed requirements in the context of two
case examples that were cited in the OIG report. In the first case, an
MA patient was a smoker and had a history of lung nodules and the
provider ordered a Computed Tomography (CT) scan of the chest. NCD
220.1 \86\ identifies Medicare coverage and limitations for CT scans.
In this specific case, the MA organization cited internal clinical
criteria that limited CT scans based on the size of nodules and the
receipt of chest X-rays. In our proposed policy, the internal criteria
applied by the MA organization would be prohibited because there is no
provision in the NCD that requires other diagnostic tests, such as a
chest X-ray, to be tried before CT scanning is used. In order to
appropriately deny this request for a CT scan under our proposed
policy, the MA organization would need to identify why the CT scan, as
the initial diagnostic test, was not reasonable and necessary based on
the medical necessity determination requirements at the proposed
422.101(1)(A) through (D).
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\86\ https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?NCDId=176.
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In another case, an MA patient had a history of dementia,
hypertension and was legally blind due to glaucoma. The patient was
admitted to the acute-care hospital for worsening dementia and acute
agitation. The acute-care hospital requested that the patient be
discharged to a SNF, but the MA organization denied the request based
on the MA organization's internal clinical criteria that determined
that the patient did not have a need for skilled care. The specific
conditions for meeting level of care requirements at a SNF, the
criteria for skilled services, and the need for skilled services can be
found at 42 CFR 409.30-409.36. The internal clinical criteria used by
the MA organization in this case were not identified by the OIG.
However, if the internal criteria were not consistent with the criteria
listed in Sec. Sec. 409.30-409.36, it would be prohibited under our
proposal. The OIG noted that because the patient required physician
supervision and access to physical and occupational therapy, the MA
organization should have covered the SNF care requested.
[[Page 79503]]
In this proposed rule, we are unable to quantify the impact of
these changes on MA organizations because many MA organizations may
already be interpreting our current rules in a way that aligns with our
proposal. MA organizations may have interpreted our longstanding policy
that they cannot apply coverage criteria that are more restrictive than
Traditional Medicare national and local coverage policies to mean
exactly what we are proposing here: that they may only deny Medicare
items or services based on criteria consistent with Traditional
Medicare coverage rules. Other MA organizations may have interpreted
our current rules to mean that they can use internal policies, like
utilization management guidelines, to deny approval for a particular
item or service while directing the MA enrollee to different, but
clinically appropriate, Medicare-covered item or service. The OIG
stated in their report that ``CMS guidance is not sufficiently detailed
to determine whether MA organizations may deny authorization based on
internal MA organization clinical criteria that go beyond Medicare
coverage rules.'' As a result, in this proposal we are making it clear
that MA organizations may not deny authorization based on internal MA
organization clinical criteria that go beyond Medicare coverage rules
or comply with proposed Sec. 422.101(b)(6) addressing standards for
when MA internal coverage rules are permissible. However, we are unable
to quantify or predict how many MA organizations are currently
operating in a manner that conforms with our proposal. We solicit
comment from stakeholders on the full scope of this burden.
3. Appropriate Use of Prior Authorization
Except for emergency, urgently needed, and stabilization services
(Sec. 422.113(a)), and out-of-network services covered by MA PPO
plans, all services covered by MA coordinated care plans (including MSA
network plans, which are coordinated care plans under
422.4(a)(iii)(D)), may be subject to prior authorization. In addition,
MA PFFS and MA MSA plans are not permitted to use prior authorization
policies or ``prior notification'' policies that reduce cost sharing
for enrollees based on whether the enrollee or provider notifies the
PFFS or MSA plan in advance that services will be furnished. See Sec.
422.4(a)(2)(i)(B) and (a)(3)(iv). Appropriate prior authorization
should only be used to confirm the presence of diagnoses or other
medical criteria and to ensure that the furnishing of a service or
benefit is medically necessary or, for supplemental benefits,
clinically appropriate and should not function to delay or discourage
care. We propose to codify this at new Sec. 422.138(a). Specifically,
we are proposing a new Sec. 422.138(a) to provide that a coordinated
care plan may use prior authorization processes for basic benefits and
supplemental benefits only when the prior authorization processes are
consistent with new Sec. 422.138. We propose to use the term
``processes'' to include prior authorization policies and procedures
that address any and all aspects of how prior authorization is used by
an MA organization in a coordinated care plan. We are also proposing a
new Sec. 422.138(b)(1) through (3) to limit the use of prior
authorization processes only to confirm the presence of diagnoses or
other medical criteria that are the basis for coverage determinations
for the specific item or service, to ensure basic benefits are
medically necessary based on standards specified in Sec.
422.101(c)(1), or to ensure that the furnishing of supplemental
benefits is clinically appropriate. This is consistent with
longstanding guidance in Chapter 4, section 30.2, of the MMCM (and also
stated in the CY 2021 Final Rule [86 FR 5864]) that supplemental
benefits must be medically necessary.
We are aware that Special Supplemental Benefits for the Chronically
Ill (SSBCI) may be non-primarily health related. Regular supplemental
benefits must be medically necessary, but SSBCI need to have a
reasonable expectation of improving or maintaining the health or
overall function of the enrollee as required at Sec.
422.102(f)(1)(ii)) and discussed in CY2020 Final Rule (85 FR 33796).
To illustrate how these proposed prior authorization policies would
work, we discuss an example regarding coverage of acupuncture.
Traditional Medicare currently has an NCD for Acupuncture for Chronic
Lower Back Pain (cLBP).\87\ This NCD authorizes acupuncture for
Medicare patients with chronic Lower Back Pain (cLBP) for up to 12
visits in 90 days under the following circumstance: lasting 12 weeks or
longer; nonspecific, in that it has no identifiable systemic cause
(that is, not associated with metastatic, inflammatory, infectious
disease, etc.); not associated with surgery; and not associated with
pregnancy. Here, an MA plan may require prior authorization, before
authorizing treatment as a covered basic benefit, to verify the
patient's pain is not the result of metastatic, inflammatory,
infectious disease, as specified in the NCD. In this example, the plan
is using the prior authorization to confirm a diagnosis specified in
appropriate Medicare Part B coverage policy (in this case an NCD).
Hence, prior authorization is used in this case to verify appropriate
use of clinical standards and thus ensuring appropriate care, which is
acceptable. Another example would be a beneficiary scheduled to undergo
a non-emergency surgery. Here, an MA plan may use prior authorization
before approving the surgery to review the beneficiary's medical
history to verify that the surgery is medically necessary based on
Sec. 422.101(c)(1). In this example, the plan is using prior
authorization to ensure that the surgery is clinically appropriate. (It
is worth noting that if the surgery is an emergency or urgent surgery,
or for stabilization purposes, then prior authorization would not be
allowed).
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\87\ https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?NCDId=373.
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CMS guidance (section 10.16 of Chapter 4 of the MMCM) currently
states that if the plan approved the furnishing of a service through an
advance determination of coverage, it may not deny coverage later on
the basis of a lack of medical necessity. This means that when an
enrollee or provider requests a pre-service determination and the plan
approves this pre-service determination of coverage, the plan cannot
later deny coverage or payment of this approval based on medical
necessity. The only exception here would be medical necessity
determinations for which the plan has the authority to reopen the
decision for good cause or fraud or similar fault per the reopening
provisions at Sec. 422.616. This has been longstanding sub-regulatory
guidance (section 10.16 of Chapter 4) that we are proposing to codify
at Sec. 422.138(c) to ensure the reliability of an MA organization's
pre-service medical necessity determination. Therefore, we do not
believe there is any additional impact. We solicit stakeholder input on
the reasonableness of this assumption. We also solicit comment whether
combining all of our proposals on prior authorization (here and in
section III.E.4 of this proposed rule) in proposed new Sec. 422.138
would make applying and understanding these requirements clearer for
the public and MA organizations.
Finally, we also remind MA plans that section 1852(b) of the Act
states that an MA plan may not deny, limit, or condition the coverage
or provision of benefits under this part, for individuals permitted to
be enrolled with the
[[Page 79504]]
organization under this part, based on any health status-related factor
described in section 2702(a)(1) of the Public Health Service Act.
Additionally, per CMS regulations at Sec. 422.100(f)(2), plan benefit
designs may not discriminate against beneficiaries, promote
discrimination, discourage enrollment or encourage disenrollment, steer
subsets of Medicare beneficiaries to particular MA plans, or inhibit
access to services. We consider prior authorization policies to be part
of the plan benefit design, and therefore cannot be used to
discriminate or direct enrollees away from certain types of services.
A complete estimation of impact on this provision cannot be given
because we require detailed knowledge of proprietary plan information
on the frequency and specific services for which prior authorization is
done in each plan. We solicit comment from stakeholders on the impact
and any additional information that would assist CMS in making an
estimation.
4. Continuity of Care
In addition to the requirements of section 1852(d) of the Act,
Sec. 422.112(b) requires MA organizations that offer coordinated care
plans to ensure continuity of care and integration of services through
arrangements with contracted providers. Requirements in Sec.
422.112(b)(1) through (b)(7) detail specific arrangements with
contracted providers by which MA coordinated care plans are to ensure
effective continuity and integration of health care services for their
enrollees. This includes requiring MA coordinated care plans to have
policies and procedures that provide enrollees with an ongoing source
of primary care, programs for coordination of plan services with
community and social services, and procedures to ensure that the MA
coordinated care plan and its provider network have the information
required for effective and continuous patient care and quality review.
a. Stakeholder Feedback
Stakeholders have communicated to CMS that MA coordinated care
plans' prior authorization processes sometimes require enrollees to
interrupt ongoing treatment. We also have received complaints that MA
plans require repetitive prior approvals for needed services for
enrollees that have a previously-approved plan of care or are receiving
ongoing treatments for a chronic condition. When MA plans require
repetitive prior approvals, enrollees may face delays in receiving
medically necessary care or experience gaps in care delivery that
threaten an enrollee's health.
b. Proposed Regulatory Changes
We believe the inclusion of additional continuity of care
requirements at Sec. 422.112 will help ensure coordinated care plans
comply with and implement the statutory requirement (in section 1852 of
the Act) that MA plans provide access to all medically necessary
Medicare covered benefits. We propose to add a new paragraph (b)(8)(i)
and (ii) at Sec. 422.112 to set two new requirements for the use of
prior authorization by MA coordinated care plans for covered Part A and
B services (that is, basic benefits as defined in Sec. 422.100(c)).
Section 422.112(b) requires MA organizations offering coordinated care
plans to ensure continuity of care and integration of services through
arrangements with contracted providers that include the types of
policies, procedures and systems that are specified in current
paragraphs (b)(1) through (b)(7). First, we propose, at Sec.
422.112(8)(i) that MA coordinated care plans must have, as part of
their arrangements with contracted providers, policies for using prior
authorization for basic benefits. These prior authorization policies
must reflect that all approved prior authorizations must be valid for
the duration of the entire approved prescribed or ordered course of
treatment or service. To illustrate this, if an MA coordinated care
plan has approved a prescribed or ordered course of treatment or
service for which the duration is 90 days, then the MA coordinated care
plan's prior authorization approval must apply to the full 90 days, and
the MA coordinated care plan may not subject this treatment or service
to additional prior authorization requirements prior to the completion
of the approved 90-day treatment or service. To further illustrate, if
the MA coordinated care plan approves a prescribed or ordered course of
treatment for a series of five sessions with a physical therapist, the
MA coordinated care plan may not subject this active course of
treatment or service to additional prior authorization requirements. We
solicit comment on whether the prior authorization should be required
to be valid for the duration of the prescribed order or ordered course
of treatment provided that the criteria in proposed Sec. 422.101(b)
and (c) are met. Second, at Sec. 422.112(b)(8)(ii)(A), we define
``course of treatment'' as a prescribed order or ordered course of
treatment for a specific individual with a specific condition, as
outlined and decided upon ahead of time, with the patient and provider.
(A course of treatment may, but is not required to be part of a
treatment plan). We also propose to define an ``active course of
treatment'' at Sec. 422.112(b)(8)(ii)(B) as a course of treatment in
which a patient is actively seeing a provider and following the
prescribed or ordered course of treatment as outlined by the provider
for a particular medical condition.
Additionally, we propose at Sec. 422.112(b)(8)(i)(B) that MA
organizations offering coordinated care plans must have, as part of
their arrangements with contracted providers, policies for using prior
authorization that provide for a minimum 90-day transition period for
any ongoing course(s) of treatment when an enrollee has enrolled in an
MA coordinated care plan after starting a course of treatment, even if
the course of treatment was for a service that commenced with an out-
of-network provider. This includes enrollees who are new to an MA
coordinated care plan having either been enrolled in a different MA
plan with the same or different parent organization, or an enrollee in
Traditional Medicare and joining an MA coordinated care plan, and
beneficiaries new to Medicare and enrolling in an MA coordinated care
plan. The MA organization must not disrupt or require reauthorization
for an active course of treatment for new plan enrollees for a period
of at least 90 days.
This means that for a minimum of 90 days, when an enrollee switches
to a new MA coordinated care plan, any active course of treatment must
not be subject to any prior authorization requirements. During the
initial 90 days of an enrollee's enrollment with an MA coordinated care
plan, the MA coordinated care plan cannot subject any active course of
treatment (as defined at the proposed Sec. 422.112(b)(8)(ii)(B)) to
additional prior authorization requirements, even if the service is
furnished by an out-of-network provider. We expect any active course of
treatment to be documented in the enrollee's medical records so that
the enrollee, provider, and MA plan can track an active course of
treatment and avoid disputes over the scope of this proposed new
requirement. We also intend that an active course of treatment can
include scheduled procedures regardless whether there are specific
visits or activities leading up to the procedure. To further
illustrate, if an enrollee has a procedure or surgery planned for
January 31st at the time of enrollment in a new MA coordinated care
plan effective January 1, the new MA coordinated care plan must cover
[[Page 79505]]
this procedure without subjecting the procedure to prior authorization.
The planned surgery is a part of an active course of treatment and thus
cannot be subjected to prior authorization by the MA coordinated care
plan in which the beneficiary has newly enrolled. In proposing to limit
the way MA coordinated care plans use prior authorization for enrollees
undergoing an active course of treatment, CMS seeks to ensure the
availability and accessibility of basic benefits, which is consistent
with section 1852 of the Act. CMS is proposing to use a 90 day
transition policy here because it mirrors Part D transition
requirements and using the same period will ensure consistency across
the MA and Part D programs. In addition, use of one consistent
transition period will likely make it easier for new enrollees to
understand their transition coverage. We solicit public comment on
alternative timeframes for transition periods of ongoing treatment,
including the clinical and economic justification for alternative
proposals.
CMS has authority to adopt standards to carry out the applicable MA
provisions in Title XVIII of the Act and to add new contract terms that
we find necessary, appropriate, and not inconsistent with the statute
in sections 1856(b) and 1857(e) of the Act. In addition, section
1854(a)(5) and (6) of the Act provide that CMS is not obligated to
accept every bid submitted and may negotiate with MA organizations
regarding the bid, including benefits. To the extent that these new
minimum standards for MA organizations and how they cover benefits
would not implement section 1852 of the Act, establish standards to
carry out the MA program under section 1856(b) of the Act (which CMS
does not concede as these are important protections to ensure that MA
enrollees receive Medicare covered services), or be contract terms that
we are authorized to adopt under section 1857(e)(1) of the Act, we
believe that our negotiation authority in section 1854 of the Act
permits creation of minimum coverage requirements. While the rules
proposed here do not limit our negotiation authority (which is
addressed in Sec. 422.256), they provide minimum standards for an
acceptable benefit design for CMS to apply in reviewing and evaluating
bids, in addition to establishing important protections to ensure that
enrollees have access to medically necessary items and services that
are covered under Part A and Part B. We note that CMS has similar
negotiation authority for the Part D program at section 1860D-11(d)(2)
of the Act. CMS implemented a similar policy regarding coverage during
a transition period using that authority and a similar explanation in
the 2005 final rule (70 FR 4193). Our proposal is similar to Part D
transitional requirements currently codified at Sec. 423.120(b), which
require Part D sponsors to provide for an appropriate transition
process for enrollees prescribed Part D drugs that are not on their
Part D plan's formulary (including Part D drugs that are on a sponsor's
formulary, but require prior authorization or step therapy under a
plan's utilization management rules). Similar to Part D, as explained
previously, we would establish a transition period for services
provided as an active course of treatment to enrollees who switch from
traditional Medicare to an MA plan and for when an enrollee switches
from an MA a plan to another MA plan as described previously. Our
experience with oversight and monitoring of the Part D program
indicates that the transition policy has proved effective in ensuring
continuity of care for Part D beneficiaries. Based on this experience,
we believe it is appropriate to incorporate a similar beneficiary
protection and coverage requirement in the MA program.
Coordinated care plans are already required to ensure continuity of
care and integration of services through arrangements with contracted
providers at 422.112(b). Therefore, some MA organizations may already
be exercising discretion to waive prior authorization for enrollees
undergoing an active course of treatment. However, CMS has received
anecdotal feedback from stakeholders that care transitions can be
difficult due to MA plan processes that require new coverage decisions
when a patient transitions from one MA plan to another. However, we are
not aware of the extent to which current MA plans are already ensuring
continuity of care in this way nor do we have a strong basis upon which
to quantify how often this type of transition occurs. Therefore, we are
not quantifying the impact in this proposed rule and we solicit
stakeholder input on both of these assumptions: that some MA plans are
providing continuity of care as defined in the proposed Sec.
422.112(b)(8) today and the lack of available data by which to quantify
it.
5. Mandate Annual Review of Utilization Management (UM) Policies by a
UM Committee (Sec. 422.137)
We are proposing procedural improvements to ensure that utilization
management policies are reviewed on a timely basis and have the benefit
of provider input. Any authority for MA organizations to use
utilization management policies with regard to basic benefits is
subject to the mandate in section 1852(a)(1) of the Act that MA plans
cover Medicare Part A and Part B benefits (subject to specific, limited
statutory exclusions) and, thus, to CMS's authority under section
1856(b) of the Act to adopt standards for to carry out the MA
provisions. In light of the feedback we have received and our concern
that enrollees may be facing unreasonable barriers to needed care, we
propose to require MA organizations to establish a Utilization
Management (UM) committee to operate similar to a Pharmacy and
Therapeutics, or P&T, committee. We propose to add requirements
pertaining to this UM committee in a new regulation at Sec. 422.137.
a. Review and Approval of UM Policies
At Sec. 422.137(a), we propose that an MA organization that uses
utilization management (UM) policies, such as prior authorization, must
establish a UM committee that is led by an MA plan's medical director
(described in Sec. 422.562(a)(4)). Section 422.562(a)(4) requires
every MA organization to employ a medical director who is responsible
for ensuring the clinical accuracy of all organization determinations
and reconsiderations involving medical necessity and establishes that
the medical director must be a physician with a current and
unrestricted license to practice medicine in a State, Territory,
Commonwealth of the United States (that is, Puerto Rico), or the
District of Columbia. We are also proposing, at Sec. 422.137(b), that
an MA plan may not use any UM policies for basic or supplemental
benefits on or after January 1, 2024, unless those policies and
procedures have been reviewed and approved by the UM committee. This
proposal would ensure that plan policies and procedures meet the
standards set forth in this proposed rule beginning with the contract
year after the finalization of this proposed rule. We anticipate that
there will be sufficient time between our issuance of a final rule and
January 1, 2024, for each MA organization to engage in the necessary
administrative activity to establish the UM committee and have its
existing UM policies reviewed and, if they meet the standards in this
proposed regulation, approved for use.
We propose the committee responsibilities at Sec. 422.137(d). The
responsibilities would include that the
[[Page 79506]]
UM committee, at least annually, review the policies and procedures for
all utilization management, including prior authorization, used by the
MA plan. We propose at Sec. 422.137(d)(1)(i) through (iii) that such
review must consider--
The services to which the utilization management applies;
Coverage decisions and guidelines for original Medicare,
including NCDs, LCDs, and laws; and
Relevant current clinical guidelines.We propose at Sec.
422.137(d)(2)(i) though (iv) the committee approve only utilization
management policies and procedures that:
Use or impose coverage criteria that comply with the
requirements and standards at Sec. 422.101(b);
Comply with requirements and standards at Sec.
422.138(a)-(c);
Comply with requirements and standards at Sec.
422.202(b)(1); and
Apply and rely on medical necessity criteria that comply
with Sec. 422.101(c)(1).
Currently, Sec. 422.202(b) requires MA organizations to establish
a formal mechanism to consult with the physicians who have agreed to
provide services under the MA plan offered by the organization,
regarding the organization's medical policy, quality improvement
programs and medical management procedures; that formal mechanism for
consultation must ensure that certain standards are met. Specifically,
Sec. 422.202(b)(1)(i) through (iv) require that MA plan practice
guidelines and UM guidelines must: (i) be based on reasonable medical
evidence or a consensus of health care professionals in the particular
field; (ii) consider the needs of the enrolled population; (iii) be
developed in consultation with contracting physicians; and (iv) be
reviewed and updated periodically. We are proposing to modify Sec.
422.202(b)(1)(i) to align it with our standard for creating internal
coverage criteria. We therefore propose to replace the requirement that
practice and UM guidelines be based on reasonable medical evidence or a
consensus of health care professionals in the particular filed with a
requirement that UM guidelines be based on current widely used
treatment guidelines or clinical literature. This is consistent with
the proposed coverage criteria requirements at Sec. 422.101(b)(6),
which are discussed in detail in section III.E.2. of this proposed
rule.
We solicit comment on whether we should also require the UM
committee to ensure that the UM policies and procedures are developed
in consultation with contracted providers; whether the UM committee
should ensure, as required by Sec. 422.202(b)(2), that MA organization
communicates information about practice guidelines and UM policies to
providers and, when appropriate, to enrollees; and whether the UM
committee should have an ongoing or active oversight role in ensuring
that decisions made by an MA plan throughout the year are consistent
with the final, approved practice guidelines and UM policies. We also
propose at Sec. 422.137(d)(3) that the committee must revise UM
policies and procedures as necessary, and at least annually, to comply
with the standards in the regulation, including removing requirements
for UM for services and items that no longer warrant UM so that UM
policies and procedures remain in compliance with current clinical
guidelines. Mandating annual review of utilization management policies
using these standards will help ensure that medically necessary
services are accessible to all enrollees. Because prior authorization
and referral or gatekeeper policies are included in UM policies and
procedures, these proposed requirements would apply as well to those
polices used by MA organizations. CMS expects MA organizations to
update their UM policies after the UM committee approves or revises
them. We solicit comment as well on the extent to which the proposed
regulation text sufficiently and clearly establishes the standards and
requirements discussed here.
We are considering whether the duties of this UM Committee should
be expanded to include all internal coverage policies of an MA plan (or
at least of all coordinated care plans). Whether a policy is explicitly
called ``utilization management'' or a ``coverage criteria,'' the
policy can limit enrollee access to plan-covered services. As this
proposed rule as a whole makes clear, ensuring that enrollees have
access to and are furnished covered benefits is a priority. We solicit
comment on whether to require the UM Committee to review all internal
coverage criteria used by the MA plan.
b. Utilization Management Committee Membership
At Sec. 422.137(c)(1) through (4), we propose that the UM
committee must include a majority of members who are practicing
physicians; include at least one practicing physician who is
independent and free of conflict relative to the MA organization and MA
plan; include at least one practicing physician who is an expert
regarding care of elderly or disabled individuals; and include members
representing various clinical specialties (for example, primary care,
behavioral health) to ensure that a wide range conditions are
adequately considered in the development of the MA plan's utilization
management policies. These composition requirements are in addition to
the proposal that the medical director, required for each MA plan under
Sec. 422.562(a)(4), lead the UM committee.
We solicit comment on recommendations for other types of providers,
practitioners, or other health care professionals that should also be
included on the UM committee and whether additional standards for
composition of the UM committee are necessary with regard to expertise,
freedom of conflicts of interest, or representation by an enrollee
representative. We have received feedback from the provider community
that UM policies for specific services or items are often not reviewed
by providers with the expertise appropriate for the service. Therefore,
we also solicit comment on whether we should include a requirement,
that when the proposed UM committee reviews UM policies applicable to
an item or service, that the review must be conducted with the
participation of at least one UM committee member who has expertise in
the use or medical need for that specific item or service.
c. Documentation of Determination Process
We propose at Sec. 422.137(d)(4) that the UM committee must
clearly articulate and document processes to determine that the
requirements under paragraphs (c)(1) through (4) of this section have
been met, including the determination by an objective party of whether
disclosed financial interests are conflicts of interest and the
management of any recusals due to such conflicts. Finally, we propose
at Sec. 422.137(d)(5) that the UM committee must document in writing
the reason for its decisions regarding the development of UM policies
and make this documentation available to CMS upon request. The
documentation should provide CMS with an understanding of the UM
committee's rationale for their decision, and may include, but is not
limited to, information such as meeting minutes outlining issues
discussed and any relevant supporting documentation.
d. Interchangeable Use of the P&T and Utilization Management Committees
We believe it is appropriate that this proposal for the
establishment of an MA plan UM committee largely mirror, with certain
exceptions, the requirements in
[[Page 79507]]
Sec. 422.136 that MA organizations have a pharmacy and therapeutic
committee that reviews and approves step therapy programs for Part B
drugs and the requirements regarding membership, scope, and
responsibilities of that P&T committee. We believe that similar
requirements, which were modeled after the longstanding Part D P&T
committee requirements at Sec. 423.120(b), are generally adequate for
the purposes of the UM committee. Overall, this proposal is designed to
require review and approval of utilization management policies,
including utilization management policies that use or impose coverage
criteria, to ensure that these policies and procedures are medically
appropriate, consistent with Medicare coverage rules, and do not
negatively impact access to medically necessary services.
To meet the existing requirements at Sec. 422.136(b), MA-PDs are
permitted to utilize an existing P&T committee established for purposes
of administration of the Part D benefit under part 423 of this chapter.
Thus, we anticipate that some of the requirements proposed for the UM
committee may overlap or duplicate existing P&T committee requirements
in connection with coverage of and utilization management policies for
Part B drugs. Therefore, we solicit comment on whether an MA plan
should be permitted to utilize the proposed UM committee at Sec.
422.137 to also meet the existing P&T committee requirements of Sec.
422.136(b), provided that elements and requirements of all applicable
regulations governing the committees and their functions (that is,
Sec. Sec. 422.136, proposed 422.137, and 423.120) are met. To the
extent that LCD policies and localized or regional professional
standards of practice are used by the proposed UM committee in
performing its duties, it may not be advisable to permit use of one UM
committee to serve multiple functions for diverse service areas. We
also solicit comment on whether to explicitly permit an MA
organization, or the parent organization of one or more MA
organizations, to use one UM committee to serve multiple MA plans,
including whether that should be limited to MA plans that are offered
under the same contract.
6. Additional Areas for Consideration and Comment
a. Termination of Services in Post-Acute Care
We have received complaints about potential quality of care issues
regarding early termination of services in post-acute care settings by
MA organizations. The complaints allege that MA organizations are
increasingly terminating beneficiaries' coverage of post-acute care
before the beneficiaries are healthy enough to return home. It is
further alleged that, in some situations, even after a beneficiary has
successfully appealed to the Quality Improvement Organization (QIO) and
received a favorable decision to reauthorize coverage of services
delivered by providers of services described in Sec. Sec. 422.624 and
422.626, the MA organization sends another notice of termination of
services a day or two after the coverage was reinstated. As described
in section III.E.2. of this proposed rule, we are proposing to revoke
the current policy, outlined in the June 2000 final rule, that when a
health care service can be Medicare-covered and delivered in more than
one way, or by more than one type of practitioner, an MA plan could
choose how the covered services will be provided. Under the proposal at
Sec. 422.101(c)(1)(i), when care can be delivered in more than one way
or in more than one type of setting, and a contracted provider has
ordered or requested Medicare covered items or services for an MA
enrollee, the MA organization may only deny coverage of the services or
setting on the basis of the ordered services failing to meet the
criteria outlined in Sec. 422.101(c)(1)(i) While CMS believes this may
address some of the issues regarding early termination of services, we
are soliciting feedback from stakeholders that have information related
to this situation, and investigating internally, in order to get a more
thorough understanding on the issue.
The rules at 42 Sec. 422.624 define what constitutes a termination
of services from home health agencies, SNFs, and comprehensive
outpatient rehabilitation facilities and how enrollees must be notified
of upcoming terminations of services. We solicit comment on potential
changes we could make to existing rules, including Sec. 422.624, or in
adopting new rules to better manage incentives between MA organizations
and post-acute care providers to deliver the best possible care for
Medicare beneficiaries. Some topics for comment include:
How MA organizations preauthorize treatment in discrete
increments and the extent to which our proposals (at proposed
Sec. Sec. 422.101(b) and (c) and 422.112(b)(8)) may address or limit
these practices;
Whether enrollees should have additional time to file
appeals or be able to file late appeals to the QIO regarding
terminations of services;
Whether enrollees should receive information from the MA
plan regarding the basis for termination of services (for example, the
clinical rationale for termination of services) as part of the
termination notice and without the enrollee having to request an appeal
to the QIO (see Sec. 422.626(e)(1) and (2));
When coverage is reinstated based on a QIO decision,
whether the enrollee should have more than the 2 day period from the
date of a new termination of services notice before coverage can be
terminated again by the MA organization, taking into account any
medical necessity determinations made by the QIO.
We thank commenters in advance for carefully considering and
providing information on this important issue.
b. Gold Carding
In the 2020 proposed rule titled ``Medicaid Program; Patient
Protection and Affordable Care Act; Reducing Provider and Patient
Burden by Improving Prior Authorization Processes, and Promoting
Patients' Electronic Access to Health Information for Medicaid Managed
Care Plans, State Medicaid Agencies, CHIP Agencies and CHIP Managed
Care Entities, and Issuers of Qualified Health Plans on the Federally-
Facilitated Exchanges; Health Information Technology Standards and
Implementation Specifications,'' which appeared in the Federal Register
on December 18, 2020 (85 FR 82586), (hereinafter the December 2020
proposed rule), CMS requested comments on ``gold-carding,'' MA plan
programs that relax or reduce prior authorization requirements for
contracted providers that have demonstrated a consistent pattern of
compliance with plan policies and procedures. At 85 FR 82619, CMS noted
that some MA plans relieve certain contracted providers from prior
authorizations requirements based on consistent adherence to plan
requirements, appropriate utilization of items or services, and other
evidence-driven criteria that the MA plan deems relevant. In the
December 2020 proposed rule, CMS also discussed its own experience and
success with a similar approach in the Medicare FFS Review Choice
Demonstration for Home Health Services.\88\ It is appropriate to
reiterate in this rule that we believe the use of gold-carding programs
could help alleviate the burden associated with prior authorization and
that such
[[Page 79508]]
programs could facilitate more efficient and timely delivery of health
care services to enrollees. We encourage MA plans to adopt gold-carding
programs that would allow providers to be exempt from prior
authorization and provide more streamlined medical necessity review
processes for providers who have demonstrated compliance with plan
requirements.
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\88\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Choice-Demonstration/Review-Choice-Demonstration-for-Home-Health-Services.html.
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c. Address Vulnerabilities That Can Lead to Manual Review Errors and
System Errors
Finally, the April 2022 OIG report indicated that some denials were
the result of MA plan errors. This included both human and system
related errors. For example, the OIG found situations where a request
was denied because the MA plan reviewer misidentified important
information in a request. They also found situations where a request
was denied because provider coverage details were incorrectly
configurated in the MA plan's system. As a result of these findings,
the OIG recommends that CMS should direct MA organizations to take
additional steps to identify and address vulnerabilities that can lead
to manual review errors and system errors. We concurred with this
recommendation, and are directing MA plans to review PA procedures,
protocols, and systems to identify and address vulnerabilities that can
lead to errors. Currently, Sec. 422.503(b)(4) requires all MA
organizations to have administrative and management arrangements that
include an effective compliance program, which must include measures
that prevent, detect, and correct non-compliance with CMS' program
requirements as well as measures that prevent, detect, and correct
fraud, waste, and abuse; MA organizations are required to include in
this compliance program the establishment and implementation of an
effective system for routine monitoring and identification of
compliance risks. Failure to furnish medically necessary covered
services in a timely manner implicates compliance with Sec. Sec.
422.100, 422.101 and 422.112 at a minimum, and we believe that the
OIG's April 2022 report has sufficiently identified this area as a
compliance risk that MA organizations must address in accordance with
Sec. 422.503(b)(4)(vi)(F) and (G).
We solicit comment on whether and how existing requirements at
Sec. 422.503(b)(4)(vi) may be adjusted to better account for these
medical review and system errors. In addition, we solicit comment
whether proposed Sec. 422.137 should include a provision for the UM
committee to develop, implement and oversee activities by MA
organizations related to utilization policies and procedures.
F. Request for Comment on the Rewards and Incentives Program
Regulations for Part C Enrollees (Sec. 422.134 and Subpart V)
CMS is soliciting comment on a potential revision to the regulation
governing MA Reward and Incentive (R&I) programs. CMS first authorized
MA organizations to offer R&I programs in a regulation (Sec. 422.134)
finalized in 2014 (79 FR 29956, published May 23, 2014) and
subsequently updated that regulation in a January 2021 final rule
titled ``Medicare and Medicaid Programs; Contract Year 2022 Policy and
Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly'' (85 FR
5864, January 21, 2021).
CMS's intent in adopting Sec. 422.134 to authorize MA R&I programs
to be offered by MA organizations is to incentivize healthy behaviors
among enrollees. Under Sec. 422.134, MA plans have the option to
uniformly offer enrollees rewards in exchange for participating in
health related activities which either promote improved health, prevent
injury and illness, or promote efficient use of health care resources.
Our experience has shown that these programs have been successful to
date.
In adopting the regulation governing MA R&I programs, we relied on
our authority under sections 1856(b)(1) and 1857(e)(1) of the Act. In
addition, several of the provisions of the regulation, such as
compliance with relevant fraud and abuse laws including the Federal
anti-kickback statute and compliance with MA program anti-
discrimination provisions, are consistent with laws governing the
Medicare program and the MA program as whole.
Sections 1851(h)(4) and 1854(d)(1) of the Act prohibit an MA
organization from giving enrollees cash or monetary rebates as an
inducement for enrollment or otherwise. Based on this statutory
prohibition of cash or cash equivalents, CMS prohibits a reward item
consisting of cash or cash equivalents at 42 CFR 422.134(d)(2)(i). In
the proposed rule titled ``Medicare and Medicaid Programs; Contract
Year 2021 and 2022 Policy and Technical Changes to the Medicare
Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid
Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care
for the Elderly'' which appeared in the February 18, 2020 Federal
Register (85 FR 9002), we explained that we were proposing at that time
to adopt the Office of Inspector General (OIG)'s definition of cash
equivalents (81 FR 88393), which defined ``cash equivalents'' as items
convertible to cash (such as a check) or items that can be used like
cash (such as a general purpose debit card) but not including a gift
card that can be redeemed only at certain store chains or for a certain
purpose, like a gasoline card. CMS finalized Sec. 422.134(d)(3)(ii) in
a January 2021 final rule with a provision that it is permissible for
an MA organization's R&I program to offer a gift card ``that can be
redeemed only at specific retailers or retail chains or for a specific
category of items or services.''
However, we have been prompted by several considerations suggesting
that CMS may need to further revise and clarify the definition of
``cash equivalent'' in the framework of MA R&I programs. First, in a
recent rule (85 FR 77684, December 2, 2020), OIG explained that cash
equivalents include ``gift cards offered by large retailers or online
vendors that sell a wide variety of items (for example, big-box stores)
. . .''. Additionally, the January 2021 CMS final rule also finalized
authority for a separate R&I program in connection with a Part D real
time benefit tool requirement at Sec. 423.128(d)(4) and (5). In the
preamble of that regulation, CMS was clear that a gift card would be
considered a cash equivalent when it could be used for large retailers
like Amazon.
In addition, another CMS rule (entitled ``Medicare Program;
Medicare Shared Savings Program; Accountable Care Organizations--
Pathways to Success and Extreme and Uncontrollable Circumstances
Policies for Performance Year 2017'' published on December 31, 2018 (83
FR 67816, 67980)) characterizes Amazon gift cards as cash equivalents
because they could be used for a variety of diverse purchases, which
makes the gift card usable like cash (86 FR 5954).
Finally, in our January 2021 final rule adopting Sec. 422.134, we
did not specifically address gift cards from big-box stores nor did we
discuss them in relation to the prohibition on cash equivalents in
Sec. 422.134(d)(2)(i). CMS has since received inquiries from various
stakeholders requesting a definition of `big-box store' in the context
of MA R&I program gift cards.
Because of these considerations and to clarify the scope of
prohibited cash equivalents for the purposes of MA Reward & Incentive
programs, we are
[[Page 79509]]
soliciting comment on whether CMS should further clarify the definition
of ``cash equivalent'' as that term is used in Sec. 422.134. CMS is
particularly interested in stakeholder feedback on whether CMS should
revise our MA R&I program regulation to include parameters for
permissible gift cards being offered as MA reward items. We are
interested in learning how MA plans interpret and implement our current
guidance and whether stakeholders believe that more specific guidance
on permissible gift card reward items is necessary. We welcome feedback
on all aspects of this issue.
G. Section 1876 Cost Contract Plans and Cost-Sharing for the COVID-19
Vaccine and its Administration (Sec. 417.454)
Section 3713 of The Coronavirus Aid, Relief, and Economic Security
(CARES) Act (2020) (Pub. L. 116-136) requires coverage of the COVID-19
vaccine and its administration at zero cost-sharing for enrollees of
Traditional Medicare and Medicare Advantage. The CARES Act revised
section 1861(s)(10)(A) of the Act to include among services provided at
zero cost-sharing in the Medicare FFS program, the COVID-19 vaccine and
its administration. 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 traditional
Medicare for a COVID-19 vaccine and its administration when the MA plan
covers this Traditional Medicare benefit.
Cost plans are coordinated care plans and share many of the same
features as Medicare Advantage plans but have a separate statutory
authority (section 1876 of the Act) and are paid on a reasonable cost
basis, In addition, unlike with MA plans, enrollees in cost plans may
receive services from original Medicare in addition to services from
the cost plan's network; when they receive benefits from healthcare
providers that are not contracted with the cost plan, cost plan
enrollees are covered by original Medicare, with the same cost sharing
and coverage as the Traditional Medicare program. The CARES Act did not
include the zero cost-sharing provision for section 1876 cost contract
plans (cost plans), so using its authority under section 1876(i)(3)(D)
of the Act, which authorizes CMS to impose ``other terms and conditions
not inconsistent with [section 1876]'' that are deemed ``necessary and
appropriate,'' CMS established a requirement for cost plans to use cost
sharing that does not exceed the cost sharing in Traditional Medicare
for a COVID-19 vaccine and its administration in an interim final rule,
titled Additional Policy and Regulatory Revisions in Response to the
COVID-19 Public Health Emergency, which appeared in the Federal
Register on November 6, 2020.\89\ Because of the cost sharing used in
Traditional Medicare per sections 1833(a)(1)(B) and 1861(s)(10)(A) of
the Act, this is effectively a requirement to cover this benefit with
zero cost sharing. In a newly adopted Sec. 417.454(e)(4), we specified
the timeline for coverage of a COVID-19 vaccine and its administration
with zero cost-sharing for cost plans coverage of cost-sharing for cost
plans that may not exceed cost sharing under Traditional Medicare as
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.'' However, the CARES Act did
not specify an end date for the zero cost-sharing requirement for MA
plans and we believe that it is appropriate that enrollees in a section
1876 cost plan have the cost sharing protection for a COVID vaccine and
its administration enrollees in the Medicare FFS program and in MA
plans have when these cost plan enrollees get this benefit from
healthcare providers that are in-network with the cost plan. Therefore,
we are proposing to replace the provision adopted at Sec.
417.454(e)(4) in the November 2020 interim final rule with a new
requirement that section 1876 cost plans cover without cost-sharing the
COVID-19 vaccine and its administration described in section
1861(s)(10)(A) of the Act. This proposal is based on authority in
section 1876(i)(3)(D) of the Act to add requirements for cost plans.
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\89\ See interim final rule with request for comments titled
``Additional Policy and Regulatory Revisions in Response to the
COVID-19 Public Health Emergency'' CMS 9912 IFC, 85 FR 71142.
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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 in-network. Requiring cost plans to comply with the same cost-
sharing protections available to Medicare beneficiaries in traditional
Medicare and those enrolled in MA plans would ensure equitable access
to care and that cost is not a barrier for beneficiaries to receive the
COVID-19 vaccine. CMS has extended to cost plans other statutory
requirements related to cost-sharing via regulation for those services
that the Secretary determines require a level of predictability and
transparency for beneficiaries. For example, in a final rule which
appeared in the Federal Register on April 15, 2011, CMS, using its
authority under section 1876(i)(3)(D) of the Act, extended to cost
plans the statutory requirements specifying that in-network cost-
sharing for MA enrollees could not be higher than cost-sharing for
traditional Medicare enrollees for chemotherapy administration
services, renal dialysis services, and skilled nursing care in those
cost sharing protections are Sec. 417.454(e)(1) through (e)(3). We
welcome comment on this proposal.
H. Review of Medical Necessity Decisions by a Physician or Other Health
Care Professional With Expertise in the Field of Medicine Appropriate
to the Requested Service and Technical Correction to Effectuation
Requirements for Standard Payment Reconsiderations (Sec. Sec. 422.566,
422.590, and 422.629)
Based on general feedback CMS has received from provider
associations regarding the use of prior authorization (PA) by MA
organizations and the submission and review of clinical documentation
to support a request for coverage of a service subject to PA, we are
proposing to modify the requirement in Sec. Sec. 422.566(d) and
422.629(k)(3) with respect to the expertise of the physician or other
appropriate health care professional who must review an organization
determination if the MA organization or applicable integrated plan
(AIP), defined at Sec. 422.561, expects to issue an adverse decision
based on the initial review of the request. Pursuant to our authority
under section 1856(b) of the Act to adopt standards to carry out the
Part C program and in order to implement section 1852(g) of the Act
regarding coverage decisions and appeals, CMS established procedures
and minimum standards for MA plans to make organization determinations
and reconsiderations regarding benefits. In addition, CMS adopted
unified grievance and appeal procedures using authority in section
1859(f)(8)(B) of the Act to establish such unified procedures for D-
SNPs; we limited the unified procedures to AIPs, a subset of D-SNPs,
when adopting those procedures. These requirements are codified in our
regulations at 42 CFR part 422, subpart M. In addition, because cost
plans must comply with the beneficiary appeals and grievance rights,
procedures, and requirements at Part 422, subpart M, per Sec. Sec.
417.600(b) and 417.840, these proposals apply to cost plan and
healthcare prepayment plan appeals as well.
[[Page 79510]]
Specifically, section 1852(g)(1)(A) of the Act requires that a MA
organization have a procedure for making determinations regarding
whether an enrollee is entitled to receive a health service and the
amount (if any) the individual is required to pay for such service and,
further, that such procedures provide that determinations be made on a
timely basis, subject to section 1852(g)(3) of the Act (which provides
for expedited determinations and reconsiderations as part of the MA
plan's appeal process). Section 1852(g)(2)(B) of the Act requires plan
reconsiderations related to coverage denials that are based on medical
necessity determinations to be made by a physician with appropriate
expertise in the applicable field of medicine, and that the physician
reviewer be different from the physician or other health care
professional involved in the initial determination. While section
1852(g)(1)(A) of the Act does not specify who must conduct the initial
medical necessity determinations, we interpret the reference in section
1852(g)(2)(B) of the Act to the physician involved in the initial
determination to mean that MA plans must have appropriate health care
professionals review initial determinations involving issues of medical
necessity. This is an established interpretation of the statute and is
reflected in existing regulations related to review of organization
determinations. Specifically, the current regulation at Sec.
422.566(d) states that if the MA organization expects to issue a
partially or fully adverse medical necessity (or any substantively
equivalent term used to describe the concept of medical necessity)
decision based on the initial review of the request, the organization
determination must be reviewed by a physician or other appropriate
health care professional with sufficient medical and other expertise,
including knowledge of Medicare coverage criteria, before the MA
organization issues the organization determination decision. The
physician or other health care professional must have a current and
unrestricted license to practice within the scope of his or her
profession in a State, Territory, Commonwealth of the United States
(that is, Puerto Rico), or the District of Columbia. The current
regulation at Sec. 422.629(k)(3) also applies the same requirement to
AIPs with the additional requirement that the health care professional
also have knowledge of Medicaid coverage criteria.
We are proposing to revise Sec. Sec. 422.566(d) and 422.629(k)(3)
to add to that existing requirement that the physician or other
appropriate health care professional who conducts the review must have
expertise in the field of medicine that is appropriate for the item or
service being requested before the MA organization or AIP issues an
adverse organization determination decision. In other words, we are
proposing that the existing regulation text with the more general
requirement that the physician or other appropriate health care
professional have sufficient medical and other expertise be replaced by
a requirement linking the requisite expertise of the reviewer to the
specific service that is the subject of the organization determination
request. Under this proposal, the physician or other appropriate health
care professional reviewing the request need not, in all cases, be of
the same specialty or subspecialty as the treating physician or other
health care provider. This is the same standard set forth at Sec.
422.590(h)(2) related to the appropriate expertise applicable to
physician review of reconsiderations. The rule at Sec. 422.590(h)(2)
interprets and implements the requirement in section 1852(g)(2)(B) of
the Act that any reconsideration that relates to a determination to
deny coverage based on a lack of medical necessity be made only by ``a
physician with appropriate expertise in the field of medicine which
necessitates treatment'' to mean a physician with an expertise in the
field of medicine that is appropriate for the covered services at
issue. The standard of requiring a reviewing physician's expertise to
be appropriate for the specific service at issue is long-standing
policy with respect to plan reconsiderations and we believe it is
appropriate as well as practical to adopt this standard for the review
of organization determinations by physicians and other appropriate
health professionals in Sec. Sec. 422.566(d) and 422.629(k)(3).
Specifically, this proposed approach would strengthen clinical review
in the organization determination process, while continuing to afford
plans maximum flexibility in leveraging reviewer resources.
If this proposal is finalized, we expect MA organizations,
including AIPs, to apply the standard of ``expertise appropriate for
the specific service at issue'' at the organization determination level
in the same manner as plans have applied this standard at the
reconsideration level. As explained in the final rule establishing the
Medicare+Choice program (65 FR 40170, 40288), published June 29, 2000,
which later became the Medicare Advantage program, and in established
sub-regulatory guidance, if the physician is not of the same specialty
or subspecialty as the treating physician, the physician must have the
appropriate level of training and expertise to evaluate the necessity
of the requested drug, item, or service. This does not require the
physician involved to be of the exact same specialty or sub-specialty
as the treating physician. As an example, where there are few
practitioners in a highly specialized field of medicine, a plan may not
be able to retain the services of a physician of the same specialty or
sub-specialty to review the organization determination. Plans will have
discretion to determine on a case-by-case basis what constitutes
appropriate expertise based on the services being requested and
relevant aspects of the enrollee's health condition. For example, if an
enrollee is referred by a primary care physician to a thyroid surgeon
for a thyroid nodule removal, the health professional evaluating the
request prior to the plan issuing a denial should be a doctor with
thyroid expertise, but does not necessarily need to be a surgeon. As
another example, if a plan intends to deny a request for a home
nebulizer, the organization determination request should be reviewed by
a health professional with respiratory expertise, such as a respiratory
therapist.
If finalized, we believe this proposal will enhance the existing
requirement for who is permitted to review organization determinations
that deny coverage in whole or in part, while retaining plan
flexibility and operational efficiency in selecting appropriate
reviewers. We reiterate that this requirement applies when the MA
organization or AIP expects to issue a partially or fully adverse
medical necessity decision based on the initial review of the request
and does not limit the scope of reviewers where the plan approves
coverage or determines that an item or service is medically necessary.
From the perspective of enrollees and providers who request coverage on
an enrollee's behalf or submit clinical documentation to support a
coverage request, we believe this review standard will increase the
likelihood of a thorough clinical review. Requiring expertise related
to the requested service, as we are proposing, will enhance the overall
decision-making process and the quality of the review conducted at the
organization determination level, particularly when a prior
authorization or other utilization management requirement on the
requested item or service necessitates review of specific clinical
[[Page 79511]]
documentation to support coverage. Further, we believe this proposal
may reduce coverage denials at the organization determination level
that could then be subject to the administrative appeals process. As a
whole, we believe that this proposal strikes the appropriate balance
between the proper clinical review of organization determinations and
minimizing overall burden in the administration of the Part C benefit
for MA plans and AIPs.
While the proposed requirement that the physician or other
appropriate health care professional have expertise in the field
appropriate to the requested service may result in AIPs and other MA
organizations reallocating staff resources in certain cases to ensure
that someone with appropriate expertise is reviewing the request, we
believe that the burden will be negligible and that this proposal will
not require changes to AIPs and other MA organizations overall
staffing. While performing a review of an organization determination
request involves review of clinical documentation, this proposal would
not impose any new information collection or recordkeeping requirements
on AIPs or other MA organizations.
In the course of this rulemaking, we noticed the need for a
technical correction in Sec. 422.590(b)(1), which cross references the
effectuation requirements in Sec. 422.618. Section 422.590(b)(1)
erroneously cites to Sec. 422.618(a)(1), but it should cite to the
effectuation requirements at Sec. 422.618(a)(2) related to favorable
decisions on payment requests. Thus, we propose to make the technical
correction in this rule.
We welcome comments on this proposal and the technical correction.
I. Effect of Change of Ownership Without Novation Agreement (Sec. Sec.
422.550 and 423.551)
In accordance with standards under sections 1857 and 1860 of the
Act, each Medicare Advantage (MA) organization and Part D sponsor is
required to have a contract with CMS in order to offer an MA or
prescription drug plan. Further, section 1857(e)(1) and 1860D-
12(b)(3)(D) of the Act authorizes additional contract terms consistent
with the statute and which the Secretary finds are necessary and
appropriate. Pursuant to this authority and at the outset of the Part C
and Part D programs, we implemented contracting regulations at
Sec. Sec. 422.550 and 423.551, respectively, which provide for the
novation of an MA or Part D contract in the event of a change of
ownership involving an MA organization or Part D sponsor (63 FR 35106
and 70 FR 4561).
Our current regulations at Sec. Sec. 422.550 and 423.551, as well
as our MA guidance under ``Chapter 12 of the Medicare Managed Care
Manual--Effect of Change of Ownership'' \90\ require that when a change
of ownership occurs, as defined in the regulation, advance notice must
be provided to CMS and the parties to the transaction must enter into a
written novation agreement that meets CMS' requirements. If a change of
ownership occurs and a novation agreement is not completed and the
entities fail to provide notification to CMS, the regulations at
Sec. Sec. 422.550(d) and 423.551(e) indicate that the existing
contract is invalid. Furthermore, Sec. Sec. 422.550(d) and 423.551(e)
provide that if the contract is not transferred to the new owner
through the novation process, the new owner must enter into a new
contract with CMS after submission of an MA or Part D application, if
needed.
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\90\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/mc86c12.pdf.
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The current regulation does not fully address what happens when the
contract becomes ``invalid'' due to a change of ownership without a
novation agreement and/or notice to CMS, or in other words, what
happens to the existing CMS contract that was held by an entity that
was sold. This presents an issue because CMS would still recognize the
original entity as the owner, even if the contract is now held by a
different entity. Therefore, we are proposing to revise Sec. Sec.
422.550(d)(1) and 423.551(e)(1) to make it clear that in this case, the
affected contract may be unilaterally terminated by CMS in accordance
with Sec. Sec. 422.510(a)(4)(ix) and 423.509(a)(4)(ix), which
establishes that failure to comply with the regulatory requirements
contained in part 422 (or part 423 if applicable) is a basis for CMS to
terminate an MA or Part D contract. In addition, we are strengthening
our enforcement authority regarding this process, with the proposed
amendments to Sec. Sec. 422.550(d) and 423.551(e). Pursuant to our
authority under sections 1857 and 1860 of the Act, we propose to amend
the regulations at Sec. Sec. 422.550(d) and 423.551(e) to outline the
process CMS will follow, including imposing applicable sanctions before
terminating a contract that has a change in ownership without a
novation agreement, in accordance with CMS requirements.
In the interest of protecting and effectively managing the MA and
Part D programs, CMS, through the application process, must ensure that
MAOs through their respective legal entities are deemed eligible to
contract with CMS. Thus, any change in ownership from one legal entity
to another requires CMS to determine whether the new organization
continues to meet the regulatory requirements for operating a contract
under the MA and Part D programs. If this does not happen and a change
in ownership from one legal entity to another occurs without CMS
approval, it compromises our ability to ensure the integrity of the MA
and Part D programs and further puts at risk our ability to monitor a
contract's activity under the new legal entity, thereby putting
enrollees at risk. We propose to provide an opportunity for
organizations to demonstrate that the legal entity that is assuming
ownership by way of novation is able to meet the requirements set forth
by our regulations.
We propose to impose intermediate enrollment and marketing
sanctions, as outlined in Sec. 422.750(a)(1) and (a)(3) and Sec.
423.750(a)(1) and (a)(3) on the affected contract, that will remain in
place until CMS approves the Change of Ownership, (including execution
of an approved novation agreement) or the contract is terminated. This
may be completed in the following ways:
If the new owner does not participate in the same service
area as the affected contract, at the next available opportunity, it
must apply for and be conditionally approved for participation in the
MA or Part D program and within 30 days of the conditional approval (if
not sooner) submit the documentation required under Sec. Sec.
422.550(c) or 423.551(d) for review and approval by CMS (note that
organizations may submit both the application and the documentation for
the change of ownership concurrently); or
If the new owner currently participates in the Medicare
program and operates in the same service area as the affected contract,
it must, within 30 days of imposition of intermediate sanctions, submit
the documentation required under Sec. Sec. 422.550(c) or 423.551(d)
for review and approval by CMS.
If the new owner is not operating in the same service area and
fails to apply at the next opportunity, the existing contract will be
subject to termination in accordance with Sec. Sec. 422.510(a)(4)(ix)
or 423.509(a)(4)(x). Or if the new owner is operating in the same
service area and fails to submit the required documentation within 30
days of imposition of intermediate sanctions, the existing contract
will be subject to
[[Page 79512]]
termination in accordance with Sec. Sec. 422.510(a)(4)(ix) or
423.509(a)(4)(x).
This action would be subject to the past performance rules
applicable under Sec. Sec. 422.502(b)(1) or 423.503(b)(1).
We solicit comments on these proposals.
J. Civil Money Penalty Methodology (Sec. Sec. 422.760 and 423.760)
Sections 1857(g)(3)(A) and 1860D-12(b)(3)(E) of the Act provide CMS
with the ability to impose Civil Money Penalties (CMPs) of up to
$25,000 per determination (determinations are those which could
otherwise support contract termination, pursuant to Sec. 422.509 or
Sec. 423.510), as adjusted annually under 45 CFR part 102, when the
deficiency on which the determination is based adversely affects or has
the substantial likelihood of adversely affecting an individual covered
under the organization's contract. Additionally, as specified in
Sec. Sec. 422.760(b)(2) and 423.760(b)(2), CMS is permitted to impose
CMPs of up to $25,000, as adjusted annually under 45 CFR part 102, for
each enrollee directly adversely affected or with a substantial
likelihood of being adversely affected by a deficiency. CMS has the
authority to issue a CMP up to the maximum amount permitted under
regulation, as adjusted annually \91\ for each affected enrollee or per
determination, however CMS does not necessarily apply the maximum
penalty amount authorized by the regulation in all instances because
the penalty amounts under the current CMP calculation methodology are
generally sufficient to encourage compliance with CMS rules.
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\91\ Per the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, which amended the Federal Civil Penalties
Inflation Adjustment Act of 1990, the maximum monetary penalty
amount applicable to Sec. Sec. 422.760(b), 423.760(b), and
460.46(a)(4) will be published annually in 45 CFR part 102. Pursuant
to Sec. 417.500(c), the amounts of civil money penalties that can
be imposed for Medicare Cost Plans are governed by section
1876(i)(6)(B) and (C) of the Act, not by the provisions in part 422.
Section 1876 of the Act solely references per determination
calculations for Medicare Cost Plans. Therefore, the maximum
monetary penalty amount applicable is the same as Sec.
422.760(b)(1).
