[Federal Register Volume 88, Number 70 (Wednesday, April 12, 2023)]
[Rules and Regulations]
[Pages 22120-22345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07115]
[[Page 22119]]
Vol. 88
Wednesday,
No. 70
April 12, 2023
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 417, 422, 423, et al.
Medicare Program; Contract Year 2024 Policy and Technical Changes to
the Medicare Advantage Program, Medicare Prescription Drug Benefit
Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care
for the Elderly; Final Rule
Federal Register / Vol. 88 , No. 70 / Wednesday, April 12, 2023 /
Rules and Regulations
[[Page 22120]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Office of the Secretary
42 CFR Parts 417, 422, 423, 455, and 460
[CMS-4201-F]
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, and Programs of All-Inclusive Care
for the Elderly
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule will 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, marketing and
communications, health equity, provider directories, coverage criteria,
prior authorization, passive enrollment, network adequacy, and other
programmatic areas. This final rule will also codify regulations
implementing section 118 of Division CC of the Consolidated
Appropriations Act, 2021, section 11404 of the Inflation Reduction Act,
and includes provisions that will codify existing sub-regulatory
guidance in the Part C, Part D, and PACE programs.
DATES:
Effective date: These regulations are effective on June 5, 2023.
Applicability dates: The provisions in this rule are applicable to
coverage beginning January 1, 2024, except as otherwise noted. The
revisions to Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i) regarding
Tukey outlier deletion are applicable on June 5, 2023. The marketing
and communications provisions at Sec. Sec. 422.2262 through 422.2274
and 423.2262 through 423.2274 are applicable for all contract year 2024
marketing and communications beginning September 30, 2023. The
revisions to the definition of ``gross covered prescription drug
costs'' in Sec. 423.308 are applicable on June 5, 2023. The removal of
the Part C Diabetes Care--Kidney Disease Monitoring measure as
described in sections V.D.1. of the final rule is applicable on June 5,
2023. The risk adjustment to the three Part D adherence measures based
on sociodemographic status characteristics as described in section
V.D.2. of this final rule is applicable for 2028 Star Rates beginning
January 1, 2026. The PACE provision on the contract year definition at
Sec. 460.6 and the PACE provision on service determination requests at
Sec. 460.121 are applicable on June 5, 2023.
FOR FURTHER INFORMATION CONTACT:
Lucia Patrone, (410) 786-8621--General Questions.
Carly Medosch, (410) 786-8633--Part C and Cost Plan Issues.
Catherine Gardiner, (410) 786-7638--Part D Issues.
Sonia Eaddy, (410) 786-5459--Part D Issues.
Kristy Nishimoto, (206) 615-2367--Beneficiary Enrollment and
Appeals Issues.
Kelley Ordonio, (410) 786-3453--Parts C and D Payment Issues.
Hunter Coohill, (720) 853-2804--Enforcement Issues.
Lauren Brandow, (410) 786-9765--PACE Issues.
Sara Klotz, 410-786-0507--D-SNP Issues.
[email protected]--Parts C and D Star Ratings
Issues.
SUPPLEMENTARY INFORMATION: CMS intends to address all of the remaining
proposals from the December 2022 proposed rule in subsequent
rulemaking. Therefore, CMS plans to make provisions adopted in the
subsequent, second final rule applicable to coverage beginning no
earlier than January 1, 2025. Notwithstanding the foregoing, for
proposals from the December 2022 proposed rule that would codify
statutory requirements that are already in effect, CMS reminds
organizations, plan sponsors, and other readers that the statutory
provisions apply and will continue to be enforced. CMS intends to
implement the statutory requirements in section 118 of Division CC of
the Consolidated Appropriations Act, 2021 (CAA) and section 11404 of
the Inflation Reduction Act (IRA) consistent with their effective
provisions.
We received nearly one thousand timely pieces of correspondence
containing multiple comments on the CY 2024 proposed rule. We note that
some of the public comments were outside of the scope of the proposed
rule. These out-of-scope public comments are not addressed in this
final rule. Summaries of the public comments that are within the scope
of the proposed rule and our responses to those public comments are set
forth in the various sections of this final rule under the appropriate
heading. However, we note that in this final rule, we are not
addressing comments received on the provisions of the proposed rule
that we are not addressing or finalizing at this time. Rather, we will
address them at a later time, in a subsequent rulemaking document, as
appropriate.
I. Executive Summary
A. Purpose
The primary purpose of this final 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 final 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.
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.
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, 423.182, 423.184,
and 423.186)
We are finalizing 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 also are finalizing the removal of the current
reward factor (a reward for consistently high performance). This policy
supports CMS efforts to ensure attainment of the highest level of
health for all people. We are finalizing the reduction in the weight of
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 also are
finalizing the removal of the Part C Diabetes Care--Kidney Disease
Monitoring measure; addition of the Part C Kidney Health Evaluation for
Patients with Diabetes measure; and substantive updates to the Part D
Medication Adherence for Diabetes Medications, Medication Adherence for
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Hypertension (RAS Antagonists), and Medication Adherence for
Cholesterol (Statins) measures. We are also finalizing a rule for the
removal of certain types of Star Ratings measures in the future;
removal of the 60 percent rule that is part of the adjustment for
extreme and uncontrollable circumstances (also called the disaster
adjustment); and technical clarifications and changes related to the
disaster adjustment, treatment of ratings for contracts after
consolidation, and the correction of an error related to codification
of the use of Tukey outlier deletion. Generally, these changes will
apply (that is, data will 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 will apply beginning with the 2024 Star Ratings; the HEI reward,
which will apply beginning with the 2024 and 2025 measurement periods
and the 2027 Star Ratings; the risk adjustment based on
sociodemographic status characteristics to the three adherence
measures, which will be implemented beginning with the 2026 measurement
period and the 2028 Star Ratings; and addressing the codification error
related to the use of Tukey outlier deletion which will be applicable
upon the effective date of this final rule and apply beginning with the
2024 Star Ratings.
The remaining Star Ratings provisions of the proposed rule are not
being finalized in this rule and instead will be addressed in a later
final rule. Those provisions include removing the stand-alone
Medication Reconciliation Post-Discharge measure; adding the updated
Colorectal Cancer Screening and Care for Older Adults--Functional
Status Assessment measures; adding 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; removing
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; modifying the Improvement Measure hold
harmless policy; and adding technical clarifications related to Quality
Bonus Payment (QBP) appeals and weighting of measures after a
substantive specification change.
2. 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.\1\ To that end, in addition to the health equity index,
we are finalizing the following regulatory updates.
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\1\ 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 final rule, we further clarify the
broad application of our policy. Specifically, we are amending 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
are codifying these best practices by requiring organizations to
include providers' cultural and linguistic capabilities (including
American Sign Language, ASL) in their provider directories. This change
will improve the quality and usability of provider directories,
particularly for non-English speakers, limited English proficient
individuals, and enrollees who use ASL.
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 finalizing policies 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. We solicited comments from
stakeholders on various aspects of our proposal, which informed the
types of MA plans we are subjecting to the finalized regulatory
requirements, and how we will collect information related to compliance
with these requirements.
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 will 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.
3. 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 finalizing several regulatory changes to address
these concerns regarding prior authorization. First, we are finalizing
that prior authorization policies for coordinated care plans may only
be used to confirm
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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 are finalizing that an approval granted
through prior authorization processes must be valid for as long as
medically necessary to avoid disruptions in care in accordance with
applicable coverage criteria, the patient's medical history, and the
treating provider's recommendation, and that plans provide a minimum
90-day transition period when an enrollee who is currently undergoing
an active course of treatment switches to a new MA plan. Third, we are
finalizing that MA plans must comply with national coverage
determinations (NCD), local coverage determinations (LCD), and general
coverage and benefit conditions included in Traditional Medicare laws.
This includes criteria for determining whether an item or service is a
benefit available under Traditional Medicare. We are finalizing that
when coverage criteria are not fully established in Medicare statute,
regulation, NCD, or LCD, MA organizations may create publicly
accessible internal coverage criteria that are based on current
evidence in widely used treatment guidelines or clinical literature. We
are also clarifying that coverage criteria are not fully established
when additional, unspecified criteria are needed to interpret or
supplement general provisions in order to determine medical necessity
consistently; NCDs or LCDs include flexibility that explicitly allows
for coverage in circumstances beyond the specific indications that are
listed in an NCD or LCD, or there is an absence of any applicable
Medicare statutes, regulations, NCDs or LCDs setting forth coverage
criteria. When additional, unspecified criteria are needed to interpret
or supplement general provisions, the MA organization must demonstrate
that the additional criteria provide clinical benefits that are highly
likely to outweigh any clinical harms, including from delayed or
decreased access to items or services.
Finally, to ensure prior authorization and other utilization
managed policies are consistent with the rules we are adopting on
coverage criteria and coverage policies and relevant current clinical
guidelines, we are finalizing that all MA plans establish a Utilization
Management Committee to review all utilization management, including
prior authorization, policies annually and ensure they are consistent
with the coverage requirements, including current, traditional
Medicare's national and local coverage decisions and guidelines. These
changes will help ensure MA enrollees have consistent access to
medically necessary care, without unreasonable barriers or
interruptions.
4. Medicare Advantage (MA) and Part D Communications and 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 proposed
several changes to 42 CFR parts 422 and 423, subpart V, to strengthen
beneficiary protections and improve MA and Part D marketing. We are
finalizing the following changes: 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; 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 12 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;
prohibiting a marketing event from occurring within 12 hours of an
educational event at the same location; 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, unless unavoidable because of use of local
or regional media that covers the service area(s); prohibiting the
marketing of information about savings available 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 represent on marketing
materials; 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;
modifying the TPMO disclaimer to state the number of organizations
represented by the TPMO as well as the number of plans; prohibiting the
collection of Scope of Appointment cards at educational events; placing
discrete limits around 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 based
on data from the current or prior year; 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; and requiring 48
hours between a Scope of Appointment and an agent meeting with a
beneficiary, with exceptions for beneficiary-initiated walk-ins and the
end of a valid enrollment period. We are not addressing our proposal to
prohibit TPMOs from distributing beneficiary contact information in
this final rule and may address it in a future final rule.
We are finalizing and implementing the changes, as previously
discussed, to Subpart V in this rule for CY 2024. As such, they will
become effective on September 30, 2023 for all activity related to CY
2024.
5. 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 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 part 92 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 a non-English language or accessible
format.
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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 non-English language not captured by the Medicare Advantage
requirements.
We are finalizing a requirement 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 upon receiving a request for the materials or
otherwise learning of the enrollee's primary language and/or need for
an accessible format. We are also finalizing the application of this
requirement to individualized plans of care for special needs plans. In
addition, we are finalizing a requirement 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.
In this rule, we are finalizing and implementing the changes as
proposed for materials produced for CY 2024.
6. Behavioral Health in Medicare Advantage (MA) (Sec. Sec. 422.112 and
422.116)
As part of 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 are finalizing to: (1) add Clinical Psychology and Licensed Clinical
Social Work 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.
7. 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. Continuity of care is essential,
especially for primary care and 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. CMS
is finalizing amendments to Sec. 422.111(e) that establish specific
enrollee notification requirements for no-cause and for-cause provider
contract terminations and add specific and more stringent enrollee
notification requirements when primary care and behavioral health
provider contract terminations occur. CMS is also amending Sec.
422.2267(e)(12) to specify the content and additional procedural
requirements for the notification to enrollees about a provider
contract termination. These requirements will generally increase
enrollee protections when MA network changes occur and will raise the
standards for the stability of enrollees' primary care and behavioral
health treatment.
8. 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 final rule, we are making the
LI NET program a permanent part of Medicare Part D, as required by the
Consolidated Appropriations Act, 2021 (CAA). We are finalizing the
regulation largely as proposed, with a few minor clarifying
modifications.
9. 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. In this rule, we are finalizing implementing regulations at
Sec. Sec. 423.773 and 423.780 as proposed.
C. Summary of Costs and Benefits
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TR12AP23.005
BILLING CODE 4120-01-C
D. General Comments on the Proposed Rule
Comment: A commenter suggested that CMS had not allowed for a 60-
day comment period for the proposed rule because the beginning of the
comment period was calculated from the date the proposed rule was made
available for public inspection on the Federal Register website rather
than the date that it appeared in an issue of the Federal Register. The
commenter recommended that CMS provide an additional 60-day comment
period on the proposed rule.
Response: Section 1871(b) of the Act requires that we provide for
notice of the proposed regulation in the Federal Register and a period
of not less than 60 days for public comment thereon. The proposed rule
was available for public inspection on federalregister.gov (the website
for the Office of Federal Register) on December 14, 2022. We believe
that beginning the comment period for the proposed rule on the date it
became available for public inspection at the Office of the Federal
Register fully complied with the statute and provided the required
notice to the public and a meaningful opportunity for interested
parties to provide input on the provisions of the proposed rule.
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); and 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
[[Page 22130]]
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 proposed 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.
For more information on MA plan segments, see 87 FR 79465 of the
proposed rule. 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. Currently, 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.
In the proposed rule (87 FR 79465), we described examples of non-
SNP MA plan segments that would be identified as D-SNP look-alikes if
we were to apply the Sec. 422.514(d)(2) criteria at the MA plan
segment level. 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).
We proposed 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. Under the
proposal, CMS would 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, is 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 (PBP) like an unsegmented MA plan and CMS separately evaluates
these submissions for compliance with MA requirements.
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. As a
result, the 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. Instead, we proposed 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 proposed 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 proposed 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 prevent similar
situations in the future, we proposed 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 proposed 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 proposed 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. We noted in the proposed rule at
87 FR 79466 that the earliest our proposed revision to expand the scope
of Sec. 422.514(d)(1) could apply is 2024.
[[Page 22131]]
3. Contract Limitations for D-SNP Look-Alikes as a Basis for MA
Contract Termination (Sec. 422.510(a)(4))
Finally, we proposed an amendment to Sec. 422.510(a)(4), which
outlined the bases for termination of an MA contract. Specifically, we
proposed 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).
We received the following comments, and our responses follow.
Comment: Numerous commenters, including MACPAC and MedPAC,
supported the CMS proposals overall to apply contracting limitations
for D-SNP look-alikes to existing MA plans and MA plan segments. A few
commenters specifically noted support for applying the contracting
limitations to MA plan segments. A commenter stated that, despite
concerns the commenter had raised in the past, the CMS proposal was a
logical extension of existing policy and would allow remaining segments
of the plan and other plans under the same contract to continue.
Another commenter emphasized that MA plan segments are treated
comparably to separate plans in a number of ways (for example, segments
can have different benefit designs and cost-sharing; bids are submitted
at the segment level; and where appropriate, compliance with MA
requirements is determined at the segment level). Another commenter
specifically emphasized its support to apply the D-SNP contract
limitations to existing MA plans and to clarify CMS' authority to
terminate an MA contract based on the application of D-SNP look-alike
requirements.
Some of these commenters emphasized their overall support for CMS'
proposals and general approach to limiting D-SNP look-alikes, noting
that D-SNP look-alikes detract from plans that integrate Medicare and
Medicaid benefits. MACPAC stated that it views D-SNP look-alikes as
acting at cross purposes to State and Federal efforts to integrate care
by drawing dually eligible individuals away from integrated products
and avoiding the additional requirements for D-SNPs. MedPAC indicated
that D-SNP look-alikes undermine efforts to develop integrated plans
for dually eligible individuals by encouraging them to enroll instead
in plans that provide many of the same extra benefits as D-SNPs but do
nothing to integrate Medicaid coverage. A commenter stated that dually
eligible individuals are better served in integrated plans, and thus,
in areas with highly integrated dual eligible special needs plans (HIDE
SNPs) or fully integrated dual eligible special needs plans (FIDE
SNPs), they should have a choice among these available integrated
modalities rather than D-SNP look-alikes. A commenter supported CMS'
proposals as an important step to advance Medicare-Medicaid
integration. A few commenters supported the proposals noting that D-SNP
look-alikes create unnecessary competition for integrated products
without meeting any requirements to work with States to integrate or
coordinate Medicaid services, have specific models of care approved by
the National Committee on Quality Assurance, or incorporate additional
SNP quality measures designed for complex needs populations.
Several commenters supported CMS efforts to close unforeseen
loopholes that have allowed D-SNP look-alikes to persist. A commenter
appreciated CMS' efforts, citing the integrity of D-SNPs is critical
since their membership consists of people with disabilities of all
ages.
Response: We appreciate the widespread support we received for the
proposed amendments and agree with the commenters' concerns about D-SNP
look-alikes. Many of these concerns mirror the discussion in the 2020
Final Call Letter,\2\ February 2020 proposed rule (85 FR 9018 through
9021), and June 2020 final rule (85 FR 33805 through 33808). We believe
the amendments that we are finalizing in this rule will enable us to
more effectively implement Medicare-Medicaid integration requirements
under the BBA of 2018 along with other State and Federal requirements.
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\2\ Available at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.
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Comment: Some commenters recommended that CMS take action beyond
implementing the proposals to lower the threshold used to identify D-
SNP look-alikes. A few of these commenters suggested CMS reduce the
threshold at Sec. 422.514(d) for declining to contract or renew
contracts with D-SNP look-alikes from 80 percent dually eligible
enrollment to 50 percent, helping to mitigate the targeting of dually
eligible individuals by non-integrated models. A commenter suggested
lowering the threshold to at least 50 percent. Another commenter noted,
while the 80 percent threshold is addressing the most obvious targeting
of dually eligible individuals by non-SNP plans, it has allowed some
non-SNP plans with enrollment of dually eligible individuals above 50
percent to continue to operate in markets where D-SNPs are not offered.
This commenter supported lowering the enrollment threshold over the
coming years as long as it can be done in a way that minimizes
disruption to the enrollees and based its support for a lower threshold
on the success of implementing the 80 percent threshold. A commenter
indicated the current 80 percent threshold can itself serve as a
loophole, allowing plans to enroll high proportions of dually eligible
individuals without being subject to D-SNP look-alike requirements.
This commenter encouraged CMS to consider a lower threshold to further
promote integrated care and minimize enrollee confusion. MACPAC did not
opine on whether or not CMS should change the enrollment threshold for
identifying D-SNP look-alikes but expressed concern that there could
still be a real risk of growth in plans of this type falling below the
80 percent threshold and thus continuing to detract from Federal and
State efforts to integrate care.
Response: We appreciate these comments. The recommendations to
reduce the enrollment threshold at Sec. 422.514(d) are outside of the
scope of our proposed amendments. We continue to monitor the level of
dually eligible enrollment among non-SNP MA plans and will consider
these comments for future rulemaking. We note that the D-SNP look-alike
contracting limitations at Sec. 422.514(d) only apply in a State where
there is a D-SNP or any other plan authorized by CMS to exclusively
enroll individuals entitled to Medicaid, which includes Medicare-
Medicaid Plans.
Comment: Some commenters suggested that CMS exclude or reconsider
excluding partial-benefit dually eligible individuals when calculating
the 80 percent threshold at Sec. 422.514(d). Several commenters
recommended that we exclude partial-benefit dually eligible individuals
from the 80 percent threshold calculation in States that limit D-SNP
enrollment to
[[Page 22132]]
full-benefit dually eligible individuals. A few of these commenters
noted that including partial-benefit dually eligible individuals in the
80 percent threshold calculation may limit managed care options for
dually eligible individuals in these States. These commenters stated
that the lack of access to medical benefits through some Medicaid
programs and differences in the level of premium support and cost-
sharing protections available to partial-benefit dually eligible
individuals warrants separate plan benefit design from plans that are
offered to full-benefit dually eligible individuals in order to
optimize benefits to support functional and social needs and limit
cost-sharing for partial-benefit dually eligible individuals. These
commenters listed States like Massachusetts and New Jersey that limit
D-SNP enrollment to full-benefit dually eligible individuals and
explained that non-SNP MA plans in these States may be incentivized not
to enroll partial-benefit dually eligible individuals due to the 80
percent threshold for determining D-SNP look-alikes. Another commenter
noted that, in 2025, this concern would apply to all States with FIDE
SNPs. Additionally, a commenter emphasized the importance of balancing
the challenge many D-SNPs have with State procurements, which can
result in increased numbers of dually eligible individuals enrolling in
general MA plans.
A commenter expressed concern that CMS' current policy for
calculating the 80 percent threshold may fail to maximize advances in
health equity, as partial-benefit dually eligible individuals who are
harmed are more likely than the overall Medicare population to be Black
or Hispanic/Latino, under age 65, experience isolation and food
insecurity, have a mental illness, and have a multiple chronic
condition diagnosis. This commenter further stated that MA plans have
the ability to offer unique, targeted benefits that are tailored to
low-income populations (for example, groceries, health meals,
transportation, and over-the-counter benefits) that directly address
social determinants of health and drive higher quality and believed
that, where plans are forced to offer less targeted benefits to avoid
triggering the 80 percent threshold, partial-benefit dually eligible
individuals are harmed. This commenter noted that at least eight States
currently prohibit partial-benefit dually eligible individuals from
enrolling in D-SNPs. Without a solution, according to the commenter,
plans in these States will need to take benefits and resources away
from this complex low-income population to instead use them to reduce
Part D cost-sharing to attract enough non-dually eligible enrollees to
avoid the 80 percent threshold.
A few commenters emphasized the value of allowing partial-benefit
dually eligible individuals to enroll into D-SNPs. These commenters
stated that D-SNPs provide supplemental benefits and care coordination
provided through individualized care plans. A commenter noted that
although partial-benefit dually eligible individuals are ineligible for
most Medicaid services, these individuals have similar clinical,
functional, and social needs as full-benefit dually eligible
individuals and can benefit from access to stronger care management
models available in D-SNPs. Recognizing that States decide whether or
not to allow D-SNPs to enroll partial-benefit dually eligible
individuals, a commenter recommended that CMS exclude these individuals
from the calculation of the 80 percent threshold.
A commenter suggested that CMS consider alternative approaches,
such as working with Congress to require States that limit D-SNP
enrollment to full-benefit dually eligible individuals to, in turn,
require their D-SNPs to have a separate PBP for partial-benefit dually
eligible individuals, as Pennsylvania and Virginia have already done.
A commenter stated that excluding partial-benefit dually eligible
individuals from the 80 percent threshold calculation would allow CMS
to enforce D-SNP look-alike contracting restrictions in States where
dually eligible individuals have D-SNPs they can move to, while not
penalizing States that have not yet adopted the D-SNP model for all
partial- and full-benefit dually eligible individuals.
Response: We thank the commenters for their perspectives. The
recommendations to revise the definition of the enrollment threshold at
Sec. 422.514(d) are outside of the scope of our proposed amendments;
we believe that policy making on this issue would benefit from further
study and engagement with interested parties. We will consider these
comments for future rulemaking. For contract year 2023, D-SNPs limited
to partial-benefit dually eligible individuals exist in 11 States (that
is, Connecticut, Delaware, Florida, Idaho, Michigan, Mississippi, New
York, Ohio, Virginia, Washington, and Wisconsin) and the District of
Columbia. We continue to believe that allowing non-SNP MA plans to
enroll partial-benefit dually eligible individuals with no limit would
discourage States from taking this approach.
We believe the commenter noting that limitations on D-SNPs
enrolling only full-benefit dually eligible individuals would apply to
all States with FIDE SNPs in 2025 is referencing an amendment we made
to the FIDE SNP definition in the Medicare Program; Contract Year 2023
Policy and Technical Changes to the Medicare Advantage and Medicare
Prescription Drug 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 on May 9, 2022 (85
CFR 22704). Per the amendment to the FIDE SNP definition at 422.2
paragraph (5), for plan years 2025 and subsequent years, FIDE SNPs must
have exclusively aligned enrollment. Starting for plan year 2025, FIDE
SNPs will no longer be permitted to enroll any partial-benefit dually
eligible individuals, because the definition of aligned enrollment is
limited to full-benefit dually eligible individuals. However, the new
requirement for exclusively aligned enrollment does not directly affect
partial-benefit dually eligible individuals because no FIDE SNPs
currently enroll partial-benefit dually eligible individuals. With
respect to the comment regarding the ability of MA plans to offer
benefits tailored to low-income populations such as groceries,
transportation, and over-the-counter benefits, we note that these
benefits may be offered when consistent with Sec. Sec. 422.100(c)(2)
and 422.102.
Comment: A commenter suggested that CMS impose D-SNP look-alike
restrictions only on MA plans and plan segments that have a minimum
number of enrollees. The commenter indicated that creating an
enrollment floor would prevent a small number of dually eligible
enrollees from having an outsized impact on the plan's percentage of
dually eligible enrollment due to low enrollment and recommended
establishing this floor at 200 enrollees per plan for both new and
existing plans to create a statistically significant sample size.
Response: We thank the commenter for this perspective but disagree
with the recommendation. The recommendations to revise the enrollment
threshold at Sec. 422.514(d) are outside of the scope of our proposed
amendments. We will consider these comments for future rulemaking.
Currently, Sec. 422.514(d)(2)(ii) already exempts from the D-SNP look-
alike contracting limitations non-SNP MA
[[Page 22133]]
plans that have been active for less than one year and have enrollment
of 200 or fewer individuals based on January enrollment of the current
year. The commenter is recommending that we adopt a minimum enrollment
floor alone, without the requirement that the non-SNP MA plan be a new
plan. As discussed in the June 2020 final rule at 85 FR 33813, we
adopted the exemption at Sec. 422.514(d)(2)(ii) to allow for some
additional flexibility for initial enrollment patterns that may not be
representative of the longer term enrollment pattern for the plan. Once
the initial enrollment period has passed or the number of enrollees
during that first year of operation exceeds 200 enrollees, we believe
the enrollment profile accurately reflects whether or not the plan was
designed to exclusively enroll dually eligible individuals.
Comment: A commenter suggested that CMS couple the proposed
amendments to the D-SNP look-alike policy with additional efforts to
mitigate targeting of dually eligible individuals by non-integrated
models, such as by considering the application of the D-SNP look-alike
policy to other types of SNPs including chronic condition SNPs (C-
SNPs). Another commenter noted that the proposed rule did not specify
whether the proposed standards would apply to C-SNPs and requested that
CMS provide more detail and transparency regarding the application of
the proposal.
Response: We welcome the commenters' perspectives but clarify that
the proposed amendments would not apply the D-SNP look alike contract
limitations to other types of SNPs. 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 who are dually eligible. 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 are dually eligible,
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 proposed adding a new paragraph at Sec. 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.
The recommendation to extend the contracting limitations at
422.514(d) to C-SNPs and I-SNPs is outside of the scope of our proposed
amendments. We stated in the February 2020 proposed rule (85 FR 9021)
and June 2020 final rule (85 FR 33813) that we proposed applying the
requirement at Sec. 422.514(d) only to non-SNP plans to allow for the
predominant dually eligible enrollment that characterizes D-SNPs, I-
SNPs, and some C-SNPs by virtue of the populations that the statute
expressly permits each type of SNP to exclusively enroll. At this time,
we are not aware of any non-SNP MA plans with features similar to C-
SNPs and I-SNPs that do not meet the C-SNP or I-SNP requirements.
Nonetheless, we will monitor evolution in enrollment patterns.
Comment: Several commenters raised concerns or requested greater
clarity about CMS' authority to terminate an MA contract. A commenter
opposed CMS terminating an entire H contract number if CMS determined
that a PBP of a health plan is a D-SNP look-alike due to having dually
eligible enrollment greater than 80 percent of total enrollment and
requested more detail regarding CMS' application of the proposal.
Another commenter expressed concerns about CMS terminating a full MA
contract when a plan segment rises above the D-SNP look-alike
enrollment threshold since it would likely lead to significant
disruptions in coverage and care coordination for impacted enrollees.
This commenter suggested that CMS permit plans to crosswalk enrollees
from MA plans that are at the 80 percent threshold or at risk of
reaching the 80 percent threshold for dually eligible enrollment in a
non-SNP plan, as well as add a corrective action period before the
termination of an MA plan if the threshold is crossed. The commenter
explained that providing such plans with the ability to crosswalk
enrollees and a six-month window for corrective action may prevent CMS
from needing to terminate the full MA contract and would prevent
negative impacts for enrollees. Another commenter recommended that CMS
provide details regarding the circumstances under which it would use
the proposed authority to terminate an MA contract instead of taking
more incremental measures to achieve compliance with the proposal.
Response: We appreciate these comments and the requests for
clarification. As stated in the June 2020 final rule at 85 FR 33812 and
reiterated in the preamble to the proposed rule at 87 CFR 79466, we
implement the contracting prohibition in Sec. 422.514 at the plan
level. We will similarly implement the contracting prohibition at the
segment level if enrollment in the segment exceeds the D-SNP look-alike
threshold.
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 then terminate the deemed contract for the
D-SNP look-alike. The other, non-D-SNP look-alike plans offered under
the original contract would not be terminated. This action, in effect,
allows CMS to renew only the portion of the contract that does not
include the D-SNP look-alike. In this final rule, we are finalizing an
amendment to Sec. 422.503(e) to allow for CMS to sever a segment from
an MA plan and allow the remaining non-D-SNP look-alike segments of
that MA plan to continue along with any other non-D-SNP look-alike
plans offered under the same contract.
Further, MA plans and MA plan segments that meet the criteria at
Sec. 422.514(d)(2) will have the opportunity to transition enrollees
from a D-SNP look-alike per Sec. 422.514(e). The transition authority
at Sec. 422.514(e) only permits transitioning the enrollment from the
D-SNP look-alike plan or segment, that is, MA plans or segments that
meet contracting limitation requirements at Sec. 422.514(d)(2). The
transition authority at Sec. 422.514(e) does not apply to non-SNP MA
plans with less than 80 percent dually eligible enrollees; a
permissible crosswalk may be available depending on the circumstances.
The comments about permitting transition of enrollees from plans at
risk of reaching the 80 percent threshold and allowing a correction
action period before termination of the MA plan meeting Sec.
422.514(d) are out of scope for this rulemaking; we believe that
policymaking on this issue would benefit from further study and
engagement with interested parties. We will consider these comments for
future rulemaking.
Comment: A few commenters supported our proposal but noted that
confusion can arise when crosswalk transactions are processed between
segmented and non-segmented plans due to the variety of permissible
scenarios. These commenters explained that in some cases CMS approved
crosswalk transition plans for 2023 but MA plans later experienced
incorrect denials during the plan crosswalk process despite the prior
approval. These commenters believed the
[[Page 22134]]
proposal would clarify some of this confusion but recommended that CMS
work with plan sponsors to ensure approvals are clearly indicated
within the Health Plan Management System (HPMS) and appropriately
communicated to all parties involved in executing crosswalk
transactions.
Response: We thank the commenters for their perspectives. We
acknowledge that confusion can arise related to D-SNP look-alike
transitions permitted under Sec. 422.514(e) and crosswalk exceptions
under Sec. 422.530(c). We are planning enhancements to HPMS that will
improve the clarity of approved and denied transactions.
Comment: A commenter requested that CMS confirm whether it is
permissible to consolidate two or more existing plans into a single
plan and then segment the resulting consolidated plan.
Response: We appreciate the comment. While an MA organization could
consolidate two or more existing plans into one MA plan per Sec.
422.530(b)(1)(ii) and segment the resulting consolidated plan, the
resulting consolidated plan would be subject to the requirement we are
finalizing at Sec. 422.514(g).
Comment: A commenter suggested that CMS delay implementation of the
contracting limitations until January 1, 2025 to align with the
transition of Medicare-Medicaid Plans (MMP). The commenter added that
this delay would give dually eligible individuals who are currently
enrolled in MMPs the ability to move to a D-SNP at the end of the
demonstration and would give States that are currently participating in
MMPs the ability to transition to D-SNPs as well.
Response: We appreciate the commenter's suggestion but do not
agree. The existing D-SNP look-alike contract limitation and transition
authority at Sec. 422.514(d) through (f), and amendments finalized at
Sec. 422.514(d) and Sec. 422.514(g) in this rule, are not necessary
to facilitate MMP to D-SNP transitions. Rather, CMS will work with
States participating in the Financial Alignment Initiative to
transition as described 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 on May 9, 2023 (CMS-4192-F) at 87 CFR 27796 through 27798.
This process is consistent with the transition of California MMPs to D-
SNPs effective January 1, 2023.\3\ The transition of enrollees from
MMPs to D-SNPs does not address our need to stem the proliferation and
growth of D-SNP look-alikes now, as summarized earlier in this section
and discussed in more detail in the February 2020 proposed rule (85 FR
9018 through 9021).
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\3\ The California three-way contract is available at: https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/FinancialAlignmentInitiative/Downloads/CAContract.pdf.
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Comment: A commenter encouraged CMS to continue efforts to reduce
incentives for non-SNP plans to focus enrollments efforts on dually
eligible individuals. A commenter suggested that CMS continue to
monitor and evaluate any non D-SNP plan where dually eligible
individuals make up the majority of the covered lives to ensure the
plan is not engaged in deceptive marketing practices. Another commenter
recommended that CMS contemplate requiring Medicare to inform
beneficiaries when they are enrolling in a non-integrated model where
an integrated model exists.
Response: We appreciate the comments and agree with concerns about
the potential proliferation of D-SNP look-alikes that are not required
to comply with the requirements for D-SNPs and that may undermine our
goals of encouraging and furthering integrated coverage options for
dually eligible individuals. As described in the June 2020 final rule
at 85 FR 9020, we stated that the prevalence of D-SNP look-alikes has
led to instances of misleading marketing by brokers and agents that
misrepresent to dually eligible individuals the characteristics of such
look-alike plans, especially where the plans have marketed themselves
as being special Medicaid-focused plans. We sought to reduce that
prevalence through finalizing the D-SNP look-alike contracting
limitations at Sec. 422.514(d). Also in the June 2020 final rule, we
codified at Sec. 422.2262(a)(1)(xvi) a prohibition on MA
organizations, with respect to their non-D-SNP plans, from marketing
their plan as if it were a D-SNP, implying that their plan is designed
for dually eligible individuals, targeting their marketing efforts
exclusively to dually eligible individuals, or claiming a relationship
with the State Medicaid agency, unless a contract to coordinate
Medicaid services for that plan is in place. We will continue to
monitor the level of dually eligible enrollment among non-SNP MA plans.
This comment is out of scope for this rulemaking, but we will consider
ways to monitor non-D-SNP plans for deceptive marketing practices and
contemplate for future rulemaking a requirement to inform beneficiaries
upon enrolling into a non-integrated model where an integrated model
exists.
Comment: A commenter noted that the unforeseen loopholes reinforced
their concerns about the overly complex nature of MA contracting and
the opportunities that complexity brings for abuse, which led to the
need for D-SNP look-alike regulations. This commenter emphasized that
complexity hampers transparency as shown by the MA plan segment issues
and recommended that CMS take a hard look at its contracting and
oversight of MA plans to ensure the system is more straightforward,
accountable, and transparent.
Response: We welcome this perspective. While this comment is out of
scope for this rulemaking, we will consider it for future rulemaking
and oversight opportunities.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing revisions to Sec. Sec. 422.503(e), 422.504(a)(19),
422.510(a)(4), and 422.514(g) as proposed.
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 conditions--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.
In 2020, we codified a number of exceptional condition 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
[[Page 22135]]
entitlement date for Part B for individuals who enroll in Part B during
the GEP.
Prior to January 1, 2023, when an individual enrolled in Part B
during the GEP, their Part B enrollment entitlement date was 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) Public Law 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 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 proposed 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 proposed 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.
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. Finalizing this SEP will 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 will 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 finalizing this SEP will adversely affect individuals
requesting enrollment in Medicare plans, the plans themselves, or their
current enrollees. Similarly, we do not believe finalizing this SEP
will have any impact to the Medicare Trust Funds.
We received a number of comments on this proposal--those comments
and our responses follow.
Comment: All commenters supported our proposal to align the
timeframe for use of this SEP based on the revised GEP effective date
parameters established by the CAA. One commenter stated that they
support beneficiaries' access to affordable, quality health coverage,
and that this change would reduce potential coverage gaps. Another
commenter agreed that this change would help alleviate potential
coverage gaps, and added that it would simplify the process for
beneficiaries and their caregivers, as it will align the effective date
of Part D coverage with the effective date for other Part D SEPs.
Another commenter stated that they support policies that support
enrollment alignment across Medicare Parts A, B, C and D.
Response: We thank the commenters for their support of this
proposed revision to align the timeframe for use of this SEP with the
new parameter for GEP effective dates established under the CAA.
Comment: One commenter supported the proposal, but stated that
current eligibility criteria do not require checking Part A status of
payment, and requested clarification on whether CMS intends to require
plans to validate Part A Entitlement Status Code in the Medicare
Advantage Prescription Drug (MARx) system as part of eligibility
verification for use of this SEP.
Response: CMS did not propose any change to the criteria for use of
this SEP, only the timeframe for its use, and the effective date of the
coverage. Therefore, the actual enrollment process will not change. Per
current procedures outlined in the CMS Plan Communications User Guide,
Part D sponsors must verify Part D eligibility/Medicare entitlement by
either the Batch Eligibility Query (BEQ) process or the MARx online
query (M232 screen) or its equivalent for all enrollment requests
except enrollment requests from a current enrollee of a PDP who is
requesting enrollment into another PDP offered by the same parent
organization with no break in coverage (that is, ``switching plans'').
CMS systems are updated within two business days of SSA processing new
or changed Part A or Part B entitlement for a Medicare beneficiary. If
the plan needs to validate the individual's Part A entitlement status,
that code/information can be found in the Part A Entitlement Status
column on the M257 screen in MARx.
Comment: One commenter stated that the individual's premium-Part A
entitlement is a necessary component if one were to use the SEP to
apply for Part D. They further stated that, the window for applying for
premium-Part A in the 14 group-payer states is limited to the GEP, so,
group-payer states can delay the individual's ability to take advantage
of the proposed Part D SEP.
Response: We thank the commenter, but the parameters for applying
for premium--Part A in group-payer states are outside of the scope of
this rule.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the SEP for Individuals Who Enroll in Part B During the Part
B GEP to request enrollment in a Part D plan at Sec. 423.38(c)(16)
without modification.
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
conditions. 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.''
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
[[Page 22136]]
Part D eligibility. 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 was effective January 1,
2023. 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 are 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 an 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 proposed 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.
We proposed 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 also proposed 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.
Because an individual may elect an MA or Part D plan only during an
election period and when eligible, MA organizations and Part D sponsors
already have procedures in place to determine the election period(s)
for which an applicant is eligible. Finalizing these coordinating SEPs
will not add to existing enrollment processes, so we believe any burden
associated with this aspect of enrollment processing will remain
unchanged from the current practice, and will not impose any new
requirements or burden.
Consequently, finalizing these SEPs 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
finalizing these SEPs will adversely impact individuals requesting
enrollment in Medicare plans, the plans themselves, or their current
enrollees. Similarly, we do not believe the finalized SEPs will have
any impact to the Medicare Trust Funds.
We received a number of comments on this proposal--those comments
and our responses follow.
Comment: All commenters supported our proposal to add corresponding
exceptional condition SEPs for MA and Part D enrollment 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. A few commenters
expressed that the availability of these SEPs would reduce potential
coverage gaps and help prevent late enrollment penalties. Another
commenter stated that they support the timely access to prescription
drugs, and these new SEPs would allow vulnerable beneficiaries access
to prescription drug coverage to become effective the first of the
month following the month the plan sponsor receives the enrollment
request. One commenter stated that they support policies that promote
enrollment alignment across Medicare Parts A, B, C and D. Another
commenter stated that their priority is to improve beneficiary
experience by reducing confusion and to align program dates within
Medicare or between Medicare and Medicaid. They further stated that
this will provide Medicare beneficiaries with the opportunity to learn
about and enroll in MA special needs plans (SNPs). The commenter added
that an ongoing issue for beneficiaries and stakeholders is the lack of
understanding of the availability of SNPs, and that this will provide
another opportunity for CMS to provide beneficiaries with the very
important choice of fee-for-service vs. MA, and MA vs. SNPs.
Response: We thank the commenters for their support of our proposal
to add corresponding exceptional condition SEPs for MA and Part D
enrollment to align with the new Medicare premium Part A and B
exceptional condition SEPs.
Comment: One commenter expressed that, under the new requirements,
a Part D plan would not know the date the applicant submitted their
application to the SSA. Accordingly, they requested CMS to clarify how
the start of the SEP factors into a plan processing an enrollment
request using the SEP.
Response: 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, 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.
For MA enrollment, the SEP begins when the individual,
using an exceptional condition SEP, submits their application for--
++ Premium--Part A and Part B; or
++ Part B only, if the individual is already entitled to Part A,
(or enrolls in premium-free Part A within the timeframe for use of this
SEP).
For Part D enrollment, the SEP begins when the individual,
using an exceptional condition SEP, submits their premium--Part A or
Part B application.
We note that the timeframe for use of both of these SEPs extends
two months beyond the premium--Part A and/or Part B entitlement date,
which will be visible to plans.
Comment: A commenter stated that, although they support CMS' policy
intent with this proposal, with increased prescription coverage for
beneficiaries, this will likely exacerbate current reimbursement
challenges at the pharmacy counter--where pharmacies are being paid
below costs for many of the prescriptions they purchase and dispense.
Another commenter suggested
[[Page 22137]]
that CMS consider creating an SEP that would allow cancer patients to
switch back to Original Medicare, in the case where a patient in an MA
plan receives a cancer diagnosis and is unable to access needed
treatment in a timely manner. The commenter also recommended that CMS
create an ongoing open enrollment window for patients diagnosed with
cancer, which would automatically provide the benefits of having
comprehensive in-network care.
Response: We thank the commenters for their feedback; however, we
proposed to add corresponding exceptional condition SEPs for MA and
Part D enrollment to align with the new Medicare premium-Part A and B
exceptional condition SEPs that CMS has finalized, and these comments
are outside of the scope of this rulemaking.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing, the MA SEP at Sec. Sec. 422.62(b)(26) with a minor edit to
the regulation text to clarify that this SEP applies to an individual
submitting an application for Part B only if they are already entitled
to Part A, or are enrolling in premium-free Part A within the timeframe
of this SEP. We are finalizing the Part D enrollment SEP at
423.38(c)(34) as proposed without modification.
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 (dually
eligible) received prescription drug benefits through Medicaid. When
the MMA went into effect, dually 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 dually
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 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 LI NET program with beneficiary
needs foremost in mind, ensuring continuous drug coverage and access
for eligible low-income individuals.
[[Page 22138]]
LI NET policies, infrastructure, and operations have evolved over
the past 13 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 is 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 took into
consideration our experience under the LI NET demonstration. Where
appropriate, we discuss the policies and practices under the LI NET
demonstration that informed 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 final 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 started with Sec.
423.2500. In Sec. 423.2500(a), we proposed the LI NET program would be
based on section 1860D-14 of the Act. We proposed 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 proposed LI NET benefits and beneficiary protections. Next, we
proposed in Sec. 423.2512 the requirements to be an LI NET sponsor and
Sec. 423.2516 proposed how the Part D sponsor administering LI NET in
partnership with CMS would be selected and the requirements set forth
in the LI NET contract to provide services and coverage. In Sec.
423.2518, we included a proposal for intermediate sanctions in the
event of contract violations. In Sec. 423.2520, we proposed how an LI
NET contract would be non-renewed or terminated. In Sec. 423.2524, we
included our proposals for bidding and determining the LI NET payment
rate. Finally, Sec. 423.2536 enumerated the Part D requirements we
proposed waiving for LI NET.
We proposed to align sunsetting the demonstration seamlessly with
the start of the LI NET program under this section. Specifically, the
LI NET demonstration will 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 Dually 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 proposed to codify at Subpart Y the LI NET eligibility
requirements set forth in section 1860D-14(e)(2) of the Act. We
proposed 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,
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.
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\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 proposed 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. We proposed to permit
[[Page 22139]]
immediate need individuals to 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 our proposal, 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 solicited comment
on the proposal to align the 2 months of enrollment with the ability to
fill prescriptions for these immediate need beneficiaries.
We proposed to permit immediate need beneficiaries whose
eligibility cannot be confirmed to 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
proposed 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 looked 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 dually
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 eligible out-of-pocket costs for
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 either
bring documentation of LIS status to a pharmacy or 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 proposed in Sec. 423.2504(b) to codify the ways in which
individuals can be enrolled into LI NET: auto-enrollment, point-of-sale
for immediate need individuals, direct reimbursement, and LI NET
enrollment form.
In Sec. 423.2504(b)(1), we proposed 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) provided that when a beneficiary
affirmatively declines enrollment in Part D per Sec. 423.34(e),
[[Page 22140]]
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) of the Act. Section 1860D-14(e)(3)(A) 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 typically cap 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
proposed 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 dually 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 proposed 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 did not propose an exception to the 36-
month limit on retroactive coverage in this rulemaking as the
statute does not provide for such an exception.
---------------------------------------------------------------------------
We proposed 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 proposed
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 provided the following two examples to further explain how LI
NET enrollment and disenrollment would work under our proposals:
Example 1: Beneficiary Kristy is a full-benefit dually eligible
individual 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 Ilan was eligible for both Medicare and
SSI starting in November 2022. CMS provides Ilan 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 Ilan was first LIS eligible,
through March 2024. After March 2024, if Ilan 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 requested
comment on whether revised or additional regulations were needed 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 proposed 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 proposed 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 determination against it. For the permanent LI NET program, we
proposed 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
[[Page 22141]]
the extent applicable if it 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 proposed 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 proposed 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 solicited comment on whether any of these provisions would not
be compatible with the LI NET program as proposed.
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. As noted in the proposed rule, we drew
upon our experience under the demonstration to develop our proposed
cost sharing and appeals policies for LI NET, which we proposed to
codify in Sec. 423.2508(d) and (e), respectively.
We proposed 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 proposed 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).\6\ 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.
---------------------------------------------------------------------------
\6\ Cost-sharing amounts in Part D are established each year in
the Rate Announcement. Final Part D benefit parameters can be found
for a plan year at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.
---------------------------------------------------------------------------
We proposed 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 processes for grievances,
coverage determinations, and appeals processes. Furthermore,
consistency with other Part D contracts with respect to grievances,
coverage determinations, and appeals would be simplest for the LI NET
sponsor.
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 LI NET. 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 a 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 for beneficiary impact is
mitigated by our proposals to non-renew or terminate the LI NET
contract per proposed Sec. 423.2520. Accordingly, while we proposed 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 proposed 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 proposed to specify at Sec. 423.2512(a)(1) that the LI NET
sponsor would be selected from among the Part D sponsors
[[Page 22142]]
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 final 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 the LI NET sponsor, and proposed at Sec.
423.2512(b) that any candidates to be the LI NET sponsor have a minimum
of 2 consecutive years contracting with CMS as a Part D sponsor.
We proposed 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 proposed 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 proposed 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 enrollments 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 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 proposed to adopt this
approach for the permanent LI NET program.
As discussed further in this section of this rule, we proposed to
waive requirements under Sec. Sec. 423.128(d)(2)(ii),
423.128(d)(2)(iii), and 423.128(d)(4). We also proposed 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.'' Implementing this
statutory provision 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 the timeframes that apply when a Part D sponsor
authorizes payment for a benefit due to a reversal in its coverage
determination (see Sec. 423.636(a)(2)). 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 timeframes have proved workable under the demonstration, we
proposed 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 proposed requiring the LI NET sponsor
to adjudicate claims from OON pharmacies according to the LI NET
sponsor's standard reimbursement for its 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 and 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
proposed 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 proposed 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 proposed that CMS may
choose to conduct discussions with potentially eligible 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
[[Page 22143]]
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
proposed 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 noted in the proposed rule and consistent with our general
approach of applying Part D requirements to the LI NET program unless
waived, we stated our intention for Sec. 423.505 to apply to LI NET
with the exception of Sec. 423.505(k)(6), which we proposed to waive
in 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 proposed to waive this requirement in Sec.
423.2536(g).
In Sec. 423.2516(c), we proposed that the term of the LI NET
sponsor's appointment would 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. As explained in the proposed rule, this
approach has worked well during the demonstration, and we saw no reason
to adopt a different approach for the permanent program.
We proposed to establish in Sec. 423.2518 that, if the LI NET
sponsor violates its contract, 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 proposed that if the LI NET sponsor decides
for any reason to non-renew its existing LI NET 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 proposed 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 proposed 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 proposed 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. 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 proposed 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, 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 proposed
to establish in
[[Page 22144]]
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 to 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 proposed to establish the
methodology and formulas that we would use to determine the amounts we
pay to the LI NET sponsor under the contract. As noted in the proposed
rule, we use our payment policies under the demonstration, including
the bidding requirements, as the basis for the proposed payment
policies for the LI NET program.
We proposed 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 proposed requirements related to the LI NET
bid. Because most of the provisions in Subpart F would not be
applicable to LI NET, we proposed to waive Subpart F except for those
provisions we proposed to apply to LI NET.
Section 423.2524(b)(1) proposed that the submission of LI NET bids
and related information will follow the requirements and limitations in
Part 423, Subpart F, 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 proposed 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 proposed 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 plan year 2021, 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 proposed Sec. 423.2524(d).
In Sec. 423.2524(c) we proposed 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 proposed 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 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 who are not confirmed to be LIS-
eligible. We
[[Page 22145]]
proposed 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 year and subsequent plan years, proposed Sec. 423.2524(c)(1)(ii)
would require the LI NET sponsor to specify its 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 final 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 proposed to waive through this rulemaking.
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 (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 proposed 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 proposed to waive for LI
NET some of the cost control and quality improvement requirements in
Part 423
[[Page 22146]]
Subpart D, except for the provisions we explicitly proposed 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 proposed to waive
pertain to drug utilization management programs, medication therapy
management programs, and consumer satisfaction surveys.
We solicited 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.
We proposed 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 is not subject to coverage gap discount
requirements under subpart W of Part 423. Thus, we proposed in Sec.
423.2536(i) to waive subpart W in full for LI NET.
We proposed in Sec. 423.2536(j) to waive the MLR requirements in
subpart X of Part 423. Section 1857 of the Act as incorporated into
section 1860D-14(e) 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
3 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 proposed 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
proposed 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
solicited comment on whether there are additional provisions in part
423 that we did not mention in the 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 proposed to make
the correction.
We also proposed 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 proposed to make the technical correction
so the header correctly reads, ``Recovery Audit Contractor Part D
Appeals Process.''
We received a number of comments on the LI NET proposals. Summaries
of the comments and our responses follow.
Comment: All comments we received on the LI NET provision stated
broad support of our proposals to make LI NET a permanent program. One
commenter specifically noted that our proposal will simplify and expand
access for the dually eligible population, in addition to the partial-
benefit dually eligible population.
Response: We thank commenters for their support.
Comment: One commenter questioned whether each MA organization
needs to have programs in place to track low-income beneficiaries'
eligibility for LI NET, provide LI NET benefits, and manage LI NET
enrollment.
Response: Only the LI NET sponsor appointed by CMS in accordance
with Sec. 423.2516 will have responsibility for administering the LI
NET program. Other Part D benchmark plans may receive beneficiary
enrollments automatically from CMS, and such enrollments could include
beneficiaries who were enrolled in LI NET. The process of identifying
low-income beneficiaries who may be eligible for LI NET is set forth in
Sec. 423.2504.
Comment: A few commenters encouraged us to consider additional
outreach to LI NET beneficiaries during their temporary enrollment in
LI NET to support beneficiaries in selecting an appropriate Part D plan
for themselves if they so choose.
Response: All beneficiaries who are enrolled into the LI NET
demonstration receive information at the beginning of their LI NET
enrollment that describes how they can choose a specific plan for their
individual circumstances or allow CMS to automatically enroll them into
a benchmark plan following their enrollment in LI NET. In the
demonstration, the beneficiary's welcome letter states in plain
language that the LI NET beneficiary has the right to choose a plan,
and lists resources like 1-800-MEDICARE, a link to Plan Compare (Plan
Finder), and the phone number for Eldercare Locator. Under the
demonstration, CMS automatically enrolls beneficiaries into a benchmark
plan. LIS-eligible beneficiaries who wish to change plans may use a
special
[[Page 22147]]
election period (SEP) to move to another plan, and instructions for how
to join a different plan are also described in CMS' notices to
beneficiaries. As is routine for all beneficiary communications
regarding Medicare, instructions that include the phone number for LI
NET beneficiaries to call for language assistance services are provided
in numerous languages to broaden the reach of beneficiary
communications. We are finalizing Sec. 423.2512(c)(3), which will
require the LI NET sponsor to conduct outreach in consultation with
CMS, as proposed. We anticipate that outreach under the LI NET program
will be substantially similar to outreach that has been conducted under
the demonstration to date.
Comment: A few commenters believed that CMS was not intending to
allow a letter from the Social Security Administration indicating a
beneficiary's LIS eligibility to be sufficient evidence for enrollment
into LI NET. Two of the commenters also referenced ``best available
evidence'' (BAE) standards in relation to LI NET. One commenter relayed
a belief that the CMS contractor reviewing BAE is too strict and
improperly excludes LTC residents from receiving LIS status. According
to the commenter, this causes LTC pharmacies to unfairly absorb the
cost of prescription drugs and related LTC pharmacy services that they
are legally obligated to provide to LTC facility residents for whom LIS
status does not get established.
Response: We proposed at Sec. 423.2504(a)(2)(i)(A) through (F) a
list of documents that would be sufficient for an immediate need
beneficiary to demonstrate LIS eligibility. A copy of a letter from SSA
showing LIS status is item (B) on the list. The documentation listed in
proposed Sec. 423.2504(a)(2)(i)(A) through (F) would be appropriate
for any individual to submit in order to enroll in LI NET in
circumstances where they are not automatically enrolled. After
consideration of these comments, we are modifying our proposal to
clarify that these documents can be submitted by any individual to
determine LIS eligibility, regardless of whether they are enrolling in
LI NET at the POS, through a direct reimbursement request, or by
submitting an LI NET application form. We are modifying our proposed
regulations at Sec. 423.2504(b) to make conforming changes.
We also take this opportunity to clarify that the list of
documentation of LIS eligibility in proposed Sec. 423.2504(a)(2)(i)(A)
through (F) is a non-exhaustive list of types of ``best available
evidence'' as defined in Sec. 423.772. ``Best available evidence'' in
Sec. 423.772 means ``evidence recognized by CMS as documentation or
other information that is directly tied to State or Social Security
Administration systems that confirm an individual's low-income subsidy
eligibility status, and that must be accepted and used by the Part D
sponsor to change low-income subsidy status.'' As applied to LI NET,
when a beneficiary chooses to provide documentation at the POS, with
their direct reimbursement request form, or with their LI NET
application form, the documentation is reviewed by CMS and upon
approval the LI NET sponsor would change the beneficiary's LIS status
appropriately.
In Sec. 423.2504(b)(3), the proposed rule refers to individuals
submitting receipts for reimbursement for claims paid out of pocket
when making a direct reimbursement request. We finalize Sec.
423.2504(b)(3) with a modification to clarify that that we are
referring to ``eligible claims''. This change makes explicit that
eligible claims, namely those for Part D drugs from dates when the
person was retroactively LIS eligible, are needed for enrollment to
successfully occur using a direct reimbursement request.
In Sec. 423.2504(b)(4), for consistency in referring to the
documentation that may be optionally submitted along with the LI NET
application form, we revise the proposed language of ``supporting
documentation demonstrating their LIS status'' to ``optional
documentation of LIS eligibility listed in [new] paragraph (a)(3)'' and
clarify that if no documentation is submitted and accepted, the LI NET
sponsor will periodically check for eligibility and enroll applicants
once LIS eligibility is confirmed.
In making these clarifications, we note that LI NET individuals
will be enrolled via one of the four enrollment options. Though they
can, for example, submit an LI NET application form and a direct
reimbursement request form at the same time, the first in time to
effectuate the enrollment will be the way in which the beneficiary is
enrolled.
In sum, to clarify the role of documentation in LI NET, we are
finalizing Sec. 423.2504 with the following revisions:
Renumber proposed Sec. 423.2504(a)(2)(i) to Sec.
423.2504(a)(3) and add a heading that reads ``Documentation of LIS
Eligibility'';
Renumber the succeeding subsections under proposed Sec.
423.2504(a)(2)(i) accordingly;
Insert Sec. 423.2504(a)(4) to say ``CMS uses
documentation submitted under paragraph (a)(3) of this section to
confirm LIS eligibility'';
Renumber proposed Sec. 423.2504(a)(2)(ii) to Sec.
423.2504(a)(5) and revise to specify that ``If CMS cannot confirm an
immediate need individual's eligibility during the period of LI NET
coverage, the individual will not be auto-enrolled into a standalone
Part D plan in accordance with Sec. 423.34(d) following their LI NET
coverage'';
Finalize Sec. 423.2504(b)(2) as follows: ``(2) Point-of-
sale enrollment. An individual who is not automatically enrolled in
accordance with paragraph (b)(1) of this section and whose claim is
submitted at the point-of-sale and accepted by the LI NET sponsor will
be enrolled into the LI NET program by the LI NET sponsor'';
Finalize Sec. 423.2504(b)(3) as follows: ``(3) Direct
reimbursement request. An individual described in paragraph (a)(1) of
this section who is not automatically enrolled in accordance with
paragraph (b)(1) or at the point-of-sale as provided in paragraph
(b)(2) and who submits a direct reimbursement request form, receipts
for reimbursement for eligible claims paid out of pocket (with optional
documentation of LIS eligibility listed in paragraph (a)(3)), will be
retroactively enrolled into the LI NET program by the LI NET sponsor.
The LI NET sponsor has 14 calendar days to reply with a coverage
decision''; and
Finalize Sec. 423.2504(b)(4) as follows: ``(4) LI NET
application form. An individual who is not enrolled through one of the
methods in paragraphs (b)(1) though (3) of this section may submit an
LI NET application form to the LI NET sponsor (with optional
documentation of LIS eligibility listed in paragraph (a)(3)). If no
documentation is submitted and accepted, the LI NET sponsor will
periodically check for eligibility and enroll applicants once LIS
eligibility is confirmed.''
Recognizing that the SSA letter uses the terminology ``Extra Help''
instead of ``LIS'', we also add for clarity the term ``Extra Help'' to
Sec. 423.2504(a)(3)(ii).
Comment: One commenter noted that the proposed definition for
point-of-sale enrollment in Sec. 423.2504(b)(2) would not adequately
capture the full range of POS enrollees, such as those who are eligible
for LI NET but do not necessarily demonstrate an immediate need for
medication.
Response: We agree that beneficiaries who present at the point-of-
sale who do not have an immediate need for medication as defined in
Sec. 423.2504(a)(2) may use the POS mechanism of enrollment if they
are otherwise eligible for LI NET and have
[[Page 22148]]
not been automatically enrolled. Thus, we finalize this provision to
include these beneficiaries by striking ``with an immediate need'' from
the description of point-of-sale enrollment in Sec. 423.2504(b)(2).
The change would allow for individuals to use the POS enrollment
mechanism if they are either an ``immediate need individual'' per Sec.
423.2504(a)(2) or if they present documentation as evidence of LIS
eligibility as listed in newly numbered Sec. 423.2504(a)(3). Note that
this change from the proposed regulation allows for individuals who are
not in immediate need of prescriptions to take advantage of the POS
enrollment mechanism when they have documentation specified in Sec.
423.2504(a)(3). Making this change allows for those with evidence of
LIS eligibility by way of presenting documentation to not be turned
away from the pharmacy counter at the POS and avoid an unnecessary
delay enrolling into LI NET. Under the demonstration, this subset of
non-immediate need individuals, though very few in number, can enroll
in LI NET at the POS with documentation, which is consistent with the
way we finalize this provision. Though beneficiaries with an immediate
need who state their LIS status are not required to show documentation
at the POS to have their prescription filled, they must either
successfully go through the BAE process or have their LIS status
reflected in CMS systems in order to be included in the auto-enrollment
process into a standalone Part D plan in accordance with Sec.
423.34(d) following their LI NET coverage.
We also note the need for a technical correction in Sec.
423.2504(b)(2), to specify that the claim submitted at the point-of-
sale must be accepted by the LI NET sponsor--it must pass the edits for
the LI NET sponsor to accept the claim into its system. For instance, a
claim that is billed but is rejected due to a misspelling of the
beneficiary's name would not be sufficient to complete an LI NET
enrollment.
We finalize Sec. 423.2504(b)(2) to say, ``An individual who is not
automatically enrolled in accordance with paragraph (b)(1) of this
section and whose claim is submitted at the point-of-sale and accepted
by the LI NET sponsor will be enrolled into the LI NET program by the
LI NET sponsor.''
Comment: One commenter suggested expanding the definition of
``pharmacies that are in good standing'' in LI NET to also prohibit
out-of-network pharmacies from submitting claims to the LI NET sponsor
if they are under a current payment suspension by any Part D sponsor
pursuant to Sec. 423.504(b)(4)(vi)(G)(4) or have been terminated from
the LI NET sponsor's network based on credible allegations of fraud.
The commenter recommends this change to avoid a situation in which a
pharmacy has been suspended or terminated from participation in a Part
D plan's network but can still serve LI NET beneficiaries.
Response: We agree with the commenter that we do not want to
consider pharmacies against which there are credible allegations of
fraud to be ``in good standing'' for purposes of participating in LI
NET. Currently, each Part D sponsor performs its own investigation to
determine whether a credible allegation of fraud against a pharmacy
exists, which may result in implementation of a payment suspension or
termination. CMS encourages Part D sponsors to use the information CMS
provides through Health Plan Management System's (HPMS) Program
Integrity (PI) Portal for FWA Reporting module regarding other plan
sponsors' payment suspensions, as well as information provided on
referrals of providers and suppliers by plan sponsors, to conduct their
own investigations of pharmacies. We remind sponsors that they should
not take any administrative action based solely on information within
CMS' HPMS PI Portal for FWA Reporting. Plan sponsors should perform
their own investigations and conduct oversight efforts to substantiate
information regarding potential pharmacy FWA.
It makes sense to similarly require the LI NET sponsor to make its
own determination of what is credible instead of adopting a standard
that any Part D sponsor's determination controls, as the commenter
suggests. Thus, we finalize the definition of ``good standing'' in
Sec. 423.2508(b) to also include pharmacies against which the LI NET
sponsor does not have a credible allegation of fraud as defined at
Sec. 423.4. With the addition of this element relying on the LI NET
sponsor's determination, and noting that there are specific, objective
standards comprising the definition of pharmacies that are in ``good
standing'' for LI NET, it is unnecessary for CMS to make a
determination about pharmacies' standings in this regard. Thus, we also
strike the phrase ``as determined by CMS'' from Sec. 423.2508(b).
Additionally, we noted an omission in Sec. 423.2508(b) of the
description of OIG's exclusion authority. OIG has the authority to
exclude individuals and entities from Medicare and State health care
programs under section 1156 of the Act. We omitted reference to State
Health care programs in proposed Sec. 423.2508(b), and take this
opportunity to fully cite the OIG's list of excluded entities under
section 1156 of the Act.
Thus, we finalize section 423.2508(b) to read, ``(b) Network. The
LI NET sponsor must allow its network and out-of-network pharmacies
that are in good standing to process claims under the program. Licensed
pharmacies are considered to be in good standing for the LI NET program
so long as they: are not revoked from Medicare under Sec. 424.535; do
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 or from Medicare and State health care programs under
section 1156 of the Act (unless waived by the OIG); do not appear on
the preclusion list as defined at Sec. 423.100; and do not have a
determination by the LI NET sponsor of a credible allegation of fraud
as defined at Sec. 423.4.''
Comment: One commenter raised a concern about an LI NET sponsor's
ability to audit and recover overpayments from out-of-network
pharmacies, which would not be contracted with the LI NET sponsor. The
commenter suggested modifying proposed Sec. 423.2512(c)(6) to
incorporate the good standing standard proposed in Sec. 423.2508(b)
and to state that pharmacies that submit claims to the LI NET sponsor
would be subject to the LI NET sponsor's standard pharmacy audit and
overpayment recovery processes.
Response: We agree with the commenter that the requirement to
adjudicate out-of-network claims would apply only to pharmacies in good
standing and have modified Sec. 423.2512(c)(6) to include a cross
reference to the good standing standard we are adopting in Sec.
423.2508(b).
We note that Sec. 423.504(b)(4)(vi)(G) is not waived for LI NET
and requires the LI NET sponsor to establish and implement ``procedures
and a system for promptly responding to compliance issues as they are
raised, investigating potential compliance problems as identified in
the course of self-evaluations and audits, correcting such problems
promptly and thoroughly to reduce the potential for recurrence, and
ensure ongoing compliance with CMS requirements.'' Further, Sec.
423.504(b)(4)(vi)(G)(2) says that the Part D sponsor must conduct
appropriate corrective actions (for example, repayment of overpayments
and disciplinary actions against responsible individuals) in response
to the potential violation, as previously referenced.
We believe the commenter is requesting that the LI NET regulations
[[Page 22149]]
expressly state that the LI NET sponsor has the ability to audit out-
of-network pharmacies and subject them to overpayment recovery
processes. The commenter does not suggest what a ``standard'' pharmacy
audit and overpayment recovery process could mean. One possibility is
for it to be the same as is used for network pharmacies, similar to how
we require the LI NET sponsor to adjudicate claims from out-of-network
pharmacies according to the LI NET sponsor's standard reimbursement for
its network pharmacies. However, given that out-of-network pharmacies
that are in good standing under Sec. 423.2508(b) must be permitted to
process claims under LI NET--a distinguishing feature of LI NET--we
believe that defining a ``standard'' pharmacy audit and overpayment
recovery process would not provide the LI NET sponsor the level of
flexibility that is already provided under Sec. 423.504(b)(4)(vi)(G).
Thus, we take this opportunity to state that the LI NET sponsor must
meet the requirements in Sec. 423.504(b)(4)(vi)(G), including for out-
of-network pharmacies, without incorporating these concepts into Sec.
423.2512(c)(6).
Thus, we finalize these concepts as proposed in Sec.
423.2512(c)(6), and add the cross-reference to the good reference
standard in Sec. 423.2508(b) to say that the LI NET sponsor must
``[a]djudicate claims from out-of-network pharmacies that are in good
standing (as defined in Sec. 423.2508(b)) according to the LI NET
sponsor's standard reimbursement for their network pharmacies.''
Comment: One commenter recommended that we require the LI NET
sponsor to maintain telephone and fax lines 24 hours a day, 7 days a
week, and every day of the year, as well as setting customer service
standards that include limits on average hold times and disconnect
rates, and availability of interpreters.
Response: The LI NET sponsor will be held to the same customer
service requirements as other Part D sponsors under Sec. 423.128(d).
Under Sec. 423.128(d)(1)(i)(B), any call center serving pharmacists
must be open so long as any network pharmacy in the region is open.
Given that the LI NET sponsor's ``region'' is nationwide because of the
requirement in Sec. 423.2512(a)(1) to have a contracted pharmacy
network in all geographic areas of the United States in which low-
income subsidies are available, practically speaking we would expect
some network pharmacies to be open 24 hours a day and therefore, by
extension, the call center serving pharmacists would also need to be
open 24 hours a day.
Section 423.128(d) also sets forth requirements for interactive
voice response systems, timeframes for return calls, average wait
times, disconnect rates, provision of interpreters (including how
quickly the interpreters are made available), and provision of
effective real-time communication with individuals using auxiliary aids
and services like TTY.
We note that the requirement to maintain a fax line is not
separately discussed in Sec. 423.128(d), but we believe as a practical
matter that it will be necessary for the LI NET sponsor to maintain a
fax line in order to conduct point-of-sale enrollments in accordance
with Sec. 423.2504(b)(2).
Comment: One commenter encouraged CMS and our contractors to
regularly educate and communicate with pharmacists about LI NET. The
same commenter called for consistent outreach to LI NET eligible
beneficiaries to make them aware of the program.
Response: We agree with the importance of making stakeholders as
well as beneficiaries who are likely eligible for LI NET aware of the
program. In Sec. 423.2512(c)(3), we require the LI NET sponsor to
identify, develop, and conduct 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 enrollments in the permanent LI NET program.
For beneficiaries who are not auto-enrolled, we agree that outreach is
important so that stakeholders such as states, SHIPs, and pharmacies
have awareness and knowledge about the LI NET program. Beneficiary
education and outreach is also important, though it has been our
experience that pharmacists and SHIP counselors are the most effective
at connecting eligible beneficiaries with LI NET. We finalize Sec.
423.2512(c)(3) as proposed, except for an editorial change to more
concisely say ``conduct outreach plans'' instead of ``carry out
outreach plans.''
Comment: One commenter expressed support for our proposal to define
the LI NET sponsor as a Part D sponsor selected by CMS to administer
the LI NET program.
Response: We thank the commenter for the support.
Comment: One commenter noted that the LI NET demonstration is
sometimes referred to by its full name of (``Limited Income Newly
Eligible Transition program''), in addition to abbreviated forms, such
as ``LI NET'' or ``LINET''. The commenter encourages us to use program
nomenclature consistently to avoid beneficiary confusion.
Response: We agree that using consistent nomenclature for the LI
NET program can minimize confusion. We take this opportunity to state
that the proper, full name of the program in this provision is the
Limited Income Newly Eligible Transition program, which may also be
referred to as the ``LI NET program''.
Comment: One commenter expressed support for the proposed LI NET
payment policies under Sec. 423.2524 with the exception of Sec.
423.2524(c)(1)(i), which proposed to require that the LI NET sponsor
assume in its 2024 plan year bid that Payment Rate A cannot exceed a 2
percent increase from the prior year's Payment A, which is a figure CMS
would provide to the LI NET sponsor. The commenter noted that under the
demonstration program, CMS instituted a per-member, per-month cap on
administrative expenses for plan year 2012 that has not been updated,
and recommended reestablishing a baseline for Payment Rate A beginning
in plan year 2024. The commenter recommended that the LI NET sponsor
and CMS engage in a collaborative rate setting process, which the
commenter suggested would contribute to the long-term stability of the
LI NET program, and provide necessary flexibility to manage the program
over the long term, particularly in light of factors like inflation or
extreme or unpredictable circumstances like the COVID-19 Public Health
Emergency (PHE).
Response: We thank the commenter for their general support of our
LI NET payment provisions. As the commenter notes, under the
demonstration we have long had a 2 percent cap on Payment Rate A, the
portion of the LI NET payment comprised of two components: estimated
administrative costs to run the LI NET program, which is inclusive of
the LI NET sponsor's profit, and the LI NET sponsor's estimated costs
to pay pharmacy claims for prescriptions filled by immediate need
individuals, for which the LI NET sponsor might not be able to submit a
prescription drug event (PDE) record to CMS due to the individual's
unconfirmed LIS status. Over this time, the Part D sponsor
administering the LI NET demonstration and CMS have had multiple
discussions about the appropriateness of the 2 percent cap. To date,
CMS has not received adequate justification to increase the cap,
including for the past few years during an ongoing PHE. We note that
Sec. 423.2524(c)(1)(i) fixes the cap at 2 percent cap for the 2024
plan year
[[Page 22150]]
only. This will maintain stability and continuity in Payment Rate A in
this year of transition from LI NET as a demonstration to a permanent
Part D program. The flexibility and collaboration the commenter seeks
is provided from the 2025 plan year onward, in Sec.
423.2524(c)(1)(ii).
Comment: One commenter expressed support for our proposal to
enumerate those Part D requirements that will be explicitly waived
under the LI NET program, concurring with the list of proposed waivers
in Sec. 423.2536. The commenter encourages CMS to partner with the LI
NET sponsor as new Part D program requirements are introduced, so there
is clarity about whether new requirements apply to the LI NET program.
Response: We thank the commenter for the support. With respect to
new Part D program requirements that may be adopted in the future, we
would consider at the time of their adoption whether they ought to
apply to the LI NET program or be added to the list of waived
requirements specified in Sec. 423.2536, as appropriate. We finalize
as proposed Sec. 423.2536, Waiver of Part D program requirements:
``CMS waives the following Part D program requirements for the LI
NET program:
(a) General information. Paragraphs (1) and (3)(B) of section
1860D-4(a) of the Act (relating to dissemination of general
information; availability of information on changes in formulary
through the internet).
(b) Formularies. Subparagraphs (A) and (B) of section 1860D-4(b)(3)
of the Act (relating to requirements on development and application of
formularies; formulary development) and formulary requirements in
Sec. Sec. 423.120(b) and 423.128(e)(5) and (6).
(c) Cost control and quality improvement requirements. Provisions
under subpart D of this part, including requirements about medication
therapy management, are waived except for the provisions in Sec.
423.2508(d)(1) through (5).
(1) Section 423.153(b) and (c) for dispensing and point-of-sale
safety edits;
(2) Section 423.154 for appropriate dispensing of prescription
drugs in long-term care facilities;
(3) Sections 423.159 and 423.160 for electronic prescribing,
excepting the requirements pertaining to formulary standards in Sec.
423.160(b)(5);
(4) Section 423.162 for QIO activities; and
(5) Section 423.165 for compliance deemed on the basis of
accreditation.
(d) Out-of-network access. Section 423.124 Special rules for out-
of-network access to Part D drugs at out-of-network pharmacies, except
for Sec. 423.124(a)(2), which applies to LI NET.
(e) Medicare contract determinations and appeals. Subpart N, except
for the provisions that apply to LI NET in Sec. 423.2520(d).
(f) Risk-sharing arrangements. Section 423.336(a), (b), and (d).
(g) Certification of accuracy of data for price comparison. Section
423.505(k)(6).
(h) Part D communication requirements. Portions of subpart V of
this part related to Part D communication requirements that are
inapplicable to LI NET, including:
(1) Section 423.2265(b)(4), (5), (11), and (13);
(2) Section 423.2265(c);
(3) Section 423.2266(a);
(4) Section 423.2267(e)(3) through (5), (9) through (12), (14)
through (17), (25), (29), and (33); and
(5) Section 423.2274.
(i) Medicare Coverage Gap Discount Program. Subpart W of this part.
(j) Requirements for a minimum medical loss ratio. Subpart X of
this part.
(k) Recovery audit contractor Part C appeals process. Subpart Z of
this part.''
Comment: One commenter raised concerns about CMS' proposal to
sunset the demonstration program on December 31, 2023 and start the
permanent LI NET program on January 1, 2024. The commenter requested we
begin the permanent program before sunsetting the demonstration program
in case glitches arise in the transition, particularly recognizing that
the start of a calendar year can be busy for pharmacists assisting
beneficiaries with new coverage. The commenter recommended that CMS
still begin the permanent program on January 1, 2024, but allow the
demonstration program to continue until at least the second quarter of
2024 or until all potential unforeseen glitches are worked out,
whichever is later.
Response: We share the commenter's desire to take precautions
against any risk of disruptions in care or LI NET beneficiaries' access
to Part D drugs. If the current Part D sponsor administering LI NET
under demonstration authority is selected to be the LI NET sponsor for
the 2024 plan year, then the change from LI NET operating as a
demonstration versus a permanent program is largely a matter of the
authority under which LI NET is operated rather than significant
operational differences. If there is a change in the Part D sponsor
administering LI NET in 2024, the new sponsor would be vetted by CMS to
confirm that the sponsor has the ability to administer the program. CMS
would work closely with that sponsor during a transition period to
ensure that there are no disruptions to beneficiaries who enroll in LI
NET.
We appreciate the feedback we received from the commenters. After
consideration of all public comments, we are finalizing the LI NET
largely as proposed, with modifications to Sec. Sec. 423.2504,
423.2508, and 423.2512, as previously discussed in our responses to
comments. The revisions include:
Sec. 423.2504: renumber proposed Sec. 423.2504(a)(2)(i)
to Sec. 423.2504(a)(3) and add a heading that reads ``Documentation of
LIS Eligibility''; renumber the succeeding subsections under proposed
Sec. 423.2504(a)(2)(i) accordingly; insert Sec. 423.2504(a)(4) to say
``CMS uses documentation submitted under paragraph (a)(3) of this
section to confirm LIS eligibility''; and renumber proposed Sec.
423.2504(a)(2)(ii) to Sec. 423.2504(a)(5) and revise to specify that
``If CMS cannot confirm an immediate need individual's eligibility
during the period of LI NET coverage, the individual will not be auto-
enrolled into a standalone Part D plan in accordance with Sec.
423.34(d) following their LI NET coverage''; striking ``with an
immediate need'' from the description of point-of-sale enrollment in
Sec. 423.2504(b)(2); revise Sec. 423.2504(b)(2) to say, ``(2) Point-
of-sale enrollment. An individual who is not automatically enrolled in
accordance with paragraph (b)(1) of this section and whose claim is
submitted at the point-of-sale and accepted by the LI NET sponsor will
be enrolled into the LI NET program by the LI NET sponsor''; finalize
Sec. 423.2504(b)(3) as follows: ``(3) Direct reimbursement request. An
individual described in paragraph (a)(1) of this section who is not
automatically enrolled in accordance with paragraph (b)(1) or at the
point-of-sale as provided in paragraph (b)(2) and who submits a direct
reimbursement request form, receipts for reimbursement for eligible
claims paid out of pocket (with and optional documentation of LIS
eligibility listed in paragraph (a)(3)), will be retroactively enrolled
into the LI NET program by the LI NET sponsor. The LI NET sponsor has
14 calendar days to reply with a coverage decision''; and finalize
Sec. 423.2504(b)(4) as follows: ``(4) LI NET application form. An
individual who is not enrolled through one of the methods in paragraphs
(b)(1) though (3) of this section may submit an LI NET application form
to the LI NET sponsor (with optional documentation of LIS eligibility
listed in paragraph
[[Page 22151]]
(a)(3)). If no documentation is submitted and accepted, the LI NET
sponsor will periodically check for eligibility and enroll applicants
once LIS eligibility is confirmed; add for clarity the term ``Extra
Help'' to Sec. 423.2504(a)(3)(ii).