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On December 15, 2016, CMS released on its website, the first public
CMP calculation methodology for calculating CMPs for MA organizations
and Part D sponsors starting with referrals received in 2017. On March
15, 2019, CMS released for comment a proposed CMP calculation
methodology on its website that revised some portions of the
methodology released in December 2016. Subsequently, on June 21, 2019,
CMS finalized the revised CMP calculation methodology document, made it
available on its website, and applied it to CMPs issued starting with
referrals received in contract year 2019 and beyond.\92\
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\92\ CMS Civil Money Penalty Calculation Methodology, Revised.
June 21, 2019. https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/Downloads/2019CMPMethodology06212019.pdf.
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On January 19, 2021, CMS published a final rule in the Federal
Register titled ``Medicare and Medicaid Programs; Contract Year 2022
Policy and Technical Changes to the Medicare Advantage Program,
Medicare Prescription Drug Benefit Program, Medicaid Program, Medicare
Cost Plan Program, and Programs of All-Inclusive Care for the Elderly''
(86 FR 5864). In that final rule, CMS finalized a policy, effective
beginning in CY 2022, to update the minimum CMP penalty amounts no more
often than every three years. Under this policy, CMS updates the CMP
penalty amounts by including the increases that would have applied if
CMS had multiplied the minimum penalty amounts by the cost-of-living
multiplier released by the Office of Management and Budget (OMB) \93\
each year during the preceding three-year period. CMS also tracks the
yearly accrual of the penalty amounts and announces them on an annual
basis.
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\93\ Per OMB Memoranda M-19-04, Implementation of Penalty
Inflation Adjustments for 2019, Pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015,
published December 14, 2018, the cost of-living adjustment
multiplier for 2019 is 1.02522.
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The intent of the minimum penalty increase policy was to establish
the CMP calculation methodology document in regulation to ensure
consistency and transparency with CMP penalty amounts. Although parts
of the regulations at Sec. Sec. 422.760(b)(3) and 423.760(b)(3) have
set standards for CMP penalties, in hindsight, CMS believes that other
parts of the regulations unnecessarily complicated CMS's approach to
calculating CMPs, which has the effect of limiting CMS's ability to
protect beneficiaries when CMS determines that an organization's non-
compliance warrants a CMP amount that is higher than would be normally
be applied under the CMP methodology. In addition, although CMS always
has had the authority to impose up to the maximum authorized under
sections 1857(g)(3)(A) and 1860D-12(b)(3)(E) of the Act, parts of the
minimum penalty increase policy may have inadvertently given the
impression that CMS was limiting its ability to take up to the maximum
amount permitted in statute and regulation. This was not the intent of
the rule. For example, there may be instances where an organization's
non-compliance has so substantially adversely impacted one or more
enrollees, that CMS would determine it necessary to impose the maximum
CMP amount, or an amount higher than the amount set forth in the CMP
methodology guidance to adequately address the non-compliance. In order
to clarify its ability to adequately protect beneficiaries and
encourage compliance, CMS proposes to modify its rules pertaining to
minimum penalty amounts.
Specifically, CMS proposes to remove Sec. Sec. 422.760(b)(3)(i)(E)
and 423.760(b)(3)(i)(E), respectively, which is the cost-of-living
multiplier. CMS also proposes to remove Sec. Sec.
422.760(b)(3)(ii)(A)-(C) and 423.760(b)(3)(ii)(A)-(C), which describes
how CMS calculates and applies the minimum penalty amount increase.
Lastly, CMS proposes to revise and add new provisions Sec. Sec.
422.760(b)(3) and 423.760(b)(3), which explains that CMS will set
standard minimum penalty amounts and aggravating factor amounts for per
determination and per enrollee penalties in accordance with paragraphs
(b)(1) and (b)(2) of this paragraph on an annual basis, and restates
that CMS has the discretion to issue penalties up to the maximum amount
under paragraphs (b)(1) and (2) when CMS determines that an
organization's non-compliance warrants a penalty that is higher than
would be applied under the minimum penalty amounts set by CMS.
If finalized, CMS would continue to follow our existing CMP
methodology and would only impose up to the maximum CMP amount in
instances where we determine non-compliance warrants a higher penalty.
This update would also be incorporated in forthcoming revised CMP
calculation methodology guidance.
We solicit comment on these proposals.
K. Call Center Interpreter Standards (Sec. Sec. 422.111(h)(1)(iii)(A)
and 423.128(d)(1)(iii)(A))
CMS is proposing to amend Sec. Sec. 422.111(h)(1)(iii)(A) and
423.128(d)(1)(iii)(A) to establish standards for interpreter services
utilized by MA organizations and Part D sponsors in connection with
their toll-free customer call centers. CMS relies on the Secretary's
authority at sections 1857(e)(1) and 1860D-12(b)(3)(D) of the Act to
adopt additional contract terms and conditions as the Secretary may
find necessary and appropriate, and not inconsistent with the statute,
to adopt these additional requirements for MA
[[Page 79513]]
organizations and Part D sponsors. CMS also relies on the authority in
sections 1852(c)(1) and 1860D-4(a)(1)(B) of the Act, under which MA
organizations and Part D sponsors must disclose detailed information
about plans, to establish call center requirements. These proposed
interpreter standards will ensure adequate and appropriate access to
information for non-English speaking and Limited English Proficiency
(LEP) Medicare beneficiaries, such that the information disclosure
requirements for MA organizations and Part D sponsors are met and
enrollment in MA and Part D plans is accessible for these groups.
Specifically, we propose to require MA organizations and Part D
sponsors to use interpreters that adhere to generally accepted
interpreter ethics principles, including confidentiality; demonstrate
proficiency in speaking and understanding at least spoken English and
the spoken language in need of interpretation; and interpret
effectively, accurately, and impartially, both receptively and
expressively, to and from such language(s) and English, using any
necessary specialized vocabulary, terminology, and phraseology.
CMS has consistently stated that MA organizations and Part D
sponsors should use appropriate interpreters to ensure that non-English
speaking and LEP beneficiaries have access to assistance. On January 2,
2008, CMS released an HPMS memo, ``Best Practices for Addressing the
Needs of Non-English Speaking and Limited English Proficient (LEP)
Beneficiaries,'' which suggested that Part D sponsors and MA
organizations review additional HHS guidance on developing an effective
plan for language assistance for LEP beneficiaries. This guidance,
titled ``Guidance to Federal Financial Assistance Recipients Regarding
Title VI Prohibition Against National Origin Discrimination Affecting
Limited English Proficient Persons,'' appeared in the Federal Register
on August 8, 2003 (68 FR 47311) and provided the following criteria to
determine the competency of interpreters: demonstrate proficiency in
and ability to communicate information accurately in both English and
in the other language; have knowledge in both languages of any
specialized terms or concepts peculiar to the recipient's program or
activity and of any particularized vocabulary and phraseology used by
the LEP person; and understand and follow confidentiality and
impartiality rules. Additionally, since 2010, CMS has annually
encouraged MA organizations and Part D sponsors to review and use the
Office of Minority Health's (OMH) National Standards on Culturally and
Linguistically Appropriate Services (CLAS), originally published in
2001 and most recently updated in 2018.\94\ The CLAS standards include
a requirement to provide competent language assistance services. Most
recently, in our December 16, 2021 HPMS memo titled ``2022 Part C and
Part D Call Center Monitoring--Timeliness and Accuracy & Accessibility
Studies,'' we recommended that MA organizations and Part D sponsors use
interpreters that adhere to generally accepted interpreter ethics
principles, including confidentiality; demonstrate proficiency in
speaking and understanding at least spoken English and the spoken
language in need of interpretation; and interpret effectively,
accurately, and impartially, both receptively and expressively, to and
from such language(s) and English, using any necessary specialized
vocabulary, terminology and phraseology. We selected these criteria in
our guidance because they are similar to requirements for interpreters
under 45 CFR 92.101(b)(3)(i)(A)-(C), when an interpreter is required as
a reasonable step to ensure meaningful access to programs or activities
by LEP individuals under 45 CFR 92.101(b)(3)(i), which implements
section 1557 of the Patient Protection and Affordable Care Act, 42
U.S.C. 18116, (Pub. L 111-148).\95\ We note that we did not adopt in
our guidance, and do not intend to adopt in this proposed rule, the
standard for requiring an interpreter under 45 CFR 92.101(b)(1).
Rather, we intend to continue to require that Part D sponsors and MA
organizations provide an interpreter for non-English speaking and LEP
individuals whenever such an individual contacts the toll-free customer
call center under 42 CFR 422.111(h)(1)(iii) and 423.128(d)(1)(iii).
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\94\ CMS includes this reminder regarding OMH's CLAS standards
in our annual HPMS memo detailing the methodology of our call center
monitoring studies. For example, see our December 9, 2010 HPMS memo
titled ``2011 Part C and Part D Call Center Monitoring and Guidance
for Providing Services to Limited English Proficient
Beneficiaries;'' our December 16, 2013 HPMS memo titled ``2014 Part
C and Part D Call Center Monitoring and Guidance for Timeliness and
Accuracy and Accessibility Studies;'' our November 16, 2016 HPMS
memo titled ''2017 Part C and Part D Call Center Monitoring and
Guidance for Timeliness and Accuracy and Accessibility Studies;''
and our December 16, 2021 HPMS memo titled ``2022 Part C and Part D
Call Center Monitoring--Timeliness and Accuracy & Accessibility
Studies.''
\95\ Recipients of Federal financial assistance are separately
obligated to comply with Federal civil rights laws that require
recipients to take reasonable steps to ensure meaningful access to
their programs and activities by LEP individuals, including through
provision of language assistance services that may require
interpreters. These laws, enforced by the HHS Office for Civil
Rights, include Section 1557 of the Affordable Care Act (42 U.S.C.
18116 and implementing regulation at 45 CFR part 92) (Section 1557),
which prohibits, inter alia, discrimination on the basis of race,
color, national origin, sex, age, and disability in health programs
and activities receiving Federal financial assistance; and Title VI
of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq. and
implementing regulation at 45 CFR part 80) (Title VI), which
prohibits discrimination on the basis of race, color, and national
origin in programs and activities receiving Federal financial
assistance. Regulations implementing Section 1557 set forth specific
requirements related to provision of language assistance services,
including requirements for interpreter and translation services,
when they are required as a reasonable step to ensure meaningful
access to programs or activities by limited English proficient
individuals. See 45 CFR part 92 for additional information.
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In the final rule titled, ``Medicare Program; Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit Programs
for Contract Year 2012 and Other Changes'' which appeared in the
Federal Register on April 15, 2011 (76 FR 21431), CMS adopted
provisions at Sec. Sec. 422.111(h)(1)(iii) and 423.128(d)(1)(iii) to
require MA organizations and Part D sponsors to provide interpreters
for non-English speaking and LEP individuals who call the plan's toll-
free customer call center. In the time since CMS created this
requirement for MA organizations and Part D sponsors, there has been a
significant increase in timely access to interpreters. For example, CMS
data show that interpreters were being made available timely by MA and
Part D plans during 66 percent and 60 percent, respectively, of the
calls we monitored in 2011; 82 percent and 81 percent, respectively, in
2015; and 88 percent and 86 percent, respectively, in 2021.
In the final rule titled ``Medicare and Medicaid Programs; Contract
Year 2022 Policy and Technical Changes to the Medicare Advantage
Program, Medicare Prescription Drug Benefit Program, Medicaid Program,
Medicare Cost Plan Program, and Programs of All-Inclusive Care for the
Elderly,'' which appeared in the Federal Register on January 19, 2021
(86 FR 5864) (the January 2021 final rule), CMS codified its standards
for evaluating compliance by MA and Part D plans with the requirement
to provide interpreters for calls to the plans' toll-free call centers
by amending Sec. Sec. 422.111(h)(1)(iii) and 423.128(d)(1)(iii). The
amendments added requirements that interpreters must be available for
80 percent of incoming calls requiring an interpreter within 8 minutes
of reaching the customer service representative and be made available
at no cost to the caller.
[[Page 79514]]
These requirements strengthened enrollees' and prospective enrollees'
access to interpreters when they call a plan, and thus to information
about how to access Medicare-covered benefits.
Building on our previous regulatory proposals to establish and
strengthen MA and Part D enrollee access to plan interpreter services,
we propose to codify requirements for minimum qualifications for
interpreters available to non-English speaking and LEP individuals at
MA and Part D call centers. To accomplish this, we are proposing to
modify Sec. 422.111(h)(1)(iii)(A) to require MA organizations'
interpreters for LEP individuals to meet certain minimum
qualifications. As proposed in new paragraphs (A)(1) through (3) these
qualifications include, respectively:
Adhering to generally accepted interpreter ethics
principles, including confidentiality;
Demonstrating proficiency in speaking and understanding at
least spoken English and the spoken language in need of interpretation;
and
Interpreting effectively, accurately, and impartially,
both receptively and expressively, to and from such language(s) and
English, using any necessary specialized vocabulary, terminology, and
phraseology.
We propose to establish the same requirements for Part D sponsor
interpreters by modifying Sec. 423.128(d)(1)(iii)(A) and adding
proposed new paragraphs (A)(1) through (A)(3) that mirror the proposed
changes to Sec. 422.111(h).
We note that on August 4, 2022, HHS published a Notice of Proposed
Rulemaking regarding Section 1557 of the Affordable Care Act, which
would codify a definition of qualified interpreter similar to what we
are proposing here.
We solicit comments on this proposal.
L. Call Center Teletypewriter (TTY) Services (Sec. Sec.
422.111(h)(1)(iv)(B) and 423.128(d)(1)(v)(B))
We are proposing to make a technical change to Sec. Sec.
422.111(h)(1)(iv)(B) and 423.128(d)(1)(v)(B), which require that MA
organizations and Part D sponsors, respectively, connect 80 percent of
incoming calls requiring TTY services to a TTY operator within 7
minutes. Our proposed change is intended to remove any ambiguity that
might result from our use of the term ``TTY operator.'' The specific
standards found at Sec. Sec. 422.111(h)(1)(iv)(B) and
423.128(d)(1)(v)(B) were intended to require that that the caller reach
a live person and confirm that said person is able to assist with
general Medicare questions or questions about the plan's Part C or Part
D benefits within a specific period of time. When an MA organization or
Part D sponsor operates their own TTY device and thereby creates a
direct TTY to TTY communication, the plan customer representative is
also the TTY operator. However, where MA organizations and Part D
sponsors utilize telecommunications relay systems, a TTY operator
serves as an intermediary between the caller and the plan's customer
service representative and is not able to answer the caller's questions
about plan benefits.
To ensure that someone utilizing TTY services is connected to a
plan customer representative within 7 minutes, we propose to modify
Sec. Sec. 422.111(h)(1)(iv)(B) and 423.128(d)(1)(v)(B) to instead
require the plan's call center establish contact with a customer
service representative within 7 minutes on no fewer than 80 percent of
incoming calls requiring TTY services.
We solicit comment on this proposal.
M. Part C and Part D Midyear Benefit Changes and Part D Incorrect
Collections of Premiums and Cost Sharing (Sec. Sec. 422.254, 423.265,
423.293, 423.294)
1. Overview and Summary
We propose to add into regulatory text our longstanding prohibition
of midyear benefit changes, previously referred to as midyear benefit
enhancements (MYBEs) for MA and Part D plans. Specifically, we propose
to add regulatory text prohibiting changes to non-drug benefits,
premiums, and cost sharing by an MA organization starting after plans
are permitted to begin marketing prospective contract year offerings on
October 1 (consistent with Sec. 422.2263(a)) of each year for the
following contract year and until the end of the applicable contract
year. Similarly, we also propose to codify into regulation our
longstanding policy prohibiting Part D sponsors from making midyear
changes to the benefit design or waiving or reducing premiums, bid-
level cost sharing (for example, the cost sharing for an entire
formulary tier of Part D drugs), or cost sharing for some or all of a
Part D plan's enrollees starting after plans are permitted to begin
marketing prospective contract year offerings on October 1 (consistent
with Sec. 423.2263(a)) of each year for the following contract year
and until the end of the applicable contract year.
Finally, we propose to require Part D sponsors to: (1) refund
incorrect collections of premiums and cost sharing, and (2) recover
underpayments of premiums and cost sharing. We also propose to
establish both a lookback period and timeframe to complete overpayments
and underpayment notices, as well as a de minimis threshold for such
refunds and recoveries. We solicit comments regarding the addition of
similar requirements in MA, specifically establishing a lookback period
and de minimis threshold for refunding incorrect collections.
2. Medicare Advantage Prohibition on Midyear Benefit Changes (Sec.
422.254)
In our proposed rule titled, ``Medicare Program; Establishment of
the Medicare Advantage Program'' (69 FR 46865), which appeared in the
Federal Register on August 3, 2004, and is hereinafter referred to as
the ``August 2004 MA proposed rule,'' we acknowledged that in the
previous Medicare+Choice program, organizations were permitted to offer
MYBEs to existing benefit packages. We proposed to discontinue this
policy, noting how we believed that it would no longer be appropriate
to allow MA organizations to offer new plans or change an existing
plan's benefits midyear because such revised (or new) MA plans would
not reflect the bids which were approved during the normal approval
process (as set forth in 42 CFR part 422, subpart K). We explained how
MYBEs are de facto adjustments to benefit packages for which bids were
submitted by MA organizations based on their estimated revenue
requirements. Specifically, we expressed concern that allowing MYBEs
could render the bid meaningless (69 FR 46899).
In our final rule titled, ``Medicare Program; Establishment of the
Medicare Advantage Program'' (70 FR 4640), which appeared in the
Federal Register on January 28, 2005, and is hereinafter referred to as
the ``January 2005 MA final rule,'' we adopted the MYBE policy
described in the August 2004 MA proposed rule with modifications in
response to comments from MA organizations requesting flexibility
regarding MYBEs in order to improve enrollee experiences or adjust for
unforeseen errors, under certain circumstances. Specifically, we
adopted a limited MYBE policy to (1) permit a MYBE to be effective no
earlier than July 1 of the contract year, and no later than September 1
of the contract year; (2) prohibit MA organizations from submitting
MYBE applications later than July 31 of the contract year; and (3)
require 25 percent of the value of the MYBE to be retained by the
government.
[[Page 79515]]
The policy also required the MA organization to submit a revised bid
and supporting documentation about how revenue requirements were
overstated in the bid submitted for the contract year. (70 FR 4640)
However, we noted that this was an interim policy for the initial years
of the competitive bidding system and that we would review the
continuing need for the policy.
Subsequent to the January 2005 MA final rule, we issued the
proposed rule titled, ``Medicare Program; Prohibition of Midyear
Benefit Enhancements for Medicare Advantage Organizations Offering
Plans in Calendar Year 2007 and Subsequent Calendar Years'' (71 FR
52014), which appeared in the Federal Register on September 1, 2006,
and is hereinafter referred to as the ``September 2006 MA proposed
rule.'' There, we proposed that, beginning with CY 2007, MA
organizations would not be permitted to make any midyear changes in
benefits, premiums, or cost sharing, even under the circumstances in
which these types of changes were permitted previously. We finalized
this policy in the final rule titled, ``Medicare Program; Prohibition
of Midyear Benefit Enhancements for Medicare Advantage Organizations''
(73 FR 43628), which appeared in the Federal Register on July 28, 2008,
and is hereinafter referred to as the ``July 2008 final rule.''
While previous rules referred to these changes as ``midyear benefit
enhancements,'' or MYBEs, we are proposing to instead use the term
``midyear benefit changes'' to better clarify that all changes
(enhancements or reductions) to non-prescription drug benefits,
premiums, and cost sharing are prohibited for MA plans, consistent with
the scope of our prior rulemaking. However, we are not proposing to
prohibit MA plans from revising plan rules, such as prior authorization
or referral policies, or from making network changes; the rules in
Sec. 422.111(d) regarding notice to enrollees about changes in plan
rules are not proposed to be changed. Please see section III.D. of this
proposed rule for our proposal to revise the rules in Sec. 422.111(e)
concerning notice of a change in an MA plan's provider network.
Additionally, this proposal, if finalized, would not prohibit MA plans
from covering required changes or additions to basic benefits, that is
Part A and Part B benefits that all MA plans must cover, when those
changes or additions to basic benefits are the result of a change in
the law, such as newly enacted legislation, or rulemaking or a National
Coverage Determination; such changes are required to be made by MA
plans, subject to section 1852(c)(5) of the Act and Sec. 422.109 which
provide for the Medicare FFS program to cover certain changes in Part A
and Part B benefits. Our proposal encompasses other changes in MA non-
drug, premiums and any cost sharing outside of required changes or
exceptions we have noted here. Consequently, we hereinafter refer to
these alterations as ``midyear benefit changes'' (MYBCs).
Although we finalized the policy in the July 2008 final rule and
have accordingly enforced it ever since, we now propose to add
regulatory text explicitly prohibiting MYBCs and specifying when such
changes will be prohibited. Specifically, we propose to clarify in
regulatory text that any changes to non-prescription drug benefits,
cost sharing, and premiums are prohibited starting after plans are
permitted to begin marketing prospective contract year offerings on
October 1 of each year for the following contract year (consistent with
Sec. 422.2263(a)) and through the end of the applicable contract year.
This means that after marketing is permitted to begin for the 2024
contract year, MA organizations must offer the benefits described in
approved bids through the end of the 2024 contract year. In other
words, MA organizations are prohibited in this scenario from changing
the benefits, cost sharing and premiums in their approved bids from
October 1, 2023 until December 31, 2024, except for modifications in
benefits required by law.
Consistent with our current practice as described in the July 2008
final rule, prohibiting changes after marketing is permitted to begin
provides MA organizations the flexibility to make changes during the
bidding process when permitted by CMS to remain in compliance with the
requirements set forth at Sec. 422.254(b), while also maintaining the
integrity of the bidding process.
We note that per Sec. 422.2263 following the start of marketing on
October 1 of each year, MA organizations may begin to market and
publicize their plan offerings for the following contract year, such
that organizations may compare their approved plans against competitors
in order to make advantageous changes. As we noted the August 2004 and
September 2006 MA proposed rules, allowing MYBCs undermines the
integrity of the bidding process as it allows MA organizations to alter
their benefit packages after the bidding process is complete. Further,
MA organizations may use MYBCs to misrepresent their actual costs and
noncompetitively revise their benefit packages later in the year (69 FR
46899, 70 FR 4301, 71 FR 52016).
Altering an approved plan to include new benefits after marketing
has started may also give MA organizations an unfair advantage over
competitors when beneficiaries are selecting their plans during the
initial coverage elections period (ICEP). We articulated in the July
2008 final rule that we believe newly age-eligible enrollees are
attractive to MA organizations because of their relatively low
utilization, as these individuals are new to the program and tend to be
healthier (73 FR 43631). Therefore, to prevent MA organizations from
inappropriately changing bids to appeal to low-utilization enrollees,
an MA organization must provide the benefits described in the MA
organization's final plan benefit package (PBP) (as defined in Sec.
422.162(a)) until the end of the applicable contract year. The July
2008 final rule reiterated these points. Despite the issuance of the
July 2008 final rule, however, we have continued to receive inquiries
from MA organizations requesting changes to PBPs after the contract
year has begun.
We note that MYBCs of this nature would also violate the uniformity
requirements set forth at Sec. 422.100(d)(ii), which requires that an
MAO must offer their plan to all beneficiaries in a service area ``at a
uniform premium, with uniform benefits and level of cost sharing
throughout the plan's service area, or segment of service area as
provided in Sec. 422.262(c)(2).'' Altering the non-prescription drug
benefits, premiums, or cost sharing midyear violates this requirement,
even if the new benefit, premium, or cost sharing is offered to all of
the plan's enrollees, as some enrollees would have paid for such
benefits, premiums, or cost sharing already, and would not be eligible
for reimbursement of these costs. In other words, some plan enrollees
would have paid higher or lower amounts for the same benefits or
services than other enrollees who paid depending on when the MYBC was
put in effect.
On May 22, 2020, we issued guidance in a Health Plan Management
System (HPMS) memorandum titled ``Information Related to Coronavirus
Disease 2019--COVID-19'' (hereinafter referred to as the ``2020 COVID-
19 guidance,'' and available at https://www.cms.gov/files/document/covid-19-updated-guidance-ma-and-part-d-plan-sponsors-may-22-2020.pdf)
which specified changes in policy for MA Organizations following the
declaration of the COVID-19 Public Health Emergency (PHE). Due to the
extraordinary nature of the PHE and its
[[Page 79516]]
impact on Medicare eligible individuals and the disabled and elderly
population generally, the 2020 COVID-19 guidance allowed for relaxed
enforcement of the prohibition on MYBCs, with certain limitations.
Specifically, MYBCs would be allowed when such MYBCs are: (1) provided
in connection with the COVID-19 PHE; (2) beneficial to enrollees; and
(3) provided uniformly to all similarly situated enrollees.
Additionally, we permitted MA organizations to implement additional or
expanded benefits that address issues or medical needs raised by the
COVID-19 PHE, and provided examples like covering meal delivery or
medical transportation services to accommodate the efforts to promote
social distancing during the COVID-19 PHE. We further noted in our
January 14, 2022 memo entitled ``Coronavirus Disease 2019 (COVID-19)
Permissive Actions Extended in Contract Year 2022'' that we would
exercise our enforcement discretion until the conclusion of the COVID-
19 PHE. Despite the current COVID-19 guidance, MA organizations have
continued to request changes to approved plan bids which are not
consistent with the parameters specified in such guidance.
While our proposed addition to the regulation text is not intended
to supersede the 2020 COVID-19 guidance (should it remain in effect
through the 2024 calendar year), we propose to add regulatory text to
solidify longstanding policy to prohibit MYBCs starting after the plan
has begun marketing prospective contract year offerings on October 1 of
each year for the following contract year and until the end of the
applicable contract year as a means to provide clarification for MA
organizations and maintain the integrity of the bidding process. As
discussed previously, this prohibition includes exceptions for changes
in benefits required by applicable law.
Employer Group Waiver Plans (EGWPs) exclusively enroll the members
of the group health plan sponsored by the employer, labor organization
(that is, union) or trustees of funds established by one or more
employers or labor organizations to furnish benefits to the entity's
employees, former employees, or members or former members of the labor
organizations; these plans generally have ``800 series'' MA contracts
with CMS. These EGWPs are not currently subject to this prohibition on
MYBCs under existing CMS waivers for EGWPs. However, an MA organization
is subject to the prohibition on MYBCs if the MA organization offers an
MA plan that that enrolls both individual beneficiaries and employer or
union group health plan members, (that is, a plan open to general
enrollment); for those types of plans, the employer or union sponsor
may make mid-year changes to offer or change only non-MA benefits that
are not part of the MA contract (that is, are not basic benefits or MA
supplemental benefits). (See 73 FR 43630 and Chapter 9, section 20.3,
of the Medicare Managed Care Manual, available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c09.pdf.)
Because this proposal would add regulatory text regarding the MYBC
policy which has already undergone notice and comment rulemaking, and
does not change the scope of that prior non-codified rule, this
provision is technical in nature, and there is no paperwork burden.
Additionally, this provision will not impact the Medicare Trust Fund.
We solicit comment on these proposals.
3. Part D Prohibition on Midyear Benefit Changes (Sec. 423.265)
Section 1860D-11(d) of the Act grants CMS the authority to review
information pertaining to Part D sponsors' proposed plans and negotiate
terms and conditions of the proposed bid and proposed plan with Part D
sponsors. Section 1860D-11(e) of the Act grants CMS the authority to
approve Part D sponsors' proposed plans. To implement sections 1860D-
11(d) and (e) of the Act, we proposed regulations at Sec. 423.272 in
our proposed rule titled ``Medicare Program; Medicare Prescription Drug
Benefit'' (69 FR 46631), which appeared in the Federal Register on
August 3, 2004 (hereinafter referred to as the ``August 2004 Part D
proposed rule''). We finalized these regulations in our final rule
titled ``Medicare Program; Medicare Prescription Drug Benefit'' (70 FR
4193), which appeared in the January 28, 2005 issue of the Federal
Register (hereinafter referred to as the ``January 2005 Part D final
rule'').
In response to comments to our August 2004 Part D proposed rule
regarding the authority to enter into bid-level negotiation with Part D
sponsors, and as was discussed in section III.M.2. of this proposed
rule, we stated in our January 2005 Part D final rule that in order to
maintain the integrity of the bidding process, we believed it was not
appropriate to allow either MA organizations or Part D sponsors to
waive premiums or offer midyear benefit enhancements, as they would be
de facto adjustments to benefit packages for which bids were submitted
earlier in the year. We also stated that these adjustments would be de
facto acknowledgement that the revenue requirements submitted by the
plan were overstated, and further, that allowing premium waivers or
midyear benefit enhancements would render the bid meaningless (70 FR
4301).
As noted in section III.M.2. of this proposed rule, we previously
referred to these changes as ``midyear benefit enhancements,'' or
MYBEs, and it stands to reason that midyear benefit changes, whether
enhancements or reductions, are equally problematic from the
perspective of bid integrity. Therefore, we hereinafter refer to these
alterations as ``midyear benefit changes,'' or MYBCs.
Additionally, section 1860D-11(e)(2)(C) of the Act requires that
the bid reasonably and equitably reflect the revenue requirements of
the expected population for the benefits provided under the plan.
Therefore, in addition to indicating that the plan bid was overstated
and rendering the bid meaningless, waiving or reducing the premiums,
cost sharing, or both, that are reflected in the approved bid would
indicate that the amounts provided in the bid were not necessary for
the provision of coverage.
We draw a distinction here between changes in ``bid-level'' cost
sharing (for example, the cost sharing associated with an entire tier
of drugs) and changes in the cost sharing for an individual drug (for
example, when such drug moves from one already approved tier of the
benefit to another already approved tier of the benefit). As is
discussed further in section III.Q. of this proposed rule, section
1860D-4(b)(3)(E) of the Act, as codified at Sec. 423.120(b)(5),\96\
requires that Part D sponsors provide appropriate notice before any
removal of a covered Part D drug from a formulary and ``any change in
the preferred or tiered cost-sharing status'' of such a drug. Thus, the
statute contemplates midyear changes in cost sharing of individual
formulary drugs. Consequently, since the beginning of the Part D
program, we have allowed formulary changes that result in changes to
the cost sharing for individual drugs (for example, moving a single
drug to a different cost-sharing tier), but have declined to permit
Part D sponsors to change their benefit designs or waive or reduce
premiums, ``bid-level'' cost sharing (for example, the cost sharing
[[Page 79517]]
associated with an entire tier of drugs), or cost sharing (for some or
all enrollees) once plans are permitted to market for the following
contract year (on October 1, consistent with Sec. 423.2263(a)) on the
grounds that such activities would be inconsistent with the CMS-
approved bid.
---------------------------------------------------------------------------
\96\ We propose organizational changes to the existing
regulations to streamline them and improve their clarity, which
would include two subparagraphs on approval of changes and provision
of notice to appear, respectively, at Sec. 423.120(e) and (f).
---------------------------------------------------------------------------
Additionally, section 1860D-2(a) of the Act defines qualified
prescription drug coverage to mean standard (Defined Standard or
Actuarially Equivalent Standard) prescription drug coverage or
alternative prescription drug coverage (with at least actuarially
equivalent benefits) and access to negotiated prices in accordance with
section 1860D-2(d) of the Act. In our proposed rule titled, ``Medicare
Program; Policy and Technical Changes to the Medicare Advantage and the
Medicare Prescription Drug Benefit Programs'' (74 FR 54633), which
appeared in the October 22, 2009 issue of the Federal Register
(hereinafter referred to as the ``October 2009 proposed rule'') we
further interpreted section 1860D-2(a) of the Act as requiring the
provision of uniform premium and benefits. We codified these
requirements in our regulations at Sec. 423.104(b) in our final rule
titled, ``Medicare Program; Policy and Technical Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit
Programs'' (75 FR 19677), which appeared in the Federal Register on
April 15, 2010.
In addition to violating the bid requirements, as we noted in the
preamble of the October 2009 proposed rule, a Part D sponsor's waiver
of cost sharing midyear also violates the uniform benefit requirements,
because doing so results in plans not providing the same coverage to
all eligible beneficiaries within their service area (74 FR 54690). The
CMS-approved benefit cannot be varied for some or all of the plan's
enrollees midyear, as that would violate the uniform benefit provisions
set forth in Sec. 423.104(b). Even if the plan changes the benefit
midyear for all of the plan's enrollees, this still violates the
uniform benefits provision because some of the plan's enrollees would
still have paid for benefits prior to the change. We note that during
the COVID-19 PHE, CMS provided for specific flexibilities by Part D
sponsors to ensure adequate pharmacy access that would otherwise
violate the uniform benefit provisions. CMS exercised its enforcement
discretion to temporarily permit Part D sponsors to fully or partly
waive cost sharing for covered Part D drugs with medically accepted
indications for COVID-19.
To clarify these points for all parties, we propose to codify in
regulation our longstanding subregulatory policy at new paragraph Sec.
423.265(b)(5) which would require that once a Part D sponsor is
permitted to market prospective plan year offerings for the following
contract year (consistent with Sec. 423.2263(a)), that is, as of
October 1, it shall not change, and therefore, must provide, the
benefits described in its CMS-approved plan benefit package (PBP) (as
defined at Sec. 423.182(a)) for the contract year without
modification, except where a modification in benefits is required by
law.
Additionally, we have been monitoring compliance with this policy
via our Part D Bid review and approval process, consistent with Sec.
423.272. Consequently, there is no additional paperwork burden
associated with codifying this longstanding subregulatory policy.
We solicit comment on this proposal.
4. Failure To Collect and Incorrect Collections of Part D Premiums and
Cost Sharing Amounts (Sec. Sec. 423.293 and 423.294)
As was described in section III.M.3. of this proposed rule, Part D
sponsors' waiver of cost sharing or premiums would violate the uniform
premium and benefit requirements of section 1860D-2(a) of the Act and
Sec. 423.104(b). Similarly, Part D sponsors' incorrect collections of
cost sharing and premiums also could have the effect of making the
benefit non-uniform.
The current regulatory language at Sec. 423.104(b) mirrors the
language at Sec. 422.100(d)(1) and (2)(i) with regard to uniform
premiums and cost sharing. However, although the MA program adopted
language at Sec. 422.270 to address incorrect collections of premiums
and cost sharing in the January 2005 MA final rule, the regulations in
Part 423 do not address Part D sponsor requirements regarding incorrect
collections of premiums and cost sharing. We intend to bring the Part D
requirements into alignment with the existing MA requirements for
incorrect collections, as well as establish new requirements regarding
failure to collect premiums and cost sharing amounts. Therefore, for
incorrect collections, we propose to codify requirements at a new Sec.
423.294 that would be similar to the MA program requirements at Sec.
422.270. We also propose to codify new requirements regarding failure
to collect premiums and cost sharing amounts at Sec. 423.294. Finally,
we solicit comment regarding adding a similar policy to add new
requirements for MAOs regarding failure to collect premiums and cost
sharing in Sec. 422.270.
Our proposed Part D requirements would require a Part D sponsor to
make a reasonable effort to collect monthly beneficiary premiums under
the timing established in Sec. 422.262(e) (made applicable to Part D
premiums in Sec. 423.293(a)(2)) and ensure collection of cost sharing
at the time a drug is dispensed. If for some reason the Part D sponsor
fails to collect or ensure collection in a timely manner, the Part D
sponsor would be required to make a reasonable effort to bill for and
recover the premium or cost sharing amount after the fact. Any
adjustments to the premium or cost sharing amount that occur based on
subsequently obtained information would be made within the timeframe
for coordination of benefits as established at Sec. 423.466(b), which
is 3 years from the date on which the monthly premium was due or on
which the prescription for a covered Part D drug was filled. A Part D
sponsor could decline to attempt to recover an amount if it is below a
de minimis amount, as detailed below.
Our proposed Part D requirements would also require a Part D
sponsor to make a reasonable effort to identify any amounts incorrectly
collected from its Medicare enrollees, or from others on behalf of
affected enrollees. Sponsors would have to issue refunds during the
same 3-year timeline applicable to recoveries, as described previously,
and need not issue refunds if they are below a de minimis amount.
Our proposed Part D requirements would differ from the existing
requirements at Sec. 422.270 in the following ways. The first
modification to our proposed requirements for Part D sponsors is that
we propose to clarify that the 3-year lookback period established in
Sec. 423.466(b) for coordination of benefits applies to retroactive
claim or premium adjustments that result in refunds and recoveries at
Sec. 423.294(b)(2) and (4) and Sec. 423.294(c)(2), respectively.
Currently, a Part D sponsor is required to process retroactive claims
adjustments within 45 days of receiving complete information, per Sec.
423.466(a), and there is no requirement for the timing of retroactive
premium adjustments. While Sec. 423.466(b) allows 3 years for
coordination of benefits, there is currently no limit in the regulation
for how far back retroactive premium adjustments or claims adjustments
unrelated to coordination of benefits must be made. For example, if a
Part D sponsor in 2022 identifies an error in their prior years' drug
pricing files that resulted in beneficiaries being charged
[[Page 79518]]
incorrect cost sharing from 2015 to 2020, the current regulation might
require them to refund and/or recover amounts for prescriptions
beneficiaries received as long as seven years ago. This is not only
inconsistent with our coordination of benefits requirements, which
would only require adjustments for the past 3 years, but is potentially
confusing to beneficiaries. By proposing to establish a 3-year lookback
period in Sec. 423.294(b)(2) and (4) and Sec. 423.294(c)(2), we would
align the timeframe established in Sec. 423.466(b) for coordination of
benefits with the timeframe for premium adjustments and claims
adjustments unrelated to coordination of benefits. Not only would this
3-year period coincide with the timeframe established in Sec.
423.466(b) for coordination of benefits with State Pharmaceutical
Assistance Programs (SPAPs) and other entities, including beneficiaries
and others paying on the beneficiaries' behalf, but it would also align
with the timeframe for redeterminations in Sec. 423.1980(b) and (c). A
Part D sponsor would not be required to make a premium or claims
payment adjustment if more than 3 years has passed from the date of
service, just as a Part D sponsor is required to coordinate benefits
for a period of 3 years.
In section IV.N. of this proposed rule, we are proposing to codify
at Sec. 423.44(d)(1)(v) current policy that excepts certain
prescription drug plan (PDP) members from being disenrolled for failure
to pay plan premiums. Additionally, as also discussed at section IV.N.
of this proposed rule, we propose at revised Sec. 423.44(d)(1)(v) a
disenrollment exception if the Part D sponsor has been notified that an
SPAP, or other payer, is paying the Part D portion of the premium, and
the sponsor has not yet coordinated receipt of the premium payments
with the SPAP or other payer. We also (1) expect Part D sponsors to
issue collection notices and, (2) consistent with the requirements at
Sec. 423.44, require Part D sponsors to make a reasonable attempt at
collection, notwithstanding the requirements at Sec. 423.44 for
involuntary disenrollment. Nonetheless, we would not expect a Part D
sponsor to disenroll a Part D enrollee for such Part D sponsor's
failure (when the plan made the error) to collect the proper payment
and subsequent failure to collect an underpayment. Section 50.3.1 of
Chapter 3 of the Medicare Prescription Drug Benefit Manual also
provides that we expect a Part D sponsor to have billed the Part D
enrollee prior to the start of the grace period for the actual premium
amount due (emphasis added), with such notice/bill specifying the due
date for that amount.
Additionally, specific to cost sharing, under current regulations
at Sec. 423.566(b)(5), a decision on the amount of cost sharing for a
drug constitutes a coverage determination. If a claim adjudicates at an
incorrectly low amount, or if other actions by a Part D sponsor result
in the Part D enrollee being asked to pay an incorrectly low cost-
sharing amount, such adjudication or action is a coverage
determination. If the Part D sponsor becomes aware of the error, the
Part D sponsor would reopen the previously adjudicated coverage
determination consistent with the reopening rules at Sec. Sec.
423.1980 through 423.1986. If the Part D sponsor issues an adverse
revised determination, the notice must state the rationale and basis
for the reopening and revision and any right to appeal.
Second, at Sec. 423.294(b)(2) and (4) and Sec. 423.294(c)(2),
respectively, we propose to clarify that the 45-day timeframe in Sec.
423.466(a) applies to the processing of refunds and recoveries for both
claims and premium adjustments. This would make the timeframes for the
refund or recovery of premium adjustments the same as for claims
adjustments and for refunds and recoveries related to the low-income
subsidy program, which under Sec. 423.800(e) are the same as the
requirements of Sec. 423.466(a). In other words, whenever a Part D
sponsor receives, within the 3-year lookback period, information that
necessitates a refund of enrollee overpayment of premiums, cost
sharing, or both, or recovery of underpayments of premiums, cost
sharing, or both, the Part D sponsor would be required to issue refunds
or recovery notices within 45 days of the Part D sponsor's receipt of
such information. Nothing in this proposal would alter the requirements
of Sec. 423.293(a)(4) with respect to the options a Part D sponsor
must provide Part D enrollees for retroactive collection of premiums.
We note we are not proposing any changes to the Medical Loss Ratio
(MLR) requirements under Sec. Sec. 422.2420(c) and 423.2420(c), which
provide that uncollected premiums that could have been collected still
count as revenue.
The final difference between our proposed requirements for Part D
sponsors and existing Part C requirements is that we propose to apply a
de minimis amount, calculated per Prescription Drug Event (PDE)
transaction or, for premium adjustments, per month, for these refunds
and recoveries. As proposed at Sec. 423.294(b) and (c)(1), if a refund
or recovery amount falls below the de minimis amount set for purposes
of Sec. 423.34(c)(2) for low income subsidies (currently at $2 for
2022), the Part D sponsor would not be required to issue a refund or
recovery notice. For instance, if a sponsor in 2024 discovered that it
had charged incorrect premiums amounts to certain beneficiaries for a
12-month period from January through December of 2022 and the de
minimis amount for 2024 is $2, the sponsor would not have to issue
recovery notices to any beneficiary who owed $24 or less total for the
12-month period. This proposal clarifies that the existing coordination
of benefits (COB) requirements in Sec. 423.466 encompass payment
adjustments. As such, the proposed timeframe for the proposed
requirements to refund or recover incorrectly collected cost sharing
and premium amounts would not result in any additional costs to Part D
sponsors, Part D enrollees, or the government. Conversely, because
there was previously no historical limit or threshold for such refunds
and recoveries, establishing both a 3-year lookback period and de
minimis amount would remove significant administrative burden on plan
sponsors and the government, particularly in circumstances where the
amount to be refunded or recovered is less than the postage required to
provide a refund or recovery notice. Consequently, this provision would
not impact the Medicare Trust Fund, and there would be no additional
paperwork burden, as recovery notices are already required under Sec.
423.466, and Sec. 423.293 already provides a process for the
retroactive collection of premiums.
Current MA regulations set forth at Sec. 422.270 do not contain
requirements for MA organizations to refund or recover incorrect
collections of cost-sharing or premiums with regard to a de minimis
amount or a lookback period. On the contrary, Sec. 422.270(b) states
that an MA organization must agree to refund all amounts incorrectly
collected from its Medicare enrollees, or from others on behalf of the
enrollees, and to pay any other amounts due the enrollees or others on
their behalf. With regard to timing of recovering underpayments when an
enrollee is not at fault, Sec. 422.262(h) states an enrollee may make
payments by equal monthly installment spread out over at least the same
period for which the premiums were due, or through other arrangements
mutually acceptable to the enrollee and the Medicare Advantage
organization. We solicit comments on
[[Page 79519]]
adding requirements regarding a de minimis amount and lookback periods
for recovering or refunding incorrect collections in MA to that mirror
proposed requirements in Part D.
We are also proposing a technical change to the regulation text
related to the Part D retroactive collection of monthly beneficiary
premiums. We propose to amend Sec. 423.293(a)(4) by replacing
``Medicare Advantage organization'' with ``Part D sponsor'' to be
consistent with the terminology used in the rest of Sec. 423.293.
We solicit comment on these proposals.
5. Summary of Proposals and Comment Solicitation
In summary, we are proposing to:
Add Sec. 422.254(a)(5) to add regulatory text regarding
the requirement that starting after an MA organization is permitted to
begin marketing prospective plan year offerings for the following
contract year (consistent with Sec. 422.2263(a)), it may not change,
and therefore must provide, the benefits described in its CMS-approved
plan benefit package (PBP) (as defined at Sec. 422.162(a)) for the
contract year without modification, except where a modification in
benefits is required by law. This proposed prohibition on changes would
apply to cost sharing and premiums as well as benefits;
Add Sec. 423.265(b)(5) to codify the requirement that
starting after a Part D sponsor is permitted to begin marketing
prospective plan year offerings for the following contract year
(consistent with Sec. 423.2263(a)), it may not change, and therefore,
must provide, the benefits described in its CMS-approved PBP (as
defined at Sec. 423.182) for the contract year without modification,
except where a modification in benefits is required by law;
Make a technical correction at Sec. 423.293(a)(4) to
replace ``Medicare Advantage organization'' with ``Part D sponsor'';
and
Add new Sec. 423.294 to codify requirements regarding
failure to collect, and incorrect collections of, enrollee premiums and
cost sharing for Part D sponsors, including:
++ Specifying in proposed Sec. 423.294(a) that failure to collect
premiums and cost sharing, or incorrect collections of premiums or
applicable cost sharing, violates the uniform benefit provisions at
Sec. 423.104(b);
++ Applying a 3-year lookback period for the identification of
applicable refunds and recoveries at the proposed Sec. 423.294(b)(2)
and (4) and Sec. 423.294(c)(2), respectively;
++ Applying a 45-day period to issue applicable refunds and
recovery notices at the proposed Sec. 423.294(b)(2) and (4) and Sec.
423.294(c)(2), respectively;
++ Specifying at proposed Sec. 423.294(b)(3) the refund methods
for amounts incorrectly collected and other amounts due; and
++ Specifying at proposed Sec. 423.294(b) and (c)(1) a de minimis
amount for applicable refunds and recoveries.
We solicit comment regarding adding new requirements (specifically
adding a de minimis amount and lookback period) in the MA regulations
regarding failure to collect premiums and cost sharing in Sec. 422.270
to align with the proposed changes for Part D sponsors described in
this section of the proposed rule.
We solicit comment on these proposals and policy questions.
N. Clarify Language Related to Submission of a Valid Application
(Sec. Sec. 422.502 and 423.503)
1. Overview and Summary
We are proposing to amend the language in Sec. 422.502 and Sec.
423.503 to codify CMS's authority to decline to consider a
substantially incomplete application for a new or expanded Part C or D
contract. We are also proposing to codify criteria for determining that
an application is substantially incomplete.
Since we began our contracting efforts under the Medicare
Modernization Act of 2003 in 2005 in preparation for the statute's 2006
effective date, we have established strict deadlines for the initial
submission of applications for an entity to qualify as an MAO or Part D
sponsor for a new contract, expansion of a service area of an existing
contract, or to offer an MA SNP and the resubmission of materials
needed to cure identified deficiencies. These deadlines are established
annually in our Parts C and D applications, in accordance with
Sec. Sec. 422.501 and 423.502. Consistent with that operational
policy, we do not review applications that are submitted after the
established deadline. Entities submitting applications after the
deadline do not receive a new or expanded Part C (either a general MA
contract or approval to offer a SNP) or D contract for the following
benefit year. An entity missing the deadline also does not receive a
notice of intent to deny under Sec. Sec. 422.502(c)(2) or
423.503(c)(2) and is not entitled to a hearing under Sec. Sec. 422.660
or 423.650.
CMS noted in the final rule which appeared in the Federal Register
on April 15, 2011 titled ``Medicare Program; Changes to the Medicare
Advantage and the Medicare Prescription Drug Benefit Programs for
Contract Year 2012 and Other Changes'' (76 FR 21431), hereafter
referred to as the April 2011 final rule, that, in order to meet the
submission deadline, some entities had submitted applications that were
so lacking in required information as to fail to constitute a valid
submission (76 FR 21527). If permitted to proceed with such an
application, the entity would be able to complete their application by
taking advantage of two later opportunities (including the period
following the notice of intent to deny) to cure deficiencies. These
``placeholder'' applications would allow entities more time to submit
complete applications than applicants that submitted complete
applications by the application deadline. We stated in the preamble to
the April 2011 final rule that we considered this an abuse of the
application review process and have therefore treated such
substantially incomplete applications as invalid since the enactment of
the April 2011 final rule.
In the April 2011 final rule, we stated that we believed that
substantially incomplete applications were submitted in part because of
confusion about our authority to enforce the application deadline (76
FR 21527). This confusion was likely a result of the then-effective
provisions of Sec. Sec. 422.502(c)(2)(i) and 423.503(c)(2)(i), which
stated that CMS would provide an applicant a notice of intent to deny
when the entity ``has not provided enough information to evaluate the
application.'' We stated that we had intended this language to afford
an entity that had made a good faith effort to complete an application
the opportunity to provide materials necessary to cure discrete
application deficiencies, not to provide an unintended protection and
additional time to entities that submitted ``placeholder''
applications. In order to correct this misunderstanding and to allow us
to enforce our application submission deadline, CMS amended the
regulation to remove the quoted language in Sec. Sec. 422.502(c)(2)(i)
and 423.503(c)(2)(i). Since that time, we have treated substantially
incomplete applications as invalid applications that are not entitled
to a notice of intent to deny or a hearing under Sec. Sec.
422.502(c)(2) or 423.503(c)(2) or entitled to a hearing under
Sec. Sec. 422.660 or 423.650. While we notify organizations that
submit substantially incomplete applications that we consider their
application to be substantially incomplete and therefore invalid, that
notification is for
[[Page 79520]]
informational purposes only and is not a notice of intent to deny under
Sec. Sec. 422.502(c)(2) and 423.503(c)(2).
CMS is proposing to codify its longstanding policy with respect to
substantially incomplete applications.
2. Discussion (Sec. Sec. 422.502 and 423.503)
We propose to modify Sec. Sec. 422.502 and 423.503 by adding new
paragraphs (a)(3) and (a)(4), respectively, regarding substantially
incomplete applications. At Sec. Sec. 422.502(a)(3)(i) and
423.503(a)(4)(i), CMS proposes to codify that it does not evaluate or
issue a notice of determination as described in Sec. Sec. 422.502(c)
and 423.503(c), respectively, when an entity submits a substantially
incomplete application. This proposed modification to the regulatory
text is consistent with the longstanding policy to treat substantially
incomplete applications as if they were not submitted by the
application deadline and therefore the submitting entity is not
entitled to review of its submitted material or an opportunity to cure
deficiencies.
We also propose at Sec. Sec. 422.502(a)(3)(ii) and
423.503(a)(4)(ii) to codify our definition of a substantially
incomplete application as one that does not include responsive
materials to one or more sections of its MA or Part D application,
respectively. Pursuant to Sec. Sec. 422.501(c) and 423.502(c), CMS
requires entities seeking to qualify as an MAO (or to qualify to offer
a SNP) and/or Part D sponsor to submit an application in the form and
manner required by CMS. Applications for service area expansions are
subject to the same rules and review processes as we treat the
expansion of a plan service area as a new application for a new area.
We prescribe the form and manner in an application published annually.
This application is subject to the Paperwork Reduction Act review
process. The form and manner vary somewhat from year to year, but
generally include several sections that require an entity to
demonstrate compliance with specific categories of program
requirements. For instance, Part D applications for new Part D
contracts include: (1) a series of attestations whereby the applicant
agrees that it understands and complies with various program
requirements; (2) a contracting section that requires entities to
demonstrate compliance with Part D requirements by submitting certain
first tier, downstream, and related entity contracts and network
pharmacy templates; (3) a network section that requires entities to
submit lists of contracted pharmacies that meet geographic and other
access requirements; (4) a program integrity section that requires
entities to submit documentation that they have documented and
implemented an effective compliance program as required by Sec.
423.504(b)(vi); and (5) a licensure and solvency section that requires
entities to meet applicable licensure and fiscal solvency requirements.
MA applications require substantially similar information related to
the operation of an MA plan, and SNP applications include additional
sections related specifically to SNP requirements for the type of SNP
the applicant seeks to offer. Consistent with past practice, CMS
proposes to treat an application that does not include required content
or responsive materials for one or more of these sections as
substantially incomplete. In our assessment, applications that fail to
include significant amounts of responsive materials, including failing
to include required content or responsive material for any section of
the application, in materials submitted by the application submission
deadline are merely submitting placeholder applications that do not
merit additional opportunities to meet CMS requirements.
An example of a Part D application that would be incomplete and
therefore excluded from further consideration under the proposed rule
is one that failed to upload a retail pharmacy list that would allow
CMS to determine whether it met pharmacy access requirements. This
would include failure to submit a list at all, submitting a list
containing fictitious pharmacies, or submitting a list that contained
so few pharmacies that CMS could only conclude that no good faith
effort had been made to create a complete network. CMS would also deem
as substantially incomplete any application that failed to submit any
executed contracts with first tier, downstream, or related entities
that the applicant had identified as providing Part D services on its
behalf.
An example of a MA application that would be incomplete and
therefore excluded from further consideration is one that failed to
upload either a State license or documentation that the State received
a licensure application from the applicant before the CMS application
due date. Another example of an incomplete MA application would be one
that failed to upload network adequacy materials, including failing to
submit network lists for designated provider types, submitting
fictitious providers, or submitting a list that contained so few
providers that CMS could only conclude that no good faith effort had
been made to create a complete network.
An example of a SNP application that would be incomplete and
therefore excluded from further consideration is one that failed to
upload a model of care (MOC) that would allow CMS to determine whether
or not it met MOC element requirements. This would include failure to
submit MOC documents at all or submitting incomplete documents that did
not contain all of the required MOC elements.
Finally, we propose at Sec. Sec. 422.502(a)(3)(iii) and
423.503(a)(4)(iii) to explicitly state that determinations that an
application is substantially incomplete are not contract determinations
as defined at Sec. Sec. 422.641 and 423.641, respectively. Because
they are not contract determinations, determinations that an
application is substantially incomplete are not entitled to receipt of
specific notices or appeal under Parts 422 and 423, subpart N. CMS has
consistently taken this position when determining an application is
substantially incomplete because a submission that is so incomplete as
to not be deemed a valid application did not meet the application
deadline and cannot be meaningfully reviewed. Nevertheless, a few
entities have used the contract determination hearing process to appeal
CMS's determination that they did not submit a substantially complete
application by the application deadline. In such cases, the Hearing
Officer has ruled that such determinations were not contract
determinations entitled to hearings under Sec. Sec. 422.660 and
423.650.
CMS does not believe that our proposed regulatory provisions at
Sec. Sec. 422.502(a)(3)(i) and 423.503(a)(4)(i) will have a
significant impact on the Part C or D programs. Only a handful of
entities have attempted to submit substantially incomplete applications
in recent years. CMS believes that codifying our treatment of
substantially incomplete applications will further discourage entities
from submitting placeholder applications and ensure that materials
submitted by the application deadline represent entities' good faith
efforts to meet application requirements.
We solicit comment on this proposal.
3. Summary of Proposals
In summary, we are proposing to:
Add Sec. Sec. 422.502(a)(3) and 423.503(a)(4) to codify
CMS's policy of not evaluating or issuing a notice of determination as
described in Sec. Sec. 422.502(c) or 423.503(c) when an
[[Page 79521]]
entity submits a substantially incomplete application;
Specify at the proposed Sec. Sec. 422.502(a)(3)(ii) and
423.503(a)(4)(ii) that a substantially incomplete application is one
that does not include responsive materials to one or more sections of
the application; and
Specify at the proposed Sec. Sec. 422.502(a)(3)(iii) and
423.503(a)(4)(iii) that a determination that an entity submitted a
substantially incomplete application is not subject to the appeals
provisions of Part 422 and 423, subpart N.
We solicit comment on these proposals.
O. Updating Translation Standards for Required Materials and Content
(Sec. Sec. 422.2267 and 423.2267)
1. Standing Request for Translated Materials and Materials in
Accessible Formats Using Auxiliary Aids and Services
In accordance with our authority under sections 1851(h), 1851(j),
1852(c), 1860D-1(b)(1)(B)(vi), 1860D-4(a), and 1860D-4(l) of the Act,
Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2) of the regulations require
MA organizations and Part D sponsors to translate materials into any
non-English language that is the primary language of at least 5 percent
of the individuals in a plan benefit package service area. This
threshold is based on the Guidance to Federal Financial Assistance
Recipients Regarding Title VI Prohibition Against National Origin
Discrimination Affecting Limited English Proficient Persons (67 FR
41455 through 41472, published in June 2002) that implemented Executive
Order 13166 (signed in August 2000). In addition, per Sec. 417.428,
cost plans with contracts under section 1876 of the Act must follow the
same marketing and communication regulations; we apply the same
standards to cost plans under this regulation based on our authority in
section 1876(i)(3)(D) of the Act. Each fall, we release an HPMS
memorandum announcing that plans can access in the HPMS marketing
review module a list of all languages that are spoken by 5 percent or
more of the population for every county in the U.S.\97\ In the Medicare
Program; Contract Year 2023 Policy and Technical Changes to the
Medicare Advantage and Medicare Prescription Drugs Benefit Program;
Policy and Regulatory Provisions in Response to the COVID-19 Public
Health Emergency; Additional Policy and Regulatory Provisions in
Response to the COVID-19 Public Health Emergency final rule, which
appeared in the May 9, 2022 Federal Register (87 CFR 27704)
(hereinafter referred to as the May 2022 final rule), we also adopted a
requirement that MA and Part D plans use a multi-language insert (MLI),
which informs the reader, in the top fifteen languages used in the
U.S., as well as any additional non-English language that is the
primary language of at least 5 percent of the individuals in a plan
benefit package service area, that interpreter services are available
for free. In accordance with Sec. Sec. 422.2267(e)(31) and
423.2267(e)(33), the MLI must be included with all CMS required
materials provided to current or prospective enrollees. As discussed in
the May 2022 final rule, CMS considers the materials required under
Sec. Sec. 422.2267(e) and 423.2267(e) to be vital to the beneficiary
decision making process; ensuring beneficiaries with limited English
proficiency are aware of and are able to access interpreter services
therefore provides a clear path for this portion of the population to
properly understand and access their benefits (87 FR 27821).
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\97\ CMS released the contract year 2023 version of this HPMS
memorandum titled, ``Contract Year 2023 Translated Model Materials
Requirements and Language Data Analysis'' on September 23, 2022.
This memorandum can be retrieved at: https://www.cms.gov/httpseditcmsgovresearch-statistics-data-and-systemscomputer-data-and-systemshpmshpms-memos-archive/hpms-memos-wk-4-september-19-23.
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In addition, MA organizations and Part D sponsors must comply with
section 504 of the Rehabilitation Act of 1973, section 1557 of the
Affordable Care Act, and implementing regulations at 45 CFR part 92.
The regulations at 45 CFR 92.102(b) require plans to provide
appropriate auxiliary aids and services, including interpreters and
information in alternate formats, to individuals with impaired sensory,
manual, or speaking skills, where necessary to afford such persons an
equal opportunity to benefit from the service in question. Section
92.102(b)(1) defines the auxiliary aids and services for plans to
provide to enrollees. For written materials this includes but is not
limited to braille, large print, data/audio files, relay services, and
TTY communications. We further explained the obligation of plans to
provide accessible communications for individuals with disabilities in
an August 30, 2017, Health Plan Management System memorandum titled,
``Frequently Asked Questions Regarding Accessible Communications for
Individuals with Disabilities, Pursuant to Section 504 of the
Rehabilitation Act of 1973 (Section 504) and Section 1557 of the
Affordable Care Act (Section 1557).'' \98\
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\98\ CMS Office of Hearings and Inquiries, ``Frequently Asked
Questions Regarding Accessible Communications for Individuals with
Disabilities, Pursuant to Section 504 of the Rehabilitation Act of
1973 (Section 504) and Section 1557 of the Affordable Care Act
(Section 1557), August 30, 2017. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/HPMS/HPMS-Memos-Archive-Annual-Items/SysHPMS-Memo-Archive-%3F-2017-Qtr3.
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However, CMS has learned from oversight activities, enrollee
complaints, and stakeholder feedback that enrollees often must make a
separate request each time they would like a material in an alternate
language or need auxiliary aids and services. In addition, during CMS
program audits and oversight activities we have found that special
needs plans (SNPs) do not always translate individualized care plans
(ICPs) into enrollees' preferred languages, even when the enrollee has
expressed a preference for translation as part of completing the health
risk assessment. To address these issues, we are proposing here, based
on our authority under the Medicare statute, to adopt regulations to
impose additional Medicare marketing and communications standards on
plans to ensure access to important information and materials for
individuals who have limited English proficiency or need auxiliary aids
or services.
The materials required under Sec. Sec. 422.2267(e) and 423.2267(e)
and ICPs are vital to how individuals access services and make
decisions about their health care. These materials furnish important
information about coverage and benefits under Medicare health and drug
plans. We believe this proposal will make it easier for beneficiaries
to understand the full scope of available Medicare benefits (as well as
Medicaid benefits available through the D-SNPs, where applicable),
increasing their ability to make informed health care decisions, and
promote a more equitable health care system by increasing the
likelihood that MA enrollees have access to information and necessary
health care.
The U.S. Census Bureau's 2019 American Community Survey (ACS) 1-
year estimates show that 12.2 percent of individuals 65 years of age
and older speak a language other than English in the home.\99\ Nearly 8
percent of Medicare beneficiaries are individuals with limited English
proficiency, many of whom need an interpreter or other language
assistance to communicate
[[Page 79522]]
effectively.\100\ The U.S. Census Bureau's 2019 American Community
Survey 1 year estimate also finds that 2.3 percent of the population is
blind or low vision and 3.6 percent are deaf or have hearing loss, with
13.7 percent of adults over 65 reporting hearing loss or deafness, and
6 percent of adults over age 65 reporting blindness or low-vision.\101\
Communication and language barriers are associated with decreased
quality of care and poorer health outcomes. In addition, individuals
with limited English proficiency are less likely to have routine health
visits, more likely to defer needed health care, and more likely to
leave the hospital against medical advice.\102\ Effective communication
is critical to providing high-quality care. Reliance on unqualified
individuals to interpret medical information can lead to
misunderstandings, poor outcomes, or even death.\103\
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\99\ Refer to https://data.census.gov/cedsci/table?q=language&tid=ACSST1Y2019.S1603.
\100\ Refer to https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Language-Access-Plan.pdf.
\101\ Refer to https://data.census.gov/cedsci/table?q=https%3A%2F%2Fdata.census.gov%2Fcedsci%2Ftable%3Fq%3DS1810%26tid%3DACSST1Y2019.S1810%26hidePreview%3Dfalse&tid=ACSST1Y2019.S1810.
\102\ Refer to https://www.healthaffairs.org/doi/full/10.1377/hlthaff.24.2.435.
\103\ Refer to https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Language-Access-Plan.pdf.
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We believe that it is a substantial burden for enrollees to have to
request each material in an alternate language or request auxiliary
aids and services for each material and that requiring enrollees to do
so could impede access to care. It is also possible that enrollees may
require both auxiliary aids and services for materials and an alternate
language (for example Spanish braille). In addition, to ensure the ICPs
are developed in consultation with the enrollee as required at Sec.
422.101(f)(1)(ii), it is important that ICP materials be provided in
the enrollee's preferred language and, where appropriate, in an
accessible format using auxiliary aids and services. Studies
consistently show the negative health outcomes that patients with
limited English proficiency experience due to the barriers they
encounter when interacting with their doctors and care team members,
accessing interpreters, and addressing insurance concerns. These
outcomes are further exacerbated by vulnerable patients often not
knowing their right to have qualified interpreters and other language
access provisions at no extra cost.\104\ We have become attuned to this
issue through our work with Medicare-Medicaid Plans (MMPs). In 2019,
CMS conducted a review of MMPs to learn how they capture, record, and
use enrollees' language preferences and any need for auxiliary aids and
services. We found that MMPs use multiple enrollee touch points to
capture this information, including welcome calls, health risk
assessments, nurse advice lines, and other interactions associated with
member services, enrollment, prescription services, appeals and
grievances, and care management. To collect and store this information,
MMPs have taken steps such as establishing centralized email accounts
within their organizations to capture all translation and auxiliary aid
and service requests they receive and to ensure greater consistency and
completion of requests, developing database reports that list their
enrollees and any identified language or auxiliary aid or service
preferences, and storing the information in their eligibility system.
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\104\ Refer to https://www.healthaffairs.org/do/10.1377/forefront.20200724.76821/full/.
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As a result, we believe that there are many ways for MA
organizations and Part D sponsors to learn of an enrollee's need for
auxiliary aids and services and language preferences and maintain this
information. The CMS Guide to Developing a Language Access Plan can
provide MA organizations and Part D sponsors with helpful information
to ensure that persons with limited English proficiency have meaningful
access to services.\105\ In addition, the Improving Communication
Access for Individuals Who are Blind or Have Low Vision brochure can
similarly assist organizations in developing policies to better serve
these individuals.\106\ We encourage plans to educate enrollees on the
availability of translated materials and accessible formats using
auxiliary aids and services through such avenues as enrollee
newsletters, advertising, or other educational forums. MA plans may use
a reward program, as permitted under Sec. 422.134, to provide rewards
as a means to encourage enrollees to provide information regarding
their need for an alternate language or auxiliary aids and services; in
our view, providing this information to the MA plan promotes improved
health and the efficient use of healthcare resources (as required by
Sec. 422.134 for reward programs) as it ensures that materials and
information are adequately furnished to be understood and used by the
enrollee in understanding and accessing covered benefits.
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\105\ Refer to https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Language-Access-Plan.pdf.
\106\ Refer to https://www.cms.gov/files/document/omh-visual-sensory-disabilities-brochure-508c.pdf.
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We would like to minimize barriers to enrollees receiving materials
in alternate languages and accessible formats using auxiliary aids and
services and remove any ambiguity associated with MA and Part D plan
responsibilities for providing materials in alternate languages and
accessible formats using auxiliary aids or services and for SNPs to
provide ICPs in alternate languages and accessible formats using
auxiliary aids and services. Therefore, we propose to re-designate the
paragraphs at Sec. Sec. 422.2267(a)(3) and 423.2267(a)(3) as
Sec. Sec. 422.2267(a)(5) and 423.2267(a)(5) and add new paragraphs at
Sec. Sec. 422.2267(a)(3) and 423.2267(a)(3) to require MA
organizations and Part D sponsors to provide materials to enrollees on
a standing basis in any non-English languages that is the primary
language of at least 5 percent of the individuals in a plan benefit
package service area as defined under Sec. Sec. 422.2267(a)(2),
423.2267(a)(2) and proposed Sec. Sec. 422.2267(a)(4) and
423.2267(a)(4), which are is discussed later in this section, and in
any accessible formats using auxiliary aids and services upon receiving
a request for the materials in another language or using auxiliary aids
and services or otherwise learning of the enrollee's preferred language
or need for an accessible format using auxiliary aids and services.
This means that once a plan learns of an enrollee's preferred language
and/or need for auxiliary aids and services--whether through an
enrollee requesting a material in a preferred language or using
auxiliary aids and services, during a health risk assessment, or
another touch point--the plan must provide required materials in that
language and/or accessible format using auxiliary aids and services as
long as the enrollee remains enrolled in the plan or until the enrollee
requests that the plan provide required materials in a different
manner. We have also proposed language at Sec. Sec. 422.2267(a)(3) and
423.2267(a)(3) to extend this requirement to the individualized plans
of care described in Sec. 422.101(f)(1)(ii) for SNP enrollees. The
proposed requirement would allow enrollees to avoid having to submit a
request to receive required materials in a preferred language and/or
using auxiliary aids and services each time the MA or Part D plan
distributes a required material. We note that plans are responsible for
providing materials in both a preferred format and using auxiliary aids
and services when needed (for example Spanish braille). These
modifications at Sec. Sec. 422.2267 and 423.2267 and other
[[Page 79523]]
requirements at Parts 422 and 423 regarding translation obligations and
auxiliary aids are in addition to plan obligations under 45 CFR part 92
that govern meaningful access for individuals with limited English
proficiency and effective communication for individuals with
disabilities. MA and Part D plans must comply with both the rules at
Sec. 422.2267 and Sec. 423.2267 and the non-discrimination
requirements in 45 CFR part 92. Where one set of regulations imposes a
higher or different standard but it is not impossible for the plan to
comply with both, the plan must comply with both. Because cost plans,
per Sec. 417.428, are subject to the regulations in part 422, subpart
V, these requirements also apply to cost plans.
There are no information collections related to creating a standing
request for translated materials or materials using auxiliary aids and
services. We believe the burden associated with these proposed
requirements is exempt from the requirements of PRA as defined in 5 CFR
1320.3(b)(2) because the time, effort, and financial resources
necessary to comply with the requirement would be incurred by persons
in the normal course of their activities. We believe most cost plans,
MA organizations, and Part D sponsors have translators on staff or
access them via contractors because of existing translation and
auxiliary aid requirements.
2. Require FIDE SNPs, HIDE SNPs, and Applicable Integrated Plans To
Translate Materials Into the Medicare Translation Standard Plus
Additional Medicaid Languages
Over 1.8 million individuals dually eligible for the Medicare and
Medicaid programs speak a language other than English at home or do not
speak English fluently.\107\ In addition, dual eligibility is a strong
predictor of poorer outcomes in an array of Medicare programs,\108\ and
dually eligible beneficiaries are far more likely than other Medicare
beneficiaries to be from racial or ethnic minority groups (48 percent
vs. 22 percent). Many dually eligible beneficiaries have low health
literacy yet need to navigate a more complex system of coverage than
non-dually eligible beneficiaries.
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\107\ Refer to https://www.resourcesforintegratedcare.com/language_preferences/.
\108\ Refer to https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
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Per the definition of specialized MA plans for special needs
individuals in Sec. 422.2, all SNPs must be MA-PDs that comply with
both Part 422 and Part 423 requirements. Sections 422.2267(a)(2) and
423.2267(a)(2) require dual eligible special needs plans (D-SNPs), like
all other MA-PD plans, to translate materials into any non-English
language that is the primary language of at least 5 percent of the
individuals in a plan benefit package service area. We propose to amend
Sec. Sec. 422.2267 and 423.2267 with a new paragraph (a)(4) that
requires that FIDE SNPs and HIDE SNPs, as defined at Sec. 422.2, and
applicable integrated plans (AIPs), as defined at Sec. 422.561,
translate all Medicare materials listed in Sec. Sec. 422.2267(e) and
423.2267(e) into any languages required by the Medicaid translation
standard as specified through their capitated Medicaid managed care
contract in addition to the language(s) required by the Medicare
translation standard at Sec. 422.2267(a)(2). Generally, we expect that
the Medicaid translation requirements would be the regulatory standard
at Sec. 438.10; however, a State may impose a higher or more stringent
translation requirement on its Medicaid managed care plans than is
required by Sec. 438.10, so we believe referring to the capitated
Medicaid managed care contract rather than Sec. 438.10 is appropriate
for this proposed new requirement. Specifically, Sec. 438.10(d)(3)
requires that entities make written materials that are critical to
obtaining services available in the prevalent non-English languages in
the service area. Section 438.10(a) defines prevalent as a non-English
language determined to be spoken by a significant number or percentage
of potential enrollees and enrollees that are limited English
proficient. Section 438.10(d)(1) requires that the State establish a
methodology for identifying the prevalent non-English languages spoken
by enrollees and potential enrollees throughout the State. Under the
definitions for FIDE SNP, HIDE SNP, and AIP, each of these types of
plan has a companion or affiliated Medicaid managed care plan, which
would itself be subject to Sec. 438.10 and the applicable State's
translation requirements for Medicaid materials described in Sec.
438.10. We propose to extend the translation standards applicable to
the Medicaid materials used by FIDE SNPs, HIDE SNPs, and AIPs to the
Medicare materials used by those plans to ensure that the dually
eligible enrollees in all FIDE SNPs, HIDE SNPs, and AIPs receive all of
the materials necessary for accessing and understanding all of their
benefits (both Medicare and Medicaid) in a language that the enrollees
understand.
For example, if current Sec. Sec. 422.2267 and 423.2267 only
require translation into Spanish for Medicare materials but the State
Medicaid agency requires translation into Chinese as well as English
and Spanish, then our proposed revisions to Sec. Sec. 422.2267 and
423.2267 would also require that the affected FIDE SNP, HIDE SNP, or
AIP translate the Medicare materials listed in Sec. Sec. 422.2267(e)
and 423.2267(e) into Chinese as well as Spanish.
These modifications at Sec. Sec. 422.2267 and 423.2267 do not
create exceptions to other laws that govern translation of written
materials provided to enrollees that we have previously described.
Rather, our intent is to make it easier for dually eligible
beneficiaries who are enrolled in FIDE SNPs, HIDE SNPs, or AIPs to
understand the full scope of Medicare and Medicaid benefits available
through such D-SNPs, which would increase their ability to make
informed health care decisions. It would also reduce the likelihood of
an enrollee receiving materials in different languages (for example,
some in English and some in Spanish) depending on whether the materials
are governed by Medicare or Medicaid requirements.
We are considering applying the proposed new requirement to
additional or different groups of D-SNPs, such as limiting the proposal
to AIPs or to organizations with D-SNP-only contracts as described
under Sec. 422.107(e), or expanding the requirement to all D-SNPs and
D-SNP look-alikes (that is, the MA plans that meet the standards in
Sec. 422.514(d)) during a period before the D-SNP look-alike plan is
nonrenewed or terminated. We decided to focus our proposal on all FIDE
SNPs and HIDE SNPs, as defined at Sec. 422.2, and AIPs, as defined at
Sec. 422.561, because these plans have capitated contracts with State
Medicaid agencies and must already translate Medicaid materials to
comply with their Medicaid managed care contracts, and would likely
either have staff that are capable of translating materials into these
languages or contract with organizations to perform these translations.
In addition, an increasing number of dual eligible individuals are in
FIDE SNPs, HIDE SNPs, and AIPs where the same organization provides
coverage of both the Medicare and Medicaid services for the enrollee.
We understand that our proposal would require some FIDE SNPs, HIDE
SNPs, and AIPs to translate the Medicare materials listed in Sec. Sec.
422.2267(e) and 423.2267(e) into additional languages. We believe that
the benefit gained by the ability for more enrollees to receive all
materials in
[[Page 79524]]
their preferred language outweighs this burden. As described previously
in this section, these enrollees are far more likely than other
Medicare beneficiaries to be from racial or ethnic minority groups or
have low health literacy yet need to navigate a more complex system of
coverage than non-dually eligible beneficiaries. As a result, to ensure
health equity for this population we have proposed including a broad
range of D-SNP types but are excluding those D-SNPs that only
coordinate with Medicaid services. We welcome comments on our proposal
and these potential alternatives we are considering.
3. Exclude Member ID Cards From New Paragraphs Proposed at Sec. Sec.
422.2267(a)(3) and (a)(4) and Sec. Sec. 423.2267(a)(3) and (a)(4)
In addition to the proposals described earlier in this section,
Sec. Sec. 422.2267(e)(30)(vi) and 423.2267(e)(30)(vi) currently
exclude the member ID card from the translation requirement under
Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2). We propose to amend the
member ID card provision at Sec. Sec. 422.2267(e)(30)(vi) and
423.2267(e)(30)(vi) to expand the exclusion for member ID cards to
include the new paragraphs proposed in this section, Sec. Sec.
422.2267(a)(3) and (a)(4) and Sec. Sec. 423.2267(a)(3) and (a)(4),
respectively.
P. Medicare Advantage (MA) and Part D Marketing (Subpart V of Parts 422
and 423)
We are proposing a number of changes to Subpart V of both 422 and
423 regulations. These changes include requiring third parties to
submit marketing materials, notifying enrollees annually that they can
opt out of plan business calls; limiting the ability of plans and
agents to contact prospective enrollees beyond six months from the time
they submit a Scope of Appointment (SOA) or Business Reply Card (BRC);
requiring website provider directories be searchable by all required
elements (for example, name, phone number, address); adding ``effect on
current coverage'' to the Pre-enrollment Checklist (PECL), as well as
requiring agents to discuss the PECL during an enrollment call;
requiring plans to list benefits at the beginning of the Summary of
Benefits and in a specified order; labeling the non-renewal notice as
standardized rather than a model, consistent with CMS's guidance
instructions; limiting the requirement to record calls between third-
party marketing organizations (TPMOs) and beneficiaries to marketing
(sales) and enrollment calls; clarifying that the prohibition on door-
to-door contact without a prior appointment still applies after
collection of a BRC or SOA; prohibiting marketing of benefits in a
service area where those benefits are not available; prohibiting the
marketing based on information about savings available to potential
enrollees that are based on a comparison of typical expenses borne by
uninsured individuals, costs that dually eligible beneficiaries are not
responsible to pay, or other unrealized costs of a Medicare
beneficiary; requiring TPMOs to list or mention all of the MA
organization or Part D sponsors that they sell; requiring MA
organizations and Part D sponsors to have an oversight plan that
monitors agent/broker activities and reports agent/broker non-
compliance to CMS; modifying the TPMO disclaimer to add State Health
Insurance Programs (SHIPs) as an option for beneficiaries to obtain
additional help; placing discrete limits on the use of the Medicare
name, logo, and Medicare card; prohibiting the use of superlatives (for
example, words like ``best'' or ``most'') in marketing unless the
material provides documentation to support the statement, and the
documentation is for the current or prior year; and clarifying the
requirement to record calls between TPMOs and beneficiaries such that
it is clear that the requirement includes virtual connections such as
Zoom and Facetime.
Sections 1851(h), 1851(j), and 1852(c) of the Act, which address
Medicare Part C, provide CMS the authority to review marketing
materials, develop marketing standards, and ensure that marketing
materials are accurate and not misleading. These provisions also
provide CMS with the authority to prohibit certain marketing
activities. Section 1856(b)(1) of the Act provides CMS the authority to
add additional standards to the MA program that the Secretary
determines are necessary for CMS to carry out the program. In addition,
sections 1876(i)(3)(D), 1857(e)(1) and 1860D-12(b)(3)(D) of the Act
provide CMS the authority to adopt additional contract terms for cost
plans, MA plans, and Part D plans when necessary and appropriate.
Likewise, section 1860D-1(b)(1)(B)(vi) of the Act directs that the
Secretary use rules similar to and coordinated with the MA rules at
section 1851(h) of the Act for approval of marketing materials and
application forms for Part D plan sponsors. Section 1860D-4(l) of the
Act applies certain prohibitions under section 1851(h) of the Act to
Part D sponsors in the same manner as such provisions apply to MA
organizations. In addition, under section 1852(c) and 1860D-4(a) of the
Act, CMS can require organizations to provide certain materials to
Medicare beneficiaries concerning MA and Part D plan choices. These
statutory provisions help ensure Medicare beneficiaries are informed
and protected when making an election to enroll in an MA (including
MAPD) or Part D plan. We believe the changes proposed in this
regulation strengthen CMS' ability to ensure MA and Part D marketing to
beneficiaries is not misleading, inaccurate, or confusing.
Additionally, under 42 CFR 417.428, most marketing requirements in
subpart V of part 422 apply to section 1876 cost plans as well. (87 FR
1899).
In accordance with regulations at Sec. Sec. 422.2261(a) and
423.2261(a), MA organizations and Part D Sponsors (MA organizations/
Part D Sponsors) must submit all marketing materials, all election
forms, and certain designated communications materials for CMS review.
Sections 422.2261(a)(3) and 423.2261(a)(3) prohibit third-party and
downstream entities from submitting materials directly to CMS, unless
specified by CMS. Following an operational change in May 2021, CMS
began permitting TPMOs to submit certain marketing materials. In cases
where a TPMO document only markets one MA organization/Part D sponsor,
there would be no change for the TPMO, meaning they would still send
the document in through the MA organization/Part D sponsor who would
submit it into HPMS. For TPMOs that develop materials for more than one
MA organization/Part D sponsor, the TPMO would submit the material
directly to CMS. Based on CMS' operational change we are proposing to
require TPMOs, as defined at Sec. Sec. 422.2260 and 423.2260, to
submit their marketing materials developed for multiple MA
organizations and Part D sponsors (and their specific plans) to CMS
through HPMS. Specifically, we are proposing to remove Sec. Sec.
422.2261(a)(3) and 423.2261(a)(3), which as implemented prohibited
TPMOs from submitting materials the TPMO alone developed, and modifying
Sec. Sec. 422.2261(a)(2) and 423.2261(a)(2) to require that where
marketing materials have been developed by a TPMO for multiple plans,
the TPMO must submit those materials that the TPMO has designed and
developed to CMS, and such submission may only occur after the TPMO
receives the prior approval of each of the MA organizations or Part D
sponsors on whose behalf the materials
[[Page 79525]]
were designed and developed by the TPMO.
The HPMS is CMS' system of record for marketing materials. In the
January 19, 2021 final rule, we modified Sec. Sec. 422.2261(a)(3) and
423.2261(a)(3) to provide CMS the flexibility to allow third parties to
submit materials directly to CMS in the future (86 FR 5998). CMS made
this modification in anticipation of changes to HPMS. CMS released an
updated marketing module in HPMS in May of 2021. Prior to this release,
third-party materials were submitted into HPMS, but the TPMO was
required to send materials to an MA organization or Part D sponsor and
have the MA organization or Part D sponsor submit the materials on the
TPMO's behalf. System changes in 2021 permitted third parties and
downstream entities, such as TPMOs, to submit materials directly to CMS
following the receipt of prior approval from at least one MA
organization or Part D sponsor. The January 19, 2021 final rule enabled
the agency to allow submission by third parties and downstream entities
because of the timing and uncertainty of the revamped HPMS marketing
module.
Since issuing the January 19, 2021 final rule, we have modified
HPMS so that TPMOs may submit materials that are being used for
multiple MA organizations, Part D sponsors, or plans. We are now
proposing to require, rather than permit, TPMOs submit to CMS any
material that the TPMO develops for multiple MA organizations and Part
D sponsors that meets the definition of marketing and that TPMOs
receive prior approval, by each MA organization or Part D sponsor, of
the material being submitted on behalf of each of the MA organization
or Part D sponsor. Failing to require submission may result in these
materials not being subject to CMS review. Thus, we are proposing to
remove Sec. Sec. 422.2261(a)(3) and 423.2261(a)(3) and modify
Sec. Sec. 422.2261(a)(2) and 423.2261(a)(2) to add that TPMOs must
submit their materials designed on behalf of and with prior approval
from the applicable MA organizations or Part D sponsors.
CMS is proposing to add a new (xix) to Sec. 422.2262(a)(1) and a
new (xviii) to Sec. 423.2262(a)(1) to address the use of the Medicare
name, CMS logo, and products or information issued by the Federal
Government, including the Medicare card. CMS is aware of concerns from
external stakeholders about marketing activities and documents that
appear to be from Medicare, CMS, or the Federal Government. Through
beneficiary complaints and CMS surveillance activities, over the years,
we have seen the word ``Medicare'' in names of store fronts (that is,
The Medicare Store), on notices or postcards where ``Medicare'' is in
large font while disclaimers are miniscule, and in television
advertisements where a beneficiary could think that the advertising is
coming from CMS. We have also seen logos, which are very similar to the
Health and Human Services (HHS) logo on websites and print materials.
These logos have featured circles with writing around the circle and a
bird, wings or other images that appear to be the same image used by
the Federal Government. In addition to the store front, postcards, and
television advertisements, there are also numerous third-party internet
sites with ``Medicare'' in the URL or a logo similar to the HHS logo,
potentially causing a beneficiary to click on a private site when they
intend to go to Medicare.gov or are seeking official Medicare
information or access. Often, it appears as if the materials urging the
beneficiary to ``take action'' are from Medicare or that these third
parties represent Medicare or the Federal Government. With the increase
of third parties in the marketplace, based on CMS' surveillance and
complaints received, especially through 1-800-MEDICARE, we are
concerned that an increasing number of beneficiaries are being misled
into believing the entity they are contacting is Medicare or the
Federal Government. One specific example, provided by a Medicare
beneficiary, is a postcard with the beneficiary-named address with
``Medicare Notice'' in large, bold letters at the top along with
``Personal & Confidential'' and ``Important Medicare Information.''
This postcard also had a ``Medicare Information'' box listing a
``Customer ID'', formatted to look like an official Medicare
beneficiary number. This misleading postcard appeared to be an official
document disseminated by the Federal Government. In our review of
complaints received through 1-800-MEDICARE, CMS discovered other
examples of beneficiaries who mistakenly believed they were calling
Medicare rather than a private MA or Part D plan or its agent or
broker, likely based on the receipt of a flyer using the word
``Medicare'' in a way that conveyed to the beneficiary that they must
call the telephone number on the mailer. These complaints illustrate
that the use of the Medicare name is at times confusing and misleading
to Medicare beneficiaries.
A top CMS priority, consistent with sections 1851(h)(2) and 1860D-
01(b)(1)(B)(vi) of the Act and CMS's implementing regulations at
Sec. Sec. 422.2262 and 423.2262, is to ensure that MA organizations
and Part D sponsors disseminate information to beneficiaries that is
accurate and not misleading. We are therefore concerned that the use of
the term ``Medicare'' in situations like those described above
erroneously leads beneficiaries to believe that Medicare-related
communications or advertising are disseminated or endorsed by Medicare
or the Federal Government, when in actuality such communications are
being disseminated by the MA organizations/Part D sponsors themselves,
or by entities operating on behalf of the MA organizations or Part D
sponsors. Although the types of plan communications described above
that feature the word ``Medicare'' typically include disclaimers that
state the information presented is not connected to or endorsed by the
Federal Government or the Medicare program, these disclaimers are often
tiny, difficult to read, and are mixed in with other CMS required
disclaimers as well as plan-developed, non-required, disclaimers. While
CMS already prohibits inaccurate or misleading information under
Sec. Sec. 422.2262(a)(1)(i) and 423.2262(a)(1)(i), we believe it is
important to specifically prohibit the misleading use of the Medicare
name, CMS logo, and products or information issued by the Federal
Government (including the Medicare card) in Sec. Sec. 422.2262(a)(1)
and 423.2262(a)(1). We are not including the Medicare Part D mark, as
CMS gives Part D sponsors contractual permission to use the mark. By
adding a new (xix) and (xviii) we are firmly and clearly prohibiting
the improper use of these terms and logos. Therefore, we propose adding
a new paragraph (xix) to Sec. 422.2262(a)(1) and a new (xviii) to
Sec. 423.2262(a)(1) which specifically prohibits the use of the
Medicare name, CMS logo, or official products, including the Medicare
card, in a misleading manner.
Since CMS contracts with MA organizations and Part D sponsors, CMS
holds these organizations accountable for the actions of their first
tier, downstream and related entities, per Sec. Sec. 422.504(i) and
423.505(i). If CMS determines that the Medicare name, CMS logo, or
official products like the Medicare card, have been used in a
misleading manner by a first tier, downstream or related entity (FDR),
CMS would address the issue with the MA organization or Part D sponsor
on whose behalf the FDR was operating and hold the sponsoring
organization accountable for the misleading information.
In our January 2021 final rule, we prohibited plan use of
unsubstantiated statements except those used in taglines
[[Page 79526]]
and logos in 42 CFR 422.2262(a)(1)(ii) and 423.2262(a)(1)(ii). Prior to
the January 2021 final rule, we had prohibited the use of
unsubstantiated superlatives and pejoratives, except when used in logos
and taglines, through our Medicare Communications and Marketing
Guidance. We now propose to further restrict the use of superlatives by
prohibiting all superlatives unless substantiating supporting data is
also provided with the material and essentially adopt a regulation that
builds upon our prior guidance. We are proposing this for all
superlatives, including those used in logos and taglines. Previously,
CMS generally required plans to provide substantiating data to support
the use of a superlative. However, that substantiating information was
only provided to CMS, resulting in the beneficiary seeing the
superlative without no context. Currently, the beneficiary has no
knowledge of how the superlative is determined, potentially misleading
the beneficiary to believe a statement which may be partially or mostly
true, but lacking context and important specificity. For example, an MA
plan may advertise that it has the largest network, which on a national
basis may be accurate. However, when looking at a particular service
area, this MA plan may have the smallest network. Permitting the use of
superlatives without specific information explaining the basis or
context, is potentially misleading to beneficiaries so we have
reconsidered the scope of Sec. Sec. 422.2262(a)(1)(ii) and
423.2262(a)(1)(ii) as previously finalized.
CMS believes it is critical to provide either actual data or
information, such as reports or studies, that forms the basis for a
superlative statement in order for beneficiaries to review and
understand the context and reference point for the superlative. This
documentation and/or data can be referenced through footnotes
explaining the basis, noting the source, with enough information for a
beneficiary to locate, or providing the actual comparison done to
determine the superlative. For example, if a plan stated that they have
the lowest premiums, the plan would need to state their premium and the
premiums of other plans in the service area, or reference a study,
review or other documentation that supports the superlative and with
which the beneficiary can make accurate comparisons between plans.
We are also proposing to add a requirement that the supportive
documentation and/or data be based on current data. Our proposed
regulation text requires that the supportive documentation or data must
reflect data, reports, studies, or other documentation to have been
published either in the existing contract year or the prior contract
year. For example, a health plan could not make the statement in CY
2022 that they have the largest provider network in an area using 2018
data. Rather, in CY 2022, the statement that a health plan has the
largest network in an area must be supported by documentation and/or
data published as of January 1, 2021 or later. Data and the underlying
situations can be dynamic and change over time, therefore, CMS is
proposing that recent data, meaning the current or the prior contract
year data, are the only data that may be used to substantiate
superlatives. We believe any data older than the prior contract year
may be misleading, given the age of the data and the potential of the
data to have changed. Based on this, we propose to modify paragraphs
Sec. Sec. 422.2262(a)(1)(ii) and 423.2262(a)(1)(ii) to prohibit the
use of superlatives, unless sources of documentation and/or data
supportive of the superlative is also referenced in the material and to
provide that such supportive documentation and/or data must reflect
data, reports, studies, or other documentation that has been published
in either the current contract year or prior contract year.
In Sec. Sec. 422.2263(b) and 423.2263(b) we propose adding a new
(8) which prohibits organizations from advertising benefits not
available in a service area, unless doing so is unavoidable in a local
market. This prohibition is codifying our previous guidance, as
previously outlined in section 30.1 of the 2016 Medicare Marketing
Guidelines (MMG),\109\ providing that marketing activities should be
limited to a plan's service area unless doing so was unavoidable, such
as advertising in a local newspaper that may be distributed outside a
service area. In cases where marketing outside a service area was
unavoidable, CMS's guidance provided that the plan's service area be
disclosed.
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\109\ https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/Downloads/2016-Medicare-Marketing-Guidelines-Updated.pdf.
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Over the past few years, CMS has seen a significant increase in
national marketing which promotes benefits such as dental, vision, and
money back on a beneficiary's Social Security check. While many of
these benefits are available to a large number of beneficiaries, they
are not available in all service areas or to all Medicare beneficiaries
in the amounts often advertised. For example, in 2021 there were
national advertisements that claimed a beneficiary ``could get up to
$144 back'' on their Social Security check, which would be accomplished
through a reduction in the beneficiary's Medicare Part B premium. A
premium reduction of this magnitude would have covered most of the
standard 2021 Part B premium of $148.50. However, the number of
counties or states where one or more available plans offered the
advertised Part B premium reduction of $144 was small. In fact, for CY
2021, Florida and Puerto Rico were the only states or territories that
had plans with a reduction of $140 or more, and in CY 2022 the only
states or territories that had plans with a reduction of $140 or more
were California, Florida and Puerto Rico. Further, although there were
plans available in these states, the plans offering the $140 or more
buy down were not available in all counties. Since beneficiaries in
more than 60% of states only have access to plans that offer a Part B
premium reduction of $99.00 or less (CY 2022), advertising on a
national or even regional level that a beneficiary can get up to the
full amount or even close to the full amount is potentially misleading.
And although over 30% of states and territories offer Part B premium
reduction of $100 or more, this reduction is not available in all
counties in each State and territory. These national advertisements
publicize that a beneficiary can get up to a certain dollar amount (for
example, $144) even if there are no plans available in that state that
offer $144 or any dollar amount close to $144. CMS believes that if a
plan offering ``up to'' the top dollar amount is advertised as
available for enrollment, then such a plan offering that top dollar
amount should be available to beneficiaries who are receiving or
exposed to the advertisement where they reside; otherwise we believe it
is potentially misleading to potential enrollees. A beneficiary
calling, based on an advertisement touting up to $144 back, would
expect that plans would be available that would provide a reasonable
Part B premium reduction. However, the actual reduction may be minimal,
anywhere from $1 to $25, significantly far from the ``up to''
advertised amount; or in other cases, there may not even be a Part B
premium reduction in that particular service area. We believe this
practice--touting a reduction far greater than what is available has
the effect of getting beneficiaries to contact the company, hoping for
financial assistance, only to be told there is little to no Part B
[[Page 79527]]
premium reduction--is a misleading tactic that is more likely designed
to attract a beneficiary's attention so that the beneficiary will call
the number and then, be subject to additional marketing and potentially
switched to a plan not that is not well suited to meet the
beneficiary's health care needs.
A similar issue exists for other MA benefits such as dental,
vision, and hearing as well as Part D benefits, non-formulary
medications and over-the-counter medications. There have been national
advertisements that promote plans with high benefit amounts for certain
benefits (for example, up to $2,500 in dental benefits). CMS believes
advertising up to a $2,500 dental benefit on a national level is
misleading when some markets may not even have access to a plan with
dental or others only have access to a plan with limited dental (for
example, $500). While many beneficiaries have access to MA plans with
some level of additional dental, vision and hearing benefits,
advertising benefits up to a large dollar amount (for example, $2,500)
is misleading when the MA plan options available to a beneficiary
provide a significantly lower value benefit (for example, $500).
CMS has seen advertisements which market up to $144 dollars back on
the beneficiaries' Social Security check, or thousands of dollars in
hearing, dental and vision, to entice a beneficiary to call the 1-800
number possibly believing they can receive the maximum amount of
benefits advertised. CMS has listened to recorded calls between a
beneficiary and an agent in which the beneficiary starts off by asking
about how to get $144 back in their Social Security check. Based on its
review of recorded calls,\110\ CMS has learned that once the
beneficiary places a call to the advertised number, the agent may
market a plan that does not provide a Part B premium reduction at all
or that offers a premium reduction at a much lower level than the
advertised dollar value, or a plan with more limited dental, hearing or
vision than was advertised. Once the agent or broker has the
beneficiary on the line, the beneficiary is either put in a position of
trying to end the call or listening to an agent sell a plan in which
the beneficiary was not interested, potentially leading the beneficiary
into enrolling in a plan that does not offer the advertised benefits.
Because of the initial call, which was based on unavailable benefits,
the beneficiary may end up enrolling in a plan that does not best meet
the health care needs of the beneficiary. In this situation, the
beneficiary may have benefited by staying in their existing plan, and
may even have stayed enrolled in their existing plan, if not for the
advertisement urging the beneficiary to call to ``get the money they
deserve.''
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\110\ CMS has retained the recordings of these calls. The calls
include sensitive information, and as such, we feel it would be
inappropriate and illegal to include them as part of this public
record.
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As mentioned above, when a plan advertises benefits which are not
available to beneficiaries in the service area where the advertisement
airs, that type of marketing is misleading. We believe that
beneficiaries should only receive marketing that advertises benefits
actually available to the beneficiary where the beneficiary resides
(that is, in a service area that covers where the advertisements air).
Therefore, we are proposing a new (8) at Sec. Sec. 422.2263(b) and
423.2263(b) that provides that MA organizations and Part D sponsors may
not engage in marketing that advertises benefits that are not available
to beneficiaries in the service area where the marketing appears unless
unavoidable in a local market.
We are also proposing a new (9) at Sec. Sec. 422.2263(b) and
423.2263(b) that prohibits marketing unless the names of the MA
organizations or Part D sponsors that offer the benefits are being
advertised are clearly identified. In cases where the MA organization
or Part D sponsor uses a specific marketing name, as identified in
HPMS, that marketing name can be used in place of the MA organization
or Part D sponsor name. CMS has seen an increase in the marketing of
benefits, through television, websites, and mailers that mention
additional benefits such as dental, vision, hearing, as well as low or
zero-dollar premiums. These advertisements do not identify which
product(s), plan(s), or specific plan(s) benefits are being advertised,
but rather act as a lead generator to obtain beneficiary contact
information. When a beneficiary calls, returns a flyer, or clicks on a
link on a web page, the advertising entity (which may be either an MA
organization, a Part D sponsor, or a TPMO) may be able to obtain a
beneficiary's contact information, which is then used by that entity
for unlimited future calls or for providing that information to other
entities that then contact the beneficiary. One particular internet
site \111\ requires an individual to enter their name, email address,
and phone number prior to looking at any plan information. The
disclaimer at the bottom of the ad (and often in much smaller font)
states ``By entering my contact information and clicking ``Next''
above, I consent to receive emails, telephone calls, text messages and
artificial or pre-recorded messages from. . .licensed insurance agents
or their affiliates and third-party partners, regarding health
insurance products and services including Medicare Advantage Plans and/
or Prescription Drug Plans, at the email address and telephone number
provided above, including my wireless number (if provided), using an
automated telephone dialing system.'' By ``automated telephone dialing
system,'' the language seems to be referring to what are commonly
referred to as robo-calls. In order for the beneficiary to get any
information, they are forced to agree to be contacted not just once
based on the initial inquiry, but for unlimited calls, texts, and
emails from the internet site they visited, as well as any other
company to whom the internet site gave or sold the beneficiary's
information. We do not believe beneficiaries realize or want their
contact information to be provided to other entities just because the
beneficiary wanted to get information about available plans from one
internet site. We believe that many of the unsolicited contact
complaints that CMS has received (through 1-800-MEDICARE, online
complaint system, anecdotally from stakeholders, etc.) are the result
of a beneficiary inadvertently or unknowingly agreeing to having their
personal information provided or sold to others entities, who then call
the beneficiary and market MA products.
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\111\ HPMS is the system of record for storing marketing
websites submitted to CMS for review and approval.
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CMS believes there are specific, important reasons for
advertisements to contain MA organization and Part D sponsor names.
First of all, we believe including the names in the advertisement will
help the beneficiary understand that they are calling a plan or a plan
representative and not Medicare, the government, or a non-partisan
entity. Adding the names provides information to put the beneficiary in
control of whether they even want to contact the agent because by
having the name on an advertisement, the beneficiary can research the
MA organization or Part D sponsor, including their Star Ratings and
complaints, or discuss the plan with relatives or friends whom they
trust to help make health care decisions. The beneficiary can then make
a more informed decision on whether they want to contact the agent to
learn about that particular plan. Without knowing the plan name, the
beneficiary may find themselves in a position of listening to an agent
(especially if that agent is in
[[Page 79528]]
the beneficiary's home) market a plan that the beneficiary is not
interested in joining.
Not only does this proposed policy assist beneficiaries, it will
also assist CMS and MA organizations and Part D sponsors to ensure the
marketing reflects the appropriate MA organizations and Part D
sponsors. CMS is proposing to require TPMO-developed marketing to be
submitted into HPMS and currently permits TPMOs to submit marketing
materials into HPMS. Under our proposal, once submitted, each MA
organization or Part D sponsor would decide whether they want the TPMO
to use that marketing piece on their behalf. If an MA organization or
Part D sponsor ``opts into'' the piece, the TPMO may then use it on
their behalf and marketing those organizations. If the MA organization
or Part D sponsor ``opts out'' of the marketing piece, then the TPMO
would not have permission to market those specific organizations. By
requiring MA organization and Part D sponsor names both CMS and the
organization would then be able to ensure that only those MA
organizations and Part D sponsors who opted into the TPMO using the
piece are being advertised in that piece. And if CMS determines a piece
is misleading, we will then be able to identify the organizations from
the advertisement, compare them to the ones that opted in and address
the issue with those organizations who opted into the TPMO piece. This
will allow CMS to quickly notify the MA organization or Part D sponsor
of the issues, have the organization resolve the issues, and get the
misleading materials out of circulation quickly.
Therefore, we are proposing a new (9) at Sec. 422.2263(b) to
prohibit MA organizations from marketing any products or plans,
benefits, or costs, unless the MA organization or marketing name(s) (as
listed in HPMS of the entities offering the referenced products or
plans) are identified in the marketing material. We are also proposing
a new (9) at Sec. 423.2263(b) to prohibit Part D sponsors from
marketing any products or plans, benefits, or costs, unless the Part D
sponsor or marketing name(s) (as listed in HPMS of the entities
offering the referenced products or plans) are identified in the
marketing material.
In addition, we propose to set requirements on how the names of the
sponsoring organization are displayed or identified in marketing
materials. In reviewing television, print, and online marketing, the
disclaimers are often small, not displayed long enough, read too fast,
or are difficult to find. We propose adding requirements in this new
paragraph (9) to ensure the information is visible. We propose adding
that print advertisements must have MA organization, Part D sponsor, or
marketing names in 12-point font and may not be solely in the
disclaimer or fine print. We use the phrase ``fine print'' as it is
generally defined to mean printed matter in small type or in an
inconspicuous manner. For television, online, or social media-based
advertisements, we propose that these names must either be displayed
during the entire advertisement in the same font size as displayed
benefits and phone numbers, or be read within the advertisement at the
same pace as advertised benefits or phone numbers. For radio or other
advertisements that are voice-based only, we propose that these names
must be read at the same speed as the phone number. To implement these
new requirements, we are proposing new paragraphs (b)(9)(A), (B), and
(C), respectively.
We are proposing to add a new (10) to Sec. Sec. 422.2263(b) and
423.2263(b) to address the marketing of ``savings'' for beneficiaries.
As part of our marketing surveillance and reviews, CMS has seen
advertisements touting that a beneficiary can save $9,000 or more on
their prescription drugs, or over $7,000 in health care expenses if
they join a particular MA plan or Part D plan. In the example referring
to savings for prescription drugs, this advertisement included a small
disclaimer stating that the ``savings'' figure is based on the usual
and customary price someone without prescription drug insurance would
pay. In other examples, MA organizations, Part D sponsors, or TPMOs are
marketing dual eligible Special Needs Plans (D-SNPs) that provide
``savings'' of over $7,000. In this situation, the ``savings''
described in the advertisement refers to the Part B Medicare premium
and copay amounts that are covered by Medicaid for fully dual-eligible
beneficiaries or are the costs saved through the Prescription Drug
savings program, which is based on income. However, with both of these
examples, most beneficiaries are not saving the advertised amount of
money because they would never have incurred many of those out-of-
pocket expenses. Specifically, a beneficiary that already has
prescription drug coverage (such as a current Part D plan or other
creditable prescription coverage from before the individual became
eligible for Medicare) would not save $9,000 in out-of-pocket costs by
switching to the advertised plan because they already had coverage for
their drugs through a different plan. This advertised ``savings'' is
only applicable if the beneficiary currently had no drug coverage,
meaning they had to pay for all of their drugs out of pocket. Likewise,
the above example of advertisements marketing D-SNPs, the
advertisements generally have very small, fine print that says the
individual may need to be income eligible or Medicare and Medicaid
eligible in order to receive the advertised savings. However, since
dual eligible beneficiaries already have Medicaid coverage or are
already in a dual plan they are not saving the full $7,000 because they
never paid the full $7,000 in their old or existing plan. Further, if
the beneficiary is eligible to have Medicaid pay certain costs on the
beneficiary's behalf (such as payment of Part B premiums) or is
protected from paying cost sharing by Sec. 422.504(g)(1)(iii), the
advertised savings are not unique to the advertised plan in any way.
We believe that these commercials and other types of advertising
(for example, direct mailers) are techniques that TPMOs, MA
organizations, and Part D sponsors use to entice a beneficiary into
calling a 1-800 number for plan X, mistakenly believing that she or he
will save thousands of dollars by switching plans, as identified in the
examples above. To address our concerns about beneficiaries being
misled, we propose to add a new paragraph (b)(10) at Sec. Sec.
422.2263 and 423.2263 to prohibit MA organizations and Part D sponsors
from including information about savings available to potential
enrollees that are based on a comparison of typical expenses borne by
uninsured individuals, unpaid costs of dually eligible beneficiaries,
or other unrealized costs of a Medicare beneficiary.
Next, we propose adding a new paragraph (A) to Sec. Sec.
422.2264(a)(2)(i) and 423.2264(a)(2)(i) to add to the current
prohibition of door-to-door solicitation. Business Reply Cards (BRC)
and other types of documents where the beneficiary requests additional
information are intended to allow the agent to reach out to the
beneficiary via telephone, email, or direct mail. One particular agent
asked CMS if the BRC gives them the legal right to visit a
beneficiary's home unannounced. We do not believe a beneficiary filling
out a BRC necessarily indicates a beneficiary's intention give
permission for an agent to show up unannounced, at their home,
requesting to market MA or Part D plans to that beneficiary. CMS
considers this activity to be door-to-door solicitation. Therefore, we
propose adding a new (A) to Sec. Sec. 422.2264(a)(2)(i)
[[Page 79529]]
and 423.2264(a)(2)(i) which provides that contacting a beneficiary at
his or her home is considered to be door-to-door solicitation unless an
appointment at the beneficiary's home at the applicable date and time
was previously scheduled.
Currently, regulations at Sec. Sec. 422.2264(b) and 423.2264(b)
permit MA organizations and Part D sponsors to contact existing
members, and to a limited extent, former members, as plan business. In
Sec. Sec. 422.2264(b) and 423.2264(b) we define plan business
activities to include calling current members to discuss Medicare
products. In addition, in Sec. Sec. 422.2264(b)(2) and 423.2264(b)(2),
we currently require that MA organization and Part D sponsors provide
beneficiaries an opportunity to opt out of being contacted concerning
plan business. However, we have interpreted and implemented this
regulation as requiring MA organizations and Part D sponsors to present
the opt-out opportunity one time, regardless of how many subsequent
contacts an enrollee receives. We are proposing, in Sec. Sec.
422.2264(b)(2) and 423.2264(b)(2), a change that would require each MA
organization and Part D sponsor to provide the opt-out information to
all its enrollees, regardless of plan intention to contact, at least
annually in writing, instead of just one time. Over time, beneficiaries
may realize that having plans contact them regarding marketing is not
necessary. Beneficiaries, by only receiving the opt-out option once
under current regulations, may fail to realize that they have the
option to opt out at any time. By requiring a written annual
notification from plans, our proposed new requirement will ensure
beneficiaries are reminded that they may decide at any time to opt out
of being contacted by their MA organization/Part D Sponsor about plan
business.
Therefore, we are proposing MA organizations/Part D Sponsors
provide beneficiaries with additional notice, in an annual written
communication, about their ability to opt out of being contacted about
plan business. We are deferring to plans on how best to communicate
this, as we believe that they are in the best position to develop
appropriate language based on the plan business they conduct. In
addition, we are not proposing the specific written format that plans
must utilize when communicating this information during the year, nor
specifying when the plan must provide this information during each
contract year. MA organizations/Part D sponsors may provide this opt-
out notification as a single letter, in a welcome packet, or another
method of written communication. The enrollee's decision to opt out of
contacts for purposes of plan business will remain in effect until an
enrollee chooses to opt in. We solicit comment on whether CMS should
expand the existing and proposed notice requirements in some fashion as
a way to ensure that Medicare beneficiaries are not marketed MA/Part D
plans in a way that is similar enough to cold calling that it should be
prohibited.
Our regulations at Sec. Sec. 422.2264(c) and 423.2264(c) regulate
what is permitted at sales and educational events as well as conduct
that is prohibited at these events. Currently, MA organizations and
Part D sponsors, including agents and brokers, may not market specific
MA/Part D plans or benefits at educational events. However, CMS
currently permits MA organizations and Part D sponsors participating in
educational events to set up future personal marketing appointments and
to collect beneficiary contact information including Scope of
Appointment forms (SOAs) at educational events. Our regulations also
permit marketing events to immediately follow an educational event,
provided the beneficiary is made aware of the change and is given an
opportunity to leave prior to the beginning of the marketing event.
In 2018, prior to the implementation of Sec. Sec. 422.2264(c) and
423.2264(c), the MCMG prohibited many of these activities, such as
holding marketing events following an educational event, distributing
SOA cards, and setting up future individual marketing appointments.
Since the January 2021 final rule, CMS' review of marketing to
beneficiaries has expanded. We have reviewed complaints about confusing
and misleading marketing tactics received through 1-800-MEDICARE and
have heard from industry groups concerned about the changes in our
policy regarding educational events. Since the 2021 final rule,
complaints to CMS have increased alleging unsolicited contact. We
believe that some of these complaints may be attributed to the
collection (and later use) of contact information or SOA cards at
educational events.
We are proposing, in Sec. Sec. 422.2264(c) and 423.2264(c), to
reinstate the prohibition on accepting SOA cards or the collection of
beneficiary contact information at educational events. Section
1851(j)(1) of the Act prohibits sales and marketing to take place at
educational events. Such events are meant to provide information on how
Medicare works including the options of Original Medicare, Medigap
plans, Part C, and Part D. These events are aimed at informing
beneficiaries on what Medicare covers and the different options a
beneficiary has when they are Medicare-eligible or are looking at the
options they have to switch the way they receive their Medicare
benefits. In other words, these events are meant to provide generic
information about the different options, rather than to persuade
beneficiaries to enroll in any type of plan (for example, MA-PD or
Medigap) or in a plan offered by any specific sponsoring organization.
Although the collection of beneficiary information through SOAs or
BRCs was previously permitted, we now believe that collection of
contact information at educational events should not be permitted. As
mentioned in our May 2022 final rule, the number of marketing
complaints has increased significantly over the past few years.
Specifically, a significant portion of these complaints involve
unsolicited contact. A likely contributor to these contacts is a
beneficiary not realizing the contact form provides permission to be
called by an agent at some time in the future. CMS has also heard from
beneficiary groups requesting that CMS reinstitute the beneficiary
protections from the MCMG that were not included in the January 2021
final rule regarding educational events.
The beneficiary attends an educational event to learn about
Medicare, unlike a sales event where a beneficiary has decided that
they want to look further into a plan to enroll. Collecting contact
information at educational events potentially unduly pressures a
beneficiary into providing their personal information. Agents passing
out SOA cards, possibly watching beneficiaries fill them out, and then
collecting these cards can put a beneficiary in an uncomfortable
position of having to decide whether they want to oblige or draw
attention by declining. This especially may be the case if the
beneficiary feels like they should provide this information in exchange
for attending the educational event, which could include the provision
of a meal and helpful question and answer opportunities in addition to
general information. We believe the beneficiary needs to be in charge
of and control whether they want to be contacted, by whom, and in what
form. Therefore, to ensure such decisions remain with the beneficiary,
we propose to amending the regulations that list the activities that
are permissible to include in educational events (Sec. Sec.
422.2264(c)(1)(ii) and 423.2264(c)(1)(ii)) by removing the paragraphs
that authorizes obtaining
[[Page 79530]]
beneficiary contact information, including Scope of Appointment forms.
The current regulations at Sec. Sec. 422.2264(c)(1)(ii)(C) and
423.2264(c)(1)(ii)(C) also permit agents to set up future personal
marketing appointments at educational events. Similar to SOAs and
contact information, we believe that beneficiaries should be in charge
of with whom they speak, when they meet with an agent, and what
products they want to discuss with that agent. In the case of
educational events, the beneficiary generally attends the event to
learn about Medicare, not to facilitate a sales meeting where the
beneficiary is urged to enroll in a plan. Once an agent speaks with a
beneficiary at an educational event, the beneficiary may feel pressured
into setting up a marketing appointment. The ``on the spot'' request at
an educational event does not provide the beneficiary enough time to
consider whether they want an someone to come to their home and market
a plan to them for the purpose of enrollment. We believe that an
educational event should be solely for education; not lead generation
or future marketing opportunities for agents. Therefore, we also
propose removing Sec. Sec. 422.2264(c)(1)(ii)(C) and
423.2264(c)(1)(ii)(C), which currently permit organizations and agents
to set up future marketing appointments at educational events.
CMS is also concerned about marketing events directly following an
educational event. As stated above, educational events are meant to
provide information on how Medicare works, including the options of
Original Medicare, Medigap plans, Part C, and Part D, not meant to
persuade beneficiaries to enroll in a plan. Beneficiaries attending an
educational event directly followed by a marketing event may feel
pressured into staying for the marketing event at the conclusion of the
educational event. For example, an agent may hold an educational event
providing free meals and desserts, which is directly followed by a
marketing event. Beneficiaries may feel pressured into staying for the
marketing event because of the offer of a free meal at the event that
follows the educational event. Although our current regulations require
there be an opportunity to leave prior to the sales event, we do not
regulate how long that needs to be, nor do we prescribe what the agent
can or cannot say regarding the sales event. Beneficiaries may feel
obligated to stay for a variety of reasons, including not having enough
time to gather their belongings or feeling awkward leaving when others
are staying, adding additional pressure to stay and possibly enroll in
an MA or Part D plan, especially when they only came to the event to
learn about Medicare and the options available to them. Furthermore,
attending a marketing event right after an educational event may raise
the risk of beneficiaries being confused that the benefits of an MA or
Part D plan in general are actually unique to the specific plan options
that are being marketed. For example, a factual and impartial statement
like, ``It is important to consider your out-of-pocket costs and which
drugs you take when deciding on your enrollment options'' in the
educational event could be followed up in the marketing event that uses
the same phrasing and terms in describing a specific plan's benefits.