Sec. 423.2508: removing CMS' role in determining
pharmacies' ``good standing'' for LI NET and adding a reference to
OIG's authority to exclude State health care programs; and
Sec. 423.2512(c)(6): adding a cross reference to the good
standing standard we are adopting in Sec. 423.2508(b).
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.
Section 11404 of the IRA (Pub. L. 117-169), enacted on August 16,
2022, amended section 1860D-14 of the Act to expand eligibility for the
full LIS to individuals who are determined to have 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,
with respect to plan years beginning on or after January 1, 2024. This
change will provide the full LIS for individuals who currently qualify
for the partial subsidy.
To implement the changes to the LIS income requirements, we
proposed 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 also proposed 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
is consistent with the IRA effectively sunsetting the partial LIS after
2023.
To implement the changes to the resource limits, we proposed 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 proposed 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. This result
of this change is that individuals are able to have a higher value of
resources and still be eligible for the full subsidy.
Lastly, we proposed 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).
We received the following comments, and our responses follow.
Comment: Commenters overwhelmingly supported our proposal to
implement section 11404 of the IRA and expand eligibility for the Part
D LIS. Commenters stated that this change will advance health equity,
increase the affordability of prescription drugs, and facilitate access
to care, especially for individuals with ESRD, and Black and Hispanic
beneficiaries, who may disproportionately fall within the partial
subsidy category. Commenters also believed that the change would
simplify the LIS benefit structure, resulting in less beneficiary
confusion and a reduction in administrative burden.
Response: We appreciate the support for the proposal and agree that
the expansion of the LIS benefit will increase beneficiaries' access to
prescription drugs and improve treatment adherence, leading to better
health outcomes.
Comment: While voicing their support, many commenters recommended
that CMS explore opportunities to educate beneficiaries newly eligible
for the full benefit, as well as those currently eligible for but not
enrolled in the LIS. They recommended that all Medicare outreach
materials, and specifically communications with Medicare Savings
Program (MSP) enrollees, include information about the Part D LIS and
that CMS should consider increasing outreach and enrollment efforts for
low-income beneficiaries. One commenter questioned whether CMS would be
notifying beneficiaries of the change and whether plans are expected to
continue to send LIS notices. Another commenter requested that we
simplify existing application forms and outreach materials, as well as
translate them into languages beyond English and Spanish.
Response: CMS agrees that it is vital that beneficiaries eligible
for the low-income subsidy understand that extra help is available to
them through low-income savings programs like MSP and LIS. We currently
have targeted language for people with limited income and resources in
the ``Get Ready for Medicare'' booklet individuals receive when they
become eligible for Medicare and ``Medicare & You'' which is mailed to
beneficiaries on an annual basis. We continue to explore efforts to
increase awareness of these savings programs through our publications,
online resources, and training materials and note that CMS is planning
to conduct direct to consumer outreach to promote MSP and LIS
enrollment in 2024.
We are contemplating sending notices in the Fall of 2023 to
individuals who will be transitioning from the partial LIS subsidy to
the full subsidy to inform them of the increased assistance they will
be receiving beginning January 1, 2024. We did not propose any changes
to the LIS notice requirements, therefore, plans will continue to be
responsible for sending their members required information (for
example, the LIS rider).
Lastly, we are always exploring avenues for improving and
simplifying our communication materials to beneficiaries, including
enrollment forms. We will continue to work to refine materials, but
note that there can be limitations in how much we are able to simplify
forms given the information we are conveying to beneficiaries and the
required information we need from them to process their request. We
note that beneficiaries who require materials in a language other than
English and Spanish can contact 1-800-MEDICARE to request translated
materials.
Comment: A few commenters expressed concern that beneficiaries with
incomes between 135 percent and 150 percent of the FPL are not auto-
enrolled into a benchmark plan. In addition, a few commenters
questioned whether CMS would be transitioning individuals eligible for
the partial subsidy to the full subsidy so these individuals do not
have to take any action to receive the additional benefits.
Response: Individuals who currently qualify for the partial LIS
subsidy and continue to qualify in 2024 will not have to take any
action to transition to full subsidy status. As a part of our
implementation efforts, we will work with governmental (for example,
SSA,
[[Page 22152]]
States) and non-governmental (for example, plans) stakeholders to
operationalize this transition and make it as seamless as possible for
affected beneficiaries.
We would note that while a few commenters stated that individuals
with incomes between 135 percent and 150 percent of the FPL are not
automatically enrolled into LIS-eligible plans, this is not entirely
accurate. Since the beginning of the Part D program, CMS has had a
mechanism in place--referred to as facilitated enrollment--that
enrolled partial benefit individuals into benchmark plans. This is
essentially the same as the auto-enrollment that CMS conducts for full-
benefit dually eligible beneficiaries and results in LIS-eligible
individuals without prescription drug coverage being enrolled into Part
D plans.
Comment: A few commenters, while supporting our proposal, noted
concerns about how other changes to the Part D program will affect LIS
beneficiaries. They noted how IRA-related changes to maximum out-of-
pocket costs and requirements for coverage of insulin and recommended
vaccines, as well as the introduction of the new definition of
negotiated price will lead to an unknown impact on the national average
monthly bid amount and the LIS benchmark, which then could result in a
higher number of reassignments in the Fall. Commenters stated that
reassignments create disruption for beneficiaries and recommended that
we consider pathways within our authority to minimize this. These
commenters recommended options such as increasing the de minimis amount
to $5, allowing Part D sponsors to offer a fourth PDP in a region that
is LIS-only for plan years 2024 and 2025, and launching a demonstration
to narrow the risk corridors between 2024 and 2026 to account for the
changes to the Part D program and unknown impact to bids. Additionally,
one commenter also requested that CMS assess the potential
disproportionate impact of this proposed rule and the 2022 final rule
on pharmacy reimbursements.
Response: We thank the commenters for expressing their concerns for
how other upcoming changes to the Part D program may disproportionately
have a negative effect on low income beneficiaries. While the
recommendations provided by commenters are outside the scope of this
particular proposal, we agree that it will be important to ensure that
individuals receiving the LIS do not face undue disruption as a result
of broader changes in Part D.
Comment: One commenter noted that the Part D LIS is offered only to
individuals residing in the 50 states and the District of Columbia and
expressed disappointment that the IRA did not extend the LIS to
beneficiaries in Puerto Rico.
Response: We acknowledge the commenter's disappointment and agree
that this type of change would have to be established in statute and,
therefore, is outside the scope of this rulemaking.
We appreciate the feedback we received from the commenters. After
consideration of all public comments, we are finalizing our proposal
with one minor change. We are revising the regulatory text of proposed
Sec. 423.773(b)(2)(iii) by adding the word ``plan'' before ``years'',
so that the provision as finalized in this rule refers to ``plan years
beginning on or after January 1, 2024''. This change is consistent with
the references to ``plan years'' in paragraphs (b)(1) and (d) of Sec.
423.773, as revised by this final rule.
III. Enhancements to the Medicare Advantage and Medicare Prescription
Drug Benefit Programs
A. Health Equity in Medicare Advantage (MA)
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).\7\ 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.\8\ 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.'' \9\ This is the definition of health equity
that we use for all health equity provisions in this final rule.
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\7\ 86 FR 7009 through 7013, available at https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021-01753.pdf.
\8\ https://www.cms.gov/cms-strategic-plan.
\9\ 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, in the proposed rule, we proposed several
regulatory updates in the MA program related to health equity. These
proposals included 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. We are finalizing these proposals,
some with modification. CMS believes that the changes included in this
final rule will 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)
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. We emphasized in our proposal and reiterate here
that ``all enrollees'' indicates that all enrollees are included in
this protection even if they do not identify as belonging to one of the
groups specifically listed in the regulation. Additionally, all of the
changes we proposed are designed to strengthen the regulation's current
application or requirements.
[[Page 22153]]
Our proposal was two-part. First, we proposed to change the current
paragraph heading from ``Cultural considerations'' 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 emphasize protecting access to care for one
population over another. As we stated in our proposal, this change
would more clearly reflect the inclusive nature of the protections MA
organizations must guarantee for all enrollees under this provision.
The second part of our proposal was to add more populations to the
existing list of groups that appear in the regulation. Specifically, at
Sec. 422.112(a)(8), CMS proposed 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 populations that
an MA organization must ensure services are provided to in a culturally
competent manner and promote equitable access to services for in order
to satisfy the existing requirement: ``(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.'' As we noted in our proposal, MA
organizations must provide all enrollees, without exception,
accommodations to equitably access services according to applicable
statutory, regulatory, and other guidance. In other words, the presence
of this list should not be construed to mean that accommodations or
steps necessary to ensure cultural competency in delivering benefits
are required only for enrollees who belong to the groups listed herein.
Instead, the proposed changes, with respect to a revised list of
populations, are clarifying in nature, non-exhaustive, and are intended
to provide additional examples of populations MA organizations should
be mindful of in their plan designs. We again emphasize that the
regulation already explicitly applies to all enrollees without
exception; therefore, the protections of this provision, which were
already in effect prior to our proposal, must continue to be part of an
MA organization's work to ensure that all Medicare-covered items and
services are available and accessible to all enrollees.
Comment: Commenters generally supported the changes we proposed for
this provision. We received no modification requests for the proposed
heading change from ``Cultural considerations'' to ``Ensuring Equitable
Access to Medicare Advantage (MA) Services.'' Some commenters suggested
that CMS include additional populations in the proposed list of groups.
For example, one commenter recommended a slight change to the
language ``rural areas and other areas with high levels of
deprivation'' to include ``under-resourced areas.'' Another commenter
suggested that CMS change the language ``persistent poverty and
inequality'' to include ``and/or lack of access to health care
services.'' Some commenters suggested that we address intersectional
conditions affecting some enrollees.
Response: We appreciate these suggestions. We consider an enrollee
in an ``under-resourced area'' or who experiences a ``lack of access to
health care services'' to be among those that an MA organization must
ensure are served equitably because the regulation extends this
protection to all enrollees. We also note that intersectional
conditions are already included, not specifically, but by virtue of the
regulation applying to all enrollees, and should likewise be addressed
when they could result in inequitable access to services. In order to
avoid redundancy and keep our language generally consistent with E.O.
13985, we will not be adding additional groups at this time. However,
we reiterate that the protections of this provision continue to apply
to all enrollees, not just the populations listed in the regulation.
Comment: Some commenters recommended that CMS further define the
newly listed populations (for example, under what conditions would an
area qualify as having ``high levels of deprivation'') to ensure it is
properly understood to whom the provisions apply and when.
Response: Because this provision applies to all enrollees, it would
be of limited practical value for CMS to define each group listed in
the regulation in detail. Instead, MA organizations should continue to
identify remedies whenever it is evident that enrollees' equitable
access to services might be challenged by conditions such as a
disability, race, geographic location, or other factors.
Comment: Some commenters recommended that CMS delay the
finalization of this proposal in order to allow MA organizations to
prepare for the changes.
Response: As we discussed in our proposal, the obligation on MA
coordinated care plans to ensure that services are provided in a
culturally competent manner to all enrollees was originally finalized
in June 2000 (65 FR 40170). Because this regulation has already been in
effect for a significant amount of time and our proposal makes no
changes to the regulation's current application or requirements, a
delay in the finalization of this proposal would unlikely benefit
enrollees or the MA organizations who serve them.
Finally, all public comments received on this proposal were
generally supportive, including those that requested that modifications
be made to the final rule. After consideration of the comments and for
the reasons outlined in the proposed rule and our responses to
comments, including that the requested modifications would not produce
substantive changes to either the application or requirements of the
provisions (which were in effect prior to the proposal), we are
finalizing the revision to Sec. 422.112(a)(8) as proposed.
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. CMS 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
[[Page 22154]]
referring to the provider directory. CMS developed the MA and Section
1876 Cost Plan Provider Directory Model,\10\ a model material created
as an example of how to convey the required information 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.
---------------------------------------------------------------------------
\10\ The current MA and Section 1876 Cost Plan Provider
Directory Model is located at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial.
---------------------------------------------------------------------------
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.
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 and
the location, 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, such as notations on
restrictions in access, or indicators regarding whether a provider is
accepting new patients, contain important information that
organizations should consider when verifying that their networks are
truly adequate. This consideration enables organizations 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, the
current provider directory model also addresses best practices for
provider directories, including encouraging organizations to identify
non-English languages spoken by each provider as well as include a
specific notation on any restrictions on the accessibility of the
provider and the provider's location for people with physical
disabilities.\11\ In the proposed rule, CMS proposed to codify two best
practices (the latter in terms of accessibility for deaf or hard of
hearing individuals) as regulatory requirements at Sec.
422.111(b)(3)(i). First, we proposed to mirror the provider directory
requirements for Medicaid managed care plans 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 regulatory addition
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 health
care provider. By proposing to align the Part C provider directory
requirements with those used in Medicaid managed care, this proposed
change sought to help move the agency closer to its goal of aligning
the various CMS program requirements.
---------------------------------------------------------------------------
\11\ The current MA and Section 1876 Cost Plan Provider
Directory Model is located at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial.
---------------------------------------------------------------------------
We note that the phrase ``cultural and linguistic capabilities'' as
proposed 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 (OMH) as
``services that are respectful of and responsive to individual cultural
health beliefs and practices, preferred languages, health literacy
levels, and communication needs.'' \12\ 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.\13\ CMS believes this important 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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\12\ https://www.minorityhealth.hhs.gov/Assets/PDF/TCH%20Resource%20Library_CLAS%20CLC%20CH.pdf.
\13\ 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 proposed change 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 proposed 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.\14\ 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 final rule for more extensive
discussion of health equity issues in the MA program.
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\14\ 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 proposed to amend Sec.
422.111(b)(3)(i) 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
[[Page 22155]]
skyrocketed during the COVID-19 pandemic.\15\ Therefore, we proposed to
require organizations to identify certain providers in their
directories who had 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
buprenorphine for opioid use disorder and who are listed on SAMHSA's
Buprenorphine Practitioner Locator (BPL).\16\
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\15\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
\16\ https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator.
---------------------------------------------------------------------------
As we stated in the proposed rule, we believe that this additional
MA provider directory data element is important and necessary for
ensuring access to behavioral health services for MA enrollees. We
further stated that it supports both national and CMS efforts related
to behavioral health priorities and strategies, as described in section
III.B.1. of this final rule. We also explained our goal that the
proposed change would help MA enrollees struggling with opioid use
disorder to find providers who could treat them by prescribing MOUD,
moving these enrollees further along the path towards long-term
recovery.
In summary, CMS proposed 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 solicited
comment on these proposed improvements to the content of MA provider
directories. We also refer readers to section III.B.2. of this final
rule to review our summary of comments and outcome for our proposal to
add prescribers of MOUD as a new specialty type to be subject to MA
network adequacy evaluation. We thank commenters for their input on
CMS's proposed new MA provider directory requirements. We received the
following comments on this proposal, and our response follows:
a. Comments on Identifying Providers' Cultural and Linguistic
Capabilities
Comment: Comments on this proposal were largely favorable.
Commenters supported allowing enrollees to make informed decisions when
choosing providers, making care more accessible and equitable, and
sharing information with enrollees in advance as to whether a provider
can deliver care that meets their cultural and linguistic needs.
Commenters stated that identifying providers' cultural and linguistic
capabilities in provider directories is crucial for enrollees to ensure
that providers are equipped to provide accessible, inclusive, person-
centered care. Commenters appreciated the benefit this new requirement
would provide 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. They believed that enrollees who are treated by providers who
speak their same language tend to have better health outcomes, and this
change will ensure equity by creating expanded and better-informed
access by enrollees to providers who can accommodate their language
needs. A commenter praised CMS's use of the HHS OMH definition of CLAS.
Another commenter supported the transparency these new elements would
provide to enrollees in understanding a provider's capabilities and
whether these capabilities match the enrollee's communication needs.
Response: We thank commenters for their support, and we concur that
there is added value of requiring organizations to include providers'
cultural and linguistic capabilities in their provider directories. We
are therefore finalizing this first aspect of Sec. 422.111(b)(3)(i) as
proposed.
Comment: Many commenters stressed the importance of provider
directory accuracy, but also noted the continued challenge in
maintaining accurate provider directories. They stated that there is no
easy or systematic way for providers to update their information with
all organizations they contract with, and organizations do not have a
single source of truth for provider information. Commenters were in
favor of a national provider directory and referenced CMS's recent
request for information (RFI) titled Request for Information; National
Directory of Healthcare Providers & Services (NDH), which appeared in
the Federal Register on October 7, 2022 (87 FR 61018). An NDH would be
a centralized data hub for provider information that would allow
providers to report changes to their information once instead of to
each organization with which they contract. Commenters recommended CMS
focus provider directory efforts on creating an NDH rather than
establishing any new piecemeal requirements that would draw resources
away from focusing on an NDH and would have limited value in the
interim. Some commenters suggested CMS delay implementation of the
proposed requirement for organizations to include providers' cultural
and linguistic capabilities in their provider directories until an NDH
is implemented. Other commenters believed that if CMS does finalize
this requirement, CMS should exercise enforcement discretion, provide
an audit safe harbor, allow for leniency, and not penalize
organizations making a good faith effort to include the new required
data elements in their directories, until there is a better long-term
solution in place, such as an NDH.
Response: We understand commenters' concerns regarding the
difficulty in maintaining accurate provider directories without a
single source of truth for provider data. As stated in our RFI, we
understand that the fragmentation of current provider directories
requires inefficient, redundant reporting from providers, and an NDH
could serve as a ``centralized data hub'' for directory and digital
contact information containing the most accurate, up-to-date, and
validated data in a publicly accessible index. We thank commenters for
referencing this RFI and expressing strong support for an NDH. However,
CMS is still considering the NDH concept. Consequently, unless and
until such a long-term solution to provider directories is adopted, CMS
continues to make every effort to improve our policies surrounding
provider directories, including this proposal for MA directories. We
believe that requiring organizations to include providers' cultural and
linguistic capabilities in their provider directories is an important
improvement that promotes transparency and equitable access to care.
Therefore, we are finalizing this first aspect of Sec.
422.111(b)(3)(i) as proposed. Regarding comments requesting CMS
exercise enforcement discretion, we note that CMS considers a variety
of factors when operationalizing policy and taking enforcement action,
including an organization's ability to implement policy changes as they
establish the processes needed to evaluate effectiveness.
Comment: Several commenters indicated that the new proposed
provider directory requirements would raise significant issues related
to providers. For example, commenters believed provider burden would
increase, there would likely be provider abrasion with all
organizations separately seeking the same data from providers, and in
general there would be a low response rate from providers. A commenter
stated that the bottleneck in achieving accurate directories lies with
[[Page 22156]]
providers who do not provide updated information to organizations, and
the proposed additional information may be yet another piece of
information organizations and providers are not willing to try hard
enough to extract or supply. Another commenter was concerned that
compliance would be difficult for organizations without additional
requirements to incentivize providers to submit timely and accurate
information. Several commenters also recommended that CMS require
providers to maintain this data, notify providers of the new
requirement, and educate or raise awareness with providers on the
importance of keeping this data updated for the organizations with whom
they contract. A commenter recommended a robust campaign to educate
providers and seek their commitment before implementing this
requirement. Another commenter stated that maintaining up-to-date
provider directories should be a shared responsibility of providers and
health plans. In general, commenters suggested that CMS support
providers if this proposal is finalized.
Response: We acknowledge that the adoption of this new requirement
may result in increased provider burden and abrasion, that providers
may have low response rates to organizations, and compliance may be
difficult for some organizations. However, organizations must still
meet this requirement. We encourage organizations to consider using
their contracts with providers to require them to provide this
information and keep it updated. The contract between the provider and
the organization is a useful tool that organizations have at their
disposal to help them meet CMS's new provider directory requirement. At
this time, CMS does not have plans to require providers to maintain
this specific data, nor to conduct provider education campaigns. It is
the responsibility of organizations to do all that they can in their
relationships with contracted providers in order to meet Sec.
422.111(b)(3)(i) as finalized.
Comment: A few commenters suggested that providers may have
reservations regarding sharing their cultural and linguistic
capabilities, some stating that providers either do not or rarely share
this information today. A commenter believed that this data element
should be optional for providers to disclose to organizations,
acknowledging and respecting concerns with the possible unintended
consequences of publicizing this demographic information.
Response: We are finalizing this first proposed change to Sec.
422.111(b)(3)(i) without modification; therefore, it will not be
optional for organizations to include this information in their
provider directories. We reiterate that organizations should use their
contracts with providers as leverage to require this information be
provided to organizations to populate their provider directory.
Information on providers' cultural and linguistic capabilities in
provider directories is critical for enrollees to have when making both
provider choices and MA plan choices. Therefore, if a provider refuses
to provide their cultural and linguistic capabilities, organizations
should document the provider's response. CMS will take such responses
into consideration when reviewing findings associated with future
provider directory reviews.
Comment: Some commenters requested additional clarity, examples,
and more guidance on how CMS expects organizations to implement this
new requirement if finalized. Commenters sought guidance on various
topics, such as how to determine a provider's cultural and linguistic
capabilities, what level of language fluency is sufficient, whether a
provider must be a certified translator prior to having a particular
language listed, what constitutes a ``skilled medical interpreter,''
and what exactly is meant by ``cultural capabilities.'' A commenter
stated that multiple issues remain to be addressed, including
development of objective criteria for certain categories, such as
language capability within a provider's office. Another commenter
questioned whether organizations must identify whether linguistic
assistance is available in-person or via telehealth.
Response: We appreciate these questions and requests for
clarification regarding how to implement this new provider directory
requirement and plan to provide additional information through future
sub-regulatory guidance. As stated in the proposed rule, ``cultural and
linguistic capabilities'' refers to the capabilities of a provider (or
skilled medical interpreter at the provider's office) to deliver CLAS,
which are defined by the HHS OMH as ``services that are respectful of
and responsive to individual cultural health beliefs and practices,
preferred languages, health literacy levels, and communication needs.''
\17\ For purposes of Sec. 422.111(b)(3)(i) as finalized, this
definition ``cultural and linguistic capabilities'' applies; therefore,
organizations should take this under consideration when determining a
provider's cultural and linguistic capabilities. The manner in which
organizations do so is at their discretion, so long as the requirement
at Sec. 422.111(b)(3)(i) is met. We are not being prescriptive in
exactly how this information must be displayed in provider directories.
The provider directory 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, organizations must: (1) accurately convey the vital
information in the required material to the enrollee, although the
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)). We will be updating the MA and Section 1876
Cost Plan Provider Directory Model upon finalization of this rule to
incorporate the new requirement in Sec. 422.111(b)(3)(i), and we
anticipate providing additional guidance and examples to organizations
within that model to explain how organizations might display providers'
cultural and linguistic capabilities in their directories.
Organizations should reference the forthcoming contract year 2024 model
document.\18\ Also, for purposes of meeting the requirement in Sec.
422.111(b)(3)(i) to identify languages offered by the provider or at
the provider's location, a provider does not need to be a certified
translator prior to having a particular language listed because we
expect that enrollees choosing that provider because they speak their
native language will not need translation services if the enrollee and
provider speak the same language. Regarding what constitutes a skilled
medical interpreter, the interpreter must be trained and certified in
medical interpreting, especially when working in a clinical setting. As
to the question about whether organizations must identify whether
linguistic assistance is available in-person or via telecommunications,
the current provider directory model requires organizations to notate
providers who offer services exclusively via telehealth, so if a
provider is identified as such and the organization also identifies the
provider's linguistic capabilities, then it would be clear to the
enrollee that that provider offers linguistic assistance
[[Page 22157]]
exclusively via telecommunications technology and not in-person.\19\
Section 422.111(b)(3)(i) does not currently require organizations to
identify all providers who offer services via telehealth, but if an
organization chooses to identify providers who offer telehealth
services, then the provider notation must also identify the provider's
linguistic capabilities, per the new requirement at Sec.
422.111(b)(3)(i) which we are finalizing here. It is the organization's
choice as to whether to distinguish if that linguistic assistance is
available in-person, via telecommunications, or both.
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\17\ https://www.minorityhealth.hhs.gov/Assets/PDF/TCH%20Resource%20Library_CLAS%20CLC%20CH.pdf.
\18\ The contact year 2024 MA and Section 1876 Cost Plan
Provider Directory Model will be available at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial.
\19\ The current MA and Section 1876 Cost Plan Provider
Directory Model is located at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial.
---------------------------------------------------------------------------
Comment: Several commenters stated concern that this requirement
would increase burden on both organizations and providers. A commenter
stated that it may require upgrades and investments in existing systems
that could potentially require organizations to terminate contracts and
change vendors, and also would require significant data pulls from
network providers to populate the additional required elements in
directories.
Response: We reiterate that per control number 0938-0753 (CMS-R-
267) currently approved by OMB, the update and maintenance of the
provider directory is part of the usual and customary normal business
activities of organizations and as such is exempt from PRA by 5 CFR
1320.3(b)(2). Organizations that do not currently collect data on their
contracted providers' cultural and linguistic capabilities 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. We expect that organizations should only have to make
minimal updates to their existing processes related to provider
directories, such as a template, related software, and the added data
points for providers.
Comment: A few commenters suggested that CMS require additional
data elements in provider directories through regulatory codifications
at Sec. 422.111(b)(3)(i). Some suggestions included: whether a
provider is accepting new patients, provider specialty granularity,
provider sub-specialty, provider telehealth capabilities, average wait
time to secure a new patient appointment, hospital affiliation, and
accessibility of provider offices and medical diagnostic equipment (for
example, availability of ramps, elevators, and accessible medical
equipment).
Response: We thank commenters for their suggestions to amend Sec.
422.111(b)(3)(i) to also require organizations to include these various
additional data elements in provider directories. We re-emphasize that
some of these data elements are already required, as stated in the
proposed rule and in the MA and Section 1876 Cost Plan Provider
Directory Model.\20\ As for the data elements that are not currently
required, we will carefully consider these additions as we update the
MA and Section 1876 Cost Plan Provider Directory Model for contract
year 2024 and as we contemplate future rulemaking on provider directory
requirements.\21\
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\20\ The current MA and Section 1876 Cost Plan Provider
Directory Model is located at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandard.
\21\ The contact year 2024 MA and Section 1876 Cost Plan
Provider Directory Model will be available at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial.
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Comment: Commenters requested greater specificity regarding CMS's
oversight and compliance monitoring, stating that the language proposed
(``periodic online provider directory reviews, as CMS deems
necessary'') is ambiguous and does not provide transparency into the
regularity in which CMS will be monitoring organizations. They
suggested that CMS provide specific timelines regarding the monitoring
of these new requirements, the process by which directory information
will be verified, and the frequency of CMS follow-up with organizations
to monitor directory accuracy. A commenter stated that CMS may wish to
consider using its contracts with organizations and Medicare's
conditions of participation to reduce the cost of providing
information, such that organizations and providers might be more
amenable to following the requirements as proposed. Another commenter
stressed that CMS oversight, including secret shopper surveys, is
necessary to monitor the accuracy of provider directories. They stated
that the track record of provider directories in giving accurate and
current information has been dismal and unlikely to improve
significantly without strong monitoring by CMS.
Response: Nothing in the proposed rule changed our compliance
authority, therefore, we are not making any changes to our provider
directory compliance oversight at this time. Regarding the suggestion
that CMS make use of its contracts with organizations and provider
conditions of participation, we are not making any changes to these
regulations at this time, but may consider changes in the future. We
note that Sec. 422.504(a)(4) already requires that in the contract
between the MA organization and CMS, the MA organization agrees to
disclose information to beneficiaries in the manner and the form
prescribed by CMS as required under Sec. 422.111. This longstanding
contract provision is binding on the organization and requires all
organizations to comply with Sec. 422.111, inclusive of Sec.
422.111(b)(3)(i) as finalized in this rule. We agree with commenters
about the importance of oversight and strong monitoring of provider
directory accuracy, and we intend to continue these activities to
ensure organizations are complying with Sec. 422.111(b)(3)(i).
b. Comments on Identifying MOUD-Waivered Providers
Comment: Regarding our proposal for Sec. 422.111(b)(3)(i)-
requiring organizations to identify certain providers waived to treat
patients with MOUD in their provider directories--a majority of
commenters pointed to recently enacted legislation that has made our
proposal moot. Section 1262 of Division FF of the Consolidated
Appropriations Act of 2023 (CAA) (Pub. L. 117-328) amended section
303(g) of the Controlled Substances Act to remove the statutory
requirement for providers to obtain a valid waiver (commonly referred
to as an ``X-Waiver'') from SAMHSA and the DEA to administer, dispense,
or prescribe MOUD. Since the waiver has been eliminated, now any
licensed provider can treat patients with MOUD without a waiver.
Therefore, commenters explained, identifying providers with the waiver
in provider directories is not necessary, as providers no longer need
to possess the special waiver in order to prescribe MOUD. Accordingly,
most commenters recommended CMS not finalize this aspect of the
proposal, a few commenters requested CMS clarify in the final rule how
the proposal aligns with the legislation, and some commenters presented
alternatives. Alternative approaches offered by commenters included
requiring organizations to still identify providers from whom enrollees
can receive MOUD treatment, identify addiction specialists, or identify
Opioid Treatment Programs (OTPs).
Response: We are aware that the CAA of 2023 was enacted after the
proposed rule was published, and we thank commenters for alerting us of
this
[[Page 22158]]
important legislative change that has a significant impact on how we
finalize the second aspect of our provider directory proposal. After
careful consideration of all comments received, we have decided to not
finalize our proposal to require organizations to include in their
provider directories notations for MOUD-waivered providers who are
listed on SAMHSA's Buprenorphine Practitioner Locator. Of those who
commented on the elimination of the ``X-waiver,'' the majority
suggested we withdraw this aspect of our proposal, therefore, that is
the approach we are taking. We appreciate the alternatives presented by
some commenters, and we will consider including in our guidance on best
practices for provider directories that organizations identify
providers who have expertise in treating patients with OUD. This
guidance would cover a wide variety of providers and facilities,
including MOUD-prescribers, addiction specialists, and OTPs. If we
choose to pursue such guidance, it would appear in the MA and Section
1876 Cost Plan Provider Directory Model, which CMS updates and releases
annually.\22\
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\22\ The current MA and Section 1876 Cost Plan Provider
Directory Model is located at: https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandard.
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Comment: Several commenters opposed our proposal to require
organizations to identify MOUD-waivered providers in their provider
directories. A commenter stated that there is currently no industry
standard for organizations to collect and document information on the
status of provider MOUD waivers. They also expressed concerns that
including this information in provider directories would cause enrollee
confusion, as most enrollees would not understand this designation nor
how to factor it into their provider selection. Another commenter
believed that it would be challenging for organizations to identify and
confirm that providers have the waiver.
Response: We agree with commenters concerns surrounding potential
implementation of this requirement. As noted previously, we are not
finalizing this second aspect of our proposal for Sec.
422.111(b)(3)(i) based on the majority of comments recommending such
course of action in alignment with the CAA of 2023 provision.
c. Summary of Regulatory Changes
We received a range of comments pertaining to this proposal, the
majority of which reflected support for the regulation. After
considering the comments we received and for the reasons outlined in
the proposed rule and our responses to comments, we are finalizing the
proposed change to Sec. 422.111(b)(3)(i) to require organizations to
include in their provider directories 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.
We are not finalizing our proposal to require organizations to
include in their provider directories notations for MOUD-waivered
providers.
4. Digital Health Education for Medicare Advantage (MA) Enrollees Using
Telehealth (Sec. 422.100)
Telehealth has become an increasingly popular and important tool in
providing access to health care, especially during the COVID-19 Public
Health Emergency (PHE). For the purposes of this section of this final
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 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. ATBs may be included in the bid and treated as basic
benefits when the requirements of Sec. 422.135 are met.
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 account for 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 finalizing in this
rule, 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 increase 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
changes we are finalizing here, taken together, are an attempt to
improve health equity in telehealth and are consistent with both E.O.
13985 and CMS's first strategic pillar ``Advance
[[Page 22159]]
Equity'' under the 2022 CMS Strategic Plan.23 24 For
purposes of this provision, we are using CMS's definition of health
equity, which is included in section III.A.1. of this final rule.\25\
In developing our digital health education program policy, we were
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.'' \26\
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\23\ 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/.
\24\ https://www.cms.gov/cms-strategic-plan.
\25\ https://www.cms.gov/pillar/health-equity.
\26\ https://telehealth.hhs.gov/providers/health-equity-in-telehealth/.
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As we described in the proposed rule, 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.\27\ 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.\28\
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\27\ https://pubmed.ncbi.nlm.nih.gov/33325524/; https://pubmed.ncbi.nlm.nih.gov/32703737/.
\28\ 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.'' \29\ Low digital health literacy can impact an
individual's access to or quality of telehealth visits.\30\ Evidence
shows that those with low digital health literacy tend to be older,
lower income, less educated, and Black or Hispanic.\31\
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\29\ https://nnlm.gov/guides/intro-health-literacy.
\30\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8464820/.
\31\ 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 indicated they lacked confidence when using
technology.\32\ Of the 32 million Americans who cannot use a computer,
approximately one-third are seniors.\33\ 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.\34\ 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.\35\ Other studies
have confirmed a significant gap in digital literacy among people with
disabilities.\36\ 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.\37\
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\32\ https://www.aarp.org/research/topics/technology/info-2022/2022-technology-trends-older-americans.html.
\33\ https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html.
\34\ https://www.jmir.org/2021/7/e27682/.
\35\ https://www.pewresearch.org/fact-tank/2021/09/10/americans-with-disabilities-less-likely-than-those-without-to-own-some-digital-devices/.
\36\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5878361/.
\37\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/.
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As outlined in this final rule, 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).\38\ Individuals with a
higher degree of digital health literacy receive more health care
information, are better equipped to evaluate the quality of information
regarding their health care, and report higher telehealth usage.\39\
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.\40\ This is significant because individuals with
two or more chronic diseases are more likely to be individuals 65 and
over.\41\
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\38\ https://academic.oup.com/jamia/article/27/12/1949/5899728.
\39\ https://jamanetwork.com/journals/jama/article-abstract/2426088.
\40\ https://www.sciencedirect.com/science/article/pii/S0738399114001876.
\41\ https://www.cdc.gov/pcd/issues/2020/20_0130.htm.
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As we described in the proposed rule, 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
[[Page 22160]]
digital health literacy policies, once implemented, will help
underserved communities in need of assistance to improve their digital
health literacy and help advance the goal of achieving health equity in
telehealth.\42\
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\42\ https://telehealth.hhs.gov/providers/health-equity-in-telehealth/.
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In the proposed rule, we proposed to add requirements for certain
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 proposed 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). We indicated that 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 used the term ``electronic exchange'' as it is broadly
defined in Sec. 422.135.
We noted that 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 solicited 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. As we
indicated in the proposed rule, this additional standard was proposed
to ensure that MA enrollees would be able to access covered benefits
and that MA organizations met 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.
After considering the comments received, and for reasons described
in this section of the rule, we are finalizing this policy, but we are
amending Sec. 422.100 rather than Sec. 422.112(b) as we originally
proposed to apply this new requirement to all MA plans and not just
coordinated care plans.
This policy will be a first step for MA organizations to assess the
landscape of health equity in telehealth in their plans and help
enrollees navigate telehealth. We noted in the proposed rule that,
under this policy 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. We
also explained that compliance with the proposal, if finalized, would
require that MA organizations 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. We noted in the proposed rule that 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.\43\ Others recommend
considering certain digital foundation skills based on a specific
framework.\44\ CMS encourages MA organizations to research current
trends and successes in the field when developing their own methods to
identify enrollees with low digital 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.\45\
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\43\ https://link.springer.com/content/pdf/10.1007/s00520-021-06629-4.pdf.
\44\ https://www.digitalinclusion.org/definitions/.
\45\ 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 will then have to
implement a digital health education program to offer to these
enrollees. CMS did not propose to identify explicit parameters for this
digital health education requirement, and we are not finalizing any
such parameters. 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 we discussed in the proposed rule, 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 digital health
education for enrollees with low digital health literacy, so as to
promote ease of access in the simplest way possible. However, we note
that MA organizations must be mindful to remain compliant with all
applicable health data privacy and security laws in establishing
systems for enrollees with low digital health literacy. In addition, if
an MA organization offers enrollees assistance with any necessary
telehealth technology--for instance, if the MA organization provides
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
[[Page 22161]]
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, previously
discussed, 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
finalizing changes in this 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 the revisions we are finalizing in this rule, Sec.
422.112(a)(8) requires MA organizations offering coordinated care plans
to ensure that services are provided in an equitable manner to all
enrollees. MA organizations offering coordinated care plans must
consider these additional obligations, as applicable, when developing
and maintaining the digital health education programs they are required
to implement under this final rule.
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.\46\
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
ACA--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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\46\ https://www.hhs.gov/sites/default/files/guidance-on-nondiscrimination-in-telehealth.pdf.
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We also proposed to require MA organizations to make information
about their required digital health literacy screening and digital
health education programs available to CMS upon request at proposed
Sec. 422.112(b)(9)(i) (finalized at Sec. 422.100(n)(1)). We indicated
that this would allow CMS to monitor the impact of the new requirement
for these programs on MA organizations, providers, enrollees, and the
MA program as a whole. In addition, we proposed 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 proposed Sec.
422.112(b)(9) (finalized at Sec. 422.100(n)).
We indicated that the purposes 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 noted
that the regulation text, now at Sec. 422.100(n)(1), would include the
language ``upon request,'' which would serve to communicate that while
CMS does not intend to establish uniform data collection from all MA
organizations at this time, CMS reserves the right to ask for this
information from individual MA organizations. However, we noted that
this provision would not limit CMS's audit access when program audits
review the performance of MA organizations. We solicited 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.
We are also finalizing the proposed requirement that the MA
organization must make information about its digital health literacy
screening and digital health education programs available to CMS upon
request. We are further finalizing language providing a non-exhaustive
list of the information CMS may request from MA organizations under
this policy. Finally, we are not finalizing regular reporting of the
data alongside other Part C reporting requirements.
In the proposed rule, we provided that our proposal to amend Sec.
422.112(b) (finalized at Sec. 422.100(n)) 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. We also described how
our estimated analysis of these impacts was qualitative in nature as we
were proposing to provide MA organizations flexibility in determining
how they wish to implement these proposed CMS requirements. We
indicated that CMS does not currently collect data regarding digital
health literacy among MA enrollees. Consequently, we would 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 estimated the direct non-quantified burden consists of
MA organization staff hours spent, resources purchased, and any digital
health education for enrollees performed. We further noted that MA
organizations may 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, we concluded
that the proposed provision would impose an unknown amount of
information collection requirements (that is,
[[Page 22162]]
reporting, recordkeeping, or third-party disclosure requirements)
because burden cannot be quantified.
We solicited 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 noted that we did not
anticipate requesting this information from more than nine MA
organizations in a given year. We noted, however, that we believed it
important to reserve the right to ask for this information if
necessary, and that we structured the proposed regulation text
accordingly. We also provided that since we estimate fewer than ten
respondents, the information collection requirement was exempt (5 CFR
1320.3(c)) from the requirements of the PRA of 1995 (44 U.S.C. 3501 et
seq.). Consequently, we found that there would be no need for review by
OMB under the authority of the PRA.
In terms of economic impact on the Medicare Trust Fund, we
indicated that we did 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, as we discussed in the proposed rule, 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,
we concluded that this provision is expected to have an unknown
economic impact on the Medicare Trust Fund.
In summary, CMS proposed to add a new requirement at Sec.
422.112(b) that all MA organizations offering coordinated care plans
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. We solicited comments on this
proposal, including whether this requirement should be expanded to all
MA organizations rather than only those offering coordinated care
plans. In addition, CMS proposed to include a requirement that MA
organizations make information about these programs available to CMS
upon request, and questioned whether we should require regular
reporting of data related to these from MA organizations alongside
other Part C reporting requirements. We solicited comment on these
proposals. We received the following comments on these proposals, and
our responses follow:
Comment: Most comments were generally supportive, especially of the
proposal to allow MA organizations flexibility and discretion in
implementing the proposed requirement.
Response: We thank commenters for their support.
Comment: Many commenters requested that CMS explain what MA
organization compliance and effectiveness would look like under this
policy.
Response: We acknowledge that many MA organizations will be
building digital health education programs from scratch and may face
logistical challenges unique to their population, service area and
network. As such, we will consider future compliance standards
carefully, but we reaffirm that MA organizations have discretion to
enact practices that best suit their unique situations. CMS recognizes
best efforts in this new and emerging area of need among the MA
population may evolve, and we expect that MA organizations will
similarly evolve their programs as they gain experience with digital
health literacy screening and programming.
Comment: Many commenters requested CMS define terminology
surrounding digital health literacy.
Response: We appreciate this suggestion. However, we are concerned
that establishing definitions of certain terminology may detract from
the flexibility we intend to provide MA organizations during their
initial development and implementation of digital health education
programs. As such, we will not provide standard definitions for digital
health literacy terms at this time beyond those referred to in the
preamble to this final rule. In developing future policy or guidance
documents, we may consider providing or compiling such a list of
relevant definitions.
Comment: Many commenters suggested CMS establish standardized
reporting metrics and resources for screening enrollees' digital health
literacy.
Response: We thank commenters for this suggestion and will consider
establishing standards and reporting metrics in future policymaking.
However, as we noted in the preamble to this final rule, CMS does not
anticipate requesting information from more than nine MA organizations
regarding information about their digital health literacy screening
tool or their digital health education programs. Establishing
standardized reporting metrics would not be consistent with this
intent.
Moreover, at this time we believe that establishing such
standardized resources and metrics would be counter to the principles
of flexibility upon which this provision was established. We are
concerned that any reporting metrics would limit the flexibility we
intend to provide MA organizations in initially establishing and
implementing digital health education programs tailored to their
respective covered populations. However, we believe that reporting
metrics may be appropriate to add in the future after MA organizations
and enrollees have gained experience with these programs, and we may
consider adding reporting metrics in the future.
In addition, we note that both the proposed and final rules
reference several sources of information on digital health literacy,
the kinds of challenges that lack of digital health literacy pose to
enrollees, especially those in vulnerable populations, and a range of
additional information on this topic. While these references are not
meant to serve as guidance, they may prove useful as a starting point
for MA organizations beginning to build a digital health education
program which is compliant with the new final rule. We further note
that MA organizations are afforded the flexibility in this final rule
to determine the most appropriate tools and methods for the populations
they serve. As such, we encourage plans to engage with enrollees,
providers, and other MA organization affiliated entities to determine
the best methods for implementing this provision. Therefore, CMS is not
finalizing any standard set of resources or reporting metrics at this
time.
Comment: Many commenters suggested that CMS convene an industry
workgroup to study research-driven standards and effective methods for
improving digital health literacy. One such commenter opposed
finalizing these provisions until the workgroup could make
recommendations regarding definitions and standards. This commenter
recommended that CMS, in the interim, work with MA organizations to
improve language used to describe telehealth services in EOCs.
Response: We will take the suggestion to convene an industry
workgroup into consideration; however, we will not finalize plans to
convene such a workgroup in this final rule. We note that the provision
regarding digital health education is sufficiently broad
[[Page 22163]]
and flexible to allow for MA organizations to establish a range of
methods and practices as they deem appropriate.
Also, CMS will not be providing standard definitions or language
for describing telehealth at this time due to concerns of limiting MA
organization discretion. We encourage MA organizations to use resources
referenced throughout the preamble to this final rule as well as other
sources as deemed appropriate.
We thank commenters for their suggestion to improve language used
to describe telehealth services in EOCs and will consider adding
language updates regarding telehealth to the EOC in the future.
Comment: Several commenters recommended that this proposal be
expanded to require all MA organizations, and not just coordinated care
plans, to implement a digital health education program. No commenters
expressed opposition to this policy change.
Response: We appreciate feedback from commenters. Given the
recommendations from commenters and the absence of any commenters
opposed to expanding this requirement to all MA organizations, we are
finalizing our proposal with modifications to expand the requirement to
encompass all MA organizations, not just MA organizations that offer
coordinated care plans. We are therefore finalizing the proposed
regulation text at Sec. 422.100(n) instead of Sec. 422.112(b)(9).
Section 422.112(b) applies to only MA organizations offering
coordinated care plans while Sec. 422.100 sets forth general
requirements related to benefits and coverage by MA plans.
Comment: Some commenters requested that CMS delay the effective
date or any data collection until contract year 2025 and use lessons
learned to build a framework for measurement. Other commenters
requested that CMS not include a digital health literacy or education
section in the annual Part C reporting requirements.
Response: We appreciate these comments and note these concerns. We
appreciate that MA organizations may be establishing digital health
education programs which are new to enrollees as well as MA
organizations. However, with the flexibility and discretion afforded in
this provision, we believe that MA organizations possess the capacity
to develop and implement compliant programs by January 1, 2024, the
effective date of these policies. We also note that this final rule
does not establish a standard data collection effort or standard
framework for measuring programs (aside from the broad statistics set
forth in the regulation text and noted in this section of this final
rule), and, as such, we do not believe that delaying the effective date
of this provision would be reasonable.
We note that the proposed rule reiterates the authority of CMS to
collect information upon request, including but 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.
422.100(n). However, MA organizations may record and keep this and any
other information related to their digital health education programs in
the manner they deem most appropriate, and CMS is not pursuing any
uniform data collection effort (such as Part C reporting requirements)
at this time.
Comment: Some commenters expressed concern that this requirement
may backfire and cause enrollees to believe that they are being
targeted and/or forced to participate, even though it would be
voluntary.
Response: While we appreciate the commenters' concerns, we
disagree. We note that while our proposed provision acknowledges the
necessity of assessing enrollees' digital health literacy, CMS
discourages use of screening tools which ask specific questions related
to age, income, educational attainment, or race and ethnicity toward
assessing an enrollee's digital health literacy. We note that such
questions may make enrollees believe they are being targeted.
Comment: Other opposing comments noted that there is insufficient
evidence that these programs are beneficial, that these requirements
will impose new burdens or costs on MA organization, and that digital
health literacy and education should be dependent on and under the
purview of providers, not MA organizations.
Response: As we noted in the proposed rule, research indicates
that, ``Individuals with a higher degree of digital health literacy
receive more health care information, are better equipped to evaluate
the quality of information regarding their health care, and report
higher telehealth usage.'' \47\ We further explained that a large body
of research indicates that a lack of digital health literacy has an
impact on overall health. To this end, we believe that MA organizations
have an opportunity to meaningfully impact the health of their
enrollees by implementing robust digital health education programs.
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\47\ https://jamanetwork.com/journals/jama/article-abstract/2426088.
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We acknowledge the commenter's concerns that these programs may
increase MA organization burden or costs, and we agree that these
requirements will impose some level of burden and cost on MA
organizations. However, commenters did not provide specific feedback or
data regarding the anticipated increased costs and/or burdens imposed
on MA organizations, and as a result, CMS is unable to make broadly
applicable estimates regarding either. Additionally, for reasons set
forth in this final rule, CMS is not able to provide quantitative
estimates regarding probable MA organization burden for implementing
this provision.
CMS does not agree that digital health literacy and education
should be exclusively dependent on, nor under the exclusive purview of,
individual providers. MA organizations are often better positioned than
individual providers to coordinate the care of their enrollees, and
this digital health education programming is part of such care
coordination. Further, we note that providing support for digital
health education programs falls outside the scope of daily work
assignments for most MA network providers and medical staff. Placing
such a burden on providers to educate all patients who are MA enrollees
in the context of hospital, clinic, or other health-related visits
would therefore be counter to the principles of this provision. While
providers may be well suited to give occasional guidance and support to
enrollees regarding digital health literacy, CMS notes that many
individuals with lower digital health literacy may attend fewer
provider appointments. The potential lack of or limited access for
these vulnerable enrollees means that providers may not be providing
support to those who have the greatest need. In addition, we note that
hospital, clinical, and other health-related visits are often brief and
focused on specific medical issues, and that digital health education
would not fit well into enrollees' medical visits.
We believe MA organizations are better positioned than providers
and suppliers to evaluate their enrollee population's digital health
literacy and provide meaningful digital health education to enrollees.
MA organizations are well situated to leverage data they have that
providers
[[Page 22164]]
may not, and to promulgate surveys and other relevant materials in an
efficient manner. Moreover, in efforts to comply with the provision of
this final rule, MA organizations may be able to collaborate with
providers and suppliers to provide digital health education in a manner
that is efficient and effective for a large group of enrollees.
Comment: A few commenters expressed concern about implementation of
the digital health education programs, specifically relating to lack of
access to broadband or devices for low-income or rural enrollees. In
addition, one commenter noted that because this population tends to be
older, sicker, and often less mobile, an effective program might
require in-home one-on-one training, which can be time-consuming and
costly to MA organizations without additional funding. Moreover, if MA
organizations were to provide equipment to enrollees, it would be
challenging to limit use to only health services and would likely
confuse enrollees.
Response: CMS appreciates this feedback and acknowledges that
challenges faced by enrollees regarding access to technology or
broadband services are likely to persist. However, as noted in both the
proposed and final rules, MA organizations have the option to provide
certain enrollees with supplemental benefits (including SSBCI) which
address some of these challenges when enrollees meet the eligibility
requirements to receive such supplemental benefits. We acknowledge that
not all enrollees may be able to take advantage of these services due
to access or eligibility; however, we believe that this number of
enrollees would likely be small given the research and statistics \48\
showing that enrollees with low digital health literacy are likely to
correlate highly with enrollees who are eligible for relevant
supplemental benefits. Therefore, at this time, CMS is not finalizing
any requirements or provisions related to implementing digital health
literacy screenings or the digital health education program specific to
low-income or rural enrollees. As previously noted, MA organizations
are encouraged to innovate and improve their digital health education
programs as they gain experience in this field, as such CMS may
consider additional flexibilities or policies in the future to address
this specific challenge.
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\48\ https://telehealth.hhs.gov/providers/health-equity-in-telehealth.
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We note the commenter's concerns about providing in-home training
and agree that, in some cases, such a digital health education program
would be beneficial to enrollees. However, we also note that this is a
broad generalization, and that MA organizations are best suited to make
this determination based on the mobility, health status, and other
factors unique to each enrollee. Additionally, as noted previously, CMS
agrees that there may be some cost involved in implementing a digital
health literacy screening and a digital health education program.
However, we are unable at this time to provide specific cost estimates.
We also note commenter's concerns about their ability to limit use
of digital equipment to health services. However, we disagree. Current
digital capability allows for a variety of controls, firewalls, and
other programs that are designed to limit or otherwise curate the
functions available to individuals utilizing digital equipment.
Moreover, CMS has established standards in regulation relating to
allowable supplemental benefits, and we believe that these regulations
effectively clarify when MA organizations may offer specific supplement
benefits and to whom MA organizations may offer them. We encourage MA
organizations that provide digital equipment to their enrollees to take
advantage of controls, firewalls, and other capabilities that would
safeguard against enrollees using such equipment in an unintended or
otherwise noncompliant manner.
Comment: One commenter suggested CMS work with community-based
advocacy and research groups to ensure concerns of vulnerable
communities are addressed in the planning and implementation of this
regulation.
Response: We thank commenters for this recommendation and encourage
MA organizations as a part of any care coordination activities to
connect with and create links for enrollees with local advocates and
groups with expertise in the area of digital health literacy and
education. We encourage MA organizations to engage these groups where
appropriate when creating plans for implementing digital health
education programs.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing, with modification, the requirement that MA organizations
must establish procedures to identify and offer digital health
education to enrollees with low digital health literary 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. We are finalizing the
proposal with modifications to apply the new requirement to all MA
organizations, rather than only to MA organizations offering
coordinated care plans by finalizing the revision at Sec. 422.100(n)
instead of Sec. 422.112(b)(9). In addition, we are finalizing without
modification the proposed policy that the MA organization must make
information about its digital health literacy screening and digital
health education programs available to CMS upon request. We are further
finalizing our proposed language providing a non-exhaustive list of the
information CMS may request from MA organizations under this policy.
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,
[[Page 22165]]
and quantifiable, measurable outcomes; guard against potential health
disparities; and produce best practices.\49\
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\49\ 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.
To meet the needs of their enrolled special needs populations, MA
special needs plans (SNPs) have 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.\50\
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.51 52 53 54 55 56 57 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.58
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\50\ Disparities in Health Care in Medicare Advantage by Race,
Ethnicity and Sex, April 2022.
\51\ 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.
\52\ 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.
\53\ 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.
\54\ Rural Communities: Age, Income, and Health Status. Rural
Health Research Recap. (2018). Rural Health Research Gateway.
https://www.ruralhealthresearch.org/recaps/5.
\55\ 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.
\56\ 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.
\57\ 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.
\58\ 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,
[[Page 22166]]
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 improve the health of and health care 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 proposed to amend the MA QI program
regulations at Sec. 422.152(a). Specifically, we proposed 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. 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
proposed 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. MA organizations
may implement activities such as improving communication, developing
and using culturally appropriate materials (to distribute to enrollees
or use in communicating with enrollees, community outreach, or similar
activities. MA organizations should design activities so that they meet
the needs of their particular enrollees, and therefore CMS is not
prescriptive in the types of activities MA organizations must implement
to meet this proposed new requirement. However, MA organizations must
ensure that all their designed activities are broadly accessible
irrespective of race, ethnicity, national origin, religion, sex,
disability, 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, adopting this requirement for MA
organizations as part of their required QI programs aligns with health
equity efforts across CMS policies and programs.
We summarize the comments received on the proposal at Sec.
422.152(a)(5) and provide our responses to those comments in this
section of this rule.
Comment: CMS received several comments expressing overwhelming
support for requiring MA organizations to incorporate one or more
activities that reduce disparities in health and health care among MA
enrollees into their QI program, and recommended that CMS finalize the
provision as proposed. Many of the commenters believed that MA plans'
QI programs are an important vehicle to develop and execute activities
designed to reduce disparities, and advance equity in the health and
health care of MA enrollees. Commenters commended CMS for its continued
efforts to advance health equity for those who have been historically
underserved, marginalized, and adversely affected by persistent poverty
and inequality. Commenters also believed that closing health care gaps
will enable every individual to achieve optimal health through the
delivery of equitable health services. Additionally, each of the
commenters conveyed a strong commitment to promote health equity and
quality of care in the MA program.
Response: CMS thanks the commenters and agrees that MA
organizations are uniquely positioned to address disparities in health
and health care, and that QI programs are an important vehicle for
improving quality and health outcomes for MA enrollees. CMS appreciates
MA organizations commitment to promote health equity and quality of
care in the MA program.
Comment: Some of the commenters conveyed that they were already
addressing disparities in care for underserved populations through a
variety of quality initiatives. Another commenter conveyed that the
examples provided in the proposed rule, that is, improving
communication, developing, and using linguistically and culturally
appropriate materials, hiring bilingual staff, and engaging in
community outreach, were good examples of actions that have helped
reduce disparities in communities across the country.
Response: CMS thanks the commenters and appreciates the initiatives
that organizations have already undertaken to reduce barriers to care,
improve care coordination and access to preventive services and
community resources. CMS believes these initiatives will help to
promote health equity among all MA enrollees.
Comment: A few commenters requested that CMS allow MA organizations
to have broad discretion regarding the types of activities they can
implement to meet the new QI program requirement. Furthermore, they
noted this will allow plans to respond to the needs of the communities
they serve, define appropriate QI activities and promote meaningful
efforts to address disparities. A commenter also requested that CMS not
limit MA organizations to those QI activities currently being
implemented by QHPs.
Response: We appreciate the comments and reiterate that the
requirement we proposed and are finalizing is not prescriptive in the
types of activities MA organizations must or can implement to meet this
new requirement. CMS also points out that the QHP activities described
in the preamble were meant to serve as examples, not required
activities. CMS firmly believed that plans should tailor QI program
activities to meet the needs of their enrollees. However, CMS reminds
MA plans that they must ensure these activities are broadly accessible
irrespective of race, ethnicity, national origin, religion, disability,
sex, or gender.
Comment: A commenter requested that CMS explicitly state that QI
program activities can include, as an element of the QI program (that
is, CCIP, QI Initiative, etc.), nutrition services such as food,
prepared meals, and groceries.
Response: CMS appreciates the comment and again notes that we are
generally not being prescriptive in the types of QI program activities
MA organizations must or can implement to meet this new requirement.
However, CMS believes that nutrition services are one of many
activities that could help to advance health outcomes in MA enrollees,
and as such has included
[[Page 22167]]
meals (on a limited basis) as an allowable supplemental benefit for
which all enrollees may be eligible, provided they meet the criteria
set forth in Chapter 4 of the Medicare Managed Care Manual.\59\
Additionally, CMS has included meals beyond a limited basis as an
allowable benefit under Special Supplemental Benefits for the
Chronically Ill (SSBCI), provided that the requirements in Sec.
422.102(f) are met regarding the chronically ill enrollees that are
eligible for the benefits and that the item or service covered as an
SSBCI have a reasonable expectation of improving or maintaining the
health or overall function of the chronically ill enrollee. We note
that any benefits (including meals) provided to enrollees must be
included in their bids and be offered in a manner consistent with
applicable regulations and criteria for providing such benefits.
Furthermore, we note that plans may not offer meals through a QI
program instead of through regular supplemental benefits or SSBCI.
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\59\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
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Comment: A few commenters encouraged CMS to exercise appropriate
oversight to ensure that MA organizations are implementing activities
that are reducing disparities, clearly and measurably. A few commenters
also recommended that MA organizations seek to identify disparities
through data collection and stratification of enrollees by various
subpopulations. Similarly, other commenters conveyed that they already
had mechanisms in place to identify disparities in health and health
care access among their members, investigate root causes, and develop
reduction strategies.
Response: CMS appreciates the comments and recognizes that some MA
organizations already have mechanisms in place to identify disparities
and address gaps in care. CMS notes that MA organizations have tools to
assist them in gaining insight into their enrollee populations, such as
CCIP initiatives, claims data, HRAs, detailed profiles of SNP enrollees
and identification of barriers to accessing care, as required by the
MOC, etc., and can use this data to identify gaps in care and tailor QI
program activities accordingly.
Lastly, we note that various aspects of the QI program require that
MA organizations have processes in place to evaluate participant
outcomes, the effectiveness of QI programs, report the status of CCIP
results to CMS as requested, report quality performance data, etc. CMS'
current oversight efforts include these requirements, and therefore, we
do not believe it is necessary to impose additional means of oversight.
Comment: Another commenter supported the increased focus on health
equity and requested that CMS provide guidance regarding measuring
disparity reduction, such as the use of the Health Equity Summary Score
(HESS) Dashboard for targeted sub-groups. The commenter suggested that
CMS publish the HESS and its research and findings to date so that
stakeholders can review and comment. They also requested the results
from CMS' recent survey about the HESS and its utility, feasibility,
ease-of-use, be published. And, that CMS stipulate a score or targeted
proportional improvement which, if met, would signal that health equity
results have been achieved, allowing for targeted improvement by each
plan, rather than compared to a group average.
Response: CMS thanks for commenter for their feedback and
appreciates the interest regarding HESS research. Though outside of the
scope of this rule, CMS points out that related information has already
been published about the HESS.60 61 62 More information can
be found in The Office of the Assistant Secretary for Planning and
Evaluation (ASPE) May 2021 report on health equity measures.\63\
Finally, an article on the development of the Medicare Advantage Health
Equity Summary Score Dashboard is slated to be published in the March
2023 issue of American Journal of Managed Care. CMS believes the
references included in the footnotes will provide the commenter with
additional insight on the HESS.
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\60\ https://pubmed.ncbi.nlm.nih.gov/31713030/.
\61\ https://journals.lww.com/lww-medicalcare/Fulltext/2022/06000/Measuring_Inconsistency_in_Quality_Across_Patient.9.aspx.
\62\ https://pubmed.ncbi.nlm.nih.gov/36038518/.
\63\ https://aspe.hhs.gov/sites/default/files/private/pdf/265566/developing-health-equity-measures.pdf.
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After consideration of the comments and for the reasons outlined in
the proposed rule and our responses to comments, we are finalizing our
proposed change to 422.152(a)(5) without modification.
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.\64\ 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.\65\ 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.\66\
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\64\ 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/.
\65\ https://www.cms.gov/files/document/2022-cms-strategic-framework.pdf.
\66\ https://www.cms.gov/files/document/cms-behavioral-health-stategy.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,\67\ 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,\68\
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.\69\ 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.\70\ CMS 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
[[Page 22168]]
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 and
explained in the December 2022 proposed rule how we used those comments
in shaping our proposals.
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\67\ https://data.hrsa.gov/topics/health-workforce/shortage-areas.
\68\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35325/NSDUHFFRPDFWHTMLFiles2020/2020PDFW102121.pdf.
\69\ https://www.samhsa.gov/data/sites/default/files/reports/rpt35324/2021NSDUHMHChartbook102221B.pdf.
\70\ 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 health care needs of those we serve. In
order to support these goals, we are finalizing regulatory changes that
focus on ensuring access to behavioral health services for MA
enrollees.
We solicited 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 that 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 in Sec. 422.116 a
mechanism to add new provider types without rulemaking. We proposed 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 responses to the RFI 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 include other outpatient
behavioral health physicians and health professionals, including those
that treat substance use disorders (SUDs), as part of our evaluation of
MA plan networks in order to better meet MA enrollees needs in
accessing behavioral health care.
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.\71\ 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, at the time of the December 2022 proposed rule
proposal, 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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\71\ 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 proposed to
strengthen our network adequacy requirements for MA plans as it relates
to behavioral health in three ways.
First, we proposed to add three new provider specialty types to the
list at Sec. 422.116(b)(1) to make them subject to the time, distance
and minimum number requirements in our network adequacy evaluation: (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 proposed base time and
distance standards and minimum number of in-person providers in each
county type for each new specialty type as follows:
[[Page 22169]]
Maximum Time and Distance Standards:
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\72\ Counties with extreme access considerations (CEAC).
[GRAPHIC] [TIFF OMITTED] TR12AP23.006
Minimum Ratios:
[GRAPHIC] [TIFF OMITTED] TR12AP23.007
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 to the 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 proposed to apply to the new behavioral health
specialty types.
Further, we explained in the February 2020 proposed rule how 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,\73\
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),\74\ the list of
practitioners waivered to provide buprenorphine for the treatment of
OUD published by SAMHSA,\75\ and the list of OTP providers enrolled in
Medicare published by CMS.\76\ We also sought clinical consultation
regarding the types of behavioral health providers that treat
[[Page 22170]]
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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\73\ https://bhw.hrsa.gov/data-research/projecting-health-workforce-supply-demand/behavioral-health.
\74\ https://pecos.cms.hhs.gov/pecos/login.do#headingLv1.
\75\ https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator.
\76\ 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 proposed 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. Based on these considerations, we also proposed 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 solicited comment on this proposal.
Comment: We received numerous comments that were supportive of our
proposal to add the three new behavioral health specialty types to the
list at Sec. 422.116(b)(1), requiring these new specialty types be
subject to network adequacy evaluation. Commenters noted that expanding
the MA network adequacy standards to include the new specialty types
would positively impact access to behavioral health providers for
enrollees.
Response: We thank commenters for their input on this proposal. CMS
is committed to ensuring access to provider networks for MA enrollees
is sufficient. Adding behavioral health specialty types to our network
adequacy standards to supplement the current specialties (psychiatry
and inpatient psychiatric facility services) will further strengthen
network adequacy requirements for MA plans and enhance access for
enrollees.
Comment: We also received several comments that opposed the
proposal to add the new behavioral health specialty types to the
network adequacy evaluation, mainly citing concerns with shortages of
behavioral health providers that could hinder the ability for MA plans
to meet network adequacy standards. A few commenters suggested that we
set the network standards for behavioral specialty types to mirror the
network standards for the primary care specialty type.
Response: We used current data and followed the established steps
to develop the time and distance standards and minimum ratios included
in the proposal for the new behavioral health specialty types.
Consistent with our established practice, the network adequacy
standards for the specialty types we are finalizing in this rule are
set such that MA organizations are able to meet them based on the
current supply and distribution of behavioral health providers. We also
remind commenters that CMS provides annual updates (422.116(a)(4)(ii))
to the Provider Supply file, which identifies available providers and
facilities with office locations and specialty types that can be
utilized as a supplemental tool for identifying appropriate providers.
Further, an MA plan may request an exception to network adequacy
criteria under our exceptions process (422.116(f)), when providers or
facilities are not available for the MA plan to meet the network
adequacy criteria as shown in the Provider Supply file for the year for
a given county and specialty type, and the MA plan has contracted with
other providers and facilities that may be located beyond the limits in
the time and distance criteria, but are currently available and
accessible to most enrollees, consistent with the local pattern of
care.
Comment: Many commenters noted that the Consolidated Appropriations
Act, 2023 eliminated the SAMHSA required waiver to prescribe medication
for treatment of OUD, and therefore suggested that CMS not finalize the
new behavioral health ``Prescribers of Medication for Opioid Use
Disorder'' requirement as part of our network adequacy standards.
Additionally, a few commenters indicated that while the waiver
requirement was no longer in effect, CMS should maintain a network
adequacy standard specifically for OTPs or develop alternative
standards for all prescribers of medication for opioid use disorder.
Response: We acknowledge that Section 1262 of Division FF of the
Consolidated Appropriations Act of 2023 (CAA) (Pub. L. 117-328) amended
section 303(g) of the Controlled Substances Act to remove the statutory
requirement for providers to obtain a valid waiver (commonly referred
to as an ``X-Waiver'') from SAMHSA and the DEA to administer, dispense,
or prescribe MOUD. Therefore, we will not be finalizing this portion of
our proposal. Because we planned to use SAMHSA's list of waivered
providers to populate the Provider Supply file, we will no longer be
able to accurately track the providers that prescribe medications like
buprenorphine in order to create and maintain a network adequacy
standard.
In addition, we are not adding OTPs to the facility-specialty type
list in Sec. 422.116(b)(2). We proposed a combined specialty type
called Prescribers of Medication for Opioid Use Disorder, which
included OTPs and MOUD Waivered Providers, that allowed us to create
meaningful access standards. At this time there is not enough supply of
OTPs to create meaningful access standards. As OTPs continue to expand,
we will monitor the appropriateness of setting network adequacy
standards in future rulemaking. We remind MA organizations that they
are required to arrange for and cover the Part B OTP benefit, which may
only be furnished by certified OTPs. Therefore, as a practical matter,
MA organizations must include certified OTPs in their networks or
arrange out-of-network care (at in-network cost sharing) for their
enrollees who need OTP benefits.
Finally, we thank commenters for their suggestions on alternative
standards for this important category of providers, and we will
consider all comments in future rulemaking.
Comment: Several commenters requested that CMS delay the effective
date of the proposal to add new behavioral health specialty types to
the network adequacy standards to 2025,
[[Page 22171]]
indicating that more time would be needed for MA organizations to
contract with providers to ensure they are able to meet network
adequacy standards especially in advance of applying for new or
expanded service areas.
Response: We appreciate commenters suggestions regarding delaying
the effective date of our proposal. However, we believe that our
regulations currently provide flexibilities that will assist MA
applicants in meeting network adequacy standards. These flexibilities
include a 10-percentage point credit for new or expanding service area
applicants towards the percentage of beneficiaries residing within time
and distance standards for the contracted network in the pending
service area, and the ability to utilize a Letter of Intent (LOI) which
meets our regulatory requirements, to meet network standards at the
time of and for the duration of the application review (Sec.
422.116(d)(7)). In addition, MA organizations are required to provide
all medically necessary services to their enrollees; it is our
expectation that these organizations already have established
relationships with these providers because certain Medicare Part B
services are furnished by clinical social workers, as defined in
section 1861(hh) of the Act, and clinical psychologist as defined in 42
CFR 410.71(d).
Comment: A few commenters requested clarification on the types of
social workers that will be allowable to submit for network adequacy
review purposes.
Response: As detailed in our proposal, commenters may refer to
section 1861(hh) of the Act regarding the definition for ``clinical
social worker.''
Comment: Several commenters supported our proposal 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.
Response: We thank commenters for their support of this proposal.
As we previously noted, this amendment will reinforce regulatory
requirements for MA plans to provide access to critical behavioral
health care services.
Comment: Many commenters supported our proposal to add the new
behavioral health specialty types to the list of those that receive the
10-percentage point credit (Sec. 422.116(d)(5)) towards the percentage
of beneficiaries that reside within published time and distance
standards when the plan includes one or more providers that provide
additional telehealth benefits, as defined in Sec. 422.135, in its
contracted network. Commenters indicated that telehealth is vital in
accessing behavioral health services for enrollees. Some commenters
requested that CMS provide a credit higher than 10-percentage points,
indicating that it would help plans meet network adequacy standards in
light of the behavioral health provider shortage. A few commenters did
not support the proposal to provide additional credits for these
provider types to MA organizations in meeting network standards.
Response: In our proposed rule, we noted that Medicare FFS claims
data from 2020 shows that telehealth was the second most common place
of service for claims with a primary behavioral health diagnosis.
Further, we agree with commenters that telehealth is important in
continuing to expand access to behavioral health care, and that the
credit may encourage MA plans to provide additional telehealth benefits
to expand access.
We are extending the telehealth credit for the new specialty types
consistent with other established credits afforded to MA organizations
in meeting network standards. We will continue to monitor the credit
and consider whether changes are appropriate in future rulemaking.
Based on our review and consideration of the comments received, and
for the reasons outlined in the proposed rule and our responses to
comments, we are finalizing these provisions with two modifications as
follows:
We are not finalizing the addition of Prescribers of
Medication for Opioid Use Disorder as a specialty type for which we set
network adequacy standards. We are finalizing the addition of clinical
psychology and clinical social work to the list of provider specialty
types at Sec. 422.116(b)(1), requiring these new specialty types to be
subject to network adequacy standards.
Adding time and distance standards and minimum ratios for
the two new specialty types to Sec. 422.116 to Table 1 to Paragraph
(d)(2) and Table 2 to Paragraph (e)(3)(i)(C), respectively, to indicate
the standards for the two new specialty types, clinical psychology and
clinical social work.
Amending Sec. 422.112(a)(1)(i) to include that the
network must also include providers that specialize in behavioral
health services.
Adding clinical psychology and clinical social work to the
list at Sec. 422.116(d)(5) that that will receive the 10 percentage
point 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.
3. Behavioral Health Services in Medicare Advantage (MA) (Sec. Sec.
422.112 and 422.113)
Care Coordination for Behavioral Health Services. In addition to
ensuring that there are specific types of providers in behavioral
health specialties accessible in an MA organization's provider network,
it is also important for individuals with behavioral health needs to
have care coordination available. Care coordination in behavioral
health can be broadly described as including the process of assisting
an enrollee to access a range of services that will assist in their
recovery or improved functioning.
Section 1852(d)(1)(A) of the Act requires MA organizations that use
a network of providers to make benefits under the plan available and
accessible to each individual electing the plan within the plan service
area. CMS proposed to further ensure that enrollees have access to
behavioral health services by adding behavioral health services to the
types of services for which MA organizations that offer MA coordinated
care plans must have programs in place to ensure continuity of care and
integration of services at Sec. 422.112(b)(3). Under 422.112(b)(3), MA
organizations must coordinate plan services with community and social
services available through contracting or noncontracting providers in
the area served by the MA plan, which must be made available for
enrollees as part of overall delivery and coordination of services. CMS
proposed 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 the inclusion of behavioral health care
services among the services for which MA organizations must have a care
coordination program in place will better ensure enrollee access to
such services.
Comment: Some commenters requested CMS delay the implementation
deadline. These commenters expressed concern with MA organizations'
abilities to secure contracts with providers who will deliver the
services.
Response: While CMS appreciates the challenges associated with
behavioral health care access, MA organizations' fundamental
responsibility to ensure their enrollees can access Part A and
[[Page 22172]]
Part B items and services through plan networks, as applicable, remains
unchanged with the advent of this provision. We also note that Sec.
422.112(a)(3) requires MA organizations to arrange for specialty care
outside of the plan provider network when network providers are
unavailable or inadequate to meet an enrollee's medical needs. MA
organizations' responsibility to cover all medically necessary care,
including behavioral health care, is further discussed in section
III.C. of this final rule.
Comment: A commenter expressed support for the addition of
behavioral health to care coordination services provision, but also
requested a list of specific services that should be added in order to
comply with the new provision.
Response: CMS appreciates the request to specify services
applicable to care coordination in behavioral health, and the
commenter's desire to be thorough, however the codification of a list
of specific behavioral health services that require care coordination
could inadvertently limit the services offered to an enrollee. Further,
the availability of certain types of services could vary based on an
enrollee's geographic location. Thus, CMS declines to create a list of
this nature at this time in order to promote MA organizations'
flexibility to meet their enrollees' needs. We intend this amendment to
ensure that MA coordinated care plans consider and address behavioral
health conditions and needs of an enrollee when developing and
facilitating community and social services for enrollees.
Emergency Medical Condition. In addition to proposing care
coordination for behavioral health services, CMS proposed to fully
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 cover, and reimburse a provider for,
emergency services without regard to prior authorization or the
emergency care provider's contractual relationship with the MA
organization.
An ``emergency medical condition'' under Sec. 422.113(b)(1)(i) 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, that is, behavioral, health. 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.
Accordingly, CMS proposed to amend the regulation by inserting ``,
mental or physical,'' after the word ``condition'' and before the word
``manifesting.'' We explained that we intended the proposed revision to
ensure that emergency medical conditions are easily interpreted as
including both physical and mental health conditions, thereby
prohibiting the use of prior authorization as required by the statute
and guaranteeing that coverage is provided by the MA organization,
consistent with the statute. This ensures that enrollees have access to
emergency behavioral health services in parity with access to other
medical emergency services.
Comment: A commenter requested that CMS specify that the rules
pertaining to emergency care in this rule are applicable only to
hospital emergency department or free-standing emergency departments.
Response: CMS does not dictate the site at which emergency services
must be provided. Section 1852(d)(3)(A) of the Act specifies that
emergency services are covered inpatient and outpatient services that
are furnished by a provider qualified to furnish the inpatient or
outpatient services, and are needed to evaluate or stabilize an
emergency medical condition. CMS will continue to use this definition
in order to determine when services are emergency services.
Additionally, CMS notes that urgently needed services, as defined at
Sec. 422.113(b)(1)(iii), must also be covered by MA plans under Sec.
422.113. Urgently needed services are not limited to services from an
Emergency Room or Emergency Department and, per Sec.
422.112(b)(1)(iii), are covered services provided when an enrollee is
temporarily absent from the MA plan's service (or, if applicable,
continuation) area (or provided when the enrollee is in the service or
continuation area but the organization's provider network is
temporarily unavailable or inaccessible) when the services are
medically necessary and immediately required as a result of an
unforeseen illness, injury, or condition and it was not reasonable
given the circumstances to obtain the services through the organization
offering the MA plan.
Comment: A commenter requested that CMS consider a specific set of
behavioral health services that meet the prudent layperson standard to
further clarify the variations of behavioral health symptoms that
necessitate emergency care.
Response: We respectfully disagree with this comment. Identifying a
specific set of behavioral health services that can or must be used to
treat an emergency medical condition in order for the condition (and
the corresponding emergency services and post-stabilization services)
to be subject to the protections in Sec. 422.113 would undermine and
inappropriately limit the regulation.
Comment: Some commenters suggested that CMS clarify that when an
enrollee has an emergency medical condition, MA organizations may not
issue denials based on medical necessity. The commenters also pointed
out that some MA organizations frequently deny payment for emergency
services (for example, those services rendered prior to stabilization)
based on opinions that such services were not medically necessary, and
this practice is variably referred to by MA organizations using terms
such as prior authorization, retrospective authorization, retrospective
prior authorization, or medical necessity review. Similarly, another
commenter offered a scenario when payment for services is denied by an
MA organization because the individual, who is stabilized and awaiting
evaluation or placement, is provided care that is no longer medically
necessary in the opinion of the MA organization.
Response: CMS emphasizes here that section 1852(d)(1)(E) of the Act
and Sec. 422.113(b)(2) require coverage--which means payment--of
emergency services defined under Sec. 422.113(b)(1)(ii). Emergency
services, under the statute and regulation, are covered inpatient and
outpatient services that are furnished by a provider qualified to
furnish the services and needed to evaluate or stabilize an emergency
medical condition (determined using the prudent layperson standard).
Further, emergency services must be covered regardless of the final
diagnosis, consistent with Sec. 422.113(b)(2)(iii), so the services
needed to treat the emergency medical condition as presented therefore
may not be retrospectively denied payment by the
[[Page 22173]]
MA plan. As CMS has explained in Ch 4, Sec. 20.3, of the Medicare
Managed Care Manual interpreting Sec. 422.113, an MA organization is
not responsible for the care provided for an unrelated non-emergency
problem during treatment for an emergency situation. For example, if
the attending physician is treating a fracture, the plan is not
responsible for any costs connected with a biopsy of skin lesions
performed while treating the fracture.
Under Sec. 422.113(b)(3), the physician treating the enrollee must
decide when the enrollee may be considered stabilized for transfer or
discharge, and that decision is binding on the MA organization. The MA
organization is financially responsible (consistent with Sec.
422.100(b) and 422.214 regarding payment) for post-stabilization
services as specified in Sec. 422.113(c)(2) and (c)(3).
Comment: Some commenters cautioned CMS against defining `emergency
medical condition' with reference to `conditions for which an enrollee
may receive behavioral health crisis services' because emergencies vary
from ``crisis'' in behavioral health treatment, and referred CMS to the
work being done to define behavioral health crisis services by an
interagency workgroup organized by the Substance Abuse and Mental
Health Services Administration (SAMHSA).
Response: CMS believes that the commenter has misinterpreted the
goal of this clarification to 422.113(b)(1)(i), which is simply to add
``mental'' (behavioral health) to the definition of emergencies to
capture mental and physical health emergencies. There is no mention of
``crisis'' services in this change, and the scope of ``behavioral
health crisis services'' is beyond the scope of this regulation. CMS
notes that an emergency medical condition is not defined by the types
of services used to treat the condition, as the commenters suggested.