The beneficiary might conflate these issues if the educational and
marketing meetings are held so close in time.
When CMS permitted marketing events to immediately follow
educational events, we were concerned about beneficiaries having to go
to two separate events at different times, potentially in two different
places. Over the past few years, there has been a significant increase
in the use of technology. The COVID-19 pandemic resulted in fewer face-
to-face communications and more technology-based marketing, such as
Zoom calls and live events on the internet. If a beneficiary attends an
educational event and wants further information about a specific MA or
Part D product, the beneficiary can go to a marketing event or ask for
a one-on-one appointment either in person or through communications
technology. Although there are still many beneficiaries that may not
have significant knowledge about digital technology, we believe the
number of beneficiaries that understand the technological options will
increase. The use of technology has provided more options for
beneficiaries, and with the increase in technology education CMS is
proposing, the need for sales events to follow educational events
because of travel considerations will become less important.
By separating educational events from the marketing events,
beneficiaries are afforded the time to consider all their questions and
options. The beneficiary can reach out to the agent if and when they
want to hear more about the particular plan the agent is selling. CMS
believes this proposal to separate marketing from educational events
will alleviate the pressure a beneficiary may feel to stay for a
marketing event and will protect beneficiaries from undue pressures to
enroll in a plan for which they may not be interested or a plan that
does not best meet their health care needs. Based on this, we are
proposing to prohibit marketing events from taking place within 12
hours of the educational event in the same location. We are proposing
changes to Sec. Sec. 422.2264(c)(2)(i) and 423.2264(c)(2)(i) to read,
``Marketing events are prohibited from taking place within 12 (twelve)
hours of an educational event, in the same location. The same location
is defined as the entire building or adjacent buildings.'' We believe a
12-hour window is important to ensure beneficiaries are not pressured
into attending a sales event. This will usually give beneficiaries
until the next calendar day, providing sufficient time to think about
the impartial and factual information provided at the educational
event. We are concerned that a short window, such as 10-15 minutes,
will not provide beneficiaries with enough time to finish
conversations, pack their belongings, and leave the facility prior to
the sales event starting. If a beneficiary is unable to leave during
the break, we are concerned that the beneficiary may be ``guided'' to
the sales event or pressured into attending by being told the event
won't last long or that there will be no pressure to join, or will be
made to feel obligated to go to the sales event. CMS believes the best
way to protect beneficiaries by being pressured into attendance would
be for the sales event to be at a different time, with a sufficient
amount of time between the two events. We also believe it is necessary
to limit this new requirement to when the sales event is in the same
location as the educational event. This ensures that an agent or broker
can hold a sales event the same day as an educational event, provided
the sales event is in a different location. If an agent wishes to have
a sales event three miles from an educational event, we do not want to
limit the ability of the agent or broker to do so. Therefore, we are
proposing to revise paragraph (c)(2)(1)(1) of Sec. Sec. 422.2264 and
423.2264 to prohibit marketing events from taking place within 12 hours
of an educational event, at the same location.
Sections 1851(j)(2)(A) and 1860D-4(l)(2) of the Act require an
advance agreement with a prospective enrollee on the scope of the
marketing appointment, which must be documented. Our regulations at
Sec. Sec. 422.2264(c)(3)(i) and 423.2264(c)(3)(i) reiterate this
requirement, designating this requirement as a Scope of Appointment.
Both the statute and the regulations require an advance agreement
between the beneficiary and the agent. Previously, we interpreted
[[Page 79531]]
this standard of agreement in advance in our MCMG guidance as meaning
as 48 hours prior the appointment when practicable. We propose
codifying our previous marketing (MCMG) guidance by prohibiting
personal marketing appointments from taking place until after 48 hours
have passed since the time the SOA was completed by the beneficiary.
However, we are not proposing to include ``when practicable'' in the
proposed regulation. We believe ``when practicable'' nullifies the
purpose of the 48 hour timeframe, given the many reasons that might be
cited for why waiting the full 48 hours is not ``practicable,'' such as
the beneficiary living an hour away, the beneficiary wanting to discuss
the products immediately following the signing of the SOA, the
beneficiary may feel pressured by the agent to discuss the product
immediately, or the beneficiary needs to arrange to have the person
that helps them with health care decisions available at the meeting.
The reasons for why a meeting must occur within the 48 hour timeframe
are numerous and subjective, meaning what is practicable for one person
may not be practicable for another, thus we are concerned about our
ability to enforce the regulation if we include ``when practicable'' in
requiring advance agreement at least 48 hours before the meeting. In
addition, given today's technology and the fact that we permit SOAs to
be completed via telephone, electronically, or in paper form, obtaining
a SOA 48 hours prior to the appointment should not present a
significant burden for either beneficiaries or the plan representatives
and agents that engage in these meetings. Therefore, we are proposing
to add ``At least 48 hours'' before the word ``Prior'' to Sec. Sec.
422.2264(c)(3)(i) and 423.2264(c)(3)(i) to read, ``At least 48 hours
prior to the personal marketing appointment beginning, the MA plan (or
agent or broker, as applicable) must agree upon and record the Scope of
Appointment with the beneficiary(ies).''
Regulations at Sec. Sec. 422.2264(c)(3)(iii) and
423.2264(c)(3)(iii) prohibit an MA organization/Part D sponsor,
including their agents and brokers and other first tier and downstream
entities, from marketing a health care product during a personal
marketing appointment beyond the scope agreed upon by the beneficiary.
Sections Sec. Sec. 422.2274(g)(1) and 423.2274(g)(1) require that MA
organizations/Part D sponsors ensure TPMOs acting on their behalf
adhere to any requirements that apply to the plan itself. Therefore,
the requirement for noting the scope of a personal marketing
appointment (that is, the SOA) is applicable to TPMOs. Currently, CMS
requires permission to be granted and completed, concerning the
products that will be discussed, prior to the marketing discussion. The
existing regulations do not stipulate a timeframe in which the
beneficiary may be contacted after an SOA is completed or an expiration
date after which the SOA is invalid.
CMS also is aware that MA organizations, Part D sponsors and TPMOs
encourage beneficiaries to fill out business reply cards (BRC) or
similar mechanisms so the MA organization/Part D sponsor or TPMO has
permission to contact the beneficiary at a later date. BRCs are
different from SOAs in that the SOA must have the products to be
discussed on the document, while many times the BRC is simply obtaining
contact information (that is, name, phone number, address, email).
While SOAs are required, BRCs are not required. However, we have the
same concerns with BRCs as we do with SOAs, BRCs often are open-ended,
allowing an MA organization, Part D sponsor or TPMO to contact a
beneficiary at any point in the future. For example, a beneficiary
could fill out a BRC in October of 1 year and be contacted by the MA
organization/Part D sponsor or TPMO 24 months later, well beyond the
timeframe that the beneficiary would reasonably expect to be contacted
about their plan choices and decision-making when they filled out the
card.
CMS is proposing to modify the current regulations at Sec. Sec.
422.2264(c)(3)(iii)(A), 422.2264(c)(3)(iii)(B), 423.2264(c)(3)(iii)(A)
and 423.2264(c)(3)(iii)(B) to limit the validity of the SOAs and BRCs
in Sec. Sec. 422.2264(c)(3)(iii)(A) and 423.2264(c)(3)(iii)(A), and
the SOAs in Sec. Sec. 422.2264(c)(3)(iii)(B) and
423.2264(c)(3)(iii)(B), to six months from the beneficiary's signature
date or the beneficiary's request for more information. BRCs and
requests for additional information are not applicable to paragraph (B)
because CMS does not have the authority to regulate how long a BRC is
valid for non-MA/Part D products. A beneficiary's permission to allow
contact by an MA organization/Part D sponsor or a TPMO is not, and
should not be, open-ended. Beneficiaries who request information
regarding MA organizations/Part D sponsors are requesting information
at that present time. Since the purpose of the SOA or BRC is for
beneficiaries to discuss plan products applicable for the present or
following contract year, having the SOA or BRC expire after 6 months
satisfies that purpose, and would prevent agents from using it in
perpetuity and thus avoiding the statutory and regulatory prohibitions
on unsolicited contact and cold calling. If a beneficiary wants the
agent tied to the SOA or BRC to continue contacting them beyond 6
months, the agent may secure and document that permission through a new
SOA, BRC, or similar mechanism.
In accordance with Sec. 422.2265(b)(4), MA organizations are
required to have a searchable provider directory on their website. The
current regulations do not identify the elements by which the provider
directory can be searched, leaving that up to each organization. We are
proposing to modify Sec. 422.2265(b)(4) by requiring the
organization's provider directory be searchable by every element, such
as name, location, and specialty, required in CMS' model provider
directory. We believe this proposal is necessary to assist
beneficiaries in finding particular providers. For example, if an
organization only provides a beneficiary with the ability to search by
location, the beneficiary would have significant difficulties finding a
particular specialty or a particular provider. In section III.A.3. of
this proposed rule, we are proposing to add two new requirements to
Sec. 422.111(b)(3)(i) that organizations must include providers'
cultural and linguistic capabilities and identify certain providers
waived to treat patients with MOUD in their provider directories. As
adopted and with our proposed revisions, Sec. 422.111(b)(3)(i)
requires organizations to include these two new elements in their
provider directories, therefore, our proposed modification to Sec.
422.2265(b)(4) would require the organization's provider directory be
searchable by these two new elements. By requiring website provider
directories be searchable by every element, our proposal would ensure
that a beneficiary would be able to locate specific provider
specialties, as well as providers by names, addresses, or other
elements the organization has listed in the online provider directory.
Therefore, we propose to modify Sec. 422.2265(b)(4) to require the
directory be searchable by every element.
CMS is also proposing to modify the pre-enrollment checklist (PECL)
requirements at Sec. Sec. 422.2267(e)(4) and 423.2267(e)(4). First, we
are proposing to add new paragraphs at Sec. Sec. 422.2267(e)(4)(viii)
and 423.2267(e)(4)(viii), to add ``Effect on current coverage'' to the
list of references currently provided within Sec. Sec.
422.2267(e)(4)(i)-(vii) and 423.2267(e)(4)(i)-(vii). Second, we are
[[Page 79532]]
proposing to update Sec. Sec. 422.2267(e)(4) and 423.2267(e)(4) to
require that plans review the PECL with the prospective enrollee during
telephonic enrollments.
The PECL contains important information prospective enrollees need
to know prior to enrolling in an MA or Part D plan. It ensures
beneficiaries understand important documents and what information is in
such documents, such as the Evidence of Coverage, which provides all
costs, benefits, and plan coverage. The PECL also includes information
designed to help beneficiaries, such as a reminder to make sure their
doctors, pharmacies, and prescriptions are either in the plan's network
or covered in their formulary. Finally, the existing PECL reminds
beneficiaries of certain plan rules, formularies, and out-of-network
services are not covered except for emergency and urgently needed care,
and that benefits and costs may change on January 1 of each year.
In Sec. Sec. 422.2267(e)(4)(viii) and 423.2267(e)(4)(viii), we
propose to add ``Effect on current coverage'' to the list of
information that must be referenced as part of the PECL. Over the past
2 years, CMS has been doing an in-depth review of 1-800-MEDICARE
complaints. Our reviews revealed numerous beneficiary complaints that
they were not aware their current coverage, such as an existing MA
plan, a Medigap plan, or their Tri-care plan would end once they
enrolled in an MA plan. Thus, CMS is proposing to add effect on current
coverage to the list of information that plans must provide to
prospective enrollees in the PECL, as we believe it will provide
additional education to beneficiaries on the implications of choosing
an MA or Part D plan and ensure beneficiaries are fully aware that this
selection will cause their existing coverage to end.
In Sec. Sec. 422.2267(e)(4) and 423.2267(e)(4), we are also
proposing that the PECL be reviewed with the prospective enrollee
during telephonic enrollments as well as provided when hard-copy
enrollment forms are provided. As previously mentioned, the PECL
provides information necessary for beneficiaries to understand the
details of the plan for which they are enrolling. Although the PECL
must be provided with an enrollment form, CMS' review of telephonic
enrollments revealed that the neither the PECL nor its substance was
being conveyed to beneficiaries during the enrollment process.
Specifically, complaints received by 1-800-MEDICARE included
beneficiaries who called 1-800-MEDICARE to inform the Agency via the
toll-free line that agents failed to inform the beneficiary that their
doctors were not in the MA plan's network, were inaccurately told that
there would be no costs, or were inappropriately told that their
existing coverage would not be affected by enrolling into a new MA or
Part D plan. During CMS' review of the telephonic enrollment audio
recordings between beneficiaries and agents, it was clear that some
beneficiaries were confused that their current coverage would be
ending. It also was clear that some were misled by the agent and were
told that their existing benefits would not change, and others were
never informed by the agent that enrollment into an MA or Part D plan
would cancel the beneficiary's current coverage. There also were cases
where the agent failed to go over the beneficiary's current providers
or Part D drugs. In addition, few, if any, calls with agents included
explanations that all of the benefits and cost sharing for the plan
could be found in the plan's Evidence of Coverage.
By requiring the PECL to be reviewed with prospective enrollees as
part of telephonic enrollments, we hope to ensure that beneficiaries
are better informed about the details surrounding the plan for which
they are enrolling. Under this proposal, MA organizations and Part D
sponsors would decide whether they require their contracted agents and
brokers to read the PECL in its entirety or to require that each item
contained on the PECL be discussed. It is CMS' expectation that the
agent ensures the beneficiary understands the items in the PECL. Agents
may do this by receiving an affirmative answer to whether the
prospective enrollee understands the information provided, as well as
asking the prospective enrollee if she or he has any questions. CMS
believes that an actual review of the PECL elements with prospective
enrollees will decrease inaccurate information and misunderstandings,
resulting in fewer 1-800-MEDICARE complaints and higher beneficiary
satisfaction.
Therefore, CMS is proposing to add the reference to ``Effect on
current coverage'' to Sec. Sec. 422.2267(e)(4)(viii) and
423.2267(e)(4)(viii) and requiring, in Sec. Sec. 422.2267(e)(4) and
423.2267(e)(4), that the PECL be reviewed with the prospective enrollee
during telephonic enrollments.
CMS also is proposing a change to Sec. 422.2267(e)(5)(ii)(A) to
require Summary of Benefits medical benefits be listed in the top half
of the first page and in the order currently listed in Sec. Sec.
422.2267(e)(5)(ii)(A)(1) through 422.2267(e)(5)(ii)(A)(10). Currently,
Sec. 422.2267(c)(2) states that model materials, like the Summary of
Benefits, must follow CMS' order of content when specified. This
existing regulation permits CMS to specify the order of content
presented in MA required model materials. CMS has already specified the
order of information on medical benefits in the Summary of Benefits
instructions, mirroring the regulatory list of medical benefits
provided at Sec. 422.2267(e)(5)(ii)(A)(1) through (10). By requiring
all plans to list certain benefits in the same location and in a
specified order, beneficiaries will be able to more easily compare
benefits across different plans and in a more standardized way. The
ability for beneficiaries to review and compare benefits across
different MA Plans will assist beneficiaries in making a more informed
health care choice.
We are also proposing a change to 42 CFR 422.2267(e)(10) and
423.2267(e)(13), which provides that the non-renewal notice is a model
communications material through which plans must provide the
information required under Sec. Sec. 422.506 and 423.507,
respectively. Per Sec. Sec. 422.2267(c) and 423.2267(c), model
materials and content are those required materials and content created
by CMS as an example of how to convey beneficiary information.
Modifications to model materials, including the non-renewal notice, can
be made at the MA organization's/Part D sponsor's discretion within
certain limits outlined in Sec. Sec. 422.2267(c) and 423.2267(c). Our
current non-renewal document and accompanying instructions do not
permit plan changes, except where noted, to the non-renewal notice. To
ensure accuracy and consistency, we are proposing to update Sec. Sec.
422.2267(e)(10) and 423.2267(e)(13) to specify that the non-renewal
notice is a ``standardized communications material'' so that it is
clear these materials must be used without modifications except where
noted. This is necessary to ensure that the vital information contained
in the non-renewal notice about a beneficiary's alternative healthcare
options and the timing for the plan to make a selection are conveyed in
a way that CMS has determined is accurate and understandable.
Beneficiaries receiving the non-renewal notice are provided a Special
Enrollment Period (SEP) (as per Sec. 422.62(b)(1)) with deadlines to
make new health care decisions. This notice provides beneficiaries with
this information, as well as other plans available to them. As a model
notice, MA organizations/Part D sponsors would be able to place this
vital information anywhere in the document,
[[Page 79533]]
potentially highlighting their other plan options, instead of providing
equal prominence to all health care choices. Our proposal would
eliminate that possibility.
In the May 2022 final rule, CMS implemented a Third Party Marketing
Organization (TPMO) disclaimer at Sec. Sec. 422.2267(e)(41) and
423.2267(e)(41). The required disclaimer states, ``We do not offer
every plan available in your area. Any information we provide is
limited to those plans we do offer in your area. Please contact
Medicare.gov or 1-800-MEDICARE to get information on all of your
options.'' We currently require TPMOs that represent more than one MA
or Part D plan in a given service area, but do not represent all plans,
to verbally convey the disclaimer within the first minute of a sales
call, electronically convey the disclaimer when communicating with a
beneficiary via email or online chat, or prominently display the
disclaimer on their website, and to include the disclaimer on all
marketing materials. We are proposing to modify this disclaimer to add
State Health Insurance Programs (SHIPs) as a source of information for
beneficiaries. We are also proposing that an additional disclaimer
requirement, which would require all TPMOs to list names of the MA
organizations or Part D sponsors with which they contract in the
applicable service area.
Although TPMOs may contract with one or more MA organizations and
Part D sponsors, they do not necessarily contract with all available
options in a service area. When a beneficiary contacts a TPMO that does
not contact with all MA organizations or Part D sponsors in a
particular service area, the beneficiary may not know that the TPMO
does not sell or represent all of the available options. To ensure
beneficiaries in this situation are aware that other options exist, the
disclaimers at Sec. Sec. 422.2267(e)(41) and 423.2267(e)(41) require
TPMOs to notify the beneficiary that a complete list of plans could be
obtained from 1-800-MEDICARE or Medicare.gov. We are proposing to
modify Sec. Sec. 422.2267(e)(41) and 423.2267(e)(41) to provide that
TPMOs in this situation also notify beneficiaries that they may contact
their local SHIP for more information. SHIPs are another resource that
beneficiaries can contact to obtain unbiased information on all
available health and drug plan options. We believe adding SHIPs to this
disclaimer provides beneficiaries with important and unbiased
information regarding other sources of assistance.
In addition, CMS is proposing that TPMOs disclose the names of the
MA organizations or Part D sponsors with which they contract. This
ensures that beneficiaries are aware of all of their choices when
communicating a TPMO. In CMS's review of hundreds of sales, marketing,
and enrollment audio calls, CMS found over 80% of the calls only
mentioned one plan option from one MA organization. The audio reviews
CMS conducted also showed that agents rarely, if ever, informed the
beneficiary that there were multiple plans available in the service
area. Although the agent may have researched other plans on behalf of
the beneficiary the agent was assisting, information about those plan
options was rarely communicated to the beneficiary, and thus the
beneficiary may not have known about their other options to make an
informed decision about the plan that best meets the beneficiary's
needs.
CMS is proposing to revise the existing TPMO disclaimer at
Sec. Sec. 422.2267(e)(41) and 423.2267(e)(41) to require TPMOs that do
not contract with every available MA organization or Part D sponsor in
a service area to include a list the MA organizations or Part D
sponsors with which they do contract in the beneficiary's service area.
In addition, because the existing TPMO disclaimer at Sec. Sec.
422.2267(e)(41) and 423.2267(e)(41) does not apply to TPMOs that
contract with every MA organization or Part D sponsor in a given
service area, CMS is also proposing to revise Sec. Sec.
422.2267(e)(41) and 423.2267(e)(41) to include a new disclaimer for
TPMOs that do contract with every MA organization or Part D sponsor in
the service area. This new disclaimer would need to be provided within
the first minute of the call, as required for TPMOs that do not
contract with MA organization or Part D sponsor in a service area. As
with the existing TPMO disclaimer, this new disclaimer would need to be
electronically conveyed when communicating with a beneficiary through
email, online chat, or other electronic means, prominently displayed on
the TPMO's website, and included in any TPMO marketing materials,
including print materials and television advertising.
Therefore, we propose modifying Sec. Sec. 422.2267(e)(41) and
423.2267(e)(41), to require two disclaimers. The first disclaimer,
which applies to TPMOs that do not sell for all MA organizations or
Part D sponsors in a service area, would read, ``We do not offer every
plan available in your area. Any information we provide is limited to
those plans we do offer in your area which are [insert list of MA
organizations or Part D sponsors]. Please contact Medicare.gov, 1-800-
MEDICARE, or your local State Health Insurance Program to get
information on all of your options.'' The second disclaimer, for those
TPMOs that sell for all MA organizations or Part D sponsors in a
service area, would read, ``We offer the following plans in your area
[insert list of MA organizations or Part D sponsors]. You can always
contact Medicare.gov, 1-800-MEDICARE, or your local State Health
Insurance Program for help with plan choices.''
We are proposing a technical change to Sec. 423.2267(e) to add new
paragraphs (e)(43) and (e)(44), to include the comprehensive medication
review (CMR) written summary which, in accordance with Sec.
423.153(d)(1)(vii)(B), Part D sponsors must provide to all MTM program
enrollees who receive a CMR, as well as the safe disposal information
that, in accordance with Sec. 423.153(d)(1)(vii)(E), Part D sponsors
must provide to all plan enrollees targeted for MTM. As noted in the
January 2021 final rule (86 FR 5984), we intended Sec. 423.2267(e) to
be a complete list of all required materials and content. The CMR
written summary and safe disposal information are materials that Part D
sponsors are already required to provide under existing regulations at
42 CFR 423.153(d)(1)(vii)(B) and (E), and were inadvertently omitted
from this section during the previous rulemaking. Because MA-PDs must
comply with Part D regulations per Sec. 422.500, this proposal
regarding the MTM and safe disposal instructions will also apply to MA-
PDs.
Based on our review of complaints and audio calls, we are concerned
about the level of oversight that MA organizations and Part D sponsors
provide over their contracted agents and brokers. In our review of
complaints and discussions with MA organizations and Part D sponsors,
MA organizations and Part D sponsors appear to be reactive instead of
proactive in addressing inappropriate agent and broker behavior. CMS
has received complaints through 1-800-MEDICARE as well as other CMS
staff. Once a complaint is received, the complaint is provided to the
applicable MA organization or Part D sponsor to review, investigate,
and take appropriate action. However, this method of oversight is more
reactive, and requires organizations and sponsors to respond to issues
that CMS has already been made aware. As a result, we are concerned
that inappropriate behavior by agents and brokers is not being
sufficiently addressed and corrected by MA organizations and Part D
sponsors. In Sec. Sec. 422.2272 and 423.2272, we propose requiring
[[Page 79534]]
sponsoring organizations have an agent and broker monitoring and
oversight plan that ensures agents and brokers are adhering to CMS
requirements and that the MA organization or Part D sponsor is actively
monitoring and reporting agents and brokers to CMS who are not
compliant with CMS requirements.
We believe a thorough oversight and monitoring plan will assist in
identifying and stopping poor performing agents and brokers more
quickly, whether they are independent, captive, or employed agents or
brokers. To that end, CMS requires MA organizations and Part D sponsors
to oversee the agent and brokers with which they contract (Sec. Sec.
422.2274(c) and 423.2274(c)). A proper oversight program includes the
review of internal grievances, 1-800-MEDICARE complaints, random
samplings of past audio calls, listening to sales/marketing/enrollment
calls in real-time, secretly shopping in-person education and sales
events, and secretly shopping web-based education and sales events.
These types of activities will improve the overall marketing and sales
activities of plans. MA organizations and Part D sponsors should be
able to identify areas where agents and brokers have not been
adequately trained, agents and brokers who may not fully understand the
product offerings, and agents and brokers who improperly market to
beneficiaries. MA organizations and Part D sponsors can then quickly
act, such as tailored training or disciplinary measures, based on the
specific issues for each agent or broker. Once an MA organization or
Part D sponsor identifies the non-compliance, the MA organization or
Part D sponsor would then be required to report that agent or broker
non-compliance to CMS. This will assist plans and sponsors in gauging
the scope of marketing issues, and help plans and sponsors in
developing methods to stop inappropriate agent and broker activity.
Therefore, we are proposing to add a new (e) to Sec. Sec. 422.2272 and
423.2272 to read, ``Establish and implement an oversight plan that
monitors agent and broker activities, identifies non-compliance with
CMS requirements, and reports non-compliance to CMS.''
Section 1856(b) of the Act provides CMS the authority to publish
regulations creating standards for organizations to carry out the MA
program. CMS is proposing to adopt, at a new paragraph (c)(12) of
Sec. Sec. 422.2274 and 423.2274, additional standards for agents and
brokers in their marketing of MA and Part D plans to beneficiaries to
require that sponsoring organizations ensure that agents and brokers
discuss specific topics and information with beneficiaries prior to
enrollment. We believe that adopting these standards is consistent with
and achieves a similar goal as the statutory requirement in section
1851(j)(2)(D) of the Act that compensation to agents and brokers create
incentives for agents and brokers to enroll beneficiaries in the plan
that best meets their health care needs. For an agent or broker to
ensure the beneficiary is in a plan that best meets their needs, the
agent or broker needs to obtain enough information to determine the
health care needs of the beneficiary. If the agent or broker fails to
have sufficient information to ensure that he or she is enrolling the
beneficiary in a plan that best meets the beneficiary's health care
needs, but is compensated for enrolling the beneficiary in a plan, we
believe that section 1851(j)(2)(D) of the Act is undermined. CMS is
concerned that agents and brokers too often fail to adequately
determine the kind of health plan into which a beneficiary wishes to
enroll, such as a plan that offers a lower premium and higher copays,
one that has specific providers in their network, or one that provides
coverage for a certain durable medical equipment. Therefore, in
Sec. Sec. 422.2274(c) and 423.2274(c), we are proposing that all
agents and brokers (employed, captive, and independent agents) go
through a CMS-developed list of items that must be asked and/or
discussed during the marketing and sale of an MA plan or Part D plan.
CMS has listened to hundreds of marketing and enrollment audio
calls. In the majority of these calls (over 80 percent), agents and
brokers failed to ask pertinent questions to help a beneficiary enroll
in a plan that best meets his or her needs. CMS listened to calls where
the agent or broker only asked about primary care providers and
prescription drugs. There were also calls that CMS listened to where
the agent or broker only discussed ``extra benefits'' such as dental
and vision. During many of the calls CMS reviewed, the agent or broker
failed to ask important questions, such as whether there was a
specialist that the beneficiary wished to see (or currently sees) and
whether that specialist was in the plan's network, whether the
beneficiary would prefer lower copays and a higher premium or vice
versa, which hospitals the beneficiary preferred, or whether the
beneficiary wanted dental and hearing benefits. Some calls were under
twenty (20) minutes in length. This short time period led CMS to
question whether an agent or broker could have realistically obtained
the necessary information from the beneficiary in order to adequately
determine their needs and wants, review available options, and complete
the enrollment.
In order to properly assist a beneficiary in choosing a Medicare
health and/or drug plan, the agent or broker must have sufficient
information about the beneficiary's needs and goals. We do not believe
a beneficiary can be enrolled in a plan that best meets his or her
needs when, for example, an agent or broker fails to ask the
beneficiary about their current providers, including specialists and
preferred hospitals or other facilities. To ensure a beneficiary's
needs are reviewed, CMS is proposing to add a new (12) to Sec. Sec.
422.2274(c) and 423.2274(c), requiring an MA organization or Part D
sponsor ensure that the agent's/broker's sales call goes over each CMS
required question or topic, including information regarding primary
care providers and specialists (that is, whether or not the
beneficiary's current providers are in the plan's network),
prescription drug coverage and costs (including whether or not the
beneficiary's current prescriptions are covered), costs of health care
services, premiums, benefits, and specific health care needs. CMS would
provide in sub-regulatory guidance more detailed questions and areas to
be covered based on these general topics.
If agents and brokers are required to ask beneficiaries certain
questions, or cover certain topics, prior to beginning the enrollment
process, we expect that beneficiaries will be more knowledgeable about
the plans that are available to them, and thus better able to make an
informed choice. We are not proposing that agents or brokers would be
required to read standardized questions or statements regarding the
topics discussed here. Rather, we are proposing that certain required
topics are addressed, prior to the enrollment, whether it be asking
questions about the medications the beneficiary takes or covering
topics such as the premium the beneficiary will be charged for the
plan. We propose to add a new (12) to Sec. Sec. 422.2274(c) and
423.2274(c) which will read, ``Ensure, prior to an enrollment, CMS'
required questions and topics regarding beneficiary needs in a health
plan choice are fully discussed. Topics include information regarding
primary care providers and specialists (that is, whether or not the
beneficiary's current providers are in the plan's network),
prescription drug coverage and costs (including whether or not the
beneficiary's current prescriptions are covered), costs of health care
services, premiums, benefits, and specific health care needs.'' or
[[Page 79535]]
``Ensure, prior to an enrollment CMS' required questions and topics
regarding beneficiary needs in a health plan choice are fully
discussed. Topics include information regarding pharmacies (that is,
whether or not the beneficiary's current pharmacy is in the plan's
network), prescription drug coverage and costs (including whether or
not the beneficiary's current prescriptions are covered), premiums, and
other services (such as over-the-counter medications and other
incentives).''
Currently in Sec. Sec. 422.2274(g)(2)(ii) and 423.2274(g)(2)(ii),
TPMOs must record all calls with beneficiaries. This regulation was put
into effect to ensure that TPMOs, including agents and brokers, were
appropriately marketing to beneficiaries. As stated above, CMS's
experience with reviewing complaints and in listening to recorded calls
revealed many instances where agents and brokers have failed to provide
enough information, confused beneficiaries, and, most concerning,
provided inaccurate information about plan benefits. In other cases,
these entities led beneficiaries to believe the beneficiaries were
calling Medicare rather than an insurance agent. This requirement for
recording all calls with beneficiaries was proposed on January 6, 2022,
and finalized in the May 2022 final rule; we had received few pertinent
comments prior to the rule being finalized. However, following this
rule, CMS has heard from trade organizations, plans, as well as
individual agents regarding the obligation to record all calls. Many of
these post-final rule questions and comments centered around whether
``smaller'' agent companies had to record conversations. Some of the
comments received after the final rule requested clarification on
whether all calls really needed to be recorded.
CMS is not proposing to change the requirement that TPMOs,
including agents and brokers, regardless of their size, must record
calls. However, we are proposing to limit calls that must be recorded
from all calls to only those calls regarding sales, marketing, and
enrollment. CMS believes the current requirement is too broad because
under the current requirement calls placed to merely set up an in-
person meeting, make sure the beneficiary received the plan welcome
packet, or ask non-marketing questions, such as when the plan will be
effective, must all be recorded. We believe this is an unnecessary
burden since our goal is to obtain call recordings to ensure the
marketing, sales, and enrollment activities conducted by agents,
brokers and TPMOs meet the applicable regulatory requirements.
Therefore, we are proposing to modify Sec. Sec. 422.2274(g)(2)(ii) and
423.2274(g)(2)(ii) to limit the calls that must be recorded to the
complete duration of marketing, sales, and enrollment calls. The
definition of marketing in Sec. Sec. 422.2260 and 423.2260 will apply
to new paragraph (g)(2)(ii) and we intend the words ``sales'' and
``enrollment'' to include the plain meaning of those terms.
In addition to modifying Sec. Sec. 422.2274(g)(2)(ii) and
423.2274(g)(2)(ii) to only require marketing, sales, and enrollment
calls to be recorded, we are also proposing to add language to clarify
the platform(s) of calls which much be recorded. Since implementing the
May 2022 final rule, we have received questions asking whether
technology-based meetings (for example, Zoom meetings) need to be
recorded. CMS considers meetings taking place on Zoom, Facetime, Skype,
or other technology-based platforms to be the same as telephonic calls
with the same concerns as telephonic calls. Technology is changing the
way people interact and Medicare beneficiaries aging into the program
are more likely to have experienced newer technologies and may be more
comfortable using technology. In addition, during the COVID-19
pandemic, many beneficiaries learned to use different technologies to
keep in touch with people. Moreover, because of the pandemic, many
agents and brokers have moved to using these newer technologies,
holding meetings through web-based technologies.
Based on the reasons stated above, we propose to modify Sec. Sec.
422.2274(g)(2)(ii) and 423.2274(g)(2)(ii) to read ``Record all
marketing, sales, and enrollment calls, including calls occurring via
web-based technology, in their entirety.''
Finally, in Sec. Sec. 422.2274(g) and 423,2274(g), we are
proposing to add a new paragraph (4) to address issues with TPMOs
distributing beneficiary contact information to multiple entities, in
any manner, including selling this information. When a beneficiary
calls a 1-800 number from a direct mail flyer, a television
advertisement, or an internet advertisement, the beneficiary most
likely believes they are only calling--and requesting contact with--the
entity that answers the call. However, some of these entities, in
quickly read disclaimers or through disclaimers in very small print,
that actually inform the beneficiary that their information may be sold
to other entities. The contact information (name, address, phone
number) obtained by these entities is then sold to one or more field
marketing organizations and/or agents/brokers. In turn, these other
entities then call the beneficiary, using the initial incoming call and
the contact information obtained by the TPMO from that incoming call,
as a form of permission to reach out and contact the beneficiary.
When a beneficiary calls a company based on an advertisement, CMS
asserts that the beneficiary is only expecting to connect with that
particular company, not to have return calls made to their personal
home or cell number from other companies. Through environmental
scanning efforts, however, CMS has learned that the selling and
reselling of beneficiary contact information is happening as described
here and that beneficiaries are unaware that by placing the call or
clicking on the web-link they are unwittingly agreeing for their
contact information to be collected and sold to other entities and
providing consent for future marketing activities.
We do not believe beneficiaries knowingly give their permission to
receive multiple calls from multiple different entities on the basis of
a single call made by a beneficiary. We believe beneficiaries intend in
these scenarios that their information will be received only by one
entity, that being the plan that will ultimately receive the
beneficiary's enrollment request. Additionally, providing a quickly-
read disclaimer or providing a disclaimer in very small print or in an
inconspicuous place when that disclaimer indicates that a beneficiary's
contact information may be provided or sold to another party, are
considered misleading marketing tactics because these entities are
using beneficiary data and contact information in a manner in which the
beneficiary did not intend. Organizations that require the beneficiary
to agree to allowing their contact information to be resold prior to
speaking with a representative or having access to any information are
another example of this. In these situations, a beneficiary initiates
contact with one organization and then ends up receiving calls from
multiple other unrelated entities. In light of the statutory
prohibition on unsolicited contact (Sec. Sec. 1851(j)(1)(A) and 1860D-
04(l)(1)), and the regulatory interpretation of that prohibition
(Sec. Sec. 422.2264(a)(3) and 423.2264(a)(3)), this practice goes
beyond the scope of what we consider permissible. Therefore, we are
proposing to add a new (4) to Sec. Sec. 422.2274(g) and 423.2274(g) to
read, ``Personal beneficiary data collected by
[[Page 79536]]
a TPMO may not be distributed to other TPMOs.''
We solicit comment on these marketing and communications proposals
and whether the proposed regulatory changes will sufficiently achieve
the goals we have outlined of protecting beneficiaries.
Q. Changes to an Approved Formulary (Sec. Sec. 423.4, 423.100,
423.104, 423.120, and 423.128)
1. Overview and Summary
We propose regulatory changes regarding (1) obtaining approval to
make changes to a formulary already approved by CMS--including
extending the scope of immediate substitutions; and (2) providing
notice of such changes.
In section III.Q.2.b. of this proposed rule, Approval of Changes to
Approved Formularies, we propose to codify longstanding sub-regulatory
guidance and terminology (such as classification of changes as either
maintenance or non-maintenance) that specify when and how Part D
sponsors obtain approval to make negative formulary changes and the
enrollees to whom these changes would apply. Section III.Q.2.b.(3). of
this proposed rule includes our proposal to permit Part D sponsors that
meet certain requirements to immediately substitute a new
interchangeable biological product for its corresponding reference
product; a new unbranded biological product for its corresponding brand
name biological product; or a new authorized generic for its
corresponding brand name equivalent. Section III.Q.2.b.(3). of this
proposed rule also includes a proposal for a third category of negative
formulary changes defined as immediate negative formulary changes.
Currently, we exempt Part D sponsors that make immediate generic
substitutions under the regulation from providing transition supplies;
we now propose in section III.Q.2.b.(3). of this proposed rule to
exempt Part D sponsors making any immediate negative formulary changes
(that is, all types of immediate substitutions and also market
withdrawals) from providing transition supplies. We also propose to
conform our regulations to provide that the same timing rules would
apply for all immediate negative formulary changes, that is they all
could take place at any time.
Section III.Q.3. of this proposed rule proposes to align our
regulatory requirements for appropriate advance notice of formulary
changes to guidance and longstanding operations, including streamlining
certain requirements.
2. Approval of Changes to Approved Formularies
a. Background: Statutes, Regulations, and Longstanding Operational
Implementation of Changes to Approved Formularies
Section 1860D-11(e)(2) of the Act provides that the Secretary may
only approve Part D plans if certain requirements are met, including
the provision of qualified prescription drug coverage.\112\ Section
1860D-11(e)(2)(D) of the Act specifically predicates approval on a
finding by the Secretary that plan design, including formulary and
tiered formulary structure, is not likely to substantially discourage
enrollment by certain Part D eligible individuals. Section 1860D-
4(c)(1)(A) of the Act calls for ``a cost-effective drug utilization
management program, including incentives to reduce costs when medically
appropriate.'' \113\
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\112\ Section 1860D-4 of the Act on beneficiary protections for
qualified prescription drug coverage includes requirements for
beneficiary access such as the development and application of
formularies. For instance, under section 1860D-4(b)(3)(B) of the
Act, the pharmacy and therapeutic committee of each Part D sponsor
must base clinical decisions on certain scientific evidence and
standards of practice, while subparagraphs (C) and (G) of section
1860D-4(b)(3) of the Act require formularies to include drugs within
certain categories and classes.
\113\ See discussion in the January 2005 Part D final rule (70
FR at 4299).
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We have taken a number of steps to implement the approval process.
For instance, under Sec. 423.272(b)(2)(i), CMS does not approve a bid
for which the plan design and benefits (including any formulary and
tiered formulary structure) or utilization management program are
likely to substantially discourage enrollment by certain individuals.
There are also regulations specific to the development and content of
formularies. For example, Sec. 423.120(b)(1) requires Part D sponsors
to establish pharmacy and therapeutic committees to develop and review
formularies as specified, and Sec. 423.120(b)(2) requires provision of
an adequate formulary.
Each year we undertake a multi-step process to review and approve
all formularies submitted by Part D sponsors as part of their annual
bid packages. We review each formulary, and associated utilization
management tools, to ensure that they do not discourage enrollment by
beneficiaries with certain types of disease states. We do this by
utilizing formulary review checks such as: provision of drugs across
different classes and categories per Sec. Sec. 423.120(b)(2)(i), (ii),
and (iv) and 423.272(b)(2); consistency with best practice formularies
currently in widespread use; clinical merit per Sec. 423.120(b)(1)(v);
and treatment guidelines for disease states in Sec.
423.120(b)(2)(iii). As part of the process, we reach out to Part D
sponsors when necessary to provide an opportunity to address any issues
identified during our review prior to final approval.
The statute contemplates changes to approved formularies: section
1860D-4(b)(3)(E) of the Act specifies that Part D sponsors may remove a
covered Part D drug or change its preferred or tiered cost-sharing
status after providing appropriate notice. We understand that the
statute does not contemplate a static formulary. Prescription drug
therapies are constantly evolving, and new drug availability, medical
knowledge, evidence-based clinical guidelines, and opportunities for
improving safety and quality in prescription drug use at a lower cost
will inevitably occur over the course of the year.
Realizing that implementing new developments may require formulary
changes, we support formulary changes that would allow enrollees to
quickly benefit from the latest clinical research, new potentially
lower-cost options, or possibly result in better health outcomes. For
instance, Sec. 423.120(b)(5)(iii) permits Part D sponsors to
immediately remove drugs from their formularies when Food & Drug
Administration (FDA) deems them unsafe and drug manufacturers remove
them from the market. Similarly, Sec. 423.120(b)(5)(iv) permits a Part
D sponsor that adds an equivalent generic drug, and otherwise meets
requirements, to immediately remove a brand name drug or change its
preferred or tiered cost-sharing status. In addition, in the final rule
titled ``Medicare Program; Contract Year 2019 Policy and Technical
Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-
for-Service, the Medicare Prescription Drug Benefit Programs, and the
PACE Program,'' which appeared in the April 16, 2018 Federal Register
(hereinafter referred to as the April 2018 final rule), we reduced the
time for advance direct notice of certain formulary changes from 60 to
30 days.
That said, as discussed at section III.M. of this proposed rule,
midyear changes to the Part D benefit can violate uniformity and
undermine the integrity of bids. And despite the statute's
contemplation of changes in the tiered or preferred cost sharing status
of a specific drug, which accords with the goal of providing an
opportunity for Part D sponsors to respond to new information specific
to a particular drug by making changes that could result in
[[Page 79537]]
better treatment for enrollees, the statute does not contemplate
allowing plans to make large scale changes to their formularies after
they have undergone the robust approval process described above.
Permitting large scale formulary changes midyear could lead to ``bait
and switch'' concerns. During open enrollment, beneficiaries decide
whether to enroll (or remain) in particular plans based on the benefit,
including drugs offered on the formulary and tier placement, and as
represented to them by the Part D sponsor. Formulary stability is
extremely important so that enrollees maintain access to the benefit
they chose. Moving too often from one drug to a different drug for non-
clinical reasons could also pose undue threats to enrollee health.
Indeed, the current regulation, Sec. 423.120(b)(6), prohibits Part D
sponsors from removing drugs or making changes to preferred or tiered
cost-sharing status between open enrollment up through the first 60
days of the contract year except as specified.\114\
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\114\ Section 423.120(b)(6) exempts Sec. 423.120(b)(5)(iii) and
(iv), which permit Part D sponsors to immediately remove drugs
deemed unsafe by FDA or withdrawn by their manufacturers or make
immediate generic substitutions as specified.
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To balance the need for a rigorously vetted, stable formulary
against the need to permit formulary changes that respond to
developments such as new drug therapies and knowledge, we have, since
the start of the program, permitted certain drug-specific changes to
approved formularies.
Our process for reviewing and approving changes to approved
formularies can be broken out into several categories, each of which is
subject to a different level of CMS review and/or approval. Consistent
with existing Chapter 6 of the Prescription Drug Benefit Manual (PDBM),
we are proposing to codify our process for review and approval of
changes to approved formularies.
b. Proposed Provisions for Approval of Formulary Changes
In this rule, we propose to define several types of formulary
changes, adopt rules for CMS approval of negative formulary changes,
revise requirements for implementation of certain formulary changes
that may be made immediately, and update and streamline our notice
requirements. As part of this proposal, we are proposing organizational
changes to the existing regulations to streamline them and improve
their clarity.
(1) Proposed Definitions
In our existing guidance in PDBM Chapter 6, we use the term
``negative formulary change'' and categorize negative formulary changes
as either ``maintenance'' or ``non-maintenance.'' Our policies with
respect to the form of sponsor submission, means of CMS approval, and
which individuals are considered to be affected by an approved
formulary change differ as between ``maintenance'' and ``non-
maintenance'' negative formulary changes. We now propose to codify our
existing policy with respect to negative changes to approved
formularies, including when and how notice must be provided to
``affected enrollees.''
In Sec. 423.100 we propose to define negative formulary changes as
the following changes with respect to a Part D drug: (1) removing the
drug from a formulary; (2) moving the drug to a higher cost-sharing
tier; or (3) adding or making more restrictive prior authorization
(PA), step therapy (ST), or quantity limits (QL) requirements for the
drug. We would note that QL restrictions would not include safety edits
described at Sec. 423.153(c)(2) to prevent unsafe or inappropriate
dosing of drugs. CMS does not require such edits to be submitted to CMS
as part of the formulary. Accordingly, we propose that negative
formulary changes do not include safety-based claim edits which are not
submitted to CMS. (See section IV.W.2. of this proposed rule on
Codifying Current Part D Transition and Continuity of Care Policies for
the proposal to define safety-based claim edits.) Negative formulary
changes would, however, include adding PA, ST, or QL to apply to a drug
for the first time, making existing applicable PA or ST requirements
more restrictive, or making QL edits more restrictive by reducing
allowances (for instance, reducing a daily dose from two tablets per
day to one tablet per day) unless the reduction is a safety edit as
described above.
In Sec. 423.100, we propose to update the definition of ``affected
enrollee'' to reference beneficiaries affected by all negative
formulary changes instead of just removal or change in preferred or
tiered cost-sharing status.
PDBM Chapter 6 also classifies negative formulary changes as either
maintenance or non-maintenance changes. Maintenance changes are changes
generally expected to pose a minimal risk of disrupting drug therapy or
are warranted to address safety concerns or administrative needs (for
example, drug availability such as shortages and determining
appropriate payment such as coverage under Part B or Part D). In our
experience the vast majority of negative formulary changes are
``maintenance'' changes that CMS routinely approves, and the vast
majority of maintenance changes are generic substitutions, in which the
Part D sponsor removes a brand name drug and adds its generic
equivalent.
Consistent with our current manual policy and operations, we
propose at Sec. 423.100 to define ``maintenance changes'' to mean the
following negative formulary changes: (1) making any negative formulary
changes to a drug and at the same time adding a corresponding drug at
the same or lower cost-sharing tier and with the same or less
restrictive PA, ST, or QL requirements (other than those meeting the
requirements of immediate substitutions currently permitted and that we
propose to permit below); (2) removing a non-Part D drug; (3) adding or
making more restrictive PA, ST, or QL requirements based upon a new
FDA-mandated boxed warning; (4) removing a drug deemed unsafe by FDA or
withdrawn from sale by the manufacturer if the Part D sponsor chooses
not to treat it as an immediate negative formulary change; (5) removing
a drug based on long-term shortage and market availability; (6) making
negative formulary changes based upon new clinical guidelines or
information or to promote safe utilization; or (7) adding PA to help
determine Part B versus Part D coverage. We additionally intend through
the use of the plural tense to clarify that Part D sponsors may request
to apply more than one negative formulary change simultaneously to that
drug.
Non-maintenance changes, which are infrequently warranted, are
negative formulary changes that limit access to a specific drug without
implementing a corresponding offset (such as adding an equivalent drug)
or addressing safety or administrative needs. We propose to define
``non-maintenance change'' at Sec. 423.100 to mean a negative
formulary change that is not a maintenance change or (as discussed in
the next paragraph) an immediate negative formulary change.
To these two longstanding categories of negative formulary changes,
maintenance and non-maintenance, we would introduce in Sec. 423.100 a
third category to capture negative formulary changes that fall within
certain parameters and that may be made immediately. We propose to
define ``immediate negative formulary changes'' as those which meet the
requirements as either an immediate substitution or market withdrawal
[[Page 79538]]
under Sec. 423.120(e)(2)(i) or (ii) respectively. We note, however,
that while such changes may be made immediately, Part D sponsors retain
the option to implement such changes as maintenance changes. This
means, those Part D sponsors that can meet all applicable requirements
would have a choice as to whether to make such changes immediately and
thereafter provide notice of specific changes or submit a negative
change request and provide specific notice of such changes 30 days
before they occur.
To effectuate our proposal, discussed in section III.Q.2.b.(3). of
this proposed rule, to permit certain immediate substitutions in the
case of authorized generics, interchangeable biological products, and
unbranded biological products, we propose to define ``corresponding
drug'' in Sec. 423.100 to mean, respectively, a generic or authorized
generic of a brand name drug, an interchangeable biological product of
a reference biological product, or an unbranded biological product of a
biological product.
Finally, we propose to move our current regulatory description of
``other specified entities'' currently in Sec. 423.120(b)(5)(i) to be
a standalone definition of the term in Sec. 423.100 that lists State
Pharmaceutical Assistant Programs (SPAPs), entities providing other
prescription drug coverage, prescribers, network pharmacies, and
pharmacists as specified.
(2) Proposed Approval and Implementation of Maintenance and Non-
Maintenance Changes
We propose to codify our existing practice with respect to CMS
review and approval of negative formulary changes. Specifically, we
propose in Sec. 423.120(e) that Part D sponsors may not make any
negative formulary changes to the CMS-approved formulary except as
specified in the regulation. We would maintain our existing
requirements for immediate implementation of certain formulary changes
for immediate substitutions and market withdrawals at Sec.
423.120(e)(2), with some modifications, as discussed in section
III.Q.2.b.(3). of this proposed rule.
We propose to codify our existing policy with respect to
maintenance changes, which would, at proposed Sec. 423.120(e)(3)(i),
permit Part D sponsors that have submitted a maintenance change request
to assume that CMS has approved their negative change request if they
do not hear from CMS within 30 days of submission. We propose to codify
our existing policy with respect to non-maintenance changes as well,
which would specify at Sec. 423.120(e)(3)(ii) that Part D sponsors
must not implement non-maintenance changes until they receive notice of
approval from CMS. We also propose to codify our longstanding policy
that affected enrollees are exempt from approved non-maintenance
changes for the remainder of the contract year at Sec.
423.120(e)(3)(ii).
As discussed further in section III.Q.2.b.(3). of this proposed
rule, we also propose revisions to our current requirement at Sec.
423.120(b)(6), which prohibits Part D sponsors from making certain
changes between the beginning of the annual election period until 60
days after the beginning of their contract year to reference negative
formulary changes and to appear at Sec. 423.120(e)(4).
(3) Immediate Negative Formulary Changes
Under current regulations at Sec. 423.120(b)(5)(iv), a Part D
sponsor meeting certain requirements can add a new equivalent generic
drug to its formulary and immediately remove a brand name drug or
change its preferred or tiered cost-sharing and then provide
retrospective direct notice to affected enrollees. Such generic
substitutions are exempt from the transition process under Sec.
423.120(b)(3)(i)(B) and are not subject to the limitation on when
formulary changes may take place under Sec. 423.120(b)(6). In
addition, under current regulations at Sec. 423.120(b)(5)(iii), Part D
sponsors can immediately remove drugs deemed unsafe by FDA or withdrawn
from sale by their manufacturers. As a matter of operations, CMS has
most recently not required Part D sponsors to submit negative change
requests for immediate generic substitutions. (Instances of drugs
removed when FDA deems them unsafe or a drug manufacturer withdraws
them from sale are infrequent.)
Our current immediate generic substitutions policy has generated
the question of whether Part D sponsors can immediately substitute
drugs in other circumstances, such as substituting an authorized
generic for its brand name equivalent. A central goal of our formulary
policy is to provide flexibility to Part D sponsors to substitute a
drug when such substitution poses minimal risk to disrupting an
enrollee's drug therapy. For this reason, we are proposing in this rule
to broaden the scope of permitted immediate substitutions so that Part
D plans can make such substitutions not only in the case of a generic
equivalent, but also in the case of authorized generics and for certain
biological products. We propose to permit immediate substitution of
authorized generics for the brand name product under the same terms
that are currently permitted for generic equivalents. By generic
equivalents, we mean drugs approved under an Abbreviated New Drug
Application (ANDA) in accordance with section 505(j) of the Federal
Food, Drug, and Cosmetic Act that are therapeutically equivalent to a
brand name drug. Authorized generics, as defined in section 505(t)(3)
of the Federal Food, Drug, and Cosmetic Act, are marketed under their
corresponding brand name drug's New Drug Application (NDA) \115\ and
are the exact same drug product as their corresponding brand name
drugs. We therefore propose to revise the regulation to define an
authorized generic drug at Sec. 423.4 and to include the immediate
substitution of authorized generics at Sec. 423.120(e)(2)(i).
---------------------------------------------------------------------------
\115\ See FDA website entitled ``FDA List of Authorized Generic
Drugs'' at: https://www.fda.gov/drugs/abbreviated-new-drug-
application-anda/fda-list-authorized-generic-
drugs#:~:text=The%20term%20%E2%80%9Cauthorized%20generic%E2%80%9D%20d
rug,product%20as%20the%20branded%20product. Accessed April 26, 2022:
``Because an authorized generic drug is marketed under the brand
name drug's New Drug Application (NDA), it is not listed in FDA's
Approved Drug Products With Therapeutic Equivalence Evaluations (the
Orange Book).''
---------------------------------------------------------------------------
When we first adopted the immediate substitution policy, we stated
that the regulation would not apply to biological products, but that we
would reconsider the issue when interchangeable biological products
became available in Part D. At the time of this writing, there is at
least one interchangeable biological product \116\ and there is also an
unbranded biological product marketed under the same license. Other
licensed interchangeable biological products may become available in
Part D in the future. Accordingly, we believe it is appropriate to
expand our policy to include interchangeable and unbranded biological
products when immediate substitution would not disrupt existing
therapy. As discussed in the preamble to the proposed rule titled,
``Medicare Program; Contract Year 2019 Policy and Technical Changes to
the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service,
the Medicare Prescription Drug Benefit Programs, and the PACE
Program,'' which appeared in the November 28, 2017 Federal Register (82
FR 56413), in deciding to permit immediate generic substitutions
without advance direct notice of specific changes to affected
beneficiaries, CMS, or other specified entities, we weighed the need to
maintain the continuity of a plan's formulary for beneficiaries who
[[Page 79539]]
sign up for plans based on the drugs offered at the time of enrollment
against the need to provide Part D sponsors more flexibility to
facilitate the use of new generics. Key to our decision to permit such
substitutions was the fact that the rule would apply only to
therapeutically equivalent generics of the affected brand name drug
because such generics are the same as an existing approved brand-name
drug in dosage form, safety, strength, route of administration, and
quality. Congress defined ``interchangeable'' in reference to
biological products, stating that interchangeable biological products
``may be substituted for the reference product without the intervention
of the health care professional who prescribed the reference product.''
\117\ FDA noted on a web page for consumers that this is similar to how
generic drugs are routinely substituted for brand name drugs.\118\
---------------------------------------------------------------------------
\116\ Semglee[supreg] (insulin glargine-yfgn).
\117\ PHSA Sec. 351(i)(3) (42 U.S.C. 262(i)(3)).
\118\ See ``Biosimilar and Interchangeable Biologics: More
Treatment Choices'' at the following FDA website: https://www.fda.gov/consumers/consumer-updates/biosimilar-and-interchangeable-biologics-more-treatment-choices. Accessed April 26,
2022.
---------------------------------------------------------------------------
All 50 states now permit or require substitution of interchangeable
biological products for prescribed biological products when available,
subject to varying requirements regarding patient and prescriber
notice, documentation of the substitution, and patient savings as a
result of the substitution, among other safeguards.\119\ In the context
of a growing market for interchangeable biological products, to follow
the lead of FDA in encouraging uptake of these products, and to provide
flexibility that could to lead to better management of the Part D
benefit that does not impede State pharmacy practices, we propose at
Sec. 423.120(e)(2)(i) to permit Part D sponsors meeting the applicable
requirements to immediately substitute a reference biological product
on its formulary with the corresponding interchangeable biological
product. In support of that proposal, we also propose the following
definitions at Sec. 423.4: An ``interchangeable biological product''
would mean a product licensed under section 351(k) of the Public Health
Service Act (42 U.S.C. 262(k)) that FDA has determined to be
interchangeable with a reference product in accordance with sections
351(i)(3) and 351(k)(4) of the Public Health Service Act (42
U.S.C.Sec. 262(i)(3) and 262(k)(4)).\120\ A ``biological product''
would mean a product licensed under section 351 of the PHSA and a
``reference biological product'' would mean a product as defined in
section 351(i)(4) of the PHSA.
---------------------------------------------------------------------------
\119\ Cardinal Health. Biosimilar Interchangeability Laws by
State. Updated July 2021. Available from: https://www.cardinalhealth.com/content/dam/corp/web/documents/publication/Cardinal-Health-Biosimilar-Interchangeability-Laws-by-State.pdf.
\120\ See sections 351(i)(3) and 351(k)(4) of the PHSA (42
U.S.C. 262(i)(3) and 262(k)(4)). For information current as of this
writing, see ``Considerations in Demonstrating Interchangeability
With a Reference Product Guidance for Industry'' at the following
FDA website: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/considerations-demonstrating-interchangeability-reference-product-guidance-industry. Accessed September 2, 2022.
---------------------------------------------------------------------------
In addition to interchangeable biological products, unbranded
biological products have recently become available. In the frequently
asked questions of FDA's ``Purple Book Database of Licensed Biological
Products,'' available at https://purplebooksearch.fda.gov/faqs#9, FDA
describes an ``unbranded biologic'' or ``unbranded biological product''
as an approved brand name biological product that is marketed under its
approved biologics license application (BLA) without its brand name on
its label. Thus, like an authorized generic, an unbranded biological
product is the same product as the brand name biological product.
Accordingly, since we are proposing to permit Part D sponsors to
immediately substitute a brand name drug with its authorized generic
version, we similarly propose at Sec. 423.120(e)(2)(i) to permit
immediate substitution, as specified, of unbranded biological products
for corresponding brand name biological products. We would further
propose at Sec. 423.4 to define ``brand name biological products'' to
mean biological products licensed under section 351(a) or 351(k) of the
PHSA and marketed under a brand name. We also propose at Sec. 423.4 to
define ``unbranded biological products'' as biological products
marketed under a licensed section 351(a) or 351(k) BLA without a brand
name on its label.
We are not proposing to permit Part D sponsors to immediately
substitute biosimilar products. Biosimilar products have not met
additional requirements to support a demonstration of
interchangeability based on further evaluation and testing of the
product, as outlined by the Biologics Price Competition and Innovation
(BPCI) Act. Nevertheless, we encourage Part D plan sponsors to offer
more biosimilar products on their formularies.
To reflect the fact that this regulation as proposed would then
permit immediate switches for more types of drugs than generic drugs,
we propose to refer to all of these changes as ``immediate
substitutions'' rather than ``immediate generic substitutions,'' and
drugs eligible to be immediately substituted as ``corresponding drugs''
as defined in Sec. 423.4.
Additionally, through use of the plural tense (``negative formulary
changes''), we intend in our proposed description of immediate
substitutions in Sec. 423.120(e)(2)(i) to make clear that a Part D
sponsor that otherwise meets our requirements that adds a corresponding
drug and chooses to retain, rather than remove, the drug currently on
its formulary may apply more than one negative formulary change to that
drug (for instance, add an interchangeable biologic product to the
formulary and both move the reference product currently on the
formulary to a higher cost-sharing tier and add prior authorization
requirements).
Our proposal would exempt negative immediate changes that meet our
requirements from the negative change request and approval process
discussed earlier in III.Q.2., but would require Part D sponsors to
submit such changes in their next required or scheduled CMS formulary
updates. We also propose to renumber Sec. 423.120(b)(6) to appear at
Sec. 423.120(e)(4). That section currently requires that, other than
immediate generic substitutions or instances in which a plan removes a
drug deemed unsafe by FDA or withdrawn from sale by a manufacturer,
Part D sponsors cannot remove a covered Part D drug from its formulary
or make any change in the preferred or tiered cost-sharing status of a
formulary drug between the beginning of the annual election period
until 60 days after the beginning of their contract year. We propose to
revise this provision to refer to negative formulary changes and exempt
all immediate negative formulary changes--be they immediate
substitutions or market withdrawals.
As noted earlier, the current regulation exempts Part D sponsors
that make immediate generic substitutions from the regulatory
requirement to provide transition supplies. The regulations do not
specify that such an exemption exists for drugs deemed unsafe by FDA or
withdrawn from sale by their manufacturers. We now propose to include
market withdrawals as well as all types of immediate substitutions:
Sec. 423.120(b)(3)(i)(B) would exempt Part D sponsors making any
immediate negative formulary changes from providing transition supplies
of such affected drugs.
[[Page 79540]]
(4) Relation to Inflation Reduction Act of 2022
Section 11001 of the IRA amended section 1860D-4(b)(3)(I)(i) of Act
to require the inclusion on a plan's formulary of selected drugs for
which a maximum fair price is in effect with respect to the plan year.
Section 1860D-4(b)(3)(I)(ii) of the Act specifies that nothing in
clause (i) shall be construed as prohibiting a Part D sponsor from
removing such a selected drug from a formulary if such removal would be
permitted under Sec. 423.120(b)(5)(iv) or any successor regulation. We
propose to identify Sec. 423.120(e)(2)(i) as the successor regulation
to Sec. 423.120(b)(5)(iv) for purposes of section 1860D-4(b)(3)(I)(ii)
of the Act.
3. Notice Requirements
a. Background: Statutes, Regulations, and Guidance on Notice of Changes
Section 1860D-4(b)(3)(E) of the Act requires Part D sponsors to
provide ``appropriate notice'' to the Secretary, affected enrollees,
physicians, pharmacies, and pharmacists before removing a Part D drug
from a formulary or changing the preferred or tiered cost-sharing
status of such a drug. We implemented this statute in regulations
issued at the start of the program in the January 2005 Part D final
rule and updated in the April 2018 final rule. We consider various
forms of advance notice to be appropriate in different situations, and
in some cases our current regulations reflect these distinctions, such
as in the case of permitted immediate generic substitutions (which we
propose earlier to broaden to include other substitutions of
corresponding drugs), where advance general notice is appropriate so
long as direct notice is provided at a later time.
In this section of the proposed rule, we are proposing various
changes to update and streamline the requirements that apply to the
provision of notice of formulary changes and to propose revised
requirements for appropriate advance notice of such changes. These
proposals will bring our regulations into better alignment with our
longstanding practice as reflected in PDBM Chapter 6.
b. Alignment of Approval and Notice Policy
We propose a series of changes to our notice requirements, both to
reorganize and streamline them, as well as to provide for faster
implementation of all formulary changes (other than negative formulary
changes), such as moving a drug to a lower cost-sharing tier or making
a utilization management tool less restrictive.
First, we propose in Sec. 423.120(f)(1) to specify that only
maintenance and non-maintenance negative formulary changes would
require 30 days' advance notice to CMS and other specified entities,
and in writing to affected enrollees. We are also proposing to retain
at Sec. 423.120(f)(1) an alternative option for Part D sponsors to
provide an affected enrollee who requests a refill an approved month's
supply of the Part D drug under the same terms as previously allowed,
as well as written notice of the change. We further propose in Sec.
423.120(f)(5)(i) to require Part D sponsors to provide advance general
notice of other formulary changes to all current and prospective
enrollees and other specified entities, in formulary and other
applicable beneficiary communication materials advising that the
formulary may change subject to CMS requirements; providing information
about how to access the plan's online formulary and contact the plan;
and stating that the written notice of any change made when provided
would describe the specific drugs involved. For immediate
substitutions, we would require information on the steps that enrollees
may take to request coverage determinations and exceptions. Our current
model documents already largely provide advance general notice of such
changes. Section 423.120(f)(5)(ii) as proposed would further state that
Part D sponsors provide enrollees and other specified entities notice
of specific formulary changes by complying with Sec. Sec.
423.128(d)(2) and provide CMS with notice of specific changes through
formulary updates.
We propose to revise and renumber the existing regulation to
specify that, except for negative immediate changes, negative formulary
changes require at least 30 days advance notice. Consistent with our
proposal for approval of maintenance changes, a Part D sponsor could
submit the negative change request, which would constitute its notice
to CMS, and notice to other specified entities at the same time. This
would permit the Part D sponsor to implement the maintenance change
once it is deemed approved under proposed Sec. 423.120(e)(3)(i)--
although facing the risk of sending notice of a change that is
subsequently disapproved by CMS.
Part D sponsors currently submit negative change requests to CMS
via HPMS that specify the negative change's intended effective date,
which under our proposed approach, would have to be at least 30 days
after submission for a maintenance change. However, consistent with our
proposal under Sec. 423.120(f)(3)(ii) to prohibit Part D sponsors from
implementing non-maintenance changes until they receive notice of
approval from CMS, Part D sponsors would not be permitted to provide
notice to other specified entities or affected enrollees, or to
otherwise update formularies or other materials, until CMS has approved
the non-maintenance change.
We propose to update Sec. 423.128(d)(2)(iii), to require online
notice of negative formulary changes. As we observed in our April 2018
final rule (83 FR 1607 and 1608), online postings that are otherwise
consistent with our requirements for notice to ``other specified
entities (currently described in Sec. 423.120(b)(5) and, as discussed
in section II.W.2.b.(1). of this proposed rule, proposed to be defined
in Sec. 423.100) may constitute sufficient notice of formulary
changes. Consistent with this observation and that Sec.
423.128(d)(2)(ii) requires an online formulary to be updated monthly,
our proposed revisions would clarify that the requirement to provide
notice to other specified entities is satisfied by the Part D sponsor's
compliance with Sec. 423.128(d)(2).
As suggested in PDBM, Chapter 6, Sec. 30.3.4.2, sponsors may elect
to provide other specified entities an annual notice providing
information on the sponsor's formulary change policy (that is, timing
of notice, methods of communication with beneficiaries, and any
electronic notices providers may receive at the point-of-sale regarding
formulary status) and the sponsor's website where these entities can
verify the formulary status of particular drugs.
c. Notice of Negative Immediate Changes
Consistent with our existing requirements for immediate generic
substitutions (which we propose above to broaden to include other
corresponding drugs), we propose to require advance general notice of
immediate substitutions and market withdrawals at Sec. 423.120(f)(2),
followed by written notice to affected enrollees as soon as possible
under Sec. 423.120(f)(3), but by no later than the end of the month
following any month in which a change takes effect.
We propose at Sec. 423.120(f)(4) to maintain our current
requirements for the contents of the direct written notice, but
reorganize and renumber them for clarity. We also propose to revise the
regulation at Sec. 423.120(f)(4)(iv) to require information on
appropriate alternative drugs that treat the same
[[Page 79541]]
condition in the same or a lower cost-sharing tier in addition to
retaining the long standing requirement for information on expected
cost-sharing. We are providing more flexibility by removing the
requirement that the alternative drugs must be in the same therapeutic
category or class: while alternative drugs are likely to be, they might
not necessarily be in the same therapeutic category or class based on a
plan's classification system. Therefore, we are increasing flexibility
with the understanding the Part D sponsor's P&T committee would
identify clinically appropriate formulary alternatives at the time the
formulary change is being evaluated.
We further propose that the contents of the written notice would be
the same regardless of when the notice must be provided. That is, for
notices of maintenance and non-maintenance changes, which must be
provided to affected enrollees at least 30 days in advance per Sec.
423.120(f)(1), and for notices of negative immediate changes, which can
be provided after the changes take effect per Sec. 423.120(f)(3), the
content of the written notice would remain largely the same. Consistent
with existing requirements, the notice proposed in Sec. 423.120(f)(4)
would contain the name of the affected drug, the type of negative
formulary change being made and why, alternatives and expected cost
sharing, and for immediate substitutions, how an affected enrollee can
obtain a coverage determination or exception.
Lastly, we propose to make conforming amendments to cross citations
in Sec. Sec. 423.104(d)(2)(iv)(A)(6) and 423.128(e)(6) as applicable
that we have moved the bulk of our discussion on changes to the
formulary from Sec. 423.120(b)(5) and (6) to Sec. 423.120(e) and (f).
4. Conclusion
We would like to take this opportunity to note that sections
Sec. Sec. 423.2265(c)(1)(v) and 423.2265(c)(1)(ii) respectively
require Part D sponsors each year to provide a Formulary to current
enrollees along with an Annual Notice of Change, for which the model
language instructs enrollees to review the drug list to confirm
continued coverage for their drug. However, while we do not require
plans to identify specific formulary changes impacting enrollees for
the next contract year, several years of experience have shown that
educating beneficiaries about formulary changes helps reduce
beneficiary confusion and complaints at the start of the plan year. We
encourage plans, particularly those with significant formulary or
benefits changes due to PBM transition, plan crosswalks, contract
consolidations, or other reasons to engage in beneficiary education and
outreach regarding formulary changes.
In the process of proposing the regulatory changes described in
this section, we realized that the burden associated with these
policies was not accurately captured in PRA package CMS-10141. This
package attributed a number of hours for each plan to provide notice to
CMS and other entities for removal of drugs from the Part D formulary,
however, the package did not properly estimate burden at the level of
granularity associated with the complete scope of negative changes,
negative change requests, or providing notice to affected enrollees. In
section VII.B.6. of this proposed rule, we describe burden associated
with our policies related to negative formulary changes as we propose
to codify them. We note that while we make this correction to the PRA
package, we believe that Part D sponsors have been following the
guidance provided in PDBM chapter 6 and annual formulary operations
memoranda. CMS monitors negative change request submission and changes
to HPMS formularies as a matter of standard operations, and we have
received few complaints from beneficiaries stating they have been
subject to formulary changes without proper notice. Thus, we believe
that Part D sponsors have been complying with the enrollee notice
component of current policy. The model notice letter for enrollees
affected by negative formulary changes will be included with the
associated updates to PRA package CMS-10141. With respect to impact of
the current policy to the Medicare Trust Fund, Part D sponsors have
been able to make negative changes to their formularies, subject to CMS
guidance and oversight, since the start of the Part D program. We
therefore assume that there is no net impact to the Medicare Trust Fund
as a result of codifying existing policy related to negative formulary
changes. We also assume there is no net impact to the Medicare Trust
Fund as a result of the proposed policy permitting immediate
substitution of new interchangeable biological products; unbranded
biological products; and authorized generics since when the initial
immediate substitution policy was adopted, there was no net impact
expected, as discussed in the April 2018 final rule.
In summary, we propose regulatory changes on how to obtain approval
to make changes to a formulary already approved by CMS and to provide
notice of such changes. In regards to approval, we propose to codify,
with some revisions, longstanding sub-regulatory guidance and
terminology specifying when and how Part D sponsors can obtain approval
to make negative formulary changes and the enrollees to whom these
changes would apply. Specifically, we propose to codify our existing
practice with respect to CMS review and approval of negative formulary
changes by proposing in Sec. 423.120(e) that Part D sponsors may not
make any negative formulary changes to the CMS-approved formulary
except as specified in the regulation. We would codify longstanding
policy at proposed Sec. 423.120(e)(3)(i), to permit each Part D
sponsor that has submitted a maintenance change request to assume that
CMS has approved its negative change request if it does not hear back
from CMS within 30 days of submission, and at Sec. 423.120(e)(3)(ii)
to specify that that Part D sponsors must not implement any non-
maintenance changes until they receive notice of approval from CMS. We
also propose to codify our longstanding policy that affected enrollees
are exempt from approved non-maintenance changes for the remainder of
the contract year at Sec. 423.120(e)(3)(i).
In support thereof, we would define ``negative formulary changes''
in Sec. 423.100 to Part D drugs to include drug removals, moves to
higher cost-sharing tiers, and adding or making more restrictive PA,
ST, or QL requirements. We would specify that negative formulary
changes can be classified in one of three categories, which we also
propose to define in that same section as:
``Maintenance changes,'' which we would define to
encompass seven types of changes including drug substitutions that do
not meet our requirements of immediate substitutions under Sec.
423.120(e)(2)(i); changes based on particular events such as certain
FDA actions, long-term shortages, and new clinical guidelines or
information or to promote safe utilization; or adding PA to help
determine Part B versus Part D coverage;
``Non-maintenance changes,'' which we would define as
negative formulary changes that are not maintenance changes or
immediate negative formulary changes; or,
``Immediate negative formulary changes'', a newly coined
term that would compass all types of immediate substitutions or market
withdrawals under Sec. 423.120(e)(2)(i) or (ii) respectively.
[[Page 79542]]
As an exception to the general rule requiring prior CMS approval of
formulary changes, our current regulations permit immediate generic
substitutions and for plans to remove drugs deemed unsafe by FDA or
withdrawn from the market. We propose to move and incorporate that
regulation text as follows: In Sec. 423.120(e)(2)(i), we propose to
permit what we would newly describe as immediate substitutions, which
would mean Part D sponsors could immediately make generic substitutions
as well as substitute a new ``interchangeable biological product'' for
its corresponding reference product; a new ``unbranded biological
product'' for its corresponding brand name biological product; and a
new ``authorized generic'' for its corresponding brand name equivalent.
We would support this proposal by defining the above quoted terms in
Sec. 423.4; identifying the corresponding relationships (including the
previously permitted generic substitutions) in our definition of a
``corresponding drug'' in Sec. 423.100; and in Sec. 423.4 also
defining ``biological product'', ``brand name biological product'', and
``reference biological product''. In proposing in Sec.
423.120(e)(2)(ii) to continue to permit plans to immediate remove from
their formulary any Part D drugs deemed unsafe by FDA or withdrawn from
sale by their manufacturer, we would newly describe these changes as
``market withdrawals''. Under proposed Sec. 423.120(e)(2), Part D
sponsors meeting our requirements for immediate substitutions and
market withdrawals would be able to make these changes immediately
without submitting negative change requests to CMS but under proposed
Sec. 423.120(f)(2) and (3) would be required to provide advance
general notice of such changes and to submit specific changes in their
next required or scheduled CMS formulary updates.
We propose in respective Sec. Sec. 423.120(b)(3)(i)(B) and
423.120(e)(4) to conform our regulations to provide that the same
transition and timing rules would apply for all immediate negative
formulary changes: as proposed all immediate negative formulary changes
could take place at any time (previously this exception only applied to
immediate generic substitutions and market withdrawals) and Part D
sponsors would not need to provide a transition supply therefor
(previously we only specified in regulation that this exception applied
to immediate generic substitutions).
We also propose to move to the current regulation at Sec.
423.120(b)(6) which prohibits Part D sponsors from making certain
changes from the start of the annual enrollment period to 60 days after
the beginning of the contract year: We propose to revise it at Sec.
423.120(e)(4) to specify that plans cannot make negative formulary
changes during the stated time period except, as noted earlier, for
immediate negative formulary changes (that is, immediate substitutions
or market withdrawals).
Miscellaneous proposed changes in Sec. 423.100 in support of the
above changes include updating the definition of ``affected enrollee''
to encompass beneficiaries affected by all negative formulary changes;
and moving our current regulatory description of ``other specified
entities'' from Sec. 423.120(b)(5)(1) to be a standalone definition of
the term in Sec. 423.100.
In regards to notice, we also propose to move, with some revisions
and streamlining, current regulations on notice of changes, and align
them to our proposed approval requirements. Specifically, in Sec.
423.120(f)(1) we would specify that only maintenance and non-
maintenance negative formulary changes require 30 days' advance notice
to CMS, other specified entities, and in written form to affected
enrollees. We propose to retain and move to Sec. 423.120(f)(1) an
alternative option for Part D sponsors to provide a month's supply with
notice at point of sale as specified. We would move and extend our
existing requirements for immediate generic substitutions to include
substitutions of corresponding drugs and market withdrawals, by
proposing to require advance general notice of immediate negative
formulary changes at Sec. 423.120(f)(2), followed by written
retrospective notice required under Sec. 423.120(f)(3) to affected
enrollees. We propose that this retrospective notice be provided to
affected enrollees as soon as possible after a specific change, but by
no later than the end of the month following any month in which a
change takes effect. We propose at Sec. 423.120(f)(4) to reorganize
and renumber our current requirements for the contents of the direct
written notice, and provide more flexibility by no longer restricting
appropriate alternative drugs to those in the same or a lower cost-
sharing tier. Our proposed revision would make clear that the contents
of the written notice would be largely the same regardless of the
timing: whether Part D sponsors are providing notice before making a
particular change (for maintenance and non-maintenance changes under
Sec. 423.120(f)(1)) or after (for negative immediate changes under
Sec. 423.120(f)(3)). Section 423.120(f)(5) would newly specify how to
provide advance general notice and specific notice of changes other
than negative formulary changes.
We are also proposing conforming amendments to update Sec.
423.128(d)(2)(iii) to require online notice of ``negative formulary
changes'' and to update to cross citations in Sec. Sec.
423.104(d)(2)(iv)(A)(6) and 423.128(e)(6) to reflect the fact we would
be moving the bulk of our discussion on formulary changes from Sec.
423.120(b)(5) and (6) to Sec. 423.120(e) and (f). We also propose to
revise text at Sec. 423.120(b)(5) and (6) to indicate that Part D
sponsors must provide notice of formulary changes and can only make
changes to CMS-approved formularies as specified, respectively, in
Sec. 423.120(f) and (e).
R. Part D Medication Therapy Management (MTM) Program (Sec.
423.153(d))
1. MTM Eligibility Criteria (Sec. 423.153(d)(2))
a. Background
Section 1860D-4(c) of the Act requires all Part D sponsors to have
an MTM program designed to assure, with respect to targeted
beneficiaries, that covered Part D drugs are appropriately used to
optimize therapeutic outcomes through improved medication use, and to
reduce the risk of adverse events, including adverse drug interactions.
Section 1860D-4(c)(2)(A)(ii) of the Act requires Part D sponsors to
target those Part D enrollees who have multiple chronic diseases, are
taking multiple Part D drugs, and are likely to meet a cost threshold
for covered Part D drugs established by the Secretary. Since January 1,
2022, Part D sponsors are also required by section 1860D-
4(c)(2)(A)(ii)(II) of the Act to target all at-risk beneficiaries
(ARBs) in their Part D drug management program (DMP) for MTM.
In the January 2005 Part D final rule (70 FR 4279 through 4283),
CMS codified MTM targeting criteria at Sec. 423.153(d)(2), without
further detail on the number of chronic diseases, the number of covered
Part D drugs, or the annual cost threshold that would be used to
identify targeted beneficiaries. In guidance provided during the
Medication Therapy Management (MTM) Program User Group Discussions on
May 13, 2005 and March 15, 2006, and in the HPMS Memorandum Changes to
Part D Sponsors' Medication Therapy Management Program (MTMP) dated
August 29, 2006, CMS initially set the annual cost threshold at $4,000
at the start of the Part D program. In the 2010 Call Letter, issued on
March 30, 2009, CMS subsequently lowered the
[[Page 79543]]
threshold to $3,000 for 2010. This approach allowed maximum flexibility
for industry to develop best practices for the provision of MTM
services. After gaining Part D program experience, in the final rule
titled, ``Medicare Program; Policy and Technical Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit
Programs,'' (75 FR 19772 through 19776), which appeared in the Federal
Register on April 15, 2010, CMS revised Sec. 423.153(d)(2) by
establishing more specific targeting criteria based on an enrollee's
number of chronic diseases (with 2 being the minimum, and 3 being the
maximum a sponsor may require), number of covered Part D drugs (with 2
being the minimum, and 8 being the maximum a sponsor may require), and
estimated annual Part D drug costs greater than or equal to $3,000 for
2011, which is then increased by the annual percentage increase (API)
specified in Sec. 423.104(d)(5)(iv) to determine the annual cost
threshold for 2012 and subsequent years. With those changes, CMS sought
to promote greater consistency across the Part D program and allow for
better evaluation and comparison of MTM programs going forward. With
the exception of adding the requirement that Part D sponsors target all
ARBs in their DMP for MTM as described previously, the MTM eligibility
framework has not been updated since that time.
In the Draft CY 2012 Call Letter (See page 109, available at
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2012.pdf), we solicited comment on evaluating and
addressing disparities in the MTM eligibility criteria. Subsequently,
in January 2014, we issued a proposed rule titled, ``Medicare Program;
Contract Year 2015 Policy and Technical Changes to the Medicare
Advantage Program and the Medicare Prescription Drug Benefit
Programs,'' (79 FR 1918) in which we proposed changes to broaden the
targeting criteria to 2 or more chronic diseases (with at least one
being a core chronic disease), 2 or more covered Part D drugs, and
average annual cost associated with taking 2 generic drugs ($620 at
that time). As discussed in the subsequent final rule, which appeared
in the Federal Register on May 23, 2014 (79 FR 29865 through 29867),
those proposals were not finalized, primarily due to the significant
number of commenters that strongly opposed the broad expansion of MTM
eligibility and concerns about the potential impact on plan
administrative costs, beneficiary premiums, and the quality of existing
MTM programs.\121\ However, we stated that we would continue to
evaluate information on MTM programs and monitor sponsors' compliance
with the MTM requirements, with the goal of proposing revisions to the
criteria in future rulemaking that would help to expand the program.
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\121\ In the proposed rule, we estimated that approximately 55
percent of Part D enrollees would have been eligible for MTM based
on the proposed criteria (79 FR 1951).
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MTM eligibility rates have steadily declined over time. At the
start of the Part D program, CMS expected about 25 percent of the Part
D population would be eligible for MTM. By 2020, MTM eligible
beneficiaries had declined to just 8 percent. In conjunction with the
decreasing eligibility rate, CMS has observed near-universal
convergence among Part D sponsors to the most restrictive targeting
criteria currently permitted under Sec. 423.153(d)(2). When we
finalized the current regulatory requirements for targeting criteria
over 12 years ago, CMS elected to give plan sponsors significant
flexibility in establishing their MTM eligibility criteria. However,
most plans now require 3 or more chronic diseases, 8 or more Part D
drugs, and target a narrow and variable list of chronic diseases.
Because plans may also limit their targeting criteria to certain
diseases, drugs, or both, in addition to the low eligibility rates
overall, enrollees with equivalent patient profiles (for example, same
chronic diseases, same number of chronic diseases, same number of Part
D drugs, and similar estimated drug costs) may or may not be eligible
for MTM depending on the criteria their plan requires.\122\ Under the
current methodology at Sec. 423.153(d)(2)(i)(C), the annual MTM cost
threshold for 2023 will be $4,935, which also significantly limits the
number of beneficiaries who are eligible to be targeted for MTM
enrollment.
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\122\ Medication Therapy Management in a Chronically Ill
Population: Interim Report, available at https://innovation.cms.gov/files/reports/mtm_final_report.pdf.
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The high cost threshold and restrictive plan criteria have
significantly reduced the MTM program size over time, and Part D
enrollees with more complex drug regimens who would benefit most from
MTM services are often not eligible. After an extensive review of CMS
and plan-reported data, CMS has identified several issues with the
current MTM targeting criteria and proposes the regulatory changes
discussed in the following sections in an effort to increase MTM
eligibility rates, reduce variability of MTM eligibility criteria
across plans, and address disparities to ensure that those who would
benefit the most from MTM services have access. Taken together, the
proposed changes to the MTM program targeting criteria would balance
eligibility and program size while allowing us to address specific
problems identified in the Part D MTM program, including marked
variability and inequitable beneficiary access to MTM services.
b. Multiple Chronic Diseases
The regulation at Sec. 423.153(d)(2)(i)(A) specifies that to be
targeted for MTM, beneficiaries must have multiple chronic diseases,
with 3 chronic diseases being the maximum number a Part D sponsor may
require for targeted enrollment. In the current guidance (See HPMS
Memorandum Correction to Contract Year 2022 Part D Medication Therapy
Management Program Guidance and Submission Instructions dated April 30,
2021), CMS identifies 9 core chronic diseases, some of which are
enumerated in the statute, including conditions that are highly
prevalent in the Part D population, align with common targeting
practices across sponsors, and are commonly treated with Part D drugs,
where MTM services could most impact therapeutic clinical outcomes. The
9 core chronic diseases are: Alzheimer's disease; bone disease-
arthritis (such as osteoporosis, osteoarthritis, or rheumatoid
arthritis); chronic congestive heart failure (CHF)*; diabetes*;
dyslipidemia*; end-stage renal disease (ESRD); hypertension*; mental
health (such as depression, schizophrenia, bipolar disorder, or other
chronic/disabling mental health conditions); and respiratory disease
(such as asthma*, chronic obstructive pulmonary disease (COPD), or
other chronic lung disorders).\123\ While the Act specifically names
congestive heart failure (CHF), we are proposing to specify only
chronic CHF as a core disease. The Act also names hyperlipidemia, but
we are proposing to codify dyslipidemia as a core disease to include
both chronically high (hyperlipidemia) and low (hypolipidemia) lipid
levels. This list of core chronic diseases aligns with longstanding MTM
guidance identifying core chronic diseases and is also consistent with
the discretion granted in the statute to identify chronic diseases.
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\123\ *denotes a disease that is enumerated in statute at
section 1860D-4(c)(2)(A)(ii)(I)(aa) of the Act.
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As explained in the CMS guidance, as previously cited, sponsors may
target enrollees with any chronic diseases or
[[Page 79544]]
target beneficiaries with specific chronic diseases. Plans that do not
target all chronic diseases should target at least 5 of the 9 core
chronic diseases identified by CMS. Sponsors may also offer MTM
services to an expanded population of enrollees who do not meet the
eligibility criteria for targeted enrollment under Sec. 423.153(d)(2).
Based on our review of 2020 plan-reported MTM program targeting
criteria and Part D enrollment data, submitted at the contract level,
86 percent of Part D enrollees were in a plan that targeted the minimum
of only 5 of the 9 core chronic diseases. In the same year, only 1
percent of the Part D population was enrolled in a plan that targeted
all 9 core chronic diseases, a decrease from 3 percent in 2015. Those
plans had an MTM enrollment rate of 15 percent versus the overall
enrollment rate across Part D of 8 percent, based on analysis of
contract year 2020 MTM plan-reported and validated beneficiary-level
data.\124\ Combined with CMS administrative claims data, we found that
a significant proportion of the Part D population that we identified as
having 3 or more core chronic conditions and using 8 or more drugs
(approximately 9 million beneficiaries) were not eligible to be
targeted for MTM (6 million). We estimate that approximately one-third
of the ineligible beneficiaries (about 2 million) were not eligible due
to variations in plan-specific targeting criteria (for example, plans
targeting fewer than all of the core chronic diseases or targeting
specific drug classes as opposed to all or most covered Part D
maintenance drugs).
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\124\ Part D reporting requirements (OMB Control No. 0938-0992).
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HIV/AIDS is not currently included in the list of core chronic
diseases. Our analysis of 2020 data, including PDE data, Parts A and B
claims data, validated beneficiary-level MTM data, and other available
program data, revealed that Part D enrollees with HIV/AIDS have an
average of 4 core chronic diseases (including HIV/AIDS), take 12 Part D
covered drugs (including 8 maintenance drugs), and incur $40,490 in
Part D annual drug spend. Many of these individuals are not eligible
for MTM because their plan does not target HIV/AIDS or does not target
enough of their other chronic conditions. Individuals with HIV/AIDS
often have complex Part D drug regimens where medication adherence is
critical, very high Part D drug costs, and multiple comorbidities, and
are more likely to be members of populations affected by disparities.
125 126 Although not currently identified as a core chronic
disease, HIV/AIDS is more likely to be targeted by plans (about 10
percent of plans in 2021) than any other non-core chronic disease.
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\125\ https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Dwnld-DataSnapshot-HIV.pdf https://www.cdc.gov/hiv/group/hiv-idu.html.
\126\ Kogut SJ. Racial disparities in medication use:
imperatives for managed care pharmacy. J Manag Care Spec Pharm.
2020;26(11):1468-1474. doi:10.18553/jmcp.2020.26.11.1468.
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Based on our internal analyses and published literature, we propose
to amend the regulations at Sec. 423.153(d)(2) by adding a new
paragraph (iii) to require all Part D sponsors to include all core
chronic diseases when identifying enrollees who have multiple chronic
diseases, as provided under Sec. 423.153(d)(2)(i)(A). As part of the
proposed new provision at Sec. 423.153(d)(2)(iii), we also propose to
codify the 9 core chronic diseases currently identified in guidance and
to add HIV/AIDS, for a total of 10 core chronic diseases. Under this
proposal, sponsors would maintain the flexibility to target
beneficiaries with additional chronic diseases that are not identified
as core chronic diseases, or to include all chronic diseases in their
targeting criteria. Because we developed the existing regulations and
guidance early in the Part D program, and without the benefit of
substantial program experience, we initially permitted significant plan
discretion in developing targeting criteria. We now have data showing
that approximately 20 percent of enrollees who meet even the most
restrictive criteria permitted (that is, have 3 or more chronic
diseases, are taking 8 or more Part D drugs, and are likely to meet the
cost threshold) are not eligible because almost all plans also adopt
the most restrictive number of core chronic diseases to target (5 core
chronic diseases). Accordingly, this proposed change aims to close this
gap in access and better ensure that the beneficiaries who are most in
need of MTM services are targeted for enrollment. By reducing the
variability in targeting criteria across plans, we would eliminate
situations where enrollees meet the requirement in Sec.
423.153(d)(2)(i) of having 3 chronic diseases but are not targeted for
MTM enrollment because their plan does not target their chronic
diseases. This reduced variability would also allow CMS to more
accurately estimate program size when calculating burden and assessing
impact.
CMS solicits comment on whether we should consider including
additional diseases in the core chronic diseases proposed at Sec.
423.153(d)(2)(iii), including cancer to support the goals of the Cancer
Moonshot.\127\ We seek comment on broadly including cancer as a core
chronic condition or alternatively including specific cancers that are
likely to be treated with covered Part D drugs such as oral
chemotherapies where MTM could be leveraged to improve medication
adherence and support careful monitoring. In particular, we are
interested in feedback from Part D sponsors, MTM providers, and
prescribers, including oncologists, on any potential implications if
CMS were to include cancer as a core chronic condition as part of the
MTM eligibility criteria. We are also interested in comments on the
impact of including any additional core chronic diseases on specialized
MTM provider training and on MTM program size. We also solicit comments
on whether MTM services furnished under a Part D MTM program are an
effective mechanism for management of certain diseases (for example,
those with high use of Part B drugs or frequently changing medication
regimens) given the statutory goals of the MTM program--specifically,
reducing the risk of adverse events, including adverse drug
interactions, and ensuring that covered Part D drugs prescribed to
targeted beneficiaries are appropriately used to optimize therapeutic
outcomes through improved medication use. We will consider the comments
received in developing our policies with respect to targeting of core
chronic diseases for the final rule.
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\127\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/02/fact-sheet-president-biden-reignites-cancer-moonshot-to-end-cancer-as-we-know-it/.
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c. Multiple Part D Drugs
Section 1860D-4(c)(2)(A)(ii) of the Act requires that targeted
beneficiaries be taking multiple covered Part D drugs. The current
regulation at Sec. 423.153(d)(2)(i)(B) specifies that 8 Part D drugs
is the maximum number a Part D plan sponsor may require for targeted
MTM enrollment. Under current CMS guidance (See HPMS Memorandum CY 2020
Medication Therapy Management Program Guidance and Submission
Instructions dated April 5, 2019), sponsors are permitted to include
either all Part D drugs, all Part D maintenance drugs, or specific drug
classes.
Based on our internal analyses and published literature, we propose
to amend the regulations at Sec. 423.153(d)(2) by adding a new
paragraph (iii) to require all Part D sponsors to include all
[[Page 79545]]
core chronic diseases when identifying enrollees who have multiple
chronic diseases, as provided under paragraph Sec.
423.153(d)(2)(i)(A). As part of this provision, we also propose to
codify the 9 core chronic diseases currently identified in guidance and
to add HIV/AIDS, for a total of 10 core chronic diseases. Under this
proposal, sponsors would maintain the flexibility to target
beneficiaries with additional chronic diseases that are not identified
as core chronic diseases, or to include all chronic diseases in their
targeting criteria. In 2020, only 13 percent of Part D plans (4 percent
of the Part D population) included all covered Part D drugs in their
criteria, while 81 percent of plans (87 percent of the Part D
population) limited their criteria to chronic/maintenance drugs, and 7
percent of plans (9 percent of the Part D population) limited their
criteria to specific drug classes only.
We propose to revise Sec. 423.153(d)(2)(i)(B) to decrease the
maximum number of Part D drugs a sponsor may require from 8 to 5 for
plan years beginning on or after January 1, 2024. Published literature
demonstrates increased risk of medication errors and increased MTM
effectiveness for individuals taking only a few drugs. While there is
no consensus definition of polypharmacy, concurrent and/or prolonged
use of 5 or more drugs has been associated with significant increases
in adverse events.\128\ Decreasing the maximum number of Part D drugs a
sponsor may require from 8 to 5 would serve as a more accurate proxy to
help ensure that the MTM program continues to focus on individuals with
more complex drug regimens and increased risk of medication therapy
problems, reduce potential gaps in eligibility due to utilization
disparities, and take into account Part D utilization trends. While we
are proposing changes to the targeting criteria with respect to the
number of Part D drugs, we note that the CMR described in Sec.
423.153(d)(1)(vii)(B) will continue to include review of all
prescription medications, over-the-counter drugs (OTCs), herbal
therapies, and dietary supplements.
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\128\ M.-C. Weng, et al., The impact of number of drugs
prescribed on the risk of potentially inappropriate medication among
outpatient older adults with chronic diseases, QJM: An International
Journal of Medicine, Volume 106, Issue 11, November 2013, Pages
1009-1015, https://doi.org/10.1093/qjmed/hct141.
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The statutory requirement specifying that MTM targeted
beneficiaries have multiple chronic diseases and take multiple covered
Part D drugs suggests that the focus of MTM should be Part D covered
drugs for longer term use. Maintenance drugs are drugs that are
commonly prescribed to treat a chronic disease, usually administered
continuously rather than intermittently, and typically prescribed for a
longer course of therapy. Beneficiaries taking maintenance medications
for chronic diseases may benefit most over time from the close
monitoring provided by MTM required interventions, including
comprehensive medication reviews (CMRs) and routine targeted medication
review assessments. Accordingly, we propose to add a new provision at
Sec. 423.153(d)(2)(iv), which would require all sponsors to include
all Part D maintenance drugs in their targeting criteria beginning in
2024. Plans are currently able to include all maintenance drugs in
their targeting criteria as an option in the MTM Submission Module in
HPMS; however, CMS does not have guidance related to how maintenance
drugs are identified for this purpose. To ensure consistency across the
MTM program, we also propose that, for the purpose of identifying
maintenance drugs, plans would be required to rely on information
contained within a widely accepted, commercially or publicly available
drug information database commonly used for this purpose, such as Medi-
Span or First Databank, but would have the discretion to determine
which one they use. Under this proposal, sponsors would no longer be
allowed to target only specific Part D drug classes, but would be
required to target all Part D maintenance drugs. However, plans would
retain the option to expand their criteria by targeting all Part D
drugs. CMS solicits public comment on our proposed parameters for
defining maintenance drugs, including potential additional sources for
making such determinations.
These proposed changes would reduce variability in MTM eligibility
across plans and improve access to MTM services for Medicare Part D
beneficiaries at risk of medication therapy problems. Black and
Hispanic individuals tend to use fewer prescription drugs and incur
lower prescription drug costs than Non-Hispanic White individuals.\129\
Consequently, the Part D utilization- and cost-based MTM eligibility
criteria, if set too high, may be an access barrier for those
populations, as well as other populations with similar utilization
patterns. Medically underserved individuals may benefit from MTM
services to address potential medication therapy problems, including
nonadherence. MTM services may also benefit underserved individuals
through identification of un- or under-treated conditions, help with
utilization of preventative therapy, or referral to needed health
services. Furthermore, using 2020 data, including PDE data, Parts A and
B claims data, validated beneficiary-level MTM data, and other
available program data to look at the entire Part D population, we
found that Part D enrollees overall have an average of 2 core chronic
diseases (including the 9 core chronic diseases in the current guidance
along with the proposed addition of HIV/AIDS), take 5 Part D
maintenance drugs, and incur $3,931 in Part D annual drug spend (median
is $617). The subset of Part D enrollees with at least one core chronic
disease (including the 9 core chronic diseases in the current guidance
along with the proposed addition of HIV/AIDS) have an average of 3 core
chronic diseases, take 6 Part D maintenance drugs, and incur $4,595 in
Part D annual drug spend (median is $899).
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\129\ Wang et al. Potential Health Implications of the MTM
Eligibility Criteria in the Affordable Care Act Across Racial and
Ethnic Groups. J Manag Care Spec Pharm. 2015 November; 21(11): 993-
1003.
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d. Annual Cost Threshold
Section 1860D-4(c)(2)(A)(ii) of the Act specifies that targeted
beneficiaries for MTM must be likely to incur annual costs for covered
Part D drugs that exceed a threshold determined by CMS. The regulation
at Sec. 423.153(d)(2)(i)(C) codifies the current cost threshold
methodology, which was set at costs for covered Part D drugs greater
than or equal to $3,000 for 2011, increased by the annual percentage
specified in Sec. 423.104(d)(5)(iv) for each subsequent year beginning
in 2012. The annual cost threshold for 2023 will be $4,935. The cost
threshold has increased substantially since it was established in
regulation, while the availability of lower cost generics and the
generic utilization rates have also increased significantly since the
Part D program began.\130\ Together, these factors have resulted in a
cost threshold that is grossly misaligned with CMS' intent and
inappropriately reduces MTM eligibility among Part D enrollees who have
multiple chronic conditions and are taking multiple Part D drugs. The
current cost threshold is more than three times the average annual cost
of 8 generic Part D drugs, which is the maximum number of Part D drugs
[[Page 79546]]
sponsors may require for MTM targeting under the current regulations.
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\130\ The Part D generic dispensing rate (the total number of
generic drug fills divided by the sum of generic and brand drug
fills), was approximately 60 percent in 2006 and has increased
steadily to a rate of 83 percent in 2019.
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The cost threshold has been identified as a significant barrier to
MTM access, and, in the past, interested parties have recommended that
it be lowered. CMS has found that the increasing threshold has
significantly reduced MTM eligibility rates over the program's
lifetime. Using 2020 data, CMS identified approximately 9 million Part
D beneficiaries with 3 or more core chronic conditions and using 8 or
more Part D drugs, which are the most restrictive criteria CMS
currently permits. Based on validated beneficiary-level plan-reported
data, about one third (approximately 3 million) of those beneficiaries
were eligible for MTM, and the remaining two thirds (approximately 6
million) were not. We estimate that about 65 to 70 percent
(approximately 4 million) of the ineligible beneficiaries had Part D
drug costs below the MTM cost threshold based on 2020 Part D PDE data,
confirming that the cost threshold substantially decreases the MTM
program size.
When CMS initially codified the MTM requirements in the January
2005 Part D final rule (70 FR 4282), we noted that cost might not be
the best proxy for identifying patients that could benefit most from
MTM. Since that time, a robust body of published literature concludes
that polypharmacy, often defined as concurrent or prolonged use of
multiple drugs, increases the risk of adverse drug events. While there
is no consensus definition of polypharmacy, concurrent use of 5 or more
drugs is commonly cited in research studies. Although other definitions
include considerations of the number of comorbid chronic disease
states, drug indications, drug interactions, healthcare setting, and
duration of therapy, none of these definitions include drug cost.\131\
As plans continue to adopt the most restrictive eligibility criteria
CMS permits with respect to the minimum number of chronic diseases and
Part D drugs, lowering the cost threshold is especially important to
help ensure MTM access for the targeted population contemplated in the
statute. Based on published literature, comments from stakeholders, and
extensive internal analysis of CMS data, we continue to believe that
the cost threshold remains the biggest driver of reduced MTM
eligibility rates.
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\131\ Mansoon, N., et al. What is polypharmacy? A systematic
review of definitions. BMC Geriatrics (2017) 17:230.
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Accordingly, we propose to set the MTM cost threshold for the 2024
plan year and each subsequent plan year at the average annual cost of 5
generic drugs. Based on 2020 PDE data, the annual cost of five generic
drugs was approximately $1,004. Under this proposal, for 2024 and
subsequent years, CMS would calculate the dollar amount of the MTM cost
threshold based on the average daily cost of a generic drug using PDE
data from the plan year that ended 12 months prior to the applicable
plan year, which is the PDE data currently used to determine the
specialty-tier cost threshold as specified in the current provision at
Sec. 423.104(d)(2)(iv)(C). For 2024, the calculation would use PDE
data from 2022 to identify the average daily cost of a generic fill,
multiplied by 365 days for an annual amount. The average daily cost for
a drug, would be based on the ingredient cost, dispensing fees, sales
tax, and vaccine administration fees, if applicable, and would include
both plan paid amounts and enrollee cost sharing. As is currently the
case, the MTM cost threshold will be published in the annual Part D
Bidding Instructions memo.
While the dollar amount would continue to be calculated annually,
revising the methodology to base the cost threshold on the average cost
of 5 generic drugs would considerably reduce year-to-year variability.
Under the current methodology, the threshold amount has increased by an
average of $140 each year since it was established in 2011. In
contrast, the average annual cost of a generic drug, adjusted for days'
supply, decreased slightly between 2012 and 2020. The proposed change
to the cost threshold would also greatly reduce the likelihood that
enrollees taking primarily lower cost generic alternatives would be
excluded from MTM as a result of a prohibitively high cost threshold,
aligning with a pillar of the Part D program: encouraging the use of
generics/lower cost drugs when medically appropriate.
We propose to amend the regulation at Sec. 423.153(d)(2)(i)(C) to
reflect this new MTM cost threshold for plans years starting in 2024
and subsequent years. Specifically, we propose to set the MTM cost
threshold at the average cost of 5 generic drugs, as defined at Sec.
423.4. We also propose to codify that CMS will set the MTM cost
threshold for a plan year beginning on or after January 1, 2024, by
calculating the average daily cost of a generic drug using the PDE data
specified at Sec. 423.104(d)(2)(iv)(C).
e. Summary
The MTM eligibility criteria established in regulation early in the
Part D program were identified based on a targeted program size. The
changes we are proposing would reframe the criteria and the MTM program
to focus on Part D drug utilization and beneficiaries with complex
patient profiles and drug regimens, with less emphasis on high drug
costs. Under our proposal, cost would continue to play a role in
determining which beneficiaries must be targeted for MTM, but would no
longer be the main driver of eligibility. The revisions proposed in
this section would also better align MTM eligibility criteria with the
statutory goals of reducing the risk of adverse events, including
adverse drug interactions, and optimizing therapeutic outcomes for
beneficiaries with multiple chronic conditions and who take multiple
Part D drugs, while maintaining a reasonable cost criterion.
In summary, we are proposing to:
Add a new paragraph at Sec. 423.153(d)(2)(iii) to: (1)
codify the current 9 core chronic diseases in regulation and add HIV/
AIDS as a core chronic disease, for a total of 10 core chronic diseases
and (2) require sponsors to include all 10 core chronic diseases in
their targeting criteria;
Revise Sec. 423.153(d)(2)(i)(B) to lower the maximum
number of covered Part D drugs a sponsor may require from 8 to 5 drugs;
Add a new paragraph at Sec. 423.153(d)(2)(iv) to require
sponsors to include all Part D maintenance drugs when determining the
number of drugs an enrollee is taking for purposes of MTM eligibility;
and
Revise Sec. 423.153(d)(2)(i)(C) to change the annual cost
threshold methodology ($4,935 in 2023) to be commensurate with the
average annual cost of 5 generic drugs ($1,004 in 2020). We are
proposing that these changes would be applicable beginning in plan year
2024. With these proposed changes, we estimate an MTM program size of
approximately 23 percent of the Part D population. Burden estimates and
impacts are discussed in sections IV.X. and VIII.X. of this proposed
rule, respectively.
2. Define ``unable to accept an offer to participate'' in a
Comprehensive Medication Review (CMR)
Section 1860D-4(c) of the Act requires all Part D plan sponsors to
have a Medication Therapy Management (MTM) program that is designed to
assure, with respect to targeted beneficiaries, that covered Part D
drugs are appropriately used to optimize therapeutic outcomes through
improved medication use and to reduce the risk of adverse events. This
requirement was codified at Sec. 423.153(d)(1) in the January 2005
Part D final rule (70 FR
[[Page 79547]]
4279). CMS subsequently finalized a requirement at Sec.
423.153(d)(1)(vii)(B) specifying that, beginning in 2011, MTM programs
must offer each MTM enrollee an annual CMR, including an interactive,
person-to-person consultation performed by a pharmacist or other
qualified provider unless the beneficiary is in a long-term care (LTC)
setting (75 FR 19772 through 19774). We included this exemption from
the requirement to offer a CMR because we recognized that many LTC
residents may not be able to participate in the interactive
consultation due to cognitive impairment.
For 2013 and subsequent plan years, the Affordable Care Act (ACA)
amended the Act by adding section 1860D-4(c)(2)(C)(i), which requires
all Part D sponsors to offer all enrollees targeted for MTM an annual
CMR. Consistent with the statutory change, CMS revised the regulation
at Sec. 423.153(d)(1)(vii)(B) in the April 2012 final rule (77 FR
22072) to remove the exemption for residents of LTC settings beginning
in 2013. In the preamble to the final rule, we noted that the ACA
provision did not provide a basis for creating an exception to the
requirement to offer a CMR based on the setting of care (77 FR 22140
through 22142). However, CMS acknowledged that many LTC residents, as
well as individuals in other health care settings (for example,
hospice), may suffer cognitive impairments and, therefore, may not be
able to participate in the CMR. Accordingly, in the same rule, we
finalized a new provision at Sec. 423.153(d)(1)(vii)(B)(2) to permit
the CMR provider to perform the CMR with an enrollee's prescriber,
caregiver, or other authorized individual if the enrollee is unable to
accept the offer to participate.
In guidance issued annually, including our most recent HPMS
guidance memorandum titled ``Correction to CY 2022 MTM Program Guidance
and Submission Instructions'' dated April 30, 2021, CMS has
consistently stated that we consider a beneficiary to be unable to
accept an offer to participate in the CMR only when the beneficiary is
cognitively impaired and cannot make decisions regarding their medical
needs. In this proposed rule, we propose to codify this definition by
amending the current regulation text at Sec. 423.153(d)(1)(vii)(B)(2)
to specify that in order for the CMR to be performed with an individual
other than the beneficiary, the beneficiary must be unable to accept
the offer to participate in the CMR due to cognitive impairment.
Consistent with existing CMS guidance, the flexibility to perform
the CMR with an individual other than the beneficiary would not apply
to situations where the sponsor is unable to reach the beneficiary
(such as no response by mail, no response after one or more phone
attempts, or lack of phone number or address), if there is no evidence
of cognitive impairment, or the beneficiary declines the CMR offer.
Cognitive status may be determined using interviews with the
beneficiary or their authorized representative, caregiver, or
prescriber. If the MTM provider determines a beneficiary is unable to
accept the offer to participate in a CMR, and the MTM provider is
unable to identify another individual who is able to participate, a CMR
cannot be performed. However, sponsors are still required to provide
the other required MTM services detailed in Sec. 423.153(d)(1)(vii).
Although claims data or diagnosis codes may be used to gather
information about a beneficiary's medical conditions, Part D sponsors
must not rely on such administrative information alone to determine
whether a beneficiary is cognitively impaired and unable to accept the
offer to participate in their own CMR.
We continue to recommend that when a targeted beneficiary moves to
a LTC facility, Part D plan sponsors should identify the appropriate
contact for each beneficiary. This contact could be the authorized
representative, caregiver, or prescriber. Sponsors, or their MTM
providers, could contact the admissions coordinator, Minimum Data Set
(MDS) coordinator, Director of Nursing, or other appropriate facility
staff person to ascertain if an authorized representative has been
designated in the beneficiary's medical record or chart. Sponsors are
encouraged to develop processes and procedures to contact the facility
in the least burdensome manner to request assistance from the facility
to identify beneficiaries who are not cognitively impaired and may be
able to accept the offer to participate in their CMR, and beneficiaries
who have a health care proxy. In the event that the definition of
authorized representative differs by State or in settings other than
LTC, we defer to State law.
The change we are proposing to the regulatory text reflects
longstanding CMS guidance and is also consistent with the discussion of
this policy in the preamble to the April 2012 final rule (77 FR 22140).
Plan sponsors have complied with this policy for several years as
evidenced by CMS data analyses using plan-reported data to identify
contract-level outliers regarding CMR completion rates, the CMR
recipient, and cognitive impairment status of MTM program enrollees. As
such, there is no associated paperwork burden not already accounted for
and approved by the Office of Management and Budget under OMB control
number 0938-1154 (CMS-10396).
3. Requirement For In-Person or Synchronous Telehealth Consultation
Since 2011, the regulation at Sec. 423.153(d)(1)(vii)(B)(1)(i) has
required that CMRs provided under a Part D sponsor's MTM program
include an interactive, person-to-person, or telehealth consultation
performed by a pharmacist or other qualified provider. In the preamble
to both the proposed (74 FR 54693) and final rules (75 FR 19773) in
which we first adopted this requirement, CMS emphasized that the
consultation must be conducted in real-time, either face-to-face or via
an alternative real-time method, such as the telephone. We further
specified in response to public comments that plans would have the
discretion to determine the method used, including emerging
technologies, as long as the CMR is conducted in real-time. In MTM
guidance issued annually through Call Letters and HPMS memoranda, most
recently in the April 30, 2021 HPMS memorandum titled, ``Correction to
CY 2022 MTM Program Guidance and Submission Instructions,'' CMS has
specified that CMRs should be performed in real-time.
In the 12 years since we finalized the current regulation text,
including during the COVID-19 public health emergency, telehealth
capabilities have developed considerably and experienced significant
growth. In its Best Practice Guide: Telehealth for Direct-To-Consumer
Care (https://telehealth.hhs.gov/providers/direct-to-consumer/), HHS
refers to synchronous telehealth as an interaction that occurs in live,
real-time settings, usually via phone or video. Asynchronous
telehealth, also referred to as ``store-and-forward,'' involves
communication that is sent and received at different times (for
example, a patient sends photos to their doctor that the doctor reviews
later). Advancements in telehealth, such as widespread use of smart
phones and secure video interactions, have confounded the concept of
``person-to-person'' interaction, which CMS--in the context of the
current CMR requirements in Sec. 423.153(d)(1)(vii)(B)(1)(i)--intended
to refer to an in-person interaction as opposed to a telehealth
consultation.
As a result of these developments, CMS has identified a need to
update our regulatory text. We propose to amend
[[Page 79548]]
the existing regulation text at Sec. 423.153(d)(1)(vii)(B)(1)(i) to
require that the CMR be performed either in person or via synchronous
telehealth to clarify that the CMR must include an interactive
consultation that is conducted in real-time, regardless of whether it
is done in person or via telehealth. While the consultation must be
conducted in real-time, under this proposal, plans would continue to
have the discretion to determine whether the CMR can be performed in
person or using the telephone, video conferencing, or another real-time
method.
The change proposed in this section is consistent with our
longstanding policy that the CMR be conducted in real-time as described
in the original rulemaking establishing the CMR requirement and
codifies existing guidance, issued annually, which plan sponsors have
complied with for years. Sponsors are required to submit their MTM
program parameters to CMS for review each year, and, in doing so, are
required to indicate the type of interactive, person-to-person or
telehealth consultation (for example, face-to-face, telephone,
telehealth), and to supply a detailed description of the CMR
consultation. Because this proposed change codifies existing program
guidance with which plans are already compliant, there is no paperwork
burden associated with it.
4. MTM Program Technical Changes
We are proposing several technical changes to the regulation text
related to the Part D MTM program. At Sec. 423.4, we propose to add a
definition for ``MTM program'' to clarify the meaning of this term as
used in Part 423. In the heading for Sec. 423.153(d), we propose to
remove the dash and replace it with a period to be consistent with
other paragraph headings in Subpart D. We propose to amend Sec.
423.153(d) by striking ``or'' from the end of existing paragraph
(d)(2)(i)(C)(2) to clarify that, consistent with section 1860D-
4(c)(2)(A)(ii) of the Act, plan sponsors must target enrollees
described in paragraph (d)(2)(i) and enrollees described in paragraph
(d)(2)(ii). Throughout Part 423, Subpart D, we propose to replace
``MTMP'' with ``MTM program'' to ensure that the terminology is used
consistently.
S. Standards for Electronic Prescribing (Sec. 423.160)
We propose updates to the standards to be used by Medicare Part D
prescription drug plans for electronic prescribing (e-prescribing).