CMS acknowledges the suggestion of collaboration with SAMHSA as that
agency does important work to improve behavioral health crisis care,
but notes that it is not related to the content of this regulation.
All public comments received on these proposals were generally
supportive, including those that requested modifications be made to the
final rule. For reasons presented in the proposed rule and our
discussion of the public comments, we are finalizing changes to Sec.
422.113 as proposed.
4. Medicare Advantage (MA) Access to Services: Appointment Wait Time
Standards (Sec. 422.112)
CMS solicited public comment through 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 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 limit coverage
using provider networks to make covered benefits available and
accessible to enrollees in the plan service area with reasonable
promptness and in a manner that 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, Chapter 4, ``Benefits and Beneficiary
Protections,'' section 110.1.1,\77\ 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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The 2022 CMS Behavioral Health Strategy \78\ 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 proposed 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 standards for
minimum appointment wait times would be added to the existing
requirement that MA organizations offering coordinated care plans
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 minimum standards we proposed here.
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\78\ https://www.cms.gov/cms-behavioral-health-strategy.
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We proposed that the wait time standards for behavioral health
services would apply to 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,\79\ 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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\79\ 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
[[Page 22174]]
access to primary care articulated in HHS' Initiative to Strengthen
Primary Care.\80\ 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.\81\
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\80\ https://www.hhs.gov/about/news/2022/06/27/fact-sheet-hhs-initiative-to-strengthen-primary-health-care-seeking-public-comment.html.
\81\ https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2724393.
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We also sought comment on alternative specific appointment wait
times standards to apply to MA organizations. For example, we
considered, 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.'' \82\ 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. We explained
that under this alternative, the wait time requirements would be
applicable to primary care and behavioral health specialty types. We
solicited comment on whether a more flexible approach would be
appropriate, such as requiring MA organizations have specific standards
for appointment wait time in their written internal policies, but that
CMS require MA plans to meet the specific standards for appointment
wait time limits for routine or non-emergency services for only a
significant portion (for example, 95 percent) of appointments.
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\82\ https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2023-Letter-to-Issuers.pdf.
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The proposal for mandatory standards for minimum 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 standards for appointment wait time 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 we
believe 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 solicited comment on our proposal, including whether one or more
of the previously described sets of standards for wait time 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 solicited comment on whether a specific standard limit for
appointment wait times for emergency or urgently needed services is
duplicative of the mandatory coverage and access requirements in Sec.
422.113.
Comment: We received many comments in support of our proposal to
codify, as requirements, the example standards for appointment wait
times for primary care and extend them to behavioral health.
Response: We thank commenters for their support regarding this
proposal. Codifying the standards for appointment wait times and
extending them to behavioral health will support our goals of reducing
barriers to behavioral health treatment and to supporting parity with
physical health. It also underscores the importance of access to timely
primary care. As adopted, these new wait time standards for behavioral
health services apply to both behavioral health services and substance
use disorder services.
Comment: We received several comments that did not support our
proposal to codify standards for appointment wait times and apply them
to both primary care and behavioral health. Commenters citied
challenges with behavioral health provider shortages and associated
burden with implementing specific wait times with providers in MA
networks that may dissuade providers from contracting with MA plans.
Further, some commenters indicated that maintaining strict wait times
could also discourage MA plans from expanding their service areas,
impacting enrollee access. In addition, commenters expressed interest
in allowing MA plans to maintain the flexibility in establishing wait
times afforded in Chapter 4 of the Medicare Managed Care Manual, and
delaying implementation of this proposal.
Response: As indicated in our proposed rule, codifying the
standards for appointment wait times for primary care and extending
them to behavioral health will support our goals for parity, and will
help strengthen beneficiary protections in access to care. We are
committed to ensuring 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.
Comment: Some commenters requested clarity on evaluation criteria
and mechanisms for monitoring MA organizations' compliance standards of
appointment wait times. Additionally, some requested that CMS provide
opportunities for stakeholders to comment on such mechanisms.
Response: CMS will use existing mechanisms to monitor and
investigate complaints related to access concerns. This includes
monitoring the Complaint Tracking Module (CTM) and working with
regional office account managers to resolve issues with the MA
organizations. In addition, Sec. 422.504(m) sets forth CMS' approach
to issuing compliance actions for failure of an MA organization to
comply with the terms of its contract (which incorporates a requirement
for MA organizations to comply with regulations in 42 CFR part 422).
CMS may issue compliance actions when it determines that an MA
organization is out of compliance by applying the performance standards
in the applicable statute or regulation or, if there is not already a
specific statutory or regulatory standard, CMS may determine that an MA
organization is out of compliance when its performance represents an
outlier relative to the performance of other MA organizations.
Comment: One commenter indicated that establishing standards for
appointment wait times could impact implementation of certain
integrated care models, such as Collaborative Care, indicating that
these models would not consider wait times.
[[Page 22175]]
Response: While we believe the commenter may be referring to the
Psychiatric Collaborative Care Model, CMS lacks sufficient information
from this comment to explain what the impact of this policy is on such
initiatives. The regulatory change to Sec. 422.112 applies to MA
coordinated care plans.
Comment: In response to our proposal, several commenters requested
that CMS align our standards for appointment wait time consistent with
those standards established for the Qualified Health Plans or by the
National Committee for Quality Assurance (NCQA). For example,
commenters stated that aligning our standards with recognized NCQA
standards would provide consistency for stakeholders; commenters also
requested that CMS consider a standard for behavioral health services
of 10 business days in alignment with Qualified Health Plans.
Response: We thank commenters for their input regarding alternative
standards for appointment wait times. While we have decided to finalize
the specific wait time standards as proposed, we have decided to
clarify that our appointment wait time standards will be based on
business days which is the approach adopted for the Qualified Health
Plans that aligns with NCQA in basing the standards for appointment
wait times on business days. The final regulation text refers to
business days.
Comment: A few commenters requested that CMS consider different
approaches to finalizing appointment wait time standards. For example,
establishing separate standards for appointment wait times for mental
health and substance use disorder, implementing a pilot program and
conducting additional analysis or studies related to appropriate
appointment wait times.
Response: We appreciate the commenters' suggestions regarding the
standards for appointment wait times. The standards that we are
finalizing in this final rule were previously established through our
sub regulatory guidance in section 110.1.1, Chapter 4 of the Medicare
Managed Care Manual. Our approach, supports parity between behavioral
health and physical health services for enrollees and strengthens our
requirements to ensure that MA organizations are meeting timely access
standards for these covered services.
Comment: We received a few mixed comments regarding our comment
solicitation and considerations on implementing the requirement that MA
organizations meet the final wait time standard for at least 95 percent
of appointments, and on implementing an attestation within the MA
application for applicants to attest to meeting the final standards.
For example, some commenters agreed that a 95% threshold for compliance
would be an appropriate standard for MA organizations to meet regarding
wait times. Conversely, one commenter did not agree to the 95%
threshold indicating that any failure to meet wait time standards would
fail to ensure access to care.
Response: We thank commenters for their input and we will monitor
and reevaluate these standards if necessary, for future rulemaking.
After consideration of the comments and for the reasons outlined in
the proposed rule and our response to comments, we are finalizing the
proposed revisions to Sec. 422.112(a)(6)(i) substantially as proposed
but with a modification to clarify that the standards are based on
business days.
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 that 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,\83\ 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 proposed
to amend Sec. 422.112(a)(1) and (a)(3) to more clearly state the scope
of the MA organization's
[[Page 22176]]
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 proposed to amend Sec. 422.112 to be
consistent with current, longstanding sub-regulatory policy and our
implementation of section 1852(d) of the Act.
CMS proposed 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 proposed to move the sentence
requiring the MA organization to arrange for out-of-network care
currently in paragraph (a)(3) to a new paragraph (a)(1)(iii) and revise
and supplement it with additional text to better state the full scope
of the current policy. We proposed that new 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. We
stated in the proposed rule that, 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 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, we stated in the
proposed rule that the proposed amendment to Sec. 422.112(a)(1) and
(a)(3) would not impose new information collection requirements (that
is, reporting, recordkeeping, or third-party disclosure requirements),
and we did not provide burden estimates in the Collection of
Information section of the proposed rule. In addition, this provision
is not expected to have any economic impact on the Medicare Trust Fund.
We solicited comment on this proposal, including on the accuracy of
our assumptions regarding information collection requirements and
regulatory impact. We did not receive comment on our information
collection requirements nor regulatory impact. We thank commenters for
their input on CMS's proposed amendment to Sec. 422.112. We received
the following comments on this proposal, and our response follows:
Comment: The majority of comments were supportive of this proposal.
Commenters agreed with codifying at Sec. 422.112(a)(1)(iii) CMS's
existing interpretation of the statute and longstanding guidance that
MA organizations offering coordinated care plans must 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. They believed that MA organizations are obligated to ensure
adequate access to medically necessary covered benefits by maintaining
a strong network, and when it fails, the enrollee should be entitled to
in-network cost sharing.
Response: We thank commenters for their support, and we agree that
this codification at Sec. 422.112(a)(1)(iii) is a necessary and
important enrollee protection.
Comment: Some comments requested that CMS develop more guidance
surrounding this policy. For example, a commenter suggested that CMS
apply a definition of ``unavailable'' that accounts for the specific
patient, their medical condition, and the urgency of their medical
need. Another commenter believed CMS should specify what ``arranges
for'' means and also define what constitutes ``necessary specialty
care,'' suggesting that this is a determination that should be made by
an enrollee and their provider, not the MA organization. This commenter
also recommended that CMS clarify that an enrollee can maintain
continuity of care and complete their treatment plan with an out-of-
network provider who has specialized expertise that cannot be found in-
network, once it has been determined that such care is medically
necessary. Other commenters requested that CMS further clarify that it
is the MA organization's responsibility to ensure medically necessary
care is provided in a timely manner, even when care must be accessed
out of network. A commenter believed CMS could further enhance enrollee
protections and access to care by establishing timelines such as a
requirement to ensure services are available within one business day of
an approved authorization. Another commenter sought specific CMS
guidance regarding the MA organization's obligation around arranging
timely out-of-network care for cancer diagnoses.
Response: Regarding the definition of ``unavailable,'' we clarify
here that an in-network provider or benefit being ``unavailable'' means
that there is no provider or benefit in the current plan provider
network to meet the enrollee's medical needs, as we noted in the
proposed rule. In other words, the MA plan's network is inadequate or
otherwise does not address the medically necessary benefit required by
an enrollee. For instance, if an enrollee requires the services of a
particular specialty or subspecialty that is not in the plan network,
then we would view this as fitting the description of ``unavailable.''
We believe that this is inclusive of the specific patient, their
medical condition, and the urgency of their medical need, and thus MA
organizations must take these factors into consideration when
determining unavailability and complying with this requirement.
The term ``arranges for'' means that the MA organization may need
to enter into case-by-case agreements with non-contracted, out-of-
network providers to ensure enrollees' access to services. In the
example previously discussed, if an enrollee needs to see a particular
out-of-network specialist or subspecialist, the MA organization may
need to enter into a limited contract with the closest available
qualified specialist to ensure its enrollee has access to the medically
necessary specialist services. (We note that except for emergency
services, non-contracted providers are generally not legally required
to treat MA enrollees.) Or the MA organization may authorize and cover
services furnished by a non-contracted provider selected by the
enrollee without the MA organization engaging in a short-term agreement
with the provider. Regarding what constitutes ``necessary specialty
care,'' the MA organization must make medical
[[Page 22177]]
necessity determinations as discussed in section III.E.2. of this final
rule. In addition, we agree with the commenter that an enrollee should
be able to maintain continuity of care and complete their treatment
plan with an out-of-network provider who has specialized expertise that
cannot be found in-network, once it has been determined that such care
is medically necessary. We believe that this policy is embodied in
current regulatory guidance in Sec. 422.206(a)(1), which prohibits or
otherwise restricts MA organizations from interfering with a health
care professional, acting within the lawful scope of practice, from
advising, or advocating on behalf of, an individual who is a patient
and enrolled under an MA plan.
We understand commenters' concerns around timeliness of access to
care. Per current CMS regulations at Sec. 422.112(a)(6)(i), MA
organizations must establish written access standards for timeliness of
access to care that meet or exceed standards established by CMS, timely
access to care 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 does not
(and will not under the revisions to Sec. 422.112(a)(6)(i) adopted
elsewhere in this final rule) apply the same wait time standards for
out-of-network care because MA organizations do not have contracts with
out-of-network providers to require timely access to care; we
appreciate that MA organizations have no contractual mechanism to hold
out-of-network providers accountable and ensure out-of-network care is
provided timely to their enrollees. While these requirements for
timeliness of access to care apply to in-network care only, per Sec.
422.568, MA organizations must notify the enrollee of its determination
to in or out-of-network care as expeditiously as the enrollee's health
condition requires, but no later than 14 calendar days after the MA
organization receives the request for a standard request, and no later
than 72 hours for an expedited request, with the exception that the MA
organization may extend the timeframe by up to 14 calendar days if the
extension is justified and in the enrollee's interest. If an MA
organization chose to enter into a case-by-case agreement or limited
contract with a non-contracted provider, as described in the preceding
paragraph, then they may be able to include a clause about timely
access to care in their agreement or contract with an expedited review
time no greater than the requirement established in Sec.
422.568(b)(1)(i)(B), but CMS does not require this.
In general, while MA organizations may not have the same level of
control when it comes to care provided outside of their plan provider
network, we still expect MA organizations to make their best effort to
ensure that the out-of-network care they arrange for is provided
timely, including for cancer diagnoses. The manner in which they do so
is at the MA organization's discretion, however, enrollees' best
interests should always be prioritized.
We note that the inability to offer in-network care may be evidence
that an MA organization is failing to meet CMS's required network
adequacy standards. Arranging for care outside of the network, while a
responsibility of MA organizations, should not be the norm. Any out-of-
network alternative arrangements should only be made in the rare
circumstance that an in-network provider or benefit is unavailable or
inadequate to meet an enrollee's medical needs. We also note that MA
organizations are required to arrange for medically necessary covered
out-of-network care at in-network cost sharing if in-network care is
unavailable or inadequate to meet the enrollee's medical needs, despite
the type of care (cancer or otherwise).
We are finalizing Sec. 422.112(a)(1)(iii) as proposed and not
adding any definitions to the regulatory text, however, we hope our
response provides some helpful clarification and guidance to commenters
on how we interpret and will implement these changes.
Comment: Other comments discussed the benefits of this requirement
for ensuring adequate access to medically necessary covered care
particularly for more vulnerable enrollees with cancer, enrollees with
rare conditions, and dually eligible enrollees. Commenters stressed
that these types of enrollees often face higher cost sharing
(especially out-of-network), higher out-of-pocket expenses, risk of
exhaustion of savings or personal bankruptcy, challenges in accessing
the care they need in a timely manner and in their geographic area,
and, for individuals with rare conditions, pools of experienced
providers that are relatively small. Further, they expressed that some
of these implications have a disproportionate effect on those with
lower incomes, for example, dually eligible enrollees. As such,
commenters believed that enrollees should not be penalized when an MA
network is not adequate to provide necessary and life-saving care and
treatment.
Response: We agree that this requirement, which seeks to guarantee
access when in-network providers or services are unavailable or
inadequate to meet an enrollee's medical needs, is particularly
beneficial for protecting more vulnerable enrollees, such as those with
cancer or rare conditions, and dually eligible enrollees. We thank the
commenters for expressing these sentiments and for their support.
Comment: A few commenters recommended that, in addition to CMS's
existing oversight processes, CMS establish a provider complaint
mechanism that would allow providers to report MA organization behavior
that potentially violates these requirements. They stated that
providers are likely to recognize patterns of enrollees' inability to
access care through network providers, inappropriate delays in care,
and denials from MA organizations, and could therefore raise concerns
that could guide heightened enforcement of this requirement. A
commenter specifically suggested CMS track MA enrollees' appeals of
requests for obtaining out-of-network services in order to better
identify MA organizations that are not following this rule.
Response: We operationally support the ability of providers to
submit complaints to CMS regarding MA organization behavior that
potentially violates these requirements. Contracted providers are
instructed to resolve their complaints directly with the MA
organizations since the contract is between the MA organization and the
provider. In addition, the definition of organization determination in
Sec. 422.566(b) includes both an MA organization's refusal to provide
or pay for services, in whole or in part, including the type or level
of services, that the enrollee believes should be furnished or arranged
for by the MA organization and an MA organization's failure to approve,
furnish, arrange for, or provide payment for health care services in a
timely manner, or to provide the enrollee with timely notice of an
adverse determination, such that a delay would adversely affect the
health of the enrollee. MA enrollees, and their providers on their
behalf, may file an appeal of organization determinations of this type
under subpart M of Part 422. We appreciate any information that
providers are willing to share that may help us enforce this
requirement. Regarding tracking MA enrollees' appeals of requests for
obtaining out-of-network services, we currently track this
[[Page 22178]]
information and can use it to identify MA organizations failing to
comply with the requirements at Sec. 422.112(a)(1)(iii).
Comment: A few commenters opposed this proposal. A commenter
believed that when CMS requires MA organizations to allow for out-of-
network providers to be seen at in-network cost sharing, it limits the
MA organization's ability to control utilization, quality, and costs,
and build higher performing networks of providers. This commenter
further emphasized that out-of-network providers are not required to
follow plan treatment protocols and guidelines for care and in some
cases do not accept Medicare rates for services, thereby creating
clinical and fiscal risk to the enrollee resulting in additional costs
for the MA organizations to absorb in the absence of a contract. On the
same topic, another commenter requested that CMS clarify that in these
circumstances, MA organizations must pay out-of-network providers the
traditional Medicare rates for their services, not a discounted rate.
Yet another commenter stated that out-of-network providers should not
be required to accept in-network reimbursement for their services, and
MA organizations should be required to reimburse out-of-network
providers at a rate that accurately reflects the services provided. A
commenter also stated that they appreciated the intent behind this
proposal but noted that it will not meaningfully improve access to
medically necessary services. They noted that many MA organizations'
existing processes for providing access to out-of-network care are
fraught with obstacles and unnecessary hurdles, prompting many
enrollees to delay or forego needed care.
Response: We acknowledge commenters' concerns that requiring MA
organizations to allow out-of-network providers to be seen at in-
network cost sharing limits the MA organization's oversight in the
absence of a contract with the providers. Nevertheless, this has been
longstanding policy, and we are finalizing Sec. 422.112(a)(1)(iii) as
proposed. We reiterate the option for MA organizations to enter into a
case-by-case agreement or limited contract with the non-contracted
provider if they wish to have more control over such things as
utilization, quality, treatment protocols, and costs.
Alternatively, if the MA organization has another means or
mechanism to address the enrollee's need for care without contracting
with an out-of-network provider to furnish that care, then the
applicable regulations do not necessarily prohibit alternate solutions.
For example, the MA organization may waive referral or ``gatekeeper''
requirements for an enrollee who cannot access in-network primary care
providers (PCPs) in a timely manner to get a referral or gatekeeper
approval for a specialist visit. In addition, if an MA organization
requires its enrollees to obtain a referral in most situations before
receiving services from a specialist, specialty care is medically
necessary, and the enrollee has not selected a PCP, then the MA
organization could assign a PCP for purposes of making the needed
referral. To account for situations like these--where the enrollee
finds the provider and the issue is not about the MA organization not
contracting with that provider, but rather authorizing the ability to
obtain medically necessary services out-of-network--we are modifying
the regulatory text at Sec. 422.112(a)(1)(iii) to read ``arrange for
and cover'' instead of just ``arrange for.''
Regarding comments about reimbursement rates for non-contracted
providers, it is true that MA organizations are required to pay non-
contracted providers at least what they would have received had they
furnished the services in an original Medicare setting, but providers
are not obligated to participate in Medicare. This is required by
section 1852(k)(1) of the Act and Sec. 422.100(b)(2). We note that
Sec. 422.220(a) prohibits MA organization from paying, directly or
indirectly, on any basis, for basic benefits furnished to a Medicare
enrollee by a physician (as defined in paragraphs (1), (2), (3), and
(4) of section 1861(r) of the Act) or other practitioner (as defined in
section 1842(b)(18)(C) of the Act) who has filed with the Medicare
contractor an affidavit promising to furnish Medicare-covered services
to Medicare beneficiaries only through private contracts under section
1802(b) of the Act with the beneficiaries. In addition, Sec.
422.224(a) prohibits MA organizations from paying, directly or
indirectly, on any basis, for items or services furnished to a Medicare
enrollee by any individual or entity that is excluded by the Office of
the Inspector General (OIG) or is included on the preclusion list,
defined in Sec. 422.2. We reiterate that MA organizations must
prioritize meeting CMS's required network adequacy standards, and
arranging for care outside of the network, while a responsibility of MA
organizations, should not be the norm. Any out-of-network alternative
arrangements should only be made in the rare circumstance that an in-
network provider or benefit is unavailable or inadequate to meet an
enrollee's medical needs.
Finally, we recognize the commenter's concern that many MA
organizations' existing processes for providing access to out-of-
network care are problematic. It is our hope that this regulation will
strengthen our requirement that MA organizations ensure adequate access
to medically necessary covered benefits and compel MA organizations to
reexamine their existing processes and make improvements to fully
comply with CMS's requirements.
Comment: Some commenters stressed that any alternative arrangements
made by MA organizations for enrollees for out-of-network benefits
should not substitute for compliance with network adequacy
requirements. They suggested that CMS monitor the use of these
alternative arrangements and continue oversight of MA organizations to
ensure that they meet the network adequacy requirements, consistently
provide access to in-network care, and give enrollees access to a
variety of in-network and, if necessary, out-of-network, providers and
facilities.
Response: We agree and again emphasize that any out-of-network
alternative arrangements should only be made in the rare circumstance
that an in-network provider or benefit is unavailable or inadequate to
meet an enrollee's medical needs. MA organizations are still required
to comply with our network adequacy requirements at Sec. Sec.
422.112(a)(1)(i) and 422.116, and we will continue our oversight of MA
organizations' compliance with these requirements through routine
network adequacy reviews. Also, as noted in the proposed rule, we will
monitor the use of alternative arrangements through account management
activities, complaint tracking and reporting, and auditing activities.
Comment: A commenter believed that CMS should amend the regulatory
text to specify that when an MA organization arranges for medically
necessary covered out-of-network benefits, enrollee preferences should
be considered. They noted that the enrollee should have options
regarding their out-of-network care, and it should be at a setting and
location that best fits the enrollee's needs and is in their best
interests.
Response: While we understand the commenter's desire to
specifically include ``enrollee preferences'' in the regulatory text,
we believe that the existing regulatory text ``to meet an enrollee's
medical needs'' is sufficient.
[[Page 22179]]
Any out-of-network care that the MA organization arranges for must meet
the enrollee's medical needs because in-network providers or benefits
were unavailable or inadequate to meet the enrollee's medical needs. We
are therefore finalizing the regulatory text as proposed.
Comment: Another comment suggested that CMS require MA
organizations to clearly and prominently highlight this requirement in
plan materials, including the Explanation of Benefits (EOB).
Response: We agree and note that this requirement is already
contained in the EOB. We intend to strengthen this language in the next
iteration of updates to the model documents.
Summary of Regulatory Changes
We received a range of comments pertaining to this proposal, the
majority of which reflected support for the regulation. After
considering the comments we received and for the reasons outlined in
the proposed rule and our responses to comments, we are finalizing the
proposed changes to Sec. 422.112(a)(1)(iii) and (3) with slight
modification. We are modifying the regulation text as follows. In
proposed regulation text Sec. 422.112(a)(1)(iii), we are adding the
phrase ``and cover.'' Thus, we are revising Sec. 422.112(a)(1)(iii) to
read as follows: ``Arrange for and cover 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.''
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.\84\ 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 proposed 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 also proposed 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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\84\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.
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First, we proposed 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. We stated in the proposed rule that
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 proposed to preserve the
phrase ``good faith effort'' for enrollee notifications for for-cause
provider contract terminations regarding the proposed timeframes. We
proposed that the ``good faith effort'' standard would apply to the
timing component for for-cause provider contract terminations. However,
we proposed to remove ``good faith effort'' for no-cause provider
contract terminations. We stated in the proposed rule that we believe
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
terminated 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 stated that our proposal would 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 proposed 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 considered various
specialty types (both providers and facilities) as fitting the
[[Page 22180]]
category of behavioral health providers so long as the treatment they
furnish to enrollees is about behavioral health; these included but
were not limited to psychiatrists, clinical social workers, clinical
psychologists, inpatient psychiatric facilities, outpatient behavioral
health clinics, and OTPs. As noted in section III.B.1. of this final
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.\85\ To support these policy
goals, using a behavioral health perspective, in the proposed rule, we
reexamined the MA enrollee notification requirements when a provider
contract termination occurs at Sec. 422.111(e).
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\85\ 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.\86\ 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.\87\ 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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\86\ https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2785383.
\87\ 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.\88\ 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, palliative care, and
end-of-life care.\89\ 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
proposed more stringent enrollee notification requirements when primary
care and behavioral health provider contract terminations occur. We
expected 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. We stated in the proposed rule
that enrollee benefits would result from increased enrollee protections
when unexpected primary care and behavioral health network changes
occur, and we also expected 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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\88\ https://www.aafp.org/pubs/fpm/issues/2021/0500/p3.html#fpm20210500p3-b1.
\89\ https://www.who.int/health-topics/primary-health-care#tab=tab_1.
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To address the previously detailed concerns surrounding unexpected
changes in MA primary care and behavioral health provider networks, we
proposed to add specific enrollee notification requirements for these
types of provider contract terminations. Our proposal had three key
aspects. We first proposed 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). We proposed that this
addition would be reflected at proposed new paragraph (e)(1)(iii).
Next, at proposed new paragraph (e)(1)(ii), we proposed 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
proposed 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 would be
required for all other specialty types. We proposed that both types of
notice would need to be provided at least 45 calendar days before the
termination effective date. For the telephonic notice, we proposed that
the first telephone call be made to the enrollee at least 45 calendar
days in advance. We proposed that 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 did not
propose 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 solicited 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
requested qualitative feedback based on any MA organization's actual
experience providing enrollees telephonic notice of primary care and
behavioral health provider contract terminations.
In the proposed rule, we stated that these 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
[[Page 22181]]
behavioral health treatment. We also stated that 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. We stated that 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, especially for both primary care and
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). We stated in our proposed
rule that the proposed enrollee notification requirements are a
positive step in the context of our policy for MA provider contact
terminations.
We proposed that MA organizations would 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
proposed 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.'' \90\ 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 believed 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 proposed to codify this definition at proposed Sec.
422.111(e)(2)(iii).
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We proposed that 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 would provide 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 distinguished
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 proposed 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.\91\ 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 proposed to codify the best practices for provider
termination notices at Sec. 422.2267(e)(12). Specifically, we proposed
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 proposed 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 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.I. of this
final rule for our amendment to paragraph (e)(10) to make the Non-
renewal Notice a standardized communications material). Next, we
proposed 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 proposed 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 proposed to model the proposed
[[Page 22182]]
regulatory text after the established precedent of a requirement for
the Non-renewal Notice at Sec. 422.2267(e)(10)(ii)(H). We stated in
the proposed rule that we believed 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 proposed
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 solicited
comment on our proposal to consider an enrollee who is 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 solicited 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 made regarding the provider termination notice
requirements at Sec. 422.2267(e)(12) concerned CMS's requirements for
the telephonic notice that we proposed 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 proposed 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 stated in
the proposed rule that we believed 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--would ensure that affected
enrollees receive the information they need to decide how to proceed
with their current course of treatment. We stated that the telephonic
communication would 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.\92\ Given that
we proposed new regulatory requirements for the content of these
provider termination notices (including codifying existing best
practices provided in CMS's guidance), CMS stated in the proposed rule
that we intend to create a model document for the provider termination
notice that contains the requirements at proposed Sec.
422.2267(e)(12), if finalized. We stated that we believed this model
document would be welcomed by MA organizations as it would provide a
useful template that MA organizations may follow when developing their
own provider termination notices. Our proposal for Sec.
422.2267(e)(12) specified the required information, and the model
document that CMS intends to develop would reflect this information as
well. In addition, we stated in the proposed rule that 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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Regarding compliance monitoring for the regulatory amendments we
proposed, 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. We stated in the proposed rule that if
finalized, CMS intends to continue these oversight operations to ensure
MA organizations' compliance with the proposed regulation. We stated
that 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, we
stated in the proposed rule that 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). We
also stated that 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 proposed 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
solicited comment on these proposals. We thank commenters for their
input on CMS's proposed new enrollee notification requirements for MA
provider contract terminations. We received the following comments on
this proposal, and our response follows:
Comment: Comments were mixed, with about half in support of the
proposal and half opposed to it. Those
[[Page 22183]]
in favor applauded the proposal's emphasis on network adequacy,
increased communication and transparency to enrollees, and promotion of
enrollee choice. A few commenters expressed support specifically for
codifying the required content of provider termination notices.
Response: We appreciate commenters' support for this proposal. We
are finalizing this proposal with modification, as discussed in our
responses to more specific comments in this section of this rule.
Comment: Many commenters expressed support for the proposal to add
specific and more stringent enrollee notification requirements when
primary care and behavioral health provider contract terminations
occur. Some believed that CMS should apply these requirements more
broadly to all provider contract terminations regardless of specialty
type. A commenter specifically requested that the 45-day enrollee
notice requirement apply to all provider contract terminations. Another
commenter suggested CMS include hospitals and other facilities'
contract terminations along with primary care and behavioral health
provider contract terminations, in relation to the requirement for the
MA organization to notify all enrollees who have ever been patients of
the terminating provider or facility. A few commenters expressed
support for the telephonic notice to enrollees. Another commenter
recommended a 60-day enrollee notice requirement for primary care and
behavioral health provider contract terminations. A commenter suggested
specific requirements in the case of OTP terminations.
Response: We thank commenters for their support and suggestions. We
are not extending the requirements for primary care and behavioral
health provider contract terminations to any other specialty types
because, as discussed in detail in the proposed rule and this final
rule, there are special considerations applicable to the services
furnished by and relationship of an enrollee with a primary care
provider and a behavioral health provider. Also, we are finalizing the
45-day enrollee notice requirement as proposed. We are modifying our
proposal for the telephonic notice to enrollees in response to other
comments received, as discussed in this section of this rule.
Comment: We received many comments regarding CMS's proposed
lookback period for identifying impacted enrollees to notify for
primary care and behavioral health provider contract terminations. Most
of these commenters opposed the infinite lookback period because it
would be burdensome and may cause enrollee distress or confusion if
they had not seen the terminating provider in a long time. They noted
that often enrollees shop around for behavioral health providers and so
there may be multiple providers that they saw only once before choosing
the right fit. Some commenters believed it might make the enrollee
believe there was something wrong with the network status of their
current provider. Instead of an infinite lookback period, they
requested that CMS specify a limited lookback period. A commenter
proposed that CMS work with MA organizations to determine an
appropriate lookback period. Other recommendations for a lookback
period included retaining CMS's existing requirements regarding which
enrollees should be notified, maintaining the existing requirements for
primary care provider contract terminations and applying those same
requirements to behavioral health provider contract terminations, only
notifying enrollees assigned to a terminating primary care provider,
performing a six-month lookback period, performing a 12-month lookback
period, and only notifying enrollees who had a minimum number of visits
with the terminating primary care or behavioral health provider.
Response: We appreciate commenters' recommendations. After careful
consideration of these comments, we have decided to modify our proposal
to require MA organizations to notify enrollees who are currently
assigned to the terminating primary care provider and enrollees who
have been patients of the terminating primary care or behavioral health
provider in the past three years. We believe use of a three-year look
back period strikes an appropriate middle ground that does not stray
too far from our original intent while also taking into consideration
the commenters' suggestions and reasons for recommending a shorter
period.
Comment: A significant number of commenters expressed opposition to
CMS's proposal to require MA organizations undergoing primary care and
behavioral health provider contract terminations to notify enrollees
via telephone in addition to the required written notice. Commenters
characterized this telephonic notice as overly aggressive, intrusive,
unhelpful, unwelcome, unnecessary, and bothersome. They also noted that
the calls may potentially be perceived by enrollees as spam. A few
commenters pointed out that enrollees already receive too many calls
and so there may be some annoyance and complaints regarding privacy.
Several commenters stated that more outreach to enrollees in instances
of primary care and behavioral health provider contract terminations
would be disruptive to enrollees and unnecessary if they are already
receiving a written notice of the termination. A commenter recommended
CMS allow MA organizations the flexibility to determine the best method
of notice based on the facts of the termination and enrollees'
preferred method of communication. Relatedly, some commenters suggested
that enrollees have the right to opt out of telephonic communication
from their plan, so requiring this would deliberately violate their
request. A few other commenters indicated that increased outreach to
enrollees ignores the fact that providers will contact their own
patients to let them know that they are leaving the plan's network and
therefore will no longer accept their insurance, so additional
telephonic notice from the plan would be excessive and unnecessary.
Another commenter suggested that if this is finalized then it should
only be required for terminations initiated by the MA organization, not
provider-initiated terminations. Commenters responding to CMS's request
for comment on how many telephonic attempts are reasonable, recommended
between one and three attempts but only for enrollees who agree to
receive telephonic communication.
Response: We thank commenters for offering their ideas based on
experience to help inform how we finalize our proposal. We understand
the concern that an additional telephonic notice with multiple attempts
may potentially be problematic, and we agree with commenters that
enrollees should not be contacted by telephone if they have opted out
of this type of communication with their plan. This is helpful
information, and we appreciate commenters bringing it to our attention.
Given the extent of these comments and our concurrence, we are
modifying our proposal by requiring only one telephone call to impacted
enrollees who have not opted out of receiving telephonic communication
with the MA organization. Specifically, we are identifying these
enrollees as those who have not opted out of calls regarding plan
business as described in Sec. 422.2264(b). We believe this is another
middle ground solution that is responsive to comments on this issue and
still preserves the spirit of the proposal.
Comment: Several commenters remarked on the proposed timeframes for
written notice of the provider
[[Page 22184]]
contract termination. A few encouraged CMS to retain the ``good faith
effort'' standard for provider-initiated terminations, while others
requested that CMS maintain the existing 30-day standard for all
specialty type terminations, except when the provider does not notify
the MA organization in time or when the two parties are in active
negotiations. Some commenters opposed the 45-day standard for primary
care and behavioral health provider contract terminations, stating that
the change from 30 to 45 days would trigger both enrollee and provider
abrasion. A commenter suggested that CMS require timeframes only when
there is 60 days' notice of the termination or longer, while retaining
the ``good faith effort'' standard for all other circumstances. Some
commenters discussed the impact of contract negotiations and stated
that in some cases, re-notification to enrollees may be required if the
termination does not end up happening, which again raises concerns with
burden and enrollee confusion or distress. Another commenter requested
CMS provide flexibility in these requirements particularly for quick
for-cause provider contract terminations.
Response: We appreciate commenters' input on the timeframes we
proposed for notifying enrollees that a provider is leaving their
network. While commenters expressed valid concerns, we are finalizing
the timeframes as proposed. We believe that more notice (45 days
instead of 30 days) is necessary for primary care and behavioral health
specialty types, as stated in the proposed rule, because of the
importance of a trusting, continuous patient-provider relationship for
behavioral health and the foundational role that primary care plays in
an individual's overall health. Therefore, affected enrollees need
ample time to make decisions that may determine the trajectory of their
treatment.
Comment: Several commenters either sought guidance on certain
aspects of our proposal or posed questions. For example, a commenter
requested CMS clarify whether MA organizations would only be required
to notify those impacted enrollees for whom they have a record of their
entire health history in order to determine previous provider
relationships. Another commenter requested that CMS clarify whether the
MA organization must provide continuity of coverage for care an
enrollee is receiving if their provider is leaving the network. And
another commenter commented on the use of the term ``palliative care''
as a component of primary care in the proposed rule, stating that the
way it is listed implies that palliative care comes at the end of a
serious illness and not along with any other treatment or
rehabilitation, which evidence shows is an incorrect misconception
because palliative care is appropriate at any age or stage of a serious
illness. The commenter therefore requested that CMS clarify that in the
final rule by changing palliative care to end-of-life care if that is
what CMS meant.
Response: To address the question of MA organizations who may not
have a record of new enrollees' entire health history, we would like to
clarify that when identifying which enrollees to notify in accordance
with Sec. 422.111(e), MA organizations must use all information that
is available to them, including claims data, and if they have any
reason to believe that they do not have an enrollee's entire health
history, then they may need to reach out to the terminating provider to
determine whether the enrollee saw that provider within CMS's required
lookback period. Regarding the question on providing continuity of
care, yes, if necessary in order to meet immediate access needs, the MA
organization must provide continuity of coverage for care an enrollee
is receiving if their provider is leaving the network. Per Sec.
422.112(a)(1)(iii), as finalized in this rule, the MA organization must
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 (see section III.C. of this final rule). Furthermore, it
may be necessary for MA organizations to allow care to continue to be
furnished on an interim, transitional basis, by providers who have been
terminated from the network in order to adequately address continuity
of care needs for affected enrollees. This is longstanding CMS guidance
from section 110.1.2.2 of Chapter 4 of the MMCM, therefore, we expect
MA organizations to be complying with this interpretation and
application of the obligations on the MA organization to ensure that
its provider network is adequate to furnish medically necessary covered
benefits to enrollees.\93\ Lastly, we agree with the commenters'
concerns that ``palliative care'' is appropriate at any age or stage of
a serious illness, so our references to the scope of primary care in
this final rule include both ``palliative care'' and ``end-of-life
care'' because we believe that both are key elements of primary care.
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Comment: We received several comments on our proposed changes to
Sec. 422.2267(e)(12). A commenter opposed requiring MA organizations
to include a list of names and phone numbers of alternative in-network
providers instead of just a link to the MA organization's current
provider directory. Another commenter believed CMS should allow for
electronic delivery for written notices if the enrollee opted into
electronic communication.
Response: We respectfully disagree with these comments on Sec.
422.2267(e)(12). We strongly believe that enrollees whose providers are
leaving their network unexpectedly should be provided a list of other
providers that they may access for continued care. As paragraph
(e)(12)(ii)(B) states, MA organizations have the option to supplement
this list with a link to their provider directory as well. Regarding
the method of delivery of the provider termination notice, we did not
propose any changes to our current requirement at Sec.
422.2267(e)(12)(i) that the notice be provided in hard copy via U.S.
mail, therefore, we decline the suggestion to allow for electronic
delivery as the only means for delivering this written notice. MA
organizations may send a supplemental notice using electronic delivery
if consistent with an enrollee's preference. Thus, we are finalizing
our proposed changes to Sec. 422.2267(e)(12)(i) and (ii)(B) as
proposed.
Comment: Generally, commenters were supportive of CMS's proposal to
consider an enrollee who is impacted by a provider contract termination
to be someone who is experiencing an exceptional condition and
therefore eligible for the SEP specified in Sec. 422.62(b)(26). One
commenter proposed that CMS provide MA organizations time to attempt to
resolve an enrollee's transition needs before informing an enrollee
that they may contact 1-800-MEDICARE to request an SEP. The commenter
was concerned that calls to 1-800-MEDICARE may be classified by CMS as
complaints and adversely impact the MA organization's overall Star
Rating.
Two commenters requested that information on the SEP for
exceptional conditions be featured more prominently in CMS
publications.
We also solicited 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
[[Page 22185]]
serve as a basis for SEP eligibility. One commenter requested that CMS
expand the SEP for Significant Change in Provider Network at Sec.
422.62(b)(23) so that it would be available to any plan enrollee who
wishes change plans mid-year in order to continue to see their
provider(s). Another commenter requested that CMS create a new SEP for
any enrollee whose provider is terminated, stating that such an event
is a common, not unique, event that should not need to be reviewed on a
case-by-case basis. This commenter requested that the new SEP be three
months in length and be available to any enrollee who receives a notice
of provider termination sent in accordance with Sec. 422.111(e).
Another commenter requested that CMS take the position that that
any enrollee who has ever received care from a particular provider or
facility is eligible for an SEP upon termination of that provider or
facility, including an enrollee who attests to having confirmed a
provider's or facility's in-network status when making a decision to
join the MA plan.
One commenter who expressed opposition to offering an SEP to an
enrollee who is impacted by a provider contract termination stated that
an enrollee should not be eligible for an SEP if other providers are
available in the network. Another stated that notifying enrollees of a
potential SEP may create confusion when a provider retires and there
are other providers available in the network.
Response: We appreciate the commenters' support for our proposal to
consider an enrollee who is impacted by a provider contract termination
to be someone who is experiencing an exceptional condition and
therefore eligible for the SEP specified in Sec. 422.62(b)(26). We
also appreciate the response to our solicitation for feedback on
alternative approaches, such as the adoption of a new SEP for this type
of provider contract termination. We did not propose any changes to the
SEPs at Sec. Sec. 422.62(b)(23) and 422.62(b)(26), so this final rule
will not include any changes to these regulations; however, we will
consider this feedback in future rulemaking and policy development.
Summary of Regulatory Changes
We received a range of comments pertaining to this proposal, the
majority of which reflected support for the regulations. After
considering the comments we received and for the reasons outlined in
the proposed rule and our responses to comments, we are finalizing the
proposed changes to Sec. 422.111(e) with the following modifications:
In proposed regulation text Sec. 422.111(e)(1)(i), we are
removing the phrase ``both written and telephonic notice'' and adding
the phrase ``written notice and make one attempt at telephonic notice
to those enrollees identified in paragraph (e)(1)(iii) of this section
who have not opted out of calls regarding plan business as described in
Sec. 422.2264(b).'' Thus, we are revising (e)(1)(i) to read as
follows: ``Provide written notice and make one attempt at telephonic
notice to those enrollees identified in paragraph (e)(1)(iii) of this
section who have not opted out of calls regarding plan business as
described in Sec. 422.2264(b),''
In proposed regulation text Sec. 422.111(e)(1)(iii), we
are adding the phrase ``are currently assigned to that primary care
provider and to enrollees who'' and removing the word ``ever'' and
adding the phrase ``within the past three years.'' Thus, we are
revising (e)(1)(iii) to read as follows: ``To all enrollees who are
currently assigned to that primary care provider and to enrollees who
have been patients of that primary care or behavioral health provider
within the past three years.''
We are finalizing changes to Sec. 422.2267(e)(12) as proposed.
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 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.\94\ 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).
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\94\ 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 \95\ titled, ``Some Medicare
[[Page 22186]]
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 Traditional Medicare coverage guidelines. In
other cases, the OIG found that prior authorization requests were
inappropriately denied by MA organizations 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.\96\
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\95\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
\96\ 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 proposed to
clarify requirements for the coverage criteria that MA plans use when
making medical necessity determinations. We also proposed additional
beneficiary protection requirements in order to improve continuity of
care and integration of health care services and to increase plan
compliance with regards to utilization management policies. Our
proposals interpreted and implemented the requirements in section 1852
of the Act regarding the provision and coverage of services by MA plans
and were, 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. We
proposed policies that 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
was primarily directed at ensuring that minimum coverage requirements
are met and that MA plans do not deny or limit coverage of basic
benefits; we were not proposing to limit the scope of permissible
supplemental benefits, but our proposal applies certain requirements
for the use of utilization management for all covered benefits as
discussed in section III.E. of this proposed rule.
In this 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, we are codifying 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
solicited comment on whether our proposed regulatory provisions
sufficiently address the requirements and limits that we described in
the preamble.
The final rules adopted here related to utilization management
requirements and limitations, coverage criteria and medical necessity
determinations, use of prior authorization and continuity of care
requirements for MA plans are additional standards to implement the
statutory requirements at section 1852(a) of the Act that MA plans
provide to their enrollees (by furnishing directly or through
contracted providers, arranging for, or paying for) basic benefits
(that is, all Part A and Part B benefits with limited exceptions) and
such supplemental benefits the MA plan elects to offer. 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
[[Page 22187]]
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(a)(6)(B) of the Act permits
creation of minimum coverage requirements. While the rules finalized
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.
2. Coverage Criteria for Basic Benefits
a. Application of Coverage Criteria
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 MMCM), that MA plans must make medical necessity
determinations based on internal policies that 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
proposed 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 proposed 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's 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 proposed 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
was designed to prohibit MA organizations from limiting or denying
coverage when the item or service would be covered under Traditional
Medicare and to 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 reiterated 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
were 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. These manuals contain significant explanations and
interpretations of Traditional Medicare laws governing Part A and Part
B benefits, most of it longstanding, to provide instructions and
procedures for day to day operations for those responsible for
administering the Medicare program. Our goal to ensure that MA
enrollees receive the same items and services as beneficiaries in the
FFS program is accomplished when the same coverage policies and
approaches are used. We expect that MA plans will consult the Medicare
Benefit Policy Manual, Medicare Program Integrity Manual, and similar
CMS guidance materials. We note that MA organizations must agree to
comply with all applicable requirements, conditions, and general
instructions under the terms of their contract with CMS under Sec.
422.504(a). 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 proposed 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 also
proposed to revise the current provision that states that Traditional
Medicare coverage rules apply unless superseded by regulations in this
part. We proposed 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.
For example, 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 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, as a basic benefit,
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 proposed
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 proposed to add the heading ``Medical
Necessity Determinations and Special Coverage Provisions'' to Sec.
422.101(c). As such, we proposed to reassign the special rule for
coverage of posthospital SNF in the absence of the prior qualifying
hospital
[[Page 22188]]
stay as Sec. 422.101(c)(2). The proposed new heading for Sec.
422.101(c), ``Medical Necessity Determinations and Special
Provisions,'' is intended to signal 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.
We proposed 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 with fully established coverage criteria, the
MA organization cannot deny coverage of the item or service on the
basis of internal, proprietary, or external clinical criteria that are
not found in Traditional Medicare coverage policies. Under this
proposal, 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, their use
by an MA organization would be prohibited unless specified within the
applicable NCD or LCD or Medicare statute or regulation. We note that
we did not propose 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 MA plan-specific step therapy for Part B drugs in Sec.
422.136 in more detail. Otherwise, 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. 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. When
use of MA plan internal coverage criteria is permitted under this rule,
as long as the supporting, widely used treatment guidelines or clinical
literature recommend another item or service first, this approach would
be acceptable under our proposed policy. We discuss adding Sec.
422.101(b)(6) later in this section of the rule.
In an 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 a 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 was consistent
with the 2019 rule in that MA 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 was to 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 that we cited in the proposed rule to support how our
proposals on coverage criteria and utilization management would treat
items and services that are not Part B drugs differently. 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 \97\ 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 \98\ demonstrating how increased cost sharing for medications
can, in and of itself, reduce patient adherence to those medications.
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\97\ https://www.fda.gov/media/78504/download.
\98\ 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 health care
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 previously discussed, studies have demonstrated that
increased cost sharing for medications can reduce patient adherence to
those medications. Therefore, we did not propose to revise our current
regulations regarding Part B step therapy.
Similar to MACs in Traditional Medicare, we expect MA organizations
to make medical necessity decisions based on 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 the MA
plan to make this medical necessity decision in a manner that most
favorably provides access to
[[Page 22189]]
services for the beneficiary and align with CMS's definition of
reasonable and necessary as outlined in the Medicare Program Integrity
Manual, Chapter 13, section 13.5.4. CMS's expectation, as previously
outlined, 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). We intended this proposal to clarify, as
recommended by the OIG, that 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 Traditional Medicare coverage criteria found in NCDs,
LCDs, and Medicare laws. We reiterated in the proposed rule our intent
that the proposed changes to the MA regulations would apply 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. We explained that under our proposal, an MA
organization may only deny a request for Medicare-covered post-acute
care services in a particular setting if the MA organization determines
that the Traditional Medicare coverage criteria for the services cannot
be satisfied in that particular setting. As we discuss in section
III.E.3 of this rule, 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 or rely upon to deny an item or service
during those reviews. We solicited 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 Medicare 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 proposed 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 proposed 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 proposed 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 did not propose 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 also proposed 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 \99\) or to determine appropriate
level of care (such as the American Society of Addiction Medicine
Criteria for placement \100\ 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.\101\
CMS solicited 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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\99\ Reference: https://www.idsociety.org/practice-guideline/clostridium-difficile and https://www.idsociety.org/practice-guideline/clostridioides-difficile-2021-focused-update/.
\100\ https://www.asam.org/asam-criteria.
\101\ (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-2009andStrengthofRecommendationTaxonomy
https://www.jabfm.org/content/17/1/59#F1).
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b. Medical Necessity Determinations and Special Coverage Provisions
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. CMS has longstanding guidance
interpreting the obligations of MA organizations when making medical
necessity determinations. Chapter 4 of the MMCM, section 10.16,
provides that MA organizations make coverage
[[Page 22190]]
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
proposed to codify these existing standards for medical necessity
decision-making at Sec. 422.101(c)(1)(i) and proposed some new
requirements to connect medical necessity determinations to our new
requirements at Sec. 422.101(b). Therefore, as previously discussed,
we proposed to codify at Sec. 422.101(c)(1)(i)(A) that MA
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 proposed 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
proposed 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 proposed 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 solicited
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 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 these 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).
In explaining the proposals in the proposed rule, we affirmed 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 also affirmed
that MA organizations may furnish a given service using a defined
network of providers, some of whom may not see patients in Traditional
Medicare, under these proposals. Further, we affirmed 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 remind MA
organizations that any incentives offered to providers and to patients
must comply with applicable fraud and abuse laws.
In the proposed rule, we acknowledged 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
proposed 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. We explained
that under our 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 proposed 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).
We explained that we were unable to quantify the impact of these
proposed changes on MA organizations because many MA organizations may
already be interpreting our current rules in a way that aligns with
what we proposed. 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 proposed 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 a
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, we proposed to be
clear that MA organizations may not deny authorization based on
internal MA
[[Page 22191]]
organization clinical criteria that go beyond Medicare coverage rules
or do not comply with proposed Sec. 422.101(b)(6) addressing standards
for when MA internal coverage rules are permissible. However, we were
unable to quantify or predict how many MA organizations are currently
operating in a manner that conforms with what we proposed. We solicited
comment from stakeholders on the full scope of this burden.
We thank commenters for helping inform CMS's policy on coverage
criteria for basic benefits in MA. We summarized comments in this
section of this rule and our responses follow.
Comment: We received several comments thanking CMS for reiterating
that MA plans must comply with general coverage and benefit conditions
included in Traditional Medicare laws, unless superseded by laws
applicable to MA plans, and for clarifying that this includes coverage
criteria for inpatient admissions at 42 CFR 412.3, requirements for
coverage of Skilled Nursing Facility Care and Home Health Services
under Part 409, and Inpatient Rehabilitation Facilities coverage
criteria at Sec. 412.622(a)(3). Several commenters requested that CMS
more clearly state that the proposed revisions to 422.101(b)(2) mean
that MA plans must follow the Inpatient Only (IPO) list as well as the
``two-midnight rule'' presumption and benchmark for hospital inpatient
admissions. Some commenters also requested that CMS more explicitly
state that additional coverage criteria are prohibited when the IPO
list and two-midnight rule are applicable. One commenter requested that
CMS explicitly state that MA plans are prohibited from making medical
necessity decisions based only on the duration of a hospital stay.
Another commenter requested CMS clarify if plan adherence to Sec.
412.3 still allows case management review of inpatient admissions based
on whether the complex medical factors documented in the medical record
support medical necessity of the inpatient admission, regardless of the
actual duration of the hospital stay. Finally, some commenters asserted
that requiring MA plans to follow the two-midnight rule as applied in
Traditional Medicare, which includes the two-midnight presumption and
benchmark, would violate non-interference rules at 422.256(a)(2)(ii)
that preclude CMS from interfering in payment rates agreed to by an MA
plan and its contracted providers. Additionally, these commenters
stated that the requirements at Sec. 412.3 are payment rules and not
coverage rules.
Response: We thank commenters for their comments. In our proposal
at 422.101(b)(2), we stated that MA plans must comply with general
coverage and benefit conditions included in Traditional Medicare laws,
unless superseded by laws applicable to MA plans. We also stated that
this includes coverage criteria for inpatient admissions at 42 CFR
412.3, requirements for coverage of Skilled Nursing Facility Care and
Home Health Services under 42 CFR part 409, and Inpatient
Rehabilitation Facilities coverage criteria at 42 CFR 412.622(a)(3). We
affirm here that the criteria listed at those regulations are
applicable in MA.
MA organizations are required by Section 1852(a) to provide Part A
or Part B items and services (with limited exceptions) through
providers that have a contract with the MA organization or by payment
to a provider that does not have a contract with the MA organization.
CMS has interpreted those obligations in Sec. 422.101(a) to require MA
organizations to ``provide coverage of, by furnishing, arranging for,
or making payment for'' these Part A or Part B items and services.
Therefore, the distinctions between regulations that contain coverage
criteria and regulations that contain criteria for Medicare payment in
Traditional Medicare are not similarly applicable in the MA program
because MA organizations provide coverage by furnishing, arranging for,
or making payment for Part A and Part B items and services. As a
result, when determining whether Traditional Medicare criteria apply in
MA, it is irrelevant whether Traditional Medicare considers the
criteria part of a coverage rule or a payment rule, as both address the
scope items and services for which benefits are available to Medicare
beneficiaries under Parts A and B. MA organizations have discretion
about how much and under what conditions they pay their contracted
providers that furnish services, but Sec. 422.101(a) and (b) are about
ensuring that MA enrollees receive the same items and services they
would receive if they were enrolled in Traditional Medicare. We explain
here what the new rule means and how it works using examples of
Traditional Medicare criteria listed at Sec. 422.101(b)(2) of this
final rule.
In regards to inpatient admissions at 412.3, we confirm that the
criteria listed at 412.3(a)-(d) apply to MA. We acknowledge that 412.3
is a payment rule for Medicare FFS, however, providing payment for an
item or service is one way that MA organizations provide coverage for
benefits. Therefore, under Sec. 422.101(b)(2), an MA plan must provide
coverage, by furnishing, arranging for, or paying for an inpatient
admission when, based on consideration of complex medical factors
documented in the medical record, the admitting physician expects the
patient to require hospital care that crosses two-midnights (Sec.
412.3(d)(1), the ``two midnight benchmark''); when admitting physician
does not expect the patient to require care that crosses two-midnights,
but determines, based on complex medical factors documented in the
medical record that inpatient care is nonetheless necessary (Sec.
412.3(d)(3), the ``case-by-case exception''); and when inpatient
admission is for a surgical procedure specified by Medicare as
inpatient only (Sec. 412.3(d)(2)). However, it is important to clarify
that the ``two-midnight presumption'' (the presumption that all
inpatient claims that cross two midnights following the inpatient
admission order are ``presumed'' appropriate for payment and are not
the focus of medical review absent other evidence) does not apply to MA
plans. The two-midnight presumption is a medical review instruction
given to Medicare contractors (for example, MACs, RACs, QIOs) to help
them in the selection of claims for medical necessity review. CMS
guidance \102\ states that Medicare contractors will presume hospital
stays spanning two or more midnights after the beneficiary is formally
admitted as an inpatient are reasonable and necessary for Part A
payment. Under this presumption, Medicare contractors will generally
not focus their medical review efforts on stays spanning two or more
midnights after formal inpatient admission.
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However, this final rule does not dictate how MA organizations will
decide which claims to subject to review. Section 1852(g)(1)(A) of the
Act states that an MA organization shall have a procedure for making
determinations regarding whether an individual enrolled with the plan
is entitled to receive a health service and that such determinations
regarding whether or not an individual may receive a health service
must be made on a timely basis. CMS has adopted regulations governing
certain minimum procedures that MA plans must use, including the timing
of organization determinations, the content of denial notices, and who
must review a decision that the plan expects to be a full or partial
denial on the basis of
[[Page 22192]]
medical necessity before the denial can be issued. (See also section
III.G. of this rule regarding the proposal to amend Sec. Sec.
422.566(d) and 433.629(k) on this last point.) In addition, the
regulations in part 422, subpart M address when and why an MA
organization may reopen an organization determination at Sec. 422.616,
which incorporates the reopening regulations at Sec. Sec. 405.980
through 405.986. However, CMS has not established requirements or
limits on how MA organizations prioritize medical claims for review
akin to the instructions CMS issues to Traditional Medicare
contractors. Therefore, CMS instructions to Traditional Medicare
contractors regarding how to prioritize medical claim review do not
apply to MA organizations, under our interpretation. Accordingly, the
amendments to Sec. 422.101(b)(2) finalized here do not include any
requirement for how MA organizations select inpatient admission claims
for review, but we do confirm that the criteria listed at 412.3(a)-(d)
apply. We confirm that MA plans may still use prior authorization or
concurrent case management review of inpatient admissions based on
whether the complex medical factors documented in the medical record
support medical necessity of the inpatient admission, under either the
two-midnight benchmark or the case-by-case exception.
Further, we do not believe that Sec. 422.101(b), as finalized with
our clarification about how 42 CFR 412.3 applies in the context of MA,
violates the non-interference rule at section 1854(a)(6)(iii). We
affirm MA organizations' rights to contract with providers of their
choosing and to set the price structures, including how and how much
contracted providers are paid. In addition, under the rules finalized
here, MA organizations may adopt procedures, and in those situations
specified in Sec. 422.101(b)(6), internal coverage policies for making
medical necessity determinations regarding whether an individual is
entitled to receive a health care service under Part A or Part B, so
long as the requirements and conditions set forth in the regulations
are met. Our focus of this policy is not on how or how much MA
organizations pay their contracted providers, but on ensuring that MA
enrollees receive items and services for which benefits are available
under Part A and Part B (excluding hospice care and organ acquisitions
for kidney transplants) that they would receive under Traditional
Medicare.
We clarify here and amend the regulation text at Sec.
422.101(b)(2) to state the applicability of the Inpatient Only list in
MA, which, under Sec. 419.22(n) are those services and procedures that
the Secretary designates as requiring inpatient care and for which
payment is not made when furnished in a hospital outpatient department
under the Medicare Hospital Outpatient Prospective Payment System. We
confirm that the Inpatient Only list applies to MA consistent with our
read of the statute that when Traditional Medicare pays for a service
only when certain conditions are met, meaning that those certain
conditions must be met for the service to be considered a Traditional
Medicare basic benefit, these same conditions, including setting, must
be met in order for the service to be considered part of the basic
benefit of an MA plan. As previously stated in this rule and in the
proposed rule, 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 must be included as basic benefits covered by an MA plan. Also, we
remind MA plans that they may cover the same service when the
conditions are not met--such as in a different setting or from a
different type of provider--as a supplemental benefit. The regulation
at Sec. 412.3(d)(2) provides that an inpatient admission for a
surgical procedure specified by Medicare as inpatient only under Sec.
419.22(n) is generally appropriate for payment under Medicare Part A
regardless of the expected duration of care. Therefore, coverage of the
inpatient admission for a procedure on the inpatient only list is fully
established under the applicable Medicare regulations and the MA plan
must cover this type of inpatient admission without application of
additional internal criteria under new Sec. 422.101(b)(6).
Comment: Many commenters expressed concern that the proposed rule
limits MA plans' ability to adequately assess whether a covered item or
service is medically necessary. Some commenters expressed concerns that
Medicare coverage guidelines are not specific enough to be relied upon
to make medical necessity determinations. One commenter suggested that
CMS provide additional clarity regarding what plans should do when
there are no CMS guidelines applicable to a service and to provide
examples regarding what is permissible under these circumstances.
Similarly, one commenter recommended that CMS provide additional
clarity on what a plan must do when an NCD or LCD acknowledges that
additional coverage criteria may be applied to determine medical
necessity. Another commenter requested that CMS establish a process
that allows plans to ask CMS questions and request clarity on Medicare
guidelines, including the applicability of certain guidelines. One
commenter noted that CMS allows Medicare review contractors to use
evidence-based guidelines to assist reviewers in making medical
necessity determinations consistent with Traditional Medicare and
requirements and, as such, MA plans should be able to maintain this
ability.
Response: We thank commenters for their comments and we believe
that ``Medicare review contractors'' used in this context means MACs in
Traditional Medicare. We understand that Traditional Medicare statutes,
regulations, NCDs, and LCDs do not always contain specific criteria for
making medical necessity determinations in every situation for every
applicable Part A or B service. Thus, in the proposed rule, we stated
that when coverage criteria are not fully established in applicable
Medicare statutes, regulations, NCDs or LCDs, MA plans may create
internal coverage criteria that are based on current evidence in widely
used treatment guidelines or clinical literature that is made publicly
available. We agree with commenters that in order to adequately adhere
to this requirement, MA plans need additional clarity on what it means
for Traditional Medicare coverage criteria to not be ``fully
established'', and thus allowed to apply internal coverage criteria
based on current evidence in widely used treatment guidelines or
clinical literature. Based on commenter recommendations, and in order
to more explicitly state the circumstances under which MA organizations
may apply internal coverage criteria, we are finalizing Sec.
422.101(b)(6) with additional modifications compared to the proposed
version. We are finalizing a new paragraph (b)(6)(i) to explain in
regulation text when coverage criteria are not fully established. At
Sec. 422.101(b)(6)(i)(A)-(C) we explain that coverage criteria are not
fully established when additional, unspecified criteria are needed to
interpret or supplement general provisions in order to determine
medical necessity consistently; NCDs or LCDs include flexibility that
explicitly allows for coverage in circumstances beyond the specific
indications that are listed in an NCD or LCD; or there is an absence of
any applicable Medicare
[[Page 22193]]
statutes, regulations, NCDs or LCDs setting forth coverage criteria.
This means that when any of these three circumstances are present, MA
plans may develop and rely upon internal coverage criteria to make
medical necessity decisions.
We agree with commenters that medical conditions and a patient's
medical history can be complex and that Medicare coverage guidelines
are not specific enough to address every possible scenario when
benefits are available under Medicare Parts A or B for every item or
service. We also acknowledge, as commenters stated, that MACs are
permitted to consider evidence-based guidelines when making individual
medical necessity determinations. Based on these comments, and in order
to clarify when Traditional Medicare coverage criteria are not fully
established, this final rule will permit MA organizations to adopt
publicly accessible internal coverage criteria based on current
evidence in widely used treatment guidelines when additional,
unspecified criteria are needed to interpret or supplement general
provisions in order to determine medical necessity consistently. First,
we proposed and address in more detail in the following pages how, in
addition to basing internal coverage criteria on current evidence in
widely established treatment guidelines, MA organizations must follow
certain procedures. Second, as specified at Sec. 422.101(b)(6)(i)(A),
the MA organization must demonstrate that the additional criteria
provide clinical benefits that are highly likely to outweigh any
clinical harms, including from delayed or decreased access to items or
services. We will use this interpretation in monitoring and evaluating
compliance with this regulation. We also require in this rule that MA
organizations make this explanation publicly accessible, along with the
internal coverage criteria in use, and identify the general provisions
that the internal coverage criteria supplement so that general
provisions can be applied in specific factual circumstances.
We explained in the proposed rule, that 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. We also acknowledged in the proposed
rule 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. Commenters agreed with these
statements, and therefore, we are finalizing in the regulation text at
Sec. 422.101(b)(6)(i)(B) and (C) that coverage criteria are not fully
established when NCDs or LCDs include flexibility that explicitly
allows for coverage in circumstances beyond the specific indications
that are listed in an NCD or LCD or when there is an absence of any
applicable Medicare statutes, regulations, NCDs or LCDs setting forth
coverage criteria. When identifying whether there is an absence of
applicable Medicare statutes, regulations, NCDs, or LCDs, the MA
organization needs to look beyond the labels of ``payment rule'' or
``coverage rule'', as both serve to establish coverage criteria in MA.
Therefore, this rule prohibits MA organizations from applying internal
coverage criteria in addition to the applicable Traditional Medicare
statutes, regulations, NCDs, or LCDs, unless Sec. 422,101(b)(6)(i)(A)
or (B) apply.
As part of applying and complying with Sec. 422.101(b)(6), we
expect that MA plans will consult the Medicare Benefit Policy Manual,
Medicare Program Integrity Manual, and similar CMS guidance materials.
These manuals contain significant explanations and interpretations of
Traditional Medicare laws governing Part A and Part B benefits, most of
it longstanding, to provide instructions and procedures for day to day
operations for those responsible for administering the Medicare program
and for making coverage decisions. Using these resources will ensure
that MA plans are covering items and services for which benefits are
available under Part A and Part B for their enrollees and minimize the
number of potential situations where Traditional Medicare coverage
policies have insufficient detail such that an MA plan must develop its
own internal coverage criteria.
When MA plans are permitted to adopt such internal criteria,
however, it must be based on current evidence in widely used treatment
guidelines or clinical literature and made publicly available. We
believe that permitting the use of publicly accessible internal
coverage criteria in these limited circumstances and contexts is
necessary to promote transparent, and evidence-based clinical decisions
by MA plans that are consistent with Traditional Medicare. We do not
view the use of internal coverage criteria in these instances as being
more restrictive than, or applying additional criteria beyond,
Traditional Medicare because that is precisely what is contemplated,
for example, by the NCDs or LCDs that provide for this type of
flexibility and interpretation in Traditional Medicare. Use of internal
policies based on current evidence in widely used treatment guidelines
or clinical literature is appropriate to fill in gaps where coverage
criteria cannot specify all possible circumstances where coverage of a
Part A or Part B item or service may be available for a beneficiary.
These policies provide MA organizations with limited discretion to
interpret Traditional Medicare coverage rules and must not create
barriers to access to care in a way that is not aligned with access in
Traditional Medicare.
In order to demonstrate how this rule applies, we discuss an
example of an actual coverage policy to further elucidate the limited
circumstances under which MA plans may apply internal coverage criteria
to supplement the existing coverage guidelines. First, in NCD 220.1 for
Computed Tomography (CT) \103\, the NCD states that, ``[s]ufficient
information must be provided with claims to differentiate CT scans from
other radiology services and to make coverage determinations. Carefully
review claims to ensure that a scan is reasonable and necessary for the
individual patient; that is, the use must be found to be medically
appropriate considering the patient's symptoms and preliminary
diagnosis.'' Here, the NCD recognizes that individual circumstances are
relevant in determining appropriate coverage, so the policy used the
term ``sufficient'' in order for the medical necessity reviewer to make
a more accurate coverage determination. Additionally, the NCD allows
the MAC medical staff to make an individual case determination that use
of a CT scan as the initial diagnostic test was not reasonable and
necessary because it was not supported by the patient's symptoms or
complaints stated on the claims form. In this circumstance, the MA plan
would be allowed to apply current evidence in widely used treatment
guidelines or clinical literature that is made publicly available, as
defined at Sec. 422.101(b)(6), to make consistent determinations about
when it would be reasonable and necessary for the individual patient
and what type of information is required to be submitted on the claim.
The MA organization would need to demonstrate in its public explanation
of the rationale that supports the internal coverage criteria that the
additional criteria provide clinical benefits that are highly likely to
outweigh any clinical harms, including from delayed or decreased access
to items or services. The MA
[[Page 22194]]
organization would also need to identify the general provisions that
are being interpreted or supplemented. In this case, the MA
organization may use internal coverage criteria to further establish
what ``sufficient information'' must be provided with the claim or pre-
service request for coverage (including a prior authorization request).
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\103\ https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?NCDId=176
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In another example, NCD 220.2 for Magnetic Resonance Imaging
(MRI),\104\ the NCD lists indications and limitations of coverage as
well as the contraindications and other non-covered indications for
appropriate use of an MRI. However, it also provides for coverage under
a category of ``other'' when ``[a]ll other uses of MRI or MRA for which
CMS has not specifically indicated coverage or non-coverage continue to
be eligible for coverage through individual local MAC discretion.''
Here, the NCD explicitly includes flexibility that allows for coverage
in circumstances beyond the specific indications that are listed in an
NCD and gives the medical necessity reviewer discretion to make this
judgment. In order to make consistent determinations on coverage in
these ``other'' circumstances not specifically addressed by the NCD,
Sec. 422.106(b) as finalized permits an MA plan to adopt an internal
coverage policy based on current evidence in widely used treatment
guidelines or clinical literature that is made publicly available.
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\104\ https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?ncdid=177
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We proposed at 422.101(c)(1) that MA organizations must make
medical necessity determinations based on a number of factors,
including the criteria in Sec. 422.101(b), the enrollee's medical
history, and other factors. Thus, to the extent that an MA organization
has developed internal coverage criteria as permitted by Sec.
422.101(b)(6) (including compliance with the procedures set forth in
paragraphs (b)(6)(i) through (ii)), the current evidence in widely used
treatment guidelines or clinical literature that are the basis for the
internal coverage policy should also be used in making individual
medical necessity determinations. Therefore, MA organizations may use
these internal criteria to deny coverage of an item or service.
However, as required by Sec. 422.568 and 422.631 (for applicable
integrated plans), MA organizations must give enrollees written notice
of a denial and the notice must state the specific reasons for the
denial. We clarify here that if an MA organization denies care based on
internal criteria, that criteria must be clearly stated in the denial
notice, just as other applicable Medicare coverage criteria must be
stated under Sec. 422.568(e)(2), when used as the basis for a denial
of coverage. Communicating all necessary information needed for the
enrollee or provider to effectively appeal the decision, including the
evidence used to support the internal coverage policy when applicable,
is one of the purposes of the denial notice. The standardized
Integrated Denial Notice is properly completed when it includes a
specific and detailed explanation of why the medical services, items or
Part B drugs were denied, including a description of the applicable
coverage rule or applicable plan policy (for example, Evidence of
Coverage provision) upon which the action was based, and a specific
explanation about what information is needed to approve coverage must
be included, if applicable.
In light of the issues raised by commenters, we are finalizing
422.101(b) with modifications to clarify when Traditional Medicare
coverage criteria are not fully established and what information about
internal coverage criteria must be made publicly accessible. We will
continue to conduct audit and monitoring activities to ensure that
appropriate coverage criteria are applied during medical necessity
reviews, and if CMS identifies abuses of this policy, we will consider
future rulemaking on this topic.
Comment: We received several comments asking CMS to prohibit use of
commercial and proprietary criteria by MA plans. Many commenters stated
that MA plan coverage criteria are often inconsistent, outside the
scope of reasonable standards of practice, and more restrictive than
Traditional Medicare guidelines. Some commenters requested that CMS not
prohibit use of proprietary coverage criteria and tools, such as
InterQual or MCG systems, stating that that these tools help plans
consolidate Medicare regulations and assist plans in making evidence-
based, clinically appropriate medical necessity determinations. Another
commenter requested that CMS continue to allow plans to use independent
third-party, proprietary tools to guide medical necessity
determinations.
Response: We thank commenters for expressing their concerns.
However, use of these tools, in isolation, without compliance with
requirements in this final rule at Sec. 422.101(b), (c), and Sec.
422.566(d), is prohibited.
We understand that utilization management tools such as InterQual
or MCG, among others, are coverage criteria products created to assist
the plans, providers and others, in clinical review processes and to
help guide medical necessity determinations. We understand from
commenters that these products were created with the intention of
serving as a single source that consolidates clinical data, medical
literature, and CMS guidance and coverage policies to assist MA plans
in making medical necessity determinations. We understand from
commenters that these tools are often used in conducting inpatient,
post-acute and home care medical necessity reviews, in particular.
As finalized, Sec. Sec. 422.101(b), (c) and 422.566(d) address
different aspects of how these products appear to be used so
consideration of all three regulations is necessary. As proposed and
finalized in Sec. 422.101(b)(2), MA plans must comply with general
coverage and benefit conditions included in Traditional Medicare laws,
unless superseded by laws applicable to MA plans. This includes
criteria for determining whether an item or service is a benefit
available under Traditional Medicare, such as payment criteria for
inpatient admissions at 42 CFR 412.3, services and procedures that the
Secretary designates as requiring inpatient care under 42 CFR
419.22(n), and requirements for payment of Skilled Nursing Facility
(SNF) Care, Home Health Services under 42 CFR part 409, and Inpatient
Rehabilitation Facilities (IRF) at 42 CFR 412.622(a)(3)). Thus, MA
plans may not use InterQual or MCG criteria, or similar products, to
change coverage or payment criteria already established under
Traditional Medicare laws.
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 proposed 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 proposed that MA organizations must follow rules similar to those
CMS and MACs 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.
[[Page 22195]]
Under this final rule, when coverage criteria are not fully
established in applicable Medicare statute, regulation, NCD or LCD, MA
plans may create internal coverage criteria under specific
circumstances described at Sec. 422,101(b)(6)(i). In these
circumstances, an MA plan is permitted to choose to use a product, such
as InterQual or MCG or something similar, to assist in creating
internal coverage criteria only so long as the requirements in Sec.
422.101(b), (c), and Sec. 422.566(d) are met. Specifically, MA plans
must comply with Sec. 422.101(b) and (c) as to: (i) what coverage
criteria are applied; (ii) how, if those criteria are not only from
Medicare laws, NCDs or LCDs, the coverage criteria were developed and
what they are based on, and (iii) how individualized determinations of
medical necessity take into account the information and considerations
specified in Sec. 422.101(c)(1). In addition, if the organization
determination made using the product is expected to be a full or
partial denial, the MA plan must ensure that the additional review
requirements in Sec. 422.566(d) are met. (See section III.G of this
final rule.) The MA plan must therefore ensure that the coverage
criteria used in these products are based on current evidence in widely
used treatment guidelines and clinical literature consistent with the
definitions and standards in Sec. 422.101(b)(6) before using the
product as the MA plan's internal coverage policy. Further, MA
organizations must comply with specific procedures, which we discuss in
more depth later in this preamble, before an internal coverage policy--
including a product such as those described by the commenters--may be
used; the MA plan must provide, in a publicly accessible way, the
internal coverage criteria in use; a 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 an explanation of the rationale that supports the
adoption of the coverage criteria used to make a medical necessity
determination. This includes, when applicable, how the additional
criteria interpret or supplement general provisions in Traditional
Medicare and provide clinical benefits that are highly likely to
outweigh any clinical harms, including from delayed or decreased access
to items or services. MA organizations must ensure that they are making
medical necessity determinations based on the circumstances of the
specific individual, as outlined at Sec. 422.101(c), as opposed to
using an algorithm or software that doesn't account for an individual's
circumstances. Finally, MA organizations must comply with amended Sec.
422.566(d), as in section III.G of this final rule, which requires that
a denial based on a medical necessity determination must be reviewed by
a physician or other appropriate health care professional with
expertise in the field of medicine or health care that is appropriate
for the service at issue.
We understand from commenters that many of these products and their
software are proprietary in nature and may be proprietary to the
particular organization that uses these products. However, use of such
tools and their proprietary nature does not absolve MA plans from their
responsibilities under this final rule. For an MA plan to use the
coverage criteria in these tools, the MA plan will need to understand
the external clinical evidence relied upon in these products and how
that evidence supports the coverage criteria applied by these tools.
The MA plan must make the evidence that supports the internal criteria
used by (or used in developing) these tools publicly available, along
with the internal coverage policies themselves. Furthermore, under
Sec. 422.504, MA organizations must provide information and access to
CMS (and HHS and the OIG) as it conducts its oversight of MA plans and
their compliance with MA program requirements. CMS may, therefore,
review all aspects of the plan's decision-making including whatever
evidence might be contained within a decision tool, or support the
determinations made from the use of decision tool, including such tools
provided by third-parties as discussed here. We expect MA plans already
using these tools, or those that may plan to use these tools in the
future, to work with third parties that provide these tools to revise
any utilization management products and ensure that these products meet
the requirements at Sec. 422.101(b), (c), and Sec. 422.566(d).
Comment: Several commenters expressed concern that requiring MA
plans to strictly adhere to Traditional Medicare coverage policies
undermines MA plans' ability to appropriately manage care. Commenters
stated that adhering to Traditional Medicare coverage policies will
impede a plan's ability to make medical necessity decisions. Commenters
also stated that the proposed policies would restrict a plan's ability
to direct patients to clinically-equivalent, lower-cost alternative
treatments or therapies first. Several commenters warned that our
proposal could lead to increased costs and duplicative and unnecessary
services. Several commenters stated that our proposal will undermine
the transition to value-based care and similar payment models. Some
commenters expressed concern that adherence to 42 CFR 412.3, part 409,
and Sec. 412.622 will remove the existing flexibility of MA plans to
provide the same level of care in different settings. One commenter
stated that removing the flexibility for plans to provide care in
alternate settings could shift care from beneficiary homes to
institutional settings, resulting in increased costs for both the plans
and beneficiaries. For example, one commenter expressed concern that
Traditional Medicare Skilled Nursing Facility payment rules in
particular incentivize facilities to prolong Skilled Nursing Facility
stays regardless of patient need.
Response: We proposed 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 and that item or service has fully established
coverage criteria, 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. However,
this rule does not mean that an MA organization must deny coverage of
all other treatment alternatives for an MA enrollee. MA plans may have
supplemental benefits that cover of items and services that are not
covered under Parts A or B. In addition, where Traditional Medicare
would cover services in specific or various settings or from specific
or various providers or cover alternative services or treatment options
for the beneficiary, an MA organization must also cover those as basic
benefits. An MA plan may make its enrollees aware of other covered
treatment options or encourage specific treatment options as part of
the MA plan's coordination and management of care for enrollees. We
reiterate that when an item or service has fully established coverage
criteria under Traditional Medicare, use by an MA plan of 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, violate the requirements proposed, and
being finalized in this rule, at Sec. 422.101(b) and
[[Page 22196]]
(c). Utilization management processes that are specified within the
applicable NCD or LCD or Medicare statute or regulation are
permissible. By contrast, when coverage criteria are not fully
established and MA organizations are allowed to adopt internal coverage
criteria based on current evidence in widely used treatment guidelines
or clinical literature, clinical treatment guidelines that require
another item or service to be furnished prior to receiving the
requested item or service must be expressly cited in the evidence in
order for it to be acceptable under our rule. Clinical criteria that
restrict access to a Medicare covered item or service, unless another
item or service is furnished first, are not based on current evidence
if the evidence does not cite or discuss the use of a different item or
service first. When not specifically required in a Medicare law, NCD or
LCD or part of the clinical evidence that supports an internal coverage
policy that is permitted because Traditional Medicare coverage criteria
are not fully established, use of a ``try first'' or similar
utilization management process would be additional internal coverage
criteria prohibited by Sec. 422.101(b)(6) as finalized in this rule.