This includes: (1) after a transition period, requiring the National
Council for Prescription Drug Plans (NDPDP) SCRIPT standard version
2022011 proposed for adoption at 45 CFR 170.205(b), and retiring the
current NCPDP SCRIPT standard version 2017071, as the e-prescribing
standard for transmitting prescriptions and prescription-related
information (including medication history and electronic prior
authorization (ePA) transactions) using electronic media for covered
Part D drugs for Part D eligible individuals; (2) requiring the NCPDP
Real-Time Prescription Benefit (RTPB) standard version 12 proposed for
adoption at 45 CFR 170.205(c) as the standard for prescriber real-time
benefit tools (RTBTs) supported by Part D sponsors; and (3) revising
current regulatory text referring to standards for eligibility
transactions.
In this proposed rule, we propose a novel approach to updating e-
prescribing standards by cross-referencing Part D requirements with
standards adopted by the Office of the National Coordinator for Health
Information Technology (ONC) and the standards adopted for electronic
transactions in the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) regulations. A joint approach to adopting and updating
electronic prescribing standards aims to mitigate potential compliance
challenges for HHS and the healthcare industry that may result from
independent adoption of such standards.
The NCPDP SCRIPT standards are used to exchange information between
prescribers, dispensers, intermediaries and Medicare prescription drug
plans (PDPs). The Medicare Part D statute at section 1860D-4(e) of the
Act and regulations at Sec. 423.160(a) require drug plans
participating in the prescription benefit to support e-prescribing, as
defined at Sec. 423.159(a), and physicians and pharmacies who transmit
prescriptions and related communications electronically, to utilize the
adopted standards. The proposed updated NCPDP SCRIPT standards have
been requested by the industry and provide a number of updates that the
industry and CMS support. Accordingly, we propose to update Sec.
423.160 throughout for prescription, medication history, and ePA
transactions utilizing the NCPDP SCRIPT standard, as well as to permit
an 18-month transition period beginning July 1, 2023 where either NCPDP
SCRIPT standard version 2017071 or 2022011 can be used, with exclusive
use of NCPDP SCRIPT standard version 2022011 required by January 1,
2025.
The NCPDP RTPB standard enables the exchange of patient
eligibility, preferred pharmacy network participation status, product
coverage (including any restrictions and alternatives), and associated
cost sharing so prescribers have access to this information through a
RTBT application that can be utilized at the point-of-prescribing. As
discussed in section III.Y.2. of this proposed rule, CMS requires at
Sec. 423.160(b)(7) that Part D sponsors implement one or more
electronic RTBTs that are capable of integrating with at least one
prescriber's electronic prescribing system or electronic health record,
as of January 1, 2021; however, at the time CMS established this
requirement, no single industry RTPB standard was available. The NCPDP
RTPB standard version 12 has since been developed and tested in real-
world applications. We propose to require it as the standard for
prescriber RTBT applications at Sec. 423.160(b)(7) starting January 1,
2025.
Eligibility transactions utilize the NCPDP Telecommunication or
Accredited Standards Committee X12 standard for pharmacy or other
health benefits, respectively. The Part D program has adopted standards
based on the HIPAA electronic transaction standards, which have not
been updated for more than a decade. Pursuant to legal authority that
we discuss in this rule, we propose to update the Part D regulation at
Sec. 423.160(b)(3) by adding a new paragraph (iii) indicating that
eligibility transactions must utilize the applicable standard named in
the HIPAA regulation at 45 CFR 162.1202, which we propose to be
required beginning July 1, 2023 in 42 CFR 423.160(b)(1)(vi). Since the
HIPAA regulation currently identifies the same standards that are named
at Sec. 423.160(b)(3)(i) and (ii), we anticipate no immediate impact
from this proposed change in regulatory language. However, on November
9, 2022, HHS's proposed rule titled ``Administrative Simplification:
Modifications of Health Insurance Portability and Accountability Act of
1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP)
Retail Pharmacy Standards; and Adoption of Pharmacy Subrogation
Standard,'' (87 FR 67634), which proposes to adopt updated versions of
the retail pharmacy standards for electronic transactions at 45 CFR
462.1202, appeared in the Federal Register. Thus, our proposal will
assure Part D requirements align with the HIPAA requirements should a
newer version of the NCPDP Telecommunication (or other) standards be
adopted as the HIPAA standard for these types of electronic
transactions as
[[Page 79549]]
a result of the aforementioned proposed rule and any future HHS rules.
1. Legislative Background
Section 1860D-4(e) of the Act requires the adoption of Part D e-
prescribing standards. Part D sponsors are required to establish
electronic prescription drug programs that comply with the e-
prescribing standards that are adopted under this authority. For a
further discussion of the statutory requirements at section 1860D-4(e)
of the Act, refer to the proposed rule titled ``Medicare Program; E-
Prescribing and the Prescription Drug Program,'' which appeared in the
February 4, 2005 Federal Register (70 FR 6255). Section 6062 of the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and
Treatment for Patients and Communities Act (Pub. L. 115-271),
hereinafter referred to as the SUPPORT Act, amended section 1860D-
4(e)(2) of the Act to require the adoption of transaction standards for
the Part D e-prescribing program to ensure secure ePA request and
response transactions between prescribers and Part D plan sponsors for
Part D-covered drugs prescribed to Part D-eligible individuals. There
is generally no requirement that Part D prescribers or dispensers
implement e-prescribing, with the exception of required electronic
prescribing of Schedule II, III, IV, and V controlled substances that
are Part D drugs, consistent with section 2003 of the SUPPORT Act and
as specified at Sec. 423.160(a)(5). However, prescribers and
dispensers who electronically transmit and receive prescription and
certain other information regarding covered drugs prescribed for
Medicare Part D eligible beneficiaries, directly or through an
intermediary, are required to comply with any applicable standards that
are in effect.
2. Regulatory History
As specified at Sec. 423.160(a)(1), Part D plan sponsors are
required to support the Part D e-prescribing program transaction
standards. Likewise, as specified at Sec. 423.160(a)(2), providers and
pharmacies that conduct electronic transactions for covered Part D
drugs for Part D eligible individuals for which a program standard has
been adopted must do so using the adopted standard. Transaction
standards are periodically updated to take new knowledge, technology,
and other considerations into account. As CMS adopted specific versions
of the standards when it initially adopted the foundation and final e-
prescribing standards, there was a need to establish a process by which
the standards could be updated or replaced over time to ensure that the
standards did not hold back progress in the industry. CMS discussed
these processes in the final rule titled ``Medicare Program; E-
Prescribing and the Prescription Drug Program,'' which appeared in the
November 7, 2005 Federal Register (70 FR 67579). An account of
successive adoption of new and retirement of previous versions of
various e-prescribing standards is described in the final rule titled
``Medicare Program; Revisions to Payment Policies Under the Physician
Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to
Part B for CY 2014,'' which appeared in the December 10, 2013 Federal
Register (78 FR 74229); the proposed rule titled ``Medicare Program;
Contract Year 2019 Policy and Technical Changes to the Medicare
Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare
Prescription Drug Benefit Programs, and the PACE Program,'' which
appeared in the November 28, 2017 Federal Register (82 FR 56336); and
the corresponding final rule (83 FR 16440), which appeared in the April
16, 2018 Federal Register. The final rule titled ``Medicare Program;
Secure Electronic Prior Authorization For Medicare Part D,'' which
appeared in the December 31, 2020 Federal Register (85 FR 86824),
codified the requirement that Part D sponsors support the use of NCPDP
SCRIPT standard version 2017071 for certain ePA transactions (85 FR
86832).
The final rule titled ``Modernizing Part D and Medicare Advantage
To Lower Drug Prices and Reduce Out-of-Pocket Expenses,'' which
appeared in the May 23, 2019 Federal Register (84 FR 23832), codified
at Sec. 423.160(b)(7) the requirement that Part D sponsors adopt an
electronic RTBT capable of integrating with at least one prescriber's
electronic prescribing or electronic health record (EHR) system, but
did not name a standard since no industry standard was available at the
time. The electronic standards for eligibility transactions were
codified in the final rule titled ``Medicare and Medicaid Program;
Regulatory Provisions to Promote Program Efficiency, Transparency, and
Burden Reduction,'' which appeared in the May 16, 2012 Federal Register
(77 FR 29001), to align with the applicable HIPAA standards.
The Part D program has historically adopted electronic prescribing
standards independently of other HHS components that may adopt
electronic prescribing standards under separate authorities; however,
past experience has demonstrated that duplicative adoption of health IT
standards by other agencies within HHS under separate authorities can
create significant burden on industry as well as HHS when those
standards impact the same technology systems. Notably, independent
adoption of the NCPDP SCRIPT standard version 2017071 by CMS at Sec.
423.160 (83 FR 16638) in 2018, which required use of the standard
beginning in 2020, led to a period where ONC had to exercise special
enforcement discretion in its Health Information Technology (IT)
Certification Program until the same version was incorporated into
regulation at 45 CFR 170.205(b)(1) through the final rule titled ``21st
Century Cures Act: Interoperability, Information Blocking, and the ONC
Health IT Certification Program,'' which appeared in the May 1, 2020
Federal Register (85 FR 25679). This resulted in significant impact on
both ONC and CMS program resources in order to address stakeholder
concerns about misalignment. See section III.T. of this proposed rule
for additional discussion of ONC's proposal and authority. Similarly,
the preamble of the May 2012 final rule noted that, in instances in
which an e-prescribing standard has also been adopted as a HIPAA
transaction standard in 45 CFR part 162, the process for updating the
e-prescribing standard would have to be coordinated with the
maintenance and modification of the applicable HIPAA transaction
standard (77 FR 29018).
3. Adoption of NCPDP SCRIPT Standard Version 2022011 as the Part D
Electronic Prescribing Standard, Retirement of NCPDP SCRIPT Standard
Version 2017071, and Related Conforming Changes in Sec. 423.160
The NCPDP SCRIPT standard has been the adopted electronic
prescribing standard for transmitting prescriptions and prescription-
related information using electronic media for covered Part D drugs for
Part D eligible individuals since foundation standards were named in
the final rule titled ``Medicare Program; E-Prescribing and the
Prescription Drug Program,'' which appeared in the November 7, 2005
Federal Register (70 FR 67568), at the start of the Part D program. The
NCPDP SCRIPT standard is used to exchange information between
prescribers, dispensers, intermediaries and Medicare prescription drug
plans. In addition to electronic prescribing, the NCPDP SCRIPT standard
is used in electronic prior authorization (ePA) and medication history
transactions.
Although electronic prescribing is optional for physicians, except
as to Schedule II, III, IV, and V controlled substances that are Part D
drugs prescribed under Part D, and
[[Page 79550]]
pharmacies, the Medicare Part D statute and regulations require drug
plans participating in the prescription benefit to support electronic
prescribing, and physicians and pharmacies who elect to transmit
prescriptions and related communications electronically must utilize
the adopted standards except in limited circumstances.
NCPDP requested that CMS adopt the proposed updated NCPDP SCRIPT
standard version 2022011 in a letter to CMS dated January 14,
2022.\132\ The updated version provides a number of updates that the
industry and CMS support. A major enhancement includes functionality
that supports a 3-way transaction among prescriber, facility, and
pharmacy, which will enable electronic prescribing of controlled
substances in the long-term care (LTC) setting (for which compliance
actions will commence on or after January 1, 2025 as specified in Sec.
423.160(a)(5)). Additional major enhancements include general
extensibility, redesign of the Product/Drug groupings, Observation
elements added to REMS transaction, ProhibitRenewalRequest added to
RxChangeResponse and RxRenewalResponse, modified Structured and
Codified Sig Structure format, and data element refinements and support
related to dental procedure codes, RxBarCode, PatientConditions,
patient gender and pronouns, TherapeuticSubstitutionIndicator, and
multi-party communications and withdrawal/retracting of a previous sent
message using the MessageIndicatorFlag.
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\132\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2022/202201NCPDP-SCRIPTNextVersionLetter.pdf.
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Because the functionality offered in NCPDP SCRIPT standard version
2022011 offers important updates and efficiencies to the healthcare
industry, we believe it would be an appropriate electronic prescribing
standard for the Medicare Part D program. NCPDP SCRIPT standard version
2022011 is fully backwards compatible with NCPDP SCRIPT standard
version 2017071. This allows for a less burdensome implementation
process and flexible adoption timeline for the industry since backwards
compatibility permits a transition period where both versions of the
NCPDP SCRIPT standards may be used simultaneously.
In addition to its use for electronic prescriptions, the NCPDP
SCRIPT standard is used for medication history (Sec. 423.160(b)(4))
and ePA transactions (Sec. 423.160(b)(8)). Thus, we propose conforming
amendments to require, after a transition period, NCPDP SCRIPT standard
version 2022011 as the Part D electronic prescribing standard for the
medication history transactions and ePA transactions in Sec.
423.160(b)(4) and Sec. 423.160(b)(8), respectively.
Instead of independently naming the NCPDP SCRIPT standard version
2022011 and incorporating the corresponding implementation guide by
reference at Sec. 423.160(c), we propose to amend Sec. 423.160(b)
throughout by cross referencing 45 CFR 170.205(b), where ONC proposes
to adopt NCPDP SCRIPT standard version 2022011. See section III.T.5. of
this proposed rule for additional discussion of this coordination
effort. We propose the same approach for the amendments listed at Sec.
423.160(b)(2) for prescription transactions, discussed in this section
of this proposed rule, and conforming changes at Sec. 423.160(b)(4)
for medication history transactions and at Sec. 423.160(b)(8) for ePA
transactions.
The proposed approach would enable CMS and ONC to avoid
misalignment from independent adoption of NCPDP SCRIPT standard version
2022011 for their respective programs. Updates to the standard would
impact requirements for both programs at the same time, ensure
consistency, and promote alignment for providers, payers, and health IT
developers participating in and supporting the same prescription
transactions.
Since the NCPDP SCRIPT standard version 2022011 is fully backwards
compatible with NCPDP SCRIPT standard version 2017071, the industry can
accommodate a transition period when either version may be used. We
propose changes at Sec. Sec. 423.160(b)(1)(vi), 423.160(b)(4)(iii),
and 423.160(b)(8)(iii), which, taken together with ONC proposals for 45
CFR 170.205(b), would establish a transition period from July 1, 2023
until January 1, 2025, with a compliance deadline of January 1, 2025,
when use of NCPDP SCRIPT standard version 2022011 will be mandatory.
Given NCPDP SCRIPT standard version 2022011 is backwards compatible
with NCPDP SCRIPT standard version 2017071, we are seeking to allow
Part D plans to begin updating to NCPDP SCRIPT standard version 2022011
as soon as practicable. While we are proposing July 1, 2023 for the
start of the transition period, we will consider updating the proposed
start date for the transition period in the final rule to align with
the effective date for the final rule if it falls before July 1, 2023.
In its letter to CMS requesting CMS to adopt NCPDP SCRIPT standard
version 2022011, NCPDP requested that CMS identify certain transactions
for prescriptions for which use of the standard is mandatory. The
transactions for prescriptions that we propose to codify at Sec.
423.160(b)(2)(v)(A)-(Y) are:
GetMessage;
Status;
Error;
NewRxRequest;
NewRx;
RxChangeRequest;
RxChangeResponse;
RxRenewalRequest;
Resupply;
RxRenewalResponse;
Verify;
CancelRx;
CancelRxResponse;
RxFill;
DrugAdministration;
NewRxResponseDenied;
RxTransferInitiationRequest (previously named
RxTransferRequest in NCPDP SCRIPT standard version 2017071);
RxTransfer (previously named RxTransferResponse NCPDP
SCRIPT standard version 2017071);
RxTransferConfirm;
RxFillIndicatorChange;
Recertification;
REMSIinitiationRequest;
REMSIinitiationResponse;
REMSRequest; and
REMSResponse.
The transactions for ePA that we propose to codify at Sec.
423.160(b)(8)(iii)(A)-(I) are:
PAInitiationRequest;
PAInitiationResponse;
PARequest;
PAResponse;
PAAppealRequest;
PAAppealResponse;
PACancelRequest;
PACancelResponse; and
PANotification.
The transactions specific to electronic prescribing remain the same
as those required for NCPDP SCRIPT standard version 2017071 (Sec.
423.160(b)(2)(iv)), except where renamed as noted above. The
transactions specific to ePA are also the same as those required with
NCPDP SCRIPT standard version 2017071, with one additional transaction
(PANotification) which was incorporated into the standard after NCPDP
SCRIPT standard version 2017071. As discussed in section III.T.6. of
this proposed rule, NCPDP SCRIPT standard version 2022011 is proposed
for adoption at 45 CFR 170.205(b)(2), and SCRIPT version 2017071 is
proposed to expire on January 1, 2025 at 45 CFR 170.205(b)(1).
Consequently, use of NCPDP SCRIPT standard version 2022011 for the
transactions related to electronic prescribing and ePA (proposed at
Sec. Sec. 423.160(b)(2)(v)(A)-(Y) and 423.160(b)(8)(iii)(A)-(I),
[[Page 79551]]
respectively) will be mandatory by January 1, 2025, if the expiration
date for SCRIPT version 2017071 is adopted as proposed. We also note
that the RxTransfer-related transactions take place between pharmacies
(that is, dispensers) and are not applicable to prescribers. Therefore,
we have proposed to acknowledge this in the proposed regulation at
Sec. 423.160(b)(2)(v) by adding language that indicates that the
business functions supported by the transactions listed for the
transmission of prescription-related information may be between
prescribers and dispensers (as stated in Sec. 423.160(b)(2)(iv)) or
between dispensers.
Mandatory use of the NCPDP SCRIPT standard for the transactions
listed means that the specified version of the NCPDP SCRIPT standard
must be used to carry out the particular business function supported by
the transaction. Mandatory use does not mean that all transactions must
be utilized (that is, if the business function supported by the
transaction is not needed, then the NCPDP SCRIPT standard transaction
would not be utilized). For example, we have been informed that the
``GetMessage'' transaction is not widely used among prescribers. For
this reason, we are reiterating guidance \133\ that the NCPDP SCRIPT
standard transactions named are not themselves mandatory, but rather
they are to be used as applicable to the entities specified at Sec.
423.160(a) involved in completing or supporting such business functions
when and if they are utilized. Our intent is that the applicable NCPDP
SCRIPT standard version is used for business functions that the
applicable NCPDP SCRIPT standard transactions support, which are named
in regulation. We believe the pharmacy industry has implemented the
standards in this manner, based on discussions with NCPDP. However, we
acknowledge that the transactions currently named in regulation, and as
we propose, are specific to the NCPDP SCRIPT standard. Thus, the
specific transactions (based on literal interpretation) can only be
used in the context of the NCPDP SCRIPT standard as a whole. We propose
to add language at Sec. Sec. 423.160(b)(2)(v) and 423.160(b)(8)(iii)
to indicate that these transactions represent the business functions
for which the NCPDP SCRIPT standard transactions must be used if such
business function is utilized.
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\133\ Supporting Electronic Prescribing Under Medicare Part D.
September 19, 2008. https://www.hhs.gov/guidance/document/supporting-electronic-prescribing-under-medicare-part-d.
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In summary, we propose to amend Sec. 423.160 by:
Revising paragraph Sec. 423.160(b)(1)(v) to reference
applicable standards for transactions until June 30, 2023;
Adding paragraph Sec. 423.160(b)(1)(vi) to identify
applicable standards for transactions beginning July 1, 2023;
Adding paragraph Sec. 423.160(b)(2)(v) to acknowledge the
entities to whom certain transactions are applicable, to include
distinction that the transactions listed represent business functions
for which the NCPDP SCRIPT standard must be used, and to indicate that
communication of prescriptions and prescription-related transactions
listed at Sec. 423.160(b)(2)(v)(A)-(Y) must comply with 45 CFR
170.205(b). This cross-reference permits a transition period when
either NCPDP SCRIPT standard versions 2017071 or 2022011 may be used
because, as ONC has proposed at 45 CFR 170.205(b)(1), the NCPDP SCRIPT
standard version 2017071 would not expire until January 1, 2025;
Revising paragraph Sec. 423.160(b)(4)(ii) to indicate
exclusive use of NCPDP SCRIPT standard version 2017071 for medication
history transactions is required from January 1, 2020 until June 30,
2023;
Adding paragraph Sec. 423.160(b)(4)(iii) indicating that
starting July 1, 2023, medication history transactions must comply with
45 CFR 170.205(b). This cross-reference would permit a transition
period when either NCPDP SCRIPT standard versions 2017071 or 2022011
may be used to complete medication history transactions because ONC
proposes at 45 CFR 170.205(b)(1) that the NCPDP SCRIPT standard version
2017071 would not expire until January 1, 2025;
Revising paragraph Sec. 423.160(b)(8)(ii) to indicate
exclusive use of NCPDP SCRIPT standard version 2017071 for ePA
transactions is required from January 1, 2022 until June 30, 2023; and
Adding paragraph Sec. 423.160(b)(8)(iii) indicating that
starting July 1, 2023, ePA transactions listed at Sec.
423.160(b)(8)(iii)(A)-(I) represent business functions which must
comply with 45 CFR 170.205(b). This cross-reference would permit a
transition period when either NCPDP SCRIPT standard versions 2017071 or
2022011 may be used for ePA transactions because ONC proposes at 45 CFR
170.205(b)(1) that the NCPDP SCRIPT standard version 2017071 would not
expire until January 1, 2025.
We specifically solicit comment on the following aspects of this
proposal: (1) requiring NCPDP SCRIPT version 2022011 and retiring NCPDP
SCRIPT standard version 2017071, following a transition period; (2)
requiring compliance with 45 CFR 170.205(b) to align Part D electronic
prescribing requirements with standards adopted by ONC; and (3) whether
the proposed date of January 1, 2025 to retire NCPDP SCRIPT standard
version 201071 provides a sufficient transition period for industry and
other interested stakeholders or if delaying this date to January 1,
2026 or later offers advantages or disadvantages.
4. Adoption of the NCPDP Real-Time Prescription Benefit (RTPB) Standard
In the May 2019 final rule (84 FR 23832), which implemented the
statutory provision at section 1860D-4(e)(2)(D) of the Act, CMS
required at Sec. 423.160(b)(7) that Part D plan sponsors implement, by
January 1, 2021, an electronic real-time benefit tool (RTBT) capable of
integrating with at least one prescriber's e-prescribing system or
electronic health record (EHR) to provide prescribers with complete,
accurate, timely and clinically appropriate patient-specific real-time
formulary and benefit information (including out-of-pocket cost,
clinically appropriate formulary alternatives, and utilization
management requirements). At that time, there were no industry-wide
standards for RTBTs. NCPDP has since developed and tested an RTPB
standard for use with RTBT applications. In an August 20, 2021 letter
to CMS, NCPDP recommended adoption of RTPB standard version 12.\134\
The NCPDP RTPB standard version 12 enables the real-time exchange of
information about patient eligibility, patient-specific formulary and
benefit information, and preferred pharmacy network participation
status. For a submitted drug product, the RTPB standard will indicate
coverage status, coverage restrictions, and patient financial
responsibility. The RTPB standard also supports providing information
on alternative pharmacies and products.
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\134\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2021/20210820_To_CMS_RTPBandFandBStandardsAdoptionRequest.pdf.
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The NCPDP RTPB standard version 12 standard is designed for
prescriber, not beneficiary, RTBT applications; however, CMS is aware
that the use of the NCPDP RTPB standard for the prescriber RTBT may
facilitate beneficiary RTBTs since the data elements from the NCPDP
RTPB standard would also be able to feed into a beneficiary RTBT. CMS
is not
[[Page 79552]]
prohibiting such a practice, but we emphasize that we are not proposing
that the proposed standard be required for beneficiary RTBTs. The
requirements for the beneficiary RTBT are discussed in the final rule
titled ``Medicare and Medicaid Programs; Contract Year 2022 Policy and
Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly,'' which
appeared in the January 19, 2021 Federal Register (86 FR 5864).
As discussed in section III.T.6. of this proposed rule, ONC
proposes to adopt the NCPDP RTPB standard version 12 at 45 CFR
170.205(c). We therefore propose to add paragraphs Sec.
423.160(b)(1)(vii) and Sec. 423.160(b)(7)(i) to indicate that as of
January 1, 2025, Part D sponsors' RTBT must comply with 45 CFR
170.205(c).
We solicit comment on this proposal.
5. Standards for Eligibility Transactions
We propose to revise Sec. 423.160(b)(3) by adding a new paragraph
(iii) to indicate that eligibility transactions must comply with 45 CFR
162.1202. Both sections currently name the NCPDP Telecommunication
standard Version D.0 with equivalent batch standard Version 1.2 and the
Accredited Standards Committee X12N 270/271-Health Care Eligibility
Benefit Inquiry and Response, Version 5010 (ASC X12N/005010x279). The
eligibility standards adopted at Sec. 423.160(b)(3)(i) and (ii) were
adopted to align with those adopted at 45 CFR 162.1202, pursuant to the
final rule titled ``Health Insurance Reform; Modifications to the
Health Insurance Portability and Accountability Act HIPAA) Electronic
Transaction Standards,'' which appeared in the January 16, 2009 Federal
Register (74 FR 3326). The proposed rule titled ``Administrative
Simplification: Modifications of Health Insurance Portability and
Accountability Act of 1996 (HIPAA) National Council for Prescription
Drug Programs (NCPDP) Retail Pharmacy Standards; and Adoption of
Pharmacy Subrogation Standard,'' which appeared in the November 9, 2022
Federal Register (87 FR 67634), proposes to update the HIPAA standards
used for eligibility transactions. We therefore propose to streamline
the Part D regulation by indicate that eligibility transactions must
comply with the applicable HIPAA regulations, as opposed to naming
standards independently, which would ensure, should the HIPAA standards
be updated as a result of HHS rulemaking, that the Part D regulation
would be synchronized with the required HIPAA standards. We foresee no
immediate impact of this proposed change since the HIPAA regulation at
45 CFR 162.1202 currently identifies the same standards as those named
in the Part D regulation at Sec. 423.160(b)(3)(i) and (ii), but we
believe establishing a cross-reference would help avoid potential
future conflicts so that the industry and CMS would not be at risk of
compliance issues.
Thus, we propose to modify Sec. 423.160(b)(3) by adding a new
paragraph (iii) to indicate that eligibility transactions should comply
with 45 CFR 162.1202. We also propose to replace earlier references to
Sec. 423.160(b)(3) in paragraphs Sec. 423.160(b)(1)(i) through
(b)(1)(iv) with revised references to Sec. 423.160(b)(3)(i) and (ii),
to specify where these historical standards referred to the standards
specifically named at Sec. 423.160(b)(3)(i) and (ii). This approach
would avoid ambiguity with respect to historical expectations from
prior to April 1, 2009 through the proposed effective date of July 1,
2023, which we propose in Sec. 423.160(b)(1)(vi).
We solicit comment on this proposal.
T. Adoption of Health IT Standards (45 CFR 170.205)
1. Overview
In this section ONC proposes to adopt standards for electronic
prescribing and related activities on behalf of HHS under the authority
in Section 3004 of the Public Health Service Act (42 U.S.C. 300jj-14).
ONC is proposing these standards for adoption by HHS as part of a
nationwide health information technology infrastructure that supports
reducing burden and health care costs and improving patient care. ONC
is proposing to adopt these standards on behalf of HHS in one location
within the Code of Federal Regulations for HHS use, including by the
Part D Program as proposed in section III.S. of this proposed rule.
These proposals reflect a unified approach across the Department to
adopt standards for electronic prescribing activities that have
previously been adopted separately by CMS and ONC under independent
authorities. This new approach is intended to increase alignment across
HHS and reduce regulatory burden for stakeholders subject to program
requirements that incorporate these standards.
2. Statutory Authority
The Health Information Technology for Economic and Clinical Health
Act (HITECH Act), Title XIII of Division A and Title IV of Division B
of the American Recovery and Reinvestment Act of 2009 (the Recovery
Act) (Pub. L. 111-5), was enacted on February 17, 2009. The HITECH Act
amended the Public Health Service Act (PHSA) and created ``Title XXX--
Health Information Technology and Quality'' (Title XXX) to improve
health care quality, safety, and efficiency through the promotion of
health IT and exchange of electronic health information (EHI).
Subsequently, Title IV of the 21st Century Cures Act (Pub. L. 114-255)
(Cures Act) amended portions of the HITECH Act by modifying or adding
certain provisions to the PHSA relating to health IT.
3. Adoption of Standards and Implementation Specifications
Section 3001 of the PHSA directs the National Coordinator for
Health Information Technology (National Coordinator) to perform duties
in a manner consistent with the development of a nationwide health
information technology infrastructure that allows for the electronic
use and exchange of information. Section 3001(b) of the PHSA
establishes a series of core goals for development of a nationwide
health information technology infrastructure that--
Ensures that each patient's health information is secure
and protected, in accordance with applicable law;
Improves health care quality, reduces medical errors,
reduces health disparities, and advances the delivery of patient-
centered medical care;
Reduces health care costs resulting from inefficiency,
medical errors, inappropriate care, duplicative care, and incomplete
information;
Provides appropriate information to help guide medical
decisions at the time and place of care;
Ensures the inclusion of meaningful public input in such
development of such infrastructure;
Improves the coordination of care and information among
hospitals, laboratories, physician offices, and other entities through
an effective infrastructure for the secure and authorized exchange of
health care information;
Improves public health activities and facilitates the
early identification and rapid response to public health threats and
emergencies, including bioterror events and infectious disease
outbreaks;
Facilitates health and clinical research and health care
quality;
[[Page 79553]]
Promotes early detection, prevention, and management of
chronic diseases;
Promotes a more effective marketplace, greater
competition, greater systems analysis, increased consumer choice, and
improved outcomes in health care services; and
Improves efforts to reduce health disparities.
Section 3004 of the PHSA identifies a process for the adoption of
health IT standards, implementation specifications, and certification
criteria, and authorizes the Secretary to adopt such standards,
implementation specifications, and certification criteria. As specified
in section 3004(a)(1) of the PHSA, the Secretary is required, in
consultation with representatives of other relevant Federal agencies,
to jointly review standards, implementation specifications, and
certification criteria endorsed by the National Coordinator under
section 3001(c) of the PHSA and subsequently determine whether to
propose the adoption of any grouping of such standards, implementation
specifications, or certification criteria. The Secretary is required to
publish all determinations in the Federal Register.
Section 3004(b)(3) of the PHSA, which is titled ``Subsequent
Standards Activity,'' provides that the Secretary shall adopt
additional standards, implementation specifications, and certification
criteria as necessary and consistent with the schedule published by the
Health IT Advisory Committee (HITAC). As noted in the final rule,
``2015 Edition Health Information Technology (Health IT) Certification
Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition,
and ONC Health IT Certification Program Modifications'' (ONC 2015
Edition Final Rule), which appeared in the October 16, 2015 Federal
Register, we consider this provision in the broader context of the
HITECH Act and the Cures Act to grant the Secretary the authority and
discretion to adopt standards, implementation specifications, and
certification criteria that have been recommended by the HITAC and
endorsed by the National Coordinator, as well as other appropriate and
necessary health IT standards, implementation specifications, and
certification criteria (80 FR 62606).
Under the authority outlined in section 3004(b)(3) of the PHSA, the
Secretary may adopt standards, implementation specifications, and
certification criteria as necessary even if those standards have not
been recommended and endorsed through the process established for the
HITAC under section 3002(b)(2) and (3) of the PHSA. Moreover, while HHS
has traditionally adopted standards and implementation specifications
at the same time as adopting certification criteria that reference
those standards, the Secretary's authority under section 3004(b)(3) of
the PHSA is not limited to adopting standards or implementation
specifications at the same time certification criteria are adopted.
Finally, the Cures Act amended the PHSA by adding section 3004(c),
which specifies that in adopting and implementing standards under
section 3004, the Secretary shall give deference to standards published
by standards development organizations and voluntary consensus-based
standards bodies.
4. Alignment With Federal Advisory Committee Activities
The HITECH Act established two Federal advisory committees, the HIT
Policy Committee (HITPC) and the HIT Standards Committee (HITSC). Each
was responsible for advising the National Coordinator on different
aspects of health IT policy, standards, implementation specifications,
and certification criteria.
Section 4003(e) of the Cures Act amended section 3002 of the PHSA
and replaced the HITPC and HITSC with one committee, the HITAC. After
that change, section 3002(a) of the PHSA establishes that the HITAC
advises and recommends to the National Coordinator standards,
implementation specifications, and certification criteria relating to
the implementation of a health IT infrastructure, nationally and
locally, that advances the electronic access, exchange, and use of
health information. The Cures Act specifically directed the HITAC to
advise on two areas: (1) A policy framework to advance an interoperable
health information technology infrastructure (section 3002(b)(1) of the
PHSA); and (2) priority target areas for standards, implementation
specifications, and certification criteria (section 3002(b)(2) of the
PHSA).
For the policy framework, as described in section 3002(b)(1)(A) of
the PHSA, the Cures Act tasked the HITAC with providing recommendations
to the National Coordinator on a policy framework for adoption by the
Secretary consistent with the Federal Health IT Strategic Plan under
section 3001(c)(3) of the PHSA. In February of 2018, the HITAC made
recommendations to the National Coordinator for the initial policy
framework \135\ and subsequently published a schedule in the Federal
Register and an annual report on the work of the HITAC and ONC to
implement and evolve that framework.\136\ For the priority target areas
for standards, implementation specifications, and certification
criteria, section 3002(b)(2)(A) of the PHSA identified that in general,
the HITAC would recommend to the National Coordinator, for purposes of
adoption under section 3004 of the PHSA, standards, implementation
specifications, and certification criteria and an order of priority for
the development, harmonization, and recognition of such standards,
specifications, and certification criteria. In October of 2019, the
HITAC finalized recommendations on priority target areas for standards,
implementation specifications, and certification criteria.\137\
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\135\ HITAC Policy Framework Recommendations, February 21, 2018:
https://www.healthit.gov/sites/default/files/page/2019-07/2018-02-21_HITAC_Policy-Framework_FINAL_508-signed.pdf.
\136\ HITAC Annual Report CY 2019 published March 2, 2020:
https://www.healthit.gov/sites/default/files/page/2020-03/HITAC%20Annual%20Report%20for%20FY19_508.pdf.
\137\ HITAC recommendations on priority target areas, October
16, 2019: https://www.healthit.gov/sites/default/files/page/2019-12/2019-10-16_ISP_TF_Final_Report_signed_508.pdf.
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5. Aligned Approach to Standards Adoption
Historically, the ONC Health IT Certification Program and the Part
D Program have maintained complementary policies of aligning health IT
certification criteria and associated standards related to electronic
prescribing, medication history, and electronic prior authorization for
prescriptions. Prescribers of Medicare Part D covered drugs that are
prescribed for a Medicare Part D eligible individual must generally
adhere to the standards set by the Part D Program for conveying
prescriptions using electronic media, while participants in the
Promoting Interoperability programs must use technology certified under
ONC's Health IT Certification Program to complete measures included in
the program, including e-prescribing. Alignment across the standards
adopted for these HHS programs is critical to ensure consistent
regulatory requirements for Part D plan sponsors, health care
providers, and health IT developers who implement and utilize
technology tools for electronic prescribing. In addition to adopting
the same standards, ONC and CMS must
[[Page 79554]]
also align the requirements for use of those standards within their
respective programs.
In this section of this proposed rule, we briefly summarize past
standards adoption activities under section 3004 of the PHSA intended
to ensure alignment for electronic prescribing and related activities
across the ONC Health IT Certification Program and the Part D Program.
On January 13, 2010, the Secretary issued an interim final rule
``Health Information Technology: Initial Set of Standards,
Implementation Specifications, and Certification Criteria for
Electronic Health Record Technology'' (2010 interim final rule) which
adopted an initial set of standards, implementation specifications, and
certification criteria to meet the requirement specified at section
3004(b)(1) of the PHSA (75 FR 2013). To ensure consistency with
standards previously adopted by CMS under the MMA for electronic
prescribing, the 2010 interim final rule adopted NCPDP SCRIPT standard
version 8.1 by referencing the Part D requirement for use of the
standard in Sec. 423.160. The 2010 interim final rule also adopted the
Formulary and Benefits standard version 1.0 (75 FR 2031) for the
purposes of performing a drug formulary check by referencing the Part D
requirement for use of the standard in Sec. 423.160.
On July 28, 2010, ONC's final rule ``Health Information Technology:
Initial Set of Standards, Implementation Specifications, and
Certification Criteria for Electronic Health Record Technology'' to
complete the adoption of an initial set of standards, implementation
specifications, and certification criteria, appeared in the Federal
Register (75 FR 44589). In that final rule, ONC replaced the reference
to Sec. 423.160 adopted in the 2010 interim final rule, as previously
described, by adopting and incorporating by reference both NCPDP SCRIPT
standard version 8.1 and NCPDP SCRIPT standard version 10.6 in 45 CFR
170.205. As stated in the final rule, ONC finalized this policy to
align with the adoption and incorporation by reference of NCPDP SCRIPT
standard version 10.6 by CMS in the ``Medicare Program; Identification
of Backward Compatible Version of Adopted Standard for E-Prescribing
and the Medicare Prescription Drug Program (NCPDP SCRIPT 10.6)''
interim final rule, which appeared in the July 1, 2010 Federal Register
(75 FR 38026).
Most recently, in the ``21st Century Cures Act: Interoperability,
Information Blocking, and the ONC Health IT Certification Program''
final rule (ONC 21st Century Cures Act Final Rule), which was effective
June 30, 2020, ONC adopted NCPDP SCRIPT standard version 2017071 in 45
CFR 170.205(b)(1) and incorporated it by reference in 45 CFR 170.299
(85 FR 25678). By adopting this standard, ONC aligned with the
``Medicare Program; Contract Year 2019 Policy and Technical Changes to
the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service,
the Medicare Prescription Drug Benefit Programs, and the PACE Program''
final rule (2019 Part C/D final rule), which appeared in the April 16,
2018 Federal Register, in which CMS adopted and incorporated NCPDP
SCRIPT standard version 2017071 in Sec. 423.160(b)(2)(iv) for use
beginning in January 2020 (83 FR 16440).
While CMS and ONC have worked closely together to ensure consistent
adoption of standards through regulatory actions, as previously
described, we recognize that the current practice of different HHS
components conducting parallel adoption of the same standards may
result in additional regulatory burden and confusion for stakeholders.
As a result of different HHS components maintaining and updating
separate regulatory provisions in different areas of the Code of
Federal Regulations for health IT standards that impact the same
stakeholders, impacted stakeholders must monitor changes to standards
in multiple regulatory vehicles. In addition, ONC and CMS must identify
separate regulatory vehicles and pursue separate rulemaking processes
in which to adopt the same standard. Due to other constraints around
regulatory cycles in each agency, proposed and final actions to adopt
the same standard may occur on different timelines. For instance, due
to discrepancies between regulatory timelines, adoption of the NCPDP
SCRIPT standard version 2017071 in different rules (respectively, the
ONC 21st Century Cures Act final rule and the 2019 Part C/D final rule)
led to a period where ONC had to exercise special enforcement
discretion in the ONC Health IT Certification Program.\138\
Stakeholders affected by these updates expressed repeated concerns
during this period regarding when updates to respective standards would
be finalized and how these regulatory contingencies would affect
program requirements referencing these standards.
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\138\ See the archived version of the Certification Companion
Guide for the ``electronic prescribing'' certification criterion in
45 CFR 170.315(b)(3): https://www.healthit.gov/sites/default/files/page/2020-12/b3_ccg.pdf.
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Given past concerns, ONC and CMS are seeking to pursue a new
approach to alignment of standards in this proposed rule. Under this
approach, HHS would adopt the standards specified (the NCPDP SCRIPT
standard version 2022011 and the NCPDP Real-Time Prescription Benefit
standard version 12) under the Secretary's authority to adopt health IT
standards in the PHSA. If finalized, these proposals would result in
the adoption and incorporation by reference to the proposed standards
in a single Code of Federal Regulations location at 45 CFR 170.205.
Programs across HHS could then cross-reference the adopted standards.
As more than one version of the NCPDP SCRIPT standard would be
specified in 45 CFR 170.205(b) if our proposal is finalized, we have
also identified an expiration date for the current version of the
standard to clearly specify when versions of the NCPDP SCRIPT standard
in 45 CFR 170.205(b) would be available for use by HHS programs.
We note that these proposals pertain only to the adoption and
incorporation by reference of the proposed standards, and when these
standards are available for use by HHS. CMS and ONC would continue to
set other program requirements independently for programs such as the
ONC Health IT Certification Program and the Part D Program, which may
require use of these standards. For instance, program requirements may
continue to include provisions such as additional amendments or
guidance related to use of standards specific to each program. However,
we believe that the approach reflected in these proposals for adoption
of standards in a single CFR location for HHS use will help to address
the concerns around alignment, as previously described. We are
requesting comment on this approach to adopting standards in a single
location for HHS use.
6. Proposal To Adopt Standards for Use by HHS
Consistent with section 3004(b)(3) of the PHSA and the efforts, as
previously described, to evaluate and identify standards for adoption,
we propose to adopt the following implementation specifications in 45
CFR 170.205(b)(2) and (c), on behalf of the Secretary, to support the
continued development of a nationwide health information technology
infrastructure as described under section 3001(b) of the PHSA, and to
support Federal alignment of standards for interoperability and health
information exchange. Specifically, we
[[Page 79555]]
propose to adopt the following standards:
NCPDP SCRIPT Standard, Implementation Guide, Version
2022011.
NCPDP Real-Time Prescription Benefit Standard,
Implementation Guide, Version 12.
a. Electronic Prescribing
As discussed previously, ONC has previously adopted three versions
of the NCPDP SCRIPT standard in 45 CFR 170.205. Most recently, we
adopted NCPDP SCRIPT standard version 2017071 in the ONC 21st Century
Cures Act final rule to facilitate the transfer of prescription data
among pharmacies, prescribers, and payers (85 FR 25678).
The updated NCPDP SCRIPT standard version 2022011 includes
important enhancements, such as additions for drug utilization review/
use (DUR/DUE) alerts and formulary information, as well as transactions
to relay medication history and for a facility to notify a pharmacy of
resident information. Enhancements have been added to support
electronic prior authorization functions as well as electronic transfer
of prescriptions between pharmacies.\139\
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\139\ See https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2022/202201NCPDP-SCRIPTNextVersionLetter.pdf.
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We propose to remove NCPDP SCRIPT standard version 10.6 from 45 CFR
170.205(b)(2) and to adopt NCPDP SCRIPT standard version 2022011 \140\
in 45 CFR 170.205(b)(2). We note that NCPDP SCRIPT standard version
10.6 is no longer required for use in either the Part D Program or the
ONC Health IT Certification Program, and we believe it is appropriate
to remove this standard from the Code of Federal Regulations. We also
propose to incorporate NCPDP SCRIPT standard version 2022011 by
reference in 45 CFR 170.299.
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\140\ See http://www.ncpdp.org/Standards/Standards-Info.
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Regarding the NCPDP SCRIPT standard version 2017071, we propose to
revise the regulatory text in 45 CFR 170.205(b)(1) to specify that
adoption of this standard will expire on January 1, 2025. If these
proposals are finalized, this would mean that both the 2017071 and
2022011 versions of the NCPDP SCRIPT standard would be available for
HHS use from the effective date of a final rule until January 1, 2025.
This ``transition period'' is consistent with previous policy in both
the ONC Health IT Certification Program and the Part D program with
respect to versions of e-prescribing standards which allow for
concurrent usage. On and after January 1, 2025, only the 2022011
version of the NCPDP SCRIPT standard would be available for HHS use
where a standard in 45 CFR 170.205(b) is required.
We request comment on the appropriateness of this proposed
expiration date for NCPDP SCRIPT standard version 2017071, and whether
we should consider, as an alternative, finalizing a transition period
of an additional year, up to January 1, 2026, or a longer period. We
are interested in whether commenters believe an extended transition
period, during which use of both standards would be allowed for
programs requiring use of a standard in 45 CFR 170.205(b), would be
appropriate. We welcome any information commenters can provide about
the time needed for stakeholders to implement the updated version of
the standard for different uses.
While we are not proposing changes to the ``electronic
prescribing'' certification criterion in the ONC Health IT
Certification Program (45 CFR 170.315(b)(3)) in this proposed rule, ONC
will consider any updates to this criterion in future rulemaking to
align with the updated NCPDP SCRIPT standard and with the Part D
program, should this proposal be finalized, consistent with past
practice.
b. Real Time Prescription Benefit
We propose to adopt the NCPDP Real-Time Prescription Benefit
standard version 12 to meet the requirements of Division CC, Title I,
Subtitle B, Section 119 of the Consolidated Appropriations Act, 2021
(CAA), Public Law 116-260. The CAA required sponsors of Medicare
prescription drug plans and Medicare Advantage Organizations to
implement a real-time benefit tool that meets technical standards named
by the Secretary, in consultation with ONC. The NCPDP Real-Time
Prescription Benefit standard version 12 \141\ enables the exchange of
patient eligibility, product coverage, and benefit financials for a
chosen product and pharmacy, and identifies coverage restrictions and
alternatives when they exist.
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\141\ See http://www.ncpdp.org/Standards/Standards-Info.
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In section III.S. of this proposed rule, CMS is proposing to
require Part D plan sponsors to comply with this standard when
implementing the real-time benefit tool or tools required in Sec.
423.160(b)(7). In addition, section 119(b) of the CAA amended the
definition of a ``qualified electronic health record'' in section
3000(13) of the PHSA to specify that a ``qualified electronic health
record'' must include or be capable of including a real-time benefit
tool. ONC intends to address this provision in future rulemaking for
the ONC Health IT Certification Program and will ensure alignment with
the proposed NCPDP Real-Time Prescription Benefit standard version 12,
should our proposal be finalized, and related proposals in the Part D
program where appropriate.
We also note that the HITAC has previously addressed real-time
prescription benefit standards, consistent with its statutory role to
recommend standards. In 2019, the HITAC accepted the recommendations
included in the 2018 report of the Interoperability Priorities Task
Force, including recommendations to continue to monitor standards then
being developed for real-time prescription benefit transactions, and,
when the standards are sufficiently validated, to require EHR vendors
to provide functionality that integrates real time patient-specific
prescription benefit checking into the prescribing workflow.\142\ In
early 2020, the National Committee on Vital and Health Statistics
(NCVHS) and HITAC convened another task force, the Intersection of
Clinical and Administrative Data (ICAD) Task Force, which was charged
with convening industry experts and producing recommendations related
to electronic prior authorizations. The task force report was presented
to HITAC in November 2020 \143\ and discussed the NCPDP Real-Time
Prescription Benefit standard as an important tool for addressing
administrative transactions around prescribing.
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\142\ See https://www.healthit.gov/sites/default/files/page/2019-12/2019-10-16_ISP_TF_Final_Report_signed_508.pdf.
\143\ See https://www.healthit.gov/sites/default/files/page/2020-11/2020-11-17_ICAD_TF_FINAL_Report_HITAC.pdf.
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We are proposing to adopt the NCPDP Real-Time Prescription Benefit
standard version 12 \144\ in 45 CFR 170.205(c)(1) and to incorporate
this standard by reference in 45 CFR 170.299. As noted in section
III.S.4. of this proposed rule, CMS proposes at Sec. 423.160(b)(7)(i)
to require this standard for use by Part D plan sponsors to fulfill the
requirements for real-time benefit tools at Sec. 423.160(b)(7). As
previously noted, ONC will consider proposals to require use of this
standard to support real-time benefit tool functionality in the ONC
Health IT Certification Program, consistent with Section 119 of the
CAA, in future rulemaking.
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\144\ See http://www.ncpdp.org/Standards/Standards-Info.
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We solicit comment on these proposals.
[[Page 79556]]
c. Interoperability Standards Advisory
ONC's Interoperability Standards Advisory (ISA) supports the
identification, assessment, and public awareness of interoperability
standards and implementation specifications that can be used by the
health care industry to address specific interoperability needs.\145\
The ISA is updated on an annual basis based on recommendations received
from public comments and subject matter expert feedback. This public
comment process reflects ongoing dialogue, debate, and consensus among
industry stakeholders when more than one standard or implementation
specification could be used to address a specific interoperability
need.
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\145\ See https://www.healthit.gov/isa.
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ONC currently identifies the standards proposed for adoption in
this section within the ISA as available standards for a variety of
potential use cases. The NCPDP SCRIPT standard version 2022011 and the
NCPDP Real-Time Prescription Benefit standard version 12 are currently
identified under the ``Pharmacy Interoperability'' domain.\146\ We
encourage interested parties to review the ISA to better understand key
applications for the implementation specifications proposed for
adoption in this proposed rule.
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\146\ See https://www.healthit.gov/isa/section/pharmacyinteroperability.
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7. ONC Health IT Certification Program
As previously noted, we are not proposing new or revised
certification criteria based on the proposed adoption of standards
within this rulemaking. Regarding the Real-Time Prescription Benefit
Standard, Section 119 of the CAA does not require ONC to adopt
certification criteria for RTBT at the same time as the standard, but
instead allows that the criteria be established after the standard has
been adopted by HHS. We are therefore proposing to adopt the standard
for HHS use and, as previously discussed, ONC would address new or
revised certification criteria referencing the standard, if finalized,
in separate rulemaking. We believe this will not only support alignment
across HHS, but will allow for continued input from interested parties
on how this standard should be incorporated into specific certification
criteria for certified health IT functionality prior to any such
proposals in future rulemaking. ONC will continue to collaborate with
CMS to ensure that any future proposals in the ONC Health IT
Certification Program continue to advance alignment with program
requirements under the Part D Program.
We believe the approach reflected in the standards proposals in
this proposed rule will support Federal alignment and coordination of
Federal activities with adopted standards and implementation
specifications for a wide range of systems, use cases, and data types
within the broad scope of health information exchange. Historically,
State, Federal, and local partners have leveraged the standards adopted
by ONC on behalf of HHS to inform program requirements, technical
requirements for grants and funding opportunities, and systems
implementation for health information exchange. We believe the adoption
of these standards will support HHS partners in setting technical
requirements and advancing the use of innovative health IT solutions
for electronic prescribing and related activities.
U. Incorporation by Reference (45 CFR 170.299)
The Office of the Federal Register has established requirements for
materials (for example, standards and implementation specifications)
that agencies propose to incorporate by reference in the Code of
Federal Regulations (79 FR 66267; 1 CFR 51.5(a)). Specifically, 1 CFR
51.5(a) requires agencies to discuss, in the preamble of a proposed
rule, the ways that the materials it proposes to incorporate by
reference are reasonably available to interested parties or how it
worked to make those materials reasonably available to interested
parties; and summarize, in the preamble of the proposed rule, the
material it proposes to incorporate by reference.
To make the materials we intend to incorporate by reference
reasonably available, we provide a uniform resource locator (URL) for
the standards and implementation specifications. In many cases, these
standards and implementation specifications are directly accessible
through the URLs provided. In instances where they are not directly
available, we note the steps and requirements necessary to gain access
to the standard or implementation specification. In most of these
instances, access to the standard or implementation specification can
be gained through no-cost (monetary) participation, subscription, or
membership with the applicable standards developing organization (SDO)
or custodial organization. In certain instances, where noted, access
requires a fee or paid membership. As an alternative, a copy of the
standards may be viewed for free at the U.S. Department of Health and
Human Services, Office of the National Coordinator for Health
Information Technology, 330 C Street SW, Washington, DC 20201. Please
call (202) 690-7171 in advance to arrange inspection.
The National Technology Transfer and Advancement Act (NTTAA) of
1995 (15 U.S.C. 3701 et seq.) and the Office of Management and Budget
(OMB) Circular A-119 require the use of, wherever practical, technical
standards that are developed or adopted by voluntary consensus
standards bodies to carry out policy objectives or activities, with
certain exceptions. The NTTAA and OMB Circular A-119 provide exceptions
to selecting only standards developed or adopted by voluntary consensus
standards bodies, namely when doing so would be inconsistent with
applicable law or otherwise impractical. We have followed the NTTAA and
OMB Circular A-119 in proposing standards and implementation
specifications for adoption, and note that the technical standards
proposed for adoption in 45 CFR 170.205 in this proposed rule were
developed by NCPDP, which is an ANSI-accredited, not-for-profit
membership organization using a consensus-based process for standards
development.
As required by 1 CFR 51.5(a), we provide summaries of the standards
we propose to adopt and subsequently incorporate by reference in the
Code of Federal Regulations. We also provide relevant information about
these standards and implementation specifications in the preamble where
these standards are proposed for adoption.
National Council for Prescription Drug Programs (NCPDP),
SCRIPT Standard Implementation Guide, Version 2022011, January 2022
(Approval Date for ANSI: December 2, 2021)
URL: http://www.ncpdp.org/Standards/Standards-Info.
Access requires registration, a membership fee, a user account, and
a license agreement to obtain a copy of the standard.
Summary: NCPDP SCRIPT is a standard created to facilitate the
transfer of prescription data between pharmacies, prescribers, and
payers. The current standard supports transactions regarding new
prescriptions, prescription changes, renewal requests, prescription
fill status notification, and prescription cancellation. Enhancements
have been
[[Page 79557]]
added for drug utilization review/use (DUR/DUE) alerts and formulary
information as well as transactions to relay medication history and for
a facility to notify a pharmacy of resident information. Enhancements
have been added to support electronic prior authorization functions as
well as electronic transfer of prescriptions between pharmacies.
National Council for Prescription Drug Programs (NCPDP), Real-
Time Prescription Benefit Standard, Implementation Guide, Version 12,
October 2021 (Approval Date for ANSI: September 27, 2021)
URL: http://www.ncpdp.org/Standards/Standards-Info.
Access requires registration, a membership fee, a user account, and
a license agreement to obtain a copy of the standard.
Summary: The NCPDP Real-Time Prescription Benefit Standard
Implementation Guide is intended to meet the industry need within the
pharmacy services sector to facilitate the ability for pharmacy benefit
payers/processors to communicate to providers and to ensure a
consistent implementation of the standard throughout the industry. The
Real-Time Prescription Benefit (RTPB) Standard enables the exchange of
patient eligibility, product coverage, and benefit financials for a
chosen product and pharmacy, and identifies coverage restrictions, and
alternatives when they exist.
V. Limitation on PDP Contracts Held by Subsidiaries of the Same Parent
(Sec. 423.272)
1. Overview and Summary
We are proposing to limit the number of PDP contracts under which a
Part D sponsor or its parent organization (as defined in Sec. 423.4),
directly or through subsidiaries, can offer individual market PBPs in a
PDP region to one contract per region. Individual market PBPs are plans
that are marketed to all Medicare beneficiaries in a region, unlike
employer group waiver plans, which are only open to retirees whose
employers contract with them to provide Part D benefits. This
requirement would promote longstanding CMS policy to encourage
meaningful competition among and a level playing field for Part D
sponsors in the Part D program. The policy to promote meaningful
competition has been implemented through our crosswalk policy
(discussed in section IV.AD. of this proposed rule), the limit of three
per region on the number of PDP plan benefit packages (PBP) that a
sponsor can offer (codified effective January 1, 2022 at current Sec.
423.265(b)(2)), the requirement that PDP PBPs offered by a sponsor be
``substantially different'' (codified effective January 1, 2011 at
Sec. 423.272(b)(3)), and the prohibition on approval of applications
that would result in a sponsor or its parent holding more than one PDP
contract per region (codified effective July 22, 2014 at Sec.
423.503(a)(3)).
2. Discussion
Since the beginning of the Part D program, CMS has promoted
meaningful competition among Part D sponsors and meaningful choice
among plans for Part D beneficiaries. CMS has pursued multiple avenues
to promote these goals. CMS attempts to ensure that PDP sponsors only
offer the number and type of PBPs necessary to provide beneficiaries
meaningfully different plan options. Effective January 1, 2022, we
codified at Sec. 423.265(b) our longstanding policy limiting the
number of PBPs a PDP sponsor may offer to no more than three in a
service area. These offerings may not include more than one PBP
offering basic prescription drug coverage, as defined at Sec. 423.100,
and no more than two enhanced alternative plans, as defined at Sec.
423.104(f)(1). The enhanced plan offerings must be ``substantially
different'' from the basic prescription drug coverage pursuant to Sec.
423.272(b)(3). All three PBPs are usually offered under the same
contract, although if a sponsor or its parent holds multiple contracts,
the sponsor may only operate three PBPs across all the contracts in the
region. CMS allows Part D sponsors, or the parent organizations of Part
D sponsors, a two-year transition period to meet these requirements
after they have acquired another Part D sponsor pursuant to Sec.
423.272(b)(3)(ii). Finally, under Sec. 423.503(a)(3), CMS does not
approve an application to qualify as a PDP sponsor that would result in
the applicant's parent organization, directly or through subsidiaries,
holding more than one PDP sponsor contract offering individual market
plans in a PDP region.