We believe this policy provides enough flexibility for MA organizations
to manage care so long as that management is grounded in current
evidence in widely used treatment guidelines or clinical literature and
made publicly available. Use of this flexibility by MA organizations is
only allowed when coverage criteria are not fully established in
applicable Medicare statute, regulation, NCD or LCD as stated at Sec.
422.101(b)(6)(i).
Comment: Some commenters also expressed concern about the
appropriateness of Traditional Medicare coverage guidelines. These
commenters suggested that these guidelines may need to be updated and
are not in line with current medical standards.
Response: NCDs are made and updated through an evidence-based
process, with opportunities for public participation through a public
comment and review process. NCDs are updated through CMS-generated
reviews and through requests by an external party for a new NCD, for
reconsideration of an existing NCD, or by an aggrieved party to issue
an NCD when no NCD exists as established in Final Notice 78 FR 48164 in
2013. CMS makes proposed NCD decisions available on the CMS website for
a 30-day public comment period after which comments are reviewed and a
final decision is issued not later than 60 days after the conclusion of
the comment period. A summary of the public comments received and
responses to the comments are included in the decision memorandum. In
some cases, CMS's own research is supplemented by an outside technology
assessment and/or consultation with the Medicare Evidence Development &
Coverage Advisory Committee (MEDCAC). When developing LCDs, MACs use
published, original research in peer-reviewed medical journals,
systematic reviews and meta-analyses, evidence-based consensus
statements and clinical guidelines. Further, LCDs undergo a similar
process to that for NCDs, including public participation. Because
Traditional Medicare follows a process of expert consultation and
public review and comment in order to stay up-to-date and align with
current medical standards and practices as it develops the coverage
guidelines governing Traditional Medicare's basic benefits, we believe
that these processes are sufficient in creating appropriate coverage
guidelines.
Comment: Some commenters noted that the proposed language at Sec.
422.101(b)(2) no longer includes a reference to complying with original
Medicare manuals and instructions. Some commenters noted that manual
guidance often includes necessary coverage guidance not included in
Medicare regulations. These commenters requested that CMS maintain
compliance with manual guidance at Sec. 422.101(b)(2).
Response: We thank commenters for their observations. Section
422.101(b)(2), with the proposed revisions (which we are finalizing
with modifications) references Traditional Medicare laws and existing
Sec. 422.101(b)(1) and (b)(3) require compliance by MA plans with NCDs
and LCDs based on how section 1852(a)(2)(C) and (a)(5) of the Act make
clear that MA plans must cover benefits consistent with NCDs and LCDs.
Although Sec. 422.101(b) will no longer refer to ``original Medicare
manuals and instructions,'' those materials are invaluable in
interpreting and understanding the scope of Part A and Part B benefits
and what benefits are available under Parts A and B in order to
determine what Traditional Medicare covers in specific situations.
Substantive legal standards about Medicare benefits may be established
through rulemaking and NCDs. In revising Sec. 422.101(b)(2) to refer
to Traditional Medicare regulations and statutes, 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. These manuals contain significant explanations and
interpretations of Traditional Medicare laws governing Part A and Part
B benefits, most of it longstanding, to provide instructions and
procedures for day-to-day operations for those responsible for
administering the Medicare program and making coverage decisions on
individual claims, so we expect that MA plans will consult the Medicare
Benefit Policy Manual, Medicare Program Integrity Manual, and similar
CMS guidance materials.
Comment: We received some comments requesting that CMS establish a
minimum number of days of initial Inpatient Rehabilitation Facilities
or Skilled Nursing Facility coverage.
Response: We thank commenters for their suggestion and note that
the minimum scope of IRF and SNF benefits are statutory requirements
under the Medicare statute. We did not propose a separate MA coverage
requirement for initial Inpatient Rehabilitation Facilities or Skilled
Nursing Facility coverage, nor did we propose to make changes to the
structure of basic benefits covered under Parts A and B. Our proposal
aims to align the applicable coverage criteria in MA with Traditional
Medicare to ensure comparable coverage for beneficiaries across both
programs. Therefore, we consider changes to scope or structure of Part
A or B benefits outside of the scope of this rule.
Comment: Some commenters expressed concern about MA plans' ability
to provide a summary of evidence for all services. One commenter stated
that sources often lack evidence to support all types of care. Some
commenters also requested that CMS clarify what exactly is meant by
``summary of the evidence that was considered.'' These commenters
requested that CMS clarify whether this includes a citation to an
article or a comprehensive synthesis of each study used, stating that
the latter would be time consuming and extremely burdensome. Other
commenters requested CMS provide guidance on how this information
should be shared publicly, noting that some resources may be behind a
paywall. One commenter suggested that plans be required to post this
information in a visible location on their websites. A few commenters
suggested that CMS also require MA plans to make any internal coverage
criteria publicly available and that this information should be
available at least 30 days prior to implementation. One commenter
suggested CMS require MA plans to consult with up to date clinical
databases if we determined that a full in-depth review of evidence was
too burdensome. Another commenter
[[Page 22197]]
requested that CMS require that a summary of evidence be provided upon
request instead of publicly posted. One commenter requested that CMS
clarify and provide examples of appropriate ``widely used treatment
guidelines.'' Some commenters stated that consideration should be given
to quality of literature and not only how often it is used. Other
commenters suggested that CMS should require that the draft coverage
policy be available for review and public comment. Finally, some
commenters expressed concern that there is not enough data or widely
used treatment guidelines available on certain conditions, including
rare diseases. Given these challenges, some commenters requested CMS
provide plans with flexibility in meeting this requirement. One
commenter expressed concern that the public summary of evidence would
require significant time and administrative effort.
Response: We thank commenters for their comments. We proposed, and
are finalizing at Sec. 422.101(b)(6), that MA organization's internal
clinical criteria must be based on current evidence in widely used
treatment guidelines or clinical literature. In the proposed regulation
text, we stated that 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. We provided an example by referring to the
Infectious Diseases Society of America for the Treatment of Clostridium
Difficile. We also explained that current, widely-used treatment
guidelines include those used to determine appropriate level of care
(such as the American Society of Addiction Medicine Criteria for
placement, continued stay, and transfer or discharge of patients with
addiction and co-occurring conditions). We proposed that clinical
literature acceptable for use to justify internal coverage criteria
includes large, randomized controlled trials or prospective cohort
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. 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 described
in the regulation would not represent proper justification for
instituting internal coverage guidelines that would restrict access to
care. These types of evidence have not undergone peer-review, are not
transparent, or are not research methodologies that can plausibly
establish causality. This evidentiary standard is overall consistent
with published frameworks that rank the reliability of different types
of studies in the clinical literature.
With regards to requiring MA plans to have a review and comment
process for their internal coverage criteria, we remind commenters that
per CMS regulations at Sec. 422.202(b), MA organizations that use a
network of providers (for example, coordinated care plans) have
obligations with regard to developing and using practice guidelines and
utilization management guidelines, including establishing 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. We believe that the regulations at Sec.
422.202(b) provide a formal and sufficient mechanism for MA
organizations to receive comment from contracted providers on internal
coverage criteria, instead of having a review and comment period open
to the general public. Therefore, we proposed and are finalizing a
revision to Sec. 422.202(b)(1)(i) to require practice guidelines and
utilization management guidelines used by an MA organization that uses
a network of providers to base those guidelines on current evidence in
widely used treatment guidelines or clinical literature. Additionally,
existing requirements under Sec. 422.202(b) require that MA plans'
practice guidelines and utilization management guidelines must consider
the needs of the enrolled population; be developed in consultation with
contracting physicians; be reviewed and updated periodically; and be
communicated to providers and, as appropriate, to enrollees. Further,
decisions with respect to utilization management, enrollee education,
coverage of services and other areas in which the guidelines apply must
be consistent with the guidelines. We believe that an additional
requirement that plans go through a comment period is redundant of
these existing requirements regarding provider participation and that
no additional requirements along such lines are necessary.
At 87 FR 79501, we proposed that an MA organization provide a
publicly accessible summary of the evidence considered in developing
the internal coverage criteria, a list of the sources of evidence, and
an explanation of the rationale for the internal coverage criteria in
order to protect beneficiaries by ensuring that coverage criteria are
rational and supportable by current, widely used treatment guidelines
and clinical literature and to provide transparency. However, the
regulation text at proposed Sec. 422.101(b)(6)(i) through (iii)
inadvertently limited the phrase ``publicly accessible'' to only the
summary of evidence. We are finalizing the proposal with modifications
to the regulation text to be consistent with the scope of the proposal
described in the preamble. Additionally, we are renumbering these
criteria to as (A) through (C) in newly established subparagraph (ii).
Along with the new standards being adopted at Sec.
422.101(b)(6)(i)(A) to allow MA organizations to create internal
coverage criteria when additional, unspecified criteria are needed to
interpret or supplement general provisions in order to determine
medical necessity consistently, we also are enhancing transparency
requirements at Sec. 422.101(b)(6)(ii)(C). When an MA organization
uses internal coverage criteria in accordance with Sec.
422.101(b)(6)(i)(A), they must also include in their publicly
accessible explanation of the rationale that supports the adoption of
the coverage criteria, an identification of the general provisions that
are being supplemented or interpreted, and explain how the additional
criteria provide clinical benefits that are highly likely to outweigh
any clinical harms, including from delayed or decreased access to items
or services. For example, the evidence supporting use of an internal
policy may demonstrate that patients benefit from increased efficacy of
treatment or increased patient safety and highly outweighs the
potential for the criteria to be used as a barrier to care that delays
or denies access to items or services. While we acknowledge that this
new requirement in Sec. 422.101(b)(6)(ii) will increase burden on MA
organizations, we believe that the benefits of transparency in the
development of internal coverage criteria balances out that burden. We
note that MA organizations may cite to policies or publicly available
evidence that is behind a paywall without having to provide access to
the policy directly. The standard at Sec. 422.101(b)(6) allows MA
organizations to create publicly accessible internal coverage criteria
that are based on current evidence in widely used treatment guidelines
or clinical literature; it does not require that the MA organization to
provide direct access to the source, but they must make
[[Page 22198]]
publicly available the information required at Sec. 422.101(b)(6)(ii).
This could be in the form of a written summary that summarizes the
evidence and treatment guidelines or clinical literature and provides a
link or citation to the location of the evidence. This transparency
provides assurances that coverage criteria are rational and supportable
by current, widely used treatment guidelines and clinical literature,
which we believe will protect MA enrollees. In an effort to provide
plans with flexibility, we decline to require specific mechanisms for
how the information is made publicly available. However, we do
recommend MA plans refer to the coverage criteria and summary of
evidence presented by MACs as a guide and best practice for how to
present this information publicly. We are finalizing Sec.
422.101(b)(6)(ii) with modifications to make everything listed in
paragraphs (b)(6)(i) through (iii) of the proposed rule publicly
accessible and to enhance transparency requirements related to the use
of internal coverage criteria.
Comment: Some commenters requested that CMS require MA plans to
adhere to Traditional Medicare coding policies related to how MA
organizations pay providers. Another commenter suggested CMS also
require MA plans to use only CMS' software and billing processes.
Response: We thank commenters for their suggestions. We remind
commenters that section 1854(a)(6)(B)(iii) of the Act and MA
regulations at Sec. 422.256(a)(2)(ii) expressly prohibit CMS from
interfering in price structures agreed to by an MA plan and its
contracted providers. Whether or how a MAO pays its providers for
furnishing covered services through use of a particular CPT code or
some other mechanism can vary depending on the contract between the MA
plan and the provider. We note that while MA organizations can develop
their own payment methodologies for in-network providers for different
diagnoses or procedure codes, national standard code sets for ICD-10
codes and CPT/HCPCS codes, along with respective coding guidelines, as
required under HIPAA, must be followed. In this sense, the code sets
and associated coding guidelines used in Traditional Medicare are the
same as those required to be used by MA organizations. Further, when
submitting encounter data to CMS, MA organizations must comply with the
data structure and coding vocabularies established by CMS for such data
and MA encounter data must conform to CMS' requirements for data
equivalent to Medicare fee-for-service data, when appropriate, and to
all relevant national standards. (See Sec. 422.310(d)) For non-
contract providers, section 1852(a)(2) requires MA organization to pay
non-contracted providers what they would receive in the Traditional
Medicare program (that is, the FFS program) for furnishing the Part A
or Part B services. Because Traditional Medicare uses specific codes
and payment procedures, when a non-contracted provider uses those codes
to request payment from an MA organization, the MA organization may not
deny payment on the basis that the codes that were submitted are not
used by the MA organization and its contracted providers.
Comment: With respect to medical necessity determinations, several
commenters stated that plan medical directors often issue
determinations without up to date patient data. These commenters
suggested that CMS require that prior to issuing a medical necessity
determination, the plan medical director must have direct access to all
of the relevant information available to the plan and the
responsibility to review all this information. Several commenters
stated that peer-to-peer reviews often include medical directors
without relevant expertise. These commenters suggested CMS require
plans to use a reviewing medical director who has specific expertise in
the relevant areas.
Response: We thank commenters for their suggestions. We proposed,
and are finalizing in this rule, at Sec. 422.101(c)(1)(i)(C), that MA
organizations must make medical necessity determinations based on,
among other things, the enrollee's medical history (for example,
diagnoses, conditions, functional status), physician recommendations,
and clinical notes. This regulation requirement means that the MA
organization, and its staff that review requests for an organization
determination related to medical necessity, must review these materials
that are specific to the enrollee and the contemplated services. We do
not believe that our regulation needs to require that MA plan medical
directors have direct access to all of the relevant information
available to the plan and the responsibility to review all this
information before any medical necessity determinations are made. As
proposed and finalized, Sec. 422.101(c)(1)(D) requires involvement of
the MA plan medical director where appropriate. Per Sec.
422.562(a)(4), which has not been amended in this rule, MA plan medical
directors are responsible for ensuring the clinical accuracy of all
organization determinations and reconsiderations involving medical
necessity. MA organizations must have adequate procedures and systems
in place to fulfill their obligations under part 422, including making
organization determinations about coverage. (See for example,
Sec. Sec. 422.503(a)(4) 422.504(a)(16) and 422.566(a)). Section
422.101(c)(1)(C) requires that medical necessity determinations be made
based on, among other things, the enrollee's medical history, physician
recommendations, and clinical notes. This effectively means that all
relevant clinical information is to be used by the MA plan in making
the determination. Also, we are also finalizing the proposal to revise
Sec. Sec. 422.566(d) and 422.629(k)(3), in section III.G of this rule,
to state that the physician or other appropriate health care
professional who conducts the organization determination review must
have expertise in the field of medicine that is appropriate for the
item or service being requested before the MA organization or
applicable integrated plan (AIP) issues an adverse decision on medical
necessity. In response to the comment that that peer-to-peer reviews
often include medical directors without relevant expertise, we
interpret peer to peer review to mean a discussion between the
patient's doctor and a medical professional at the MA plan to obtain a
prior authorization approval or appeal a previously denied prior
authorization. While CMS does not have requirements that govern who
within an MA plan must conduct peer to peer reviews, we reiterate that
if the MA plan issues an adverse organization determination, the
physician or other appropriate health care professional who conducts
the organization determination review must have expertise in the field
of medicine that is appropriate for the item or service being
requested.
Comment: Some commenters requested that CMS require that a treating
clinician's medical determination be the primary factor in any
determination related to admission or transfer to another level of care
when no NCD or LCD is present.
Response: We thank commenters for their suggestions. Under the
revisions to Sec. 422.101(c)(1) that we proposed and are finalizing in
this rule, physician recommendations are required to be considered when
making medical necessity determinations about the specific enrollee and
requested services. This will apply in all contexts, not only when an
enrollee is being transferred from one level of care to another or
being admitted on an inpatient basis. Specifically, CMS proposed to
codify at 422.101(c) that MA organizations must
[[Page 22199]]
make medical necessity determinations based on: (1) coverage and
benefit criteria as specified or authorized at 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); (2) whether the
provision of items or services is reasonable and necessary under
section 1862(a)(1) of the Act; (3) the enrollee's medical history (for
example, diagnoses, conditions, functional status), physician
recommendations, and clinical notes; and (4) where appropriate,
involvement of the organization's medical director as required at Sec.
422.562(a)(4). This regulation text is based on longstanding guidance
in section 10.16 of Chapter 4 of the Medicare Managed Care Manual. In
codifying this policy for medical necessity determinations, we
reiterate that these four factors are appropriate and necessary
considerations when making a medical necessity determination.
Comment: One commenter requested CMS clarify whether the proposed
rules around coverage criteria for basic benefits prevent plans from
providing supplemental benefit based on functional or social
determinants of health (SDOH) needs.
Response: The rules around coverage criteria for basic benefits
adopted and discussed in this final rule do not prevent MA
organizations from taking SDOH into account when designing or
determining eligibility for Special Supplemental Benefits for the
Chronically Ill (SSBCI) Sec. 422.102(f). For clarity, we remind the
commenter that as discussed in the 2020 Final rule (85 FR 33796), MA
plans may consider social determinants of health as one factor, when
determining eligibility for an SSBCI, to help identify chronically ill
enrollees whose health could be improved or maintained with SSBCI.
However, MA plans may not use social determinants of health as the sole
basis for determining eligibility for SSBCI.
Comment: Some commenters requested that CMS clarify how we intend
to enforce the requirements in section III. E of this rule, including
the new requirements related to coverage criteria at Sec.
422.101(b)(2) and Sec. 422.101(b)(6) and medical necessity
determinations at Sec. 422.101(c). One commenter suggested CMS audit
inpatient admissions to ensure the rules are followed.
Response: We thank commenters for their comments. As stated in the
proposed rule, CMS currently monitors MA organization compliance with
this existing policy through account management activities, complaint
tracking and reporting, and auditing activities. These oversight
operations are designed to alert CMS to any issues with access to care,
and CMS may require MA organizations to address these matters if they
arise. CMS intends to continue these oversight operations to ensure MA
organizations' compliance with the provisions in this final rule.
Furthermore, as previously discussed, under Sec. 422.504, MA
organizations must provide information and access to CMS (and HHS and
the OIG) as it conducts its oversight of MA plans and their compliance
with MA program requirements. CMS may, therefore, review all aspects of
the plan's decision-making as necessary to ensure compliance with
program rules.
Comment: We received some comments requesting that CMS delay the
implementation date of the utilizations management related provisions
in this rule, including the medical necessity proposals at Sec.
422.101(b) and (c). One commenter stated that they were concerned that
plans would have a limited time to review, assess, and implement
changes needed to comply with these rules. Another commenter stated
that compliance with these changes would require contracting, staffing,
and resource infrastructure changes. Some commenters stated that
providing a publicly accessible summary of evidence (considered during
the development of the criteria) would require significant
administrative effort in particular. Some commenters stated that the
implementation date should be delayed because utilization management
provisions finalized in this rule, would require significant
administrative effort to implement.
Response: We thank commenters for expressing their concerns.. We
believe MA organizations already have robust processes and systems in
place for making medical necessity determinations, as these decisions
are inherent in and fundamental to any care coordination plan. We
acknowledge that compliance with Sec. 422.101(b) and (c) will require
changes to existing plan processes and create burden for MA
organizations. We believe that many MA organizations are already
following Traditional Medicare coverage guidelines, while others may be
making greater use of other clinical decision-making tools that fall
outside Traditional Medicare. As such, we are not able to fully
quantify the burden of these changes. Nevertheless, we believe it is
important to codify clearer rules regarding how Part A and B benefits
must be covered and furnished in the MA program as soon as possible in
order to ensure that all MA enrollees receive the basic benefits
coverage to which they are entitled.
We solicited comment on the burden associated with our proposals.
As discussed, we stated that we were unable to quantify or predict how
many MA organizations are currently operating in a manner that would
conform with our proposed changes to Sec. 422.101(b) and (c). We
solicited comment from stakeholders on the full scope of this burden.
As previously discussed, some commenters stated that the utilization
management provisions and coverage criteria requirements in this rule
would require significant administrative effort. For example, some
commenters stated that providing a publicly accessible summary of
evidence would require significant administrative effort. Some
commenters asserted that the rules presented here would require changes
to contracts, staff, resource infrastructure, and other plan related
systems and processes. One commenter stated that CMS did not adequately
account for the effort associated with meeting these requirements.
However, we did not receive comments on our cost and burden analyses.
The stakeholder comments of increased administrative burden are
consistent with our statement in the proposed rule that due to its
complexity and many unknowns, we cannot quantify the burden.
After careful consideration of all comments received, and for the
reasons set forth in the final rule and in our responses to the related
comments in sections III.E.2 of this final rule, we are finalizing the
substance of our proposals for Sec. 422.101(b) and (c) with
modifications as follows:
We are finalizing amendments to Sec. 422.101(b)(2),
largely as proposed but with modifications to clarify the scope of the
requirement and to correct the citation to 42 CFR 412.622(a)(3) and to
explicitly state the applicability of the inpatient only list.
We are finalizing the regulatory language at Sec.
422.101(b)(6) largely as proposed, but with modifications to state when
coverage criteria are not fully established, to clarify that the
obligation to make information publicly accessible applies to the
internal criteria in use, to enhance transparency requirements related
to use of internal coverage criteria. Based on the scope of these
modifications and clarifications, we have slightly reorganized
paragraph (b)(6) to add a new paragraph (b)(6)(i) to address when
Medicare coverage criteria are not fully established and a new
paragraph (b)(6)(ii) to address the procedural and transparency
requirements that apply when an MA
[[Page 22200]]
organization adopts internal coverage criteria for basic benefits.
We are finalizing the modifications at 422.101(c) as
proposed; and
We are finalizing the re-designation of Exception for
qualifying hospital stay paragraph from 422.101(c)(1) to 422.101(c)(2)
as proposed.
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. Therefore, we proposed to codify this at new Sec. 422.138(a).
Specifically, we proposed 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 explained that, for
purposes of this proposal, we used 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 also proposed 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.
The standard ``clinically appropriate'' used for supplemental
benefits 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. Special
Supplemental Benefits for the Chronically Ill (SSBCI) may be non-
primarily health related so a standard based on medical necessity may
not always be appropriate. 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 CY 2020 Final
Rule (85 FR 33796).
To illustrate how these proposed prior authorization policies would
work, we discussed an example regarding coverage of acupuncture.
Traditional Medicare currently has an NCD for Acupuncture for Chronic
Lower Back Pain (cLBP).\105\ 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 confirm the
appropriate use of clinical standards in order to verify that
Traditional Medicare coverage criteria are met, thus ensuring
appropriate care, which is acceptable. 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 proposed to codify at Sec. 422.138(c) to ensure the reliability of
an MA organization's pre-service medical necessity determination.
Therefore, we did not believe there was any additional impact on MA
organizations caused by the proposal to codify this at proposed Sec.
422.138(c) and we solicited stakeholder input on the reasonableness of
this assumption. We also solicited comment whether combining all of our
proposals on prior authorization (here and in section III.E.4 of this
proposed rule discussing proposed changes to Sec. 422.112(b)(8)) in
proposed new Sec. 422.138 would make applying and understanding these
requirements clearer for the public and MA organizations.
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\105\ https://cms.gov/medicare-coverage-database/view/ncd.aspx?NCDId=373.
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Finally, we also reminded 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 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 processes to be part of the plan benefit design, and
therefore such processes cannot be used to discriminate or direct
enrollees away from certain types of services.
We explained that a complete estimation of impact from proposed
Sec. 422.138(a) and (b) cannot be given because we would need detailed
knowledge of proprietary plan information on the frequency and specific
services for which prior authorization is done in each plan. (As noted
in a prior paragraph, proposed Sec. 422.138(c) would only codify
existing guidance to MA organizations.) We solicited comment from
stakeholders on the impact and any additional information that would
assist CMS in making an estimation. Some commenters stated that
publicly posting a summary of evidence considered during the
development of the criteria would require significant administrative
effort. However, we did not receive specific comments on our estimates.
The stakeholder comments of increased administrative burden are
consistent with our statements in the proposed
[[Page 22201]]
rule, that due to its complexity and many unknowns we cannot quantify
the burden. We thank commenters for helping inform CMS's policy on the
appropriate use of prior authorization and the requirements proposed at
Sec. 422.138. We summarize the comments and our responses follow.
Comment: Some commenters asserted that this proposed rule goes
against sections 1852(c)(1)(G) and (c)(2)(B) of the Act, and the MA
regulations at Sec. 422.4(a)(1)(ii) which reference a MA plan's
application of utilization management tools, like prior authorization
and other ``procedures used by the organization to control utilization
of services and expenditures.'' Other commenters expressed concern that
limiting prior authorization will lead to redundant, unnecessary, and
inappropriate care.
Response: In the proposed rule, we acknowledged that utilization
management tools, including prior authorization, are expressly
referenced at section 1852(c)(1)(G) and (c)(2)(B) of the Act, as part
of the disclosure obligations of MA organizations. We also stated that
section 1852(g)(1)(A) of the Act states that MA organizations 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. We proposed at Sec. 422.138(a)
that coordinated care plans may use prior authorization processes for
basic benefits and supplemental benefits, 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. Thus, under our proposal and as
finalized here, coordinated care plans are still permitted to use prior
authorization as a utilization management tool. However, the use of
prior authorization is subject to a number of new limitations, which we
proposed to ensure that MA enrollees receive the Part A and Part B
benefits to which they are entitled.
We proposed, and are finalizing, at Sec. 422.138(b)(1) through (3)
that coordinated care plans may use 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. With regards to
supplemental benefits at Sec. 422.138(b)(3), we state that MA
organizations may use prior authorization to ensure that the furnishing
of supplemental benefits is clinically appropriate. The regulation text
uses the term ``clinically appropriate'' as opposed to ``medically
necessary'' because while supplemental benefits must be medically
necessary based on long standing guidance, certain supplemental
benefits (that is, SSBCI) may be non-primarily health related. Thus, a
standard based on medical necessity may not always be appropriate and
using the term ``clinically appropriate'' is more inclusive of SSBCI
that may or may not be primarily health related. As discussed in
section III.E.2 of this rule, MA plans are still permitted to use
additional coverage criteria when Traditional Medicare coverage
criteria are not fully established to determine medical necessity as
specified at Sec. 422.101(b)(6). This codifies CMS's existing
expectations about the appropriate use of prior authorization and will
provide important beneficiary protections that prior authorization
processes are not used as a barrier to accessing medically necessary
services.
Comment: Several commenters thanked CMS for acknowledging prior
authorization as an acceptable and useful utilization management tool.
Some commenters stated that prior authorization is necessary to manage
care and prevent overutilization. Many of these commenters supported
CMS codifying that prior authorization policies and procedures for
coordinated care plans may only be used to confirm the presence of
diagnoses or other medical criteria that are the basis for coverage
determinations for the specific item or service, and for basic
benefits, to ensure an item or service is medically necessary based on
standards specified in Sec. 422.101(c)(1). Other commenters suggested
that CMS do more to limit the use of prior authorization, in general.
For example, some commenters suggested CMS prohibit prior authorization
for certain covered services. One commenter suggested CMS require MA
plans to exempt providers participating in value-based models from
prior authorization requirements. Another commenter requested that CMS
require plans to post prior authorization criteria. Others suggested
CMS implement greater oversight over prior authorization policies by
requiring plans to submit their policies for CMS to review.
Response: We thank commenters for their comments and suggestions.
As previously stated, CMS believes that prior authorization is an
acceptable utilization management tool and authorized under the
Medicare Advantage statutory provisions at section 1852(c) and
(g)(1)(A) of the Act. However, we also believe that appropriate
limitations on the use of these policies is necessary, so we are
relying on our authority under section 1856(b) and 1857(e)(1) of the
Act to adopt regulatory limitations designed to protect beneficiaries
and ensure their access to medically necessary (or clinically
appropriate in the case of certain supplemental benefits) covered
benefits. Section 1852(a) of the Act requires MA plans to cover basic
benefits and authorizes coverage of supplemental benefits. Ensuring
access to covered benefits is one of CMS's policy goals for the MA
program and regulating use of prior authorization to ensure that
inappropriate barriers to services are not being established supports
that policy goal.
As to suggestions that CMS do more to prohibit the use of prior
authorization, we do not believe that we have authority for a sweeping
prohibition on all use of prior authorization. As to prior
authorization requirements for specific services, we did not propose
such broad limitations and believe that appropriate investigation and
study of such a policy is warranted before it could be adopted. Our
proposals at Sec. 422.138, which we are finalizing, address when and
how MA plans may use prior authorization generally, except where
prohibited by other rules (for example Sec. 422.113). As previously
discussed, the proposals at Sec. 422.138(b)(1) through (3) were made
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. We are also finalizing, at Sec.
422.112(b)(8), that minimum continuity and coordination of care
requirements for coordinated care plans include that approval of a
prior authorization request for a course of treatment must be valid for
as long as medically necessary to avoid disruptions in care, and that
prior authorization be prohibited for a minimum 90-day transition
period for any active course(s) of treatment when an enrollee has
enrolled in an MA plan after starting a course of treatment.
In response to the suggestion that CMS require MA plans to exempt
providers participating in value-based
[[Page 22202]]
models from prior authorization requirements, we note that MA plans
determine through negotiations with providers, the terms by which
contracted health care providers are paid, and section
1854(a)(6)(B)(iii) of the Act and CMS regulations at Sec.
422.256(a)(2)(ii) prohibit CMS from requiring an organization to
contract with a particular health care provider or to use a particular
price structure for payment under such a contract. MA organizations
have the flexibility to, but are not required to, incorporate value-
based payment into their payment arrangements with providers, including
the terms on which payments are made (for example, whether payment is
available if prior authorization procedures have not been met). We
consider participation in such payment arrangements to be a contractual
matter between organizations and their contracted providers. Given
these limitations, we do not believe CMS has the authority to adopt
requirements for these contractual arrangements related to payment
between MA organizations and contracted providers.
As to the comment requesting that CMS require MA plans to make
prior authorization criteria publicly available, we do not believe
adopting that requirement in this rule is necessary. Currently, Sec.
422.111(b)(7) requires MA plans to disclose to enrollees any prior
authorization rules and other review requirements that must be met in
order to ensure payment for the services. In addition, Sec.
422.202(b)(2) requires MA plans that use a network of providers to
communicate practice guidelines and utilization management guidelines
to providers and, as appropriate, to enrollees. Finally, the proposed
rule ``Medicare and Medicaid Programs; Patient Protection and
Affordable Care Act; Advancing Interoperability and Improving Prior
Authorization Processes for Medicare Advantage Organizations, Medicaid
Managed Care Plans, State Medicaid Agencies, Children's Health
Insurance Program (CHIP) Agencies and CHIP Managed Care Entities,
Issuers of Qualified Health Plans on the Federally Facilitated
Exchanges, Merit-Based Incentive Payment System (MIPS) Eligible
Clinicians, and Eligible Hospitals and Critical Access Hospitals in the
Medicare Promoting Interoperability Program'' (``Interoperability
proposed rule''), which appeared in the Federal Register on December
13, 2022, includes proposals to revise the timelines on which MA
organizations make prior authorization decisions, to require use of an
application programming interface to identify the covered items and
services for which prior authorization is required and related
documentation requirements, and for MA organizations to report certain
metrics regarding use of prior authorization.\106\ Given that proposed
rule is pending and the scope of current requirements for MA
organizations, we will continue to monitor this area to determine if
additional requirements are necessary.
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\106\ The scope of that proposed rule is broader than summarized
here.
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Comment: Some commenters made recommendations regarding PA
policies. Many of these commenters suggested CMS require MA plans to
implement a number of PA standardizations including timelines, format,
and content. Other commenters stated that CMS should standardize prior
authorization requirements across all CMS programs. Some commenters
requested that CMS establish standards for prior authorization requests
in regards to both format and contents. Comments also suggested CMS
establish standards regarding timelines for payers to response to
requests. Some commenters requested CMS require MA plans to publicly
post prior authorization denial rates. Another commenter requested that
CMS clarify whether prior authorization policies or procedures that
dictate specific definitions of medical diagnoses is considered more
restrictive than Traditional Medicare.
Response: We thank commenters for their suggestions. Existing
regulations governing organization determinations, which include pre-
service requests and prior authorization requests, address many of the
issues raised by these commenters. Under the rules at Sec.
422.572(a)(1) related to an expedited organization determination
request for a medical item or service (which could include an item or
service subject to prior authorization), the MA organization must make
its determination and notify the enrollee (and the physician involved,
as appropriate) of its decision, whether adverse or favorable, as
expeditiously as the enrollee's health condition requires, but no later
than 72 hours after receiving the request. For a standard organization
determination request for a medical item or service (again, which could
include an item or service subject to prior authorization), the rules
at Sec. 422.568(b)(1) require the MA organization to notify the
enrollee of its determination as expeditiously as the enrollee's health
condition requires, but no later than 14 calendar days after the date
the organization receives the request for a standard organization
determination. Under certain limited circumstances, an MA organization
may extend these adjudication timeframes. Existing regulations also
specify that when an MA organization denies an organization
determination request for an item or service, the denial notice must
use approved notice language in a readable and understandable form;
state the specific reasons for the denial; inform the enrollee of his
or her right to a reconsideration; describe both the standard and
expedited reconsideration processes, including the enrollee's right to,
and conditions for, obtaining an expedited reconsideration and the rest
of the appeal process; and comply with any other notice requirements
specified by CMS. See Sec. Sec. 422.568(e) and 422.2267(e)(14) and
(e)(16). We did not propose to change the timing requirements for
organization determinations.
In addition to these existing requirements that apply to
organization determinations that involve PA, CMS recently released the
Interoperability proposed rule,, which includes proposals to expand
access to health information and streamline certain procedures used for
prior authorization. The Interoperability proposed rule includes
proposals requiring implementation of a HL7[supreg] Fast Healthcare
Interoperability Resources[supreg] (FHIR[supreg]) standard Application
Programming Interface (API) for electronic access to certain
information about pending and approved prior authorization requests,
including the reason for a denial of a prior authorization request. In
addition, there are proposals to require MA organizations to send
decisions within 72 hours for expedited (that is, urgent) requests and
seven calendar days for standard (that is, non-urgent) requests, and
publicly report certain prior authorization metrics. We believe the
proposals in the Interoperability proposed rule, if finalized, may
address these commenters' recommendations. As we continue to monitor
the needs of the program, we will consider these comments for future
rulemaking. Finally, in response to whether prior authorization
policies or procedures that dictate specific definitions of medical
diagnoses is considered more restrictive than Traditional Medicare, we
consider coverage policies that dictate specific definitions of medical
diagnoses to be additional coverage criteria that are only authorized
in accordance with Sec. 422.101(b)(6) as finalized in this rule. We do
not
[[Page 22203]]
consider internal coverage criteria authorized under Sec.
422.101(b)(6) to be more restrictive than Traditional Medicare when the
requirements of that regulation are met. We believe that permitting the
use of publicly accessible internal coverage criteria in these limited
circumstances and contexts is necessary to promote transparent, and
evidence-based clinical decisions by MA plans that are consistent with
Traditional Medicare. Additionally, we are finalizing requirements at
Sec. 422.137 that require MA plans' UM committees to review all
utilization management procedures used by the MA plan. Under these
requirements, UM committees are required to ensure compliance with a
number of MA rules, including approving only utilization management
policies and procedures that use or impose coverage criteria that
comply with the requirements and coverage standards at Sec. 422.101(b)
and medical necessity criteria at Sec. 422.101(c)(1).
Comment: Some commenters recommended that CMS clarify how we intend
to enforce these new utilization management rules and the prior
authorization requirements at new section Sec. 422.138. One commenter
suggested CMS establish third party reviews of prior authorization
denials. Another commenter suggested that CMS develop a process for
providers to report when MA organizations are not following these
rules.
Response: We thank commenters. 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 plans to address these matters
if they arise. CMS intends to continue these oversight operations to
ensure MA organizations' compliance with the final rule.
Comment: Some commenters requested that CMS revise the proposed
good cause language at 422.138(c), stating that the proposed language
is too broad and may be interpreted too broadly by plans. Some
commenters suggested that CMS should not continue to allow coverage
decisions to be reopened under the provisions at Sec. 422.616. Another
commenter suggested we revise Sec. 422.138(c) to state that ``. . .
unless the MAO has evidence of good cause or fraud or similar fault''
to prevent plans from abusing their authority here.
Response: We thank commenters for their comments and suggestions.
Under the reopening rules at Sec. 422.616(a), an organization
determination made by an MA organization is one of the types of
decisions that may be reopened and revised by the MA organization under
the rules in 42 CFR part 405, subpart I. The application of the
reopening rules at Sec. 405.980(b) permit an MA organization to, among
other reasons, reopen an organization determination within 1 year from
the date of the initial determination for any reason; in addition,
reopenings are permitted within 4 years for good cause; at any time to
where there is reliable evidence that the initial determination was
procured by fraud or similar fault; and for other specified reasons.
However, under the new provision we proposed at Sec. 422.138(c), if an
MA organization approved the furnishing of a covered item or service
through a prior authorization or pre-service determination of coverage
or payment, it may not deny coverage later on the basis of lack of
medical necessity. We proposed that if the MA organization has the
authority to reopen on the basis of good cause or fraud or similar
fault, it may do so consistent with the rules at Sec. 422.616 which
cross-reference the reopening rules at Sec. 405.980. An MA
organization may reopen an approved organization determination made
through a prior authorization or pre-service determination within 4
years from the date of the organization determination for good cause as
defined in Sec. 405.986 or at any time if there exists reliable
evidence as defined in Sec. 405.902 that the organization
determination was procured by fraud or similar fault as defined in
Sec. 405.902. Under new Sec. 422.138(c), an MA organization is not
permitted to reopen an organization determination on the basis of a
lack of medical necessity for any of the other reasons described in
Sec. 405.980(b) (for example, for any reason within 1 year) if the
approval was made pursuant to a prior authorization or pre-service
organization determination process. In other words, an MA organization
cannot subsequently reopen and revise such a decision on a later
finding of a lack of medical necessity.
We believe that the commenter's suggested revision with respect to
an MA organization having evidence of good cause or fraud or similar
fault is redundant of what is already stated in the proposed regulation
text and therefore, there is no need to revise the proposed regulation
text exactly as suggested. However, for added clarity, we are
finalizing the regulation text with modifications to make clear that
the types of decisions contemplated in Sec. 422.138(c) cannot be
reopened except for good cause (as provided in Sec. 405.986) or if
there is reliable evidence of fraud or similar fault per the reopening
provisions at Sec. 422.616. We further clarify in Sec. 422.138(c)
that the definitions of the terms ``reliable evidence'' and ``similar
fault'' in Sec. 405.902 of this chapter apply to this provision.
Comment: Some commenters supported CMS' decision not to propose an
amendment to Sec. 422.136 and to, therefore, continue the current
rules permitting step therapy for Part B drugs. Some commenters
disagreed with CMS' clarification that we did not authorize step
therapy practices for Part A or Part B (non-drug) items or services as
part of adopting the Part B drug step therapy regulation, and requested
that CMS allow plans to apply step therapy to covered non-drug items
and services. Other commenters expressed disappointment with CMS'
continued allowance of step therapy of Part B drugs and suggested that
the continued allowance of step therapy for Part B drugs contradicts
our proposal that MA plans not impose clinical criteria that are
stricter than original Medicare. Some commenters requested that CMS
more explicitly differentiate and explain the rules around step therapy
for part B drugs and the step therapy for other non-drug Part A and B
services, including DME. One commenter suggested that if CMS keeps step
therapy for Part B drugs, we should require step therapy policies to be
consistent with clinical guidelines and peer-reviewed supporting
evidence, adopt certain Part D oversight policies, and require plans to
disclose all step therapy policies to beneficiaries before enrollment.
This commenter also requested that CMS prohibit plans from requiring an
off-label Part B drug when an on-label drug is available.
Response: We thank commenters for expressing their comments and
concerns. To clarify, the utilization management policies discussed in
this rule do not limit MA organizations' ability to use step therapy
for Part B drugs when it is permitted under Sec. 422.136. Under this
final rule, certain utilization management processes, such as clinical
treatment guidelines that require an item or service (that is not a
Part B drug) to be furnished prior to receiving the requested item or
service, would violate Sec. 422.101(b) and (c), and thus, those
utilization management processes are prohibited unless it is specified
within the applicable NCD or LCD or Medicare statute or regulation when
Traditional Medicare coverage criteria are fully established. When
Traditional Medicare coverage criteria are not fully established under
[[Page 22204]]
Sec. 422.101(b)(6)(i), this final rule permits utilization management
policies as part of an internal coverage policy when the current
evidence in widely used treatment guidelines or clinical literature
expressly supports the use of such utilization management policies and
the MA organization complies with policies at Sec. 422.101(b)(6).
We believe there are a number of differences between step therapy
for Part B drugs and guidelines for non-drug items and services that
require another item or service be furnished prior to receiving the
requested item or service. 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.
Additionally, as discussed in the proposed rule, 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 and potentially other out of pocket costs like premiums or
costs for other benefits for MA enrollees. Reducing drug costs for
beneficiaries remains a top concern of CMS. Additionally, as stated in
the 2019 rule (84 FR 23856), MA plans have been and remain subject to
the MA regulations and must comply with national and applicable local
coverage determinations. Step therapy protocols for part B drugs cannot
be stricter than an NCD or LCD with specified step therapy
requirements. We believe that this interpretation of Sec. 422.136 is
consistent with this rule.
We acknowledge the concerns about the potential for step therapy
programs for Part B drugs to deviate from existing clinical guidelines
and peer-reviewed supporting evidence, but believe that Sec. 422.136
adequately addresses this. Per Sec. 422.136(b)(5), the P&T committee
used by an MA plan to review and approve its Part B step therapy
programs must base clinical decisions on the strength of scientific
evidence and standards of practice, including assessing peer-reviewed
medical literature, pharmacoeconomic studies, outcomes research data,
and other such information as the P&T committee determines appropriate.
Similarly, we believe existing MA regulations adequately address
disclosure of Part B step therapy policies to beneficiaries before
enrollment. Per Sec. 422.136(a)(2), MA organizations must have
policies and procedures to educate and inform providers and enrollees
of any Part B step therapy program used by the MA plan. Per Sec.
422.111(b)(2), MA plans are required to disclose accurate information
about benefits coverage, including applicable conditions and
limitations on benefits coverage. MA plans that apply step therapy to
Part B drugs must disclose that Part B drugs may be subject to step
therapy requirements in the plan's Annual Notice of Change (ANOC) (when
initially adopted or subsequently changed) and Evidence of Coverage
(EOC) documents as part of their obligations under Sec. 422.111 (84 FR
23854). As to the recommendation that CMS prohibit MA plans from
requiring an off-label Part B drug when an on-label is available, we
did not propose this additional limitation to the existing rule at
Sec. 422.136(c). Step therapy for Part B drugs regulations at Sec.
422.136(c), state that an MA plan may include a drug supported only by
an off-label indication in step therapy protocols only if the off-label
indication is supported by widely used treatment guidelines or clinical
literature that CMS considers to represent best practices. This type of
substantive change in the regulation would require additional
rulemaking; we may consider this issue as part of future policy
development but currently believe that the reasons for adopting Sec.
422.136(c) are sufficient (See 84 FR 23855 and 23863). Finally, in
response to this recommendation that we adopt certain Part D oversight
methods and apply them to Part B drug step therapy programs, we did not
propose any changes to Sec. 422.136, thus we cannot finalize any of
these recommendations in this rule. However, we will continue to
monitor step therapy for Part B drug programs in MA and will consider
these recommendations in any future rulemaking on this subject.
Comment: Some commenters expressed concerns about the OIG report.
One commenter stated that the study only looked at 250 denials during a
short time period and thus was not enough to indicate a complete
understanding of the use and impact of prior authorization in Medicare
Advantage. This commenter also asserted that a Kaiser Family Foundation
(KFF) study,\107\ which used CMS data, presented different findings
from the OIG report and thus does not demonstrate a problem with prior
authorization in MA. Another commenter stated that the OIG report
stated that among payment requests that were denied, 18 percent met
Medicare coverage rules and MAO billing rules and that most of the
payment denials in their sample were caused by human and system
processing errors. This commenter asserted that the findings of the
report were based on human error and that as the proposal does not
focus on issues related to human error, it will have a limited impact.
Another commenter stated that the OIG report highlighted a small
percentage of denials and thus CMS proposals based on the report will
have a limited impact.
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\107\ https://www.kff.org/medicare/issue-brief/over-35-million-prior-authorization-requests-were-submitted-to-medicare-advantage-plans-in-2021/.
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Response: We thank commenters for their comments. The OIG report
found that, among the prior authorization requests that MA
organizations denied, 13 percent met Traditional Medicare coverage
rules and that these services likely would have been approved for these
beneficiaries under Traditional Medicare. This is an important finding
and we believe that modification of MA coverage rules is appropriate
and necessary to ensure MA enrollees have access to Part A and B
services as required by the Medicare statute. In response to the
comment that the OIG report was too limited to make any broad
statements about MA, we note that a Health Affairs study \108\ came to
similar conclusions and similarly found that 15 percent of denials were
tied to additional plan coverage criteria. Thus, we do not believe that
the OIG's findings, as detailed in their report, are isolated. With
respect to the differences between the KFF and OIG studies, we note
that different data and methods were used. The KFF study analyzed data
from the CMS 2021 Parts C and D Reporting Requirements Public Use File
(PUF).\109\ These data represent a contract-level reporting of, among
other things, all Part C Organization Determinations and
Reconsiderations for the 2021 coverage year. In other words, these data
are reported at a high level and only account for the number of appeals
for each contract that are at a particular stage in the appeals
process.\110\ As KFF noted in their presentation regarding the data
limitations, ``Medicare Advantage insurers are not required to indicate
the reason a denial was issued in the reporting to CMS, such as whether
the service was not deemed medically necessary, insufficient
documentation was provided, or other requirements for coverage (such as
trying a more basic
[[Page 22205]]
service first) were not met.'' \111\ Thus, the CMS Reporting
Requirements in the PUF do not account for more granular and detailed
data that one would find in the full case record for each
determination, including medical records and a medical necessity review
conducted by a physician. By contrast, the OIG study did include
``reviews by health care coding experts and the clinical reviews by
physicians'' from the case records studied.\112\ Therefore, we believe
the OIG study presents appropriate and sufficient evidence regarding
the reasons for MA coverage denials and how they differ from coverage
policy in Traditional Medicare.
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\108\ https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01054.
\109\ https://www.cms.gov/files/zip/2021-parts-c-and-d-reporting-requirements-puf-not-incl-part-d-mtm-data.zip.
\110\ https://www.cms.gov/files/zip/2021-reporting-requirements-puf-tech-specs.zip.
\111\ https://www.kff.org/medicare/issue-brief/over-35-million-prior-authorization-requests-were-submitted-to-medicare-advantage-plans-in-2021/.
\112\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
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In response to the assertion that the OIG report found that denials
were based on human error, we note that the OIG report stated that
among the payment requests that MAOs denied, 18 percent met Traditional
Medicare coverage rules but that many of the payment denials in their
sample were caused by human error during manual claims-processing
reviews as well as system processing errors. This statement was made in
regards to payment denials, not prior authorization requests. Prior
authorization requests and payment requests are not the same as
described by OIG in the report.\113\ Prior authorization requests are
made to receive authorization for certain services before the MAO will
provide coverage and payment where payment requests are made to receive
reimbursement for services that the providers have already delivered to
beneficiaries.\114\ The OIG report attributed human errors to payment
requests specifically and we do not believe that is a basis to dismiss
the totality of the OIG report findings and the concerns raised about
whether MA plans are furnishing, arranging for, and paying for Part A
and B benefits for their enrollees. Finally, while we believe the OIG
findings are significant, even if only a few MA organizations are using
more restrictive criteria than used in Traditional Medicare, it is
important to codify clearer rules on how coverage of Part A and B
benefits must be covered and furnished in the MA program 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.
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\113\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
\114\ https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
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Comment: We received some comments requesting that CMS delay the
implementation date of all the UM related provisions in this rule,
including the new prior authorization requirements at Sec. 422.138.
These commenters requested that CMS delay the implementation date to
2026 to better align with the requirements in the Interoperability rule
(87 FR 76238).
Response: We thank commenters for their suggestions. We believe
that many coordinated care plans are already using prior authorization
to confirm diagnoses or other medical criteria, to determine medical
necessity of basic benefits, and to ensure the clinical appropriateness
of supplemental benefits as proposed at the new Sec. 422.138(b)(1)
through (3). Therefore, we do not believe that these requirements
present such burden that they should be delayed. In regards to basic
benefits, these requirements state that prior authorization may only be
used to confirm diagnosis or other medical criteria that are the basis
for coverage determinations for the specific item or service and to
ensure that an item or service is medically necessary based on the new
standards specified in Sec. 422.101(c)(1). However, we believe
providing further clarification to coordinated care plans on how Parts
A and B benefits should be covered and furnished, including the
appropriate role or prior authorization, is necessary. We believe it is
important to implement these rules as soon as possible.
After careful consideration of all comments received, and for the
reasons set forth in the final rule and in our responses to the related
comments in sections III.E.3 of this final rule, we are adopting the
new regulation at Sec. 422.138 substantially as proposed with minor
modifications to clarify the text. Specifically, we are including that
prior authorization processes include all policies and procedures used
in prior authorization unless otherwise noted.
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 feedback 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
Traditional Medicare (that is, Part A and Part B) benefits that MA
plans must cover. We proposed to add a new paragraph (b)(8)(i) and (ii)
at Sec. 422.112 to establish 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 proposed at Sec.
422.112(8)(i) that MA coordinated care plans must have, as part of
their arrangements with contracted providers, policies that when
enrollees are undergoing an active course of treatment, approved prior
authorizations must be valid for the duration of the entire approved
course of treatment or service. Under our proposal, 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
[[Page 22206]]
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. We
also explained that 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 solicited 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 proposed to 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 and clarified that a
course of treatment may, but is not required to be part of a treatment
plan. We also proposed 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 proposed 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. We explained that 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.
We explained that under our proposal, during the initial 90 days of
an enrollee's enrollment with an MA coordinated care plan, the MA
coordinated care plan would not be permitted to 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
explained how we expect any active course of treatment to be documented
in the enrollee's medical records so that the enrollee, provider, and
an MA plan can track an active course of treatment to avoid disputes
over the scope of this proposed new requirement. We also explained that
we intended that an active course of treatment covered by the proposal
could include scheduled procedures regardless of whether there are
specific visits or activities leading up to the procedure. We explained
that under the proposal, 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 1st, the new MA coordinated
care plan would be required to cover the procedure without subjecting
the procedure to prior authorization because it is within the 90-day
timeframe. In this example, the planned surgery is a part of an active
course of treatment and thus would not be subjected to prior
authorization by the MA coordinated care plan in which the beneficiary
has newly enrolled under the proposed new Sec. 422.112(b)(8)(B). 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
proposed 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 solicited public
comment on alternative timeframes for transition periods of ongoing
treatment, including the clinical and economic justification for
alternative proposals.
We outlined in the proposed rule CMS's authority to adopt the
proposed new requirements for MA coordinated care plans. In addition,
we noted and briefly explained how CMS implemented a similar policy
regarding coverage during a transition period using CMS's authority to
negotiate bids and with a similar explanation in the 2005 final rule
(70 FR 4193); CMS has similar negotiation authority in the MA program.
As explained in the December 2022 proposed rule, we believe it is
appropriate to incorporate a similar beneficiary protection and
coverage requirement in the MA program to address the transition for
new enrollees.
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 eliminate or waive prior authorization for
enrollees undergoing an active course of treatment. However, prior to
our proposed rule, CMS received anecdotal feedback from stakeholders
that care transitions can be difficult for enrollees due to MA plan
processes that require new coverage decisions when an enrollee
transitions from one MA plan to another. We are not aware of the extent
to which current MA plans are already ensuring continuity of care in
the way our proposals would require, nor do we have a strong basis upon
which to quantify how often this type of transition occurs. Therefore,
we solicited 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.
In summary, CMS proposed to add new continuity of care requirements
to Sec. 422.112(b)(8), to require that approval of a prior
authorization be valid for the entire duration of the approved course
of treatment, and that plans provide a minimum 90-day transition period
when an enrollee who is currently undergoing an active course of
treatment switches to a new MA plan. We thank commenters for their
input on CMS's proposed new MA continuity of care requirements.
We received the following comments on this proposal, and our
response follows:
Comment: A majority of commenters expressed support for the
proposal to require that any plan approval of a prior authorization
request from a provider on behalf of an enrollee, or from an enrollee
directly, for a course of treatment be valid for the entire duration of
the approved course of treatment. Supporters cited that MA plans often
approve treatments in increments that may not be clinically supported
or medically appropriate, which can be disruptive to care. Other
commenters requested clarification as to whether a plan is required to
approve the exact course of treatment included in the original coverage
request, or whether an MA plan may approve a course of treatment that
differs from what was ordered or prescribed by the provider. Several
commenters requested that CMS give deference to providers
[[Page 22207]]
when establishing a course of treatment. Several other commenters
expressed concern that requiring a prior authorization be valid for an
entire duration of the approved course of treatment is overly broad,
and could lead to the continuation of treatments that are no longer
medically necessary. Several commenters stated that the requirement
conflicts with MA plans' obligations to ensure access to medically
necessary care, and impedes MA plans' ability to manage care through
strategies that ensure quality and control unnecessary cost. Some
commenters suggested that there are situations where a prior
authorization and plan of care should be revisited, and the course of
treatment be revised, if the patient is not responding as expected.
Some commenters suggested that CMS allow limitations on the duration of
approvals to ensure there are opportunities to reassess medical
necessity at reasonable intervals.
One commenter suggested that CMS modify the proposal to allow
limits on the duration of the prior authorization that are consistent
with guideline-suggested reassessment of disease, in cases where
treatments may be indefinite (for example, in cases of chronic
illnesses). Another commenter suggested that the definition of ``active
course of treatment'' should be aligned with industry standards,
specifically: (1) a course of treatment for a serious and complex
condition, which includes a condition that is serious enough to require
specialized medical treatment to avoid the reasonable possibility of
death or permanent harm, or a condition that is life threatening,
potentially disabling, degenerative, or congenital, and requires
specialized medical care over a prolonged period of time; (2) course of
institutional or inpatient care; (3) scheduled nonelective surgery,
including related postoperative care; (4) a course of treatment for a
pregnancy; and (5) treatment for a terminal illness. Several commenters
requested clarification as to whether there are a minimum number of
days that constitute a ``course of treatment.'' Another commenter
requested that CMS explicitly define ``course of treatment'' in
reference to Traditional Medicare coverage and benefits benchmarks (for
example, the mean Length of Stay for a given Medicare Severity
Diagnosis Related Group). Finally, one commenter requested additional
examples of what is and is not permissible to ensure treatments that
are not medically necessary under Traditional Medicare guidelines are
not required to be covered under this policy.
Response: CMS would like to thank all commenters for providing
feedback on the proposed regulation. We understand the concerns that
the proposal could result in the continuation of medically unnecessary
care, which in turn could result in waste and increased costs. However,
as highlighted in the preamble, over the past several years, we have
received feedback from many stakeholders, including enrollees and
providers, that MA plans often require repetitive prior approvals for
needed services, even when enrollees have a previously-approved course
of treatment, plan of care, or are receiving ongoing treatments for a
chronic condition. The feedback we have received consistently outlines
how this practice delays medically necessary care and can cause gaps in
care delivery that threaten an enrollee's health, sometimes leading to
negative outcomes. For that reason, we believe this proposal is
essential to minimize such delays and disruptions to care for MA
enrollees.
We agree that clarification of the policy being finalized will help
ensure the new regulation is implemented appropriately. Therefore, we
are finalizing the revisions at Sec. 422.112(8)(i)(A) with
modifications from the proposed rule, to require that an approval of a
prior authorization request for a course of treatment must be valid for
as long as medically necessary to avoid disruptions in care, in
accordance with applicable coverage criteria, the patient's medical
history (for example, diagnoses, conditions, functional status), and
the treating provider's recommendation. The determination of medical
necessity to establish the duration of the approved course of treatment
must be made consistent with Sec. 422.101(c); any adverse
determination on medical necessity, such as approval of a duration that
this less than the requested duration for the course of treatment, must
be reviewed in accordance with Sec. 422.566(d) (and Sec. 422.629(k)
for an applicable integrated plan) before an MA plan may issue the
determination. Further, the coverage policies governing these
determinations must also comply with Sec. 422.101(b). This will ensure
that services delivered during the approved and previously authorized
course of treatment remain consistent with Medicare coverage
guidelines, are reasonable and necessary for the individual enrollee,
and do not overly burden the provider with unnecessary and repeated
prior authorization requests.
CMS is not requiring a minimum or maximum number of days for a
course of treatment, since the necessary scope and duration of a course
of treatment can vary widely from enrollee to enrollee and should be
based upon the individual's needs and medical necessity. We believe
flexibility is necessary to accommodate the varying complexities of a
multitude of conditions for which an enrollee may be receiving care,
and recognize that many treatment courses last for varying periods of
time and may require varying amounts of interventions that are unique
to the individual being treated.
In response to comments expressing concern over the potential for
treatment continuing indefinitely or recommending that treatments
should be revisited at certain intervals, we believe that in many cases
additional evaluation of the patient to ensure ongoing medical
necessity and efficacy of treatment at certain intervals will be
required or recommended and supported by the relevant coverage
criteria, or by the patient's medical needs and the treating provider's
recommendation. Under this final rule, all decisions for prior
authorization, including those involving the authorization of treatment
that lasts over a period of time, must be made in accordance with Sec.
422.138. This means that prior authorization may only be used to
confirm the presence of a diagnosis or other medical criteria that are
the basis for coverage or to ensure an item or service is medically
necessary based on standards specified in Sec. 422.101(c)(1). In order
for an approval of a prior authorization request for a course of
treatment to last indefinitely, it would have to be medically necessary
and supported by the applicable coverage criteria, and the patient's
medical condition and provider's recommendation. Therefore, we believe
it would be uncommon that a MA organization would be required to
approve a request for a treatment indefinitely. Additionally, where
prior authorization is used by fee-for-service Medicare, the use of
prior authorization by the MA organization on the same services must
apply the fee-for-service Medicare standards based on Sec.
422.101(b)(2). Further, pursuant to Sec. 422.138(c), if the MA
organization approved the furnishing of a covered item or service
through a prior authorization or pre-service determination of coverage
or payment, it may not deny coverage later on the basis of lack of
medical necessity unless the MA organization has the authority to
reopen the decision for good cause or fraud or similar fault per the
reopening provisions at Sec. 422.616.
[[Page 22208]]
An MA plan may approve and authorize treatment for a different
period of time than the treating provider's ordered course of treatment
if the plan has determined that what was ordered or prescribed by the
treating provider was not medically necessary or appropriate based on
the enrollee's condition or diagnosis. The following example
illustrates how this modification will work in practice:
The patient is a type 1 diabetic. The treating provider orders a
course of treatment that consists of continuous subcutaneous insulin
infusions for a period of 3 months. The treatment is subject to prior
authorization. In order to apply prior authorization, the MA plan must
follow the requirements of Sec. 422.101(b), and apply any applicable
coverage criteria for the service. The applicable NCD \115\ for
infusion pumps requires that ``continued coverage of the insulin pump
would require that the patient be seen and evaluated by the treating
physician at least every 3 months.'' Additionally, the patient's
medical history does not indicate a need for more frequent evaluations.
Here, it would be appropriate, under our proposal, for the MA plan to
issue a prior authorization approval of the service for a period of 3
months because the NCD requires that the patient be evaluated at least
every 3 months, and the treating provider ordered the course of
treatment for 3 months. If the patient's medical history and the
treating provider suggests possible complications in treatment, it may
be appropriate for the MA plan to authorize approval of the service for
a period of less than 3 months.
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\115\ https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?NCDId=223&ncdver=2.
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However, MA plans should not shorten authorization periods that are
outlined in Traditional Medicare coverage criteria. The only instances
where an MA plan may use a shorter (or different) periodicity or
frequency of evaluation or other such review would be if the change
were consistent with the relevant coverage criteria, and supported by
the evidence in the patient's medical record, and by treatment
guidelines or clinical literature that is widely available. This must
be clearly documented and referenced by the MA plan in the prior
authorization decision. Moreover, in all instances, we expect the MA
plan and its contracted provider to coordinate care to ensure that the
prior authorization is approved for a period that ensures that care is
delivered for as long as is medically necessary and that minimizes
disruptions in care for the enrollee. In other words, the MA plan may
not establish blanket rules for the duration of an authorization
associated with course of treatment decisions for purposes of
convenience or simplicity; the duration of a prior authorization must
be valid for as long as medically necessary to avoid disruptions in
care and not in conflict with applicable coverage criteria.
Comment: A few commenters stated that care should not be based
solely on a physician's order, but include other provider types when
appropriate.
Response: As outlined in the preamble and proposed regulatory text,
a course of treatment is a prescribed or ordered course of treatment
for a specific individual with a specific condition that is outlined
and decided upon ahead of time with the patient and the treating
provider. The term ``provider'' is defined in Sec. 422.2 to mean an
individual who is engaged in the delivery of health care services in a
State and is licensed or certified by the State to engage in that
activity in the State and an entity that is engaged in the delivery of
health care services in a State and is licensed or certified to deliver
those services if such licensing or certification is required by State
law or regulation. This definition is not limited to physicians.
Therefore, the definition of course of treatment we proposed and are
finalizing at Sec. 422.112(b)(8)(ii)(A) includes courses of treatment
ordered by non-physician health care providers.
Comment: Several commenters requested clarification regarding
whether and how the continuity of care provisions apply specifically to
Part B drugs, and how the ``entire prescribed or ordered course of
treatment'' would be determined where a drug may be used indefinitely.
One commenter requested clarification that the continuity of care
proposal include all new enrollees who are actively receiving
physician-administered drugs that are covered under Medicare Part B,
not just existing enrollees.
Response: As discussed in the preamble, these provisions apply 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)). This includes relevant Part B drugs.
In order to provide additional guidance and clarity, we are finalizing
Sec. 422.112(b)(8)(i) with changes from the proposal to ensure that
enrollees do not have disruptions in care due to additional prior
authorization requirements; these changes from the proposal are in
response to comments. We are finalizing Sec. 422.112(b)(8)(i)(A) to
require that an approval of a prior authorization request for a course
of treatment be valid for as long as medically necessary to avoid
disruptions in care, in accordance with applicable coverage criteria,
the patient's medical history, and the treating provider's
recommendation. In cases where a drug being used indefinitely is
medically necessary and consistent with the relevant coverage criteria,
the patient's medical history and the provider's recommendation, we
encourage MA coordinated care plans to work with the provider to assess
continued efficacy and medical necessity as is reasonable; this type of
coordination is consistent with how Sec. 422.112(b) requires MA
organizations offering these plans to have arrangements (which meet the
minimum requirements in paraphs (b)(1) through (b)(8)) to ensure
continuity of care and integration of services.
In response to the comments, we clarify that the transition period
required by Sec. 422.112(b)(8)(i)(B), as proposed and finalized,
applies, beginning with coverage January 1, 2024, to all new enrollees
who are undergoing an active course of treatment--including where the
active course of treatment is taking a physician-administered drug
covered under Part B. An 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.
Comment: Several commenters requested that CMS clarify whether a
course of treatment includes inpatient services, skilled nursing
facilities (SNF), home health care (HHC), and other post-acute care.
One commenter suggested that the regulatory text be amended at
422.112(b)(8)(ii)(B) so that continuity of care applies where ``an
active course of treatment includes transfer of a patient to another
inpatient provider.''
Response: We clarify here that an active course of treatment may
include situations when a patient is transferred from an acute
inpatient setting to a SNF, HHC, and care in other post-acute care
settings. However, this new regulation does not change or affect how
section 1853(g) of the Act and Sec. 422.318 assign financial
responsibility for inpatient services from one of the facilities listed
in Sec. 422.318(a) (a ``subsection (d) hospital'' as defined in
section 1886(d)(1)(B) of the Act, a psychiatric hospital described in
section 1886(d)(1)(B)(i) of the Act, a rehabilitation hospital
described in section 1886(d)(1)(B)(ii) of the Act, a distinct part
rehabilitation unit
[[Page 22209]]
described in the matter following clause (v) of section 1886(d)(1)(B)
of the Act, or a long-term care hospital (described in section
1886(d)(1)(B)(iv)) that begin before, and carry over to, the effective
date of enrollment in a new MA plan. Under section 1853(g) and Sec.
422.318, when MA plan coverage begins during an inpatient stay, the
previous MA plan or Traditional Medicare if the enrollee is joining an
MA plan from Traditional Medicare is responsible for payment. CMS
reminds commenters that all other relevant Traditional Medicare
regulations must also be followed, including those regarding inpatient
admissions and terminations.
Comment: One commenter requested that, in addition to ensuring that
prior authorizations remain active for a patient's entire course of
treatment, CMS adopt language to ensure that surgical or other
procedures/services performed incident to a procedure that has received
prior approval may not be denied for failure to obtain prior approval.
Response: We thank the commenter for the suggestion, but decline to
explicitly prohibit an MA plans from denying coverage of a service
provided incident to a course of treatment but not expressly included
in the approved course of treatment, because of a failure to obtain
prior approval. In the case where a service is provided incident to a
procedure, it may be appropriate for the MA plan to conduct a
concurrent or retrospective review to determine medical necessity of
the incidental procedure. Our proposal was about prior authorization,
and we are not adding requirements or limitations on concurrent or
retrospective reviews in the final rule.
Comment: A majority of commenters expressed support for requiring a
90-day transition period when an enrollee is new to an MA plan. Other
commenters expressed concern that this transition period restricts
plans' ability to conduct concurrent reviews, which are necessary for
quality control and to prevent waste, fraud, and abuse. Some commenters
were concerned that the proposal could potentially require an MA plan
to be held responsible for the long-term cost of care provided by an
out-of-network provider, or for a treatment that may not meet the
standards of their internal coverage criteria, where such criteria are
consistent with CMS policies, but utilization management policies may
vary. A few commenters stated that the goal of this proposal is already
achieved through existing plan specific practices where prior
authorization approvals are continued, allowing a provider to
demonstrate to the new MA plan that the prior approval already took
place and was granted by the previous plan. Several commenters
suggested that the transition requirement will put patients at risk of
receiving care that is no longer medically necessary. Other commenters
expressed concern that requiring a blanket transition period on all
services creates a significant burden to MA plans from a technical and
procedural perspective, as well as from a claims adjudication
perspective. Other commenters requested additional guidance regarding
how CMS expects MA plans to implement this requirement. One commenter
requested clarification on whether the continuity of care provisions
proposed in this rule are satisfied by a plan approving continuation of
services or treatment for 90 days to ensure continuity of care if a new
member is receiving care from a non-contracted provider when their
enrollment in the plan becomes effective, while working with the
enrollee to find in-network providers as needed. Finally, a few
commenters expressed concern that the transition period may be used as
a tactic to delay care by either the plan or by providers aiming to
receive a different reimbursement rate--that is, postpone care until
the new plan takes over and is, therefore, responsible for paying for
services.
Response: As outlined in the preamble and proposed regulatory text,
the 90-day transition period only applies to active courses of
treatment when an enrollee has enrolled in the MA plan after starting a
course of treatment. See also our discussion in the proposed rule at 87
FR 79504 through 79505 about active courses of treatment. As proposed
and finalized at Sec. 422.112(b)(8)(ii)(B), an active course of
treatment is one in which a patient is actively seeing the provider and
following the course of treatment. This does not mean that the active
course of treatment must last for the full 90-days, rather this means
that the new plan may not subject an active course of treatment to an
additional prior authorization for a period of 90 days, beginning the
day enrollment in the new plan becomes effective. Because this new
requirement is tied to an active course of treatment that began before
enrollment in the new MA plan, the transition period applies for the
shorter of the 90-day period (though MA plans have the discretion to
extend this period) or the end of the active course of treatment.
For example, if an enrollee is undergoing an active course of
treatment that is 60 days in duration, and the enrollee transfers to a
new MA plan 30 days into that course of treatment, then the MA plan may
not subject that course of treatment to a prior authorization
requirement for the next 30 days. After that time, the course of
treatment is complete and any future treatments may be subject to prior
authorization as appropriate. This does not mean that an MA plan may
not apply prior authorization to any services in the first 90-days of
enrollment, but only that active courses of treatment may not be
subjected to prior authorization within a 90-day timeframe. We expect
that MA plans would use this period to coordinate with the treating
provider, or find (or help the enrollee find) a new provider as needed,
to satisfy any utilization management policies that may apply at the
completion of the 90 days to ensure that there is not a disruption in
treatment for the patient. Further, Sec. 422.112(b)(8)(i)(B), as
proposed and finalized, does not prohibit concurrent or retrospective
review of an active course of treatment. A plan may conduct concurrent
reviews as necessary, as long the review does not interfere with an
active course of treatment. The MA plan cannot deny coverage of such
active courses of treatment on the basis that the active course of
treatment did not receive prior authorization (or was furnished by an
out-of-network provider) but may review the services furnished during
that active course of treatment against permissible coverage criteria
when determining payment.
In response to the comments that the proposal is redundant due to
many MA plans already utilizing internal practices for continuing prior
authorization approvals, or allowing for a continuation of services,
CMS continues to believe that codification and standardization are
necessary. While some plans may have internal processes in place to
allow for a continuation of services, we are not aware that these
practices have been universally adopted and consistently applied by all
plans. If plans are already allowing for these types of transitions,
then existing practices may already comply with what is proposed.
Finally, since the provision only applies to active courses of
treatment, CMS does not foresee the possibility that medically
necessary services could or would be delayed solely for the purpose of
requiring another plan to pay for that service. If treatment is
medically necessary at the time it is ordered, it would be highly
inappropriate for that treatment to be delayed solely for the purposes
of shifting payment responsibility. While, as stated in the preamble,
we have interpreted active
[[Page 22210]]
course of treatment to include scheduled procedures, regardless of
whether there are specific visits or activities leading up to the
procedure, it would seem unrealistic for a plan or a provider to know
in advance that an enrollee is anticipating leaving an MA organization
to join another plan, anticipate the enrollee's departure, and decide
to delay a course of treatment so as to pass those costs onto the new
plan. Such an action would be a violation of our rules to provide all
necessary and appropriate care to enrollees. Further, the new rule
requires that the course of treatment must be active at the time the
patient's enrollment in the new MA plans becomes effective, so the 90-
day transition period would not be implicated if care had not begun at
the time of enrollment.
Comment: Several commenters requested clarification as to whether
after 90 days a plan may apply out-of-network limits, conduct a new
review, and issue a new decision. Some commenters stated that plans
should be required to extend coverage, on a case-by-case basis, for
patients receiving care after the 90-day period expires and should not
impose additional prior authorization requirements (for example. in
cases of life sustaining care). Several commenters requested that CMS
require plans to notify new enrollees about the transition period, and
any changes in benefits.
Response: As outlined in the preamble and the proposed regulation,
the minimum 90-day transition period prohibits an MA plan from
disrupting or requiring reauthorization for an active course of
treatment for new plan enrollees for a period of at least 90 days. The
transition period is intended to provide enrollees with an assurance of
continued care when changing plans, and to minimize disruptions when
moving to a new plan that may have differing benefits. After the
transition period, a plan may reassess medical necessity and apply out-
of-network limits in accordance with plan benefits and other relevant
requirements as appropriate. We clarify that Sec. 422.112(b)(8)(i)(B)
does not mandate that the new MA plan cover the active course of
treatment regardless of other applicable coverage rules (for example,
Sec. 422.101(b) or plan coverage policies for supplemental benefits).
The MA plan cannot deny coverage of such active courses of treatment on
the basis that the active course of treatment did not receive prior
authorization or was furnished by an out-of-network provider, but may
apply permissible coverage criteria.
At this time, CMS is not adding a requirement for notification to
enrollees because pursuant to Sec. 422.111(b)(7), MA organizations are
required to disclose information to enrollees regarding prior
authorization and review rules. This includes the continuity of care
provisions outlined in this proposal. CMS urges plans and their
contracted providers to work with these transitioning enrollees and
their previous treating providers, even if those previous treating
providers are not contracted with the receiving plan, during the
transition period to ensure that care is continued in the least
disruptive manner possible. CMS also notes that the 90-day transition
period is a minimum requirement. Therefore, if an active course of
treatment is approved by the previous treating provider or plan to last
longer than the 90-day minimum, an MA plan that is newly covering the
enrollee may elect to permit the enrollee to finish the course of
treatment, which lasts beyond 90 days, before imposing additional prior
authorization(s). CMS will consider adding an additional notice
requirement during future policymaking.
Comment: One commenter requested CMS require plans to notify
enrollees that they should check whether an enrollee's ongoing
prescriptions would be covered with the same level of cost-sharing
after the initial 90 days of enrollment and, if so, whether any
utilization management protocols will apply to these medications.
Response: As outlined in the previous comment response, CMS is not
requiring any additional notification requirements at this time. If an
on-going Part B prescription is an active course of treatment under the
definition at Sec. 422.112(b)(8), then the MA plan may not subject the
treatment to additional prior authorization for the first 90 days of
enrollment. After the 90-days, prior authorization may be applied in
accordance with the prior authorization provisions in this rule. Cost-
sharing levels will be based on the specific plan, and are not within
the scope of this rule.
Comment: One commenter requested that the 90-day transition period
apply when an enrollee who is currently undergoing treatment switches
to a new MA plan, switches from a traditional Medicare plan to an MA
plan, or is new to Medicare. Another commenter requested clarification
on whether MA plans must provide the proposed transition period for any
ongoing course of treatment that had been covered under a traditional
Medicare coverage policy, regardless of whether there was a prior
authorization requirement for that course of treatment in traditional
Medicare.
Response: As stated in the regulatory text at Sec.
422.112(b)(8)(i)(B), the transition requirement applies to ``. . .
enrollees new to a plan and enrollees new to Medicare . . .'' who are
currently undergoing an active course of treatment. This means the
requirement applies for any active course of treatment when an enrollee
switches to a new MA plan, switches from a traditional Medicare plan to
an MA plan, or is new to Medicare. Further, the plan must provide the
transition period, wherein an active course of treatment may not be
subjected to prior authorization, for all new enrollees who are
undergoing an active course of treatment, regardless of whether the
treatment was subject to a prior authorization by a previous plan. As a
reminder, ``course of treatment'' and ``active course of treatment''
are defined at Sec. 422.112(b)(8)(ii).
Comment: CMS solicited public comment on alternative timeframes for
transition periods of ongoing treatment, including the clinical and
economic justification for alternative proposals. Several commenters
stated that a 30-day policy would provide a more reasonable timeframe
to review a previously approved and ongoing plan of treatment, but
longer periods could be permitted if medically necessary. One commenter
requested that CMS modify the proposal at Sec. 422.112(b)(8)(i)(B) to
require MA plans to provide continued coverage for an active course of
treatment authorized by the member's prior plan for the remainder of
the authorized period or units of service. At least one plan provided
feedback that they already have 90-day continuation of care policy in
place, and other plans indicated they have similar policies for
continuing approvals for ongoing treatments. A few commenters commented
that the Part D transition period and the proposed transition period
are not analogous. Commenters stated that the costs of Part D drugs are
often lower than the costs for medical services, and that differing
clinical opinions can lead to differing courses of treatment based on
the resources available to the MA plan. Some commenters stated that a
90-day timeframe would be both financially and administratively
burdensome to MA plans.
Response: While some commenters indicated that a 90-day timeframe
could be financially and administratively burdensome to some MA plans,
CMS did not receive specific details to demonstrate that the burden to
MA plans outweighs the value of ensuring
[[Page 22211]]
continuity of care for enrollees. Further, we believe that 90 days is
an appropriate amount of time to minimize disruptions in treatment, and
to allow plans and providers to ensure continuity and coordination of
care. As outlined in the proposed rule, we believe a 90-day transition
policy is beneficial because it mirrors Part D transition requirements
and using the same period will ensure consistency across the MA and
Part D programs. We understand that there are differences in the costs
associated with Part D drugs and with certain medical procedures,
however the Part D transition period mandates coverage, whereas Sec.
422.112(b)(8), as previously explained, only prohibits the application
of prior authorization requirements for the pre-existing active course
of treatment.
Regarding the comments that different plans may offer differing
courses of treatment, we do not find this a compelling reason to alter
the transition time frame. Since this requirement only affects active
courses of treatment, altering the course of treatment when the
enrollee enrolls in a new MA plans is precisely the type of disruption
this requirement aims to eliminate.
Comment: One commenter requested that CMS clarify that the 90-day
transition period applies only to basic benefits and not to
supplemental benefits.
Response: As proposed and finalized, the new rules at Sec.
422.112(b)(8)(i) apply to basic benefits only. Per this new regulation,
MA coordinated care plans must have, as part of their arrangements with
contracted providers, policies for using prior authorization for basic
benefits that include the new restrictions on use of prior
authorization for a course of treatment and an active course of
treatment for a new enrollee. An MA organization may elect to extend
this policy to supplemental benefits. We note that MA PFFS plans may
not use prior authorization processes at all and that MA PPO plans may
not use prior authorization processes for out of network services.
Comment: One commenter requested that plans be permitted to conduct
their own prior authorization or utilization management review for
treatments extending beyond the 90-day transition period. The commenter
stated that plans should also be permitted to support an enrollee's
transition to an in-network provider at the end of the transition
period.
Response: The 90-day period prohibits prior authorization on active
courses of treatment, including when the service is furnished by an
out-of-network provider. Once the 90 days has elapsed, the plan is
permitted to impose prior authorization requirements on the service.
After the 90-day transition period is complete (or the course of
treatment has concluded, whichever comes first), the new plan may
direct care through in-network providers and apply prior authorization.
Comment: CMS solicited stakeholder input as to whether some MA
plans are already providing continuity of care consistent with what CMS
proposed at Sec. 422.112(b)(8), as well as any additional information
that may be useful for CMS to quantify the burden associated with this
proposal. Several stakeholders indicated that some MA plans provide
some similar level of continuity care today. Commenters did not provide
additional information regarding quantifying the burden associated with
implementing the proposal.
Response: CMS thanks the commenters for their feedback.
Comment: Several commenters requested additional time to implement
the requirements related to continuity of care, citing that
operationalizing these new requirements will involve significant
information technology and administrative resources. Commenters
requested that the implementation date be moved to 2025 at the
earliest. Other commenters suggested an effective date of 2026 would
align with CMS' proposed 2026 effective date for its Advancing
Interoperability and Improving Prior Authorization proposed rule that
also impacts MA plans.
Response: CMS appreciates the intricacies involved with
implementing new regulatory requirements. However, since several MA
plans indicated they already have existing policies in place that are
similar to what CMS proposed at Sec. 422.112(b)(8), and we continue to
receive feedback from stakeholders that medically necessary care is
being disrupted by unnecessary prior authorization, we believe that it
is important to implement this requirement as soon as possible. The new
requirements at Sec. 422.112(b)(8) are applicable beginning on and
after January 1, 2024, for MA coordinated care plans.
After careful consideration of all comments received, and for the
reasons set forth in the proposed rule and in our responses to the
related comments, we are finalizing Sec. 422.112(b)(8) largely as
proposed but with modifications. We are finalizing Sec.
422.112(b)(8)(i)(A) with revisions to require approval of a prior
authorization request for a course of treatment be valid for as long as
medically necessary to avoid disruptions in care, in accordance with
the applicable coverage criteria, the individual patient's medical
history, and the treating provider's recommendation.
5. Mandate Annual Review of Utilization Management (UM) Policies by UM
Committee (Sec. 422.137)
We proposed 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 to carry out the MA provisions.
In light of the feedback we received and our concern that enrollees may
be facing unreasonable barriers to needed care, we proposed to require
MA organizations to establish a Utilization Management (UM) committee
to operate similar to a Pharmacy and Therapeutics, or P&T, committee.
We proposed 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 proposed that an MA organization that uses
UM policies, such as prior authorization, must establish an 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
also proposed, 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 final rule
beginning with the contract year after the finalization of this
proposed rule. We explained that we anticipate that there will be
sufficient time between our issuance of a final rule and January 1,
[[Page 22212]]
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 proposed the committee responsibilities at Sec. 422.137(d). The
responsibilities would include that the UM committee, at least
annually, review the policies and procedures for all utilization
management, including prior authorization, used by the MA plan. We
proposed 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 proposed 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 proposed to modify Sec.
422.202(b)(1)(i) to align it with our standard for creating internal
coverage criteria. We therefore proposed 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 field
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 final rule.
We solicited 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 that the MA organization, as required by Sec.
422.202(b)(2), 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 proposed 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. We explained that 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 and CMS expects MA
organizations to update their UM policies after the UM committee
approves or revises them.
As this final rule as a whole makes clear, ensuring that enrollees
have access to and are furnished covered benefits is a priority. We
solicited comment on whether to require the UM Committee to review all
internal coverage criteria used by the MA plan. We also solicited
comment on the extent to which the proposed regulation text
sufficiently and clearly establishes the standards and requirements
discussed here.
b. Utilization Management Committee Membership
At Sec. 422.137(c)(1) through (4), we proposed 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 of 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 solicited 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 from conflicts of interest, or representation by
an enrollee representative. We also solicited 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 of, or medical need for that
specific item or service.
c. Documentation of Determination Process
We proposed 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 proposed
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. We explained
that 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
As discussed in our proposal, we believe it is appropriate that the
establishment of an MA plan UM committee, with certain exceptions,
largely mirror the requirements in Sec. 422.136 that MA organizations
have a
[[Page 22213]]
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. We explained
that this proposal was 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.
In the proposed rule, we stated that 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. We solicited 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 solicited 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.
In summary, CMS proposed to require at Sec. 422.137 that all MA
organizations that use utilization management policies, such as prior
authorization, must establish an UM committee that is led by an MA
plan's medical director. Further, we proposed than 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. We thank all commenters for
their input on CMS's proposed new requirements. We received the
following comments on this proposal, and our response follows:
Comment: CMS solicited comment on whether MA organizations should
be permitted to use one committee to serve multiple plans. Many
commenters expressed support for making this allowance. Some commenters
recommended that plans maintain the flexibility to define the structure
and appropriate additional responsibilities of the UM committee. One
commenter requested clarification as to the number of UM committees
required, and whether committees are required per plan or per MA
organization. One commenter stated that if an MA organization is
permitted to use one committee for multiple MA plans, then the final
rule should contain specific requirements related to UM committee
membership composition and input from external stakeholders.
Response: CMS appreciates the comments and input regarding this
issue. We will allow MA organizations the discretion regarding whether
the UM committee is best served at the organization or plan level, and
we will not prescribe whether UM committees must be formed at the plan
or organization level. This flexibility does not, however, extend to
the parent organization of the MA organization (that is, an UM
committee cannot serve multiple MAOs). Regardless of whether the MA
organization decides to organize its UM committee at the plan or
organization level, the MA organization must ensure that the
committee's review functions cover the needs of all plans under its
organization. If at any time it appears that MA organizations are not
fulfilling regulatory requirements regarding the UM committee, then we
may engage in further rulemaking regarding whether the UM committee
must operate at the organization or the plan level.
As proposed, Sec. 422.137(a) requires the UM committee to be led
by a plan's medical director. In light of our decision to interpret and
implement Sec. 422.137 by permitting one UM committee to serve
multiple MA plans offered by the same MA organization, one plan's
medical director may fulfill this role for the MA organization.
Comment: A majority of comments were supportive of requiring MA
organizations to establish UM committees. Several commenters pointed
out that some accrediting bodies require MA plans to maintain active
committees that serve a similar function to the proposed UM committee,
and that many plans are already accredited and therefore already have
such standing committees. For that reason, some commenters suggested
that CMS permit plans to adopt existing committees to fulfil the
regulatory requirements of the UM committee. Some commenters also
requested that CMS require MA plans to be accredited. One commenter
questioned if it would it be permissible to incorporate an UM committee
with a credential committee, since both are provider specific and
include applicable attendees. CMS also solicited comment on whether
plans should be permitted to use existing P&T Committee to serve as the
UM committee. Commenters were generally supportive, but requested that
MA plans retain discretion when deciding whether and how to adapt
committees to serve multiple functions.
Response: CMS thanks all commenters for providing input regarding
the proposed regulations. We appreciate that many plans already have
existing committees that are similar in composition and function to the
proposed UM committee, including committees required by various
accrediting bodies. While we do not believe requiring MA plans to be
accredited is necessary or within the scope of this rule, we do believe
it is appropriate to permit MA organizations to leverage existing
committees to satisfy the new regulatory requirement. Therefore, MA
organizations may adapt or alter existing committees, including
committees required by accrediting bodies and existing P&T committees,
to conform with the regulatory requirements of Sec. 422.137. We
emphasize, however, that this flexibility does not change or lessen the
composition requirements or duties of the UM committee; all of the
requirements in Sec. 422.137 finalized in this rule must be met for
the UM committee and if the MA organization is also using that
committee to satisfy the requirements of Sec. Sec. 422.136 and 423.120
for a P&T committee, those requirements must be met as well.
Comment: A few commenters requested that CMS delay the effective
date to at least January 1, 2025, citing the administrative burden
associated with forming and operationalizing a committee, as well as
the requirement to review all UM policies and procedures. One commenter
expressed concern that the requirement to review all policies by
January 1, 2024, will result in ``good'' policies being discarded and
cause confusion among providers and enrollees. The commenter suggested
[[Page 22214]]
that policies should remain active during the review period and be
reviewed in accordance with the transparent processes. Some commenters
requested CMS delay the implementation date to 2026 to better align
with the requirements in the Interoperability rule (87 FR 76238).
Response: CMS declines these suggestions. We are finalizing the
proposal that beginning on and after January 1, 2024, MA plans may not
use any policies that have not been reviewed or approved by the UM
committee established for the plan. Any policy that has not been
reviewed or approved by the deadline may not be used by the MA plan
until it has been reviewed (and revised as necessary) and approved by
the UM committee. Because plans are permitted to leverage existing
committees, and some plans indicated they already had committees in
place serving a similar function to what was proposed (for example,
when required by an, accrediting organization and P&T committees
established to review utilization management associated with covered
drugs), we believe there is sufficient time for MA organizations and MA
plans to form UM committees and review UM policies within the proposed
timeframe. Further, Sec. 422.111(d) permits MA plans to change plan
rules (including prior authorization and utilization management
policies) during the plan year. To make mid-year changes, MA plans must
provide a minimum 30-day notice to enrollees, submit the notice to CMS
for review, and comply with the model notice specified at Sec.
422.2267(e)(9). This means that if an MA plan's UM committee reviews
policies and approves them on a rolling basis, the reviewed and
approved policies can be issued during the plan year even if all the
reviews are not complete before January 1, 2024.
Comment: CMS solicited comment regarding whether to require UM
committees to ensure that the UM policies and procedures are developed
in consultation with contracted providers. Numerous commenters
supported this requirement. One commenter requested that if UM policies
are required to be developed in consultation with contracted providers,
the regulation also include a provision that acknowledges MA
organizations may not receive responses from providers, therefore an
attempt to engage will meet the requirement.
Response: CMS appreciates the feedback received and will take it
into consideration for future rulemaking. We encourage MA plans to work
with contracted providers while developing UM policies and procedures,
and remind plans that under Sec. 422.202(b)(2), MA organizations must
communicate information about practice guidelines and UM policies to
providers and, when appropriate, to enrollees.
Comment: Many commenters stated they would be supportive of
requiring an UM committee to ensure, as required by Sec.
422.202(b)(2), that an MA organization communicates information about
practice guidelines and UM policies to providers and, when appropriate,
to enrollees. One commenter suggested amending Sec. 422.202(b)(1)(iii)
to state MA plan practice guidelines and UM guidelines ``must be
developed in consultation with contracting physicians or
practitioners.''
Response: CMS thanks all commenters for their input. CMS will
continue to monitor compliance with the existing obligations under
Sec. 422.202(b) and with Sec. 422.137 as finalized and consider this
requirement for future rulemaking. We believe the request to amend
Sec. 422.202(b)(1)(iii) is outside the scope of this proposal and that
the existing requirements on this issue and on incorporating adequate
information about clinical practices are sufficient in light of other
amendments in this final rule regarding coverage criteria, medical
necessity determinations and use of utilization management policies.
Comment: Many commenters were supportive of a requirement for the
UM committee to 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. A few
commenters expressed concern that this requirement could be
administratively burdensome on the UM committee. One commenter
suggested that the UM committee be required to engage in internal
oversight of plan operations, including randomized audits, assessment
of rates of and reasons for denial, and duration of time between
denials issued. Another commenter suggested that the UM committee
review appealed cases and caseloads to determine whether MA plan
operations are complying with the relevant requirements so as to not
unduly burden provider, MA plan, and the Office of Medicare Hearings
and Appeal resources through unnecessary appeals. Another commenter
suggested the UM committee conduct retroactive review of organization
determinations throughout the year and assess whether the approved
practice guidelines and UM policies are being followed. Another
commenter suggested a regulatory revision that would require the UM
committee to ``. . . undertake appropriate diligence and oversight to
ensure that the MA plan's coverage or medical necessity decisions under
any UM policy are consistent with such policy and any revisions to it
made by the UM committee.'' One commenter suggested revising proposed
Sec. 422.137(d)(1)(i) to read as follows: ``The services to which the
utilization management applies, including the total number of cases or
requests reviewed under a specific policy being reviewed, the number of
approvals for cases or requests under such policy, the number of
denials for cases or requests under such policy, and a review of a
subset of patient determinations whose cases were denied under such
policy, based on the most recent 6 months of data and information
available.''
Response: CMS appreciates the feedback received and will take it
into consideration for future rulemaking. Because MA plans are required
to follow the relevant coverage criteria and other requirements
pertaining to the use of utilization management adopted in this rule,
CMS does not believe it is necessary to require the UM committee to
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 at this time. CMS
encourages MA plans to involve the UM committee in such decisions to
the extent practicable.
Comment: Several commenters expressed concern over how proposed
Sec. 422.137 will be enforced, as well as who will be responsible for
enforcement. One commenter suggested that CMS require regular
submission of committee determinations and associated documentation to
CMS to allow for CMS audit and oversight. Another commenter suggested
CMS conduct ongoing audits throughout the year to ensure decisions made
by the MA plan are in line with the final approved guidance from the UM
committee
Response: CMS currently monitors MA plan compliance through account
management activities, complaint tracking and reporting, and auditing
activities. These oversight operations alert CMS to any issues with
access to care and plan compliance, and CMS may require MA plans to
address these matters if they arise. We intend to use these oversight
operations to ensure MA organizations comply with the final rule.
Further, Sec. 422.137(d)(5) requires the UM committee to document in
writing the reason for its decisions regarding the development of UM
[[Page 22215]]
policies and make this documentation available to CMS upon request. CMS
may request and review such documentation as part of its monitoring and
oversight.
Comment: CMS solicited comment regarding whether the proposed
regulation text sufficiently and clearly establishes the standards and
requirements discussed in the proposed rule. A few commenters requested
that the regulations should establish a clear process to ensure
transparency with stakeholders, including posting detailed meeting
minutes and policies to websites, making the composition of the
committee available to the public, and mandating regularly scheduled
meetings. Additionally, several commenters requested that there be an
opportunity for the public to provide input and comment on UM policies
and procedures to ensure transparency and clinician engagement. Several
commenters suggested that the UM committee be required to meet and/or
review and revise UM policies and procedures more frequently than
annually. One commenter suggested that the committee be required to
revise UM policies and procedures ``at any time.'' Another commenter
stated that policies should remain active during the review period. A
few commenters suggested that the UM committee participate in the
development of UM policies and procedures. One commenter suggested that
the UM committee conduct quarterly or bi-annual reviews of UM policies
and programs and their effects on organizational determinations,
patient access and clinical validity. One commenter suggested the
committee annually update its list of novel therapies and make
available to the public the clinical literature and research linked to
treatment criteria. A few commenters suggested that CMS revise the
regulatory text to require that the clinical members of the UM
committee be ``appropriately licensed and skilled physicians or other
qualified health care providers'' opposed to ``practicing physicians.''
Response: CMS appreciates the feedback received. While Sec.
422.137, as proposed and finalized, requires that prior authorization
policies and procedures be reviewed and approved at least annually by
the UM committee, the regulation does not prescribe the frequency with
which the committee is required to meet or prohibit UM committees from
reviewing policies more frequently to address changes in clinical
guidelines, coverage criteria, or similar considerations. CMS believes
there is value is giving flexibility to UM committees to review UM
polices more frequently than once a year, and acknowledges that more
frequent meetings are likely warranted. The minimum requirement is that
the relevant policies be reviewed and approved annually. We intend to
take the feedback from commenters into consideration for future policy
development.
Comment: Several commenters addressed the documentation
requirements for the UM committee, including 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. Several commenters requested that the regulation
establish a clear process to ensure transparency with stakeholders,
including posting detailed meeting minutes and policies to websites,
and making the composition of the committee available to the public.
Commenters also stated that MA plans do not regularly release minutes
from P&T meetings in a timely manner, and that when these minutes are
released, they do not contain detailed information. Several commenters
requested that CMS require UM criteria documents to be publicly posted.
One commenter requested that such documents should not be required to
contain a detailed summary of each piece of evidence considered or
rationale for adopting the policy due to potentially containing
proprietary information.
Response: CMS thanks commenters for their feedback. As outlined in
the preamble, MA organizations must make relevant 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. Supporting documentation could include relevant coverage
criteria that comply with Sec. 422.101 that was relied on in the
decision-making process. As to P&T committee documentation, Sec.
422.136(b)(9) requires that MA plan P&T committees document their
decisions regarding the development and revision of step therapy
programs and to make that documentation available to CMS upon request;
we appreciate the commenter's concerns that information is not always
made available publicly or with regularity. Should an MA organization
use a P&T committee to fulfill the requirement of the UM committee,
that committee must meet all of the requirements outlined in Sec.
422.137, which includes the requirement to make documentation available
to CMS upon request. We will consider these comments for future
rulemaking.
Comment: Many commenters supported implementing a requirement for
the UM committee to review all internal coverage criteria used by the
MA plan. Some commenters expressed opposition to the proposal and to
any requirement that the UM committee review all internal coverage
criteria used by the MA plans, citing that many MA plans have separate
committees tasked with reviewing UM policies and coverage criteria. One
commenter requested clarification as to which policies and procedures
the UM committee is required to review.
Response: Per Sec. 422.137(d), as proposed and finalized, the UM
committee is responsible for reviewing UM policies and procedures used
by the MA plan(s) served by the committee. The UM Committee must
approve only UM policies and procedures that use and are consistent
with the relevant coverage criteria that comply with Sec. 422.101 and
other applicable regulations. In addition, the UM committee is charged
with making any needed revisions to such policies and procedures to
ensure that the standards in Sec. 422.137(d)(1) and (2) are met. Such
revisions should be made expeditiously when inconsistencies are
identified.
Comment: Some commenters requested flexibility in the requirements
regarding the composition of the UM committee, specifically the
requirement that the committee include various clinical specialties,
because of potential operational challenges, including that the
conflict of interest requirement be removed. Many commenters requested
that specific provider types be explicitly required for the committee,
including but not limited to: Nurse practitioners; physical therapists;
chiropractors; integrative medicine providers; pharmacists; clinicians
with skilled nursing facility experience; nonphysician care team
members; and case management professionals. A few commenters suggested
that physician committee members be members of the American College of
Physician Advisors, board certified through board of medical
specialists or American Board of Medical Specialties. Many commenters
supported the inclusion of an enrollee representative. One commenter
suggested that more than one provider should be free from conflict, and
another commenter suggested that members should have to
[[Page 22216]]
annually attest to being free from conflict.
Response: CMS appreciates the feedback received and will take it
into consideration for future rulemaking. We believe the proposed
composition requirements are sufficient because they represent a
diverse group of medical professionals, with the relevant expertise
necessary to fulfil the regulatory requirements. Requiring additional
specific provider types or specialties could end up limiting the
committee composition, and that there is value in allowing plans the
flexibility to determine which providers should be represented.
Further, Sec. 422.137(c)(4) requires that the committee include
members representing various clinical specialties to ensure that a wide
range conditions are adequately considered in the development of the MA
plan's utilization management policies. We believe this requirement
will ensure that a diverse range of specialists are represented.
Section 422.137(c)(2) requires that at least one physician be
independent from the MA plan and free of conflict. We believe this is
sufficient because the other requirements for the UM committee clearly
establish the parameters in which the UM committee must review and
approve UM policies and procedures, and therefore additional
independent committee members are not necessary to ensure appropriate
decisions are being made. We encourage plans to include an enrollee
representative on the UM committee as we believe enrollee
representation will add a valuable perspective to the review process.
Comment: Many commenters supported having a specialist with
expertise in the particular item or service that is subject of the UM
policy and procedure under review by the UM committee be involved in
that review. A few commenters suggested that there should be specialty-
focused subcommittees or workgroups to ensure appropriate expertise is
represented. One commenter suggested that the UM committee be required
to seek outside assistance when the committee does not have expertise
in a certain area.
Response: CMS appreciates the feedback received and will take it
into consideration as part of future policy development. We believe
that the requirements in Sec. 422.137(d)(1) and (2) that set the
standards for the review by UM committees, including that utilization
management policies comply with Sec. 422.101(b) (which includes
compliance with Traditional Medicare coverage rules and limits on MA
plan internal coverage criteria) and that the committee review relevant
current clinical guidelines, are sufficient to ensure that appropriate
evidence is reviewed and relied upon by the committee during its annual
(or more frequent) review of utilization management policies.
Therefore, we are not adopting an additional requirement for the UM
committee to have specialty focused subcommittees and workgroups.
We are not finalizing an additional requirement for participation
or involvement by a specific specialty provider or health care provider
with expertise related to each individual UM policy. We believe that is
unnecessary because, as previously noted, all utilization management
policies must comply with Sec. 422.101(b), which requires any
permissible internal coverage 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.
Therefore, we do not believe it is necessary for additional involvement
of specialists when reviewing utilization management policies and
procedures. CMS encourages plans to include relevant experts when
feasible during the review process.
Comment: One commenter requested clarification on the definition of
``practicing physician who is an expert regarding care of elderly or
disabled individuals.''
Response: CMS considers someone an expert who, per the dictionary
definition of ``expert,'' \116\ has special skill or knowledge derived
from training or experience; here that level of skill or knowledge must
be in the area of providing care for elderly or disabled individuals.
Because the UM policies under review by the committee will be used for
coverage and services furnished to Medicare beneficiaries, it is
critical to ensure that a provider with knowledge relevant to the
population eligible for enrollment in the MA plan (that is, Medicare
enrollees) is represented on the UM committee. We encourage MA
organizations that offer SNPs to include providers with experience and
expertise related to the special needs of the enrollees served by the
SNP.
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\116\ https://www.merriam-webster.com/dictionary/expert.
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Comment: A commenter suggested that the UM committee be required to
review any prior authorization policies used by the MA organization,
including those developed and managed by third party entities. Another
commenter requested clarification as to how proposed Sec. 422.137
would apply when an MA plan has delegated utilization management
functions, including whether and how the requirements of proposed Sec.
422.137 would be shared or divided between the MA plan and its
delegate(s)
Response: Per Sec. 422.138 as proposed and finalized, the UM
committee is required to, at least annually, review the policies and
procedures for all utilization management, including prior
authorization, used by the MA plan. This means that any UM policy or
procedure that is used by the plan, whether developed or managed by a
third-party entity, must be reviewed and approved by the UM committee.
Comment: A few commenters requested that CMS not require a
committee to review and approve all UM policies and procedures.
Response: CMS declines this suggestion. For the reasons outlined in
the proposed rule and our responses to other comments and in light of
feedback CMS has received and concern that enrollees may be facing
unreasonable barriers to needed care, CMS believes ensuring UM policies
and procedures are reviewed on a timely and consistent basis to ensure
that the UM policies meet minimum standards is of paramount importance.
Comment: A commenter supported involving the UM committee in
developing mechanisms to address system vulnerabilities. Another
commenter suggested revise Sec. 422.137(d) to require the UM Committee
to review data on manual review errors, system errors, and excessive
denials, to revise UM policies and procedures as appropriate to reduce
the risk of such errors, and to identify and implement system changes
to mitigate the risk of manual review errors and system errors.
Response: CMS thanks the commenters for their comment. At this
time, we decline to make these revisions and are finalizing as
proposed. We will consider these suggestions in future rulemaking.
We thank all commenters for their comments. After careful
consideration of all comments received, and for the reasons set forth
in the proposed rule and in our responses to the related comments, as
previously summarized, we are finalizing the new regulation Sec.
422.137 and the modification to Sec. 422.202(b)(1)(i) as proposed.
[[Page 22217]]
6. Additional Areas for Consideration and Comment
CMS solicited comment on three areas: (1) termination of services
in post-acute care, (2) gold carding, and (3) addressing
vulnerabilities that can lead to manual review errors and system
errors. Since no regulations were proposed, we are not finalizing
anything in these areas at this time. We thank commenters for their
input, and will consider all comments during future rulemaking.
F. 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 health care
providers that are not contracted with the cost plan, cost plan
enrollees are covered by Traditional 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.\117\ 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 same
cost sharing protection for a COVID vaccine and its administration that
enrollees in Traditional Medicare and in MA plans have when these cost
plan enrollees get this benefit from health care providers that are in-
network with the cost plan. Therefore, we proposed 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
the COVID-19 vaccine and its administration without cost-sharing as
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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\117\ 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.
---------------------------------------------------------------------------
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).
Comment: Several commenters expressed support for our proposal
requiring cost plans to cover the COVID-19 vaccine and its
administration without cost-sharing.
Response: We thank the commenters for their support of our
proposal.
We received several supportive comments on this proposal and are
finalizing the provision as proposed.
G. 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)
We proposed to revise Sec. Sec. 422.566(d) and 422.629(k)(3) to
state if the MA organization or applicable integrated plan expects to
issue a partially or fully adverse medical necessity (or any
substantively equivalent term used to describe the concept of medical
necessity) decision based on the initial review of the request, the
organization determination must be reviewed by a physician or other
appropriate health care professional with expertise in the field of
medicine or health care that is appropriate for the services at issue,
including knowledge of Medicare coverage criteria, before the MA
organization issues the organization determination decision. This is
the same standard of review with respect to expertise that applies to
physician review of reconsiderations at Sec. 422.590(h)(2). 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. As stated in the
proposed rule, we believe it is
[[Page 22218]]
appropriate to adopt this standard for the medical necessity review of
organization determinations by physicians and other appropriate health
professionals in Sec. Sec. 422.566(d) and 422.629(k)(3) where the plan
expects to issue an adverse decision.
We received the following comments on the proposal related to the
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.
Comment: Most commenters expressed strong support for this proposal
and many agree that, if finalized, this standard would likely enhance
the overall decision-making process and the quality of medical
necessity reviews. Many of the commenters agreed that health care
professionals making coverage decisions should have the expertise in
the field of medicine or health care that is appropriate for the
service at issue and were supportive of the decision not to require the
case reviewer involved to be of the exact same specialty or sub-
specialty as the treating physician. Many MA organizations noted that
requiring the reviewer to be of the same specialty would be
restrictive, cost-prohibitive and highly problematic. In addition, a
commenter recommended that CMS develop a reasonableness standard to
ensure that this approach, if finalized, is balanced and sensitive to
the clinical workforce shortage that could be impacted by an overly
decisive policy. This commenter cited the example of an internal
medicine or family practice physician who has experience caring for the
elderly and the disabled as an appropriate health care professional who
could review medical necessity. Another commenter referenced the
example from the proposed rule that 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. This commenter believes that the language in the
final rule should provide sufficient flexibility to support plan use of
a physician specialized in, for example, internal medicine. The
commenter further stated that internal medicine physicians are also
familiar with the reasons why a home nebulizer may be medically
necessary, such as for severe asthma or Chronic Obstructive Pulmonary
Disease (COPD). Many commenters were supportive of flexibility for
plans 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 and recommended that we make this clear
in the regulatory text.
Response: CMS thanks the commenters for their support of this
proposal. As noted in the proposed rule, our goal is to strengthen the
quality of medical necessity reviews at the organization determination
level when the plan expects to issue a partially or fully adverse
medical necessity determination. We believe requiring expertise in the
field of medicine or health care that is appropriate for the requested
service advances that goal. If the plan reviewer is not of the same
specialty or subspecialty as the treating physician, it's our
expectation that the physician or other appropriate health care
professional have specialized training, certification, or clinical
experience in the applicable field of medicine in order to satisfy the
requirement of expertise in the field of medicine that is appropriate
for the requested item or service.
Comment: A few commenters expressed concern related to the ability
of MA organizations to implement this requirement in practice and
questioned whether or not the proposal will solve the problem we are
seeking to address. A commenter was particularly concerned by the lack
of detail provided by CMS under this proposal and the challenges it
creates in terms of implementation noting that, as proposed, it would
be difficult for a plan to identify that a provider has expertise in a
specific field. Another commenter provided that there is marginal
benefit seen in practice when common specialty cases are reviewed peer-
to-peer, which begs the question of whether this proposal will improve
medical necessity determination accuracy or reduce burden. Commenters
also expressed concern about the limited availability of some provider
specialties and the difficulty for plans to hire enough providers to
cover all possible utilization management review cases. A commenter
questioned how CMS expects plans to comply with this requirement in the
event that the item or service involves a more unusual medical
specialty or item or service. Another commenter, requested that CMS
consider the difference in resources available to large, dominant
national MA organizations and those with a more limited geographic
footprint and resource availability. The commenter noted that in many
service areas that are served by small and medium-sized MA
organizations, there may only be one or two specialists of a certain
type, or all the specialists of the same type are in the same group,
resulting in a conflict of interest, as this would necessitate those
physicians reviewing the care in which they have an economic interest.
Several commenters were also concerned about the cost associated
with implementing this requirement. A commenter suggested that this
proposal could result in plans being required to scale back available
benefits due to the cost of specialist reviews. Commenters also
expressed concern that the requirement to find a specialist with
appropriate expertise could delay access to necessary care as plans
work to find the appropriate reviewer and recommended that, if
finalized, we provide as much flexibility for plans as possible in
determining what constitutes appropriate expertise on a case-by-case
basis. Another commenter, indicated that the costs could be excessive
and further add to administrative expense, thereby increasing
beneficiary premiums, especially when not scalable to smaller regional
not-for-profit health plans that may not see the volume of subspecialty
review over a given period. Another commenter provided the example of
MA plans offering dental, vision and hearing benefits as a supplemental
benefit, and questioned if CMS expects each MA plan to have these
provider types on call 24/7 for medical necessity review. This
commenter indicated that most plans do not have dentists, for example,
on staff, so to require these physician types be on call, this
requirement will be costly and CMS should evaluate the aggregate costs
of this proposal across the program and determine whether the benefit
outweighs the cost.
Response: We appreciate the commenters' concerns related to
staffing, associated costs and implementation, but we believe the
proposed approach strikes a reasonable balance between ensuring a
robust review when the plan expects to issue a partially or fully
adverse medical necessity organization determination and maintaining
flexibility in how plans manage their review resources. We did not
propose to require that plans use reviewers of the same specialty as
the enrollee's treating physician. In addition, unlike the requirement
at the reconsideration level that requires review by a physician, plans
are able to utilize other appropriate health care professionals to
review organization determinations that involve medical necessity. We
believe there is sufficient overlap in training and clinical knowledge
among health care providers to ensure flexibility in how plans allocate
their staffing resources. While
[[Page 22219]]
we acknowledge there will be some unique circumstances that may
necessitate input by a specialist, because the revisions to Sec. Sec.
422.566(d) and 422.629(k) do not require the plan reviewer to be of the
same specialty or subspecialty, there is a degree of flexibility for
plans to manage clinical staffing resources. As proposed and finalized,
the level of expertise in the field of medicine or health care that is
appropriate for the services at issue is the same standard that applies
at the reconsideration level. Plans should implement this requirement
at the organization determination level with respect to reviews
performed by physicians or other health care providers in the same
manner as plans have implemented the existing requirement for expertise
of physician reviewers at the reconsideration level. Further, as
proposed and finalized, this requirement does not apply to all
organization determinations. Rather, per our proposal, the requirement
applies to those organization determination requests where the plan
expects to issue a partially or fully adverse decision on medical
necessity (or any substantively equivalent term used to describe the
concept of medical necessity) based on the initial review of the
request.
Comment: Several commenters noted the nationwide shortage of
primary care physicians and recommended that CMS include registered
nurses, clinical psychologists, and pharmacists as appropriate
reviewers in the final rule.
Response: As proposed and finalized, the review at the organization
determination level may be by a physician or other appropriate health
care professional, which could include a registered nurse, so long as
the individual has expertise in the field of medicine or health care
that is appropriate for the services at issue, including knowledge of
Medicare coverage criteria. In addition, the existing regulations at
Sec. Sec. 422.566(d) and 422.629(k)(3) require that 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. We reiterate our intended approach
that plans 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. In satisfying this
requirement, plans should be guided in determining what constitutes
appropriate expertise in a given case by the related requirements on
medical necessity determinations that are being finalized in Sec.
422.101(c) of this final rule. Section 422.101(c) requires MA
organizations to make medical necessity determinations based on:
applicable coverage and benefit criteria; whether the provision of
items or services is reasonable and necessary under section 1862(a)(1)
of the Act; the enrollee's medical history (for example, diagnoses,
conditions, functional status), physician recommendations, and clinical
notes; and, where appropriate, involvement of the plan's medical
director. This final rule requires the plan to exercise judgement to
determine the type of reviewer (or identify an individual reviewer
among its staff) who has sufficient expertise to make an informed and
supportable decision whether a service is not medically necessary for
the enrollee, such that coverage should be denied on the basis of a
lack of medical necessity. We believe that applying the principles in
Sec. 422.101(c) to the decision-making around who is an appropriate
reviewer in a given case will guide the plan to a reasonable and
supportable interpretation of this review standard.
Comment: A commenter requested that CMS clarify that ``appropriate
health care professional'' also includes subcontracted vendors.
Response: Pursuant to Sec. 422.566(a), each MA organization must
have a procedure for making timely organization determinations
regarding the benefits an enrollee is entitled to receive under an MA
plan, including basic benefits and mandatory and optional supplemental
benefits. Plan functions can be performed directly by plan employees or
under an arrangement between the plan and a first tier, downstream or
related entity (FDR) consistent with the regulatory requirements at 42
CFR part 422, particularly Sec. 422.504(i). If a plan uses an FDR,
which includes subcontractors, to perform plan functions, the plan
remains responsible under the MA regulations and its contract with CMS.
Comment: Another commenter, requested that we establish a standard
of reasonableness in how to demonstrate the appropriateness of the
clinician that does not place undue burden on the process. This
commenter recommends that health plans not be required to litigate
these instances on a case-by-case basis. This commenter noted that
health plans work to ensure that the clinician conducting medical
necessity reviews has the requisite experience and expertise. Further,
it was noted that, for practical reasons, health plans cannot have
clinicians representing each specialty or subspecialty employed to
conduct medical necessity reviews and therefore rely on qualified
generalists in some circumstances to provide the necessary expertise.
Response: Our intent in proposing this change is that plans ensure
that when the plan expects to issue a partially or fully adverse
medical necessity determination, the plan reviewer have expertise in
the field of medicine that is appropriate for the item or service that
is the subject of the organization determination request. As such, the
expectation is that the plan determine on a case-by-case basis which
physician or other health care professional has the requisite expertise
to conduct the review. We agree with the commenter on applying a
reasonableness standard in determining the appropriateness of the
reviewing clinician. As previously stated, when exercising judgement to
determine the type of reviewer who has appropriate expertise to decide
whether a service is medically necessary for an enrollee, the plan
should be guided by the medical necessity principles being established
in this final rule at Sec. 422.101(c). We believe that applying these
principles to the decision-making on who is an appropriate reviewer in
a given case will guide the plan to a reasonable and supportable
interpretation of this review standard.
We understand the commenter's concern regarding the difficulties a
plan may encounter in employing a specialist in every field of
medicine, which is why our proposal did not include a requirement that
the plan reviewer be of the same specialty as the treating physician.
To the extent a plan uses a ``generalist'' as suggested by the
commenter, to satisfy this standard, that reviewer would need to have
relevant training or experience in the field of medicine related to the
requested service in order to determine the medical necessity of the
requested item or service.
Comment: Numerous commenters expressed concern with the use of the
term ``expertise'' as it relates to this proposal, suggesting it is too
vague. Commenters requested that we clarify what this term means and
provide additional examples. A commenter was concerned that by not
including specifics about the level of training or expertise of the
reviewer, there would be no meaningful change to the current review
standard. Commenters offered several suggestions on how to better
define the scope of ``expertise'' as it relates to the physician or
other health care professional who must review medical necessity
decisions. Specifically, another commenter
[[Page 22220]]
recommended that CMS revise the proposal to specify years of
specialized training, while other commenters suggested that CMS specify
that ``relevant expertise'' means that the physician involved must be
of the exact same specialty or sub-specialty as the treating physician.
Another commenter suggested that we require the plan reviewer to be of
the ``same or similar specialty'' relevant to the services under
review. Similarly, another commenter recommended that any coverage
denial should be issued by a reviewer with ``equal or greater
expertise'' in the relevant field of medicine to the treating
physician. Additionally, this commenter questioned that CMS explore
various measures for determining relevant expertise, such as setting
thresholds requiring reviewers to have successfully performed a set
number of relevant procedures, to the extent possible. Another
commenter suggested that CMS require physician reviewers comply with
the same requirement as Traditional Medicare where the physician must
be engaged in the active practice of medicine in the State and be a
specialist in the same field as the physician whose services are under
review. It was noted that the ``same specialty'' standard for physician
reviewers is verifiable by documentation of physician credentialing,
while the proposed ``expertise in the field'' is not readily
verifiable. This commenter also suggested that the physician reviewer
should attest no less frequently than annually that they and their
immediate family members do not have a conflict of interest in the MA
organization for whom they provide medical necessity review services.
Numerous commenters requested that CMS strengthen the proposed policy
by requiring the physician reviewer to have the same clinical expertise
as the health care professional under FFS who can request the item or
service. Several commenters cited the example of a determination on a
request for a patient to be admitted to an inpatient rehabilitation
facility (IRF) and stated their opinion that the plan should utilize
the expertise of a physician trained in inpatient rehabilitation, as is
required for patients to be admitted by an IRF in traditional Medicare.
Other commenters offered examples of what they believe should
constitute an appropriate reviewer in the context of this proposal,
such as, decisions involving treatment of patients with cancer and
blood disorders should be explicitly limited to board certification in
oncology or hematology, respectively. Additionally, a commenter
requested that CMS require more specific physical therapy expertise for
adverse decisions on therapy services given the widespread availability
of physical therapists to perform medical necessity reviews and the
high rate of physical therapy and rehabilitation services that are
subject to prior authorization requirements.
Response: We thank the commenters for their suggestions regarding
how the concept of appropriate expertise should be interpreted if we
finalize this proposal. We did not propose that the plan reviewer be of
the same specialty or subspecialty as the treating physician. This
proposal attempted to balance enhancing the quality of medical reviews
at the organization determination level when the plan expects to issue
a partially or fully adverse medical necessity determination, with
maintaining plan flexibility in leveraging reviewer resources. We
recognize that 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. Nor did we propose that an
appropriate reviewer have a minimum number of years of specialized
training in the field of medicine related to the requested service. We
believe there are a number of ways a plan can ensure that the reviewing
physician or other health care professional has expertise in the field
of medicine that is appropriate for the item or service being
requested. In some instances, we expect that plans will use a physician
or other health care professional of the same specialty or subspecialty
as the treating physician. In other instances, we expect that plans
will utilize a reviewer with specialized training, certification, or
clinical experience in the applicable field of medicine. As stated in
the proposed rule, we intend the revisions to Sec. Sec. 422.566(d) and
422.629(k) to permit plans 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. Ultimately,
the goal of determining the appropriate reviewer for the requested
service is to ensure that denials based on medical necessity are based
on a thorough clinical review by someone with sufficient expertise so
that enrollees receive the benefits to which they are entitled.
Decisions to deny coverage on the basis of medical necessity require
the exercise of clinical judgment based on the considerations specified
in Sec. 422.101(c) as finalized in this rule.
With respect to the IRF example cited by several commenters, the
plan reviewer reviewing a request for IRF care would need to have the
background and knowledge to determine that the enrollee's medical
condition requires intensive rehabilitation, continued medical
supervision, and coordinated care. Accurately assessing the enrollee's
diagnoses, conditions and functional status requires clinical expertise
that is appropriate to the requested item or service and could be made,
for example, by a physical medicine and rehabilitation doctor, a
neurosurgeon, a physical therapist or a rehabilitation nurse.
Finally, given the related provisions in this rule with respect to
determinations of medical necessity and utilization management tools,
including prior authorization, we do not believe that this review
standard requiring appropriate expertise needs to be unduly
prescriptive to make an overall positive impact in the thoroughness of
medical necessity reviews. For example, the codification of 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
dovetails with the proposed requirement that plans utilize reviewers
with appropriate expertise in the requested service. In addition, there
are several other related provisions in this rule regarding utilization
management and prior authorization at Sec. Sec. 422.112, 422.137 and
422.138 that we believe will strengthen medical necessity reviews, such
as the proposal 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. Again, decisions
to deny coverage on the basis of medical necessity require the exercise
of clinical judgment based on the considerations specified in Sec.
422.101(c) as finalized in this rule. Exercising that type of judgment
necessarily requires that the reviewer have knowledge and experience
relevant to the requested services to reasonably determine when a
requested service is reasonable, necessary and covered under the
clinical coverage criteria that plans must use under Sec. 422.101(b)
as finalized in section III.E of this rule. We believe the totality of
the provisions addressed in this rule will enhance the overall
decision-making process and the quality of the
[[Page 22221]]
review conducted at the organization determination level, particularly
when a prior authorization or other utilization management requirement
is involved.
Since we did not specifically propose that the reviewer be of the
same specialty or sub-specialty as the physician requesting the service
on the enrollee's behalf, we decline to finalize this proposal with
such a requirement. As stated in the proposed rule, CMS's goal is to
balance strengthening clinical review in the organization determination
process when the plan expects to issue a partially or fully adverse
medical necessity determination, with plan flexibility and operational
efficiency in selecting appropriate reviewers. We plan to monitor
implementation of this standard to assess whether future rulemaking may
be necessary related to additional specificity on what constitutes
expertise appropriate to the requested service.
Comment: A commenter recommended CMS use the term ``qualified
health professional'' rather than ``other health professional'' to
avoid ambiguity and to align with the National Committee for Quality
Assurance (NCQA) utilization management terminology.
Response: The existing regulation at Sec. 422.566(d) related to
who must review organization determinations 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.
We did not propose to modify this existing reference to ``appropriate
health care professional'' as we believe it affords proper flexibility
for plans in selecting and allocating reviewer resources while
establishing the level of qualification necessary to protect
beneficiaries.
Comment: Several commenters recommended that CMS strengthen the
proposed policy by specifying that medical necessity decisions must be
made by a licensed physician in the state where care is being provided
and the reviewing physician must have experience in the treatment being
requested. Another commenter suggested that CMS require the physician
reviewer to have an active licensure or relevant certification in the
field of medicine specific to the request.
Response: Existing regulations at Sec. 422.566(d) require the
reviewing physician or other appropriate health care professional to
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. We do not
believe that it is necessary for the reviewer be of the same specialty
as the treating physician because we also believe there is sufficient
overlap in training and clinical knowledge among health care providers
to ensure appropriateness in decision making. Additionally, the
requirement at Sec. 422.590(h), which requires a physician with
expertise in the field of medicine that is appropriate for the service
at issue to reconsider an adverse organization determination, does not
require the physician to be of the exact same specialty or subspecialty
as the treating physician. This is a longstanding requirement in the MA
program, which has demonstrated that enrollees are adequately protected
by requiring the reviewer to have expertise in the field of medicine
appropriate to the service at issue. The reviewer could satisfy the
expertise standard in a number of ways including, but not necessarily
limited to, specialized training, a certification in the applicable or
related field of medicine, or related clinical experience.
Comment: Multiple commenters expressed concern related to CMS'
allowance of plan discretion. Specifically, a commenter was concerned
in instances where there are few practitioners in a highly specialized
field of medicine, and the plan may not be able to retain the services
of a physician of the same specialty or sub-specialty to review the
organization determination. This commenter recognized that while it may
be difficult for MA organizations to retain the services of the wide
variety of specialists and sub-specialists needed to adequately review
adverse determinations, it detrimentally impacts patient safety to have
coverage determinations reviewed by health care professionals that lack
the requisite knowledge, experience, and training of the relevant
specialist or sub-specialist. This commenter suggested that rather than
allowing MA organizations to risk beneficiary safety due to inadequate
staffing, CMS should instead require that MA organizations retain the
services of the necessary specialists and sub-specialists prior to
implementing a particular utilization management policy, and further,
suggested that impacted PA requirements due to inadequate staffing
should be suspended until the MA organization can secure adequate
staffing to review medical necessity decisions. We received a similar
comment related to care that is often unavailable at other
institutions, noting that it may not be possible to meet this standard
if the treatment in question is for the specialized and sub-specialized
care provided only at teaching hospitals. This commenter suggested that
when it is not possible for the reviewing physician to have the same
level of expertise and training as the treating physician, then the
reviewing physician should be required to consult with the treating
physician to inform their decision making.
Several commenters expressed concern related to the plan's
discretion to determine the appropriate expertise on a case-by-case
basis. These commenters recommended that CMS require MA organizations
to develop a list to be shared with its contracted providers each year
of services which require prior authorization and delineate the
specific provider types and specialties, noting requisite training and
rationale, who will be conducting medical necessity reviews, prior
authorization reviews and peer-to-peer consults for those services.
Another commenter suggested that the Utilization Management Committee,
as proposed in this rule, should play a prominent role in developing
this list of provider types and specialties in order to ensure
compliance. A commenter requested that CMS ensure that this proposal
also extends to inpatient care decisions and to the reporting of
medical diagnoses that support inpatient care.
Response: CMS thanks the commenters for their perspective and
feedback. Our proposal did not include a requirement that plans be
required to develop a list that delineates the specific provider types
and specialties, noting requisite training and rationale, who will be
conducting medical necessity reviews, prior authorization reviews and
peer-to-peer consults for services subject to PA. MA organizations are
currently required under Sec. 422.202(b) to establish a formal
mechanism to consult with its contracted physicians regarding the
organization's medical policy, quality
[[Page 22222]]
improvement programs and medical management procedures to ensure that
certain standards are met. These standards include practice guidelines
and utilization management guidelines that are developed based on
reasonable medical evidence or a consensus of health care professionals
in a particular field and in consultation with contracting physicians.
Further, these guidelines are reviewed and updated periodically and are
communicated to providers, and, as appropriate, to enrollees. We will
consider the merit of these suggestions for future policy proposals. In
terms of the comment suggesting that when it is not possible for the
reviewing physician to have the same level of expertise and training as
the treating physician, then the reviewing physician should be required
to consult with the treating physician to inform their decision making,
Sec. 422.101(c) requires MA organizations to make medical necessity
determinations based on: applicable coverage and benefit criteria;
whether the provision of items or services is reasonable and necessary
under section 1862(a)(1) of the Act; the enrollee's medical history
(for example, diagnoses, conditions, functional status), physician
recommendations, and clinical notes; and, where appropriate,
involvement of the plan's medical director. In exercising its judgement
to determine the type of reviewer that has the appropriate expertise to
decide whether a service is medically necessary for an enrollee, the
plan should be guided by medical necessity principles set forth at
Sec. 422.101(c). As a whole, this final rule adopts new provisions and
requirements designed to strengthen the prior authorization process. We
believe these provisions will strengthen the overall decision-making
process in the adjudication of organization determinations, including
those that involve utilization management.
With respect to the comment on inpatient care decisions, any
organization determination where the plan expects to make an adverse
decision based on medical necessity will be subject to this provision.
If an organization determination is requested for authorization of an
inpatient admission and the plan has a prior authorization requirement
that a particular diagnosis or diagnoses be present and the plan
intends to issue an adverse decision based on its initial review of the
request, the request must be reviewed by a physician or other
appropriate health care professional with expertise in the field of
medicine or health care that is appropriate for the services at issue,
including knowledge of Medicare coverage criteria, before the MA
organization issues the organization determination decision.
Comment: A few commenters expressed concern related to the time it
will take an MA organization to identify the appropriate reviewer in
certain cases. These commenters requested that CMS ensure that this
proposal does not result in MA organizations extending the timeframe to
review prior authorization requests.
Response: Under existing rules at Sec. 422.566(a), MA plans must
have a procedure for making timely organization determinations (in
accordance with the requirements of 42 CFR 422 subpart M) regarding the
benefits an enrollee is entitled to receive under an MA plan. This
proposal is not intended to allow plans additional time to review
organization determinations where the plan expects to issue a partially
of fully adverse medical necessity decision. Existing regulations
prescribe adjudication timeframes for organization determinations,
which include pre-service requests subject to PA. Under the rules at
Sec. 422.572(a)(1) related to an expedited organization determination
request for a medical item or service (which could include an item or
service subject to PA), the MA organization must make its determination
and notify the enrollee (and the physician involved, as appropriate) of
its decision, whether adverse or favorable, as expeditiously as the
enrollee's health condition requires, but no later than 72 hours after
receiving the request. For a standard organization determination
request for a medical item or service (again, which could include an
item or service subject to PA), the rules at Sec. 422.568(b)(1)
require the MA organization to notify the enrollee of its determination
as expeditiously as the enrollee's health condition requires, but no
later than 14 calendar days after the date the organization receives
the request for a standard organization determination. Under certain
limited circumstances, an MA organization may extend these adjudication
timeframes.
Comment: Many commenters requested clarification on how this
requirement will be enforced. Another commenter stated the belief that
MA organizations currently have the ability to deny medically necessary
care with little recourse. A commenter suggested the need for enrollees
and providers to have a mechanism to challenge whether the standard has
been met by the plan.
Response: CMS thanks the commenters for their interest in how we
intend to enforce this standard and for the feedback related to medical
necessity denials. We are assessing the best options for oversight of
this requirement, including leveraging existing resources for
monitoring Part C IRE reversals of plan decisions. We expect plans to
implement this requirement at the organization determination level with
respect to reviews performed by physicians or other health care
providers in the same manner as plans have implemented the existing
requirement for expertise of physician reviewers at the reconsideration
level. Determining who has the appropriate expertise to conduct a
review of medical necessity must be made on a case-by-case basis. Plans
have additional flexibility at the organization determination level
because they can utilize other appropriate health care professionals.
As finalized in this rule, Sec. 422.101(c) requires MA organizations
to make medical necessity determinations based on: applicable coverage
and benefit criteria; whether the provision of items or services is
reasonable and necessary under section 1862(a)(1) of the Act; the
enrollee's medical history (for example, diagnoses, conditions,
functional status), physician recommendations, and clinical notes; and,
where appropriate, involvement of the plan's medical director. In
exercising its judgement to determine the type of reviewer who has
appropriate expertise to decide whether a service is medically
necessary for an enrollee, the plan should be guided by medical
necessity principles set forth at Sec. 422.101(c). Applying these
principles to the decision-making around who is an appropriate reviewer
in a given case will guide the plan to a reasonable and supportable
interpretation of this review standard.
Further, the enrollee (or the treating physician acting on behalf
of the enrollee) always has recourse through the appeals process if the
enrollee is dissatisfied with the plan's decision. This proposal in no
way affects the enrollee's right to appeal a denied organization
determination or to file a grievance expressing dissatisfaction with
any aspect of an MA organization's or a provider's operations or
activities. As stated in the proposed rule, the goal of this proposed
policy change is to enhance medical necessity reviews at the initial
coverage decision level which should ultimately reduce the number of
cases that get into the appeals process. We expect this policy to
result in a decrease in the number of denied organization
determinations because we believe requiring reviewers with
[[Page 22223]]
appropriate expertise in the requested item or service will enhance the
accuracy and overall clinical supportability of the medical necessity
decisions. To the extent this requirement increases the likelihood of
beneficiaries getting medically necessary covered services, the need
for a beneficiary to appeal a denial will be reduced.
Comment: Several commenters recommended that we extend this
proposal to apply to medical professionals who participate in peer-to-
peer (P2P) discussions. These commenters suggested that many encounters
during such discussions are with medical professionals who do not have
applicable expertise for the service at issue, yet are responsible for
making medical necessity decisions. Several commenters recommended that
we add this clarification on applicability to P2P discussions to the
regulatory text.
Response: We proposed that if a plan expects to issue an
unfavorable organization determination decision, the request must be
reviewed by a physician or other appropriate health care professional
with expertise in the field of medicine that is appropriate for the
item or service being requested before the plan issues an adverse
organization determination decision. We note that if a P2P discussion
occurs between a treating physician and a plan reviewer in the course
of a plan reviewing a coverage request, the P2P discussion is not
separate and distinct from an organization determination. Rather, P2P
discussions take place during adjudication of an organization
determination. To the extent a plan reviewer engages in a P2P with the
enrollee's treating physician during adjudication of an organization
determination request, this standard of review related to expertise in
the field of medicine appropriate for the requested service would apply
to that aspect of the organization determination process. Because a P2P
is part of the organization determination process, to the extent such a
discussion occurs, and not a separate process, we do not believe the
regulatory text needs to explicitly reference P2P discussions if this
standard is finalized.
Comment: Several commenters suggested that CMS clarify that this
proposal applies to expedited requests in addition to standard requests
for prior authorization.
Response: The regulations at Sec. 422.566 regarding organization
determinations refer to the procedures plans must have in place per the
rules at Sec. Sec. 422.568 and 422.572. The regulations at Sec.
422.629(k) regarding decision-making requirements for integrated
organization determinations establish the individuals who make
decisions per the rules at Sec. 422.631 for standard and expedited
integrated organization determinations. As proposed and finalized, this
review standard applies to organization determinations where the MA
organization or applicable integrated plan expects to issue a partially
or fully adverse medical necessity (or any substantively equivalent
term used to describe the concept of medical necessity) decision based
on the initial review of the request regardless of the timeframe on
which the plan is required to make the decision. This includes
organization determinations (including those involving prior
authorization) whether the organization determination is adjudicated
under the standard timeframe per Sec. 422.568, the expedited timeframe
per Sec. 422.572, or the timeframes for integrated organization
determinations at Sec. 422.631(d).
Comment: A commenter, requested that CMS explain how it envisions
medical necessity review processes to work when there are multiple
items and services being reviewed.
Response: As proposed and finalized, the amendment to Sec. Sec.
422.566(d) and 422.629(k) does not change the plan's responsibility for
making individualized medical necessity determinations based on the
item or service being requested and relevant aspects of the enrollee's
health condition, as well as applicable Medicare coverage rules. As
previously noted, this final rule amends Sec. 422.101(c)(1) to
establish that plans must make medical necessity determinations based
on specific standards and information, which will apply to all medical
necessity determinations, even if a request for multiple services is
under review. If multiple services are requested, and the plan expects
to issue a partially or fully adverse medical necessity determination,
the plan must make a determination as to the appropriate expertise for
each service and ensure that the decision to deny coverage on the basis
of medical necessity for each service is made by a reviewer with the
appropriate expertise. If the services are interrelated for the same
condition, it may be appropriate to use a single reviewer. Again, this
determination must be made on a case-by-case basis.
Comment: A commenter noted that this rule does not include the
requirement which is imposed on medical necessity reviews conducted
under Traditional Medicare, that is, physician reviewers must determine
if the medical services which are subject to review are ``reasonable
and necessary''. This commenter recommended that these program
integrity provisions be referenced in Sec. Sec. 422.566(d) and
422.629(k)(3). The commenter believes this is necessary to provide
compatible coverage between the Medicare Advantage program and
Traditional Medicare program.
Response: Under existing rules at Sec. 422.566(a), MA plans must
have a procedure for making timely organization determinations (in
accordance with the requirements of 42 CFR 422 subpart M) regarding the
benefits an enrollee is entitled to receive under an MA plan, including
basic benefits as described under Sec. 422.100(c)(1) and mandatory and
optional supplemental benefits as described under Sec. 422.102, and
the amount, if any, that the enrollee is required to pay for a health
service. Organization determinations and integrated organization
determinations made under the provisions at Sec. 422.629 are made on
the basis of whether the item or service is reasonable and necessary
for the enrollee. The proposal related to the expertise of the plan
reviewer if the plan expects to issue a partially or fully adverse
medical necessity determination does not alter this existing
requirement. Elsewhere in this final rule, we discuss proposed changes
to amend Sec. 422.101(b) and (c) to clarify the obligations and
responsibilities for MA plans in covering basic benefits. Specifically,
Sec. 422.101(c) requires MA organizations to make medical necessity
determinations based on: applicable coverage and benefit criteria;
whether the provision of items or services is reasonable and necessary
under section 1862(a)(1) of the Act; the enrollee's medical history
(for example, diagnoses, conditions, functional status), physician
recommendations, and clinical notes; and, where appropriate,
involvement of the plan's medical director. In exercising its judgement
to determine the type of reviewer who has appropriate expertise to
decide whether a service is medically necessary for an enrollee, the
plan should be guided by medical necessity principles set forth at
Sec. 422.101(c).
Comment: A commenter recommended that CMS require that plans
provide documentation of the physician reviewer's compliance with
qualification standards with each denial notice, in addition to the
factual basis for the denial of coverage. This commenter suggested that
this will provide for monitoring and enforcement of compliance with
physician reviewer criteria and this information may be
[[Page 22224]]
used in the administrative appeals process, QIO reviews, and complaints
made to CMS. Another commenter recommended that CMS require physician
reviewers to provide the beneficiary and treating physician with a
notice/certification that their medical necessity review did not
involve the use or consideration of screening criteria. Another
commenter recommended that CMS require the MA organization to include
its rationale for the supporting reviewer's ``expertise'' for a given
service at issue in each denial notice.
Response: We thank the commenter for these suggestions. We did not
propose that the plan be required to produce specific documentation of
the plan reviewer's relevant expertise with a denial notice or that
there by a certification that medical necessity review didn't use
screening criteria. Existing rules require plans to have processes in
place for receipt and documentation of initial determination requests.
MA organizations are also required to adhere to the maintenance of
records and disclosure of information requirements at Sec. Sec.
422.504(d)(1)(ii) and 422.504(f)(2)(v), respectively. In addition, we
expect that the administrative case file would include documentation
relevant to the medical necessity review conducted in each organization
determination.
Comment: Several commenters recommended that CMS add more specific
guardrails to ensure appropriately qualified reviewers are involved in
the decision-making around coverage for particularly complex services.
Commenters suggested that CMS require MA organizations to give
deference to the treating physician when the MA organization is unable
to obtain a reviewer of the same specialty or subspecialty unless the
patient record directly contradicts the medical necessity
determination. A commenter recommended that, if this proposal is
finalized, coverage be mandatory in cases where sections Sec. Sec.
422.566(d) and 422.629(k)(3) are violated; that is, where the physician
reviewer did not have expertise in the field of medicine appropriate to
the case or where required documentation was not maintained by the MA
organization and provided to the enrollee and the physician whose order
for services become the subject of a notice of denial of coverage. This
commenter also recommended that decisions to deny coverage be effective
no earlier than the date a denial notice is communicated in writing and
received by the affected enrollee and the practitioner whose order for
medical services was subject to medical necessity review.
Response: We appreciate the commenter's suggestions, but our
proposal to establish minimum requirements for who reviews an
organization determination before the plan issues a denial on the basis
of medical necessity did not include requirements for mandatory or
automatic coverage of the requested service in the event the plan
reviewer does not have expertise in the field of medicine related to
the requested item or service. Further, we did not propose a change to
existing requirements related to denial notices. Plans are responsible
for determining the medical necessity of an organization determination
request on a case-by-case basis and nothing about this proposal
obviates the need for an individualized review of medical necessity.
Section III.E. 2.b. of this final rule amends Sec. 422.101(c)(1) to
establish that plans must made medical necessity determinations based
on specific standards and information, which will apply to all medical
necessity determinations, even if a request for multiple services is
under review.
Comment: A commenter strongly opposed this proposal and requested
that it be withdrawn. The commenter stated that it is not practical or
advisable at the organization determination level of review. This
commenter asserted that there is evidence that many clinicians are
leaving frontline medicine to become consultants who perform
independent reviews. The commenter also suggested that this proposal
would result in increased demand for clinicians to perform these roles
and create shortages in hospitals and medical practices. Further, the
commenter stated that under current Medicare Advantage rules, consumers
have access to specialists during the independent review process and
requiring specialists to participate in organization determinations
will increase pressures on the workforce and costs for taxpayers and
beneficiaries.
Response: We appreciate the commenter's perspective and concerns
related to staffing issues. In developing this proposal, we attempted
to balance enhancing the quality of medical reviews at the organization
determination level with maintaining plan flexibility in leveraging
reviewer resources. Based on that balance, we did not propose and are
not finalizing a requirement that plans must use a physician or other
health care professional with the same specialty as the treating
physician. We believe it is reasonable for plans to have physicians and
other health care professionals with various types of clinical
expertise in order to conduct robust medical reviews in addition to the
beneficiary protections afforded by the independent review entity level
of adjudication.
Comment: A commenter requested clarification related to how this
proposal would affect reviews under Part D, while another commenter
recommended that this requirement also apply to Part D. We also
received a comment related to consistency on the part of the IRE,
noting that if there is not uniformity, the IRE could make a difference
in clinical judgement on a case.
Response: We thank the commenters, but these comments are outside
the scope of this rule.
Based on the feedback we received from commenters, we are
finalizing this requirement as proposed by revising Sec. Sec.
422.566(d) and 422.629(k)(3) to state if the MA organization or
applicable integrated plan expects to issue a partially or fully
adverse medical necessity (or any substantively equivalent term used to
describe the concept of medical necessity) decision based on the
initial review of the request, the organization determination must be
reviewed by a physician or other appropriate health care professional
with expertise in the field of medicine or health care that is
appropriate for the services at issue, including knowledge of Medicare
coverage criteria, before the MA organization issues the organization
determination decision.
We also proposed a technical correction at Sec. 422.590(b)(1) to
include the correct cross reference regarding favorable decisions on
payment requests at Sec. 422.618(a)(2). We did not receive comments on
this technical correction and we are finalizing this correction.
H. 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
In accordance with our authority to interpret and implement the
requirements and limitations in 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. In addition,
per Sec. 417.428, cost plans with contracts under section 1876 of the
Act must follow the same
[[Page 22225]]
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.\118\ 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 FR 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 fifteen most commonly spoken non-English 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
provides a clear path for this portion of the population to properly
understand and access their benefits (87 FR 27821). We remind MA
organizations and Part D sponsors that as recipients of Federal
financial assistance, they have independent language access
requirements under Title VI of the Civil Rights Act of 1964 and section
1557 of the Affordable Care Act and implementing regulations at 45 CFR
parts 80 and 92, respectively.
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\118\ 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 and section 1557 of the
Affordable Care Act, and the Department of Health and Human Services
implementing regulations at 45 CFR parts 84 and 92. As recipients of
Federal financial assistance, MA organizations and Part D sponsors must
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.
Auxiliary aids and services can include 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).'' \119\
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\119\ 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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These requirements notwithstanding, CMS has learned from oversight
activities, enrollee complaints, and stakeholder feedback that
enrollees often must make a separate request each time they need
material in an alternate language or in an alternate format. 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' primary languages,
even when the enrollee has expressed a need for translation as part of
completing the health risk assessment. To address these issues, we
proposed, 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 and
individuals with disabilities.
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 noted our belief that our proposal would 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.
At 87 FR 79521 through 79522 of the proposed rule, we described the
need for providing materials in non-English languages and in any
accessible formats. We explained that 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.\120\ Effective communication or meaningful
access are critical to providing high-quality care.
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\120\ Refer to https://www.healthaffairs.org/doi/full/10.1377/hlthaff.24.2.435.
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We believe that it is a substantial burden for enrollees to have to
request each material in a non-English language or accessible format
and that requiring enrollees to do so could impede access to care. It
is also possible that enrollees may require materials in both an
alternate format and a non-English 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 primary
language and, where appropriate, in an accessible format. As described
at 87 FR 79522 of the proposed rule, research has found patients with
limited English proficiency experience negative health outcomes due to
the barriers they encounter, including when interacting with their
doctors and care team members. We have become attuned to this issue
through our work with Medicare-Medicaid Plans (MMPs), as explained at
87 FR 79522 of the proposed rule.
We believe that there are many ways for MA organizations and Part D
sponsors to learn of an enrollee's need for an accessible format and
language needs and maintain this information. We outlined examples at
87 FR 79522 of the proposed rule.
[[Page 22226]]
We would like to minimize barriers for enrollees (and potential
enrollees) with limited English proficiency and/or with disabilities
who need materials in non-English languages and accessible formats and
remove any ambiguity associated with MA and Part D plan
responsibilities. Therefore, we proposed 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). In these new paragraphs, we proposed
to require that MA organizations and Part D sponsors provide materials
to enrollees on a standing basis in any non-English languages that are
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 discussed later in this section, and in
any accessible formats upon receiving a request for the materials in
another language or otherwise learning of the enrollee's preferred
language or need for an accessible format. This means that once a plan
learns of an enrollee with limited English proficiency's primary
language and/or an enrollee with a disability's need for an alternate
format--whether through an enrollee requesting a material in a primary
non-English language or alternate format, during a health risk
assessment, or another touch point--the plan must provide required
materials in that language and/or accessible format 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 also
proposed language at Sec. Sec. 422.2267(a)(3) and 423.2267(a)(3) to
explicitly apply this requirement 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 their primary language and/or
alternate format each time the MA or Part D plan distributes a required
material. We note that plans are responsible for providing materials in
both an identified non-English primary language and accessible format
when needed (for example Spanish braille). These modifications at
Sec. Sec. 422.2267 and 423.2267 and other requirements at Parts 422
and 423 regarding translation obligations and accessible formats are in
addition to plan obligations under 45 CFR parts 80 (Title VI), 84
(Section 504), and 92 (Section 1557) 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 parts 80, 84, and 92.
Where one set of regulations imposes a higher or different standard,
but it is possible 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.
As we noted in the proposed rule at 87 FR 79523, there are no
information collections related to creating a standing request for
translated materials or materials in alternate formats. 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.
We received the following comments, and our responses follow.
Comment: Many commenters supported CMS' plan to require MA plans to
provide standardized materials to enrollees on a standing basis in any
non-English language that is the primary language of at least 5 percent
of individuals in a plan benefit package service area and in accessible
formats. They noted that untranslated materials can create barriers in
accessing care and poor outcomes for patients with limited English
proficiency (LEP). A few commenters appreciated that disability
communication access is also a part of the effort to address language
and cultural barriers to care and stated that the standardization of
language access requirements will help patients reliably expect what
their language access to health information will be. Another commenter
noted that without access there can be no equity, and the CMS proposal
changes the emphasis to ensure everyone has access to necessary care as
a foundation for equity. A commenter was pleased to see the proposed
requirement extend to individualized plans of care (ICPs) for special
needs plans and noted that research has shown enrollees often are not
aware of benefits that address social needs or do not know how to
access them. A commenter also expressed that enrollees should not have
to repeat requests for information, including critical information like
ICPs, from plans as this poses unnecessary barriers to needed care and
such communication and language barriers are associated with decreased
quality of care and poorer health outcomes.
Response: We appreciate the widespread support for our proposal. We
agree that the proposed requirements will help to strengthen access to
care and improve equity.
Comment: A few commenters opposed the proposal and stated that the
current policy was sufficient to meet enrollee needs. Several
commenters noted that information regarding how to access translation
services is included in materials. Another commenter stated that
providers can assist enrollees in understanding the information.
Response: We appreciate the perspective raised by these commenters.
However, as stated in the proposed rule at 87 FR 79522, we believe that
it is a substantial burden for enrollees to have to request each
material in anon-English language or request alternate formats for each
material and that requiring enrollees to do so could cause a critical
delay to timely access to care.
Comment: A number of commenters expressed concern over the
financial investment that would be needed in developing an
organization-wide process for capturing language and alternate format
needs and implementing the requirement on a standing basis, including
an investment in IT and vendor contracts. Numerous commenters also
noted that it would take time to implement these processes including
the system updates, updating vendor contracts, staff training, etc.,
and requested that CMS delay implementation until CY 2025. A commenter
also requested a delay in implementing this requirement since these
materials are often prepared well in advance of open enrollment for the
following plan year. A few commenters expressed concern over the cost
of translating materials into several languages on a standing basis. A
commenter believed the proposed requirement would necessitate plans
translating materials into more than 30 languages. Another commenter
noted that they will still have to provide English versions of the
materials for providers, even when enrollees request information in
other languages.
Response: We appreciate the commenters' concerns regarding the
infrastructure updates that will be needed to capture an enrollee's
preference for receiving materials in non-English languages and/or
accessible formats and then using this information
[[Page 22227]]
to send out materials in the requested format on a standing basis.
We also understand that some commenters are concerned about the
cost of translating materials into several languages on a standing
basis. Each fall, we release an HPMS memorandum announcing that plans
can access in the HPMS marketing review module a list of all languages
that meet the 5 percent threshold for plan service areas, which is the
threshold for translation.\121\ For contract year 2023, the threshold
requires few contracts to translate into languages beyond Spanish: 16
MA contracts meet the threshold that requires translating materials
into Chinese, and 19 MA and PDPs meet the threshold that requires
translating materials into other Asian languages. There are no other
service areas with additional languages that currently meet the 5
percent threshold for translation. As a result, there are very few MA
organizations or PDPs that will be required to translate required
materials and, for MA SNPs, ICPs into more than one language.
Therefore, we do not agree that plans will be required to translate
materials into several languages. Also, the current regulations at
Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2) already require plans to
translate required materials into languages that meet the 5 percent
threshold. We also remind MA organizations and Part D sponsors that, as
recipients of Federal financial assistance, they have independent
language access requirements under Title VI of the Civil Rights Act of
1964 and section 1557 of the Affordable Care Act and implementing
regulations at 45 CFR parts 80 and 92, respectively.
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\121\ 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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For auxiliary aids and services, section 504 of the Rehabilitation
Act of 1973, section 1557 of the ACA, and the regulations at 45 CFR
92.102(b) already require plans to provide appropriate auxiliary aids
and services 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. The
requirement we are finalizing at Sec. Sec. 422.2267(a)(3) and
423.2267(a)(3) only clarifies that plans must provide the materials
based on the enrollee's preference on a standing basis.
While we understand that plans may need to make some adjustments to
vendor contracts and make system updates, plans should already have
resources in place to provide these materials translated into the
languages required currently under Sec. Sec. 422.2267(a)(2) and
423.2267(a)(2) and accessible formats. In addition, plans should have
systems in place that can be adjusted to track standing requests since
they are already required to track a request for hard copy materials as
described in Sec. Sec. 422.2267(d)(2)(i)(E) and 423.2267(d)(2)(i)(E).
We believe the benefit of ensuring access to materials that can be
easily understood by enrollees so that they can receive timely access
to care outweighs any additional effort that plans may need to
undertake. As stated earlier in this section and in the proposed rule
at 87 FR 79522, we believe it is a substantial burden for enrollees to
have to request each material in a non-English language or request
accessible formats for each material and that requiring enrollees to do
so could cause a critical delay to timely access to care. Thus, we are
finalizing the provisions at Sec. Sec. 422.2267(a)(3) and
423.2267(a)(3) as proposed, without a delay in implementation.
Comment: Many commenters recommended that CMS provide plans with
flexibility to meet the requirements in other ways and believe that it
is critical to provide materials in a way that is preferred by the
enrollee or what the plan believes is in the best interest of the
enrollee. They noted that an enrollee may not want all communications
in the same language or format. Other commenters inquired if they may
ask the enrollees whether they would like a material in an alternate
format as a one-time request or as a standing basis. A commenter
questioned whether the plan could offer telephonic translation services
to the member, by bringing a translator or TTY on the line to help
answer any questions in lieu of fulfilling the translated or alternate
format document request. Some commenters noted that verbal
communication is the most valuable language access method. A commenter
noted that enrollees may not find value in an audio recording of the
formulary or provider directory, or receiving an entire EOC in large
print that would be nearly 600 pages and arrive in a box.
Response: We thank commenters for suggestions to allow flexibility
to provide materials based on the request of the enrollee, provided the
request is reasonable. We agree that materials should be provided in
the manner requested by the enrollee. We note at 87 FR 79522 and
earlier in the preamble of our proposed rule that once the plan
receives a request for materials in another language or for using
auxiliary aids and services, the plan must provide required materials
in the language and/or accessible format as long as the enrollee
remains enrolled in the plan or until the enrollee requests that the
plan provide materials in a different manner. CMS believes that
enrollees are in the best position to determine their needs for
translation or an accessible format, and the plan should ensure that
there is flexibility to accommodate different needs for different
materials as requested by the enrollee. However, if a plan has concerns
that a specific format may not be an effective way to provide
information based on the enrollee's needs, then it is appropriate for
the plan to reach out to the enrollee to confirm their need for
specific materials, provided that this outreach meets the entity's
obligations for translation or interpretation services under Title VI
(45 CFR part 80), Section 504 (45 CFR part 84), and Section 1557 (45
CFR part 92). For example, if an enrollee states that they would rather
receive certain information included in specific materials translated
verbally instead of a translated written copy of the document, it is
acceptable for the plan to fulfill that request without sending a
written copy. However, the plan must ensure that it documents this
information in the plan's systems. It is also acceptable for the plan
to inquire whether an enrollee would like a material in a non-English
language or alternate format on a one-time or standing basis.
Comment: Numerous commenters raised concerns regarding the
turnaround time needed to create non-standardized enrollee-specific
materials in non-English languages and alternate formats, such as
braille or non-English braille. Some commenters described concerns
about producing materials quickly, such as coverage determination or
organization determination notices which must be provided under tight
timelines. These commenters stated that they would need to provide the
materials first in English and then in non-English language(s) and the
alternate formats to meet timeliness standards. Some commenters also
noted that the turnaround time to create translations such as braille
can be as much as four weeks. A commenter also expressed concerns that
this requirement would further burden contracted vendors that work with
multiple plans that would all be subject to these new requirements and
believed
[[Page 22228]]
that this would result in reduced capacity.
A commenter noted that the proposed rule is in addition to existing
obligations under 45 CFR part 92 and that plans are expected to comply
with both, even if one imposes a higher or different standard, unless
it is impossible to do so. This commenter stated that the lack of
clarity in the proposal on whether the standards under 45 CFR part 92
for determining reasonableness apply to the draft regulation could
cause confusion for plans in implementing the guidance and, in turn,
result in differential application across payers. The commenter
explained that such ambiguity could result in beneficiary confusion and
unnecessary cost for plans. The commenter included an example where a
visually impaired enrollee could request an alternate format of
braille, which the commenter noted under 45 CFR part 92 plans are
permitted to determine the reasonableness by applying the applicable
standards. The commenter suggested that CMS revise the current proposal
to include explicit language that the same standards under 45 CFR part
92 apply to the proposed CMS requirement for providing all CMS required
materials in both the preferred format and/or language.
A few commenters raised concerns regarding their ability to meet
the September 30 deadline for providing a translated or accessible
format Annual Notice of Change (ANOC) to current enrollees. Several
commenters recommended that CMS establish a stakeholder workgroup that
includes translation contractors to discuss how turnaround times can be
improved and which communications can be translated fast enough to meet
the need of the beneficiaries.
Response: We appreciate the commenters' concerns regarding the
turnaround time needed for required materials, and we acknowledge the
specific concern for enrollee-specific materials, such as coverage
determination notices. However, the proposed requirement to provide
materials on a standing basis did not change a plan's current
obligation to provide materials timely in alternate languages under
Sec. 422.2267(a)(2) or alternate formats under 45 CFR part 92, nor do
they change a plan's current obligations under 45 CFR parts 80 and 84.
As outlined in the HPMS 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)'' dated August 30, 2017,\122\ which is guidance that interprets
these laws, MA plans are responsible for having appropriate processes
in place to meet the applicable regulatory adjudication and notice
timeframes at 42 CFR 422 Subpart M and Sec. 423 Subpart M. This
includes cases where an MA plan has to produce a notice in an alternate
format. This guidance informs MA plans of their obligation to provide
materials in an alternate format, if requested by the enrollee, so long
as the requests are reasonable requests. MA plans are responsible for
complying with the timely-notice requirements (set forth at Sec. 422,
Subpart M, and Sec. 423, Subpart M, respectively) in all cases. If
there are certain facts and circumstances when the plan has difficulty
producing an alternate format within the applicable adjudication
timeframe, the plan should first work proactively with the individual
to achieve equivalent communications, but nevertheless document the
facts and circumstances, including an explanation of why the
documentation could not be produced within the regulatory timeframe,
and make best efforts to communicate the information to the individual
via the most effective means. If communications are not provided in a
timely manner, potential impacts include disadvantaging an individual's
opportunity to take full advantage of enrollment periods, the appeals
process, the opportunity to pay premiums in a timely manner, etc.
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\122\ 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.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.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.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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Section 504 and section 1557 require reasonable modification. For
example, the August 30, 2017 memorandum describes one scenario which
could occur if an individual with a disability used an out-of-network
provider and now requests instructions in an alternate format. This
scenario describes how an individual could request that the MA plan
reimburse them for the out-of-pocket claim. If the MA plan requires the
claim to be filed within a certain amount of time, the August 30, 2017
memo states that the MA plan must take into account any added time
needed to provide the instructions in the alternate format if the
request is reasonable as required under section 504 and section 1557.
If it took the MA plan an extra three days to put the instructions into
the alternate format, three days should be added to the length of time
in which the MA plan will accept the individual's claim.
The MA plan should document how it ensured that the individual had
an equal opportunity to participate in the program or activity. If an
MA plan denies a request, the MA plan should document its decision and
be able to share it with CMS or the HHS Office for Civil Rights (OCR)
upon request. If CMS or HHS OCR reviews an MA plan's decision, it will
give weight to the individual's request based on the communications
standards in 45 CFR 84.52(d), and 92.102.
We note that CMS provides translated models for the ANOC and EOC
each summer in Spanish and Chinese so that plans then can focus on
including the plan-specific information prior to the September 30
annual deadline. For CY 2023, CMS also provided Spanish and Chinese
versions of the ANOC and EOC for the D-SNP specific models. We plan to
provide these translated models for CY 2024 as well. Finally, we will
consider establishing a stakeholder workgroup to discuss how turnaround
times can be improved. We believe the benefit of ensuring access to
materials that can be easily understood by enrollees so that they can
receive timely access to care outweighs any additional effort that
plans may need to undertake. For these reasons and those noted
previously, we are finalizing and implementing these requirements for
CY 2024. As such, these requirements will be applicable for all
required materials related to CY 2024.
Comment: A commenter suggested that CMS ensure any requirements
imposed on plans are consistent and implemented in coordination with
changes issued by the HHS OCR. They suggested that CMS delay the
requirements of this rule, since any change in OCR regulations that CMS
wishes to impose on plans will not have been available for public
comment.