Consistent with these requirements, CMS has traditionally
encouraged PDP sponsors and their parent organizations that acquire new
PDP contracts by, for example, merging with or acquiring other PDP
sponsors to consolidate their PDP contracts so that they only offer
individual market PBPs under one PDP contract per PDP region.
Individual market PBPs are plans that are marketed to all Medicare
beneficiaries in a region, unlike employer group waiver plans, which
are only open to retirees whose employers contract with them to provide
Part D benefits. Such contract consolidations are accomplished through
contract consolidation crosswalks, described in section IV.AD. of this
proposed rule, which allow sponsors to transfer enrollment from a non-
renewing PDP to the surviving PDP.
CMS advises that plans take not more than two full benefit years to
accomplish a consolidation. CMS uses its negotiation authority under
section 1860D-11(d)(2)(B) of the Act, the three-plan limit, and the
substantial difference requirement to encourage consolidations. Both
the three-plan limit and the substantial difference requirements are
applied at the parent organization level--that is, a parent
organization with subsidiaries that hold multiple contracts in a PDP
region cannot, after the two-year transition period following
acquisition, offer more than three PDP PBPs in that region. PDP
sponsors usually consolidate their PDPs in response to our
encouragement and to accommodate the three-plan limit and substantial
difference requirements, but some have delayed consolidation or
declined to consolidate altogether. In proposing to require
consolidations, CMS intends not only to promote meaningful choice and
competition, but to ensure a level playing field for all affected PDP
sponsors.
At Sec. 423.272(b), we propose to add a new paragraph (5) to
codify limits on the number of PDP contracts held by subsidiaries of
the same parent organization in a PDP region. We propose to adopt this
requirement pursuant to our authority to add additional contract terms
and conditions, not inconsistent with Part C, as necessary and
appropriate (see section 1860D-12(b)(3)(D) of the Act). We propose to
add a new paragraph (5)(i) to provide that CMS would no longer approve
bids that would result in a PDP sponsor or a PDP sponsor's parent
organization, directly or through its subsidiaries, offering individual
market PBPs under more than one PDP contract in a PDP region. This
proposed requirement would not apply to EGWP PBPs. For instance, if
Parent Organization 1 had two subsidiaries, Sponsor 1 and Sponsor 2,
that each had a PDP contract in Region 3 for at least the past two
years, CMS would not approve the bids from both Sponsor 1 and Sponsor 2
unless one of the contracts was non-renewed or its service area reduced
so it no longer served Region 3. This requirement would align bid
review and approval criteria with our current prohibition at Sec.
423.503(a)(3) on approving applications that would result in
[[Page 79558]]
multiple PDPs held by the same sponsor or parent organization in a
region.
This proposal promotes meaningful competition among Part D sponsors
by preventing sponsors that are controlled and operated by the same
parent organization from offering competing PDP contracts in a region.
Two subsidiaries of the same parent organizations offering plans in the
same PDP region are not truly competitors, as decisions concerning
their operations are ultimately controlled by a single entity or parent
organization. PDP sponsors under common parent organizations usually
share leadership and operational staff, use the same pharmacy benefit
manager, and use the same systems and procedures to administer the Part
D benefit across different contracts. Because of Sec. 423.503(a)(3),
the only way a parent organization could have two PDP sponsor contracts
in a region is if they applied for them before we adopted Sec.
423.503(a)(3) in 2014 or if they purchase an existing PDP sponsor. CMS
does not believe that it is fair to continue to allow these exceptions
to our general policy limiting the number of contracts that a parent
organization may operate in a region.
CMS is also concerned that Part D sponsors and parent organizations
offering multiple PDPs in a region may do so to segment risk or
manipulate Part D Star Ratings. Informal communications with
organizations seeking multiple contracts in a region have indicated
that some of these organizations wish to segregate low-income
beneficiaries into their own contract and/or confine the experience of
a low performing plan to a single contract. Allowing organizations to
isolate low income, or otherwise high risk or high cost, individuals
into a single contract subverts Part D nondiscrimination requirements
at section 1860D-11(e)(2)(D)(i) of the Act. Allowing segregation of low
performing plans in a different contract from higher performing plans
offered by a subsidiary of the same parent organization also undermines
the integrity of CMS's Star Ratings. CMS assigns star ratings at the
contract level. Ratings are meant to reflect all aspects of the PDP
operations controlled by a contracting entity. This purpose is
undermined when a parent organization is allowed to effectively
administer two or more PDP contracts in a region in a way that would
allow them to inflate their Star Ratings under one of the contracts by
confining poor-performing plans to another contract. Such manipulation
of the Star Ratings could mislead beneficiaries about the performance
of the organization responsible for administering a plan.
CMS recognizes that consolidating contracts held by subsidiaries of
the same parent organization can be complex and requires careful
planning, particularly if one or more of these contracts was recently
acquired through the purchase of or merger with another PDP sponsor.
Consistent with CMS's current practice, CMS is therefore proposing at
new paragraphs (5)(ii) and (iii) to allow sponsors or parent
organizations that acquire new PDP contracts or that operate more than
one contract in a PDP region as of January 1, 2024 a transition period
of two bid cycles to reduce the number of PDP contracts offering
individual market PBPs to one per region. This proposed requirement
would not apply to EGWP PBPs, so that subsidiaries of a parent
organization could continue to operate multiple PDP contracts in a
region so long as all but one of those contracts only operated EGWP
PBPs in that region.
Consolidating PDP contracts results in the beneficiaries from one
contract being transferred, or ``crosswalked,'' into a PBP in another
contract held by a subsidiary of the same parent organization. We are
proposing to codify this process at section IV.AD. of this proposed
rule. Consolidations can involve substantial disruption to operations
and affected enrollees' experience. Particularly where a newly acquired
PDP contract is served by a different pharmacy benefit manager,
sponsors must plan carefully to update systems and transfer information
in a way that minimizes disruptions for beneficiaries. Benefits can
also vary significantly between PBPs offered under different PDP
contracts immediately following an acquisition. Based on its experience
in the program, CMS has found that a transition period of two bid
cycles is sufficient for plans to minimize disruptions by planning for
transitions and, where appropriate, gradually adjusting the benefits
offered by PBPs under different contracts each year so that benefit
structures between two contracts are more closely aligned before
beneficiaries are crosswalked to a different contract.
Consistent with current practice when encouraging consolidations
and assessing substantial difference under Sec. 423.272(b)(3), CMS
would only apply the proposed limit on PDP contracts after the sponsor
or its parent has submitted bids under multiple contracts for two
contract years. For example, if a parent organization currently
operates Contract 1 in a region and acquires Contract 2 in the same
region on September 1, 2024, the organization would be permitted to
operate multiple contracts for the remainder of 2024 and for 2025, as
well as for 2026 and 2027. The parent organization would not have had
the opportunity to adjust the 2025 bid in light of the acquisition
because it did not acquire the contract until after the 2025 bid
deadline. CMS would therefore allow them to submit bids for 2026 and
2027 in 2025 and 2026, respectively, in order to plan for an orderly
transition.
CMS acknowledges that a few Part D sponsors and parent
organizations have operated multiple PDP contracts offering individual
market PBPs in a region for many years. For the reasons already
discussed, CMS does not believe that this is consistent with our policy
promoting meaningful competition and beneficiary choices. Nor do we
believe that allowing parent organizations whose contracts predate the
2014 restriction on approval of applications that would result in
multiple PDP contracts to continue to operate multiple contracts in
region is fair to other parent organizations. CMS also believes that
continuing to allow these sponsors to operate multiple contracts in a
region is unfair to organizations that may be required to reduce the
number of contracts offered in a region following an acquisition
pursuant to the proposed provisions at Sec. 423.272(b)(5)(i) and (ii).
CMS therefore proposes to require these parent organizations to reduce
the number of PDPs offered in a region to one PDP per parent, per
region, after a transition period of two bid cycles as described
previously. For example, if this proposed rule is finalized prior to
the 2024 bid submission deadline of June 5, 2023, a parent organization
holding two or more PDP contracts at that time (directly or through
subsidiaries) would be allowed to submit 2024 and 2025 bids for
multiple contracts in 2023 and 2024, but would be required to submit
2026 bids in 2025 that only included one PDP per region.
CMS solicits comments on the length of the transition period
proposed at paragraph (b)(5)(iii). In particular, CMS solicits comments
on whether the transition periods for new acquisitions and
organizations offering multiple PDP contracts on January 1, 2024 should
be the different to account for the fact that organizations offering
multiple PDP contracts on January 1, 2024 do not face the same
transition difficulties as organizations that acquire new PDP
contracts.
In summary, we are proposing to:
Add Sec. 423.272(b)(5) to limit the number of PDP
contracts held by subsidiaries of the same parent
[[Page 79559]]
organization to one PDP contract per region;
At proposed Sec. 423.272(b)(5)(ii) & (iii), provide a
two-year transition period for parent organizations that do not
currently meet the requirement or that violate the requirement
following a future acquisition to comply with the requirement.
We solicit comment on these proposals.
W. Medicare Parts A, B, C, and D Overpayment Provisions of the
Affordable Care Act (Sec. Sec. 422.326(c), 423.360(c), (Sec.
401.305(a)(2))
Section 6402(a) of the Patient Protection and Affordable Care Act
(Pub. L. 111-148) as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) (collectively known as the
Affordable Care Act) established section 1128J(d) of the Act. Section
1128J(d)(1) of the Act requires a person who has received an
overpayment to report and return the overpayment to the Secretary, the
State, an intermediary, a carrier, or a contractor, as appropriate, and
to notify the Secretary, State, intermediary, carrier or contractor to
whom the overpayment was returned in writing of the reason for the
overpayment. Section 1128J(d)(4)(B) of the Act defines the term
``overpayment'' as any funds that a person receives or retains under
title XVIII or XIX to which the person, after applicable
reconciliation, is not entitled under such title. Section
1128J(d)(4)(C) of the Act defines, the term ``person'' for purposes of
Medicare Part A and Part B to include providers and suppliers as those
terms are defined in the Act. Section 1128J(d)(4)(C) of the Act also
defines the term ``person'' for purposes of Medicare Part C and Part D
to include a Medicare Advantage organization (``MAO'') (as defined in
section 1859(a)(1) of the Act) and a Part D sponsor (as defined in
section 1860D-41(a)(13) of the Act).
Section 1128J(d)(2) of the Act requires that an overpayment be
reported and returned by the later of: (1) the date which is 60 days
after the date on which the overpayment was identified; or (2) the date
any corresponding cost report is due, if applicable. Section
1128J(d)(3) of the Act specifies that any overpayment retained by a
person after the deadline for reporting and returning an overpayment is
an obligation (as defined in 31 U.S.C. 3729(b)(3)) for purposes of the
False Claims Act, 31 U.S.C. 3729.
Section 1128J(d)(4)(A) of the Act provides that the terms
``knowing'' and ``knowingly'' have the meaning given those terms in the
False Claims Act at 31 U.S.C. 3729(b)(1)(A). The False Claims Act (31
U.S.C. 3729(b)(1)(A)) defines the terms ``knowing'' and ``knowingly''
to include information about which a person ``has actual knowledge,''
``acts in deliberate ignorance of the truth or falsity of the
information,'' or ``acts in reckless disregard of the truth or falsity
of the information.''
1. Regulations Promulgated Under Section 1128J(d) of the Act
The agency has published two final rules under section 1128J(d) of
the Act. On May 23, 2014, CMS published a final rule titled ``Medicare
Program; Contract Year 2015 Policy and Technical Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit
Programs'' (79 FR 29844) (hereinafter referred to as the final ``Parts
C & D Overpayment Rule''), which provided, among other things, that an
MAO or Part D sponsor has identified an overpayment when the MAO or
Part D sponsor has determined, or should have determined through the
exercise of reasonable diligence, that the MAO or Part D sponsor has
received an overpayment.
On February 12, 2016, we published a final rule titled ``Medicare
Program; Reporting and Returning of Overpayments, in Medicare Parts A
and B'' (81 FR 7654) (hereinafter referred to as the final ``Parts A &
B Overpayment Rule''), which provided, among other things, that a
provider or supplier has identified an overpayment when the provider or
supplier has determined, or should have determined through the exercise
of reasonable diligence, that the provider or supplier has received an
overpayment and quantified the amount of the overpayment.
2. Relevant Litigation
In UnitedHealthcare Insurance Co. v. Azar, a group of MAOs
challenged the final Parts C & D Overpayment Rule, and the District
Court held, in relevant part, that by requiring MAOs to use
``reasonable diligence'' in searching for and identifying overpayments,
the final rule impermissibly created False Claims Act liability for
mere negligence. UnitedHealthcare Ins. Co. v. Azar, 330 F. Supp. 3d
173, 191 (D.D.C. 2018), rev'd in part on other grounds sub nom.
UnitedHealthcare Ins. Co. v. Becerra, 16 F.4th 867 (D.C. Cir. 2021),
cert. denied, 142 S. Ct. 2851 (U.S. June 21, 2022) (No. 21-1140). The
District Court noted that ``(t)he False Claims Act--which the ACA
refers to for enforcement, see 42 U.S.C. 1320a-7k(d)(3)--imposes
liability for erroneous (`false') claims for payment submitted to the
government that are submitted `knowingly' . . . a term of art defined
in the FCA to include false information about which a person `has
actual knowledge,' `acts in deliberate ignorance of the truth or
falsity of the information,' or `acts in reckless disregard of the
truth or falsity of the information.' '' Id. at 190. We now propose to
amend the final Parts C & D Overpayment Rule at Sec. Sec. 422.326(c)
and 423.360(c), as well as the final Parts A & B Overpayment Rule at
Sec. 401.305(a)(2), to remove the reference to ``reasonable
diligence'' and replace it with language at section 1128J(d)(4)(A) that
gives the terms ``knowing'' and ``knowingly'' the same meaning given
those terms in the False Claims Act at 31 U.S.C. 3729(b)(1)(A). See
UnitedHealthcare, 330 F. Supp. 3d at 191 (finding that this language
would be consistent with a 2000 agency rule, the FCA, and the
Affordable Care Act's reference to the FCA).
3. Provisions of Proposed Regulations
a. Medicare Part A and Part B--Amending the Standard for When an
Overpayment Is Identified (Sec. 401.305(a)(2))
This section of the proposed rule would amend Sec. 401.305(a)(2)
to change the standard for an ``identified overpayment.'' Consistent
with the proposed Medicare Part C and Part D provisions under this
Overpayment Rule, we propose to remove the existing standard and adopt,
by reference, the False Claims Act definition of ``knowing'' and
``knowingly.'' Under the proposed rule, a provider or supplier has
identified an overpayment if it has actual knowledge of the existence
of the overpayment or acts in reckless disregard or deliberate
ignorance of the overpayment.
b. Medicare Advantage Program and Part D--Amending the Standard for
When an Overpayment Is Identified (Sec. Sec. 422.326(c) and
423.360(c))
This section of the proposed rule would amend Sec. Sec. 422.326(c)
and 423.360(c) to change the standard for an ``identified overpayment''
to align with the statutory obligation provided by Congress in section
1128J(d)(4)(A) of the Act, which provides that the terms ``knowing''
and ``knowingly'' have the meaning given those terms in the False
Claims Act at 31 U.S.C. 3729(b)(1)(A). We propose to remove the
existing standard and adopt, by reference, the False Claims Act
definition of ``knowing'' and ``knowingly.'' Under the proposed rule,
an MA organization or Part D sponsor has identified an overpayment if
it has actual knowledge
[[Page 79560]]
of the existence of the overpayment or acts in reckless disregard or
deliberate ignorance of the overpayment.
IV. Strengthening Current Medicare Advantage and Medicare Prescription
Drug Benefit Program Policies
A. Amending the Definition of Severe or Disabling Chronic Condition;
Defining C-SNPs and Plan Types; and Codifying List of Chronic
Conditions (Sec. 422.2)
A specialized MA plan for special needs individuals, generally
known as a special needs plan or SNP, is an MA plan specifically
designed to provide targeted care and limit enrollment to special needs
individuals. CMS defines Specialized MA Plans for Special Needs
Individuals at Sec. 422.2 as an MA coordinated care plan (CCP) that
exclusively enrolls special needs individuals as set forth in Sec.
422.4(a)(1)(iv) and that provides Part D benefits under part 423 to all
enrollees; and which has been designated by CMS as meeting the
requirements of an MA SNP as determined on a case-by-case basis using
criteria that include the appropriateness of the target population, the
existence of clinical programs or special expertise to serve the target
population, and whether the proposal discriminates against sicker
members of the target population. As provided in section 1859(b)(6) of
the Act and the definition in Sec. 422.2, a special needs individual
could be any one of the following: an institutionalized or
institutionalized-equivalent individual; a dual eligible individual; or
an individual with a severe or disabling chronic condition and who
would benefit from enrollment in a specialized MA plan. Chronic
Condition Special Needs Plans (C-SNPs) are SNPs that restrict
enrollment to special needs individuals with specific severe or
disabling chronic conditions, defined at Sec. 422.2.
The Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123)
amended section 1859 of the Act to revise the definition of ``severe or
disabling chronic condition'' for purposes of identifying individuals
eligible to enroll in C-SNPs beginning January 1, 2022; add care
management requirements for special needs individuals who have a severe
or disabling chronic condition; direct the Secretary to convene a panel
of clinical advisors to establish and update a list of severe or
disabling chronic conditions that meet certain criteria; mandate the
inclusion of several current C-SNP chronic conditions onto the list;
and direct that the panel take into account the availability of
benefits in the Medicare Advantage Value-Based Insurance Design model.
Section 1859(f)(9) of the Act, as added by the BBA, instructs the
Secretary to convene the panel of clinical advisors not later than
December 31, 2020 and every 5 years thereafter, to establish and update
a list of conditions that meet the statutory criteria to be a severe or
disabling chronic condition and conditions that meet the statutory
criteria for certain other conditions that require prescription drugs,
providers, and models of care that are unique to the specific
populations covered by MA special needs plans. We are proposing to
codify the BBA of 2018's amendment of the definition of severe or
disabling chronic condition; define C-SNP; update and codify the
recommended list of chronic conditions by a panel of clinical advisors
as specified by the BBA; and codify existing subregulatory guidance
permitting the inclusion of certain chronic condition combinations for
the purposes of offering single standalone C-SNP plan benefit packages
(PBPs).
1. Amending the Definition of Severe or Disabling Chronic Condition
Section 231 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) amended sections 1851(a)(2)(A) and
1859(b) of the Act to authorize the creation of specialized MA plans
for special needs individuals, including specialized MA plans that
exclusively enroll individuals with severe or disabling chronic
conditions. The MMA did not define severe and disabling chronic
conditions but noted that the Secretary may determine specific
requirements that special needs individuals would need to meet in order
to enroll in a chronic condition plan. In the proposed rule titled,
``Medicare Program; Establishment of the Medicare Advantage Program''
(69 FR 46865), which appeared in the August 3, 2004 issue of the
Federal Register (hereinafter, the August 2004 MA proposed rule), CMS
did not propose a definition of ``severe or disabling chronic
condition''; however, we asked for comments on whether CMS should set
standards for the designation of an individual with severe or disabling
chronic conditions and what criteria should be used. In the ensuing
final rule titled Medicare Program: Establishment of the Medicare
Advantage Program (70 FR 4588), which appeared in Federal Register on
the January 28, 2005 (hereinafter the January 2005 MA final rule), we
declined to establish a detailed definition of severe and disabling
chronic because of concerns that a definition might limit plan
flexibility. The January 2005 MA final rule stated that CMS would
review and evaluate proposals for specialized MA plans that serve
beneficiaries who may qualify for enrollment in SNPs covering severe or
disabling chronic disease categories, and that among the criteria to be
considered would be the appropriateness of the target population, the
existence of clinical programs or special expertise to serve the target
population, and whether the proposal discriminates against ``sicker''
members of the target population (70 FR 4596). CMS then developed a
process that allowed MA organizations to identify qualifying chronic
conditions.
Section 164(e) of the Medicare Improvement for Patients and
Providers Act of 2008 (MIPPA) added a new clause to section
1859(b)(6)(B)(iii) of the Act to clarify the definition of the special
needs individuals eligible for C-SNPs. Beginning on January 1, 2010,
the third type of special needs individual (in addition to the
categories for individuals who were institutionalized or dually
eligible for Medicare and Medicaid) was defined as an individual who
has one or more co-morbid and medically complex chronic condition(s)
that are substantially disabling or life-threatening, has a high risk
of hospitalization or other significant adverse health outcomes, and
requires specialized delivery systems across domains of care. CMS
continued to use the term ``special needs individual who has a severe
or disabling chronic condition'' for this group. Based on the MIPPA
amendments to the Act, CMS adopted the definition of severe or
disabling chronic condition at Sec. 422.2 in the final rule with
comment period titled Medicare Program; Medicare Advantage and
Prescription Drug Benefit Programs: Negotiated Pricing and Remaining
Revisions, which appeared in the Federal Register on January 12, 2009
(74 FR 1493, hereafter, the January 2009 final rule (FR)). (The January
2009 FC discussed and finalized a number of provisions related to
eligibility for and performance requirements for C-SNPs and SNPs
generally.)
Section 164(e) of MIPPA also directed the Secretary to convene a
panel of clinical advisors to determine the chronic conditions that
meet the definition severe or disabling chronic conditions used in the
amendment to the definition at section 1859(b)(6)(B)(iii) of the Act.
CMS subsequently convened the panel in October 2008 and implemented the
fifteen SNP-specific chronic conditions recommended by the panel that
met the
[[Page 79561]]
definition of severe or disabling and needed specialized care
management. The list was later incorporated into Chapter 16b of the
Medicare Managed Care Manual (MMCM).
In 2018, the BBA of 2018 amended section 1859(b)(6)(B)(iii) of the
Act by adding a new definition of special needs individuals to apply
beginning January 1, 2022. Under the new definition of special needs
individual, an eligible individual must, on or after January 1, 2022,
``have one or more comorbid and medically complex chronic conditions
that is life threatening or significantly limits overall health or
function, have a high risk of hospitalization or other adverse health
outcomes, and require intensive care coordination and that is listed
under [section 1859(f)(9)(A) of the Act].'' Subsection (f)(9)(A)
directs the Secretary to convene a panel of clinical advisors every 5
years to review and revise a list of chronic conditions that meet two
sets of criteria:
The amended definition of a severe or disabling chronic
condition in subsection (b)(6)(B)(iii); and
Conditions that require prescription drugs, providers, and
models of care that are unique to the specific population of enrollees
in a specialized MA plan for special needs individuals and either (1)
as a result of enrollment in a C-SNP, the enrollee with the condition
would have a reasonable expectation of meeting a certain standard
regarding health status, outcomes and costs compared to other coverage
options, or (2) the condition has a low prevalence in the general
population of Medicare beneficiaries or a disproportionally high per-
beneficiary cost.
We are proposing now to amend the definition of severe or disabling
chronic condition at Sec. 422.2 to match the definition at section
1859(b)(6)(B)(iii)(II) of the Act and to include the specific
conditions identified by the panel convened under section 1859(f)(9)(A)
of the Act.
Currently, CMS provides guidance on severe or disabling chronic
conditions that meet the current regulatory definition of the term in
Chapter 16b of the Medicare Managed Care Manual (MMCM), which includes
a list of SNP-specific chronic conditions in section 20.1.2. That list
of conditions was drawn from a panel of clinical advisors established
under section 164(e)(2) of the MIPPA of 2008. Starting in 2010, CMS
adopted subregulatory guidance whereby a C-SNP could only offer a plan
benefit package (PBP) that covered one of the fifteen SNP-specific
chronic conditions identified in the guidance. Several of the chronic
condition categories include a list of sub conditions that provide
further information regarding the types of diseases that qualify under
the chronic condition categories. Examples of such conditions include
autoimmune disorders, cardiovascular disorders, severe hematologic
disorders, chronic lung disorders, chronic disabling mental health
conditions, and chronic disabling neurologic disorders. A C-SNP that
targets several sub-categorical disorders must enroll an eligible
beneficiary who has one or more of these sub-categorical disorders; the
C-SNP is not permitted to exclude an eligible beneficiary having the
covered condition or a covered sub-categorical condition. For example,
a C-SNP that enrolls special needs individuals with a chronic and
disabling mental health condition must enroll special needs individuals
with one or more of the following sub-categorical conditions: bipolar
disorders, major depressive disorder, paranoid disorder, schizophrenia,
or schizoaffective disorder. Currently, C-SNPs may only cover one of
the fifteen qualifying chronic conditions in a single PBP, unless the
C-SNP receives approval from CMS to focus on a group of severe or
disabling chronic conditions. Generally, CMS believes that structuring
a C-SNP to target multiple commonly co-morbid conditions that are not
clinically linked in their treatment would result in a general market
product rather than an MA plan that is sufficiently tailored for
special needs individuals. Therefore, CMS will approve targeting of
multiple severe or disabling chronic conditions by a C-SNP only for:
(1) one of the CMS-developed group of commonly co-morbid and clinically
linked conditions listed in section 20.1.3.1 of Chapter 16b where the
special needs individuals may have one or more of the conditions in the
grouping or (2) a MAO-customized group of multiple co-morbid and
clinically linked conditions where the special needs individuals served
by the C-SNP have all of the specified conditions.
In meeting its obligation under section 1859(f)(9)(A) of the Act to
convene a panel of clinical advisors not later than December 31, 2020,
to establish the list of conditions that meet the statutory criteria,
CMS was committed to engaging the public--industry, advocates,
beneficiaries, and medical professional societies--in the discussion
about appropriate SNP- specific chronic conditions. Panel members were
tasked with assessing the statutory criteria for reviewing the
appropriateness of potential conditions as required by section
1859(f)(9)(A) of the Act. The criteria are:
The condition meets the definition of a severe or
disabling chronic condition under section 1859(b)(6)(B)(iii)(II) of the
Act on or after January 1, 2022; and
Conditions that require prescription drugs, providers, and
models of care that are unique to the special needs individuals with
several or disabling chronic conditions as defined in subsection
(b)(6)(B)(iii)(II) of section 1859 of the Act as of that date and:
++ As a result of access to, and enrollment in, such a specialized
MA plan for special needs individuals, individuals with such condition
would have a reasonable expectation of slowing or halting the
progression of the disease, improving health outcomes and decreasing
overall costs for individuals diagnosed with such condition compared to
available options of care other than through such a specialized MA plan
for special needs individuals; or
++ Have a low prevalence in the general population of beneficiaries
under this title or a disproportionally high per-beneficiary cost under
title XVIII of the Act. In addition, sections 1859(f)(9)(B) and (C) of
the Act require that:
The list of severe or disabling chronic conditions used
for C-SNPs include: HIV/AIDS, end stage renal disease (ESRD), and
chronic and disabling mental illness.
The panel consider the availability of varied benefits,
cost-sharing, and supplemental benefits under the Medicare Advantage
Value-Based Insurance Design (VBID) model being tested by the Center
for Medicare and Medicaid Innovation (CMMI).
On August 8, 2019, CMS announced a Request for Information (RFI)
related to the review of C-SNP specific chronic conditions as mandated
by the BBA of 2018 to solicit comments from the public to assist the
panel of advisors convened by CMS under section 1859(f)(9)(A) of the
Act.\147\ The 2019 SNP Chronic Condition Panel met for three sessions
between September 9 and September 23, 2019. CMS provided panelists with
a summary of comments received in response to the RFI. The panelists
reviewed and discussed the written public comments from 14 stakeholders
representing the industry, advocacy groups, medical societies, and
beneficiaries. The panelists also
[[Page 79562]]
examined the chronic conditions already covered by existing C-SNPs.
They employed their collective national and international experience
with chronic condition research and clinical practice to weigh
inclusion of chronic conditions on the list. As in 2008, the panelists
also considered the condition's prevalence in the Medicare population,
a factor that would potentially affect the capacity of an MA
organization to attract eligible enrollees and be viable in a given
service area as well as being identified in section
1959(f)(9)(A)(ii)(II) of the Act as a criterion to be considered. The
panelists were sensitive to the reality that C-SNPs require sufficient
disease prevalence and access to a specialized provider network within
a marketable service area to manage risk under a capitated payment
system (even with risk-adjustment of those capitated payments), and
effectively and efficiently serve the targeted special needs
beneficiaries. The panelists also reflected on the need for
beneficiaries, health care practitioners, and the health care industry
to recognize the SNP-specific chronic conditions and consider them
appropriate for a specialized service delivery system in order to
stimulate participation. While the Panel did consider a condition's
prevalence in the Medicare population as required by section
1859(f)(9)(A) of the Act, it was not charged with and did not make any
additional judgments based on business considerations (that is, the
potential profitability of the selected chronic conditions) as CMS
expects interested MA organizations to reach their own conclusions
about product offerings and markets in which they wish to operate.
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\147\ The full RFI can be found here: https://www.cms.gov/Medicare/Health-Plans/SpecialNeedsPlans/Downloads/RFI-Chronic-Condition-SNP-Panel.pdf.
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Upon review and deliberation, the Panel identified 22 chronic
conditions as meeting the statutory criteria. The conditions identified
are:
1. Chronic alcohol use disorder and other substance use disorders;
2. Autoimmune disorders:
Polyarteritis nodosa,
Polymyalgia rheumatica,
Polymyositis,
Dermatomyositis
Rheumatoid arthritis,
Systemic lupus erythematosus,
Psoriatic arthritis, and
Scleroderma;
3. Cancer;
4. Cardiovascular disorders:
Cardiac arrhythmias,
Coronary artery disease,
Peripheral vascular disease, and
Valvular heart disease;
5. Chronic heart failure;
6. Dementia;
7. Diabetes mellitus;
8. Overweight, Obesity, and Metabolic Syndrome;
9. Chronic gastrointestinal disease:
Chronic liver disease,
Non-alcoholic fatty liver disease (NAFLD),
Hepatitis B,
Hepatitis C,
Pancreatitis,
Irritable bowel syndrome, and
Inflammatory bowel disease;
10. Chronic kidney disease (CKD):
CKD requiring dialysis/End-stage renal disease (ESRD), and
CKD not requiring dialysis;
11. Severe hematologic disorders:
Aplastic anemia,
Hemophilia,
Immune thrombocytopenic purpura,
Myelodysplastic syndrome,
Sickle-cell disease (excluding sickle-cell trait), and
Chronic venous thromboembolic disorder;
12. HIV/AIDS;
13. Chronic lung disorders:
Asthma,
Chronic bronchitis,
Cystic Fibrosis,
Emphysema,
Pulmonary fibrosis,
Pulmonary hypertension, and
Chronic Obstructive Pulmonary Disease (COPD);
14. Chronic and disabling mental health conditions:
Bipolar disorders,
Major depressive disorders,
Paranoid disorder,
Schizophrenia,
Schizoaffective disorder,
Post-traumatic stress disorder (PTSD),
Eating Disorders, and
Anxiety disorders;
15. Neurologic disorders:
Amyotrophic lateral sclerosis (ALS),
Epilepsy,
Extensive paralysis (that is, hemiplegia, quadriplegia,
paraplegia, monoplegia),
Huntington's disease,
Multiple sclerosis,
Parkinson's disease,
Polyneuropathy,
Fibromyalgia,
Chronic fatigue syndrome,
Spinal cord injuries,
Spinal stenosis, and
Stroke-related neurologic deficit;
16. Stroke;
17. Post-organ transplantation care;
18. Immunodeficiency and Immunosuppressive disorders;
19. Conditions that may cause cognitive impairment:
Alzheimer's disease,
Intellectual and developmental disabilities,
Traumatic brain injuries,
Disabling mental illness associated with cognitive
impairment, and
Mild cognitive impairment;
20. Conditions that may cause similar functional challenges and
require similar services:
Spinal cord injuries,
Paralysis,
Limb loss,
Stroke, and
Arthritis;
21. Chronic conditions that impair vision, hearing (deafness),
taste, touch, and smell;
22. Conditions that require continued therapy services in order for
individuals to maintain or retain functioning.
The Panel recommended a number of changes to the list of chronic
conditions that are currently used by CMS to approve C-SNPs. In this
proposed rule, we are proposing to codify the list of chronic
conditions created by the panel as part of the definition of severe and
disabling chronic condition at Sec. 422.2. This proposal takes into
account the changes recommended by the panel, as discussed in this
section of this proposed rule. These changes include:
Removed the term ``limited.'' The panel chose this
revision so that unlisted chronic conditions will not disqualify the
enrollee from plan eligibility even if the unlisted or another listed
condition is not the targeted condition that qualifies the beneficiary
for a specific C-SNP. In other words, the beneficiary could have other
conditions beyond the index condition (which is required to be present)
and still be permitted to enroll in a specific C-SNP. For example, a
beneficiary with heart failure could also have psoriasis or epilepsy
and not be excluded from the Chronic Heart Failure C-SNP. Because our
proposal does not exclude a beneficiary from being a special needs
individual or eligibility for an applicable C-SNP if the beneficiary
has conditions in addition to a severe or disabling chronic condition,
we are not proposing to use the word ``including'' in the proposed
definition; our proposal is to codify the list of specific conditions
(and subconditions) that have been identified as meeting the statutory
criteria and avoid ambiguity regarding related but unlisted conditions;
Renamed ``Chronic alcohol and other drug dependence'' to
``Chronic alcohol use disorder and other substance use disorders;''
Added dermatomyositis, psoriatic arthritis, and
scleroderma to the
[[Page 79563]]
Autoimmune disorders chronic condition category;
The panel recommended changing title of ``Cancer,
excluding pre-cancer conditions or in-situ status'' to ``Cancer;
``however; they did not recommend altering the current limitations to
the chronic condition category, only a clerical change to the title;
Added valvular heart disease to the Cardiovascular
disorders chronic condition category;
Added new chronic condition category, ``Overweight,
Obesity, and Metabolic Syndrome;''
Added new chronic condition category, ``Chronic
gastrointestinal disease'' with the following conditions: chronic liver
disease, non-alcoholic fatty liver disease (NAFLD), hepatitis B,
hepatitis C, pancreatitis, irritable bowel syndrome, and inflammatory
bowel disease;
Renamed the ``End Stage Renal Disease (ESRD) requiring
dialysis'' condition category to ``Chronic kidney disease (CKD)'' with
the following conditions: CKD requiring dialysis/end-stage renal
disease (ESRD), and CKD not requiring dialysis;
Added Cystic Fibrosis and Chronic Obstructive Pulmonary
Disease (COPD) to the Chronic lung disorders chronic condition
category;
Added post-traumatic stress disorder (PTSD), eating
disorders, and anxiety disorders to the Chronic and disabling mental
health conditions category;
Added fibromyalgia, chronic fatigue syndrome, and spinal
cord injuries to the Neurologic disorders conditions category;
Added post-organ transplantation care and immunodeficiency
and immunosuppressive disorders as new chronic condition categories;
Created new chronic condition category ``Conditions that
may cause cognitive impairment,'' including the following sub-
conditions: Alzheimer's disease, intellectual disabilities,
developmental disabilities, traumatic brain injuries, disabling mental
illness associated with cognitive impairment, and mild cognitive
impairment;
Created new chronic condition category ``Conditions that
may cause similar functional challenges and require similar services,''
including the following sub-conditions: spinal cord injuries,
paralysis, limb loss, stroke, arthritis, and chronic conditions that
impair vision, hearing (deafness), taste, touch, and smell; and
Created new chronic condition category ``Conditions that
require continued therapy services in order for individuals to maintain
or retain functioning.''
As previously demonstrated in the last three bullets, the panel
recommended the creation of several new chronic condition categories
that differ from how the current list of severe or disabling chronic
conditions uses categories as a single condition or set of related
diseases. By including these new categories, we are proposing that C-
SNPs will be permitted to create benefit packages and care coordination
services to address the needs of beneficiaries who share the same
functional needs even if their specific disease or chronic condition
may differ. For example, using the condition categories ``Conditions
associated with cognitive impairment;'' ``Conditions associated with
similar functional challenges and require similar services;'' ``Chronic
conditions that impair vision, hearing (deafness), taste, touch, and
smell;'' and ``Conditions that require continued therapy services in
order for individuals to maintain or retain functioning;'' MA
organizations would have the opportunity to propose C-SNPs that seek to
ameliorate specific disease outcomes such as impaired vision without
having to target one specific chronic condition. In another example, MA
organizations would be permitted to create specific care coordination
services and benefit packages to address the functional challenges
facing beneficiaries with spinal cord injuries and those suffering
paralysis from stroke. The challenge for SNPs would be to address the
needs not of enrollees who share the same disease or chronic condition,
but those diagnosed with different diseases and chronic conditions that
share similar impacts on health and functionality. The proposed
categories in this paragraph will apply the same statutory and
regulatory considerations per the parameters of a severe and disabling
chronic condition and as noted in Title XVIII of the Act and part 422.
That is, by proposing to list these three categories that are focused
on impacts on health and functionality rather than underlying disease
or condition, we are not proposing to eliminate the need for the effect
on the enrollee to meet the statutory criteria in section 1859(f)(9) of
the Act. We believe this new approach to creating a C-SNP is in line
with types of services and benefits required of current C-SNPs in
operation, and beneficiaries facing similar challenges would benefit
from coordination of care among multiple providers for services found
in a variety of settings appropriate for the enrollee's health
challenges.
Under our proposal, this new definition of severe or disabling
chronic condition will be applicable for plan years that begin on or
after January 1, 2025. We believe the additional delay will allow plans
and CMS to put in the place the necessary operational steps to permit
transition between the current list of chronic conditions and the list
in this proposal. If adopted in the final rule, several current chronic
conditions would transition to new chronic condition categories, such
as End Stage Renal Disease (ESRD) and End Stage Liver Disease. As of
June 2022, there are 17 ESRD plans with a total enrollment of 4,529
members. There are no C-SNPs that restrict enrollment to End Stage
Liver Disease for CY 2022. However, if our proposal is finalized, MA
organizations seeking to establish a plan covering End Stage Liver
Disease would be able to do so under the proposed new category of
Chronic Gastrointestinal Disease. Although this proposal would make
changes to the list of conditions used by MA organizations to determine
C-SNP plan offerings, we believe the impact of those changes will be
minimal. In addition, we are proposing the delay implementing the new
chronic condition list in order to give CMS time to collect data and
information related to the structuring of the proposed CKD C-SNP plan
bids. Per section 1853(a)(1)(H) of the Act, the capitation rates paid
to MA plans for enrollees with ESRD are set separately from the
capitation rates and bidding benchmarks applicable for other enrollees,
which may complicate the transition to using this specific severe or
disabling chronic condition category. Current ESRD C-SNPs plan bids are
based on a distinct bidding methodology. CMS will provide additional
bid pricing information to MAOs if this proposal is finalized. We
solicit comment on the proposed updates to this definition.
Specifically, we are soliciting comment on our proposal to limit the
regulatory definition of severe or disabling chronic condition to the
list the conditions on the list established by the panel. Also, we are
seeking comment on the proposed list of chronic conditions recommended
by the 2019 panel of clinical advisors. We would like to call
particular attention to proposed condition numbers 19 through 22. Under
these proposed conditions, the C-SNP would focus on specific and
clinically appropriate therapeutic approaches that address multiple
chronic disease types causing similar
[[Page 79564]]
health outcomes and functional limitations. We are seeking feedback on
the potential clinical accomplishments that may be addressed through
this type of plan design. We are also seeking comment on challenges
that might exist both from a clinical and business standpoint. For
example, we would be interested to know whether and the extent to which
MA organizations require further guidance from CMS to identify chronic
conditions or diseases that would fit into condition numbers 19 through
22.
2. Chronic Condition Special Needs Plan Definition, Scope and
Eligibility (Sec. Sec. 422.2, 422.4, and 422.52)
A C-SNP must have specific attributes and meet certain standards
that go beyond the provision of basic benefits (as defined in Sec.
422.100(c)) and care coordination that is required of all coordinated
care plans; such additional standards include the enrollment
limitations and care management requirements set forth in section
1859(f) of the Act and codified in the regulations at Sec. Sec.
422.52(a) and (b), 422.101(f), and Sec. 422.152(g). While C-SNPs must
generally meet requirements that are specified to all SNPs, we believe
it is important to codify a definition of C-SNP that reflects how they
are limited to serving special needs individuals who have a severe or
disabling chronic condition, as defined in Sec. 422.2 (and which we
are also proposing to revise). Adopting a definition of C-SNP in Sec.
422.2 would be consistent with how we have previously adopted
definitions for the term dual eligible special needs plan (D-SNP) and
specific types of D-SNPs. We believe adopting a specific definition
will help to clarify how C-SNP specific requirements and policies are
distinguishable from requirements and policies for D-SNPs and I-SNPs as
well as different from general MA coordinated care plans. Since the
intent of the proposed definition is to provide clarification for MA
organizations and providers regarding the meaning and scope of C-SNPs,
we believe this codification will have little to no impact on MA
enrollees nor accrue operational or other costs to MA organizations.
Our proposal generally reflects current policy and practice, with a few
modifications as discussed where applicable.
As part of current C-SNP subregulatory guidance and during the MA
plan application process, MAOs may apply to offer a C-SNP that targets
any one of the following:
A single CMS-approved chronic condition (selected from the
list in section 20.1.2 of Chapter 16b);
A CMS-approved group of commonly co-morbid and clinically-
linked conditions (described in section 20.1.3.1 of Chapter 16b); or
An MA organization-customized group of multiple chronic
conditions (described in section 20.1.3.2 of Chapter 16b).
CMS recognizes that there is value for C-SNPs to use groupings of
severe or disabling chronic conditions in identifying their focus and
limiting enrollment, and our proposals reflect how the MA organizations
that offer C-SNPs must choose a single chronic condition from the
definition of severe or disabling chronic condition or choose from a
list of permitted multiple chronic conditions found in in the new
subparagraphs (A) and (B) under Sec. 422.4(a)(1)(iv).
First, we are proposing, as part of the definition of C-SNP at
Sec. 422.2 and in the description of special needs plans at Sec.
422.4(a)(1)(iv), to codify current guidance regarding the ability of MA
organizations to offer a C-SNP that focuses on single or multiple
chronic conditions. The proposed definition of chronic condition
special needs plan (C-SNP) provides that C-SNPs are SNPs that restrict
enrollment to MA special needs eligible individuals who have a severe
or disabling chronic condition as defined in Sec. 422.2 under this
section. In other words, the chronic conditions on which a C-SNP may
focus are limited to those conditions listed in the definition of
severe or disabling chronic condition. When a C-SNP focuses on one
chronic condition, enrollees must have that severe or disabling chronic
condition in order to enroll in the C-SNP. In addition to single
chronic condition category PBPs, CMS currently permits MA organizations
to apply to offer a C-SNP that includes specific combinations of CMS-
approved group of commonly co-morbid and clinically linked conditions,
as described in section 20.1.3.1 of Chapter 16b of the MMCM. We are
proposing to codify how a C-SNP may focus on multiple chronic
conditions in two ways. The proposed definition of C-SNP provides that
the restricted enrollment to individuals with severe or disabling
chronic conditions includes restricting enrollment based on the
multiple commonly co-morbid and clinically-liked conditions groupings
specified in Sec. 422.4(a)(1)(iv) of this chapter.
Currently, CMS has identified five combinations of commonly co-
existing chronic conditions that may be the focus of a C-SNP based on
our data analysis and recognized national guidelines. The current set
of combinations include:
Diabetes mellitus and chronic heart failure;
Chronic heart failure and cardiovascular disorders;
Diabetes mellitus and cardiovascular disorders;
Diabetes mellitus, chronic heart failure, and
cardiovascular disorders; and
Stroke and cardiovascular disorders.
As of March 2022, MA organizations offered 178 C-SNPs covering more
than one chronic condition. A majority of these plans (151) represent a
grouping of just three commonly co-morbid and clinically-linked
conditions: cardiovascular disease, congestive heart failure (CHF), and
diabetes mellitus. Another 21 plans represented a combination of
cardiovascular disease and CHF. C-SNPs have tended to focus on
combinations of these three specific conditions since this policy was
implemented. Considering the established clinical connection between
these conditions and the interest among plans and beneficiaries, we
propose to maintain the current list. We are proposing to codify this
current list of combinations of chronic conditions that may be used by
a C-SNP at Sec. 422.4(a)(1)(iv)(A)(1) through (5).
A C-SNP may not be structured around multiple commonly co-morbid
conditions that are not clinically linked in their treatment because
such an arrangement results in a general market product rather than one
that is tailored for a particular population. As part of its review,
the 2019 clinical advisor panel convened in accordance with section
1859(f)(9)(A) of the Act recommended the continuation of the current
Chapter 16b linked conditions plus three additional groups. The panel
considered a number of relevant factors, including all statutory
criteria required under the Act, when determining the appropriateness
of additional pairings, including clinical considerations and the
potential of these conditions to be successfully managed by a
specialized provider network. The panel recommended the following
additional groupings conditions were as follows:
Anxiety associated with COPD.
CKD and post-renal organ transplantation.
Substance Use Disorder (SUD) and Chronic and disabling
mental health conditions.
In addition to our proposal to codify the current approved set of
commonly co-morbid and clinically-linked conditions, we propose to add
the three
[[Page 79565]]
recommended pairings as permissible groupings of severe or disabling
chronic conditions that may be used by C-SNPs at new Sec.
422.4(a)(1)(iv)(B)(6) through (8). Under this proposal, a C-SNP may
focus on one of the commonly co-morbid and clinically-linked conditions
specified in these eight specific combinations of co-morbid condition
groupings upon CMS approval. We are also proposing to add a new
paragraph (a)(1)(iv)(A) at Sec. 422.4 to clarify that enrollees need
only have one of the qualifying conditions for enrollment listed in the
approved groupings in proposed paragraph (a)(1)(iv)(B). This is
consistent with current CMS operational practices regarding the current
set of approved C-SNP groups. We are seeking comment on our proposal to
codify the current list of five commonly co-morbid and clinically-
linked conditions. We are also seeking comment on the applicability of
the proposed set of three new chronic condition pairs based on the
chronic condition panel's recommendations. Second, we are also
proposing to add at a new paragraph (g) at Sec. 422.52 that SNPs may
enroll eligible beneficiaries into a C-SNP consisting of commonly co-
morbid and clinically-linked conditions if the beneficiary has only one
of the qualifying conditions for enrollment.
Lastly, CMS is not proposing to codify a C-SNP plan application
option that is currently available under subregulatory guidance in
section 20.1.3.2 of Chapter 16b of the MMCM. In effect, this will
remove this approach as an option for C-SNPs beginning 2024. Under the
current guidance, we permit MA organizations seeking to sponsor a C-SNP
to apply for an MA organization-customized group of multiple chronic
conditions. If a C-SNP uses such a customized group of conditions,
enrollment in that C-SNP is limited to special needs individuals who
have all of the severe or disabling conditions in the group. CMS has
reviewed only a few SNP plan application proposals since the initial
implementation of the C-SNP program and has not granted any
applications either due to the lack of clinical connection between the
proposed conditions or because the MA organization failed to meet other
conditions of the application process. No C-SNPs of this type have been
approved nor will be operational in CY 2023. We are proposing to remove
this option from the C-SNP application process beginning in CY 2024.
Given the historical lack of interest from MA organizations,
beneficiaries, or patient advocacy groups, we believe there will be
minimal impact on stakeholders associated with the elimination of this
current flexibility. In addition, with the addition of three new
groupings and the ability to establish a C-SNP that is based on
functional limitations that we are proposing with paragraphs (20)
through (21) of the proposed definition of severe or disabling chronic
condition, we believe that there is adequate flexibility for MA
organizations to develop C-SNPs that meet the needs of the Medicare
population.
In conclusion, we are proposing to define C-SNPs at Sec. 422.2 as
SNPs that restrict enrollment to MA eligible individuals who have a
severe or disabling chronic condition as defined under Sec. 422.2. We
are proposing to amend Sec. 422.4(a)(1)(iv) to limit C-SNPs that focus
on multiple chronic conditions to the list of CMS-approved group of
commonly co-morbid and clinically linked conditions. And we are
proposing to amend Sec. 422.52 to clarify that enrollees need only
have one of the qualifying conditions for enrollment when a C-SNP
focuses on multiple conditions in one of the groupings specified in
proposed Sec. 422.4(a)(1)(iv)(B). This will provide greater clarity
for MA organizations seeking to establish combination plans and for
Medicare beneficiaries exploring potential MA plan options. We are
seeking comment on these proposals.
Many of the changes we are proposing in connection with C-SNPs,
including the revision of the definition of severe and disabling
chronic condition and the new definition of C-SNP, would unify and
streamline existing requirements, which should reduce burden and are
therefore not expected to have impact. The proposal regarding the
definitions of severe or disabling chronic condition and C-SNP and the
amendments to Sec. Sec. 422.4(a)(1)(iv) and 422.52 would be applicable
beginning with plan year 2024. Together, these proposals would
implement the new list of chronic conditions recommended by the panel
of clinical advisors established by section 1859(f)(9)(A) of the Act.
Our proposed update to the list would create new chronic condition
categories, relabel several existing categories, and include several
new sub-conditions ``under a number of chronic conditions. It is
unclear how many MA organizations would create new C-SNPs based on the
proposed new list of severe or disabling chronic conditions that meet
the criteria in section 1859 of the Act. Historically, MA organizations
have generally focused plan and benefit efforts around a few specific
chronic conditions. As reflected on Table D-A 1, C-SNPs based on just
three conditions make up 63 percent of all C-SNPs created since 2007:
Cardiovascular Disorders, Chronic Heart Failure, and Diabetes
Mellitus.\148\ Given this historical pattern, we expect that MA
organizations may be slow or hesitant to create new C-SNP plan type
options around the new set of chronic conditions.
---------------------------------------------------------------------------
\148\ Table D-A 1 was created using data from CMS' SNP
Comprehensive Report, found here: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data. Data was collected
by sampling reports from May 2007 through January 2022. Data from
reports was then coded and analyzed to create a distribution of C-
SNP plan types.
---------------------------------------------------------------------------
We anticipate that changes from current plan and enrollment
practices would most likely be seen in connection with chronic
condition categories like ESRD, where the proposal would somewhat
revise enrollment qualifications. Based on the proposal to use the
condition category ``Chronic kidney disease (CKD)'' and to include ESRD
as part of that condition category, we expect that current ESRD C-SNPs
will be permitted to enroll, in addition to those with ESRD,
beneficiaries with CKD Stages 1-4 once this proposal is finalized. As
of July 2022, CMS contracts with 17 C-SNPs for ESRD. CMS estimates that
just under 23 percent of Medicare beneficiaries qualify for one of the
stages of CKD; however, this figure includes beneficiaries who may
already qualify for an ESRD C-SNP in their area.\149\ However, we have
no clear evidence to suggest how this will impact enrollment for
current ESRD plans potentially impacted by this proposal or new C-SNPs
that would be created because of it.
---------------------------------------------------------------------------
\149\ This 2018 estimate is based on the CMS Office of
Enterprise Data and Analytics analysis of chronic conditions
identified using ICD-10 codes. Additional information can be found
here: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Chronic-Conditions/CC_Main.
---------------------------------------------------------------------------
Because MA organizations would be able to choose to create and
submit a C-SNP under one of the new chronic condition categories
starting in CY 2024 (with the exception CKD as proposed in section
IV.A.1. of this proposed rule), we do not see this as a new burden. The
burden associated with the MA application process is covered under PRA
CMS-10237/OMB 0938-0935, while the burden associated with complying
with the SNP MOC process is covered under PRA CMS-10565/OMB 0938-1296.
The proposals here, if finalized, would add no additional burden for MA
organizations sponsoring a C-SNP now or in the future. The proposed
policy would allow MA organizations to select new C-SNP plan
[[Page 79566]]
type options, but it would not compel them to do so. However, we would
monitor all C-SNP type applications for CY 2025 and future years to
inform future implementation strategies and impact on the program.
[GRAPHIC] [TIFF OMITTED] TP27DE22.010
B. Defining Institutional Special Needs Plans and Codifying Beneficiary
Protections (Sec. 422.2)
Institutional Special Needs Plans (I-SNPs) are MA special needs
plans (SNPs) that restrict enrollment to MA-eligible individuals who
are institutionalized or institutionalized-equivalent as those terms
are defined in Sec. 422.2. Institutionalized is defined, for the
purposes of defining a special needs individual and for the open
enrollment period for institutionalized individuals at Sec.
422.62(a)(4), as an MA eligible individual who continuously resides or
is expected to continuously reside for 90 days or longer in one of the
following long-term care facility settings: skilled nursing facility
(SNF) as defined in section 1819 of the Act (Medicare); nursing
facility (NF) as defined in section 1919 of the Act (Medicaid);
intermediate care facility for individuals with intellectual and
developmental disabilities as defined in section 1905(d) of the Act;
psychiatric hospital or unit as defined in section 1861(f) of the Act;
rehabilitation hospital or unit as defined in section 1886(d)(1)(B) of
the Act; long-term care hospital as defined in section 1886(d)(1)(B) of
the Act; hospital which has an agreement under section 1883 of the Act
(a swing-bed hospital); and last, subject to CMS approval, a facility
that is not listed as part of the definition of ``Institutionalized''
at Sec. 422.2 but meets both of the following: furnishes similar long-
term, healthcare services that are covered under Medicare Part A,
Medicare Part B, or Medicaid; and whose residents have similar needs
and healthcare status as residents of one or more facilities listed in
the definition of ``Institutionalized'' at Sec. 422.2. We define, at
Sec. 422.2, the term ``institutionalized-equivalent,'' for the purpose
of identifying a special needs individual, as an MA eligible individual
who is living in the community, but requires an institutional level of
care; in addition, the definition of the term ``institutionalized
equivalent'' includes specific limitations on how an assessment is made
that an individual meets the definition.
Per the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (Pub. L. 108-173), I-SNPs, along with C-SNPs and D-SNPs,
are MA plans that are specifically designed to provide targeted care
and limit enrollment to special needs individuals. Under section
1859(b)(6)(B) and (f)(1) of
[[Page 79567]]
the Act, I-SNPs restrict enrollment to MA eligible individuals who meet
the definitions of ``institutionalized'' or ``institutionalized-
equivalent'' in Sec. 422.2, which are based on section
1859(b)(6)(B)(i) and (f)(2)(A) of the Act. As of February 2022, there
are 87 I-SNP MA contracts with 186 plans serving 96,792 enrollees.\150\
CMS currently permits MA organizations to submit SNP applications that
are restricted to institutionalized individuals only or
institutionalized-equivalent individuals only, as defined in Sec.
422.2 respectively, or to submit an application for a combination SNP
that covers beneficiaries who qualify for either institutionalized or
institutionalized-equivalent status, but are enrolled under the same
plan.
---------------------------------------------------------------------------
\150\ See ``SNP Comprehensive Report 2022 02,'' found here:
https://www.cms.gov/research-statistics-data-and-systemsstatistics-trends-and-reportsmcradvpartdenroldataspecial-needs/snp-comprehensive-report-2022-02.
---------------------------------------------------------------------------
We propose to add four definitions at Sec. 422.2: a definition of
I-SNPs and three additional definitions for each of the current I-SNP
types that correspond to CMS' current MA application process. In
addition, we propose to codify, as part of the definitions for I-SNPs
that enroll special needs individuals who are institutionalized,
current policies that address the need for the I-SNP to contract with
the institutions where such special needs individuals reside. We
believe that adding these four definitions will help clarify the
specific standards that are applicable to I-SNPs, as distinguished from
other MA plans and from other MA SNPs. This proposal includes tying the
definitions of institutionalized and institutionalized-equivalent in
Sec. 422.2 and the list of eligible institutions set forth in that
definition, to our proposed definition of I-SNP. This approach is
consistent with how CMS has adopted regulatory definitions for D-SNPs,
FIDE SNPs, and HIDE SNPs in Sec. 422.2. The proposed definitions
clarify that MA organizations may offer SNPs that are: exclusive to
beneficiaries meeting the definition of institutionalized under Sec.
422.2; are exclusive to beneficiaries meeting the definition of
institutionalized-equivalent under Sec. 422.2; or are exclusive to
beneficiaries who meet either of those definitions. Our proposed
language linking I-SNP enrollment to the definitions noted here matches
current subregulatory guidance and practice used by CMS during the MA
application process for I-SNPs.