Response: We appreciate the comment. We do not believe that the
requirements we are finalizing conflict with obligations for MA and
Part A plans under section 1557 of the ACA. Further, as discussed in
more detail in
[[Page 22229]]
other responses to public comments, we do not believe that the scope of
this final rule necessitates a delay in the requirements we are
finalizing at Sec. Sec. 422.2267(a)(3) and 423.2267(a)(3). We also
note that the OCR Section 1557 proposed rule was published on August 4,
2022, and there was the opportunity to comment on that rule until
October 3, 2022.
We are finalizing the requirements at Sec. Sec. 422.2267(a)(3) and
423.2267(a)(3) as applicable for all required materials related to CY
2024. We expect the tracking and use of standing requests can begin
with requests received from enrollees in connection with materials for
coverage in CY 2024. Unless an MA plan already has an existing process
to track and use standing enrollee requests, we do not expect MA plans
to go back to past enrollee requests to apply them as standing requests
for 2024 materials. Consistent with Question 14 in the August 30, 2017
HPMS memo, an MA plan must make a best effort to ensure that an
enrollee needs to only make the request of an MA plan once during the
time the beneficiary is enrolled with the MA plan. If the enrollee
leaves the MA plan and returns, the individual may need to make the
request to the MA plan again.
Comment: A commenter encouraged CMS to clarify the application of
this requirement in regard to 42 CFR 422.2267(d)(2)(i).
Response: Sections 422.2267(d)(2)(i) and 423.2267(d)(2)(i) state
that, without prior authorization from the enrollee, MA organizations
may mail new and current enrollees a notice informing enrollees how to
electronically access the following required materials: the Evidence of
Coverage, Provider and Pharmacy Directories, and Formulary. The option
for plans to use electronic delivery is not changed by this final rule,
but if a plan elects to use the procedures for electronic delivery of
those materials, the notice informing the enrollee how to
electronically access these materials is a required material subject to
the translation requirements in existing paragraph (a)(2) and new
paragraphs (a)(3) and (a)(4), as finalized in this rule, of Sec. Sec.
422.2267 and 423.2267. In addition, Sec. Sec. 422.2267(d)(2)(i)(E) and
423.2267(d)(2)(i)(E) indicate that the notice must provide the enrollee
with the option to request hard copy materials; requests for the hard
copy materials may be material specific and must have the option of a
one-time request or a permanent request that must stay in place until
the enrollee chooses to receive electronic materials again. Delivery of
the hard copy materials is also subject to the translation
requirements.
This means that plans can send the notice in the enrollee's primary
non-English language or accessible format stating how the enrollee can
access the materials electronically in lieu of sending a hard copy in
the primary non-English language or accessible format. However, if an
enrollee confirms that they want a hard copy of the material on a
standing basis in their primary non-English language or alternate
format, then the plan must provide that material in the primary non-
English language or alternate format on a standing basis unless the
enrollee noted that it is a one-time request. We also note that
websites must be compliant with Section 508 of the Rehabilitation Act
so that individuals can read sites and materials with screen reader
technology. Also, as discussed in the August 30, 2017, HPMS 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)'' \123\ plans must ensure that a
beneficiary can access and use the MA plan's electronic means of
communications such as the plan's website in order to be compliant with
45 CFR 92.202 and 92.204.
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\123\ 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.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.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.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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Comment: Numerous commenters noted that they support the concept of
making ICPs accessible to all enrollees, but, as proposed, they
expressed concern about the time it would take to translate ICPs as
well as the high cost of translating them on a standing basis since the
materials are individualized based on the enrollee. Some commenters
suggested that a care team member verbally review the ICP with the
enrollee following updates to the ICP. This approach would have the
added benefit of improving enrollee understanding and adherence to the
ICP as they would have a team member to review the plan with them and
the opportunity to ask questions. Following such a review, if the
enrollee requested written translation, the plan could then be required
to translate the ICP into the enrollee's requested language. A
commenter noted that if a provider makes treatment notes, it may not be
possible for the plan to ensure that those notes are translated or
provided in accessible formats such as braille. This commenter also
stated that even for items that the plan can translate, ICPs often
involve complex and technical terms--terms that may not be easily
translated immediately.
Response: We appreciate the commenters' perspectives on this issue
and understand the effort that it takes to translate an ICP and/or
provide it in an accessible format. Section 422.101(f)(1)(ii) requires
SNPs to develop and implement a comprehensive ICP through an
interdisciplinary care team in consultation with the beneficiary, as
feasible, identifying goals and objectives including measurable
outcomes as well as specific services and benefits to be provided. We
agree that SNPs should have the care team verbally review and develop
the ICP in consultation with the enrollee. However, we have often found
through CMS program audits that SNPs do not always discuss ICPs with
enrollees. In addition, we believe it is essential for enrollees to
have ICP information in writing in a format that they can understand so
that they can refer to it beyond an initial meeting with a care team
and work towards the goals included in the ICP. We also note that
enrollee-facing ICP information should be provided in an easily
understandable manner. While an ICP may include physician notes and
medical terminology, we encourage plans to keep the ICP focused on
enrollee-specific goals and objectives, including measurable outcomes
and the specific services to be provided. In addition, as previously
described, the 5 percent threshold requires few contracts to translate
into languages beyond Spanish.
Comment: A few commenters requested that CMS clarify which
materials are required to be provided in alternate formats or
languages. A commenter suggested that CMS clarify that the requirement
does not apply to supplemental documents, such as health education
materials. Other commenters requested that CMS confirm expectations for
providing materials on a standing basis.
[[Page 22230]]
Response: We are happy to clarify which materials are required to
be provided in non-English languages and accessible formats. The
requirement we are finalizing at Sec. 422.2267(a)(3) applies to all of
the required materials described at Sec. 422.2267(e) and ICPs, but it
does not extend to other supplemental documents, such as health
education materials. We also noted at 87 FR 79522 of the proposed rule
that on a standing basis means that once a plan learns of an enrollee's
primary language and/or need for an alternate format--whether through
an enrollee request, during a health risk assessment, or another touch
point--the plan must provide required materials in that language and/or
accessible format 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 also reiterate that it is acceptable for an
enrollee to request to receive a material in a non-English language or
alternate format on a one-time or standing basis and that the plan may
inquire as to the enrollee's needs.
Comment: A commenter requested that we define the word enrollee.
Another commenter questioned how an enrollee can request alternate
formats and whether a representative can make the request. This
commenter questioned if CMS can provide model scripting to discuss
requests with enrollees. Another commenter questioned if CMS has
considered developing model documents in large print and the 15
nationally most-common languages and braille and Spanish braille.
Response: We are happy to clarify this information for the
commenters. As defined at Sec. 422.2 and Sec. 422.561, an MA plan
enrollee, or enrollee, means an MA eligible individual who has elected
an MA plan offered by an MA organization. The terms Part D enrollee and
enrollee are used in a similar way in 42 CFR part 423. At 87 FR 79522
of the proposed rule, we described multiple enrollee touch points that
plans can use to capture an enrollee's preference for alternate
languages or accessible formats. Examples of these touch points include
welcome calls, health risk assessments, nurse advice lines, and other
interactions associated with member services, enrollment, prescription
services, appeals and grievances, and care management. As described at
Sec. 422.119, MA plans must make information accessible to current
enrollees or the enrollee's personal representative. Therefore, they
can make a request for non-English languages or alternate formats on
behalf of an enrollee. Since, as previously described, there are a
variety of ways a plan can obtain information regarding an enrollee's
preference for alternate languages or accessible formats, CMS does not
provide model scripting to discuss requests with enrollees. In
addition, we noted in the August 30, 2017 HPMS 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)'' \124\ that it is the
responsibility of the MA plans to produce its materials in accessible
formats when requested.
---------------------------------------------------------------------------
\124\ 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.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.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.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.
---------------------------------------------------------------------------
Comment: A commenter requested that CMS clarify that both existing
and proposed translation standard requirements do not apply to third-
party marketing organizations (TPMOs) or first-tier, downstream, and
related entities (FDR) unless otherwise agreed upon between the MA
organization and the TPMO or FDR, or the Part D sponsors and the TPMO
or FDR.
Response: We clarify that per Sec. 422.2274(g), in addition to all
applicable FDR requirements at Sec. 422.504(i), when doing business
with a TPMO, the MA organization is responsible for ensuring that the
TPMO adheres to any requirements that apply to MA plans, including the
existing and proposed translation standard requirements.
Comment: Several commenters requested that CMS expand the list of
languages provided in HPMS for MA contracts to the 15 most commonly
spoken non-English languages spoken in a service area. These commenters
believed that this change would allow plans to see how close service
areas are to meeting the 5 percent threshold for updating materials and
content and plan accordingly. A few of them also recommended that CMS
designate the effective date for updating new materials and content as
the plan year that begins a year after the date the 5 percent threshold
is met and recommended that CMS delay enforcement for a period of time.
Response: We appreciate the comments. Sections 422.2267(a)(2) and
423.2267(a)(2) require that MA organizations and Part D sponsors
translate required materials into any non-English language that is the
primary language of at least 5 percent of the individuals in a plan
benefit package (PBP) service area. In HPMS, we currently provide MA
organizations and Part D sponsors with information noting the languages
they are required to translate materials into based on this standard.
We will consider expanding the list of languages provided in HPMS for
MA and Part D plans to the 15 most commonly spoken non-English
languages in a service area in a future HPMS update to assist plans in
monitoring which languages may be getting close to the 5 percent
threshold. We remind plans that they must also comply with translation
requirements under 45 CFR 92.101 and any future requirements under 45
CFR parts 80 and 92. We also acknowledge the recommendation that CMS
designate the effective date for updating new materials and content as
the plan year that begins a year after the date the 5 percent threshold
is met and the recommendation that CMS delay enforcement for a period
of time. We note that the languages requiring translation based on the
5 percent threshold have not changed for several years. Thus, we do not
anticipate that plans will need to translate required materials in many
new languages in the future and decline to delay the applicability date
of the requirement we are finalizing at Sec. 422.2267(a)(3) to the
year after the date the 5 percent threshold is met. Also, we decline to
delay enforcement of the requirement. We believe that the benefits of
enrollees being provided required materials in non-English languages
and alternate formats outweighs any additional burden by plans and are
finalizing the requirement as applicable for all required materials
related to CY 2024.
Comment: A few commenters requested that CMS revisit the threshold
requirement at Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2) for
translation by MA and Part D plans. The commenters recommended setting
a threshold that, in addition to the percentage of individuals in a PBP
service area, includes a numerical threshold based either on the number
of enrollees speaking a non-English language in the PBP service area or
the number enrolled in the plan. They noted that with very
[[Page 22231]]
few exceptions, the 5 percent standard means that the translation
requirement applies only to Spanish, yet close to one million Medicare
beneficiaries speak a non-English language other than Spanish. They
also stated that using a percentage measure without any reference to
the absolute number of individuals in a service area leaves significant
swaths of individuals with LEP, particularly those in large diverse
service areas, without access to any translated materials from their MA
plans.
Response: We appreciate the commenters' perspectives and agree that
there are few service areas in which plans are required to translate
materials in non-English languages beyond Spanish. The requests for us
to change the threshold for the translation requirement at Sec. Sec.
422.2267(a)(2) and 423.2267(a)(2) are out of scope of this regulation.
We believe policy making on this issue would benefit from further study
and engagement with interested parties, including notice to the public
and the opportunity to submit comments on this topic. We require MA and
Part D plans to provide the multi-language insert that will inform the
reader in the fifteen most commonly spoken non-English 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 PBP
service area, that interpreter services are available for free. We
remind plans that they must also comply with translation requirements
under 45 CFR 92.101 and any future requirements under 45 CFR parts 80
and 92.
Comment: A few commenters stated that the translation requirement
should also apply to original Medicare materials such as the Medicare &
You Handbook.
Response: We appreciate the comments. Materials sent directly by
CMS are beyond the scope of this rulemaking, but we note that when
individuals request the Medicare & You Handbook in Spanish or an
accessible format, we continue to send them the Medicare & You Handbook
every year in the requested format (and use that preference for other
CMS mailings as well).
Comment: A commenter requested that CMS increase its oversight of
plan performance through secret shopper testing of language access,
monitoring of language access grievances, focus groups, and other
measures to hold plans accountable for compliance with language access
requirements.
Response: We appreciate the suggestions for oversight of plan
performance for language access. Oversight of plan performance is very
important to us, and we will continue to use multiple methods to ensure
that plans meet the regulatory requirements and enrollees have access
to the information needed to make informed health care decisions.
Comment: A commenter highlighted the opportunity plans have to use
community-based organizations (CBOs) to create, operationalize, and
maintain the capacity to supply translation services as well as
auxiliary aids and supports. The commenter asserted that such plan-CBO
capacity-building can reach historically-underserved and linguistically
and culturally diverse pockets of the country with (1) adaptive
interventions and (2) interventions to improve provider-patient
interactions and relationships. They noted the importance of working
with community partners who may be best suited to provide these
language and cultural competencies, but they also emphasized that
Medicare language is ``highly technical in nature'' and not every CBO
partner can translate this type of language. The commenter highlighted
how State Health Insurance Assistance Program (SHIP) offices and their
agencies are stepping up to fulfill the need for translation services
where that capacity does not currently exist. They stated that CMS's
proposed language access provisions for the 2024 calendar year are
necessary because SHIP counselors have limited resources and are merely
scratching the surface to meet the need for translation services in
their communities.
Another commenter expressed that health plan materials should
provide clear information on plan benefits to both enrollees and
providers, and care coordinators and navigators should be available to
discuss the options with enrollees. They noted that accountable care
organizations (ACOs) can help with this, because they are more likely
to have a longitudinal relationship with the patient and have a care
team in place to help with outreach and coordination. The commenter
also stated that ACOs and practices participating in advanced
alternative payment models often have the infrastructure to use data to
better identify, outreach, and successfully engage harder-to-reach
patients, but they cannot do it as efficiently on their own. According
to the commenter, the more standardization there is in how health plans
communicate to patients and providers on how to access benefits and
what resources are available to them, the better partners primary care
physician practices can be in helping dually eligible individuals
navigate the complex health care landscape.
Response: We thank the commenters for highlighting the important
roles that CBOs, SHIPs, and ACOs play in providing potential enrollees
and enrollees with their health care options. We agree that these
organizations can play a vital role in working with Medicare
beneficiaries with LEP since they often have close relationships with
these communities.
Comment: A commenter noted the importance of using medical
interpreters as a means of improving the quality of care provided to
patients with LEP and patients with sensory impairments. This commenter
expressed concern about the cost of providing interpreter services and
that limited reimbursement is available for language access services.
The commenter noted the cost of these services should be paid for by
health plans and not providers. The commenter also stated that it is
important that MA organizations, cost plans, and Part D sponsors
adequately inform their enrollees of the ability to access interpreters
and/or with written materials in their primary language or an
accessible format. Finally, the commenter indicated that CMS needs to
ensure the competency of interpreters. Another commenter encouraged CMS
to ensure access to a translation service that helps address gaps
between patient and provider fluency by continuously evaluating the
quality of interpreters.
Response: We appreciate the commenters' perspectives on this issue.
These comments are outside the scope of this rulemaking to address the
requirement of MA, cost, and Part D plans to provide written 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 and in accessible formats. However, we
note that 45 CFR 92.101(b)(2) discusses language assistance services
requirements and requires that services must be provided free of
charge, be accurate and timely, and protect the privacy and
independence of individuals with LEP. Section 92.101(b)(3) also
requires that services be provided by an interpreter who adheres to
generally accepted interpreter ethics principles, including client
confidentiality; has demonstrated proficiency in speaking and
understanding at least spoken English and the spoken language in need
of interpretation; and is able to interpret effectively, accurately,
and impartially, both receptively and expressly, to and from such
language(s) and English,
[[Page 22232]]
using any necessary specialized vocabulary, terminology and
phraseology. In addition, 45 CFR 92.102 discusses effective
communication for individuals with disabilities. It requires entities
to take appropriate steps to ensure that communications with
individuals with disabilities are as effective as communications with
others in such programs and activities. Section 92.101(b) also requires
that a recipient or State exchange 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.
In addition, we note that, per Sec. Sec. 422.2267(e)(31) and
423.2267(e)(33), MA plans and Part D plans are required to include a
multi-language insert with all required materials noting that free
interpreter services are available in Spanish, Chinese, Tagalog,
French, Vietnamese, German, Korean, Russian, Arabic, Italian,
Portuguese, French Creole, Polish, Hindi, Japanese and any additional
languages that meet the 5 percent service area threshold. In addition,
Sec. Sec. 422.2267(e)(35) and 423.2267(e)(36) requires a statement
about the availability of accommodations for persons with special
needs, including a telephone number; this notice must be in disclaimer
form or within the body of the material on any advertisement of
invitation to education and marketing events.
Comment: A few commenters requested that CMS extend the standing
basis proposed rule to interpreter services. They stated that if an
enrollee with LEP has requested an interpreter for live, real-time
communication (for example, over the phone or in connection with a
visit to an in-network provider), the enrollee should have the option
to establish a standing order for interpretation. They also indicated
that the same rule should apply to CMS itself. When requested by any
enrollee who is LEP, CMS should as a matter of course note in the
enrollee's Medicare record a standing order for interpretation and the
language required, to be used for both incoming and outgoing calls.
Response: We thank the commenters for their input. While not
addressed in this final rule, CMS did propose new standards governing
interpretation services furnished in connection with plan call centers
at section III.K. of the proposed rule (87 FR 79512). That proposal
would 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. We did not propose to require provision
of interpreter services on a standing basis nor did the proposed rule
address Medicare interpreter services. As a result, this comment is out
of the scope of the regulation. We learned from oversight activities,
enrollee complaints, and stakeholder feedback that enrollees often must
make a separate request each time they would like a written material in
an non-English language or need materials in alternate formats. Since
our experience was based on feedback about written materials, we
focused our proposal on written materials. We will consider extending
the standing basis policy to interpreter services for future
rulemaking.
After considering the comments received and for the reasons
outlined in our proposed rule and responses to comments, we are
finalizing the proposed changes to re-designate current paragraph
(a)(3) in Sec. Sec. 422.2267 and 423.2267 to paragraph (a)(5) and to
adopt a new paragraph (a)(3) in both regulations to require plans to
provide required materials to enrollees on a standing basis in an non-
English language or accessible format upon receiving a request for the
materials in a non-English language or accessible format or when
otherwise learning of the enrollee's primary language or need for
accessible format.
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.\125\ In addition, dual eligibility is a strong
predictor of poorer outcomes in an array of Medicare programs,\126\ 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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\125\ Refer to https://www.resourcesforintegratedcare.com/language_preferences/.
\126\ 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 proposed 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 proposed to extend the translation standards applicable to
the
[[Page 22233]]
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.
The proposed modifications at Sec. Sec. 422.2267 and 423.2267
would 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
enrollees 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.
As explained in the propose rule, we considered 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 dually 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 received the following comments, and our responses follow.
Comment: Many commenters, including MACPAC, supported our proposal
to require that FIDE SNPs, HIDE SNPs, and AIPs translate materials into
any languages required by Medicare plus the Medicaid translation
standard of the State in which the plan operates. MACPAC reported that
dually eligible individuals are more likely to be from racial or ethnic
minority groups than Medicare-only beneficiaries. For example, MACPAC
noted in 2020, 17 percent of dually eligible individuals were Hispanic
compared to 6 percent of Medicare beneficiaries who are not dually
eligible. A commenter noted that when culturally and linguistically-
appropriate services are not provided, some dually eligible recipients
of home and community-based services have had trouble accessing the
care they need. This commenter also expressed that, if done well,
integrating Medicare and Medicaid in a culturally-appropriate way could
advance health equity. Another commenter stated that plans
participating in the Financial Alignment Initiative (FAI)
demonstrations have had to do targeted and culturally competent
education and outreach, so some plans may have the necessary experience
to do so in the D-SNP environment. A few commenters noted that a
similar requirement was successfully applied to the MMPs in FAI and
resulted in improved communication to plan enrollees.
Response: We appreciate the commenters' support for our proposed
changes to require that FIDE SNPs, HIDE SNPs, and AIPs translate
materials into any languages required by Medicare plus the Medicaid
translation standard of the State in which the plan operates. Based on
our experience with MMPs, we agree with the commenters that these
changes can help improve access to care and advance health equity.
Comment: A few commenters recommended that CMS apply this
translation requirement to all D-SNPs, including those that do not have
affiliated Medicaid managed care plans. A commenter noted that D-SNPs
are designed for and required to offer at least some coordination
between Medicare and Medicaid benefits, even when Medicaid benefits are
provided on a fee-for-service basis. This commenter explained that
sending communications to a plan enrollee about Medicare in English--a
language that the individual cannot understand--when that same member
is receiving information about Medicaid benefits in another language
the individual can understand is the antithesis of coordination.
According to the commenter, conforming to State translation standards
should be one of the core minimum requirements for all D-SNPs.
Response: We appreciate the commenters' perspectives on this issue.
The requirement we are finalizing at Sec. 422.2267(a)(4) will require
HIDE SNPs, FIDE SNPs, and AIPs in certain States to translate Medicare
materials into additional languages. The finalized requirement will not
apply to HIDE SNPs, FIDE SNPs, and AIPs in all States because the
Medicaid translation standard does not require translation for
languages that exceed the Medicare translation standard in all States.
However, based on the number of HIDE SNPs, FIDE SNPs, and AIPs offered
by MA organizations in contract year 2022, we estimate that the
requirement will result in 73 plans having to translate materials into
additional languages. We believe it is best to take an incremental
approach by focusing on these D-SNPs that have capitated contracts with
State Medicaid agencies and must already translate Medicaid materials
to comply with their Medicaid managed care contracts. We believe these
D-SNPs would likely either have staff that are capable of translating
materials into these languages or contract with organizations to
perform these translations.
Comment: A few commenters requested that CMS align translation
thresholds at the Federal level rather than set State-specific
standards. A commenter indicated that working across CMS' silos to
create a single Medicare and Medicaid standard would also be beneficial
to enrollees.
Response: We appreciate the commenters' input; however, the
languages spoken by Medicare and Medicaid enrollees varies greatly
throughout the country, so we prefer to set policy for translation
requirements based on the languages needs for these programs within a
service area.
Comment: A commenter requested that CMS specify that translation
into State-required alternate languages apply to annual required
communications only. The commenter noted that this would ensure
enrollees receive their benefit information in their selected language
while retaining the option to request translated transactional
communications as needed. The commenter further explained that CMS
could permit the States to specify in the State Medicaid agency
contract (SMAC) the documents the State requires be translated into
specific languages.
Response: We appreciate the commenter's perspective on this issue.
However, we believe it is important for this population to receive all
Medicare materials listed in Sec. Sec. 422.2267(e) and 423.2267(e) and
ICPs in their preferred language. We believe it would cause confusion
for HIDE SNP, FIDE SNP, and AIP enrollees to receive all of their
Medicaid materials in their preferred language, some of their Medicare
materials in their preferred language, and other Medicare materials in
English.
[[Page 22234]]
Comment: A commenter requested that if CMS finalizes the
translation requirement as proposed, CMS or the relevant State should
provide the translated templates for any required communications and
CMS should provide flexibility to meet the enrollee's needs using
methods other than documents sent via U.S. Mail. The commenter
estimated that industry cost to implement the requirements as proposed
would significantly exceed the combined $12.5 million estimate CMS has
noted. While the annual required materials could be plan-specific and
the financial impact could be somewhat limited, the transactional
communications are not plan-specific, so all of them would have to be
translated to meet the proposed requirement. The commenter also
emphasized there would be a significant ongoing cost to maintain
translated communications after the initial implementation.
Response: We thank the commenter for these comments. CMS has
translated several forms to Spanish and Chinese, including the EOC,
ANOC, Formulary, LIS Rider, Part D transition letter, enrollment form,
and Pharmacy and Provider Directories.\127\ In addition, in response to
the comment for flexibility to use other delivery methods besides U.S.
mail, as we noted in a previous response, Sec. 422.2267(d)(2)(i)
states that without prior authorization from the enrollee, MA
organizations may mail new and current enrollees a notice informing
enrollees how to electronically access the following required materials
in their primary language or accessible format: the Evidence of
Coverage, Provider and Pharmacy Directories, and Formulary. Thus, plans
do have flexibility with these materials. On average, we expect these
plans to translate materials into one additional language based on our
experience with MMPs where, out of nine states, only two states
(California and Rhode Island) required translation of materials into
additional languages that exceeds the Medicare translation standard.
California required MMPs to translate materials into nine additional
languages in certain counties and Rhode Island required MMPs to
translate materials into two additional languages.
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\127\ Refer to https://www.cms.gov/medicare/health-plans/
managedcaremarketing/
marketngmodelsstandarddocumentsandeducationalmaterial and https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/Part-D-Model-Materials.
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Comment: Other commenters suggested that CMS defer to the State's
translation standard, which is based on the State's understanding of
their population and access needs. A commenter noted that the
disconnect between the Medicare and Medicaid requirements will result
in confusion, overlapping requirements, and burden on FIDE SNPs,
because State languages are more relevant to the particular dually
eligible individuals served than the nationally standardized set of
languages. As an example, this commenter identified that FIDE SNPs in
the State of Minnesota are required to translate documents into German,
despite the very few German speakers in the State and many of the
languages spoken by higher percentages of Minnesotans, like Somali and
Oromo, are not included in the Medicare standard. These commenters
recommended that Medicaid languages should supersede the Medicare
languages to reduce burdens on both plans and consumers and to better
service the populations in each State.
Response: We appreciate the commenters' perspective on this issue.
We agree that States have a good understanding of their Medicaid
population and the needs of that population. However, we disagree that
there is a disconnect between the Medicare and Medicaid standards since
the Medicare standards for MA, cost, and Part D plans are based on the
population of the specific service area. It is more likely that the
State Medicaid program translation standard will include those
languages required by Medicare plus additional languages based on the
Medicaid standard. For contract year 2023, in addition to those service
areas that meet the threshold to translate materials into Spanish, only
16 MA contracts have service areas that meet the Medicare threshold to
translate materials into Chinese and 19 MA plans and PDPs meet the
threshold to translate materials into other Asian languages. There are
no other service areas with additional languages that currently meet
the 5 percent threshold for translation at Sec. Sec. 422.2267(a)(2)
and 423.2267(a)(2). While the commenter noted that that plans in
Minnesota are required to translate materials into German, we believe
that the commenter may be referring to the requirement that all MA
plans, per Sec. 422.2267(e)(31), must include the multi-language
insert in several languages, including German. While the multi-language
insert itself is required to include German among other languages,
there are no MA, cost, or Part D plan service areas that currently meet
the Medicare 5 percent threshold to require translation into German.
Comment: A commenter requested that CMS incorporate the State-
specific requirements into HPMS, along with the Medicare requirements,
to save plans from having to find the information themselves and keep
everyone consistent in the languages they are using.
Response: We appreciate the suggestion. We provided similar
information in HPMS for MMPs and will consider updating HPMS to include
the State-specific Medicaid requirements into HPMS for those plans that
are impacted by this requirement. In addition, we note that FIDE SNPs,
HIDE SNPs, and AIPs all have contracts with the State or an affiliated
plan which should include information regarding the State's translation
requirements for the Medicaid managed care organization or where they
may obtain this information.
After considering the comments received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the requirement at Sec. Sec. 422.2267(a)(4) and
423.2267(a)(4) as proposed.
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)
Currently, Sec. Sec. 422.2267(e)(30)(vi) and 423.2267(e)(30)(vi)
exclude the member ID card from the translation requirement under
Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2). We proposed 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.
We received no comments on this proposal. We are finalizing these
revisions as proposed for the reasons outlined in the proposed rule.
I. Medicare Advantage (MA) and Part D Communications and Marketing
(Subpart V of Parts 422 and 423)
In the December 2022 proposed rule, we proposed a number of changes
to Subpart V of both Sec. Sec. 422 and 423 regulations. These changes
include submitting marketing materials into the Health Plan Management
System, prohibiting the use of the Medicare name, CMS logo, and
products or information issued by the Federal Government in a
misleading way; prohibiting the use of superlatives (for example, words
like ``best'' or ``most'') in marketing without supporting data which
reflects content for the current or
[[Page 22235]]
prior year; prohibiting marketing of benefits in a service area where
those benefits are not available; requiring TPMOs to list or mention
all of the MA organization or Part D sponsors that they sell;
prohibiting marketing based on information about the savings available
to potential enrollees that are based on a comparison of typical
expenses borne by uninsured individuals, costs for which dually
eligible beneficiaries are not responsible, or other unrealized costs
of a Medicare beneficiary; clarifying that the prohibition on door-to-
door contact without a prior appointment applies even after an agent or
broker has collected a BRC or SOA; notifying enrollees annually that
they can opt out of plan business calls; prohibiting the distribution
of Scope of Appointment and Business Reply Card forms at educational
events; prohibiting sales events to directly follow educational events;
requiring 48 hours between the Scope of Appointment and an agent
meeting with a beneficiary; limiting Scope of Appointments and Business
Reply Cards to a six month timeframe from the submission of 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 review the PECL with enrollees; requiring plans to list
benefits at the beginning of the Summary of Benefits (SB) and in a
specified order; labeling the non-renewal notice as standardized rather
than a model, consistent with CMS's guidance instructions; modifying
the TPMO disclaimer to add State Health Insurance Programs (SHIPs) as
an option for beneficiaries to obtain additional help; 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; requiring agents and brokers to go over a CMS list
of required elements with an enrollee prior to enrollment; limiting the
requirement to record calls between third-party marketing organizations
(TPMOs) and beneficiaries to marketing (sales) and enrollment calls;
clarifying the requirement to record calls between TPMOs and
beneficiaries such that it is clear that the requirement to record
applies only to calls that result in an enrollment and includes virtual
connections such as Zoom and FaceTime; and, prohibiting the
distribution of data by TPMOs. We are finalizing, in some cases with
modifications, the majority of the proposed policies in this final
rule. We are not addressing our proposal to prohibit the distribution
of data by TPMOs in this final rule but, may address it in a future
final rule.
The regulatory changes for Subpart V of Parts 422 and 423 are
applicable for the 2024 Contract Year and beyond; thus applying to
marketing and communications materials and activities beginning for the
2024 Contract Year; current regulations require the distribution of
2024 materials beginning September 30, 2023.
Sections 1851(h) and 1851(j) of the Act, which address MA, 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
authorizes CMS to adopt standards, through rulemaking, standards that
are consistent with, implement and carry out the Medicare Advantage
statutory provisions. 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, sections
1852(c) and 1860D-4(a) of the Act require organizations to provide
certain materials to Medicare beneficiaries concerning MA and Part D
plan choices, benefits coverage, and other information to make informed
enrollment decisions. These statutory provisions help ensure Medicare
beneficiaries are informed, and thus have sufficient knowledge to
assist in protecting them when making an election to enroll in an MA
(including MAPD) or Part D plan. We believe the changes proposed and
adopted in this rulemaking strengthen CMS' ability to ensure MA and
Part D marketing to beneficiaries is not misleading, inaccurate, and/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. (75 FR 19783 through 19785)
1. Requirement for TPMOs To Submit Materials Into the Health Plan
Management System (HPMS)
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.
The HPMS is CMS' system of record for marketing materials.\128\ In the
past, Sec. Sec. 422.2261(a)(3) and 423.2261(a)(3) prohibited third-
party and downstream entities from submitting materials directly to
CMS, unless specified by CMS. In the January 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 operational changes to HPMS, which occurred in May
2021. Prior to the HPMS changes, 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. These system changes
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. 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 proposed 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 proposed 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 modify
Sec. Sec. 422.2261(a)(2) and 423.2261(a)(2) to require that marketing
materials developed by a TPMO for multiple plans must be submitted into
HPMS by the TPMO. In addition, submission may only occur after the TPMO
receives the prior approval of
[[Page 22236]]
each of the MA organizations or Part D sponsors on whose behalf the
materials were designed and developed by the TPMO.
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\128\ 73 FR 2257, 78 FR 32257 and 83 FR 659.
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CMS believes these changes are beneficial to the MA and Part D
programs, for CMS, and plans. By having the TPMO submit materials
directly to CMS and MA organizations and Part D sponsors opting into
the piece, CMS will know exactly which organizations the piece is being
used to market. This will allow CMS to hold only those MA organizations
and Part D sponsors accountable for inappropriate marketing. This also
allows organizations to decide whether they want to be represented by
the TPMO on a specific material. Prior to this change, if the marketing
material was sent in by the one ``lead'' organization, the ``non-lead''
organizations were automatically included in the marketing piece.
Comment: The vast majority of commenters supported our proposal to
require TPMOs to submit marketing materials to CMS through the HPMS.
One commenter supported the proposal but was concerned about the burden
if all plans did not opt into the marketing piece.
Response: CMS thanks the commenters for supporting our proposal to
require TPMOs to submit marketing materials into HPMS. Regarding the
concern about plans that may not have opted in, a TPMO may not use the
marketing piece for any plan that does not opt into the piece.
Comment: We received a few comments opposing our proposal.
Commenters generally stated that the current process is cumbersome and
inefficient, requiring a TPMO to receive approval from every plan prior
to submission into HPMS. One of the commenters suggested that a single
plan serve as the reviewer for multi-marketing plan materials submitted
by the TPMO while another commenter suggested CMS return to the former
process where one plan submitted on behalf of the TPMO.
Response: We appreciate the comments. Our proposal does not change
our current process. Currently, marketing materials are required to be
submitted to CMS, with HPMS being the method of submitting materials.
The current regulation was written, stating that TPMOs may submit
materials into HPMS, in preparation for a major HPMS marketing module
change. The marketing module change took place in May 2021, which
changed the way third party materials were submitted. We proposed to
modify the regulation to make the submission of multi-plan marketing
materials in HPMS a requirement, instead of a ``may,'' which, as
previously stated, was in preparation for our systems change.
This change to require TPMOs to submit the materials they develop
ensures that all plans on whose behalf the TPMO is marketing, know what
material is being submitted and that CMS knows which materials will be
used by which plans. This process also allows for MA organizations and
Part D sponsors to either opt into or opt out of each material, which
allows CMS to see which organizations the TPMO material is being used
for. With this new process CMS can better hold MA organizations and
Part D sponsors responsible for the actions of their first tier,
downstream, and related entities and, therefore, we believe that MA
organizations and Part D sponsors should know and approve of the
materials being used to market their products.
Comment: We received one comment opposing requiring TMPOs to submit
materials on behalf of employer group waiver plans (EGWPs).
Response: Currently, our Medicare Communication and Marketing
Guidelines (MCMG) do not require EGWPs to submit communication or
marketing materials in HPMS, provided the materials are specific to the
EGWP(s). The HPMS material submission requirement is waived (for TPMOs
and EGWPs) when the materials are only applicable to and used for
EGWPs.
After review of the comments and for the reasons outlined in the
proposed and our responses to comments, we are finalizing the provision
to require TPMOs to submit marketing materials into HPMS as proposed.
The benefits of ensuring that TPMO marketing materials are submitted
into HPMS and are approved by each plan to permit the TPMO to use the
material far outweigh any additional effort made by TPMOs.
2. Prohibit the Use of the Medicare Name, CMS Logo, and Products or
Information Issued by the Federal Government in a Misleading Way
CMS proposed to add a new sub-subparagraph (xix) to Sec.
422.2262(a)(1) and a new sub-subparagraph (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, on notices or postcards
where ``Medicare'' is in large font while disclaimers are miniscule,
and in television advertisements where a beneficiary could assume that
the advertising is coming from CMS or the Medicare program in general.
We have also seen logos that 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. 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. CMS can see no value or purpose in a non-
governmental entity's use of the Medicare logo or HHS logo except for
the express purpose of sowing confusion and misrepresenting itself as
the government.
[[Page 22237]]
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, and their first tier and downstream entities,
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, as previously described,
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, previously
described, 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, as well as prohibiting the use of the Medicare
card unless previously approved by CMS 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. With
these proposals, we intended to firmly and clearly prohibit the
improper use of these terms and logos. Therefore, we proposed 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 products or information issued by the Federal
Government, including the Medicare card, in a misleading manner. We
acknowledge that reasons exist to use the Medicare card image, which we
will permit with authorization from CMS.
Since CMS contracts with MA organizations and Part D sponsors and
those contracts incorporate requirements to comply with part 422 and
part 423 regulations, CMS holds these organizations accountable for the
actions of their first tier, downstream and related entities (FDR), per
Sec. Sec. 422.504(i) and 423.505(i); in addition, CMS requires MA
organizations and Part D sponsors to include in their contracts with
first tier, downstream and related entities that any services or
activities conducted by the first tier, downstream or related entity
are performed in accordance with the MA organization's or Part D
sponsor's obligations under its contract with CMS. If CMS determines
that the Medicare name, CMS logo, or official products like the
Medicare card, have been used in a misleading manner by an 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.
Comment: We received numerous comments supporting our proposal
limiting the use of the Medicare name, logo, and products. Some
commenters supporting our proposal did request that we provide
additional guidance on ways the Medicare name or Medicare card image
could be used. Commenters stated specific circumstances such as using
the image of the Medicare card to help beneficiaries recognize their
card when needed.
Response: We appreciate the support for this proposal. We agree
with the commenters that there are instances where the use of the word
``Medicare'' or the image of the Medicare card are both necessary and
not misleading. Situations such as identifying the difference between a
MA organization's or Part D sponsor's card from the Medicare card,
displaying a picture of the Medicare card to remind beneficiaries that
they do need to keep the card safe, even though they are in a Medicare
Advantage plan, and showing the card so a beneficiary knows where to
find their Medicare Beneficiary Identification number serve legitimate
and important purposes. To ensure that the Medicare card image is not
being used inappropriately, we are requiring organizations, including
first tier, downstream, and related entities to receive authorization
from CMS prior to the use of the image. This will ensure that the card
is only being used in educational ways and not for marketing purposes.
Comment: We received one comment opposing this proposal. The
commenter stated that as long as the website clearly states it is not
Medicare, then the use of the word Medicare is not misleading.
Response: Ensuring that beneficiaries can recognize and trust that
materials are from Medicare or the federal government is important.
Specifically prohibiting the misleading use of the Medicare name, CMS
logo, and products or information issued by the Federal Government, as
well as prohibiting the use of the Medicare card unless previously
approved by CMS in Sec. Sec. 422.2262(a)(1) and 423.2262(a)(1), will
protect beneficiaries. Website names containing ``Medicare'' such as
``medicare.com'' may easily be confused with Medicare.gov. Although
sites may have a disclaimer stating they are not a governmental agency,
the disclaimer may be small, at the bottom of a very long page, or
hidden in another page, all of which can make the disclaimer difficult
for a beneficiary to notice on the website.
Disclaimers or taglines that are prominently placed, in a font size
and color to be readily noticed, and that clearly explain that an
entity or website is not affiliated with, endorsed by, or otherwise
somehow related to the federal government, CMS, HHS, and/or Medicare
are essential. Additional information or factors may contribute to, or
alternatively, actually eliminate the potential for use of the Medicare
name, CMS logo, and products and information issued by the federal
government to be confusing or misleading to enrollees or potential
enrollees. It is necessary to consider and evaluate the facts, when
using the Medicare name, CMS logo, and products or information issued
by the Federal Government to determine whether the use of them violates
this provision we are finalizing. Plans and their TPMOs need to take
the necessary steps to ensure that their marketing and communication
materials and activities comply.
Based on the comments, CMS is finalizing the proposal, with a minor
modification, to prohibit the use of the Medicare name, logo, or
products in a misleading manner when used in marketing of MA and Part D
plans. The modification is to permit use of the Medicare card image
with CMS authorization.
3. Prohibiting the Use of Unsubstantiated Statements Without Supporting
Data
In our January 2021 final rule, we prohibited plan use of
unsubstantiated statements except those used in taglines 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 Guidelines. In the
[[Page 22238]]
December 2022 proposed rule, we proposed 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 proposed
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 any context. Currently, a beneficiary
may have no knowledge of how the superlative is determined, potentially
misleading the beneficiary to believe a statement that may be partially
or mostly true, but is lacking context and important specificity. For
example, an MA organization may advertise that it has the largest
fitness network, which may be accurate if all fitness facilities in
their national network are considered. However, when looking at a
particular service area, the MA organization advertising the largest
fitness network may only have two contracted facilities, but another
organization may have eight contracted facilities. The advertisement of
the largest fitness network would be mis-leading, potentially enticing
a beneficiary to enroll in a plan based on inaccurate information.
Permitting the use of superlatives without specific information
explaining the basis or context that is relevant to the prospective
enrollee 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 current, reliable, and valid
data or documentation, such as reports or studies, as 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 an organization stated that
they have the lowest premiums, the organization must identify the
specific MA or Part D plan and 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 also proposed 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 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 plan has the largest network
(of providers or pharmacies) in an area must be supported by
documentation and/or data published January 1, 2021 or thereafter. Data
and the underlying situations can be dynamic and change over time,
therefore, CMS proposed 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 that the data has changed. Based on this, we proposed 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 the prior
contract year.
Comment: CMS received numerous comments supporting the requirement
to use current year or previous year data.
Response: CMS thanks those supporting our proposal. Requiring that
a superlative statement be based on data about current or recent
circumstances will ensure that beneficiaries can make decisions
informed by accurate information that best reflects the plan options at
the time the beneficiary is choosing among MA and Part D plans.
Comment: One commenter noted that the proposed regulation text
stated ``published documentation.'' This commenter recommended
replacing ``published documentation'' with ``documentation that is
applicable,'' stating that published documentation could be based on
significantly older data.
Response: We thank that commenter for identifying the potential
issue and providing a recommended solution. We agree that more precise
language is necessary. It may be possible for a study published in 2023
to be based on data from 2018 and using that information would not be
consistent with our goals and intent for this rule. Ensuring that
superlative statements, which lack nuance, are supported by current and
relevant data is at the heart of our goal for the proposed revision to
Sec. Sec. 422.2262(a)(1)(ii) and 423.2262(a)(1)(ii). We are finalizing
the proposed change with modifications from our proposal, including
using the phrase ``that applies to'' instead of ``has been published.''
Information applying to the current or prior contract year means
information that is about, from or based on the current or prior
contract year.
Comment: One commenter partially supported the proposal, stating
that their support was contingent on permitting citations to be used as
the documentation.
Response: As proposed, the amendments to paragraphs (a)(1)(ii)
required ``sources of documentation or data supportive'' when using
superlatives. CMS considers footnotes explaining the basis, noting the
source (with enough information for a beneficiary to locate), or
providing the actual comparison sufficient documentation. Therefore, a
citation referring the reader to the actual documentation, with a link
to the documentation, to be a ``source of documentation,'' would be
acceptable.
Comment: CMS received one comment opposing the two-year limit on
using data for the superlative. The commenter stated that plans may
want to advertise a long-standing positive performance.
Response: CMS understands the concerns and agrees with the
commenter that advertisements describing long-standing positive
performance should not be prohibited by the two-year data requirement.
It was not our intent to prohibit advertising an organization's long-
standing positive performance, but rather to ensure that the
performance advertised is about the current or previous contract year.
If an organization has maintained the high performance for the current
and previous contract year, as well as years prior, CMS will permit the
advertising of the past two years' worth of data. For example, if an
organization's contract has received five Stars (CMS Star ratings) for
the past five consecutive years, the organization may advertise that
they have received five Stars since X date. However, if the
organization received a four Star rating in the previous contract year,
the organization would not be able to advertise that they
[[Page 22239]]
received a five Star rating since X date or in Y years out of the past
five years.
After consideration of the comments we received and for the reasons
outlined in the proposed rule and our responses to the comments, we are
finalizing the proposal with two minor modifications. First, we are
finalizing the regulatory revision using language that more clearly
requires supporting documentation or data to be about, from or based on
the current or prior contract year, instead of requiring the data to
have been published in the current or prior year. Second, we are
finalizing an additional paragraph to both Sec. Sec.
422.2262(a)(1)(ii)(A) and 423.2262(a)(1)(ii)(A) to clarify that the
inclusion of older data (that is data that is not about, from or based
on the current or prior contract year) in the documentation and data
included in the communication or marketing material to support the
superlative.
4. Prohibition on Advertising Benefits Not Available in a Service Area
In Sec. Sec. 422.2263(b) and 423.2263(b), we proposed 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 outlined in
section 30.1 of the 2016 Medicare Marketing Guidelines (MMG),\129\
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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\129\ 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, during CYs
2021 and 2022, the only states or territories that had plans with a
reduction of $140 or more were California, Florida, and Puerto Rico.
Further, the plans offering the $140 or more premium reduction were not
available in all counties in those locations. Since beneficiaries in
more than 60 percent of states only had access to plans that offer a
Part B premium reduction of $99.00 or less in CY 2022, advertising on a
national or even a regional level that a beneficiary can get up to--or
even close to--the full amount is potentially misleading. And although
MA plans in over 30 percent of states and territories offered a Part B
premium reduction of $100 or more in CY 2022, those plans were not
available in all counties in those locations. 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 the state or location where the advertisement runs that offer 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 should be available to beneficiaries who are receiving
or exposed to the advertisement where they reside. A beneficiary
calling, based on an advertisement touting up to $144 back, would
expect that plans would be available that provide a reasonable Part B
premium reduction. However, the actual reduction available for many
beneficiaries in various locations may be minimal, anywhere from $1 to
$25, significantly below 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 is a misleading
tactic to entice beneficiaries to call the number and potentially
enroll or switch them into another plan, regardless of whether the plan
offers any Part B premium reduction or a reduction of the scope that is
advertised, resulting in a plan choice that may not be 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. In the past, national
advertisements have promoted plans with high dollar amounts for certain
benefits, for example, a $2,500 dental benefit on a national level.
While many beneficiaries have access to MA plans with some level of
additional dental, vision, and hearing benefits, CMS believes
advertising that high dollar amount is misleading when some markets may
not have access to a plan with any dental benefit, while others may
only have access to a plan with limited dental benefits (for example,
$500).
Based on CMS' marketing surveillance of recorded calls,\130\ CMS
has learned that once the beneficiary places a call to the advertised
number, the agent often markets an MA or MA-PD plan that offers a
premium reduction at a much lower level than the advertised dollar
value or that does not provide a Part B premium reduction at all, 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 put in a position of trying to end the call or listening
to an agent sell a plan in which he or she was not interested,
potentially resulting in the individual 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 individual's health care needs.
In this situation, the beneficiary may have benefited by staying in the
individual's existing plan, and may have stayed in that plan, if not
for the advertisement urging the beneficiary to call to ``get the money
they deserve.''
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\130\ CMS has retained the recordings of these calls. The calls
include sensitive information, and as such, we believe it would be
inappropriate and illegal to include them as part of this public
record.
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When a plan advertises benefits that are not available to
beneficiaries in the service area where the advertisement airs, that
type of marketing is misleading. Therefore, we proposed a new paragraph
(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.
Comment: CMS received numerous comments supporting this proposal.
Response: We thank the commenters for their support.
Comment: Some commenters requested clarification on what
``unavoidable'' means in the context of this proposed new rule.
Response: CMS thanks the commenters for requesting clarification on
the term ``unavoidable.'' As proposed and finalized, Sec. Sec.
422.2263(b)(8) and 423.2263(b)(8) permits advertising benefits that are
not available to all potential Medicare beneficiaries viewing the
advertisement if it is
[[Page 22240]]
unavoidable in the local market. We discuss examples here of
permissible exceptions and will provide examples and additional
assistance in our Medicare Communication and Marketing Guidelines.
One example of unavoidable marketing would be a newspaper
advertisement in a metropolitan area which is distributed to
beneficiaries that live within the metropolitan area, but the
beneficiaries do not live within the service area of the plan for which
the particular benefits are being marketed. For example, an MA
organization advertises dental benefits up to $3,000 in a Washington,
DC newspaper. This benefit is only applicable to the plans being sold
by the MA organization in Washington, DC. However, the local
distribution of this newspaper encompasses Washington, DC, parts of
Maryland, and parts of Virginia. In this case, the marketing of
benefits that are not available to the full scope is unavoidable since
the ``normal'' distribution of the local newspaper is greater than the
service area of the plan, about which the benefits are being
advertised.
Another example would be a local television commercial airing in a
specific market, but that may be picked up in an adjacent market. For
example, Baltimore television channels can be seen in parts of the
Washington, DC market and vice versa. An MA organization advertising
benefits available through plans with service areas that encompass
Baltimore on a Baltimore television station would result in unavoidable
marketing for those beneficiaries in the Washington, DC market who are
able to access Baltimore stations.
The exception we are finalizing for unavoidable marketing does not
apply for any national marketing, so new paragraph (b)(8) includes an
exception only for marketing in local media that covers the service
area(s) for the benefits. Since the advertised benefits must be
available in the area in which the marketing is occurring, the ``unless
unavoidable'' standard in our regulation is only applicable to
advertising that is occurring in a limited area. National
advertisements cannot be tailored to only market benefits available to
specific service areas, especially since Medicare Advantage is not
available in every county in the United States and its territories.
Comment: Some of the commenters supported the proposal, but also
requested that we permit the marketing of benefits if a certain
percentage of plans in that marketed area offered the benefits. For
example, if 70 percent or more of the plans offered dental, vision, and
hearing the marketing could state ``most plans offer . . .''. If 50
percent to 70 percent offered vision, dental, and hearing the marketing
piece could say ``many plans offer . . .''.
Response: We appreciate the commenters suggestions. However, we
believe limiting the scope of the regulation as suggested will result
in marketing that misleads or has the potential to mislead
beneficiaries or marketing that does not provide sufficient information
to be useful for a beneficiary. Benefits can vary greatly by service
area, individual plan, and by type and value of the benefits offered.
A company, especially a TPMO, that advertises that most plans offer
dental, vision, and hearing is providing very little specific
information relevant to the beneficiary and what plans are available in
the beneficiary's service area and the actual benefits offered. There
may be no plans in a beneficiary's service area that offer hearing
benefits, making this marketing inaccurate for this beneficiary, even
though hearing is available in 80 percent of the plans the TPMO offers.
In addition, even if vision, dental, and hearing benefits were all
available, it is important to provide the value of these benefits that
are available to the beneficiaries that are exposed to these
advertisements and marketing, so that the beneficiaries have the
information that is useful in making an informed decision about their
health care. For example, the vision benefit advertised nationally in a
generic way could be $50 per year and the dental benefit may only
include cleanings. We have seen vague ads, which we believe are leading
or at least have significant potential to lead beneficiaries to believe
the benefit available in their area is a more valuable benefit,
covering dental covering fillings, root canals, and dentures, when the
benefit is actually of lesser value.
To make the advertising of benefits useful for beneficiaries to
choose the best plan for their needs, organizations would need to
provide a benefit amount associated with the benefits offered. For
example, if a TPMO advertised that 85 percent of the plans represented
by a TPMO may offer hearing benefits, the plans offering hearing
benefits may be limited to one geographic region, while plans in other
regions do not offer hearing. Another concern is advertising that plans
may have hearing benefits up to $3,000. In this case there may only be
one plan that offers more than $1,000 in hearing benefits, while all of
the other plans offer $1,000 or less in hearing benefits. To permit the
advertising of up to a certain amount, even if it states the
beneficiary ``may'' be eligible could lead a beneficiary to believe the
benefits available to them are far greater than the benefits actually
available.
Comment: CMS received a few comments opposing this proposal. A
commenter stated that plans would have to create multiple materials to
address different benefits for each specific area. The commenter noted
this would be especially problematic for regional plans who have
multiple products spanning across large areas.
Response: CMS appreciates the comments. We disagree that plans will
face significant issues in accurately marketing available benefits.
Plans will not be required to create a new material for each area, but
rather will just need to change the dollar amounts reflecting the
benefits offered in the specific markets. If a plan has four markets
and wants to advertise dental up to $4,000, the plan can use the exact
same advertisement for all markets and simply switch out the dollar
amount offered to reflect the appropriate amount for the dental benefit
in each individual market. Protecting beneficiaries from misleading
advertisements promoting benefits for which beneficiaries are
ineligible far outweighs the perceived burden of organizations having
to create marketing materials that specifically reflect the benefits
offered by their plans in specific service areas. In addition, over the
past year, CMS has seen a decrease in the number of advertisements
promoting specific dollar amounts, especially with respect to the Part
B premium buydown and has not received complaints from plans regarding
the burden of producing advertisements that more accurately reflect the
actual benefits being offered.
CMS recognizes the majority of the advertisements discussed here
are tailored to Part C benefits. However, we believe it is necessary to
include this proposal in the Part D regulations as well to account for
the instances where a Part D plan does or may advertise benefits that
are not available in a particular service area. After review of the
comments received and for the reasons outlined in the proposed rule and
our responses to the comments, we are finalizing new paragraph (b)(8)
in Sec. Sec. 422.2263 and 423.2263 as proposed.
5. Prohibits Marketing Unless the Names of MA Organizations or Part D
Sponsors Being Advertised Are Clearly Displayed
We proposed a new paragraph (9) at Sec. Sec. 422.2263(b) and
423.2263(b) to prohibit marketing unless the names of the MA
organizations or Part D sponsors that offer the benefits being
advertised
[[Page 22241]]
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
speak generically about those items and serve to generate sales leads
and obtain beneficiary contact information.
There are specific reasons for advertisements to contain the MA
organization's and Part D sponsor's names. We believe including the
names in the advertisement will help the beneficiary understand that
they are calling a plan, a plan representative (including an
independent agent) and not Medicare or another non-profit, neutral
agency such as a State Health Insurance Program (SHIP). Adding the
names of specific organizations or sponsors provides the necessary
information for a prospective enrollee to know if they reach out
because of the advertisement they saw, they are contacting an
individual connected to a particular MA or Part D plan. In addition,
when an advertisement provides a name, a prospective enrollee can do
additional research on the plan before reaching out to the plan,
including reviewing their Star Ratings and complaint rates. The
prospective enrollee could also discuss the plan with relatives or
friends, whom they trust to help make health care decisions. All of
these factors allow a prospective enrollee to make a more informed
decision on whether they want to contact the particular plan's agent to
learn more.
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 also proposed (and finalized in section III.I.1) to
require, instead of permitting, TPMO developed marketing to be
submitted into HPMS. Under both policies, the TPMO must ensure each MA
organization or Part D sponsor on whose behalf the materials were
created or will be used was reviewed. Under the revisions to Sec. Sec.
422.2261(a)(2) and 423.2261(a)(2), as proposed and finalized, once TPMO
materials are submitted, each MA organization or Part D sponsor would
decide whether they want the TPMO to use that particular marketing
material on their behalf. Even though organizations have already
reviewed the piece prior to the TPMO submission, we are providing an
organization the ability to decide if they want the TPMO to use the
piece. If an MA organization or Part D sponsor ``opts into'' the
material, the TPMO may then use it on their behalf and market those
organizations. If the MA organization or Part D sponsor ``opts out'' of
the marketing material, then the TPMO would not have permission to
market those specific organizations. In addition, we do permit TPMOs to
add additional MA organizations and Part D sponsors to the HPMS
submission. These added organizations also decide if they want to opt
in or opt out of each specific marketing piece. All organizations are
permitted to change their original opt in or opt out at any time. This
may be necessary in case an organization stops contracting with a
specific TPMO or the organization has just decided to limit marketing
by the TPMO.
By requiring MA organization and Part D sponsor names in marketing
materials, 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 material are being advertised in that material. And CMS
oversight and review of marketing materials would be more effective and
efficient. If CMS determines a material 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 material. 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 proposed a new paragraph (9) at Sec. Sec.
422.2263(b) and 423.2263(b) to prohibit MA organizations and Part D
sponsors from marketing any products or plans, benefits, or costs,
unless the MA organization's or Part D sponsor's name or marketing
name(s) (as listed in HPMS of the entities offering the referenced
products or plans) are identified in the marketing material. By
requiring the name of the organization, beneficiaries will have
knowledge of who they are contacting.
In addition, we proposed requirements regarding the display and
identification in marketing materials of sponsoring organizations'
names. In reviewing television, print, and online marketing, CMS has
noted that the disclaimers are often small, not displayed long enough,
read too fast, or are difficult to find. We proposed including
requirements in this new paragraph (9) to ensure the information is
comprehensible and visible. We proposed adding that in print
advertisements must display the MA organization, Part D sponsor, or
marketing name in 12-point font and the MA organization, Part D
sponsor, or marketing name may not be only be displayed 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 print
displayed in an inconspicuous manner. For television, online, or social
media-based advertisements, we proposed 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
proposed that these names must be read at the same speed as the phone
number. To implement these new requirements, we proposed new paragraphs
(b)(9)(i), (ii), and (iii), respectively. (In the proposed rule, we
mistakenly identified these as paragraphs (b)(9)(A), (B), and (C) but
use the correct references here.)
Comment: CMS received a number of comments supporting this
proposal.
Response: CMS thanks the commenters for their support.
Comment: We received a few comments opposing this proposal. One
commenter noted that there would be too much information on the
advertisement.
Response: CMS does not believe that a concern that the names of the
plan or organization being marketed is ``too much information''
justifies not finalizing the proposal. Beneficiaries need to have
certain information to make informed decisions. By having the names of
organizations or plans being marketed available on the advertisements,
beneficiaries will have necessary and appropriate information to decide
whether they want to contact the organization, plan, or TPMO, based on
the organizations the TPMO represents.
Comment: Another commenter noted that advertisements would need to
be pulled if a plan did not opt into the TPMO advertisement.
Response: CMS has stressed that the marketing material should be
reviewed by the applicable MA organizations and Part D sponsors--
meaning all of those for whom the marketing material(s) will be used
and all those named in the
[[Page 22242]]
material(s)--plans prior to submission into HPMS. The revisions to
Sec. Sec. 422.2261(a)(2) and 423.2261(a)(2) are clear that prior
review of the organization is necessary before the TPMO submits the
materials. If a TPMO provides the marketing material to organizations
and updates the material appropriately based on comments, the TPMO's
material should be opted-in by the organizations, eliminating the need
for the piece to be pulled.
After review of the comments received and for the reasons outlined
in the proposed rule and our responses to the comments, we are
finalizing as proposed with minor modifications to paragraphs (9)(ii)
and (iii) to require the marketing names to be read or displayed at the
same pace or in the same font as the phone number or contact
information included in the advertisement.
6. Prohibit the Marketing of ``Savings'' Not Realized
We proposed to add a new paragraph (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 Part D plan or MA plan. In the
example referring to savings for prescription drugs, advertisements
included a small disclaimer stating that the ``savings'' figure is
based on the usual and customary price that someone without
prescription drug insurance would pay. In other examples, MA
organizations, Part D sponsors, or TPMOs have marketed dual eligible
special needs plans (D-SNPs) that provide a ``savings'' of over $7,000.
In this instance, the ``savings'' described in the advertisement refers
to the Part B Medicare premium and cost sharing amounts that are
covered by Medicaid for full-benefit dually eligible beneficiaries, or
are the costs saved through a prescription drug savings program, in
which the eligibility for the program 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 who
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 the retail cost for all of their
drugs out-of-pocket. In the case of significant savings on Part C
benefits, some of these advertised savings required dual eligibility,
but only included information about this requirement in fine print
stating that the individual may need to be income eligible or Medicare
and Medicaid eligible in order to receive the advertised savings.
However, since dually eligible beneficiaries already have Medicaid
coverage or may already be enrolled in a D-SNP, those individuals would
not be saving the full $7,000, because they never paid the full $7,000
in their previous or current plan. Further, if the beneficiary is
eligible for Medicaid to 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
specific to the advertised plan because the same ``savings'' would
accrue if the individual enrolled in any available D-SNP.
We believe that these commercials and other types of advertising
(for example, direct mailers) using these techniques and descriptions
of ``savings'' are used to entice a beneficiary into calling a 1-800
number to get information about or enroll in plan X, mistakenly
believing that the beneficiary will save thousands of dollars by
switching plans, switching from original Medicare, or enrolling into
plan X as a new Medicare beneficiary. However, as identified in the
previous examples, these ``savings'' are not actual savings since the
beneficiary would not have incurred these costs in any case. To address
these concerns, we proposed 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.
Comment: Many commenters supported this proposed change agreeing
that the change would reduce the potential for misinformation.
Response: We appreciate the support from these commenters.
Comment: A commenter stated that CMS should not prohibit
advertising savings associated with enrolling in Part D coverage. The
commenter suggested that CMS instead require appropriate disclaimers
where such ``savings'' are discussed.
Response: The commenter may have misunderstood CMS's proposed
change. CMS did not propose to prohibit all advertising of savings on
Part D costs that would come from an enrollment change. Similarly, the
proposal would not prohibit MA plans from marketing cost savings
associated with a specific plan's coverage of Part A, Part B or
supplemental benefits. As proposed and finalized, the amendment to add
new paragraph (b)(10) to Sec. Sec. 422.2263 and 423.2263 specifically
prohibits advertising ``savings'' 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. Advertisements based on comparisons to specific costs that
a Medicare beneficiary would or could face--such as accurate
comparisons of plan copayments for specific services to original
Medicare cost sharing for the same services, are permissible, subject
to our marketing rules. CMS believes it is better to prohibit
misleading language in advertising rather than requiring a disclaimer
on the advertising indicating how the language is misleading.
After review of the comments received, particularly the extensive
support for the proposed change and for the reasons outlined in the
proposed rule and our responses to the comments, CMS is finalizing the
revision to add a new (10) to Sec. Sec. 422.2263(b) and 423.2263(b) as
proposed.
7. Clarify Door to Door Solicitation
We proposed 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 unsolicited 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. We do not believe
a beneficiary filling out a BRC indicates a beneficiary's intention to
permit an agent to show up unannounced, at the individual's home,
requesting to market MA or Part D plans to that beneficiary. CMS
considers this activity to be unsolicited door-to-door solicitation.
Therefore, we proposed adding a new (A) to Sec. Sec. 422.2264(a)(2)(i)
and 423.2264(a)(2)(i) which provides that contacting a beneficiary at
the individual's home is unsolicited door-to-door contact unless an
appointment at the beneficiary's home at the applicable date and time
was previously scheduled.
[[Page 22243]]
Comment: Many commenters supported this proposed change. There were
no comments directly opposing this proposed change.
Response: We appreciate the support for this proposed change. Upon
reflection during the comment period, we believe that the regulation
text would be clearer without the phrase ``considered to be,'' because
our position is that the BRC is not an agreement to an unscheduled, in-
person meeting initiated by an agent or other individual arriving at a
beneficiary's home. Therefore, such contact is unsolicited.
After considering the strong support for this proposed change and
for the reasons outlined in the proposed rule and our response to
comments, we are finalizing the changes to add a new paragraph (A) to
Sec. Sec. 422.2264(a)(2)(i) and 423.2264(a)(2)(i) largely as proposed
but without the phrase ``considered to be.''
8. Requirement for an Annual Opt-Out for Plan Business
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, to discuss plan
business. In Sec. Sec. 422.2264(b) and 423.2264(b), we define plan
business 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
enrollees with a one-time opt-out opportunity, regardless of how many
subsequent contacts an enrollee receives. Therefore, we proposed to
amend Sec. Sec. 422.2264(b)(2) and 423.2264(b)(2) to 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. By only receiving only a one-time opportunity to opt-out of
plan business contacts, a beneficiary may not realize that they have
the option to opt out at any time. By requiring a written annual
notification from plans that an enrollee may opt-out of plan business
contacts, our proposed new requirement ensures 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.
Under the proposal, we defer to plans on how best to communicate
this, so long as it is in writing, as we believe that plans 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. Under this
proposal, as with the current regulation, 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 solicited comments on whether
CMS should expand the existing and proposed notice requirements in some
way to ensure that MA organizations and Part D sponsors do not market
their products in a way that could be equivalent to prohibited cold
calling.
Comment: We received numerous comments supporting this proposal.
Many commenters stated that receiving calls about other lines of
business is akin to unsolicited contact, and makes it harder for
beneficiaries to distinguish between important plan information and
marketing. A commenter was concerned if our change in requirements
would prohibit organizations from contacting beneficiaries about their
existing plan coverage.
Response: We appreciate the support for this proposal, as we
believe providing an annual, written notice will empower enrollees to
make the decisions that are right for them about the extent to which
their MA or Part D plan contacts them for plan business. We appreciate
the concern about ensuring that plans may continue to contact current
enrollees regarding their existing plan and current coverage but this
proposal, which we are finalizing, does not prohibit calls and other
contact about the enrollee's current plan. Per Sec. Sec. 422.2264(b)
and 423.2264(b), plan business includes discussion about other Medicare
products (not the enrollee's current plan) or about other types of
insurance or lines of business (for example automotive or home
insurance). Plans and agents would still be permitted to call members
regarding their current plan.
Comment: We received a few comments opposing this provision. A
commenter stated that the opt-out notice was unnecessary and unwanted
by beneficiaries because of the overall amount of communications they
already receive regarding their plan, including the ability to opt-out
of calls regarding plan business.
Response: CMS believes the opt-out communication is necessary for
beneficiaries. As noted in the proposed rule, beneficiaries may decide
at a later date that they do not wish to receive calls regarding plan
business. This opt-out provision provides member with a yearly notice,
reminding them of their ability to opt out.
Comment: Another commenter opposed the provision because opting out
would prohibit an agent from contacting a beneficiary about another
plan that may be better for the member.
Response: Requiring an opt-out on a yearly basis does not, in
itself, preclude an agent from contacting a beneficiary regarding plan
business. Agents are still permitted to reach out through email, direct
mail, events, or other general marketing. The agent is precluded from
reaching out only if the beneficiary notifies the agent that they no
longer wish to be contacted regarding plan business.
Based on the numerous comments supporting this proposal, we are
finalizing as proposed.
9. Prohibiting the Distribution of Scope of Appointment (SOA) and
Business Reply Card (BRC) Forms at Educational Events
Our regulations at Sec. Sec. 422.2264(c) and 423.2264(c) describe
what marketing activities are permitted at sales and educational
events, as well as any conduct that is prohibited at these events.
Currently, MA organizations and Part D sponsors, including the agents
and brokers with which they contract, 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 Business Reply Cards (BRCs),
or Scope of Appointment forms (SOA) at educational events. Our
regulations also permit marketing events to immediately follow an
educational event, provided the beneficiary is made aware of the change
in events 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), our sub-regulatory guidance prohibited many of these
activities, such as holding marketing events following an
[[Page 22244]]
educational event, distributing SOA cards, and setting up future
individual marketing appointments. In the January 2021 final rule, CMS
codified, in large part, this sub-regulatory guidance. Since that time,
CMS has expanded its review of plan marketing activities and related
information. We have reviewed complaints through 1-800-MEDICARE about
confusing and misleading marketing tactics received and have heard from
industry groups concerned about the changes in our policy regarding
educational events. Since the 2021 final rule, complaints about plan
marketing activity have increased and included allegations of
unsolicited contact to prospective enrollees. We believe that some of
these complaints may be attributed to the collection (and later use) of
beneficiary contact information, such as BRCs, or SOA cards at
educational events.
We proposed, 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 the
basics of Medicare, including information about coverage options
through Traditional Medicare, Medigap plans, as well as Part C and Part
D. These events are aimed at informing beneficiaries on what Medicare
covers and the different options beneficiaries have when they are
Medicare-eligible, or are looking at the options should they wish to
change the way they receive their Medicare benefits. In other words,
these events are meant to provide generic, factual, non-biased
information about different coverage options, rather than information
designed to persuade beneficiaries to enroll in a particular type of
plan (for example, MA-PD or Medigap), or in a plan offered by a
specific organization.
Although the collection of beneficiary information through SOAs or
BRCs was has been permitted at educational events, we now believe that
agents should be permitted to receive contact information at
educational events, if the beneficiary chooses to provide their
information. As discussed in our May 2022 final rule, the number of
marketing complaints received by CMS has increased significantly over
the past few years. Specifically, a significant portion of these
complaints involve unsolicited contact. A likely contributor to these
unsolicited contacts is a beneficiary not realizing the contact form
they have completed at an educational event gives an agent permission
to contact the beneficiary in the future. CMS has also heard from
advocacy groups requesting that CMS reinstitute the beneficiary
protections from our previous sub-regulatory guidance that were not
included in the January 2021 final rule, including limits on
distributing SOA and BRCs at educational events.
Beneficiaries attend educational events to learn about Medicare,
unlike a sales event where a beneficiary has decided that they want to
look further into a particular plan (or sponsoring organization) in
which to enroll. Collecting contact information at educational events
may unduly pressure a beneficiary into providing their personal
information. Agents passing out SOA or BRC cards, possibly watching
beneficiaries until they fill these forms out, and then collecting them
may put a beneficiary in an uncomfortable position of having to decide
whether the individual wants to oblige the agent by completing the
form, or draw attention to the individual by declining to complete
them. This especially may be the case if the beneficiary believes 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. We believe the beneficiary
needs to be in charge of and in control of whether or not they want to
be contacted, by whom, and in what form. Therefore, to ensure such
decisions remain with the beneficiary, we proposed 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 authorize obtaining
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 marketing meeting where the
beneficiary is encouraged to enroll in a plan. Once an agent speaks
with a beneficiary at an educational event, the beneficiary may believe
they are being pressured into setting up a marketing appointment. The
``on the spot'' request at an educational event for the beneficiary to
schedule a future meeting does not provide the beneficiary enough time
to consider whether they want 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 and not for lead
generation or future marketing opportunities for agents. Therefore, we
also proposed 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.
Comment: We received a substantial number of comments supporting
the proposal to prohibit the collection of SOAs and BRCs at educational
events.
Response: CMS thanks the commenters for their support.
Comment: We also received a substantial number of comments opposing
this proposal. Some commenters stated that not being able to collect
SOAs and BRCs at educational events will result in agents not holding
these events at all, and that such a result is a detriment to
beneficiaries.
Response: We appreciate the comments. However, we disagree that the
prohibition of collecting SOAs and BRCs will cause agents to no longer
hold educational events. We note that prior to 2018, CMS prohibited the
collection of SOAs and BRCs at educational events and these events
still took place. We also note that many educational events are held by
individuals and entities other than agents or plans. Educational events
are regularly sponsored by individuals and groups that are not
affiliated with any specific MA organization or Part D sponsor, such as
events and forums sponsored by State Health Insurance Assistance
programs and other local and community-based groups.
Comment: A few comments stated that this proposal will place an
undue burden on beneficiaries since the beneficiary will have to reach
out to the agent instead of the agent contacting the beneficiary
through the SOA or BRC collected at these events. One of these
commenters stated that beneficiaries go to educational events to meet
with agents.
Response: Thank you for your comments. However, CMS disagrees that
it will place an undue burden on beneficiaries to reach out to an agent
after an educational event, rather than the agent reaching out to the
beneficiary. If a beneficiary takes the time to travel to an
educational event, it should not be burdensome for the beneficiary to
later contact the agent after attending the event. As for the
[[Page 22245]]
statement that beneficiaries go to the educational event to meet with
agents, CMS also disagrees that this is the only or primary purpose for
beneficiaries to attend these events. If a beneficiary's goal is to
meet with an agent, he or she can simply call an agent and set up an
appointment without going to an educational event. We believe
beneficiaries are going to educational events to learn about all parts
of Medicare, not just to meet with agents.
However, we do not want to unnecessarily burden beneficiaries. Our
proposal is to ensure the beneficiary is making the decision to reach
out to an agent. Given the comments, we are modifying this proposal to
permit BRCs to be made available and received by agents at educational
events but are still prohibiting the collection of SOAs at educational
events.
Comment: One commenter stated that this will create challenges in
connecting with beneficiaries.
Response: As stated previously, we believe the choice to reach out
and potentially meet with an agent should be up to the beneficiary. The
proposal, which we are finalizing with some modifications, to prohibit
scheduling or setting up personal future marketing appointments and
obtaining beneficiary contact information, including SOA forms, will
require agents to wait until a beneficiary reaches out to them, which
may present challenges for the agent. This change is aimed at
protecting and giving the choice to the beneficiary, not at easing the
path for agents to more readily reach out to beneficiaries, who may not
wish to receive such outreach.
After reviewing the comments and for the reasons outlined in the
proposed rule and responses to comments, CMS is finalizing the proposed
policies with changes that we believe are in the best interest of the
program and of beneficiaries. First, we are finalizing changes to
Sec. Sec. 422.2264(c)(1)(ii) and 423.2264(c)(1)(ii) to prohibit the
collection of SOAs and prohibit agents from setting up future marketing
appointments at educational events. This is accomplished by removing
paragraph (c)(1)(ii)(C) from both regulations as proposed and
redesignating current paragraph (c)(1)(ii)(D) (permitting the
distribution of business cards) as paragraph (c)(1)(ii)(C). Second, we
are redesignating current paragraph (c)(1)(ii)(E) as paragraph
(c)(1)(ii)(D) and revising it to permit organizations (and their
agents) to make available and receive beneficiary contact information,
including Business Reply Cards, but not including Scope of Appointment
forms. The permission for using BRCs at educational events is similar
to how CMS allows plan materials to be located in common areas of a
provider's office and we intend to interpret and apply the new
regulation that way.
10. Prohibiting Sales Events To Directly Follow Educational Events
CMS is also concerned about marketing events directly following an
educational event. Educational events are meant to provide information
on how Medicare works, including material on the options of Original
Medicare, Medigap plans, Part C, and Part D, and are not meant to
persuade beneficiaries to enroll in a plan. Beneficiaries attending an
educational event directly followed by a marketing event may believe
that they are being pressured, at the conclusion of the educational
event, into staying for the marketing event. For example, an agent may
hold an educational event providing free meals and desserts, and then
directly follow that educational event with a marketing event.
Beneficiaries may believe that they are being pressured into staying
for the marketing event because of the free meal they received at the
preceding educational event. Although our current regulations require
there be an opportunity for a beneficiary to leave the educational
event prior to the start of the marketing event, we do not regulate how
much time must elapse between an educational and a marketing event, nor
do we prescribe what the agent can or cannot say at the educational
event about the marketing event that will follow. Beneficiaries may
believe that there is an obligation to stay for a variety of reasons,
including not having enough time to gather their belongings or feeling
awkward leaving when others are staying. The belief of an obligation
may add pressure for a beneficiary to stay and possibly enroll in an MA
or Part D plan, even though they only came to the event to be educated
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. For example, the
beneficiary may believe that the plan being touted at the marketing
event is the best, or even only plan available, taking into account the
individual's costs and drug needs.
In the past, CMS permitted marketing events to immediately follow
educational events because at the time we were concerned if these
events were separated by time and location, beneficiaries might have to
travel to separate educational and marketing events at different times,
and potentially different locations. Over the past few years, CMS has
witnessed a significant increase in the use of technology replacing the
need for individuals to physically travel to locations to attend
educational or marketing events and receive information. The COVID-19
pandemic resulted in fewer face-to-face communications and more
technology-based marketing, such as Zoom calls and live education
events on the internet and has lessened travel to physical locations.
The use of technology may have in these instances provided more options
for some beneficiaries to be educated about Medicare. We note that
because of the policy to require MA organizations to evaluate the need
for and provide digital literacy education to their enrollees addressed
elsewhere in this rule, we expect digital literacy among enrollees to
improve as well. As a result, we believe that the need for sales events
to immediately follow educational events because of travel
considerations has become less critical.
By separating educational events from marketing events,
beneficiaries are afforded the time to consider all their questions and
options before making any decisions about their health care and without
any pressure to decide on the spot with the agent present. By mandating
a specific time between an educational event and a marketing event, CMS
believes it is allowing beneficiaries needed time to carefully consider
their health care coverage options and whether or not they want to
reach out to the agent and learn more about the particular plan(s) the
agent is selling. CMS believes this proposal to separate marketing from
educational events will alleviate the pressure a beneficiary may
believe that they are being pressured to stay for a marketing event
after an educational event, and will protect beneficiaries from
potential undue pressures to enroll in a plan that does not best meet
their health care needs. Based on this, we proposed to prohibit
marketing events from taking place within 12 hours of an educational
event in the same location. We proposed
[[Page 22246]]
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 marketing event. This will usually give beneficiaries
until the next calendar day, providing sufficient time to consider 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 marketing 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 otherwise believe that
is an obligation to go to the sales event. CMS believes the best way to
protect beneficiaries from 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 marketing event is in the same
location as the educational event. This ensures that an agent or broker
can hold a marketing event the same day as an educational event,
provided the marketing 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 proposed 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.
Comment: We received numerous comments supporting the proposal to
clearly separate educational events from marketing events. Some of
these commenters specifically addressed the need for prospective
enrollees to clearly recognize the different purposes of each event,
and a time gap or venue change, along with the accompanying lack of
pressure to immediately attend a marketing event, would help with that
goal. A few commenters reiterated that educational events should only
be for education and not for lead generation.
Response: We appreciate the support and agree that educational
events should only be educational in nature and not for lead generation
purposes.
Comment: Approximately half of the comments we received opposed
this provision. We received a number of comments stating that agents
are not hurting seniors, comments that this proposal will result in
friction for beneficiaries, comments that this requirement will not add
any additional protection, comments that the proposal will degrade the
consumer experience, and comments that the proposed solution is both
heavy handed and unworkable.
Response: We acknowledge that some commenters generally oppose this
proposal. However, these commenters did not provide CMS with evidence
indicating that reduction in marketing event attendance will likely
occur if this proposal is implemented, or occurred when our prior
guidance in place before 2018 prohibited marketing events from directly
following educational events. With the increase of online events and
other tools for TPMOs to inform and market plans to prospective
enrollees, we believe that those prospective enrollees that attend in-
person sessions will be sufficiently motivated to either leave a
completed BRC with agents at educational events, or move to another
venue or return to a marketing event in the same location soon
thereafter.
Comment: A few commenters stated that educational events would not
be held, resulting in beneficiaries being less informed overall and
increasing the likelihood of a beneficiary enrolling in a plan that
does not meet their help care needs.
Response: We appreciate the concern about the decrease in
educational events. However, we disagree that beneficiaries will not
receive sufficient detail on their options. Plans and agents can
incorporate sufficient information about Traditional Medicare, Parts C
and D, as well as Medigap options during their marketing presentations.
CMS does not prohibit educational information being presented at
marketing events but marketing events are (or should be) accurately
identified as marketing, so that beneficiaries can make informed
decisions about whether to attend and to understand the goal of such
events from the presenters: to sell the beneficiary something.
Educational events must remain as advertised and as permitted by
Sec. Sec. 422.2264 and 422.2263; they must be designed to generally
inform beneficiaries about Medicare, including Medicare Advantage,
Prescription Drug programs, or any other Medicare program. The goals of
the marketing and communications regulations are undermined when there
is not a clear distinction between an educational event and a marketing
event, particularly when they are held in the same location on the same
day. Section 1851(j)(1)(D) of the Act directs that sales and marketing
are prohibited from occurring at educational events; ensuring that
these different types of events remain separate is part of CMS's
responsibilities and obligations under the Medicare statute.
Comment: Several commenters opposed this provision stating that
transportation issues, especially for dually eligible beneficiaries,
make this challenging. These commenters suggested that dually eligible
individuals frequently lack access to transportation, making it
critical to have access to information and resources in just one
interaction. Some expressed health equity concerns based on those with
transportation issues having to go to separate locations to attend an
educational event and a marketing event.
Response: We appreciate the concern regarding transportation,
especially for beneficiaries that are low-income, have disabilities, or
are part of underserved communities. The revisions to Sec. Sec.
422.2264(c)(2)(i) and 423.2264(c)(2)(i), as proposed and finalized
here, do not prohibit educational events or prohibit marketing events
from including educational content and materials. This final rule
establishes parameters to clearly separate educational events and
marketing events to ensure that beneficiaries are not pressured into
attending a marketing/sales event which directly follows an educational
event. Commenters are concerned about vulnerable populations and CMS is
concerned also. Protecting dually eligible individuals and other
vulnerable groups is exactly why we are requiring a break between an
educational event and a marketing event. We want to ensure
beneficiaries are ready to make a health care decision, rather than
being pressured into a decision. If a beneficiary attends an
educational event, requests to hear more about specific products, but
has no transportation to a sales event, CMS believes the agent will
reach out and meet with the beneficiary or provide the beneficiary with
the agent's contact information to set up another meeting. We do not
believe a beneficiary's transportation issues will prevent an agent
from finding a way to connect with the beneficiary, either
telephonically or in person. The number of people ages 65+ who own a
smartphone has increased dramatically over the past few years. In 2018,
46%
[[Page 22247]]
of those 65+ owned a smartphone. This number has increased to 61% in
2021, an increase of almost 25% in four years.\131\
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\131\ https://www.statista.com/statistics/489255/percentage-of-us-smartphone-owners-by-age-group/.
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Comment: Several commenters stated that in-person conversations are
the most effective way to share information, that beneficiaries prefer
in-person meetings and in person meetings result in fewer
disenrollments, fewer complaints, and higher customer satisfaction.
Response: CMS agrees that in-person meetings can be effective for
explaining and discussing information about a beneficiary's health
needs and various options for Medicare coverage. In addition, we agree
that beneficiaries may prefer in person meetings. The changes proposed
and being finalized here about when and where a marketing event can
take place in relation to an educational event do not prohibit in-
person meetings. This revision will prohibit marketing events from
being held in the same location within 12 hours of an educational
event. We actually strongly support agents meeting with beneficiaries,
believing that more information, better communication, and a better
understanding may occur in person. We believe if the beneficiary
prefers an in-person interaction, he or she will choose to attend the
marketing event or will meet with an agent one-on-one.
Comment: Lastly, it was noted that beneficiaries should be able to
make their own decisions on when to attend events.
Response: We agree that beneficiaries should be in control of when
and how they meet or engage with MA organizations, Part D sponsors or
agents who are trying to market to the beneficiary and sell a
particular coverage option (or options) to a beneficiary. We disagree
that this provision prohibits beneficiaries from making their own
decisions on when to attend events. This provision is not prohibiting
attendance at events, rather it is prohibiting when events can occur.
If a beneficiary wants to attend both an educational event and a
marketing event, they are welcome to attend both.
After considering the comments, and for the reasons outlined in the
proposed rule and the final rule, we are finalizing these provisions as
proposed.
11. Requiring 48 Hours Between the Scope of Appointment (SOA) and a
Meeting With a Beneficiary
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
(SOA). Both the statute and the current regulations require an advance
agreement between the beneficiary and the agent. Previously, we
interpreted this standard of agreement in advance in our marketing
(MCMG) guidance as meaning as 48 hours prior the appointment when
practicable. We proposed 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 did not propose to include
``when practicable'' in the proposed regulation because we believe the
phrase ``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
believe that they are being 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
proposed 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).''
Comment: We received a significant number of comments on our
proposal to require 48 hours between an SOA and a meeting with a
beneficiary. About twenty percent of the comments supported this
proposal.
Response: We appreciate the support; however, based on the reasons
discussed this section of this rule, we are modifying the proposal as
described in this section.
Comment: We received a substantial number of comments opposing our
proposal. Some of the commenters stated that that the 48-hour waiting
period will have no real positive effect on beneficiaries as there is
no need for a waiting period when one takes the substantial step to
request a detailed discussion of programs and benefits at a certain
time and place, it is detrimental to beneficiaries, and beneficiaries
are not required to wait 48 hours for such things as purchasing a car.
A commenter stated that CMS lacks authority to require a specific
period of time between the SOA agreement and the meeting with a
beneficiary because section 1851 of the Act only requires an ``advance
agreement,'' not agreement a specific time period in advance.
Response: We appreciate these comments. We disagree that the
Secretary, in promulgating rules and requirements under Section 1851 of
the Act, does not have the authority to interpret and define what
timeframe may be applied to an advanced agreement. The 48-hour
timeframe was a longstanding rule before 2018, both in Subpart V of
Part 422 and the MCMG. This proposal was, in effect, a restoration of
that requirement. We also disagree that the rule is detrimental for the
majority of beneficiaries. We also do not agree that the timeframe will
have no real effect. Giving beneficiaries time to consider their
options and whether they wish to meet with an agent is often
beneficial, providing beneficiaries, especially vulnerable
beneficiaries, time to speak with caregivers and others who they may
rely upon for help or advice, or just provide the beneficiary
additional time to consider their options.
CMS, under its delegated authority from the Secretary, is
authorized to set limitations and standards for the marketing by plans.
Section 1851(h) of the Act requires compliance by plans with fair
marketing standards adopted by the Secretary, which must include that
plans engage in activities described in section 1851(j)(2) ``in
accordance with the limitations established under that subsection.
Section 1851(j)(2)(A) of the Act requires that the Secretary establish
certain limitations on marketing activating ``with respect to at least
. . . [the] scope of any
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appointment [for marketing a plan]'' (emphasis added) and the
limitations adopted require an advance agreement. The proposal to amend
Sec. Sec. 422.2264(c)(3)(i) and 423.2263(c)(3)(i) to establish how far
in advance a SOA must be set is within the scope of CMS's authority as
the statute sets forth minimum requirements and authorizes additional
limitations as well as standards to implement and interpret the
specific limitations set forth in subsection (j)(2)(A).
Comment: We received a significant number of comments noting that
beneficiaries that contact an agent at the end of the Annual Enrollment
Period (AEP) may miss their opportunity to enroll because of the
required 48-hour timeframe. A number of commenters were also concerned
about the impact of our proposed policy on beneficiaries who may face
transportation barriers, or those that travel long distances to meet
with an agent. Based on the previously stated reasons, some of these
commenters opposed the provision and some requested exceptions. A
commenter pointed out that the reasons listed by CMS in the proposed
rule for having a meeting sooner than 48 hours after the SOA is set
indicated how the 48-hour requirement, especially with no exceptions,
would interfere with the real-world planning beneficiaries need to do.
Response: We agree with the commenters that for beneficiaries who
travel long distances or who have transportation issues, and those that
are nearing the end of a valid election period, a shorter period
between when the SOA is set and the personal marketing meeting occurs
may be appropriate to ensure beneficiaries get the assistance they
need. Our proposal was meant to provide an opportunity for
beneficiaries to consider their options, but not to inhibit enrollment
by beneficiaries who choose to enroll through a particular agent. We
did not intend, nor do we want, a beneficiary to miss the opportunity
to enroll in a plan because of a required 48-hour waiting period.
Based on comments, we are convinced that a categorical prohibition
on having a personal meeting less than 48 hours after the SOA is set is
too strict and that exceptions are necessary. Therefore, we are
finalizing the revisions to Sec. Sec. 422.2264(c)(3)(i) ad
423.2264(c)(3)(i) with modifications from our proposal to provide two
exceptions to the 48-hour requirement. The first exception is for
beneficiaries who are approaching the end of a valid enrollment period.
This could be the end of the AEP, the OEP, an SEP or the ICEP. For
these beneficiaries, we will not apply the 48-hour rule if the SOA is
completed during the last four days of the election period. For
example, the AEP ends on December 7th of each year so if an SOA is
completed on or after December 3rd, the personal marketing appointment
can occur during the period between December 3rd and December 7th. If
an election period ends on the 31st of the month, the SOA must have
been completed no earlier than the 27th of that month.
The other exception we will be for walk-ins. Beneficiaries who walk
into an agent's office, a kiosk, a plan's office or any other walk in
will not be subject to the 48-hour rule. This exception will assist
beneficiaries who have transportation issues and those that have
traveled long distances to see an agent. Because this exception is tied
to an unscheduled in-person meeting initiated by a beneficiary, we are
finalizing an additional change to use the phrase ``personal marketing
appointment or meeting'' in paragraph (c)(3)(i) of Sec. Sec. 422.2264
and 423.2264.
After review of the comments and for the reasons outlined in the
proposed rule and our responses to comments, we are revising Sec. Sec.
422.2264(c)(3)(i) and 423.2264(c)(3)(i), including the addition of new
paragraphs (c)(3)(i)(A) and (B), to require that a plan (or agent or
broker, as applicable) agrees upon and records a Scope of Appointment
with a beneficiary at least 48 hours prior to a personal marketing
appointment or meeting, except in two situations: (A) When a
beneficiary requests an appointment within four days of the end of a
valid election period, including the AEP, OEP, SEP, ICEP or the month,
based on eligibility; and (B) When a beneficiary initiates an in-person
meeting.
12. Limiting Scope of Appointments (SOAs) and Business Reply Cards
(BRCs) to a Six-Month Timeframe
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 (which includes agents and
brokers) 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 (SOA) is applicable to TPMOs.
Currently, CMS requires permission by the beneficiary to be granted and
completed in the SOA, 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 list all the products to be
discussed at the appointment on the document, while many times the BRC
is simply a process for obtaining contact information for a beneficiary
(that is, name, phone number, address, email). While SOAs are required
by statute to identify the types of products that will be discussed,
BRCs are not required to specify the products expected to be discussed.
Because BRCs like SOAs, often are open-ended and without expiration,
they allow 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 one year and be contacted by the MA
organization/Part D sponsor or TPMO 24 months later, well beyond the
timeframe a beneficiary might reasonably expect to be contacted about
their plan choices when they first filled out the card.
CMS proposed 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 time period when the SOAs and
BRCs are valid 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. 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
[[Page 22249]]
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.
Comment: We received numerous comments about limiting how long a
Scope of Appointment, Business Reply Card, or other contact mechanism
remains valid. Almost all of the commenters supported limiting the
duration for which an SOA or BRC may be used to contact a beneficiary.
However, many commented that the length of time should be expanded to
either nine or 12 months to account for the next Annual Enrollment
Period.
Response: We appreciate all of the supportive comments and have
considered extending the six-month timeframe to either nine or 12
months, and the timing of when SOA, BRC, or other cards could be
received and how that receipt date would affect the ability of an agent
to reach out to beneficiaries. After that review, we determined that a
12-month timeframe is the appropriate timeframe for the validity of
these documents. For example, a beneficiary in original Medicare might
miss the individual's chance to enroll in an MA plan during the AEP and
might begin to consider enrolling in an MA plan in January. Or the
beneficiary might decide against enrolling in one of the plans
available during an AEP, but wish to re-evaluate that decision in the
next AEP. This beneficiary might fill out an BRC in January and be
contacted by an agent, but under our proposed policy, this individual
would not be able to be contacted by the agent again, when the next AEP
begins in October, because 10 months would have transpired between the
time he or she filled out the BRC and the start of the AEP. In
addition, using a 12-month limit will facilitate a beneficiary giving
permission annually to be reminded about the next AEP and the
opportunity to evaluate (or reevaluate) MA and Part D plan options.
Comment: A few commenters opposed limiting how long a SOA, BRC, or
other contact card remained valid. These commenters generally did not
provide a rationale for their opposition.
Response: CMS continues to believe that SOAs, BRCs, and other
contact cards should not be open-ended and adopting a time limit on how
long these materials may be used to contact a beneficiary is necessary
and appropriate to protect beneficiaries from unwanted or unsolicited
contact in the future. We believe that a 12-month limit reflects when a
reasonable person would consent to or expect to be contacted,
especially given how for most beneficiaries, the AEP is when enrollment
decisions are made.
After considering the comments, and for the reasons outlined in the
final rule, we are modifying the proposal to extend the timeframe from
six months to 12 months.
13. Searchable Provider Directory
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
proposed 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 final rule, we are
adding a new requirement to Sec. 422.111(b)(3)(i) to require that
provider directories include providers' cultural and linguistic
capabilities. The amendment to Sec. 422.2265(b)(4) will require the
organization's provider directory be searchable by this new element. 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.
Comment: We received a few comments that supported this proposed
change. Most of those comments that discussed this change specifically
also commented on the need for improved accuracy of provider directory
information overall.
Response: We appreciate the support for this proposed change, which
we continue to believe will assist beneficiaries. While provider
directory accuracy is outside the scope of this proposed change, CMS
remains committed to working towards greater accuracy in provider
directories.
Comment: One commenter opposed this proposed change, but only for
the element of ``languages spoken.'' The commenter stated that this
change would add to the burden providers already face in communicating
changes in their information reflected in a provider directory. The
commenter recommended that CMS delay implementation of this requirement
until a national provider information data system is made available.
Response: We do not agree that the addition of this element places
significant additional burden on providers as it will require the
providers to spend a minimal amount of time to communicate the new
contents specified in this rule to each MA organization with which the
provider contracts. Providers are already required to provide
information to MA organizations and Part D sponsors, under their
contracts with the plans. This proposal does not require the provider
to provide more information, rather it is to require MA organizations
and Part D sponsors to make the provider directory searchable by all
elements. This proposal to require the MA plan's website include a
provider directory that is searchable by every data element required in
the model provider directory will primarily require MA organizations to
build or revise their existing website software to enable searches by
more fields.
After considering the comments, and for the reasons outlined in the
proposed rule and the final rule, we are finalizing this provision as
proposed.
14. Effect on Current Coverage Added to the Pre-Enrollment Checklist
(PECL) and Review of PECL
CMS proposed to modify the pre-enrollment checklist (PECL)
requirements at Sec. Sec. 422.2267(e)(4) and 423.2267(e)(4). First, we
proposed 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 proposed 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,
[[Page 22250]]
formularies, and that 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
proposed to add ``Effect on current coverage'' to the list of
information that must be referenced as part of the PECL. During most of
2021 and all of 2022, CMS engaged in 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 proposed 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 also proposed
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 discussed, 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 most telephonic enrollments. 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 the individual's 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 telephonic enrollment audio recordings between beneficiaries
and agents, it was clear that some beneficiaries were confused when
they were told 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, of the calls with agents we reviewed 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 intend 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 would 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's expectation
that the agent ensures the beneficiary understands the items in the
PECL. Agents may confirm this understanding 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 proposed 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.
Comment: We received many comments supporting the addition of
``effect on current coverage to the PECL'' and the requirement that
agents/brokers discuss the effect on current coverage with the
prospective enrollee on telephonic enrollments.
Response: We appreciate the support for this proposed change.
Comment: Some commenters suggested that CMS provide model language
to the PECL to be used when confirming effect on current coverage with
potential enrollees.
Response: CMS will add language to the PECL that can be used as a
basis for the conversation with potential enrollees regarding the
effect of an enrollment choice on the potential enrollee's current
coverage. Please note that the PECL is a standardized material that
plans must use as issued by CMS (except for filling in designated
blanks) and that the model language added to the PECL could be
customized so long as the new regulatory requirement that the contents
of the PECL be reviewed with the potential enrollee is met.
After considering the comments, and for the reasons outlined in the
proposed rule and the final rule, we are finalizing these provisions as
proposed.
15. Summary of Benefits (SB) Medical Benefits
CMS also proposed a change to Sec. 422.2267(e)(5)(ii)(A) to
require that the Summary of Benefits (SB) list medical benefits on 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
SB, 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 SB 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.
Comment: CMS received a number of comments regarding this proposal.
All, but one of the commenters supported this proposal.
Response: We thank the commenters for their support. Codifying this
specific requirement will provide it with more strength, clarity and
transparency versus only including it in instructions to the SB model
document. Furthermore, we believe it is important to ensure that the
substance of the SB begins with the medical benefits contained in Sec.
422.2267(e)(5)(ii)(A)(1) through (10).
Comment: One commenter did not support the proposal, stating that
their organization often provides a cover page or other information
prior to listing the benefits.
Response: We appreciate that comment, and want to further clarify
the changes to Sec. 422.2267(e)(5)(ii)(A) that we proposed and are
finalizing. As revised in this rule, Sec. 422.2267(e)(5)(ii)(A)
requires that the information on medical benefits be listed in the top
half of the first page of the SB and be in the same order as the
information is listed in paragraphs (e)(5)(ii)(A)(1) through (10). This
means that the benefits listed in this regulation must be the first set
of benefits listed in
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an MA plan's SB document. Cover pages and other information, provided
these do not include benefits, may be above the required medical
benefits chart. CMS will provide additional information in our MCMG
and/or our SB model material to clarify this.
After considering the comments, and for the reasons outlined in the
proposed rule and the final rule, we are finalizing this provision as
proposed.
16. Non-Renewal Notice
We proposed 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 information to beneficiaries. CMS provides model materials in
the form of an example document and/or a list of required content.
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).
Although our regulations list the non-renewal notice as a model notice,
we have always implemented it as a standardized notice; plans are not
permitted to make any changes to standardized materials, except where
noted. To ensure accuracy and consistency, we proposed 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 modification except where
noted in the standardized material. This is necessary to ensure that
the vital information contained in the non-renewal notice about a
beneficiary's alternative health care options and the timing for the
beneficiary to make an enrollment decision is 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 plan choices. This notice provides beneficiaries with
information about the SEP, as well as information regarding other plans
that may be available to them. As a model notice, currently, MA
organizations/Part D sponsors can place information about SEPs and
other plan options anywhere in the document. As a result, MA
organizations/Part D sponsors have the ability to highlight their own
plan options, instead of providing equal prominence to all health plan
options including those offered by competitor organizations. Our
proposal would eliminate that possibility.
Comment: We had general support from commenters for this provision,
but no specific comments regarding this provision.
Response: We thank the commenters for their general support.
We are finalizing this provision as proposed.
17. Adding ``SHIP'' to the Third Party Marketing Organization (TPMO)
TPMO Disclaimer and Disclosing the Names of All Entities the TPMO
Represents
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 proposed to modify this disclaimer to add State
Health Insurance Programs (SHIPs) as a source of information for
beneficiaries. We also proposed 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 contract 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 enrollment options
exist, the disclaimers at Sec. Sec. 422.2267(e)(41) and
423.2267(e)(41) currently require TPMOs to notify the beneficiary that
a complete list of available plans can be obtained from 1-800-MEDICARE
or Medicare.gov. We proposed to add that TPMOs also notify
beneficiaries that they may contact their local SHIP for more
information on available options because SHIPs are a resource to obtain
unbiased information on all available health and drug plan options. We
believe adding SHIPs to this disclaimer provides beneficiaries with
another important and unbiased resource for assistance.
In addition, CMS proposed that TPMOs disclose the names of the MA
organizations or Part D sponsors with which they contract when speaking
with a beneficiary. This ensures that beneficiaries are aware of all of
their choices when communicating with a TPMO. In CMS's review of
hundreds of sales, marketing, and enrollment audio calls, CMS found
over 80 percent of the calls only discussed 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 they were
assisting, the agent rarely communicated information about those plan
options 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 their needs.
CMS proposed 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 of 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 also proposed 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, the same as what is 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
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materials, including print materials and television advertising.
The first disclaimer, proposed for 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
plans offered by [insert list of MA organizations here]. 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, proposed 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]. You can
always contact Medicare.gov, 1-800-MEDICARE, or your local State Health
Insurance Program (SHIP) for help with plan choices.''
We received comments on this proposal and respond to them as
follows:
Comment: We received a number of comments regarding the addition of
SHIP to the TPMO disclaimer. Most of these comments supported this
addition.
Response: We thank the commenters who supported the addition of
SHIP to the TPMO disclaimer. We continue to believe that beneficiaries
should be notified of the availability of their local SHIP as a
resource for assistance.
Comment: Some of the commenters opposed adding SHIPs to the TPMO
disclaimer. The comments focused on SHIPs having limited budgets, SHIPs
not being trained as well as agents, and beneficiaries enrolling
through SHIPs can be harmful. One commenter stated that they had to
clean up information provided by SHIPs, SHIPs don't face the same level
of repercussions as agents, and stated that they did not want to give
their business to SHIPs.
Response: We appreciate the comments. We understand budget
constraints may limit the constraints of some SHIPs. However, adding
SHIPs to the disclaimer ensures that beneficiaries are notified about
another neutral party to whom they can direct questions and receive
guidance regarding their health care choices. As for SHIP counselor
knowledge, we trust that counselors are ensuring they have up to date
information. SHIPs receive a significant amount of training and are
subject to monitoring by the HHS Administration for Community Living
(ACL) to ensure that they have access to information prepared or
reviewed by CMS. Furthermore, ACL requires SHIPs to attend federal
training sessions and to provide extensive training to staff who
provide information, assistance and counseling to beneficiaries; ACL,
both directly and through its technical assistance consultant
contractor, reviews training materials used by the SHIPs. Therefore, we
believe SHIPs, as well as 1-800-Medicare, are important sources for
beneficiaries to receive unbiased information regarding all of their
choices.
Comment: CMS received numerous comments regarding the requirement
of TPMOs to mention all of the organizations they represent in the TPMO
disclaimer that is required to be read within the first minute of a
call. Many of these commenters supported this requirement.
Response: We thank the commenters for supporting this proposal.
Comment: CMS received a number of comments opposing the proposal to
require plan names be included within the TPMO disclaimer. Commenters
stated the disclaimer would be long, given the average number of plans
offered was 39 in Contract Year 2022, while one county had 82 plans
offered. Reading so many plan names would likely confuse, distract, or
result in the beneficiary failing to pay attention to the agent. A few
commenters suggested that TPMOs may decrease the number of plans they
sell for in order to meet the disclaimer requirement, resulting in less
choices for beneficiaries, especially smaller plans since TMPOs would
most likely contract only with larger organizations. Commenters also
stated that adding to the disclaimer would result in their inability to
read the disclaimer in its entirety within the first minute of the
call.
Response: We appreciate the comments and understand the effects of
listing all plan names in the disclaimer. Including this information in
the disclaimer is intended to ensure the beneficiary is aware of the
individual's options and understands the scope of plans represented by
a TPMO (including an agent). Because CMS's review of audio recordings
during our surveillance activities identified that beneficiaries are
generally told of one only plan, even if the agent represents multiple
plans, we are concerned that beneficiaries do not have the information
available to knowingly select the best plan option for them. Our goal
is for the beneficiary to know and understand that the individual has
choices. The full scope of potential plan options outlined in the
comments reinforces our belief that beneficiaries should be notified of
what is available. However, we agree that providing extensive
information or reading a long list to a beneficiary is not likely to
achieve the goals we have for the proposed amendments to the disclaimer
about other plan options. Therefore, we are not finalizing a
requirement for TPMOs to list all of the sponsoring organizations (or
MA and Part D plans) represented by the TPMO; instead we are finalizing
revisions to the disclaimer required by Sec. Sec. 422.2267(e)(41) and
423.2267(e)(41) that require the TPMO to identify only the number of
organizations and the total number of products available to the
beneficiary where they reside. For example, if TPMO A represents ten
organizations, three of which have a service area that includes
beneficiary B's residence and those three organizations have a total of
eight products (HMO, DSNP, PPO, etc.) available, the TPMO will be
required to tell the beneficiary that information as part of the
standardized disclaimer that we are finalizing.
Comment: A couple of commenters suggested CMS review more data
prior to making changes to the disclaimer. One commenter suggested
holding a focus group with beneficiaries to gather information on their
experiences with TPMOs while another suggested CMS review complaint
data to determine if CMS' previous changes have had any impact.
Response: CMS appreciates these comments. We have and will continue
to monitor complaints for trends and will consider focus groups to
assist with marketing concerns. As discussed in the proposed rule, we
developed our proposal based on our review of hundreds of sales,
marketing, and enrollment audio calls over the past year. CMS found
over 80% of the calls only discussed one plan option from one MA
organization. In the calls that we reviewed, agents rarely informed the
beneficiary that there were multiple plans available where the
beneficiary resided. We believe that this information is adequate to
conclude that a requirement for TPMOs to provide additional information
is appropriate.
Comment: One commenter who opposed adding the names to the
disclaimer suggested a slight modification to the existing disclaimer.
This commenter stated that the correct terminology for TPMOs would be
``represents'' rather than ``sells'' for plan.
Response: We appreciate that comment and will modify the language
for clarity purposes.
After consideration of the comments received and for the reasons
outlined in the proposed rule and this final rule, we are finalizing
the first disclaimer as proposed by adding the addition of
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SHIP to the disclaimer. We are also modifying the current disclaimer.
If a TPMO does not sell for all MA organizations and/or Part D sponsors
in the service area the disclaimer consists of the statement: ``We do
not offer every plan available in your area. Currently we represent
[insert number of organizations] organizations which offer [insert
number of plans] products in your area. Please contact Medicare.gov, 1-
800-MEDICARE, or your local State Health Insurance Program (SHIP) to
get information on all of your options.'' If the TPMO sells for all MA
organizations and/or Part D sponsors in the service area the disclaimer
consists of the statement: ``Currently we represent [insert number of
organizations] organizations which offer [insert number of plans]
products in your area. You can always contact Medicare.gov, 1-800-
MEDICARE, or your local State Health Insurance Program (SHIP) for help
with plan choices.''
18. Comprehensive Medication Review and Safe Disposal
We proposed 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) and (D), 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. We
received no comments on this proposed technical change and, for the
reasons outlined in the proposed rule, we are finalizing the addition
of new paragraphs Sec. 423.2267(e)(43) and (e)(44) as proposed.
19. Requiring MA Organizations and Part D Sponsors Have a Monitoring
and Oversight Plan and Report Agent Non-Compliance to CMS
Based on our review of beneficiary complaints and audio calls
between agents and beneficiaries, we are concerned about the level of
oversight that MA organizations and Part D sponsors maintain over their
contracted agents and brokers. In our review of complaints and our
discussions with MA organizations and Part D sponsors, we have
determined that 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
shared with the applicable MA organization or Part D sponsor to review,
investigate, and take appropriate action. However, this method of
oversight is reactive, and requires organizations and sponsors to
respond to issues that CMS is already aware of. As a result, we are
concerned that inappropriate behavior by agents and brokers is not
being sufficiently curtailed and corrected by MA organizations and Part
D sponsors. In Sec. Sec. 422.2272 and 423.2272, we proposed requiring
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 those 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 agents and brokers with whom they contract (Sec. Sec.
422.2274(c) and 423.2274(c)). At a minimum, a proper oversight program
would include the review of internal grievances and 1-800-MEDICARE
complaints, reviewing a random samplings of past audio sales/marketing/
enrollment 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 would improve the plans' overall marketing and sales
activities. 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 they sell, and agents and brokers who improperly market to
beneficiaries. MA organizations and Part D sponsors can then quickly
act, with such activities as tailored training or disciplinary
measures, based on the specific issues for each agent or broker. We
also proposed that MA organizations and Part D sponsors be required to
report specific agent or broker non-compliance to CMS. Such oversight
and monitoring plans would 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
proposed to add a new paragraph (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.''
Comment: CMS received many comments regarding the proposal to
require an oversight plan that monitors agents and brokers, identifies
non-compliance, and reports non-compliance to CMS. Almost all of the
commenters supported this proposal. However, a number of commenters did
request clarification on what non-compliance needs to be reported to
CMS. Suggestions included egregious issues and repeated issues.
Response: CMS appreciates the support. We agree that additional
information on what non-compliance needs to be reported is warranted.
We are not expecting organizations to report minor, insignificant
issues such as failing to go over one element in a required list of 18
elements. However, if an agent continually fails to address a
significant number of elements, especially after being notified of
issues, or the agent's conduct could have beneficiary impact (for
example, potential beneficiary harm), the regulation we proposed and
are finalizing requires plans to report that particular type of non-
compliance. We will provide additional information in our Medicare
Communications and Marketing Guidelines, including examples in the
future.
Comment: We received a few comments opposing the oversight and
reporting requirement. One commenter stated that TPMOs already have a
robust oversight plan.
Response: We appreciate and are pleased that the commenter believes
TPMOs have robust oversight plans. However, a TPMO having an oversight
plan does not replace an MA organization or Part D sponsor having an
oversight plan that ensures that the MA organization or Part D sponsor
effectively manages TPMO performance and ensures compliance by TPMOs
with Part 422 and Part 423 requirements. In many cases, organizations
also have their own agents and brokers and may contract with
independent agents and brokers, as well as contracting with TPMOs. As
CMS holds organizations responsible for the activities of their
contracted TPMOs, the organizations need to properly oversee all of its
agents and brokers, even if the TPMO or agent has their own oversight
plan.
Comment: One commenter stated that the oversight plan is already
required as part of their organization's compliance plan maintained
under the Part 422 or
[[Page 22254]]
Part 423 regulations. A few commenters stated that this proposal would
cause additional burden on plans, especially small and medium sized
plans.
Response: We only received one comment stating that this proposal
is already incorporated into an MA organization or Part D sponsor's
existing compliance plan. For those organizations who have put an agent
and broker oversight plan in their compliance plan, this proposal
should not have a significant effect. These organizations, however,
will still need to provide the plan to CMS, upon request, and will also
need to report any non-compliance to CMS. For MA organizations and part
D sponsors that have not already established an oversight plan of this
type for monitoring and ensuring compliance by their TPMOs, we believe
that this is an important step toward achieving compliance by TPMOs
with CMS requirements.
Organizations are required to ensure all first tier, downstream,
and related entities adhere to all statutory and regulatory
requirements. In order to ensure compliance, plans should be monitoring
and overseeing agents and brokers. This proposal is requiring actions
that plans should already be taking. For organizations that do not have
an oversight plan in place there will be additional work; however, CMS
believes that work is necessary in order to protect beneficiaries from
inappropriate marketing by non-compliant agents and brokers.
After consideration of the comments received and for the reasons
outlined in the proposed rule and this final rule, we are finalizing as
proposed.
20. CMS List of Required Elements Prior to Enrollment
CMS proposed 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. The provisions in section
1851(h)(4)(D) and (j)(2) regarding the marketing of MA plans apply as
well to the marketing of Part D plans per section 1860D-4(l) of the
Act. 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, yet is still 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 a beneficiary
wishes to enroll in, 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 proposed that
all agents and brokers (employed, captive, and independent agents) go
through a CMS-developed list of items that must be 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 the individual's needs. CMS listened to calls
where the agent or broker only asked about primary care providers and/
or 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.
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 the individual's
needs when, for example, an agent or broker fails to ask the
beneficiary about their current providers or medications, including
specialists and preferred hospitals or other facilities. To ensure a
beneficiary's needs are reviewed, CMS proposed 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 marketing 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. We
explained in the proposed rule that 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 whether those plans fit their
needs; this would, in turn, better enable beneficiaries to make an
informed choice about their Medicare benefits and how to receive them.
We did not propose that agents or brokers would be required to read
standardized questions or statements regarding the topics discussed
here. Rather, we proposed to require that certain required topics are
addressed, prior to the enrollment, specifically topics about providers
and whether a beneficiary's current or preferred providers or
pharmacies are in-network, costs and premiums for prescription drug
coverage and health care coverage, benefits, and the beneficiary's
specific health care needs and current medications.
Comment: We received numerous comments supporting this proposal.
Response: We thank the commenters for their support.
Comment: We received two comments opposing this provision. These
commenters stated that agents are already required to go over the Pre-
Enrollment Checklist.
Response: We appreciate the comments, but the Pre-Enrollment
Checklist does not contain the level of detail required to ensure an
agent receives all of the information necessary to assist a beneficiary
in making a decision that is best for their health care needs.
Therefore, we continue to believe
[[Page 22255]]
that requiring questions from the agent or broker to the beneficiary
and a discussion of specific topics is appropriate.
After consideration of the comments received and for the reasons
outlined in the proposed rule and this final rule, we are finalizing
the addition of a new paragraph (c)(12) to Sec. Sec. 422.2274 and
423.2274.
21. Limit TPMO Call Recording to Sales, Marketing, and Enrollment
Currently, Sec. Sec. 422.2274(g)(2)(ii) and 423.2274(g)(2)(ii)
require TPMOs to record all calls with beneficiaries. This requirement
helps ensure that TPMOs, including agents and brokers, are
appropriately marketing to beneficiaries by ensuring adequate records
are available for oversight and monitoring. This requirement for
recording all calls with beneficiaries was proposed in a January 2022
proposed rule, and finalized in the May 2022 final rule (CMS 4192-F).
The requirement to record all calls was pre-dated by CMS's requirement
to record enrollment calls. As indicated in Sec. 1851(c)(2)(A) of the
Social Security Act, a person with Medicare enrolls in an MA plan or
Part D plan by filing an appropriate election form with the
organization. CMS has established models for this election form,
providing different formats depending on the type of MA or Part D plan
as well as the format of the election itself (paper, electronic,
telephonic, etc.). The telephonic model includes language establishing
the enrollee's agreement to abide by the rules of the plan into which
they are enrolling as well as recording this agreement. That recording
(that is, the physical recording of the telephone conversation) is the
record of the enrollee's request to enroll. As such, CMS has required
recording of telephonic enrollment since the incipience of the
telephonic enrollment process as a requirement of the encompassing
enrollment process. This requirement is reflected in Sec. 422.60(c)(2)
which states that an MA plan must file and retain elections forms for
the period specified in CMS's instructions and Sec. 422.504(e)
requires MA plans to provide access to enrollment and disenrollment
records for the current contract period and 10 prior periods. Similar
requirements apply to Part D sponsors at Sec. Sec. 423.136 and
423.505(e).
As previously stated, CMS's experience in reviewing beneficiary
complaints and listening to recorded calls between agents and brokers
and beneficiaries revealed many instances where agents and brokers
failed to provide enough information, and, most concerning, provided
inaccurate information about plan benefits. In some cases, the agents
and brokers led beneficiaries to believe the beneficiaries were calling
Medicare rather than an insurance agent. We received few pertinent
comments to this proposal in the January 2022 proposed rule prior to
the requirement being finalized at Sec. Sec. 422.2274(g)(2)(ii) and
423.2274(g)(2)(ii). However, following the May 2022 final rule, CMS
heard from trade organizations and 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.
In the December 2022 proposed rule, CMS did not propose to change
the requirement that TPMOs, including agents and brokers, regardless of
their size, must record calls. However, we proposed to limit calls that
must be recorded from all calls to only those calls regarding sales,
marketing, and enrollment by amending Sec. Sec. 422.2274(g)(2)(ii) and
423.2274(g)(2)(ii). We explained in the proposed rule a concern that
current requirement is too broad because calls placed to merely set up
an in-person meeting, or to confirm a beneficiary received a plan
welcome packet, or calls to provide a beneficiary the opportunity to
ask non-marketing questions, such as when the plan will be effective,
must all be recorded. We believe requiring the recording of these types
of calls is an unnecessary burden and not aligned with our goal 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 proposed to modify Sec. Sec.
422.2274(g)(2)(ii) and 423.2274(g)(2)(ii) to limit the calls that must
be recorded in their entirety to marketing, sales, and enrollment
calls. We explained that the definition of marketing in Sec. Sec.
422.2260 and 423.2260 would apply to the use of the term in new
paragraph (g)(2)(ii) and that we intended the words ``sales'' and
``enrollment'' to include the plain meaning of those terms.
Comment: CMS received numerous comments supporting this proposal.
Response: CMS thanks the commenters for their support.
Comment: One commenter was concerned that they would have to go
back and delete all non-marketing, sales, and enrollment calls.
Response: This provision does not require adjustments to be made to
recordings of past calls. The commenter will not need to delete non-
marketing, sales, or enrollment calls.
Comment: CMS received a few comments opposing the requirement to
record calls in any case. Commenters focused on two main points: that
beneficiaries may not want to be recorded, but the TPMO has no choice
and that marketing issues and potential non-compliance are tied to
large call centers and not independent agents or smaller offices.
Response: We appreciate the comments about call recordings.
However, our proposal addressed limiting the recording requirements,
not eliminating CMS' recording requirements, including the longstanding
requirement to record enrollments. Beneficiaries have the right to
refuse to be recorded and have alternative methods to enroll, such as
in-person or online. Finally, as previously discussed, CMS's reviews of
telephone call between agents and beneficiaries strongly indicate that
call centers, independent agents, and smaller offices face similar
compliance challenges and training needs. Furthermore, all agents must
be trained, tested, and licensed in the same manner regardless of
location or operational size.
After consideration of the comments and for the reasons outlined in
the proposed rule, we are finalizing the amendments to Sec. Sec.
422.2274(g)(2)(ii) and 423.2274(g)(2)(ii) as proposed.
22. Require Web-Based Technology Meetings To Be Recorded
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 also proposed to add language to clarify that
web-based technology is included in the call recording requirements.
Since the May 2022 final rule, we have received questions asking
whether technology-based meetings (for example, Zoom meetings between
an agent and a beneficiary) 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 that present the same
concerns about inappropriate marketing as has been found during
telephonic calls. Technology is changing the way people interact, and
Medicare beneficiaries aging into the program are more likely to have
experience with newer technologies and may be more comfortable using
such
[[Page 22256]]
technology. In addition, during the COVID-19 pandemic, many
beneficiaries learned to use different technologies to keep in touch
with people and to conduct business. Moreover, because of the pandemic,
many agents and brokers have moved to using these newer technologies,
holding both sales and educational meetings using web-based
technologies. And unlike in-person or online documentation, the
practical effect of using technology like Zoom, Facetime, or Skype is
similar to a telephone call.
We proposed 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.''
Comment: We received some comments supporting this proposed change.
Response: We appreciate the support.
Comment: A commenter opposed the proposed change stating that the
change as written did not provide the beneficiary with the choice to
not be recorded. The commenter pointed out that if the recording would
be preserved for ten years, the beneficiary should have a say as to
whether they wanted to be recorded.
Response: The requirement to record calls does not prevent a
beneficiary from declining to have the call recorded. CMS has always
expected that if a beneficiary declines to be recorded, the call must
end. The TPMO may engage with the beneficiary through an in-person
meeting.
Comment: One commenter stated that they opposed the requirement to
record calls between beneficiaries and TPMOs. They indicated that they
did not want their personal information disclosed, recorded during the
phone call and then stored.
Response: We appreciate this individual's desire to not have their
information recorded on a phone call between a beneficiary and a TPMO,
regardless whether the objection to the recording is from a beneficiary
or a TPMO. If the commenter was a beneficiary, there are other
enrollment mechanisms outside of phone calls that beneficiaries can use
to enroll in a plan.
Comment: One commenter indicated that they opposed the requirement
to record calls between TPMOs and beneficiaries as it is an undue
burden on independent agents. Some commenters indicated that they
opposed the requirement to record calls altogether, regardless of CMS
limiting the scope of the recording requirement to certain types of
calls. One of these commenters indicated that there should be separate
rules for independent agents and large call centers.
Response: The requirement to record all calls is outside the scope
of this regulation. The commenter also requested CMS distinguish
between independent agents and large call centers with regard to the
requirement. CMS did not address the definition of TPMO in the proposed
rule and we decline to adopt a change of this scope in the regulation
without a fuller opportunity for the public to understand and comment
on it. In addition, CMS has anecdotal experience that marketing
misrepresentation issues have occurred during calls with independent
agents, as well as with the TPMO call centers. Finally, the premise
that this requirement is an undue burden is based on the idea that
independent agents do not have the capability to record calls and
maintain the recordings of those calls and we fundamentally disagree.
Independent agents have long been engaging in telephonic enrollment as
detailed in the Medicare Managed Care Enrollment Manual and the
Medicare Part D Enrollment Manual. Telephonic enrollment entails
capturing enrollment requests over the phone. MA and Part D enrollment
require the plan to maintain a copy of the enrollment request. In the
medium of a telephonic enrollment this would be impossible without the
ability to record the telephonic conversation that comprised the
telephonic enrollment. As such, independent agents should already have
the capability available to capture telephonic conversations with the
beneficiaries whom they serve.
After considering the comments on the inclusion of web-based
technology meetings, and for the reasons outlined in the proposed rule,
we are finalizing this change largely as proposed but with the
clarification that the requirement applies only to the audio portion of
web-based calls.
IV. Strengthening Current Medicare Advantage and Medicare Prescription
Drug Benefit Program Policies
K. Clinical Trial-Related Provisions (Sec. 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 proposed 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). We received several comments supporting our
proposals in general. We address comments on specific proposals in the
appropriate sections of this rule.
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), long-standing 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
Items or services needed for reasonable and necessary care
arising from the provision of an investigational item or service in
particular, for the diagnosis or treatment of complications.
Although MA plans must follow all NCDs, section 1852(a)(5) of the
Act, which CMS has implemented in Sec. 422.109(b), provides that if an
NCD or new legislative benefit introduced in the middle of a plan year
is considered a significant cost as determined by the
[[Page 22257]]
Office of the Actuary, MA plans are not responsible for coverage until
the cost to provide the new benefit is calculated into the plan's
payment rate. CMS has previously determined, as discussed in the CY
2019 Advance Notice,\132\ that the multiple clinical trials covered
under NCD 310.1 trigger the significant cost threshold. Therefore,
Traditional Medicare has covered the Medicare-covered routine costs of
clinical trials that are covered under NCD 310.1 for MA enrollees. To
ensure continued clarity and transparency for this longstanding policy,
discussed in section 10.7.1 of Chapter 4 of the Medicare Managed Care
Manual, we proposed to codify this policy by adding new Sec.
422.109(e). In Sec. 422.109(e)(1), we proposed to codify that
traditional Medicare is responsible for coverage of routine costs of
qualifying clinical trials for MA enrollees for clinical trials covered
under the Clinical Trials National Coverage Determination 310.1 and all
reasonable and necessary items and services used to diagnose and treat
complications from participating in clinical trials.
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\132\ The Advance Notice of Methodological Changes for Calendar
Year (CY) 2019 for Medicare Advantage (MA) Capitation Rates, Part C
and Part D Payment Policies and 2019 draft Call Letter discusses the
clinical trial coverage policy for the MA program on pages 23-23 and
is available at this link: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2019Part2.pdf.
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Deductibles and MA Responsibility for Differences in Cost-Sharing
Traditional Medicare pays for all routine costs of clinical trials
for MA enrollees and, as explained in the CY 2011 Rate
Announcement,\133\ MA enrollees do not pay the traditional Medicare
Part A and B deductibles when Traditional Medicare pays the Medicare-
covered costs associated with the clinical trial.\134\ In Sec.
422.109(e)(2), we proposed to codify this policy that MA enrollees
participating in clinical trials are not subject to Part A and B
deductibles.
---------------------------------------------------------------------------
\133\ The Announcement of Calendar Year (CY) 2011 Medicare
Advantage Capitation Rates and Medicare Advantage and Part D Payment
Policies and Final Call Letter addresses this in a response to a
comment on page 20-21 and is available at the following link:
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2011.pdf.
\134\ In addition, the See page 31 of the MA Payment Guide for
Out of Network Payments, page 31, addresses this topic. The guide is
available at the following link: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/downloads/oonpayments.pdf.
---------------------------------------------------------------------------
MA plans are responsible for paying the difference between
traditional Medicare cost-sharing incurred for qualifying clinical
trial items and services and the MA plan's in-network cost-sharing for
the same category of items and services. We proposed to codify this
requirement for MA plans to pay the difference between traditional
Medicare and plan's cost sharing in Sec. 422.109(e)(3). We also
proposed in Sec. 422.109(e)(4) to codify that the enrollee's in-
network cost-sharing portion must be included in the plan's maximum
out-of-pocket (MOOP) calculation. As the clinical trial costs within
the scope of NCD 310.1 are covered by Part A and/or Part B, these are
basic benefits within the scope of the MOOP requirements in Sec. Sec.
422.100(f)(4) and (5) and 422.101(d)(2) and (3), but for clarity we
proposed to codify at Sec. 422.109(e)(4) the requirement that the
enrollee's in-network cost-sharing must be included in the plan's MOOP
calculation. In requiring MA organizations to provide in-network cost
sharing for clinical trial services, CMS is requiring that MA plan
enrollees have coverage for clinical trial services that is consistent
with coverage they have for all other Medicare Part A and Part B
services. In paragraph (e)(5), consistent with our guidance in section
10.7.1 of Chapter 4 of the Medicare Managed Care Manual, we proposed
that MA plans may not require prior authorization for participation in
a Medicare-qualified clinical trial not sponsored by the plan, nor may
it create impediments to an enrollee's participation in a non-plan-
sponsored clinical trial under NCD 310.1. This protection is necessary
in order to ensure that MA enrollees have access to and coverage of
clinical trials within the scope of NCD 310.1 to the same extent as
Medicare beneficiaries enrolled in the traditional Medicare program.
While MA plans are responsible for covering any differences in cost-
sharing between traditional Medicare and MA plan in-network costs for
services in the same category, traditional Medicare, through the MACs,
is responsible for all other costs included in clinical trials within
the scope of NCD 310.1. Finally, in accordance with Sec.
422.109(c)(2), CMS requires MA organizations to provide coverage for:
(1) services to diagnose conditions covered by clinical trial services;
(2) most services furnished as follow-up care to clinical trial
services; and (3) services already covered by the MA organization.
Because Sec. 422.109(c) adequately addresses how MA organizations are
required to cover certain benefits and costs even when the traditional
Medicare program pays for changes in benefits as a result of an NCD or
legislative change, we do not believe that additional regulation text
is necessary to apply those rules in the context of NCD 310.1.
Comment: A commenter supported the proposal to codify clinical
trial-related policies under NCD 310.1 and stated it believes there is
sufficient information on expectations of MA organizations with respect
to clinical trial coverage. The commenter also suggested that CMS
continue to provide MA organizations with information about coverage
responsibilities for Medicare-covered trials to include information in
the final decision memo for the NCD regarding significant cost as well
as information on policy implications for Part D, dually eligible, and
Medicaid.
Response: We thank the commenter for its support of our proposal.
We note that, for clinical trials that are outside the scope of NCD
310.1 and are conducted under a separate NDC, coverage of items and
services under that separate NCD is addressed by the existing
regulation at Sec. 422.109(a) through (d). We also appreciate the
commenter's suggestion that significant cost information be included
with the decision memo for the NCD and will work with our colleagues in
Traditional Medicare about including this information in future
decision memos. With respect to information about other programs,
unless the NCD has specific information relevant to other programs, we
believe that each program can best explain through its guidance for the
program any issues in implementation or coverage.
Comment: A commenter recommended that CMS reconsider its proposal
to permit MA enrollees to participate in clinical trials without prior
authorization from an enrollee's MA plan. The commenter expressed
concern that the enrollee or the MA organization would have no control
over whether the enrollee would, for example, receive a placebo, or the
treatment being tested in the trial which could put the enrollee's
health and quality of care at risk while also undermining the MA
organization's care coordination efforts for the enrollee.
Response: Under the current policy that we proposed to codify,
Traditional Medicare pays for MA enrollees for clinical trials under
310.1. MA organizations do not cover these trials for MA enrollees and
the costs of what is covered is paid by the Traditional Medicare
program; therefore, MA organizations cannot require prior
authorization. MA organizations may, however, require prior
authorization for A and B-IDE trials and NCD-CEDs. Although MA
organizations may not require prior authorization for clinical
[[Page 22258]]
trials under 310.1, enrollees, if they choose, may notify plans of
their participation in clinical trials and MA organizations may help
facilitate communication with the trial leaders and enrollee. MA
enrollees in clinical trials also receive the same protections as those
in Traditional Medicare, including informed consent requirements and
discussion of the trial's features, such as, whether a placebo will be
used.
After consideration of the comments received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing Sec. 422.109(e) as proposed with a minor modification to
the heading for paragraph (e) to clarify the scope of the paragraph is
limited to NCD 310.1.
2. A-B Investigational Device Exemption Trials
The regulation at Sec. 405.211 specifies Medicare coverage of
Category A and B investigational device exemption (IDE) studies.
Providers of device trials must submit evidence of an FDA approved IDE
for the devices studied, as part of their application to CMS for
approval of a trial. Once a trial has been approved by CMS, it is
listed on the CMS website. In addition to including assessment of
devices, IDE trials differ from clinical trials under NCD 310.1, as
they are not covered as a result of an NCD nor are they subject to a
significant cost assessment. As a result, MA organizations are
responsible for payment of claims related to enrollees' participation
in both Category A and B IDE studies that are covered under traditional
Medicare. This is part of the MA organization's obligation to cover the
items and services (other than hospice care or coverage for organ
acquisitions for kidney transplants) for which benefits are available
under Parts A and B for their enrollees under section 1852 of the Act.
MA plans are responsible for payment of routine care items and
services in CMS-approved Category A and Category B IDE studies. An MA
plan is also responsible for coverage of CMS-approved Category B
devices. While CMS will cover routine care items and services, it will
not approve coverage of Category A devices themselves because they are
considered experimental and excluded from coverage under Sec.
405.211(a). As with other benefits for which it is responsible for
coverage, an MA plan may apply utilization management, including prior
authorization, consistent with Sec. 422.4(a)(1)(ii).
Section 10.7.2 of Chapter 4 of the Medicare Managed Care Manual
addresses this policy. In order to clarify this scope of required
coverage for MA plans and avoid any inadvertent confusion between the
coverage requirements associated with clinical trials under NCD 310.1,
we proposed to add Sec. 422.109(f) to specify MA plan coverage of the
routine items and services, including the Category B IDE device and
related items and services in the context of a Category A and B IDE
studies, that are covered by Medicare under Sec. Sec. 405.211(a) and
(b).
Comment: A couple of commenters expressed support for the clinical
trial-related proposals, but requested that it was especially necessary
in the case of B-IDE coverage to have some mechanism to indicate an
enrollees' MA status. The commenters stated that inability for MA plans
and providers to distinguish MA enrollees from other enrollees in
commercial plans can lead to confusion and delays in coverage.
Response: Per Sec. 422.111(i), MA plans must issue and reissue (as
appropriate) member identification cards that enrollees may use to
access covered services under the MA plan. Such cards indicate that the
enrollee is in an MA plan and must meet, at a minimum, the content
requirements at Sec. 422.2267(e)(30). The minimum required information
includes the MA plan's website, customer service number, and contract/
PBP number; the cards should also include information on how to contact
the plan if there are questions about coverage. Providers also have
access to the HIPAA Eligibility Transaction System (HETS), which
permits providers to view Medicare eligibility and coverage. We believe
compliance with these regulations and use of the HETS website are
sufficient to allow providers and plans to determine plan coverage for
B-IDE.
After consideration of the comments received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing Sec. 422.109(f) without modification.
3. National Coverage Determinations With Coverage With Evidence
Development
As with other Part A and B benefits (aside from hospice and the
cost of kidney acquisition for transplant), MA plans must cover items
and services covered by Medicare under NCDs. This is true for NCDs that
also have a trial or registry component that is required as part of the
coverage, which is explained in section 10.7.3 of Chapter 4 of the
Medicare Managed Care Manual. This is referred to as ``coverage with
evidence development'' (CED), as authorized under section 1862(a)(1)(E)
of the Act. CED is a paradigm whereby Medicare covers items and
services on the condition that they are furnished in the context of CMS
approved clinical studies or with the collection of additional clinical
data (for example, registry). A list of NCD-CEDs with the coverage
protocol for each is available at: https://www.cms.gov/Medicare/Coverage/Coverage-with-Evidence-Development.
As in the proposed rule, we are merely reiterating here that MA
plans must cover NCDs with CED and CMS has not proposed or finalized a
change in coverage requirements or policy for MA plans on this topic.
We solicited comment whether additional regulations are needed to
address NCDs with CED; we believe that Sec. 422.101(b) is sufficient
that these NCDs are within the scope of the traditional Medicare
benefits that MA plans must cover and that additional regulations are
unnecessary. MA plans may apply utilization management, including prior
authorization, to the Medicare benefits covered under these NCDs,
consistent with Sec. 422.4(a)(1)(ii) of the MA program regulations.
Significant Cost
In cases of a new NCD or legislative change in benefits, CMS
determines, consistent with Sec. 422.109(b), whether the benefit or
service is a significant cost to MA plans. As in the December 2022
proposed rule, CMS is including this discussion to make clear that
significant cost requirements apply to all new NCDs, that is, that the
significant cost assessment includes NCDs with CED. The thresholds for
significant cost are specified in Sec. Sec. 422.109(a)(1) and (a)(2).
The assessment generally applies to each NCD or legislative change in
benefits that occurs after the rate announcement for a contract year
such that the change in costs was not incorporated into the capitation
rates for the contract year. Costs are estimated for a particular NCD
or legislative change in benefits so the thresholds specified in
Sec. Sec. 422.109(a)(1) and (a)(2) apply to each NCD or legislative
change in benefits rather than to the aggregate number of such changes
over the course of a contract year.
Comment: A commenter stated it did not believe regulations beyond
those proposed were necessary for NCD-CED policies and that it believes
that the agency is taking appropriate steps to ensure that NCD-CEDs
generate meaningful clinical data.
Response: We thank the commenter for its input on this proposal.
Comment: A commenter was concerned that with respect to NCD-
[[Page 22259]]
CEDs, our proposal would shift costs from Medicare Advantage to
Traditional Medicare. The commenter was also concerned that the NCD-CED
proposal could permit obstacles to emerging care for especially
patients with rare diseases because of utilization management policies
permitted under the Medicare Advantage program.
Response: Currently, Traditional Medicare covers clinical trials
under 310.1 for MA enrollees while MA plans are responsible for
covering NCD-CED and A-B IDE trials. Because MAOs already cover NCD-
CEDs there will be no cost-shifting from the Medicare Advantage program
to Traditional Medicare. As with any benefit for which it is
responsible, an MA plan may require utilization management, including
prior authorization, subject to the requirements in Part C of the
Medicare statute and MA regulations in 42 CFR part 422. We direct
readers to section III.E., Utilization Management Requirements:
Clarifications of Coverage Criteria for Basic Benefits and use of Prior
Authorization, Additional Continuity of Care Requirements, and Review
of Utilization Management Tools for new requirements related to prior
authorization and other utilization management policies being finalized
in this rule.
After considering the comments revised and for the reasons outlined
in the proposed rule and our responses to comments, we are finalizing
this provision without modification.
L. Update of Terminology to ``Individuals With Intellectual
Disabilities'' (Sec. 423.154)
We proposed a terminology update at Sec. 423.154(c) to the
outdated term ``mentally retarded.'' We inadvertently neglected to
update this terminology in our regulations following two previous
terminology updates found in the ``Medicare and Medicaid Program;
Regulatory Provisions to Promote Program Efficiency, Transparency, and
Burden Reduction'' final rule which appeared in the Federal Register on
May 16, 2012 (77 FR 29001) and the ``Medicare Program; Contract Year
2016 Policy and Technical Changes to the Medicare Advantage and the
Medicare Prescription Drug Benefit Programs'' final rule which appeared
in the Federal Register on February 12, 2015 (80 FR 7911).
Consequently, we proposed to update the current language at Sec.
423.154(c) (that is, update it to use the term ``individuals with
intellectual disabilities'').
We solicited comments on this proposal.
Comment: A commenter indicated their support for the transition to
the term ``intellectual disabilities.'' They stated that CMS should
prioritize the use of compassionate language when engaging with patient
populations and noted that the intent of the proposed rule is
consistent with CMS updates that have taken place over the last decade.
Response: CMS agrees that the language currently used at Sec.
423.154(c) is outdated and inappropriate. The terminology update will
improve the consistency of language used in regulations while following
the intent and spirit of Rosa's Law (Pub. L. 111-256). We are therefore
finalizing the proposed update to Sec. 423.154(c) without
modification.
M. Technical Correction To Restore the Substantial Difference
Requirement (Sec. 423.265)
We proposed to make a technical correction to Sec. 423.265(b)(2)
to restore language on requirements for substantial differences between
Medicare Part D sponsors' bids that was inadvertently removed in a
recent revision of the section.
In the ``Medicare Program; Contract Year 2019 Policy and Technical
Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-
for-Service, the Medicare Prescription Drug Benefit Programs, and the
PACE Program'' final rule, which appeared in the Federal Register on
April 16, 2018 (hereinafter referred to as the April 2018 final rule,
73 FR 16440), we reorganized paragraph (b)(2) to incorporate a general
rule in paragraph (b)(2)(i) and an exception in paragraph (b)(2)(ii),
the latter of which excluded enhanced alternative plan bid submissions
from the substantial difference requirement.
We added language placing limits on the number of Part D plan
offerings as part of 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 (hereinafter referred to as the January 2021 final
rule, 86 FR 5864). However, the new language was incorrectly added to
Sec. 423.265(b)(2) rather than Sec. 423.256(b)(3), and the previous
regulatory text on substantial differences was inadvertently
overwritten. To correct this inadvertent deletion, we proposed to:
Redesignate the regulatory text from our January 2021
final rule limiting the number of bids a Part D plan sponsor may submit
currently at Sec. 423.265(b)(2) as Sec. 423.265(b)(3);
Restore the language from our April 2018 final rule on
substantial differences at Sec. 423.265(b)(2)(i) and (ii); and
Redesignate the regulatory text currently at Sec.
423.265(b)(3) as paragraph (b)(4).
As described previously, all of the regulatory language that we
proposed to restore at Sec. 423.265(b)(2) has previously undergone the
full notice and comment process. This proposal would merely correct a
technical error made by the January 2021 final rule.
We received no comments on the proposed technical correction to
Sec. 423.265(b)(2) and are finalizing our proposal without
modification.
N. Gross Covered Prescription Drug Costs (Sec. 423.308)
Section 1860D-15(b)(3) of the Act defines ``gross covered
prescription drug costs'' as, ``with respect to a part D eligible
individual enrolled in a prescription drug plan or MA-PD plan during a
coverage year, the costs incurred under the plan, not including
administrative costs, but including costs directly related to the
dispensing of covered part D drugs during the year and costs relating
to the deductible. Such costs shall be determined whether they are paid
by the individual or under the plan, regardless of whether the coverage
under the plan exceeds basic prescription drug coverage.'' In our final
rule, ``Medicare Program; Medicare Prescription Drug Benefit,'' which
appeared in the Federal Register on January 28, 2005 (70 FR 4194), we
codified the definition of ``gross covered prescription drug costs'' at
Sec. 423.308. This regulatory definition refers to ``gross covered
prescription drug costs'' as ``actually paid costs.'' The term
``actually paid'' has a specific meaning in Medicare Part D and is
separately defined at Sec. 423.308 to mean costs actually incurred by
the plan that are net of direct and indirect remuneration (DIR),
including discounts, rebates, or other price concessions typically
received and applied after the point of sale (POS). However, unlike the
statutory definitions of ``allowable reinsurance costs'' and
``allowable risk corridor costs'' at sections 1860D-15(b)(2) and 1860D-
15(e)(1)(B) of the Act, respectively, the statutory definition of
``gross covered prescription drug costs'' at section 1860D-15(b)(3) of
the Act does not use the phrase ``actually paid'' or otherwise specify
that such costs must be net of all DIR. As we explained in the December
2022 proposed rule (87 FR 79611), because
[[Page 22260]]
the definition of ``gross covered prescription drug costs'' was
codified in regulation for the sole purpose of describing the
methodology for calculating the reinsurance payment amount, in using
the phrase ``actually paid'' in the regulatory definition of ``gross
covered prescription drug costs,'' CMS was incorporating a requirement
from the statutory definition of ``allowable reinsurance costs'' to
emphasize that DIR would be netted out in the calculation of costs
eligible for Part D reinsurance.
In light of certain provisions added to the Social Security Act by
the Inflation Reduction Act of 2022 (IRA) that refer to ``gross covered
prescription drug costs as defined in section 1860D-15(b)(3) [of the
Act]'' (see sections 1191(c)(5) and 1860D-14C(g)(4)(D) of the Act), we
revisited the regulatory definition of ``gross covered prescription
drug costs.'' We proposed to revise the regulatory definition of
``gross covered prescription drug costs'' to mirror the language in the
statutory definition and to remove any ambiguity that might arise from
the current regulatory definition as it may now also be applicable
outside of the reinsurance context. Specifically, we proposed to amend
the definition of ``gross covered prescription drug costs'' at Sec.
423.308 to remove the phrase ``actually paid.''
As we explained in the proposed rule, the proposed revisions to the
definition would not change the fact that Part D reinsurance is
ultimately based on net drug costs or change the final reinsurance
payment amount a Part D sponsor receives. Rather, allowable reinsurance
costs would continue to be defined at Sec. 423.308 as the subset of
gross covered prescription drug costs actually paid. Thus, the revision
would not constitute a change in policy or require a change in
operations under Part D, and would not place any additional burden or
reduce existing burden on Part D sponsors, nor result in government
savings or costs.
1. Background
The term ``gross covered prescription drug costs'' (hereinafter
referred to as ``GCPDC'') is defined and used at section 1860D-15(b) of
the Act for the purpose of describing the methodology for calculating
the reinsurance payment amount. As specified in section 1860D-
15(b)(1)(A) of the Act, the reinsurance payment amount for a year
preceding 2025 is equal to ``80 percent of the allowable reinsurance
costs (as specified in paragraph (2)) attributable to that portion of
gross covered prescription drug costs as specified in paragraph (3)
incurred in the coverage year after such individual has incurred costs
that exceed the annual out-of-pocket threshold specified in section
1860D-2(b)(4)(B).'' Although the statutory definition of ``allowable
reinsurance costs'' at paragraph (2) of section 1860D-15(b) of the Act
specifies that such costs are the subset of GCPDC that are ``actually
paid (net of discounts, chargebacks, and average percentage rebates),''
the statutory definition of GCPDC at paragraph (3) of section 1860D-
15(b) of the Act does not use the phrase ``actually paid'' or otherwise
specify that such costs must be net of all DIR. As we explained in the
proposed rule, this distinction, coupled with the use of the modifier
``gross'' to describe these costs, indicates that the best reading of
section 1860D-15(b)(3) of the Act is that GCPDC should reflect gross
costs, not net costs that reflect all DIR that a Part D sponsor may
receive. We also stated that CMS' use of the phrase ``actually paid''
in the current regulatory definition of GCPDC was intended to emphasize
that all DIR would be netted out in the calculation of costs eligible
for Part D reinsurance consistent with the plain language of the
statute, which requires that the reinsurance payment amount be based on
net drug costs. While the use of the phrase in the current regulatory
definition of GCPDC is consistent with the statute for this reason, we
recognized that it may have led to ambiguity as to when the DIR would
be netted out. We also recognized that the use of the phrase could
create ambiguity when GCPDC is referenced outside of the reinsurance
context.
We further noted in the proposed rule that the statutory definition
of GCPDC describes these costs as ``not including administrative costs,
but including costs directly related to the dispensing of covered Part
D drugs during the year and costs relating to the deductible.'' CMS has
long held that costs directly related to the dispensing of covered Part
D drugs are most logically calculated as the accumulated total of the
negotiated prices that are used for purposes of determining payment to
the pharmacy or other dispensing entity for covered Part D drugs, and
which are required under section 1860D-2(d)(1) of the Act to be made
available to Part D beneficiaries and are used to adjudicate the Part D
benefit (that is, used to determine plan, beneficiary, manufacturer,
and government liability during the course of the payment
year).135 136 As stated in several past rulemakings, we
interpret the statutory definition of ``negotiated prices'' at section
1860D-2(d)(1)(B) of the Act as allowing the application of DIR at the
POS, to reduce the negotiated price, either at the discretion of Part D
plan sponsors or at the direction of CMS (see, for example, 70 FR 4244,
74 FR 1511, and 87 FR 27833). Therefore, even if the phrase ``actually
paid'' were not included in the regulatory definition of GCPDC, GCPDC
would continue to be reduced by POS DIR reflected in negotiated prices.
However, such an accounting of POS DIR would not make the resulting
amount ``actually paid,'' which requires accounting for all DIR,
including DIR not applied at the POS.
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\135\ We noted that this logic is borne out in the portion of
our current regulatory definition of GCPDC at Sec. 423.308 that
states that GCPDC reflect ``actual costs.'' ``Actual cost'' is
defined at Sec. 423.100 as the negotiated price for a covered Part
D drug when the drug is purchased at a network pharmacy, and the
usual and customary price when a beneficiary purchases the drug at
an out-of-network pharmacy.
\136\ The different components of the negotiated price of a
drug, and ultimately of GCPDC, are required to be reported
separately using the following cost fields on the Prescription Drug
Event (PDE) record submitted to CMS by Part D plan sponsors for
payment purposes, the sum of which must equal GCPDC: Ingredient
Cost, Dispensing Fee, Vaccination Administration, and Sales Tax.
GCPDC are also required to be reported using the following two
payment fields on the PDE record depending on whether the costs fall
in the catastrophic phase: Gross Drug Cost Below the Out of Pocket
(OOP) Threshold (GDCB) and Gross Drug Cost Above the OOP Threshold
(GDCA). The amounts reported in these fields are then used to update
the Total Gross Covered Drug Cost (TGCDC) Accumulator on the PDE
record, which tracks and indicates which non-catastrophic phase of
the Part D benefit the beneficiary is in. See, for example, 2006
Prescription Drug Event Data Training Participant Guide, available
at https://www.csscoperations.com/internet/csscw3_a.nsf/DIDC/
K3V5B8PN1H~Prescription%20Drug%20Program%20(Part%20D)~Training, and
2011 Regional Prescription Drug Event Data Technical Assistance
Participant Guide, available at https://www.csscoperations.com/
internet/csscw3.nsf/DIDC/
FJUKANFCP1~Prescription%20Drug%20Program%20(Part%20D)~Training.
---------------------------------------------------------------------------
As a supplement to the background we included in the NPRM, we also
wish to clarify that in using Part D negotiated prices to calculate
GCPDC, we currently include manufacturer discounts paid under the
Coverage Gap Discount Program under section 1860D-14A of the Act and
will continue to do so through 2024. Such manufacturer discounts are
paid at the POS by the Part D sponsor on behalf of the manufacturer,
and the manufacturer is required to reimburse the Part D sponsor on
behalf of the Part D beneficiary, with the discounts counting as
incurred costs as required by section 1860D-2(b)(4)(E) of the Act.
Manufacturer discounts paid under the Coverage Gap Discount Program
have been included in GCPDC since the beginning of the Coverage Gap
Discount Program, and this practice is consistent with the current
statutory
[[Page 22261]]
and regulatory definitions of GCPDC, which generally require the
inclusion of all costs incurred under the plan paid by the plan or by
or on behalf of the Part D beneficiary. The change we proposed to the
regulatory definition of GCPDC in the December 2022 proposed rule does
not alter that fact, thus, GCPDC would continue to include Coverage Gap
Discount payments even if the phrase ``actually paid'' is no longer
included in the regulatory definition of GCPDC. We also note that
section 11201(c)(2) of the IRA adds paragraph (h) to section 1860D-14A
to sunset the Coverage Gap Discount Program on January 1, 2025.
Section11201(b)(2) of the IRA adds subparagraph (B) to section 1860D-
15(b)(2) of the Act to require the inclusion of manufacturer discounts
paid under the Manufacturer Discount Program under section 1860D-14C in
the calculation of allowable reinsurance costs, as defined in section
1860D-15(b)(2)(A), beginning in 2025. Additionally, section 11201(b)(3)
of the IRA amends section 1860D-15(b)(3) in two places to also require
the inclusion of manufacturer discounts paid under the Manufacturer
Discount Program in the calculation of GCPDC (first, by specifying that
the definition of GCPDC is subject to paragraph (2)(B) of section
1860D-15(b) and second, by adding language specifying that with respect
to 2025 and subsequent years, in the case of an applicable drug, as
defined in section 1860D-14C(g)(2), GCPDC shall be determined whether
the costs are paid by the individual, under the plan, or by a
manufacturer). There are two important differences between the Coverage
Gap Discount Program and Manufacturer Discount Program that would
result in manufacturer discounts paid under the two programs being
treated differently for purposes of calculating allowable reinsurance
costs and GCPDC absent the explicit statutory requirement to include
manufacturer discounts paid under the Manufacturer Discount Program in
the calculation of these amounts. First, unlike manufacturer discounts
paid under the Coverage Gap Discount Program, manufacturer discounts
paid under the Manufacturer Discount Program do not count toward
incurred costs per section 1860D-2(b)(4)(C)(iii)(II) of the Act and
thus are not considered paid by or on behalf of Part D beneficiaries.
Second, the Manufacturer Discount Program creates a new manufacturer
discount obligation in the catastrophic phase, so the treatment of such
discounts has a direct impact on the calculation of the reinsurance
payment amount for the first time beginning in 2025. Further
information on the treatment of manufacturer discounts paid under the
Manufacturer Discount Program under section 1860D-14C of the Act for
purposes of calculating allowable reinsurance costs and GCPDC will be
provided prior to the start of the Manufacturer Discount Program in
2025.
In the December 2022 proposed rule (87 FR 79612), we proposed to
amend the definition of ``gross covered prescription drug costs'' at
Sec. 423.308 to mirror the statutory language in section 1860D-
15(b)(3) of the Act and to remove any ambiguity that might arise from
the current regulatory definition of GCPDC, as discussed in greater
detail in this section of this final rule.
2. Proposed Change
Consistent with the language of section 1860D-15(b) of the Act, CMS
policy, including the current reporting requirements, and operations,
including how the industry tracks and reports costs (that is, industry
practice), we proposed to amend the definition of ``gross covered
prescription drug costs'' at Sec. 423.308 to remove the two references
to ``actually paid'' to clarify that GCPDC are not net of all DIR.
We explained that the proposed change would have no impact on Part
D payment calculations or reporting requirements. Consistent with
section 1860D-15(b)(2), the reinsurance payment amount would continue
to be calculated based on drug costs net of DIR. Outside of the
reinsurance context, CMS' long-standing operational guidance has
instructed plans to report costs without first netting out DIR applied
after the POS, and thus, the guidance would not need to be adjusted as
a result of this proposed change to the regulatory definition of GCPDC.
For instance, the amounts reported in the Ingredient Cost, Dispensing
Fee, Vaccine Administration, Sales Tax, GDCB, GDCA, and the TGCDC
Accumulator fields on the PDE record are required to include costs
incurred by the Part D sponsor and all amounts paid by or on behalf of
an enrollee under a Part D plan. Further, CMS guidance instructs Part D
sponsors to net out only plan administrative costs and any DIR applied
at the POS when reporting GCPDC. Hence, a key step in calculating the
Part D reinsurance payment amount is to determine the allowable
reinsurance cost amount by subtracting from the GCPDC incurred in the
catastrophic phase all DIR attributable to the proportion of
catastrophic phase spending that was not already accounted for at the
POS in order to determine the amount ``actually paid'' by the Part D
plan and ensure that the reinsurance payment amount is ultimately
calculated based on net drug costs. As we would continue to take this
important step in determining allowable reinsurance costs for purposes
of calculating the reinsurance payment amount even if ``actually paid''
were removed from the regulatory definition of GCPDC as proposed, there
would be no change in the final reinsurance payment amount a Part D
sponsor receives.
Moreover, we noted that no other rules or policies would be
affected by this proposed change, including the rules regarding how to
account for coverage not provided by the Part D sponsor, and instead
provided by other payers, because they do not directly address the
calculation of the reinsurance payment amount and thus do not rely on
the current regulatory definition of GCPDC. For example, we explained
that under rules regarding Medicare secondary payer (MSP) or subrogated
claims, the amounts reported in the cost and payment fields of the PDE
record reflect a reduction in the Part D plan's incurred cost for a
drug resulting from other payer arrangements, which is currently
captured in GCPDC and would continue to be captured in GCPDC under our
proposed revisions.
We noted that in the 2022 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'' (87 FR 27833 through 27851)
which appeared in the Federal Register on May 9, 2022, we amended our
regulations at Sec. 423.100, to add a new definition of ``negotiated
price'' effective January 1, 2024. The new definition specifies, among
other things, that the negotiated price for a Part D drug is the lowest
possible reimbursement a network pharmacy will receive, in total, for
the drug, net of all pharmacy price concessions. Thus, as of January 1,
2024, all price concessions from network pharmacies, negotiated by Part
D sponsors and their contracted pharmacy benefit managers (PBMs), will
be reflected in the negotiated price that is made available at the POS
and reported to CMS on a PDE record, meaning that these pharmacy price
concessions will be reflected in GCPDC even if the phrase ``actually
paid'' is removed from the regulatory definition of the term as
[[Page 22262]]
proposed. We reiterated that, accounting for DIR, including pharmacy
price concessions, applied at the POS in the calculation of GCPDC, does
not make the resulting amount ``actually paid,'' which requires
accounting for all DIR, including DIR not applied at the POS.
While this proposed change to the regulatory definition would not
be a change in policy and would not directly affect the way in which
GCPDC are calculated and used for purposes of Part D, we stated that we
believe it is important to revise the definition to remove any
ambiguity regarding the meaning of the term ``gross covered
prescription drug costs.'' As noted previously, the IRA added
provisions to the Social Security Act that refer to ``gross covered
prescription drug costs as defined in section 1860D-15(b)(3) [of the
Act].'' Removing the phrase ``actually paid'' from the regulatory
definition of GCPDC as proposed would eliminate any ambiguity in the
regulation text and help to ensure there is a consistent understanding
of the meaning of this term for purposes of both the Part D program and
the relevant provisions of the IRA.
We further explained that nothing in the proposed change would
place additional requirements on Part D sponsors or beneficiaries or
change how CMS currently uses the GCPDC reported by the Part D sponsor
on the PDE for purposes of determining payments under Part D. Rather
the proposed change would be consistent with our current policy and
operations, including the current reporting requirements. As such, the
proposed change to the definition of ``gross covered prescription drug
costs'' at Sec. 423.308 would not place any additional burden on Part
D sponsors, nor did we expect that the proposed change would result in
savings. We received 19 pieces of correspondence containing one or more
comments in response to our proposal to amend the regulatory definition
of ``gross covered prescription drug costs'' at Sec. 423.308 by
removing the phrase ``actually paid.''
Comment: Several commenters supported the proposed revisions to the
regulatory definition of GCPDC at Sec. 423.308 to mirror the statutory
definition. The commenters agreed that the statutory definition of
GCPDC at section 1860D-15(b)(3) of the Act does not use the phrase
``actually paid'' or otherwise specify that such costs must be net of
all DIR. Some of these commenters agreed with CMS that the use of the
phrase ``actually paid'' in the statutory definition of ``allowable
reinsurance costs'' at section 1860D-15(b)(2) of the Act, but not in
the statutory definition of GCPDC at section 1860D-15(b)(3) indicates
that GCPDC should not be understood to mean net drug costs. These
commenters agreed that removing the phrase ``actually paid'' from the
regulatory definition would allow the definition to better reflect the
definition of GCPDC in the Social Security Act and avoid any ambiguity.
Response: We appreciate the feedback and support from these
commenters.
Comment: A few commenters asserted that the distinction between
GCPDC and ``allowable reinsurance costs'' is not based on whether GCPDC
is net of all DIR and that GCPDC does not need to reflect gross drug
costs. These commenters contended that the statute merely requires
allowable reinsurance costs to be the subset of costs (1) incurred by
the plan alone, not the enrollee, and (2) for basic prescription drug
coverage only.
Response: We disagree with the commenters. First, even if we accept
the suggestion that GCPDC does not need to reflect gross drug costs,
the commenters did not demonstrate why GCPDC should or must reflect net
drug costs and thus why the change being considered is not reasonable
and appropriate. Second, the commenters did not account for the fact
that the phrase ``actually paid'' is used in the statutory definition
of ``allowable reinsurance costs'' at section 1860D-15(b)(2) of the Act
but does not appear in the statutory definition of GCPDC at section
1860D-15(b)(3). As a result, we believe the statute draws a distinction
between the two terms with respect to the treatment of DIR. As stated
in the proposed rule, this distinction, coupled with the use of the
modifier ``gross'' to describe GCPDC, indicates that the best reading
of section 1860D-15(b)(3) of the Act is that GCPDC should reflect gross
costs, not net costs. Finally, we note that section 1860D-15(b)(2) of
the Act requires that ``allowable reinsurance costs'' include costs
incurred by the Part D sponsor as well as the enrollee (specifically
defining such costs as those actually paid ``by the sponsor or
organization or by (or on behalf of) an enrollee under the plan''), and
not, as the commenters suggest, just the costs incurred by the plan
alone.