Lastly, we are proposing to amend Sec. 422.101(f)(2) to add a
requirement that the models of care for I-SNPs ensure that contracts
with long-term care institutions (listed in the definition of the term
institutionalized in Sec. 422.2) contain requirements allowing I-SNP
clinical and care coordination staff access to enrollees of the I-SNP
who are institutionalized. This proposed new paragraph (f)(2)(vi) would
codify longstanding subregulatory guidance in section 20.3 of Chapter
16b of the MMCM that is designed to provide I-SNPs enrollees
protections regarding access to care coordination and communication
between providers and I-SNP staff. Under our proposal, I-SNP clinical
and care coordination staff may be employed by the MA organization
offering the I-SNP or under contract with the I-SNP to furnish
healthcare, clinical or care coordination services. CMS has received
feedback in the past that institutional providers sometimes fail to
share relevant information regarding an I-SNP enrollee's health status
or need for care or services with the I-SNP staff. We intend that
codifying this requirement for I-SNP MOCs to ensure that the contracts
between the I-SNP and these institutions where I-SNP enrollees reside
include provisions allowing access for I-SNP staff will protect
beneficiaries. Our proposal would leave the details of how access to I-
SNP enrollees would be assured for I-SNP staff but we intend the term
``access'' to be interpreted broadly to encompass information sharing,
admission to physical facilities to see enrollees, and other issues. We
are seeking comment on whether the regulation text needs to more
specifically address information sharing or other related issues. We
believe that codifying this policy would improve transparency for
stakeholders, improve care coordination and ensure the continuity of
care for vulnerable beneficiaries. In the years since it was issued in
2016, we have used the I-SNP guidance from section 20.3 of Chapter 16b
to administer policies central to plan compliance and application
review. In that time, I-SNP enrollment has grown from 54,643 enrollees
under 37 contracts and 79 plans to 96,792 enrollees being served by 87
I-SNP MA contracts with 186 plans.\151\ As of 2021, MedPAC shows that
72 percent of Medicare beneficiaries have access to at least one I-SNP
plan, up from 52 percent in 2017.\152\ As MedPAC noted in its March
2013 report, I-SNPs perform better than other SNPs and other MA plans
on the majority of available quality measures for SNPs. MedPAC also
noted in the same report that I-SNPs had much lower than expected
hospital readmission rates and scored just as well as D-SNPs and C-SNPs
on other measures.\153\ From an administrative standpoint, CMS has
found I-SNPs to be comparable to other SNPs when it comes to meeting
compliance standards.
---------------------------------------------------------------------------
\151\ See ``SNP Comprehensive Report 2016 01,'' found here:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data-
Items/SNP-Comprehensive-Report-2016-01; and ``SNP Comprehensive
Report 2022 02,'' found here: https://www.cms.gov/research-statistics-data-and-systemsstatistics-trends-and-reportsmcradvpartdenroldataspecial-needs/snp-comprehensive-report-2022-02.
\152\ See Chapter 12: The Medicare Advantage program: Status
report (March 2021), found here: https://www.medpac.gov/wp-content/uploads/2021/10/mar21_medpac_report_ch12_sec.pdf.
\153\ The full report, ``Chapter 14: Medicare Advantage special
needs plans'' (March 2013), can be found here: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/chapter-14-medicare-advantage-special-needs-plans-march-2013-report-.pdf.
---------------------------------------------------------------------------
Section 1859(f) of the Act includes additional requirements for all
types of specialized MA plans for special needs individuals and
requirements specific to I-SNPs. Per the current definition of
specialized MA plan for special needs individuals in Sec. 422.2, MA
SNPs must all cover Part D benefits under part 423 for their enrollees.
In addition, the definition of MA SNPs provides that these MA plans
have been designated by CMS as meeting the requirements of an MA SNP as
determined on a case-by-case basis using criteria that include the
appropriateness of the target population, the existence of clinical
programs or special expertise to serve the target population, and
whether the proposal discriminates against sicker members of the target
population. The proposed definition of the term ``institutional special
needs plan (I-SNPs)'' uses the term ``specialized MA plan for special
needs individuals'' and therefore incorporates the requirements and
limitations on SNPs that are included in that definition in Sec.
422.2. Accordingly, we are proposing to define I-SNPs as SNPs that
restrict enrollment to MA eligible individuals who meet the definition
of institutionalized and institutionalized-equivalent in this section.
We are also proposing to include in our definition of I-SNP that there
are the following types: I-SNP Institutionalized, I-SNP Equivalent, and
I-SNP Hybrid. We believe this definition is consistent with our current
guidance and operational practices involving I-SNPs and Medicare
beneficiaries enrolled in those plans such that this proposal
represents a continuation of I-SNP policies.
We are also proposing to define three I-SNP types that are
currently used by
[[Page 79568]]
CMS to operationalize MA applications and Medicare beneficiary
enrollment into I-SNPs. The proposed definitions address both
enrollment limitations used by these different types of I-SNPs and
certain performance and contracting requirements that are specific to
each type. Each new definition would be added to Sec. 422.2.
Our first proposed definition is an I-SNP type that enrolls only
Medicare beneficiaries who meet the definition of institutionalized in
Sec. 422.2. We proposing to call these I-SNPs ``Facility-based
Institutional Special Needs plans'' or FI-SNPs. In addition to the
enrollment criteria noted in this paragraph, the proposed definition
provides that FI-SNPs must own or have a contractual arrangement with
at least one institution specified in the definition of
institutionalized in Sec. 422.2 for each county within the plan's
service area and with each institutionalized facility serving enrollees
in their plan. The latter two requirements represent codifications of
longstanding subregulatory guidance in section 20.3 of Chapter 16b of
the MMCM.
We are proposing a definition for a second I-SNP type called
``Institutional-equivalent Special Needs Plan'' or IE-SNP. IE-SNPs are
an I-SNP type that restricts enrollment to MA eligible individuals who
meet the definition of institutionalized-equivalent in Sec. 422.2.
Those special needs individuals are living in the community but require
an institutional level of care, which is determined using assessment
tools that meet requirement specified in the definition of the term
institutionalized-equivalent. The determination that a Medicare
beneficiary requires an institutional level of care (LOC) must be made
using a State assessment tool from the State in which the individual
resides and the LOC assessment must be conducted by an impartial party
with the requisite knowledge and experience to accurately identify
whether the beneficiary meets the institutional LOC criteria. CMS has
interpreted the standard that the assessment be done by an impartial
entity as requiring that the entity be other than the I-SNP and that
the I-SNP cannot own or control the entity. CMS currently uses the IE-
SNP designation for operational purposes during the MA application
review and approval process.
We are proposing a definition for a third I-SNP type called
``Hybrid Institutional Special Needs Plan.'' HI-SNPs are I-SNP type
that restricts enrollment to both MA eligible individuals who meet the
definition of institutionalized and MA eligible individuals who meet
the definition of institutionalized-equivalent. For enrollees that meet
the definition of institutionalized, the HI-SNP must own or contract
with at least one institution, as determined under the definition of
institutionalized in this section, for each county within the plan's
county-based service area; and must own or have a contractual
arrangement with each institutionalized facility serving enrollees. In
other words, we are proposing that HI-SNPs meet the standards specified
in the definitions of FI-SNPs and HE-SNPs since these hybrids serve
both type of special needs individuals. CMS currently uses the HI-SNP
designation for operational purposes during the MA application review
process.
CMS's current guidance for I-SNPs in section 20.3.4 of Chapter 16b
of the MMCM addresses a number of requirements that the contract
between the I-SNP and the LTC facility must include in order for an I-
SNP to meet CMS compliance in addition to the requirement, proposed to
be added to Sec. 422.101(f)(2)(vi), that the I-SNP model of care
ensure that contracts with long-term care institutions (listed in the
definition of the term institutionalized in Sec. 422.2) contain
requirements allowing I-SNP clinical and care coordination staff access
to enrollees of the I-SNP who are institutionalized. Some of that
guidance addressing an I-SNP's relationship with long-term care
institutions is proposed to be included in the definitions for specific
types of I-SNPs. We are not proposing to codify the remainder of the
requirements listed in section 20.3.4 of Chapter 16b because they would
duplicate requirements in other current MA regulations under part 422.
Specifically, we believe the following standards described in section
20.3 are addressed or required by current regulations:
Section 20.3.4 states that facilities in a chain
organization must be contracted to adhere to the I-SNP MOC. Currently,
requirements for compliance with and implementation of the I-SNP's
required model of care (MOC) by the LTC facilities and other providers
that contract with the I-SNP to furnish services to the I-SNP's
enrollees are addressed by Sec. Sec. 422.101(f)(2), 422.202 and
422.504. Currently, all SNPs are required under Sec. 422.4(a)(1)(iv)
to submit their model of care (MOC) to CMS for National Commission on
Quality Assurance (NCQA) evaluation and approval. All SNPs (including
I-SNPs) are required by Sec. 422.101(f)(2) to have appropriate
employed, contracted, or non-contracted staff trained on the SNP plan
MOC to coordinate and/or deliver all services and benefits; and in
addition, SNPs must develop and implement model of care requirements to
coordinate the delivery of care to their enrollees across healthcare
settings, providers, and services to assure continuity of care. Per
Sec. 422.202, MA organizations are required to provide information
about the rules of participation in the organization's network of
providers and to have a mechanism for consulting with and communicating
practice guidelines and utilization management guidelines to contracted
providers. Finally, Sec. 422.504(i) provides that MA organizations
must include certain provisions and beneficiary protections in their
contracts with first tier, downstream and related entities (which
includes contracted providers), including compliance with Medicare laws
and the MA organization's contractual obligations with CMS. Thus, we
believe codifying this aspect of the existing guidance would be
duplicative. We solicit comment from providers whether an additional
regulation specific to this issue is necessary to further clarify the
obligations of I-SNPs.
Section 20.3.3 provides that an I-SNP must document that
it is prepared to implement the approved MOC when an enrollee changes
residence or LTC facility that furnishes services to the I-SNP's
enrollees. If an I-SNP enrollee changes applicable facility status, the
I-SNP must document that it is prepared to implement the approved MOC
at the enrollee's new residence or in another I-SNP contracted LTC
setting that provides an institutional level of care. Again, we believe
a regulation that is specific to this issue would be duplicative of
existing regulations. All SNPs, including I-SNPs, are required under
Sec. 422.101(f)(2)(ii) to have contracted staff trained on the MOC. In
addition, per Sec. 422.101(f)(1), SNPs must develop and implement
individualized plans of care for enrollees and use interdisciplinary
teams to manage and furnish care; we believe that in order to meet
those obligations, an I-SNP would necessarily have to involve and
coordinate services with the long-term care facility (LTCF) where an
enrollee receives services.
Section 20.3.4 of Chapter 16b also addresses how:
++ The I-SNP must provide protocols to all LTCFs for serving the I-
SNP's enrollees in accordance with the approved I-SNP MOC, and the
contract with each LTCF must reference these protocols.
++ The I-SNP must clearly specify in its contract with the LTCF
provider the services to be provided to I-SNP
[[Page 79569]]
enrollees by the LTCF and its staff, in accordance with the protocols
and payment for the services provided by each LTCF. The I-SNP must
include in its contract with the LTCF provider a training plan to
ensure that LTC facility staff understands their responsibilities in
accordance with the approved I-SNP MOC, protocols, and contract. If the
training plan is a separate document, then the contract should
reference it.
Like the other issues previously discussed, these actions are
required in order for an I-SNP to meet their obligations to coordinate
and implement the approved MOCs and to maintain effective oversight
over first tier, downstream and related entities involved in the
furnishing of covered benefits to enrollees under Sec. Sec. 422.101(f)
and 422.504. We believe additional regulations that are specific to how
Sec. Sec. 422.101(f) and 422.504 work together in this context would
be unnecessary and duplicative.
Section 20.3.4 provides that I-SNPs must develop
procedures for LTCFs to maintain a list of credentialed I-SNP clinical
staff in accordance with the LTC facility's responsibilities under
Medicare conditions of participation. Per Sec. 422.204(b)(2), MAOs
must follow a documented process with respect to providers and
suppliers who have signed contracts or participation agreements in
meeting the initial credentialing and recredentialing requirements. In
addition, per Sec. 422.204(b)(3), the I-SNP can only contract with a
LTCF (which is a provider of services as that term is defined in
section 1861(u) of the Act) for furnishing Part A and B benefits when
the facility has a Medicare participation agreement, which would
include the obligations to comply with conditions of participation in
42 CFR part 483. We believe that an additional regulation that
specifies that I-SNPs must include in their contracts with LTCFs that
the LCTFs comply with their Medicare conditions of participation would
be unnecessarily duplicative.
Section 20.3.4 of Chapter 16b provides that I-SNPs must
ensure that the contract between the I-SNP and the LTCF where enrollees
of the I-SNP reside must specify the start and end date of the
contract; the guidance also states that the contract should include the
full CMS contract cycle, which begins on January 1 and ends on December
31. The I-SNP may also contract with additional LTC facilities
throughout the CMS contract cycle. To the extent that this guidance
goes beyond requirements in Sec. 422.504(i), we do not believe that it
is necessary to adopt a regulation to require these specific contract
terms for I-SNPs and their contracted LTCFs. The proposed definitions
for the I-SNPs that serve beneficiaries that are institutionalized
would require those MA plans to have contracts with the LTCFs where
enrollees reside and with LTCFs in the service area; in order to meet
these requirements during the full term of the I-SNP's contract with
CMS, those contracts would necessarily have to cover the full January
through December time frame. We do not believe that a more detailed
regulation governing the terms of contracts between I-SNPs and LTCFs on
this point is necessary.
Finally, section 20.3.4 of Chapter 16b provides that the
contract between the I-SNP and the LTCF include a termination clause
that clearly states any grounds for early termination of the contract
and a clear plan for transitioning the enrollees to another facility
where the I-SNP can furnish covered benefits should the I-SNP's
contract with the LTC facility terminate. In addition, a transition
plan would only be necessary if the beneficiary elects to continue
enrollment with the I-SNP rather than elect enrollment in a different
MA plan or Original Medicare. Further, we note that a beneficiary who
remains in the terminated facility or who transfers to another non-
contracted facility would lose eligibility for enrollment in their
current I-SNP. Section 422.504(i) requires MA organizations to include
in their contracts with first tier, downstream and related entities
provisions that address termination and scope of the activities to be
performed by the contracted entity; this regulation applies to
contracts between the MA plan and providers. In addition, SNPs are
required to implement the MOC under Sec. 422.101(f) with appropriate
networks of providers and specialists designed to meet the specialized
needs of the plan's targeted enrollees and to have individualized plans
of care for each enrollee; ensuring the continued delivery of services
during a period of transition would necessarily have to be addressed in
implementation of the MOC and plans of care. Therefore, we are not
proposing an additional regulation to codify this aspect of our current
guidance.
The changes that we are proposing carry no burden. We are proposing
definitions of I-SNP and I-SNP types under Sec. 422.2 to clarify
existing policies that are specific to I-SNPs and not general policies
impacting D-SNPs or C-SNPs. This proposal is also a codification of
several specific longstanding subregulatory guidance in Chapter 16b of
the MMCM. We believe there is no burden associated with either pieces
of our proposal, as the creation of a definition will not engender
operational or policy changes impacting MA organizations sponsoring I-
SNPs nor impact enrollees; likewise, we do not expect any burden
associated with the continuation of existing guidance that was
incorporated and implemented with the release of the 2016 update of
Chapter 16b of the MMCM.
We are seeking comment on the proposed codification of chapter 16b
subregulatory guidance and the proposed new definition of I-SNP. In
particular, we are seeking feedback on I-SNP operationalization of the
current subregulatory guidance. We also seek feedback from commenters
who have other suggestions for improving the care furnished to the
special needs individuals enrolled in I-SNPs, many of whom are dually
eligible for Medicare and Medicaid, based on parallels or lessons
learned from other State or Federal programs administering services to
long-term care residents or beneficiaries requiring a nursing home
level of care.
C. Definition of Network-Based Plan (Sec. Sec. 422.2 and 422.114)
This proposed revision would move the current definition of a
network-based plan from Sec. 422.114(a)(3)(ii) to the definitions
section in Sec. 422.2. This proposed change has no implications for
other provisions in part 422 in which the definition or description of
network plans play a role, for example, the network adequacy provisions
at Sec. 422.116 and the plan contract crosswalk provisions at Sec.
422.530. Currently, Sec. 422.116(a)(1)(i) references the current
definition of network-based plan at Sec. 422.114(a)(3)(ii) in its
specification of network adequacy requirements for the various plan
types. We propose to make, however, a conforming change to Sec.
422.116(a)(1)(i) consistent with our proposal to move the definition of
network-based plan; this conforming change is to reference Sec. 422.2.
The regulation at Sec. 422.530(a)(5) specifically addresses the types
of plans to which it applies and when CMS considers a crosswalk to be
to a plan of a different type, so we do not believe any amendment to
Sec. 422.530 is necessary in connection with moving the definition of
network based plan to Sec. 422.2.
Private-fee-for-service (PFFS) plans were established by the
Balanced Budget Act of 1997 and were originally not required to have
networks. The Medicare Improvements for Patients and Providers Act of
2008 (MIPPA) revised
[[Page 79570]]
the PFFS requirements to require that beginning contract year 2011 any
PFFS plan operating in the same service area as two or more network-
based plans also have a network. For purposes of this requirement,
section 1852(d)(5)(C) of the Act and Sec. 422.114(a)(3)(ii) define
network-based plans as a coordinated care plan (as described in section
1851(a)(2)(A) of the Act and Sec. 422.4(a)(1)(ii)), a network-based
MSA plan, and a section 1876 reasonable cost plan. The statutory and
regulatory definitions both specifically exclude an MA regional plan
that meets access requirements substantially through means other than
written contracts, per Sec. 422.112(a)(1)(ii).
When codifying this requirement in the final rule that appeared in
the Federal Register September 18, 2008 titled ``Medicare Program;
Revisions to the Medicare Advantage and Prescription Drug Benefit
Programs'', (73 FR 54226), we included the definition of network-based
plan in the section of the regulations for PFFS plans, as the
definition was integral to the new requirement for PFFS plans. (73 FR
54230, 54249) A network-based plan, however, has meaning in contexts
other than in addressing these specific requirements for MA PFFS plans
and, in order to ensure that the definition is more readily accessible
for those seeking requirements related to network-based plans, we are
proposing to move it to the definitions section at Sec. 422.2. The
PFFS section at Sec. 422.114(a)(3)(ii) would continue to include
language specifying the network requirement, but the proposed
conforming change to this section would refer to the definitions in
Sec. 422.2 instead of including the definition in Sec.
422.114(a)(3)(ii).
D. Required Notices for Involuntary Disenrollment for Loss of Special
Needs Status (Sec. 422.74)
Section 231 of the Medicare Modernization Act of 2003 (MMA) amended
section 1851(a)(2)(A)(ii) of the Act to establish specialized MA plans
for special needs individuals. Special needs plans (SNPs), defined at
section 1859(b)(6)(A) of the Act, are plans with limited enrollment,
specifically designed to provide targeted care to institutionalized
individuals, dual eligible individuals, or individuals with severe or
disabling chronic conditions, collectively known as a ``special needs
individual'' as defined at section 1859(b)(6)(B) of the Act. Only those
individuals who qualify as special needs may enroll, and remain
enrolled, in a SNP. In the January 2005 MA final rule, we established
regulations at Sec. 422.52 that provided that to be eligible to enroll
in a SNP, an individual must meet the definition of a special needs
individual, meet the eligibility requirements for that specific SNP,
and be eligible to elect an MA plan. Sections 1859(b)(6)(B) and
1894(c)(4) of the Act, and CMS's implementing regulation at Sec.
422.52(d), allow individuals who lose special needs status, if, for
example, they were to no longer have the level of Medicaid eligibility
or other qualifying condition necessary to be eligible for the plan, to
have a period of deemed continued eligibility if they are reasonably
expected to regain special needs status within, at most, the succeeding
6-month period. The period of deemed eligibility must be at least 30
days but may not be longer than 6 months. In implementing regulations,
we also established loss of special needs status (and of deemed
continued eligibility if applicable) as a basis for required
disenrollment at Sec. 422.74(b)(2)(iv).
The January 2005 MA final rule served as the basis for our current
sub-regulatory guidance in Chapter 2 of the Medicare Managed Care
Manual, Section 50.2.5, which specifically provides that plans send
certain notices prior to and following the effective date of
involuntary disenrollment based on loss of special needs status. These
policies are intended to ensure that beneficiaries are given adequate
notice prior to being disenrolled from a SNP and provided an
opportunity to prove that they are eligible to remain enrolled in the
plan, if applicable. Providing these members at least 30 days advance
notice of disenrollment, along with information about deemed continued
eligibility and eligibility for an SEP to elect other coverage, gives
beneficiaries ample time to prove they are still eligible for their SNP
or to evaluate other coverage options.
To provide stability and assurance about the requirements for MA
organizations in these situations as well as transparency to
stakeholders, we are proposing to codify current policy for MA plan
notices prior to a member's disenrollment for loss of special needs
status, as well as a final disenrollment notice. We intend that
stakeholders will be able to rely on these regulations, and that these
regulations would only be changed through a subsequent rulemaking,
establishing the procedures that an MA organization must follow in the
event that a SNP enrollee loses special needs status and is disenrolled
from the SNP on that basis. Specifically, we are proposing to revise
Sec. 422.74(d) by redesignating paragraph (d)(8) as paragraph (9) and
adding new paragraph (8), to state that the plan would be required to
provide the enrollee a minimum of 30 days advance notice of
disenrollment, regardless of the date of the loss of special needs
status. As proposed in new paragraphs (8)(i) and (ii), an advance
notice would be provided to the enrollee within 10 calendar days of
learning of the loss of special needs status, affording the enrollee an
opportunity to prove that he or she is still eligible to remain in the
plan. The advance notice would also include the disenrollment effective
date, a description of SEP eligibility, as described in Sec.
422.62(b)(11), and, if applicable, information regarding the period of
deemed continued eligibility, the duration of the period of deemed
continued eligibility, and the consequences of not regaining special
needs status within the period of deemed continued eligibility.
Additionally, as proposed in new paragraph (8)(iii), the plan would be
required to provide the enrollee a final notice of involuntary
disenrollment within 3 business days following the disenrollment
effective date, which is either the last day of the period of deemed
continued eligibility, if applicable or a minimum of 30 days after
providing the advance notice of disenrollment, and must be sent before
submission of the disenrollment to CMS. Lastly, we propose in new
paragraph (8)(iv), that the final involuntary disenrollment notice must
include an explanation of the individual's right to file a grievance
under the MA organization's grievance procedures, which are required by
Sec. 422.564.
We are codifying longstanding guidance with these changes. Based on
infrequent questions or complaints from MA organizations and enrollees
on these notices, we believe that these notice requirements have been
previously implemented and are currently being followed by plans. We do
not believe the proposed changes to the regulatory text will adversely
impact MA organizations or individuals enrolled in MA special needs
plans who lose special needs status, other than the appropriate
disenrollment from the plan due to the individual's loss of eligibility
for the plan. Similarly, we do not believe the proposed changes would
have any impact to the Medicare Trust Funds.
E. Involuntary Disenrollment for Individuals Enrolled in a MA Medical
Savings Account (MSA) Plan (Sec. 422.74)
Section 4001 of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-
33) added section 1851(a)(2) of the Act
[[Page 79571]]
establishing private health plan options available through Part C of
the Medicare program known originally as ``Medicare + Choice'' and
later as ``Medicare Advantage (MA).'' Under this program, eligible
individuals may elect to receive Medicare benefits through enrollment
in one of an array of private health plan choices beyond the original
Medicare program. As enacted, section 1851(a)(2)(B) of the Act
established the authority for an MA organization to offer a MA medical
savings account (MSA) option which is, a combination of a high-
deductible MA plan, as defined in section 1859(b)(3) of the Act, with a
contribution into a Medical Savings Account (MSA).
In the interim final rule titled Medicare Program; Establishment of
the Medicare+Choice Program,'' published in the Federal Register June
26, 1998 (63 FR 34968), we established the conditions for MA
organizations to enroll individuals in a MA MSA plan. The restrictions
on enrollment in MA MSA plans were set forth under section 1851(b)(2)
and (b)(3) of the Act and in implementing regulations at Sec. 422.56.
Specifically, consistent with section 1851(b)(2) of the Act, Sec.
422.56(b) provides that an individual who is enrolled in a Federal
Employee Health Benefits Program (FEHB) plan, or is eligible for health
care benefits through the Veterans Administration (VA) or the
Department of Defense (DoD), may not enroll in a MA MSA plan. In
addition, Sec. 422.56(c) incorporates the statutory prohibition under
section 1851(b)(3) of the Act on enrollment in MA MSA plans by
individuals who are eligible for Medicare cost-sharing under Medicaid
State plans. Additional restrictions were set forth under section
1852(a)(3)(B) of the Act and in implementing regulations at Sec.
422.56(d) based on supplemental benefits under an MA MSA plan.
The January 2005 MA final rule implemented section 233 of the
Medicare Modernization Act, which lifted the time and enrollment limits
on MSA plans imposed by the BBA of 1997. However, section 233 of the
MMA did not alter the prohibitions in sections 1851(b)(2) and (b)(3) of
the Act on enrollment into an MA MSA plan for individuals covered under
other health programs, and likewise the January 2005 MA final rule did
not alter the implementing regulations regarding these policies at
Sec. 422.56.
The current regulations do not specify whether the eligibility
criteria described in Sec. 422.56, which preclude an individual with
certain health care coverage from electing an MA MSA plan, are
applicable to individuals who gain or become eligible for other
coverage while enrolled in an MSA plan. In other words, the current
regulations do not specify that an individual who ceases to satisfy the
eligibility criteria described in Sec. 422.56 while already enrolled
in an MA MSA plan must be involuntarily disenrolled from the MSA,
regardless of the time of year. CMS has historically understood the
eligibility criteria for an individual to be enrolled in an MSA plan in
Sec. 422.56, coupled with the statutory prohibitions on enrolling in
an MA MSA by individuals with Medicaid or coverage under other health
benefits, to mean that an enrollee in an MSA plan is not able to remain
a member of the MSA plan and must be disenrolled by the plan when the
individual ceases to meet the statutory and regulatory criteria for
eligibility. We also note that this policy is consistent with our
general approach in section 50.2, Chapter 2 of the Medicare Managed
Care Manual, in which an enrollee becomes ineligible due to a status
change, such as the loss of entitlement to Medicare Part A or Part B or
the inability to regain special needs status during the period of
deemed continued eligibility and outlined in Sec. 422.74.
To address more clearly the consequences of the general loss of
eligibility in an MSA plan, we are proposing to amend Sec. 422.74 to
add new paragraph (b)(2)(vi) to include the requirement that an MA MSA
enrollee must be disenrolled, prospectively, due to the loss of
eligibility. If an MA MSA enrollee does not provide assurances that he
or she will reside in the United States for at least 183 days during
the year the election is effective, is eligible for or begins receiving
health benefits through Medicaid, FEHBP, DoD, or the VA or obtains
other health coverage that covers all or part of the annual Medicare
MSA deductible, that enrollee must be involuntarily disenrolled by the
MSA plan effective the first day of the calendar month after the month
in which notice by the MA organization is issued that the individual no
longer meets the MA MSA's eligibility criteria, as proposed in Sec.
422.74(d)(10). We are also proposing to revise Sec. 422.74(c) to
require MA MSA plans to provide a written notice of the disenrollment
with an explanation of why the MA organization is planning to disenroll
the individual before the disenrollment transaction is submitted to
CMS.
Should an individual's coverage under an MA MSA plan end before the
end of a calendar year, CMS recovers from the plan the amount of the
lump-sum deposit attributable to the remaining months of that year.
This requirement is codified at Sec. 422.314(c). In addition, the
disenrolled beneficiary will owe a prorated portion of the current
year's deposit amount back to the MA MSA plan. Plans will be able to
reconcile and identify MSA deposit amounts for the Current Payment
Month (CPM) at the beneficiary-level from the monthly generated MSA
Deposit-Recovery Data file. We are proposing at Sec. 422.74(e)(1) that
involuntarily disenrolled individuals will be defaulted to enrollment
in Original Medicare, which will now pay claims incurred by the former
MSA enrollees. Conversely, the former MSA enrollee also has the option
to elect to join another MA plan during a valid enrollment period.
F. Codification of Special Needs Plan Model of Care Scoring and
Approval Policy (Sec. 422.101)
Congress first authorized special needs plans (SNPs) to exclusively
or disproportionately serve individuals with special needs through
passage of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (hereinafter referred to as the MMA) (Pub. L.
108-173). The law authorized CMS to contract with Medicare Advantage
(MA) coordinated care plans that are specifically designed to provide
targeted care to individuals with special needs. Originally SNPs were
statutorily authorized for a limited period, but after several
extensions of that authority, section 50311(a) of the BBA of 2018
permanently authorized SNPs. Under section 1859(f)(1) of the Act, SNPs
are able to restrict enrollment to Medicare beneficiaries who are: (1)
Institutionalized individuals, who are currently defined in Sec. 422.2
as those residing or expecting to reside for 90 days or longer in a
long-term care facility, and institutionalized equivalent individuals
who reside in the community but need an institutional level of care
when certain conditions are met; (2) individuals entitled to medical
assistance under a State plan under Title XIX; or (3) other individuals
with certain severe or disabling chronic conditions who would benefit
from enrollment in a SNP. As of July 2022, 492 SNP contracts with 1,198
SNP plans had at least 11 members. These figures included 307 Dual
Eligible SNP contracts (D-SNPs) with 729 D-SNP plans with at least 11
members, 87 Institutional SNP contracts (I-SNPs) with 186 I-SNP plans
with at least 11 members, and 98 Chronic or Disabling Condition SNP
contracts (C-SNPs) with 283 C-SNP plans with at least 11 members. SNPs
as of June 2022 serve 4,897,054 MA enrollees, with D-SNPs enrolling
4,385,315, C-SNPs with
[[Page 79572]]
409,931, and I-SNPs with 100,808 members.
Section 164 of the Medicare Improvements for Patients and Providers
Act (hereinafter referred to as MIPPA) (Pub. L. 110-275) added care
management requirements for all SNPs effective January 1, 2010, which
are in section 1859(f)(5)(A) of the Act. As a result, all SNPs are
required to implement care management requirements which have two
explicit components: an evidence-based model of care (MOC) and a series
of care management services. For more discussion of the history of
SNPs, please see Chapter 16b of the Medicare Managed Care Manual
(MMCM).
This proposed rule would codify certain subregulatory guidance from
Chapters 5 and 16b of the MMCM about current SNP MOC scoring protocols;
annual C-SNP MOC submissions as required by the BBA of 2018; and
processes for amending SNP MOCs after National Committee for Quality
Assurance (NCQA) approval.
1. Codification of Model of Care (MOC) Scoring Requirements for Special
Needs Plans (SNPs) (Sec. 422.101)
Section 3205 of the Patient Protection and Affordable Care Act of
2010 (hereinafter referred to as the Affordable Care Act) (Pub. L. 111-
148) amended section 1859(f) of the Act to require that, starting in
2012, all SNPs be approved by NCQA based on standards developed by the
Secretary. As provided under Sec. Sec. 422.4(a)(iv), 422.101(f), and
422.152(g), the NCQA approval process is based on evaluation and
approval of the SNP MOC. In the final rule titled Medicare and Medicaid
Programs; Contract Year 2022 Policy and Technical Changes to the
Medicare Advantage Program, Medicare Prescription Drug Benefit Program,
Medicaid Program, Medicare Cost Plan Program, and Programs of All-
Inclusive Care for the Elderly, which appeared in the Federal Register
on January 12, 2021 (hereinafter referred to as the January 2021 final
rule), we adopted several regulatory amendments to implement
requirements for the SNP MOC that were enacted as part of the BBA of
2018 and our extension of some C-SNP-specific standards to all SNP
MOCs.
All SNPs must submit their MOCs to CMS for NCQA evaluation. An MA
organization sponsoring multiple SNPs must develop a separate MOC to
meet the needs of the targeted population for each SNP type it offers.
MA organizations that wish to offer a SNP must submit an application
(under part 422, subpart K) to demonstrate that they meet SNP specific
requirements, including the requirement in Sec. 422.101(f) that MA
organizations offering a SNP implement an evidence-based MOC to be
evaluated by the NCQA; the requirement in Sec. 422.107 that D-SNPs
have a contract with the State Medicaid agencies in the states in which
they operate; and the requirement in Sec. 422.152(g) that SNPs conduct
quality improvement programs. SNP applicants follow the same process in
accordance with the same timeline as applicants seeking to contract
with CMS to offer other MA plans. Most recently, in the January 2021
final rule, CMS revised and amended Sec. 422.101(f) to improve plan
implementation of enrollee care management practices and to strengthen
the review process by establishing a minimum benchmark score of 50
percent for each element of a plan's MOC (Sec. 422.101(f)(3)(iii)).
Since the beginning of the MOC approval process, CMS has developed
and issued guidance on the MOC to improve plan performance and
beneficiary care. CMS provided guidance and instructions in the CY 2010
Final Call Letter issued March 30, 2009, in a section titled, ``Model
of Care Reporting for New Applicants and Existing SNPs,'' in order to
more clearly establish and clarify delivery of care standards for
SNPs.\154\ In May, 2008, CMS proposed that SNPs have networks with
clinical expertise specific to the special needs population of the
plan; use performance measures to evaluate models of care; and be able
to coordinate and deliver care targeted to people with frailty or
disability, and those near the end of life based on appropriate
protocols. (73 FR 28555, 28559) Section 164 of the MIPPA subsequently
added care management requirements for all SNPs in an amendment to
section 1859(f)(5) of the Act, outlining new requirements for an
evidence-based model of care that include--(1) an appropriate network
of providers and specialists to meet the specialized needs of the SNP
target population; (2) a comprehensive initial health risk assessment
(HRA) and annual reassessments; (3) an individualized plan of care
containing goals and measurable outcomes; and (4) an interdisciplinary
team to manage care. The MIPPA amendments to section 1859(f)(5) of the
Act laid a statutory foundation for much of our regulatory standards
for the model of care. In the September 2008 interim final rule with
comment (73 FR 54226, 54228) and the January 2009 final rule (74 FR
1493, 1498), we finalized standards for the required model of care at
Sec. 422.101(f).
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\154\ The full 2010 Call Letter can be found here: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/2010finalcallletter_03.30.09_59.pdf.
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MOCs are a vital quality improvement tool and integral component
for ensuring that the unique needs of each beneficiary enrolled in a
SNP are identified and addressed. As we noted in the May 2008 proposed
rule, CMS deliberately structured its guidance toward the conceptual
framework of a MOC without being prescriptive about the specific staff
structure, provider network, clinical protocols, performance
improvement, and communication systems. We expected SNPs to develop a
MOC structure that allowed plans to develop care plans that addressed
differing needs among members of the plan. For example, a C-SNP
targeting diabetes mellitus may enroll a member with diabetic
complications who is near the end of life and might require assisted
living or institutional services for which the SNP would develop
different goals, expanded specialty services and facilities in their
provider network, different performance measures, and additional
protocols that would inappropriate for enrollees in the C-SNP who have
less severe health complications.
In addition to the requirements in Sec. 422.107(f) for the MOC,
CMS has issued guidance over the years, for both NCQA's use in
reviewing and approving MOCs and SNPs' use in developing and
implementing their MOCs. We believe that, in practice, MOCs are
consistent with the existing guidance. The MOC is organized to promote
clarity and enhance the focus on care coordination, care transition,
care needs and activities. It is a vital quality improvement tool and
integral component for ensuring that the unique needs of each enrollee
are identified by the SNP and addressed through the plan's care
management practices. The NCQA review and approval process is based on
scoring each of the clinical and non-clinical elements of the MOC. Each
element is comprised of a set of required subcomponents, or factors,
such as an identification and comprehensive description of the SNP-
specific population. These subcomponents are reviewed and scored by
NCQA and contribute to the overall score for that element. A full list
of elements and factors is in Chapter 5 of the MMCM. CMS also includes
the list of elements as part of attachment A (or the MOC Matrix) of the
``Initial and Renewal Model of Care Submissions and Off-cycle
Submission of Model of Care Changes'' PRA package (CMS-
[[Page 79573]]
10565).\155\ This MOC Matrix is released for public comment prior to
the expiration of the PRA package. We are proposing here to codify the
SNP MOC scoring protocols by amending Sec. 422.101(f)(3)(iii) to
include the current subregulatory scoring protocols. This proposal, and
these scoring protocols, align with the minimum benchmark for each
element of the SNP MOC of a plan that is currently reflected at Sec.
422.101(f)(3)(iii), as added by the January 2021 final rule. Our
adoption of these scoring standards is authorized by section 1859(f)(7)
of the Act for NCQA review and approval to be based on standards
established by the Secretary and our authority in section 1856(b) of
the Act to establish standards to carry out the MA program.
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\155\ The full MOC PRA package can be found here: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-10565.
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First, we are proposing to amend Sec. 422.101(f)(3)(iii) to add
the minimum overall score requirement for approval of a SNP's MOC,
using the term aggregate minimum benchmark; we are proposing to use the
same minimum standard for the aggregate minimum benchmark as is
currently used by NCQA in reviewing and approving MOCs. Currently, SNP
MOCs are approved for 1, 2, or 3-year periods. Each element of the
SNP's submitted MOC is reviewed and scored. As provided in Sec.
422.101(f)(3)(iii), the minimum benchmark for each element is 50
percent. The MOC is scored by NCQA based on the review of four
elements: Description of the SNP Population; Care Coordination; SNP
Provider Network; and MOC Quality Measurement & Performance
Improvement. Each of these four elements has a number of sub-elements
and factors to address the necessary scope and detail of the MOCs.
Currently, each of the four SNP model of care elements is valued at 16
points. The aggregate total of all possible points across all elements
equals 64, which is then converted to percentage scores based on the
number of total points received. CMS provides additional information
regarding MOC scoring criteria in Section 20.2.2 of Chapter 5 of the
MMCM. In addition to the current element-level minimum benchmark
regulatory requirement at Sec. 422.101(f)(3)(iii), SNPs are also
required to meet a minimum benchmark score for the aggregate total--
otherwise known as the aggregate minimum benchmark. Currently, the
aggregate minimum benchmark is 70 percent of the total 64 points. We
are proposing to codify this current practice by amending Sec.
422.101(f)(3)(iii) to add that, in addition to the current requirement
that all SNPs must meet a minimum benchmark score of 50 percent on each
element, each SNP's MOC must meet an aggregate minimum benchmark of 70
percent. As reflected in the proposed revision to paragraph
(f)(3)(iii), a SNP's model of care will only be approved if each
element of the model of care meets the minimum benchmark and the entire
model of care meets the aggregate minimum benchmark.
Second, we are proposing regulation text to address the period of
approval for the MOCs that meet the aggregate minimum benchmark. We are
proposing to codify at Sec. 422.107(f)(3)(iii)(A) the requirement,
from section 1859(f)(5)(B) of the Act, that C-SNP MOCs are annually
reviewed and evaluated. Beginning in 2020, under the MOC review
process, C-SNPs are only eligible to receive a MOC approval for 1-year
and therefore are subject to annual review and approval processes.
Specifically, we are proposing at paragraph (f)(3)(iii)(A) to codify
that an MOC for a C-SNP that receives a passing score is approved for 1
year. We do not propose to apply the requirement for annual review and
approval to the MOCs of all D-SNPs and I-SNPs. Instead, we are
proposing, at new paragraph (f)(3)(iii)(B), to codify different
approval permits for the MOCs of I-SNPs and D-SNPs that is based on the
final score of the MOC on the aggregate minimum benchmark. We are
proposing that: (1) an MOC for an I-SNP or D-SNP that receives an
aggregate minimum benchmark score of 85 percent or greater is approved
for 3 years; (2) an MOC for an I-SNP or D-SNP that receives a score of
75 percent to 84 percent is approved for 2 years; and (3) an MOC for an
I-SNP or D-SNP that receives a score of 70 percent to 74 percent is
approved for 1 year. This proposed scoring process matches the current
process NCQA uses to score initial and annual MOCs. We believe it is
prudent to maintain the current scoring process as it has worked well
to incentivize improvements in MOCs and strikes a balance with respect
to the burden associated with reviews and approvals for all
stakeholders by allowing higher scoring MOCs remain in place longer.
Third, we are proposing a new paragraph (f)(3)(iii)(C) to provide
an opportunity for a SNP to cure deficiencies in its MOC if the MOC
fails to meet the minimum element benchmark or the aggregate minimum
benchmark when reviewed and scored by NCQA. Currently, the review and
evaluation process includes a second opportunity to submit an initial
or renewal MOC, known as ``the cure process.'' Regardless of the final
score by NCQA of an MOC resubmitted using the cure process (provided
the MOC has the minimum scores to be approved), SNPs that need to use
the cure process to reach a passing aggregate minimum and/or minimum
element benchmark score will receive only a 1-year approval under this
proposal. This policy provides added incentive for SNPs to develop and
submit comprehensive and carefully considered MOCs for initial NCQA
approval and rewards those SNPs that have demonstrated ability to
develop quality MOCs without requiring additional time. We are
proposing that the opportunity to cure deficiencies in the MOC is only
available once per scoring cycle for each MOC. Under this proposal, a
MA organization that fails to meet either the minimum element benchmark
for any MOC element or the aggregate minimum benchmark for the entire
MOC after having an opportunity to cure deficiencies will not have its
MOC approved. MOCs that do not receive NCQA approval after the cure
review will not have a third opportunity for review. As a result, the
SNP(s) that use that MOC would need to be nonrenewed by the MA
organization or terminated by CMS for failure to meet a necessary
qualification for SNPs.
We reiterate that this proposal would maintain the current scoring
criteria and review process. We believe this proposal creates no
additional burden to SNPs, as current MOCs are evaluated based on this
criterion already. We welcome comment on the codification of existing
MOC scoring requirements for SNPs. These new regulations would be
applicable for MOCs reviewed for contract year 2024 and we will
continue our current practice pending a final rule.
2. Amending SNP MOCs After NCQA Approval
CMS is proposing to codify current policies and procedures for an
MA organizations to amend its MOCs after NCQA approval. CMS has labeled
this the ``off-cycle MOC submission process.'' CMS has acknowledged in
the past that in order to more effectively address the specific needs
of its enrollees, a SNP may need to modify its processes and strategies
for providing care during the course of its approved MOC timeframe; CMS
announced a process for SNPs to submit MOC changes for review in the CY
2016 Final
[[Page 79574]]
Call Letter.\156\ Currently, a D-SNP or I-SNP that decides to make
substantive revisions to their existing approved MOC may submit a
summary of their off-cycle MOC changes, along with the red-lined MOC,
in the Model of Care module in HPMS for NCQA review and approval.
Substantive revisions are those that have a significant impact on care
management approaches, enrollee benefits, and/or SNP operations. MOC
changes are at the discretion of the applicable MA organization
offering the SNP and it is the responsibility of the MA organization to
notify CMS of substantive changes and electronically submit their
summary of changes to their MOC in HPMS. Beginning with CY 2020, C-SNPs
are required to submit MOCs annually, and thus, their MOCs receive
approvals for a period of one-year. Upon implementation the annual
review and approval of C-SNP MOCs, C-SNPs were not permitted to submit
a revised MOC through an off-cycle submission.
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\156\ See https://www.cms.gov/medicare/health-plans/medicareadvtgspecratestats/downloads/announcement2016.pdf.
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At the time of the CY 2016 Final Call Letter, based on our previous
experience with the small number of SNPs seeking to amend their MOCs,
we expected that mid-cycle amendments to MOCs would be relatively rare
and CMS did not anticipate that the off-cycle process would result in a
higher incidence of such MOC changes. We believed that only relatively
unusual circumstances would require SNPs to make changes to their MOCs
that are so significant that notification to CMS and review of the
changes to the MOC would be warranted. However, CMS and NCQA have seen
the number of off-cycle MOC submissions steadily rise over the past
four years and plans have expressed frustration and confusion over what
plan changes merit or require submission to NCQA for an off-cycle
approval. This proposed rule is intended to address stakeholder
feedback regarding the off-cycle review process and to mitigate the SNP
community's concerns regarding continued plan burden in this area.
In general, CMS intends the MOC review and approval process to
include an MA organization's submission of a MOC only in the following
scenarios: the MA organization seeks to offer a new SNP; the MA
organization's SNP's MOC approval period ends; or CMS deems revision
and resubmission of the MOC necessary to ensure compliance with the
applicable standards and requirements, such as a change in applicable
law or when CMS discovers a violation. For the last scenario, an off-
cycle MOC submission may be necessary if during an audit, it appears
that the MOC (including in practice as the SNP applied the MOC) is not
meeting applicable standards, then CMS may ask the SNP to correct and
resubmit the MOC. Other examples include regulatory changes or when a
State Medicaid agency requires changes to the MOC of a D-SNP to meet
State-specific requirements. In order to ensure a stable care
management process and to ensure appropriate oversight by CMS of SNPs
and their operation, SNPs may not implement any changes to a MOC until
NCQA has approved the changes. Based on our experience, additional
situations may justify the submission of a revised MOC for review and
approval. This proposal would establish when an MA organization may
submit updates and corrections to its approved MOC.
First, we are proposing to codify the off-cycle process at Sec.
422.101(f)(3)(iv). We propose that MA organizations offering SNPs that
need to revise their MOC mid-cycle during their MOC approval period may
submit the revised MOC for review by NCQA at specific times. CMS has
historically restricted the period that SNPs can submit an off-cycle
submission from June 1st to November 30th of any contract year, which
is meant to allow for the efficient and prudent administration of the
annual initial and review MOC process--with the exception of C-SNPs who
are prohibited from submitting off-cycle submissions because of the
requirement that plans submit their MOC annually. However, CMS has also
allowed SNPs to submit off-cycle MOCs outside of this window when CMS
deems it necessary to ensure the SNP or its MOC was meeting statutory
or regulatory requirements, guarantee the safety of enrollees, or meet
State Medicaid requirements. We propose to maintain this process and
codify it at Sec. 422.101(f)(3)(iv)(A). We propose that SNPs may
submit updates and corrections to their NCQA-approved MOC between June
1st and November 30th of each calendar year or when CMS deems it
necessary to ensure compliance with applicable standards and
requirements. We intend the phrase ``applicable standards and
requirements'' to encompass the situations described here in the
preamble or similar situations where a potential or existing violation
needs to be addressed. To ensure consistent application of this
standard and demonstrate our intent that these be limited situations
where a revision is truly necessary, the proposed regulation text is
clear that CMS will make this determination and provide directions to
the MA organization. If an MA organization believes that this standard
in which revision is necessary to ensure compliance by the SNP and its
MOC, we anticipate that the MA organization will contact CMS for
guidance and approval to submit a revision.
Since the beginning of the off-cycle submission process, CMS has
attempted to provide guidance clarifying which MOC changes require
submission to CMS and how SNPs should submit their MOC changes to CMS.
We have said in the past that SNPs that make significant changes to
their MOCs must submit (in HPMS) a summary of the pertinent
modifications to the approved MOC and a redlined version of the
approved MOC with the revisions highlighted. Given the level of
questions we have received over the years regarding what constitutes a
significant change, we are proposing to codify a list of reasons for
when a SNP must use an off-cycle submission of a revised MOC for review
and approval. Proposed Sec. 422.101(f)(3)(iv)(B) provides that an MA
organization must submit updates or corrections to a SNP's MOC to
reflect the following:
Changes in policies or procedures pertinent to:
++ The health risk assessment (HRA) process;
++ Revising processes to develop and update the Individualized Care
Plan (ICP);
++ The integrated care team process;
++ Risk stratification methodology; or
++ Care transition protocols;
Target population changes that warrant modifications to
care management approaches or changes in benefits. For example, we
intend this to include situations like adding Diabetes to a
Cardiovascular Disease and Congestive Heart Failure C-SNP;
Changes in a SNP's plan benefit package between
consecutive contract years that can considerably impact critical
functions necessary to maintain member well-being and are related SNP
operations. For example, changes in Medicaid services covered by a HIDE
SNP or FIDE SNP through its companion Medicaid managed care plan or
changes in Medicaid policy (such as benefits or eligibility) that
require changes to an ICP for coordinating Medicare and supplemental
benefits with the new Medicaid policy;
Changes in level of authority or oversight for conducting
care coordination activities (for example, medical provider to non-
medical provider, clinical vs. non-clinical personnel);
[[Page 79575]]
Changes to quality metrics used to measure performance.
The proposed regulation text does not include immaterial examples
of the type and scope of MOC policy changes that may be made by an MA
organization to the SNP's approved MOC without any review or approval
by CMS or NCQA. Changes that do not need to be submitted through HPMS
include:
Changes in legal entity, parent organization, and
oversight (novation/mergers, changes to corporate structure);
Changes to delegated providers and agreements;
Changes in administrative staff, types/level of staff that
do not affect the level of authority or oversight for personnel
conducting care coordination activities;
Updates on demographic data about the target population;
Updates to quality improvement metric results and
technical quality measure specification updates;
Additions/deletions of specific named providers;
Grammatical and/or non-substantive language changes; and
For D-SNPs, minor changes to Medicaid benefits.
Under this proposal, we are adding a requirement to a new
subparagraph D under Sec. 422.101(f)(3)(iv) that SNPs may not
implement any changes to a MOC until NCQA has approved the changes. In
addition, NCQA will continue to review the summary of changes and a
redlined copy of the revised MOC submitted in HPMS to verify that the
revisions are consistent with the previously detailed list of
applicable submissions and in line with acceptable, high-quality
standards, as included in the original, approved MOC. The revised MOCs
will not be rescored. Further, the MOC's original approval period (that
is, 1-year or multi-year) will not be modified as a result of NCQA's
approval of the changes. We propose to codify this policy at Sec.
422.101(f)(3)(iv)(E), which provides that the successful revision of
the MOC under proposed (f)(3)(iv) does not change the MOC's original
period of approval by NCQA. Therefore, changes made to MOC cannot be
used to improve a low score. We anticipate that the current procedures
and documentation processes will continue; such procedures and
operational practices do not need to be in regulation text. CMS may
change procedures as necessary (for example, use of HPMS as the system
for submission, the mechanism for providing notice to MA organizations
of the review of the MOC initially or any revisions, etc.). We intend
that the current procedures will continue for NCQA reviewers to
designate the summary as ``Acceptable'' or ``Non-Acceptable,'' and
enter the findings in the HPMS character text box. Similarly, we will
continue the current process in which a system-generated email is sent
to the designated SNP Application Contact and the MA Quality Contact,
as well as to the individual who submitted the revised MOC summary.
Lastly, we are proposing under Sec. 422.101(f)(3)(iv)(F) to codify
existing operational practices with respect to off-cycle submissions by
C-SNPs. Currently, C-SNPs are prohibited from submitting off-cycle MOC
submissions, as all C-SNPs submit MOCs annually as required under
section 1859(f)(5)(B)(iv) of the Act. We are proposing to codify that
C-SNPs are prohibited from submitting an off-cycle MOC submission
except when CMS requires an off-cycle submission to ensure compliance
with the applicable regulations. C-SNPs must wait until the annual MOC
submission period to make changes to their MOC.
SNPs have one opportunity to correct (``cure'') deficiencies, as
noted in our proposed rule Sec. 422.101(f)(3)(iii)(C) to confirm that
the revised MOC is consistent with the standards outlined in the
original MOC. If NCQA determines that revisions to an initial or
renewal MOC, as delineated in the MOC summary, do not reflect the
quality standards as demonstrated by the original MOC and its
associated score/approval period, the SNP will be notified via email
with a ``Non-Acceptable'' determination and a list of all deficiencies.
If the summary and redlined version is not acceptable after the second
review, the SNP must continue implementing its approved MOC without any
revisions for the remainder of its MOC approval period. The proposed
MOC off-cycle cure process at Sec. 422.101(f)(3)(iv) differs from the
review and scoring process being codified Sec. 422.101(f)(3)(iii). The
review process employed under Sec. 422.101(f)(3)(iii) provides a one-
time cure process. Likewise, the cure process proposed (and under
current operational use by NCQA) would allow D-SNPs and I-SNPs to
resubmit a single revised off-cycle submission or cure until the end of
the Off-cycle submission period to an Off-cycle MOC that was deemed
unacceptable during the off-cycle review process. We are proposing to
codify this policy of a single cure opportunity during the off-cycle
time period under a new paragraph at Sec. 422.101(f)(3)(iv)(G)
We have also found that SNPs have sought to modify an initial or
renewal MOC shortly after NCQA approval and before the MOC has gone
into effect. We have generally rejected these submissions because the
MOC has yet to go into effect. We will continue to prohibit an off-
cycle submission until the approved MOC has gone into effect. For
example, if NCQA approved a SNP's MOC on April 1, 2022, the plan would
be prohibited from submitting an off-cycle submission until the
effective date of the MOC, which would be January 1, 2023.
In order clarify this process, we are proposing to codify this
guidance at Sec. 422.101(f)(3)(iv)(C). We propose that NCQA will only
review off-cycle submissions after the start of the effective date of
the current MOC unless it is deemed necessary to ensure compliance with
the applicable regulations or State Medicaid agency requirements for D-
SNPs. Finally, we reiterate that we still believe that off-cycle
submissions to substantively revise an MOC should be a rare occurrence
rather than an eventuality. We believe that these proposed processes
and procedures will make certain that CMS and NCQA are apprised of up-
to-date information regarding the MOC; strengthen our ability to
adequately monitor the approved MOCs; and guarantee that SNPs continue
to provide high quality care to enrollees. We seek comment on the
codification of the current off-cycle MOC submission process.
The proposed regulations described here reflect and would codify
current policy and procedures. While this proposed rule as a whole is
generally intended to be applicable beginning with contract year 2024,
we intend to continue our current policy as reflected here. We also
believe the following proposed changes carry no burden. This proposal
is a codification of previously issued subregulatory guidance in
Chapter 5 and other CMS transmittals to impacted MA organizations. More
importantly, the current proposed codification is already captured
under the PRA package ``Initial and Renewal Model of Care Submissions,
and Off-cycle Submission of Summaries of Model of Care Changes (CMS-
10565, OMB 0938-1296). As part of the PRA approval package, CMS reviews
public comments directed towards the initial and renewal MOC process,
MOC trainings, and the off-cycle MOC submission system. Again, the
burden effort associated with this proposed rule covering the latter
items is captured in the currently approved MOC PRA.
Based on our experience monitoring SNPs and engaging in the process
for review and approval of MOCs, we believe plans are following the our
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current subregulatory guidance and therefore no further burden is
imposed by codifying these standards.
G. Clinical Trial-Related Provisions (Sec. Sec. 422.101 and 422.109)
MA plans must cover Medicare Part A and Part B benefits, excluding
hospice, kidney acquisitions for transplant, and certain changes in
benefits due to a National Coverage Determination (NCD) or a
legislative change. We are proposing to adopt regulations regarding MA
coverage of clinical trials covered by Medicare to ensure clarity on
these coverage rules for MA plans. These coverage rules implement
section 1852 of the Act and are within our rulemaking authority for the
MA program. These proposals generally codify guidance currently
specified in section 10.7 of Chapter 4 of the Medicare Managed Care
Manual for clinical trials covered under National Coverage
Determination (NCD) 310.1; A and B investigational device trials (A-B
IDE); and National Coverage Determinations with coverage with evidence
development (NCD-CED).
1. Clinical Trials Under National Coverage Determination 310.1
Clinical trials may include some items and services that would not
be covered by Medicare, absent the trial. For clinical trials covered
under the Clinical Trials National Coverage Determination 310.1 (NCD)
(NCD manual, Pub. 100-03, Part 4, section 310), longstanding CMS policy
has been that traditional Medicare (that is, the Medicare FFS program)
covers the routine costs of qualifying clinical trials for all Medicare
enrollees who volunteer to participate in the approved trial, including
those enrolled in MA plans. CMS has discussed this policy in several
Advance Notices and Rate Announcements, including the advance notices
of methodological changes in Part C payments issued for 2004, 2007,
2008, 2009, 2011, 2017, and 2019, and in the announcements of
capitation rates and payment policies for Part C in 2009, 2011, 2012,
and 2017. NCD 310.1 is the current statement of the Medicare coverage
of routine costs associated with clinical trial participation. As
specified in the NCD, routine costs associated with a clinical trial
include:
Items or services that are typically provided by Medicare
absent a clinical trial (for example, conventional care);
Items or services required solely for the provision of the
investigational item or service (for example, administration of a
noncovered chemotherapeutic agent), the clinically appropriate
monitoring of the effects of the item or service, or the prevention of
complications; and