Comment: Several commenters stated that CMS did not complete an
adequate regulatory impact analysis because the agency failed to
account for the policy implications of this proposed change on IRA
implementation, including on the selection of drugs for Medicare price
negotiation. A commenter added that the IRA impacts should have been
part of CMS' analysis given that CMS acknowledged in the proposed rule
that the term for which the regulatory definition is being amended is
referenced in the IRA. These commenters further posited that, by
omitting any discussion of the proposal's implications for the
implementation of the IRA, CMS did not provide the specificity and
clarity needed to allow interested parties to participate in the
rulemaking process in a meaningful and informed manner and that
finalizing the proposed change would therefore violate the requirements
for notice-and-comment rulemaking under the Administrative Procedure
Act (APA).
Response: We disagree with the commenters. We do not believe that
it was necessary for the proposed rule to take into account possible
impacts that the proposed change to the regulatory definition of GCPDC
might have on IRA implementation. The regulatory definition that CMS is
amending was adopted for use and currently applies only in the context
of determining reinsurance payments under the Part D program. Guidance
related to the IRA, including details of the requirements and
procedures for implementing the Medicare Drug Price Negotiation
Program, is being provided outside of this rulemaking, in accordance
with the requirements under the IRA to implement certain provisions by
program instruction instead of notice-and-comment
rulemaking.137 138
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\137\ See sections 11001(c) and 11002(c) of the IRA.
\138\ We refer readers to the Initial Guidance for the Medicare
Drug Price Negotiation Program for further discussion of
implementation of the Medicare Drug Price Negotiation Program for
initial price applicability year 2026. Available here: https://www.cms.gov/files/document/medicare-drug-price-negotiation-program-initial-guidance.pdf.
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Within the reinsurance context, as noted in the proposed rule,
amending the regulatory definition of GCPDC as proposed creates no
additional requirements or other burden on Part D sponsors or
beneficiaries, nor does it change how CMS currently uses the GCPDC
reported by the Part D sponsor on the PDE record for purposes of
determining payments under Part D. Moreover, as discussed in the
proposed rule, because we will continue to take the important step of
removing all DIR in determining allowable reinsurance costs for
purposes of calculating the reinsurance payment amount, there will be
no change in the final reinsurance payment amount a Part D sponsor
receives, and thus no change in government costs. We believe this
analysis is a sufficient assessment of the impact of the proposed
revisions to the
[[Page 22263]]
regulatory definition of GCPDC and meets all applicable APA
requirements.
Comment: A commenter agreed with our impact assessment and noted
that the level of information was helpful in providing clarity on the
agency's thinking.
Response: We appreciate the feedback from the commenter.
Comment: A commenter encouraged CMS to make the proposed change
effective as of September 1, 2023 to coincide with IRA implementation
timelines.
Response: The revised definition of GCPDC will take effect on the
effective date of this final rule and will also be applicable on that
date.
Comment: A few commenters suggested that since a ``clear
interpretive rule'' that defined GCPDC in regulation as ``actually
paid'' already existed when the IRA was enacted, Congress intentionally
used the term GCPDC to mean net drug costs.
Response: There is no reference in the IRA to the regulatory
definition of GCPDC at Sec. 423.308. Although certain provisions of
the IRA reference GCPDC ``as defined in section 1860D-15(b)(3),'' the
statutory definition of GCPDC does not use the phrase ``actually paid''
or otherwise specify that these costs must be net of all DIR.
Furthermore, as we stated in the proposed rule, because the definition
of GCPDC was codified in regulation for the sole purpose of describing
the methodology for calculating the reinsurance payment amount, the use
of the phrase ``actually paid'' in the regulatory definition of GCPDC
was intended to incorporate a requirement from the statutory definition
of ``allowable reinsurance costs'' to emphasize that DIR would be
netted out in the calculation of costs eligible for Part D reinsurance
as required by the statute. Thus, the current regulatory definition
should not be understood to reflect the agency's interpretation of the
plain language of section 1860D-15(b)(3) at the time the IRA was
enacted.
Comment: Several commenters expressed concern that CMS' proposed
revision of the regulatory definition of GCPDC serves as a
determination by CMS that the selection of drugs for the Medicare Drug
Price Negotiation Program will be based on gross drug costs instead of
net drug costs. Commenters noted several concerns related to the
selection of drugs based on gross drug costs. A few commenters also
provided general comments about drug selection under the Medicare Drug
Price Negotiation Program, including a request for CMS to publish gross
expenditure data that will be used for ranking drugs selected for
negotiation and provide guidance on drug pricing and selection for
Medicare Drug Price Negotiation Program.
Response: We thank the commenters for their consideration. As
previously stated, the regulatory definition that CMS is amending was
adopted for use and currently applies only in the context of
determining reinsurance payments under the Part D program. Guidance
related to the IRA, including guidance on the selection of drugs for
the Medicare Drug Price Negotiation Program, is being provided outside
of this rulemaking. Specifically, we refer readers to the Initial
Guidance for the Medicare Drug Price Negotiation Program issued on
March 15, 2023 for further discussion of the topics raised by the
commenters.
After considering all of the comments received, CMS is finalizing
as proposed the revisions to the definition of ``gross covered
prescription drug costs'' at Sec. 423.308 and removing the two uses of
the phrase ``actually paid'' and replacing the second use with
``paid.''
V. Medicare Advantage/Part C and Part D Prescription Drug Plan Quality
Rating System (42 CFR 422.162, 422.164, 422.166, 423.182, 423.184, and
423.186)
A. Introduction
CMS develops and publicly posts a 5-star rating system for Medicare
Advantage (MA)/Part C and Part D plans based on the requirement to
disseminate comparative information, including information about
quality, to beneficiaries under sections 1851(d) and 1860D-1(c) of the
Act and the collection of different types of quality data under section
1852(e) of the Act. The Part C and Part D Star Ratings system is used
to determine quality bonus payment (QBP) ratings for MA plans under
section 1853(o) of the Act and the amount of beneficiary rebates under
section 1854(b) of the Act. Cost plans under section 1876 of the Act
are also included in the Part C and Part D Star Ratings system, as
codified at Sec. 417.472(k). We use multiple data sources to measure
quality and performance of contracts, such as CMS administrative data,
surveys of enrollees, information provided directly from health and
drug plans, and data collected by CMS contractors. Various regulations,
including Sec. Sec. 417.472(j) and (k), 422.152(b), 423.153(c), and
423.156, require plans to report on quality improvement and quality
assurance and to provide data which help beneficiaries compare plans.
The methodology for the Star Ratings system for the MA and Part D
programs is codified at Sec. Sec. 422.160 through 422.166 and 423.180
through 423.186, respectively, and we have specified the measures used
in setting Star Ratings through rulemaking. In addition, the cost plan
regulation at Sec. 417.472(k) requires cost contracts to be subject to
the Part 422 and 423 Part C and Part D Quality Rating System. (83 FR
16526-27). As a result, the policies adopted as final in this rule
apply to the quality ratings for MA plans, cost plans, and Part D
plans. We generally use ``Part C'' to refer to the quality measures and
ratings system that applies to MA and cost plans. Where a cost plan
covers Medicare Part D, it is treated like an MA-PD plan and therefore
must also report Part D measures.
We are working to ensure that the Star Ratings program is aligned
with the CMS Quality Strategy as that Strategy evolves over time. This
includes reducing the weight of patient experience/complaints and
access measures and codifying clarifications to the rules for
calculating the Part C and D Star Ratings related to disasters and
contract consolidations. The current CMS National Quality Strategy
encourages the highest quality outcomes, safest care, equity, and
accessibility for all individuals (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy). In addition to focusing on a person-
centric approach as individuals move across the continuum of care, the
current CMS Quality Strategy aims to create a more equitable, safe, and
outcomes-based health care system and, where feasible, works to align
performance metrics, programs, and policy across CMS programs.
In this final rule, we are finalizing a health equity index reward
to further incentivize Part C and D plans to focus on improving care
for enrollees with specified social risk factors (SRFs), and to support
CMS efforts to ensure attainment of the highest level of health for all
people. We are also finalizing the following measure updates:
Remove the Part C Diabetes Care--Kidney Disease Monitoring
measure;
Add the updated Part D Medication Adherence for Diabetes
Medication, Medication Adherence for Hypertension (RAS Antagonists),
Medication Adherence for Cholesterol (Statins) measures; and
Add the Part C Kidney Health Evaluation for Patients with
Diabetes measure.
We are also finalizing several methodological changes:
[[Page 22264]]
Reduce the weight of patient experience/complaints and
access measures to further align the Part C and Part D Quality Rating
System with other CMS quality programs;
Add an additional basis for the subregulatory removal of
Star Ratings measures; and
Remove the 60 percent rule for the adjustment for extreme
and uncontrollable circumstances (generally called the adjustment for
disasters).
Finally, we are also finalizing a series of technical
clarifications of the existing rules related to adjustments for
disasters and contract consolidations, as well as a technical amendment
to Sec. Sec. 422.162(a)(2)(i) and 423.186(a)(2)(i) to fix a
codification issue. Unless otherwise stated, the changes will apply
(that is, data will be collected and performance measured) for the 2024
measurement period and the 2026 Star Ratings.
In addition, we proposed in the December 2022 proposed rule other
policies to amend the Part C and D Star Ratings but are not addressing
those proposals in this final rule; those other proposals will be
addressed in a subsequent, second final rule. Any policies we proposed
in the December 2022 proposed rule that are addressed in that
subsequent rule would apply (that is, data will be collected and
performance measured) for no earlier than the 2025 measurement period
and the 2027 Star Ratings. CMS appreciates the feedback we received on
our proposals.
In the sections that follow, we summarize the comments we received
on each proposal we are finalizing and provide our responses.
B. Definitions (Sec. Sec. 422.162 and 423.182)
We proposed to add the following definition for Part 422, Subpart D
(for Part C plans) and Part 423, Subpart D (for Part D plans) in
paragraph (a) of Sec. Sec. 422.162 and 423.182, respectively.
Health equity index means an index that
summarizes contract performance among those with specified SRFs across
multiple measures into a single score.
We received no comments on this proposed definition in paragraph
(a) of Sec. Sec. 422.162 and 423.182 and are finalizing it without
modification for the reasons in the proposed rule. This new definition
is relevant for our policies discussed in section V.F. of this final
rule and will be used in that context.
C. Contract Ratings (Sec. Sec. 422.162(b) and 423.182(b))
1. Contract Type
In the April 2018 final rule (83 FR 16440) at Sec. Sec. 422.162(b)
and 423.182(b), we codified the methodology for calculating the same
overall and summary Star Ratings for all plan benefit packages (PBPs)
offered under each MA-only, MA-PD, or PDP contract.
As different organization or contract types offer different
benefits, the overall and summary Star Ratings differ across contract
types when the set of required measures differs. For example, non-SNP
contracts do not currently submit the following measures and,
therefore, their overall and Part C summary ratings do not include
them: SNP Care Management, Care for Older Adults--Medication Review,
and Care for Older Adults--Pain Assessment.
We proposed to amend Sec. Sec. 422.162(b)(1) and 423.182(b)(1) to
add a sentence at the end to clarify that the overall and summary Star
Ratings are calculated based on the measures required to be collected
and reported for the contract type being offered for the Star Ratings
year. This is our current practice and how the Star Ratings have
historically been calculated. For example, the 2023 Star Ratings were
calculated for the 2023 contract year using data primarily from
measurement year 2021.\139\ The 2023 Star Ratings were published on
Medicare Plan Finder in October 2022 to provide comparative quality
performance information about plans for people with Medicare to use in
making enrollment decisions for the 2023 calendar year. If a contract
offered a SNP PBP in measurement year 2021, but is no longer offering a
SNP PBP for the 2023 contract year, the 2023 Star Ratings excluded the
SNP-only measures and the contract was rated as ``Coordinated Care Plan
without SNP.'' This is our current (and historical) process and how the
proposed regulatory clarification would be applied.
---------------------------------------------------------------------------
\139\ There are exceptions to this for some measures. For
example, as adopted in the April 2018 final rule and used now, the
measures from the CAHPS survey are based on the most recent data
submitted from surveys of enrollees; the surveys ask about the
experience of the enrollees over the last six months. The annual
Medicare Part C & D Star Ratings Technical Notes (available online
here: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData) identify the measures and
their data sources for each year's Star Ratings.
---------------------------------------------------------------------------
We solicited comments on this proposal.
Comment: A commenter expressed support.
Response: CMS appreciates the support.
After considering the comments we received and for the reasons
outlined in the proposed rule, we are finalizing the clarification at
Sec. Sec. 422.162(b)(1) and 423.182(b)(1) regarding the scope of
measures used in calculating the overall and summary ratings without
modification. We are also finalizing a revision related to adoption of
the health equity index and future removal of the reward factor, which
is discussed in more detail in section V.F. of this final rule.
2. Contract Consolidations
The process for calculating measure scores for contracts that
consolidate is specified as a series of steps at Sec. Sec.
422.162(b)(3) and 423.182(b)(3). As described in the April 2018 final
rule (83 FR 16528 through 16531), we use the enrollment-weighted means
of the measure scores of the consumed and surviving contract(s) to
calculate the measure-level ratings for the first and second years
following the contract consolidation. For all contracts, under
Sec. Sec. 422.164(f)(4) and 423.184(f)(4), the Part C and Part D
improvement measures compare current contract-level measure scores with
scores from the prior year across all measures included in the
improvement measures calculations. Given there are no comparable prior
year measure-level scores available for contracts in the first year of
the consolidation, historically we have not calculated the Part C and D
improvement measures for the first year after a consolidation.
We proposed to amend Sec. Sec. 422.162(b)(3)(iv)(A)(1) and
423.182(b)(3)(ii)(A)(1) to clarify the calculation of the Part C and
Part D improvement measures for contracts that consolidate. For the
first year after a consolidation, we proposed to clarify that the Part
C and Part D improvement measures will not be calculated for the
consolidated contract. The prior year measure-level scores only include
data from the surviving contract; using those as the comparison point
for a consolidated contract would not be an accurate comparison because
it does not include any information about performance of the consumed
contract(s). For the second year after a consolidation, the improvement
measure is calculated using the enrollment-weighted measure scores for
the current and prior year because scores for both years are available
for the consolidated contract. This is our current (and historical)
process and how the proposed regulatory clarification would be applied.
We proposed to revise the current regulation text at Sec. Sec.
422.162(b)(3)(iv)(A)(1) and 423.182(b)(3)(ii)(A)(1) to clarify that the
Part C and Part D improvement measures are not calculated for the first
[[Page 22265]]
year after a contract consolidation in order to codify our current
application of the ratings rules.
We solicited comments on this proposal.
Comment: All commenters supported this proposed provision.
Response: CMS appreciates the support.
After considering the comments we received and for the reasons
outlined in the proposed rule, we are finalizing the clarification at
Sec. Sec. 422.162(b)(3)(iv)(A)(1) and 423.182(b)(3)(ii)(A)(1) without
modification.
D. Adding, Updating, and Removing Measures (Sec. Sec. 422.164 and
423.184)
The regulations at Sec. Sec. 422.164 and 423.184 specify the
criteria and procedure for adding, updating, and removing measures for
the Star Ratings program. In the April 2018 final rule, at 83 FR 16532,
we stated that we are committed to continuing to improve the Part C and
Part D Star Ratings system and anticipated that over time measures
would be added, updated, and removed. We also specified at Sec. Sec.
422.164(d) and 423.184(d) rules for measure updates based on whether
they are substantive or non-substantive. The regulations, at paragraph
(d)(1), list examples of non-substantive updates. See also 83 FR 16534-
37. Due to the regular updates and revisions made to measures, CMS does
not codify a list in regulation text of the measures (and their
specifications) adopted for the Part C and Part D Star Ratings program
(83 FR 16537). CMS lists the measures used for the Star Ratings each
year in the Medicare Part C & D Star Ratings Technical Notes or similar
guidance issued with publication of the Star Ratings. We proposed
measure changes to the Star Ratings program for performance periods
beginning on or after January 1, 2024 unless noted otherwise. We also
proposed a new rule for the removal of measures.
1. Diabetes Care--Kidney Disease Monitoring (Part C) Measure Removal
We proposed to remove the Diabetes Care--Kidney Disease Monitoring
measure because it has been retired by the measure steward.\140\ NCQA,
the measure steward, announced the retirement of the Diabetes Care--
Kidney Disease Monitoring measure after measurement year 2021. As we
stated in the Announcement of Calendar Year (CY) 2023 Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment Policies,
since NCQA will no longer be collecting data for this Healthcare
Effectiveness Data and Information Set (HEDIS) measure beginning with
measurement year 2022, CMS will not have data for this measure to be
included in the 2024 Star Ratings. The measure was included in the 2023
Star Ratings using data from measurement year 2021. We proposed to
replace this measure with the Kidney Health Evaluation for Patients
with Diabetes measure (described in section V.D.3. of this final rule).
---------------------------------------------------------------------------
\140\ The measure, which has the HEDIS label ``Comprehensive
Diabetes Care (CDC)--Medical Attention for Nephropathy'' was retired
after the 2021 performance period as noted here https://www.ncqa.org/wp-content/uploads/2022/07/Summary-Table-of-Changes-HEDIS-MY-2022.pdf and does not appear in the list for the 2022
performance period.
---------------------------------------------------------------------------
CMS proposed to permanently remove the Diabetes Care--Kidney
Disease Monitoring measure starting with the 2024 Star Ratings because
we will not have data to calculate the measure.
We solicited comments on removing this measure from the Star
Ratings program.
Comment: All commenters supported the removal of the Diabetes
Care--Kidney Disease Monitoring measure from the Star Ratings program.
Response: CMS appreciates the support.
After considering the comments we received and for the reasons
outlined in the proposed rule, we are finalizing the removal of the
Diabetes Care--Kidney Disease Monitoring measure from the Star Ratings
program.
2. Measure Updates
In the April 2018 final rule, we specified at Sec. Sec. 422.164(d)
and 423.184(d) rules for measure updates based on whether they are
substantive or non-substantive. (83 FR 16534 and 16535). Where an
update by the measure steward is substantive within the scope of
Sec. Sec. 422.164(d)(2) and 423.184(d)(2), CMS will initially solicit
feedback on whether to make substantive measure updates through the
process described for changes in and adoption of payment and risk
adjustment policies in section 1853(b) of the Act and then engage in
rulemaking to make substantive changes to a Star Ratings measure. Per
Sec. Sec. 422.164(d)(2) and 423.184(d)(2), CMS will place the updated
measure on the display page for at least 2 years prior to using the
updated measure to calculate and assign Star Ratings. This 2-year
period for the updated measure to be on the display page may overlap
with the period during which CMS solicits comment and engages in
rulemaking. Further, the legacy measure may continue to be used in the
Star Ratings during this period.
a. Medication Adherence for Diabetes Medication, Medication Adherence
for Hypertension (RAS Antagonists), Medication Adherence for
Cholesterol (Statins) (Part D)--Substantive Change
CMS proposed to implement risk adjustment (also sometimes referred
to as case-mix adjustment) based on sociodemographic status (SDS)
characteristics, a substantive update, to the three Part D medication
adherence measures for the 2028 Star Ratings (2026 measurement year).
The adherence measures would be adjusted for the following beneficiary-
level SDS characteristics: age, gender, low-income subsidy/dual
eligibility (LIS/DE) status, and disability status. Health outcomes are
affected by patient-related and external factors such as existing
clinical conditions and SDS. Currently, the three medication adherence
measures (Diabetes, Hypertension, and Cholesterol) are included in the
determination of the Star Ratings Categorical Adjustment Index (CAI)
because they are not excluded by the criteria established in Sec. Sec.
422.166(f)(2) and 423.186(f)(2); for example, the measures are not
case-mix adjusted for socioeconomic status (SES). The CAI was
implemented in the 2017 Star Ratings to adjust for average within-
contract disparity in performance associated with the percentages of
beneficiaries who receive LIS/DE and/or have disability status. The CAI
was initially developed as an interim analytical adjustment to address
concerns about disparities while longer-term solutions were explored,
including engaging with measure stewards to examine if re-specification
is warranted for measures used in the Star Ratings. The methodology for
the CAI was codified at Sec. Sec. 422.166(f)(2) and 423.186(f)(2); the
factor is calculated as the mean difference in the adjusted and
unadjusted ratings (overall, Part D for MA-PDs, and Part D for PDPs) of
the contracts that lie within each final adjustment category for each
rating type.
In addition, the National Quality Forum (NQF) convened an expert
panel in 2014 and recommended that performance-based measures should be
risk adjusted for SES and other socio demographic factors in 2017. On
June 28, 2020, the Office of the Assistant Secretary for Planning and
Evaluation (ASPE) submitted a second Report to Congress; \141\ ASPE is
required under section 2(d) of the Improving Medicare Post-Acute Care
Transformation (IMPACT) to study the effects of certain
[[Page 22266]]
SRFs of Medicare beneficiaries on quality measures and measures of
resource use in Medicare value-based purchasing programs.
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\141\ https://www.aspe.hhs.gov/reports/second-report-congress-social-risk-medicares-value-based-purchasing-programs.
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CMS contracted with the Pharmacy Quality Alliance (PQA), the
steward of these measures, to examine the medication adherence measures
for potential risk adjustment. PQA recommended SDS risk adjustment for
the Medication Adherence for Diabetes Medication, Medication Adherence
for Hypertension (RAS Antagonists), and Medication Adherence for
Cholesterol (Statins) measures. PQA recommended and endorsed the
following changes related to SDS in their Measure Manual:
All three adherence measures should be risk adjusted for
SDS characteristics to adequately reflect differences in patient
populations.
The measures should be adjusted for the following
beneficiary-level SDS characteristics: age, gender, LIS/DE status, and
disability status.
The measures should be stratified by these four
beneficiary-level SDS characteristics (listed in the prior bullet) to
allow health plans to identify disparities and understand how their
patient population mix is affecting their measure rates.
The PQA measure specifications were endorsed by NQF in the 2019
Spring cycle (NQF endorsed #0541) (CMIT ID: 00436-01-C-PARTD for
Diabetes, 00437-01-C-PARTD for Hypertension, and 00435-01-C-PARTD for
Cholesterol).
CMS has included stratifications by age, gender, LIS/DE status, and
disability status in the Medication Adherence patient safety reports to
Part D sponsors beginning with the 2019 measurement year.
We proposed to implement risk adjustment for the medication
adherence measures based on the PQA specifications, which would be
reflected in the Star Ratings. Additionally, because the medication
adherence measures will be risk adjusted based on SDS characteristics
(that is, for age, gender, LIS/DE status, and disability status), the
medication adherence measures will be excluded from the CAI adjustment
per Sec. Sec. 422.166(f)(2)(ii)(A) and 423.186(f)(2)(ii)(A). We found
in our analysis that implementing the SDS risk adjustment to the
patient safety reports can be very time consuming and should be
incorporated at one period of time. Therefore, since we proposed to
implement the SDS risk adjustment to the medication adherence measures
(which will remove these measures from the Star Ratings CAI
determination), we intend to incorporate the SDS risk adjustment
operationally to the medication adherence measures reported by CMS to
Part D sponsors in the last monthly patient safety report for the
measurement year.
In developing this proposal, we considered how this change might
affect Star Ratings for MA-PD and PDP contracts. We calculated SDS risk
adjusted medication adherence measure rates using year of service (YOS)
2019 measurement year data and recalculated the CAI values excluding
these three adherence measures. We then recalculated the overall and
Part D summary ratings using the SDS risk adjusted medication adherence
measure rates, revised CAI values, the final 2021 Star Ratings for
other measures, and the reward factor. In our analysis, we found that
the threshold shifts for measure-level cut points with SDS risk
adjustment were minimal for both MA-PD and PDP contracts, ranging from
-2 to +1 percentage point(s) for MA-PD contracts and about -2 to +3
percentage points for PDP contracts. We found that for both MA-PD and
PDP contracts, approximately 60-70 percent of contracts retained the
same star level across the Medication Adherence for Hypertension (RAS
Antagonists) and Medication Adherence for Cholesterol (Statins)
measures. When a star level shift was observed, most of the MA-PD and
PDP contracts shifted by one-star level and usually shifted upwards
when the SDS risk adjustment was applied to the adherence measures. One
percent of MA-PD contracts shifted two-star levels for the Medication
Adherence for Hypertension (RAS Antagonists) and Medication Adherence
for Cholesterol (Stains) measures. The two-star level shifts were
primarily upwards, but one contract did shift down two stars in the
Medication Adherence for Cholesterol (Stains) measure. For the
Medication Adherence for Diabetes Medication measure, 82 percent of MA-
PD contracts and 59 percent of PDP contracts retained the same star
level. When a star level shift was observed for the Medication
Adherence for Diabetes Medication measure, most MA-PD and PDP contracts
saw a one-star downward movement with the SDS risk adjustment applied
to the measure.
As previously noted, if CMS implements SDS risk adjustment for the
three medication adherence measures, the measures would no longer be
included in determining the Star Ratings CAI. Therefore, we also
conducted an analysis to simulate calculating the CAI values without
case-mix adjusting the three adherence measures for LIS/DE and
disability; these simulated CAI values were used in the application of
the simulated summary rating calculations. For most MA-PD contracts,
this resulted in a negative shift in the CAI adjustment values for the
overall and Part D summary ratings, and in contrast, most PDPs had a
positive shift in values. Additionally, the analysis found a minimal
change in reward factor thresholds, ranging from -0.07 to +0.02 for
mean percentile thresholds and -0.08 to +0.008 for variance percentile
thresholds. In the analysis of the overall and Part D summary rating,
91 percent of MA-PD contracts retained the same overall rating, 7
percent decreased by half a star, and 2 percent increased by half a
star. We found that 81 percent of MA-PD contracts retained the same
Part D summary rating, 11 percent decreased by half a star, and 7
percent increased by half a star. The impact on PDP contracts was
neutral or positive; 63 percent of PDP contracts retained the same Part
D summary rating star level while 37 percent increased by a half a
star. No PDP contracts had a decrease in their Part D summary rating.
The Part C and Part D improvement measures were not recalculated
for this simulation. The final 2021 Star Ratings for both improvement
measures were used for the summary rating recalculations in the
simulations to illustrate the impact of this proposed change to the
three medication adherence measures. Additionally, the final 2020 Star
Ratings for both improvement measures and for the three adherence
measures were used for the CAI value recalculations in the simulations.
It is possible that the simulated differences could vary if or when we
are able to have two consecutive years of adjusted data for
recalculating these components.
Per Sec. 423.184(d)(2), the change to implement SDS risk
adjustment for the three Part D medication adherence measures would be
a substantive update. We signaled this potential update and solicited
initial feedback on incorporating the SDS risk adjustment in the
Advance Notice and Announcement of Calendar Year (CY) 2023 Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment Policies.
A majority of the comments submitted in response to the CY 2023
Advance Notice supported SDS risk adjustment for the medication
adherence measures. Some of those comments also requested information
on how the CAI will be affected by this update. We completed testing of
the impact of the adjustment and are including the additional
information about the simulations in this final rule, as summarized
previously. If finalized, the legacy
[[Page 22267]]
medication adherence measures would remain in the Star Ratings and the
updated medication adherence measures with the SDS risk adjustment
would be on the display page for at least 2 years (beginning with the
2024 measurement year for the 2026 display page). Beginning with the
2026 measurement year and 2028 Star Ratings, CMS would then move the
re-specified measures from display page to Star Ratings and the legacy
measures would be removed under this proposal.
In addition, to provide a more complete explanation of the changes
in the specifications to the three medication adherence measures, the
December 2022 proposed rule included a summary of non-substantive
updates to the medication adherence measures. As noted in the proposed
rule and in the Advance Notice of Methodological Changes for Calendar
Year (CY) 2024 for Medicare Advantage (MA) Capitation Rates and Part C
and Part D Payment Policies, our intent was to implement the non-
substantive changes regardless of whether we ultimately finalized
changes to add risk adjustment for SDS factors to the three medication
adherence measures. The non-substantive updates are to: (1) apply
continuous enrollment (CE) instead of member-years (MYs) adjustment and
(2) no longer adjust for stays in inpatient (IP) settings and skilled
nursing facilities (SNFs). More information about the non-substantive
updates is in section V.D.2.b. of this rule and in the Announcement of
Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and
Part C and Part D Payment Policies issued on March 31, 2023.
We solicited comments on this substantive update to incorporate SDS
risk adjustment for the medication adherence measures. In addition, we
summarize here the comments received regarding the non-substantive
updates that specifically reference the proposed substantive measure
updates to the medication adherence measures.
Comment: The majority of commenters supported the proposal to
implement SDS risk adjustment for the Part D Star Ratings medication
adherence measures. Commenters also expressed their support for CMS's
efforts to promote health equity in the Star Ratings program.
Commenters believed that including case-mix adjustment based on SDS
characteristics would help improve health care quality for underserved
individuals and incentivize plan sponsors to both seek and improve the
care for additional vulnerable beneficiaries. Some commenters requested
that SDS risk adjustment be carefully monitored to ensure overall
quality shortcomings are not concealed.
Response: CMS appreciates the support received for the proposal to
incorporate SDS risk adjustment for the three medication adherence
measures: Diabetes, Hypertension (RAS), and Cholesterol (Statins). We
do not want to mask quality issues and intend to carefully monitor the
SDS risk adjusted measure rates while they are on the display page for
two years and after they are implemented in the Star Ratings. The
stratified Medication Adherence patient safety reports and SDS risk
adjusted measures provided to plan sponsors should incentivize plans to
improve performance, provide high quality of care to Medicare
beneficiaries, and identify disparities.
Comment: A commenter requested clarification on whether
implementing SDS risk adjustment for the three adherence measures is a
substantive update.
Response: The change to implement SDS risk adjustment for the three
Part D medication adherence measures is a substantive update according
to Sec. 423.184(d)(2) because it sufficiently changes the nature or
scope of the three medication adherence measures and is not similar to
any of the examples of non-substantive updates listed in Sec.
423.184(d)(1)(i) through (v). Therefore, the process for non-
substantive updates does not apply. According to Sec. 423.184(d)(1)(i)
through (v), examples of non-substantive updates include those that:
narrow the denominator or population covered by the measure with no
other changes; do not meaningfully impact the numerator or denominator
of the measure; update the clinical codes for quality measure; provide
additional clarifications such as adding additional qualifiers that
would meet the numerator requirements, clarifying documentation
requirements, or adding additional instructions; or adding additional
data sources. As required by Sec. 423.184(d)(2) for substantive
updates to measures, CMS solicited initial feedback to incorporate the
SDS risk adjustment in the Advance Notice and Announcement of Calendar
Year (CY) 2023 Medicare Advantage (MA) Capitation Rates and Part C and
Part D Payment Policies and received support on this substantive
update.
Comment: Several commenters opposed the proposal to apply SDS risk
adjustment for the medication adherence measures. Commenters were
concerned about the complexity of the SDS risk adjustment, that it
contradicts CMS's expressed interest to simplify the Part C and D Star
Ratings, that it could make tracking individual performance complicated
for plans, and that it could make it difficult for beneficiaries to
understand when comparing plans. Others were concerned SDS risk
adjustment would create multiple standards by which plans are measured
or that there is no definition of success or ``ceiling'' for medication
adherence ratings. One commenter noted that the removal of the Part C
Medication Reconciliation Post-Discharge measure will have a negative
impact on adherence since the measure is an intervention to ensure
adherence and that these changes to implement SDS risk adjustment would
dissuade sponsors from enrolling sicker populations associated with
poor adherence.
Response: While risk adjustment does add complexity, CMS does not
have concerns about applying the SDS risk adjustment and has tested
this change. The update to implement SDS risk adjustment aligns with
the PQA's recommendations as the measure steward. We will work to
provide technical and non-technical information as appropriate about
the updated measures for plans, beneficiaries, and other interested
parties to help understand the specifications and to make comparisons.
We will continue to provide contract-level and beneficiary-level
information to Part D sponsors through the patient safety reports to
assist plans with tracking their performance improvement efforts on
medication adherence measures. Additionally, the medication adherence
measures are intermediate outcome measures, while the other Part D
patient safety measures included in the Star Ratings are process
measures and not recommended for SDS risk adjustment by the PQA.
Therefore, we are aligning with the PQA and implementing the SDS risk
adjustment on only the three medication adherence measures. We remind
commenters that the thresholds for the medication adherence measure
rates in the Medicare Part D Star Ratings are not predetermined. They
are based on the distribution of data for the year the data are
collected. CMS uses the clustering methodology in accordance with Sec.
423.186(a)(2) to determine thresholds for the medication adherence
measures. Additionally, the Part C Medication Reconciliation Post-
Discharge measure will continue to be measured as part of the
Transitions of Care (Part C) measure.
Comment: Commenters expressed concerns surrounding the adherence
measures being excluded from the CAI adjustment and unintended harm or
impacts to sponsors with high
[[Page 22268]]
enrollment of beneficiaries with SRFs. One commenter requested CMS to
continue adjusting the three adherence measures through the CAI. Some
commenters opposed implementation of SDS risk adjustment since the SDS
characteristics are already accounted for in the CAI.
Response: Currently, the Star Ratings CAI adjusts for the average
within-contract disparity in performance for LIS/DE and/or disability
status. The SDS risk adjustment for the adherence measures adjusts for
additional beneficiary-level SDS characteristics: age, gender, LIS/DE
status, and disability status. The CAI is designed to adjust for the
impact of SES on measure scores and ratings when the measures do not
already include an adjustment to account for SES or similar
sociodemographic factors. Because case-mix adjustment (that is, risk
adjustment) of a measure adjusts scores to account for certain
respondent characteristics not under the control of the health or drug
plan, adjusting again for the same or similar factors through the CAI
is duplicative and unnecessary. CMS has encouraged and supported
measure stewards to continue examining their measures for possible re-
specification to include case-mix adjustment as appropriate. The PQA
updated the measure specifications for the three adherence measures to
include the SDS risk adjustment to account for SDS characteristics of
age, gender, LIS/DE status, and disability status that may impact
beneficiary health outcomes. As noted in the preamble, the PQA
medication adherence measure specifications with the SDS risk
adjustment were endorsed by the NQF. Per the Star Ratings rules, the
medication adherence measures must be excluded from the CAI adjustment
per Sec. 423.186(f)(2)(ii)(A) once the measure is already case-mix
adjusted for beneficiary-level SDS characteristics: age, gender, LIS/DE
status, and disability status. With the updated measure-level
specifications, the adherence measures no longer needed to be included
in the CAI since the measure scores are already adjusted for
differences in the enrollee case mix across contracts.
Comment: One commenter requested that the risk adjustment for the
three adherence measures be introduced earlier in the 2026 Star
Ratings. A commenter was concerned with program stability of moving the
risk adjusted measures to the display page for two years and then
reintroducing the measures to the Star Ratings with a triple weight. A
few commenters suggested decreasing the weight of the adherence
measures when incorporating the new methodology for program stability.
Response: We appreciate the feedback we received. Measures with
substantive updates are on the display page for a minimum of two years
prior to becoming a Star Ratings measure and therefore cannot be
introduced into the Star Ratings earlier per Sec. 423.184(d)(2). CMS
will keep the three legacy adherence measures in the Star Ratings
during the period when the updated adherence measures are placed on the
display page. CMS and sponsors will have the opportunity to monitor the
three updated measures' rates while on the display page. New measures
to the Star Ratings program are assigned a weight of 1 for their first
year in the Star Ratings and then in subsequent years, the weight
associated with the measure weighting category would be used. When
substantive updates are made to an existing measure in the Star
Ratings, the updated measure is then added to the display page for at
least 2 years prior to its introduction to the Star Ratings. For
weighting purposes, a substantively updated measure is treated as a new
measure and will receive a weight of 1 for the first year in the Star
Ratings. In subsequent years, an updated measure is assigned the weight
associated with its category. (See 86 FR 5919 and 87 FR 79616).
Therefore, being consistent with the Star Ratings policy, during the
first year the SDS risk adjusted adherence measures will be in the Star
Ratings with a weight of 1, but then beginning with the following Star
Ratings year, the weight will increase to 3, as these measures are
categorized as intermediate outcome measures.
Comment: Some commenters appreciated the lead time provided for
implementation of the proposed update and the advance notification that
the SDS risk adjustment would be included in the last monthly patient
safety report of the measurement year. A commenter noted that the lead
time allows them to find solutions to automate the process internally.
Only a couple of commenters suggested that SDS risk adjustment be
provided to plans prior to year-end or possibly monthly to give plans
an understanding of the impact of these adjustments.
Response: We appreciate the comments submitted on the proposed
rule; however, CMS is unable to provide monthly patient safety reports
with SDS risk adjustment. As CMS noted previously, implementing the SDS
risk adjustment to the patient safety reports is very time consuming
and labor intensive. As a result, we are unable to provide this
information on a monthly basis because of the tight production
timelines for the monthly patient safety reports. We intend to apply
the SDS risk adjustment for the final medication adherence patient
safety reports of the measurement year which is typically in July of
the following calendar year. During the display page transition period,
CMS will assess the feasibility of providing the medication adherence
patient safety reports with SDS risk adjustment at an additional time
period prior to the determination of the final rates.
Comment: Commenters requested that CMS publish detailed methodology
and analysis results for the SDS risk adjustment. One commenter
requested additional analysis examining contracts that were impacted by
the SDS risk adjustment.
Response: Thank you for the additional requests to increase
transparency about the SDS risk adjustment. As a reminder, CMS provides
detailed contract-level reports and user guides to Part D plan sponsors
for each of the current Part D patient safety measures. Similarly, we
will update the medication adherence measure report user guides to
reflect the implementation of the SDS risk adjustment and provide SDS
risk adjustment methodology. As we align with the PQA,\142\ CMS will
continue to monitor the SDS risk adjusted medication adherence measures
while on the display page and will conduct further analyses if needed.
We will also explore adding additional information to the reports
provided to plan sponsors to help understand the non-adjusted and SDS
risk adjusted rates.
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\142\ Risk-Adjusted Adherence Measures: https://www.pqaalliance.org/index.php?option=com_dailyplanetblog&view=entry&year=2020&month=04&day=23&id=8:risk-adjusted-adherence-measures.
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Comment: We received one comment encouraging CMS to adopt the PQA
Proportion of Days Covered (PDC) Medication Adherence ``combined''
measure and to apply the case-mix adjustment to that measure.
Response: The PQA endorsed the PDC composite health plan measure in
2022. CMS defers to the measure steward, PQA, regarding questions on
the composite health plan measure specifications and evaluation for
risk adjustment. CMS would need to propose through rulemaking to add
PQA's composite health plan measure as a new measure to the Part C and
Part D Quality Star Ratings system. CMS will consider testing the new
PQA measure in the future as part of our continued oversight and
maintenance of the Star Ratings program.
[[Page 22269]]
Comment: A commenter expressed concerns that the medication
adherence performance measures used by plans to evaluate pharmacies may
not be risk adjusted and recommended that CMS implement standardized
pharmacy performance measures. Additionally, a commenter expressed
concerns of potential downstream implications of the SDS risk
adjustment update to the adherence measures on the pharmacy community
and that Part D sponsors will structure reimbursement to penalize
pharmacies if PDC thresholds are not achieved. A commenter was
concerned that plans would ``game'' the measure by having their
pharmacies auto-ship prescriptions.
Response: These comments are out of scope for the proposed SDS risk
adjustment to the Star Ratings medication adherence measures used to
evaluate Part D plan performance. The SDS risk adjusted medication
adherence measures are endorsed by the PQA and used by CMS at the plan-
level, not the pharmacy-level. We encourage the PQA and industry to
continue to work together on developing a set of pharmacy performance
measures through a consensus process and Part D sponsors to adopt such
measures to ensure standardization, transparency, and fairness. CMS is
not addressing the proposals around auto-ship policies in this final
rule.
Comment: Commenters expressed concern that removing the IP/SNF stay
adjustment may undermine or counteract the proposed SDS risk adjustment
updates, may not simplify the measure, or that implementing SDS risk
adjustment for the adherence measures and removing the adherence
measures from the CAI may provide additional complexity to these
calculations which may disadvantage some populations with more IP/SNF
stays. A commenter was concerned about the disproportionate impact of
removing the IP/SNF stay adjustment on plans with enrollees with
frequent or prolonged IP stays even after adjusting for LIS status; the
commenter also requested more data.
Response: CMS understands these concerns about removing the IP/SNF
stay adjustment in the context of adding the SDS risk adjustment. As
noted in the proposed rule, we conducted testing on the impact of the
combined changes of the SDS risk adjustment and removing the IP/SNF
stay adjustment. Our testing indicated that applying both the SDS risk
adjustment and the IP and SNF stay adjustments added complexity to the
measure and created concerns about the accuracy of the SDS risk
adjustment. As a reminder, the IP/SNF stay adjustment does not align
with current PQA measure specifications that were endorsed for the
adherence measures. CMS and plan sponsors will have the opportunity to
monitor their measure scores while the SDS risk adjusted medication
adherence measures are on the display page for two years. The patient
safety report user guides provided to Part D plan sponsors will include
more information to describe how the SDS risk adjustment is applied to
help sponsors understand the calculations.
Comment: A few commenters suggested additional updates to the
medication adherence measure specifications to: (1) apply the IP/SNF
stay adjustment prior to or as part of the SDS risk adjustment; or (2)
exclude beneficiaries who reside in long-term care (LTC) facilities.
For the second suggestion, the commenter stated that exclusion of LTC
residents is appropriate because such enrollees generally have a
potential higher disease burden and their medications are actively
monitored, and because inclusion of LTC residents could skew the
performance rates on the measure based on other enrollees. Some
commenters were concerned that the SDS risk adjustment would not
directly account for IP/SNF stays or would not offset the removal of
IP/SNF stay adjustment from the adherence measures since many of the
reasons for IP/SNF stays may be unrelated to the SDS characteristics
included in the risk adjustment.
Response: As finalized in this rule, CMS will implement SDS risk
adjustment for the following beneficiary-level SDS characteristics:
age, gender, LIS/DE status, and disability status, as developed and
endorsed by the PQA (the measure steward) and endorsed by NQF, for the
three medication adherence measures. The PQA medication adherence
measure specifications do not adjust for IP/SNF stays or exclude
beneficiaries who reside in LTC. We will consider additional updates
made by the measure steward in the future. For further details
regarding the non-substantive updates to the medication adherence
measures, refer to the Announcement of Calendar Year (CY) 2024 Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment Policies
which was published on March 31, 2023.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the implementation of the SDS risk adjustment to the three
medication adherence measures (Medication Adherence for Diabetes
Medication, Medication Adherence for Hypertension (RAS Antagonists),
and Medication Adherence for Cholesterol (Statins)). We will first
display the updated SDS risk adjusted medication adherence measures for
the 2024 measurement year (2026 display page). Then, the updated SDS
risk adjusted measures will replace the existing medication adherence
measures beginning with the 2026 measurement year (2028 Star Ratings).
The IP/SNF stay adjustment will be removed from the medication
adherence measures starting with the 2026 measurement year (2028 Star
Ratings). CMS will implement the CE to the medication adherence
measures starting with the 2024 measurement year (2026 Star Ratings).
Publishing the display measures for at least two years will allow Part
D sponsors and CMS additional experience with contract-specific results
using the new measure specifications.
b. Medication Adherence for Diabetes Medication, Medication Adherence
for Hypertension (RAS Antagonists), Medication Adherence for
Cholesterol (Statins) (Part D)--Non-Substantive Changes
As discussed in the December 2022 proposed rule, our analysis of
the proposed substantive changes (to add risk adjustment for SDS for
the three adherence measures) included two non-substantive changes to
the adherence measures, based on the current PQA measure
specifications, which are endorsed by NQF. While we did not need to
propose non-substantive changes through rulemaking, given that we
intend to make the non-substantive changes to the measures along with
the proposed substantive changes to risk adjust the adherence measures,
we described the non-substantive updates as well in the preamble to the
proposed rule in order to provide a full picture of the changes to
these measures. However, implementing these non-substantive updates was
not dependent on finalizing the SDS risk adjustment proposal and was
included in the Advance Notice of Methodological Changes for Calendar
Year (CY) 2024 for Medicare Advantage (MA) Capitation Rates and Part C
and Part D Payment Policies. These specification changes are non-
substantive in accordance with Sec. 423.184(d)(1) because they narrow
the denominator population or do not change the target population or
intent of the measure: (1) apply continuous enrollment (CE) instead of
member-years (MYs) adjustment and (2) no longer adjust for stays in
inpatient (IP) settings and skilled nursing facilities
[[Page 22270]]
(SNFs). The comments that we received that were solely about the non-
substantive updates are addressed in the Announcement of Calendar Year
(CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part
D Payment Policies, which was issued by CMS on March 31, 2023. As noted
in section V.D.2.a., comments on the interaction or overlap of the
substantive changes and the non-substantive changes to the three
medication adherence measures are addressed as part of our discussion
of the substantive changes.
3. Measure Addition--Kidney Health Evaluation for Patients With
Diabetes (KED) (Part C)
We are committed to continuing to improve the Part C and Part D
Star Ratings system by focusing on improving clinical and other health
outcomes. Consistent with Sec. Sec. 422.164(c)(1) and 423.184(c)(1),
we continue to review measures that are nationally endorsed and in
alignment with the private sector. (83 FR 16521, 16533). For example,
we regularly review measures developed by NCQA and PQA. CMS proposed to
adopt the new measure described in this rule, which was developed by
NCQA. The Kidney Health Evaluation for Patients with Diabetes (KED)
measure has been collected from MA (including MA-only and MA-PDs) and
cost plans since the 2020 measurement year.
We proposed to add the KED measure beginning with the 2024
measurement year and 2026 Star Ratings. This measure was introduced as
a HEDIS measure for the 2020 measurement year. NCQA, in collaboration
with the National Kidney Foundation, developed a kidney health
evaluation measure, and NCQA tailored the measure specifically for
health plans. The KED NCQA measure assesses whether adults who have
diabetes received an annual kidney profile evaluation, defined by an
estimated Glomerular Filtration Rate (eGFR) \143\ and a Urine Albumin-
Creatinine Ratio (UACR) during the measurement year. This new measure
aligns with recommendations from the American Diabetes Association and
provides critical information for screening and monitoring of kidney
health for patients with diabetes. This measure would replace the prior
related measure, Diabetes Care--Kidney Disease Monitoring, which was
removed beginning with the 2024 Star Ratings as the measure steward,
NCQA, retired the measure beginning with the 2022 measurement year.
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\143\ NCQA added the new Logical Observation Identifiers Names
and Codes (LOINC) for the new race-free eGFR equations to the KED
value sets.
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CMS began reporting the KED measure on the display page for the
2022 Star Ratings. As provided at Sec. Sec. 422.164 (c)(3) and (4) and
423.184(c)(3) and (4), as new performance measures are developed and
adopted they are initially posted on the display page for at least 2
years.
We submitted the KED plan measure through the 2022 Measures Under
Consideration process for review by the Measures Application
Partnership, which is a multi-stakeholder partnership that provides
recommendations to HHS on the selection of quality and efficiency
measures for CMS programs, and the Measures Application Partnership
provided support for this measure. The MIPS program had also submitted
it to the 2021 Measures Under Consideration process and this measure
will also be implemented for qualified health plans (QHPs).\144\
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\144\ https://www.cms.gov/files/document/final-2022-call-letter-qrs-qhp-enrollee-survey.pdf.
---------------------------------------------------------------------------
We solicited comments on adding this measure to the 2026 Star
Ratings program.
Comment: Most commenters supported adding the KED measure beginning
with the 2024 measurement year and 2026 Star Ratings. A commenter
stated that adding the measure will serve to increase early diagnosis
and treatment of kidney disease, stop or slow disease progression for
chronic kidney disease, and continue the agency's prioritization of the
efficient management of end-stage renal disease.
Response: CMS thanks the commenters for their support of our
proposal to add this measure beginning with the 2026 Star Ratings.
Comment: A commenter stated there is concern about not using the
race-neutral eGFR when monitoring kidney health and recommended that
CMS wait to implement the measure until the race-neutral eGFR is
incorporated into the measure specifications.
Response: The new race-neutral eGFR codes are already incorporated
into the measure specifications. Currently, NCQA includes all codes for
eGFR, including both new and old codes, to allow transition to the
race-neutral eGFR. Starting with the 2023 measurement year, only the
race-neutral eGFR will be included in the technical specification for
the KED measure.\145\
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\145\ Measurement year 2023 Technical Specifications Update
available under Volume 2: https://www.ncqa.org/hedis/measures/.
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Comment: A commenter suggested that CMS cover CPT code 80050 under
Original Medicare given its inclusion in the KED measure code set since
the commenter suggested not including it could create provider
hesitation to order the test.
Response: The KED measure assesses whether members 18-85 with
diabetes received an annual kidney health evaluation including both a
uACR and an eGFR. The intent is that any code that indicates that an
eGFR was completed can count towards the measure. CPT code 80050 is one
of several codes included in the value set for eGFR. Our proposal to
add the KED measure to the Part C and Part D Quality Star Ratings
program was not about whether and how Medicare covers all of the tests
under CPT code 80050. Comments about the scope of services covered by
Medicare are outside the scope of the proposal to add the KED measure
to the Star Ratings.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the addition of the KED measure to the 2026 Star Ratings.
Table 2 summarizes the additional and updated measures addressed in
this final rule for the 2026 Star Ratings, unless otherwise noted. Due
to the level of detail and changes in measure specifications, CMS does
not list the measures and their specifications in the regulation text
for the Part C and Part D Quality Star Ratings, but their final
adoption and required use are addressed in this final rule. The measure
descriptions listed in this table are high-level descriptions. The
annual Star Ratings measure specifications supporting document, the
Medicare Part C & D Star Ratings Technical Notes, provides detailed
specifications for each measure. Detailed specifications include, where
appropriate, more specific identification of a measure's: (1)
numerator, (2) denominator, (3) calculation, (4) timeframe, (5) case-
mix adjustment, and (6) exclusions. The Technical Notes document is
updated annually. The annual Star Ratings are produced in the fall of
the prior year. For example, Stars Ratings for the year 2026 will be
produced in the fall of 2025. If a measurement period is listed as
``the calendar year 2 years prior to the Star Ratings year'' and the
Star Ratings year is 2026, the measurement period is referencing the
January 1, 2024 to December 31, 2024 period.
[[Page 22271]]
[GRAPHIC] [TIFF OMITTED] TR12AP23.008
4. Measure Removal (Sec. Sec. 422.164(e)(1) and 423.184(e)(1))
CMS proposed adding a new rule for measure removal. We proposed
that CMS would have the authority to remove a measure from calculations
of Star Ratings when a measure steward other than CMS retires the
measure. CMS continually reviews measures that are used in calculations
of Star Ratings. As codified at Sec. Sec. 422.164(e)(1) and
423.184(e)(1), CMS may remove a measure when either (1) the clinical
guidelines associated with the specifications of the measure change
such that the specifications are no longer believed to align with
positive health outcomes; or (2) a measure shows low statistical
reliability. See also 83 FR 16533-16537. In both of these
circumstances, as codified at Sec. Sec. 422.164(e)(2) and
423.184(e)(2), CMS will announce the removal of any measure in advance
of the measurement period through the process described for changes in
and adoption of payment and risk adjustment policies in section 1853(b)
of the Act.
We proposed adding a rule at Sec. Sec. 422.164(e)(1)(iii) and
423.184(e)(1)(iii) to allow removal of a Star Ratings measure, without
separate rulemaking, when a measure steward other than CMS (for
example, NCQA or PQA) retires a measure. Under the proposal, which we
are finalizing, CMS will have the authority to remove the measure from
calculations of Star Ratings through the process described at
Sec. Sec. 422.164(e)(2) and 423.184(e)(2). When a measure steward such
as NCQA retires a measure, they go through a process that includes
extensive review by their various measurement panels and they solicit
public comment regarding proposed measure retirements so health plans,
purchasers, consumers, and other stakeholders have an opportunity to
weigh in on the relevance and scientific soundness of any changes to
the measurement set. This change will allow CMS to respond more quickly
to measure removals by external measure stewards to ensure that
measures included in Star Ratings are clinically meaningful, reliable,
and up-to-date. We solicited comments on this proposal.
Comment: Commenters supported CMS having the authority to remove
Star Ratings measures when an external measure steward retires a
measure from its program. A couple of commenters stated they would like
to see CMS continue to communicate to plans which measures will be
removed.
Response: CMS appreciates the support to be able to quickly remove
Star Ratings measures when an external measure steward retires a
measure. This will ensure that measures included in the Star Ratings
program are clinically meaningful, reliable, and up-to-date. CMS agrees
that transparency is important. Prior to removing any measure, CMS will
announce the removal in advance of the measurement period, as required
by Sec. Sec. 422.164(e)(2) and 423.184(e)(2), through the process
described for changes in and adoption of payment and risk adjustment
policies in section 1853(b) of the Act, that is, through the Advance
Notice and Rate Announcement.
Comment: A commenter raised the concern that there will be a gap in
the 2024 Star Ratings program for immunization measures, including
influenza and pneumococcal vaccinations, since NCQA is retiring these
measures from the HEDIS measurement set.
Response: CMS understands this concern and wants to clarify that
the influenza measure used in the Star Ratings program will continue to
be
[[Page 22272]]
included in the 2024 Star Ratings because the Star Ratings influenza
measure is different than the NCQA HEDIS measure being retired. The
HEDIS measure for influenza is limited to Medicare members who are 65
or older. For the Star Ratings, the influenza vaccination measure is
currently assessed for a sample of Medicare members through the
Medicare CAHPS survey and covers all Medicare members, regardless of
age. Pneumococcal vaccination is also assessed for a sample of Medicare
members through the Medicare CAHPS survey and reported on the display
page. As noted in the 2023 Rate Announcement \146\ and the Announcement
of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and
Part C and Part D Payment Policies issued on March 31, 2023, any
substantive changes to the current influenza vaccination measure or the
addition of a more comprehensive immunization measure would need to be
proposed through rulemaking.
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\146\ Announcement of Calendar Year (CY) 2023 Medicare Advantage
(MA) Capitation Rates and Part C and Part D Payment Policies
(cms.gov).
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After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the additional rule at Sec. Sec. 422.164(e)(1)(iii) and
423.184(e)(1)(iii) as proposed without modification.
E. Patient Experience/Complaints and Access Measure Weights (Sec. Sec.
422.166(e)(1)(iii) and (iv), 423.186(e)(1)(iii) and (iv))
CMS proposed to lower the weight of patient experience/complaints
and access measures to 2 beginning with the 2026 Star Ratings covering
the 2024 measurement period. The weight for the patient experience/
complaints and access measures is codified at Sec. Sec.
422.166(e)(1)(iii) and (iv) and 423.186(e)(1)(iii) and (iv). Process
measures receive a weight of 1, outcome measures receive a weight of 3,
and the Part C and D improvement measures receive a weight of 5. In the
April 2018 final rule, we finalized an increase in the weight of
patient experience/complaints and access measures from 1.5 to 2,
starting with the 2021 Star Ratings. (83 FR 16575-77). These measures
include the patient experience of care measures collected through the
CAHPS survey, Members Choosing to Leave the Plan, Appeals, Call Center,
and Complaints measures. We also stated in the April 2018 final rule
(83 FR 16575-16576) that, given the importance of hearing the voice of
patients when evaluating the quality of care provided, CMS intended to
further increase the weight of patient experience/complaints and access
measures in the future. In the June 2020 final rule, CMS finalized an
additional increase in the weight of patient experience/complaints and
access measures from 2 to 4 for the 2023 Star Ratings. At that time, we
stated we were putting more weight on this category of measures that
primarily reflect patient experience of care measures to put patients
first and to emphasize CMS's goal of listening to the voice of the
patient to identify opportunities to improve care delivery (85 FR
33837). We still believe these measures focus on critical aspects of
care such as care coordination and access to care from the perspective
of enrollees, but taking into consideration additional stakeholder
feedback we have received and the effect of the policy on the 2023 Star
Ratings, we have reconsidered our position from the June 2020 final
rule and now believe these measures currently receive an undue weight
in the Star Ratings program.
One of the guiding principles of the Part C and Part D Star Ratings
program is to align with the CMS Quality Strategy (83 FR 16521). As
part of the current CMS Quality Strategy, CMS is trying to create a
resilient, high-value health care system that promotes quality
outcomes, safety, equity, and accessibility for all individuals, as
described at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy. One
of the goals of the CMS Quality Strategy is to increase alignment
across the CMS quality programs to improve value. Currently, the
measure weight of 4 for the patient experience/complaints and access
measures is not consistent with the contribution of these types of
measures in the overall performance scores for other CMS quality
measurement programs. For example, in the hospital value-based
purchasing program, person and community engagement measures, which are
measures collected through the Hospital CAHPS Survey, account for 25
percent of the total performance score for hospitals (https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/hospitalqualityinits/hospital-value-based-purchasing-). As
another example, one-sixth of the global score for the Quality Rating
System for QHPs is based on enrollee experience (https://www.cms.gov/files/document/2022-qrs-and-qhp-enrollee-survey-technical-guidance.pdf). In contrast, for the 2023 Star Ratings, with a weight of
4, the patient experience/complaints and access measures account for
approximately 58 percent of the overall rating for MA-PDs. For the Part
C and Part D Star Ratings, we include a broader set of measures related
to person and community engagement relative to other CMS quality
programs. For example, we include appeals measures given the importance
of access to care and services for Part C plan enrollees. However, if
the patient experience/complaints and access measures had a weight of
2, these measures would account for 41 percent of the overall rating.
Reducing the weighting to 2 for this category of measures would align
the patient experience/complaints and access measures more closely with
other programs, without exactly matching the lower influence measures
of this type have on the overall (that is, total performance or global)
score in these other programs. We did not propose to reduce the weight
further than 2 given the important link between patient experience,
adherence, and health outcomes. We stated that reducing the weight for
these measures from 4 to 2 is a significant change and a more extensive
change may be too much to adopt at this time. Prior to the April 2018
final rule, the weight of 1.5 given to the patient experience/
complaints and access measures in the Part C and Part D Stars Ratings
had been in place since the 2012 Star Ratings, so we have extensive
experience with how using a weight lower than 2 for these categories of
measures influences plan behavior. We stated that we continue to
believe that a weight higher than 1.5 is appropriate.
The weighting of measures within the Star Ratings program is
important as not all measures contribute equally to the goals of the
program. Patient experience, complaints, and access to care have been
linked to improved clinical outcomes and are important aspects of
health care. For example, patient experience is associated with better
patient adherence to recommended treatment, better clinical processes,
better hospital patient safety culture, better clinical outcomes,
reduced unnecessary health care use, and fewer inpatient complications
(Anhang Price et al., 2014; Anhang Price et al., 2015; Quigley et al.,
2021).\147\ We also
[[Page 22273]]
recognize that whether clinicians acknowledge patient preferences \148\
may be another factor that is important to measure and include in the
Star Ratings program; consequently, we tested a question for the CAHPS
survey related to whether an enrollee's personal doctor dismisses
symptoms that are important to them for potential incorporation in the
survey and Star Ratings in the future. CMS continues to believe, as we
stated in the April 2018 final rule at 83 FR 16576, that we must listen
to the perceptions of care from people with Medicare, as well as ensure
they have access to needed care. While focusing on patient experiences
of care and ensuring that care is person-centric are critical, health
and drug plans also have a responsibility to consider and work toward
improving clinical outcomes. Improving clinical outcomes is an
important goal for the Part C and Part D programs to meet the CMS
Quality Strategy goal of promoting the highest quality outcomes and
safest care for all individuals. High-value care does not always align
with patient experiences of care, and we must take this into
consideration as we consider how to weight the different Star Ratings
measures. Clinical quality measures, for example, are also important in
that they measure health outcomes, clinical processes, and adherence to
clinical guidelines. They measure whether plans are following the best
practices for health care delivery, including providing preventive care
such as immunizations and cancer screenings and caring for enrollees
with ongoing health problems such as diabetic enrollees who need blood
sugar tests, eye exams, and blood pressure monitoring. It is also
important to create incentives for health and drug plans to
continuously focus on quality improvement by giving sufficient weight
to the Health Plan Quality Improvement and Drug Plan Quality
Improvement measures relative to the patient experience/access and
complaints measures. In the proposed rule, we stated that we believe
the weight given to measures in the Part C and Part D Star Ratings
program should be in line with how the measures are linked to health
care and the value they have in improving health care.
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\147\ Anhang Price, R, Elliott, MN, Zaslavsky, AM, Hays, RD,
Lehrman, WG, Rybowski, L, Edgman-Levitan, S, & Cleary, PD (2014).
Examining the role of patient experience surveys in measuring health
care quality. Medical Care Research and Review, 71(5), 522-554.
Anhang Price, R, Elliott, M., Cleary, PD, Zaslavsky, AM, & Hays, RD
(2015). Should health care providers be accountable for patients'
care experiences? Journal of General Internal Medicine, 30(2), 253-
256. Quigley DD, Reynolds K, Dellva S, & Anhang Price, R (2021).
Examining the business case for patient experience: a systematic
review. Journal of Healthcare Management, 66(3), 200-224.
\148\ Cohen, Marc A, Hwang, Ann and Hawes, Frances M (July 13,
2022). Could Person-Centered Care Be The Secret To Achieving the
Triple Aim? Health Affairs Forefront.
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Subsequent to finalizing the weight of 4 for patient experience/
complaints and access measures in the June 2020 final rule, we have
received significant stakeholder feedback on this issue through the
Part C and D Advance Notices, the 2023 Part C and D proposed rule (CMS-
4192-P), the COVID-19 interim final rules (CMS-1744-IFC and CMS 3401-
IFC), letters sent to CMS, and meetings with plans. A number of
concerns have been raised by stakeholders related to a weight of 4,
including devaluing measures of health outcomes, encouraging plans to
abandon efforts to drive clinically appropriate care, sending the
message that preventive care such as cancer screenings are not
important, and not balancing appropriately clinical excellence and
patient experience. Stakeholders have also raised concerns around
disproportionately overweighting patient experience measures, which in
turn diminishes the importance of other measures. MedPAC noted in their
response to the CY 2021 and 2022 proposed rule (CMS-4190-P) that the
increased weight would give disproportionate weight to patient
experience measures relative to outcome measures and create an
imbalance between the two most important measure groupings--outcome and
patient experience measures. Stakeholders have continued to raise
concerns about the disproportionate weight given to patient experience/
complaints and access measures. Stakeholders have continued to suggest
that clinical outcomes should count more than patient experience of
care measures. Additionally, we have received feedback that cancer
screenings, medication reconciliation, and other Star Ratings measures
are critical areas of focus in particular in underserved communities
but have a diminished role in the Star Ratings program due to the high
weight of patient experience/complaints and access measures.
Given these concerns, as well as the impact of the weighting policy
on the 2023 Star Ratings, CMS re-evaluated its decision to weight these
measures higher than outcome measures. We were concerned that the
higher weight of 4 may create incentives for plans to not focus as much
on patient outcomes, screenings, and preventive care. This could lead
to ineffective or inappropriate care and increased costs if providers
primarily focus on patient experiences. Although patient experience/
complaints and access to care measures have been linked to improved
clinical outcomes and are important aspects of health care, we proposed
to move back to a weight of 2 to more appropriately balance the value
these measures contribute to achieving high quality care without
weighting them higher than clinical outcome measures and to better
align the total contribution of patient experience and outcome measures
with other CMS quality reporting programs.
To better align the Part C and Part D Star Ratings with the current
CMS Quality Strategy and other CMS quality programs and to better
balance the contribution of the different types of measures in the Star
Ratings program, we proposed to modify Sec. 422.166 at paragraphs
(e)(1)(iii) and (iv) and Sec. 423.186 at paragraphs (e)(1)(iii) and
(iv) to decrease the weight of patient experience, complaints, and
access measures from 4 to 2 beginning with the 2026 Star Ratings. At a
weight of 2, the patient experience, complaints, and access measures
would be weighted higher than process measures but not as high as
outcome measures. This is in line with the value these measures add to
achieving high quality care without weighting them higher than clinical
outcome measures. In addition, this would align more closely with the
weight these types of measures are given in other CMS quality programs.
We solicited feedback on this proposed change.
Comment: The majority of commenters strongly supported CMS's
response to stakeholder concerns regarding the overemphasis on patient
experience/complaints and access measures in the Part C and D Star
Ratings program. Commenters noted that by lowering the weight from 4 to
2, CMS will continue to emphasize patient experiences in the Star
Ratings, but the Star Ratings will also highlight preventive care and
clinical outcomes more and be more in line with other quality programs.
There was concern that undue weight for patient experience/complaints
and access measures may shift payer priorities and lessen emphasis on
clinical outcomes.
Some commenters noted that they recognize the importance and value
of patient experience/complaints and access measures, but agree that
they should not account for more than half of the overall Star Ratings.
A commenter noted that bringing patient experience, complaint, and
access measures back to their prior weight of 2 rebalances the impact
of different measure types, signals the critical importance of clinical
outcome and process measures, which had been underweighted when the
weighting was doubled, and ensures
[[Page 22274]]
that the Quality Rating System reflects the continuum of care from
patient experiences to health outcomes. A commenter noted that access
to care, care coordination, and health care quality cannot be measured
solely through a member perception survey, and plan performance related
to members receiving timely preventive screenings and care for chronic
conditions should receive substantial weighting in the Star Ratings
program. By reducing the weight of CAHPS measures back to a weighting
of 2, a commenter stated that the Star Rating program will return to a
more balanced framework that extends relatively equal weighting across
domains. In doing so, this commenter noted that CMS will positively
impact population health-based quality measures, such as cancer
screenings, chronic condition management, and medication adherence that
are the ultimate path to health equity. Another commenter noted that
patient experience and access measures are critical to evaluating plan
quality; however, the weights should not be higher than clinical
outcomes. Weighted at 2, patient experience measures will still play a
critical part in rating a plan.
Response: We appreciate and agree with these comments. As we noted,
this weight reduction further aligns efforts with other CMS quality
programs and the current CMS Quality Strategy, and better balances the
contribution of the different types of measures in the Star Ratings
program.
Comment: Multiple commenters stated that the weight reduction
appropriately accounts for the value these types of measures contribute
to achieving high quality care and better aligns the total contribution
of patient experience/complaints and outcome measures within the Star
Ratings program. Another commenter supported this change and noted that
while enrollees' perspectives and experiences with the plan are
critical components of a plan's Star Ratings, and highly rated plans
should have reasonably satisfied enrollees, enrollee satisfaction
should not overshadow a plan's obligations to the quality of care and
health outcomes it delivers or ability to meet clinical and operational
performance standards.
Response: We agree and note that concerns from interested parties
after the weight was increased to 4, including concerns about
disproportionately overweighting patient experience measures and
subsequently diminishing the importance of other measures, are what led
to our proposal to reduce the weight to 2.
Comment: Some commenters strongly encouraged that CMS make the
weight change sooner than the 2026 Star Ratings to correct the current
weighting imbalance and ensure plans are also focused on patient
outcomes, screenings, and preventive care.
Response: In the June 2020 final rule, CMS finalized an increase in
the weight of patient experience/complaints and access measures from 2
to 4 for the 2023 Star Ratings and since then we have not proposed
further changes to the measure weights. Any changes to the weights need
to be proposed and finalized through rulemaking to amend Sec. Sec.
422.166 and 423.186. The 2026 Star Ratings is the soonest this change
can be implemented to ensure adequate notice to plans about this change
in advance of the performance period. We do not intend for this change
to rebalance the weight of the patient experience/complaints and access
measures to unfairly surprise plans or undermine efforts during the
2023 performance period to improve performance consistent with measure
weights in place at the start of the year.
Comment: A commenter recommended that the weight be decreased
further so that there is not a negative impact on preventive care and
patient outcomes. This commenter further suggested we might want to
evenly weight CAHPS/HOS, HEDIS, and Part D measures. Another commenter
stated that patient experience of care measures should receive a weight
of 1 and outcome measures should be weighted more heavily.
Response: At a weight of 2, the patient experience, complaints, and
access measures would be weighted higher than process measures but not
as high as outcome measures. We believe this is in line with the value
these measures add to achieving high quality care without weighting
them higher than clinical outcome measures. Prior to the 2012 Part C
and D Star Ratings, all measures were weighted equally. Beginning with
the 2012 Star Ratings, CMS has placed greater weight on outcome
measures compared to process measures; at that time, patient
experience/complaints and access measures were weighted higher than
process measures, but not as high as outcome measures. This
differential weighting was implemented to create incentives to drive
improvement in clinical outcomes, patient experience/complaints, and
access measures. Patient experience of care measures are related to
positive clinical outcomes so receive a higher weight than process
measures. Assigning all measures within HEDIS with the same weight, for
example, would weight process measures the same as outcome measures in
the set of Star Ratings measures derived from HEDIS. This would no
longer place greater weight on outcome measures and would assume that
all measures within a group, whether HEDIS, CAHPS/HOS, or Part D, are
equally important. One of the primary goals of the MA and Part D Star
Ratings system is to encourage improved health outcomes (83 FR 16520)
and the weighting of individual measures in the program reflects this
goal.
Comment: A handful of commenters encouraged CMS to continue efforts
to modernize the CAHPS surveys and appreciated CMS's efforts to test
the web mode and other updates to the survey.
Response: We thank these commenters for their support.
Comment: A commenter recommended regular patient satisfaction
surveys around network access questions such as how many clinicians the
patient contacted before finding an appointment and how long a patient
had to wait for an appointment.
Response: There are two existing Star Ratings measures, Getting
Needed Care and Getting Appointments and Care Quickly, that are
collected through the CAHPS survey and focus on issues related to
accessing care. Contracts are permitted to add a limited number of
supplemental questions to the MA and PDP CAHPS questionnaire so long as
they do not contain content similar to existing MA and PDP CAHPS survey
items or affect responses. In this case, contracts can add additional
survey items if the added questions capture different aspects of
patient experiences getting appointments and care.
Comment: Some commenters opposed the weight decrease and noted that
the patient experience, complaints, and access measures are critical
indicators of plan quality and important factors for a beneficiary
making plan decisions. A commenter noted that complaints against plans
can include issues regarding terminated coverage and denied
authorization requests that impact beneficiaries' health and care and
should be given significant weight in the Star Ratings. Another
commenter suggested that patient experience is underweighted in other
CMS quality programs. A commenter also stated that there is a positive
association between various aspects of patient experience, such as good
communication between providers and patients, and several important
health care processes and outcomes.
A commenter noted that CAHPS patient experience of care and access
measures help support an age-friendly health system that encourages
age-
[[Page 22275]]
friendly care.\149\ This commenter noted that the 4x weighting of the
CAHPS experience of care and access measures has shifted the clinical
and operational discussions within their organization more than any
payment innovation in recent organizational history since it created
incentives for an adaptive approach to the evolving and variable needs
of Medicare enrollees. The commenter noted that while HEDIS measures
have drawbacks since they are limited to the eligible populations,
CAHPS measures include more of the enrollee population and help drive
interventions to address social needs to improve access to care. This
commenter also noted that plans can influence CAHPS scores to a greater
degree than many currently recognize. They stated that examining
grievances, appeals, and call center statistics can also reveal gaps in
member education, delays, or process issues in utilization management,
as well as provider abrasion that is communicated to members. This
commenter further noted that MA is sufficiently unique such that CAHPS
weightings in other programs are not directly relevant.
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\149\ Age-Friendly Care (johnahartford.org).
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Response: We appreciate these comments but remain concerned that
the higher weight of 4 may create incentives for plans to not focus as
much on patient outcomes, screenings, and preventive care. This could
lead to ineffective or inappropriate care and increased costs if
providers primarily focus on patient experiences. We believe a weight
of 2 more appropriately balances the value these measures contribute to
achieving high quality care without weighting them higher than clinical
outcome measures. We agree with the commenters that patient experience/
complaints and access measures are critical aspects of care, and with
the weight change to 2, these measures will account for approximately
40 percent of the overall rating for MA-PD contracts, 45 percent of the
Part C summary rating for MA-only contracts, and 37 percent of the Part
D summary rating for PDPs so they will still have a significant
contribution to a contract's overall rating. We acknowledge the
commenter's position that other programs are underweighting patient
experience of care measures. However, similar to our approach here to
tailor the weights to reflect an overall balance for the Part C and
Part D Quality Star Ratings program, other CMS programs are trying to
balance creating incentives for facilities, providers, or plans to
ensure Medicare beneficiaries get high quality care across different
domains of quality in each of the programs. For example, the hospital
value-based purchasing program has multiple goals focused on improving
the quality, efficiency, patient experience, and safety of care that
Medicare beneficiaries receive during an inpatient stay and must
balance the weights across these different goals.\150\ While we believe
consistency and alignment across programs is important and a
consideration for alignment with the CMS Quality Strategy, the specific
goals and circumstances of each program also need to be taken into
account. The change in weights for patient experience/complaints and
access measures will not be implemented prior to the 2026 Star Ratings
to allow adequate notice to plans in advance of the 2024 measurement
period. This will allow any efforts during the 2023 performance period
to be reflected in the 2025 Star Ratings.
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\150\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/HVBP/Hospital-Value-Based-Purchasing.
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Comment: A commenter does not support the reduction in the weight
for access measures, noting that the current four access measures are
the only quality measures in the program that specifically address, and
hold plans accountable for, a timely appeals process and adequate
interpreter services. Another commenter suggested that Members Choosing
to Leave the Plan (a measure of ultimate plan satisfaction) and the
Call Center--Foreign Language Interpreter and TTY Availability measures
(which support CMS's health equity goals) be weighted as 4.
Response: We agree access measures and Members Choosing to Leave
the Plan remain critical measures given the importance of access to
care and services for Part C plan enrollees. We also agree that the
Call Center--Foreign Language Interpreter and TTY Availability measures
are important in measuring the operational performance of a plan and,
as a result, for an MA-PD, we include both a Part C measure and a Part
D measure. Since there are already two measures focused on call center
monitoring, we do not agree that these measures should be weighted a 4.
We remain concerned that a weight of 4 for access, disenrollment, and
call center measures devalues measures of health outcomes and
encourages plans to abandon efforts to drive clinically appropriate
care. We also note that CMS has other means to evaluate compliance by
plans with the regulatory requirements for appeal processes and
interpreter services, and CMS can take action as necessary to address
deficiencies in performance (including issuing notices of non-
compliance).
Comment: A few commenters recommended a weight of 3 for CAHPS
measures so there would be proportionate weighting between patient
experience measures relative to outcome measures and to avoid creating
an imbalance between the two most important measure groupings. A
commenter noted that having patient experience and outcome measures
weighted equally ensures that the patient voice is heard but would help
assuage concerns that it is overweighted. A commenter recommended CAHPS
measures that they believe are subjective survey questions receive a
weight of 2 and measures related to health plan operations and access
maintain the current weight of 4.
Response: Outcome measures reflect improvements in a beneficiary's
health and are central to assessing quality of care. Although patient
experience measures have been linked to improved clinical outcomes and
are important aspects of health care, we believe a weight of 2 more
appropriately balances the value these measures contribute to achieving
high quality care without weighting them higher than clinical outcome
measures and better aligns the total contribution of patient experience
and outcome measures with other CMS quality reporting programs. If we
used a weight of 3 for CAHPS measures of patient experience, nearly one
third of an MA-PD's overall rating would be from CAHPS patient
experience of care measures, which we believe is still too high. We
also believe it is appropriate to continue to weight patient
experience, complaints, and access measures equally. Further, CAHPS
surveys focus on matters that patients themselves say are important to
them and for which patients are the best and/or only source of
information, so we do not agree that CAHPS measures are subjective.
Comment: A commenter stated that it was unable to reach a consensus
among its diverse set of patient, provider, payer, and purchaser
members on a specific weight for patient experience measures in the
Star Ratings program and encourages CMS to continue finding ways to
incorporate the beneficiary experience into Star Ratings.
Response: We understand the differing viewpoints and agree that
patient experience is a critical component of the Star Ratings program.
We will continue to work to enhance the measures focused on patient
[[Page 22276]]
experience. As noted in other responses to comments and in the proposed
rule, we believe that a weight of 2 for the patient experience measures
appropriately balances the importance of these measures with other
measures that address health outcomes, plan processes, and improvement.
Comment: A couple of commenters recommended that CMS not make
significant methodological changes year-over-year in the Star Ratings
program since it makes it more difficult for payers and providers to
make stable, strategic investments in targeted quality improvement
efforts. A commenter suggested waiting to reduce the patient
experience/complaints and access measure weights in half until there is
compelling evidence of the policy effects of the current methodology. A
commenter noted that reducing the weight is not aligned with CMS's
commitment to achieve person-centered care across its programs and
there have been recent drops in the national averages for CAHPS
measures, as well as the Members Choosing to Leave the Plan and Call
Center--Foreign Language Interpreter and TTY Availability measures.
Response: CMS is committed to listening to feedback from
stakeholders and providing advance notice of methodological changes. As
stated in the April 2018 final rule, the methodology for the Star
Ratings program was codified in regulation to give Part C and D
sponsors more predictability as the rulemaking process creates a longer
lead time for all changes and measure changes are announced several
years in advance. (83 FR 16519-20). Any changes to the Star Ratings
methodology are finalized prior to the measurement year so Part C and D
sponsors can adapt their investments and focus. The weight change we
are finalizing here will be effective for the 2024 measurement year and
2026 Star Ratings. We note that from the 2021 to 2022 MA and PDP CAHPS
surveys, two MA-PD CAHPS national average measure scores changed by
less than 2 points, a ``small'' change, and seven changed by less than
1 point, a ``trivial'' amount.\151\ These small changes are unlikely to
persist at the time the new weights will be applied. We believe that we
should not wait until there is additional evidence for the need for
this change since multiple stakeholders have expressed concern over the
increase of the weight to 4 and it is taking away the focus of plans on
improving clinical care. As part of CMS's Strategic Plan, ``CMS serves
the public as a trusted partner and steward, dedicated to advancing
health equity, expanding coverage, and improving health outcomes.''
With the weight of 4 for patient experience/complaints and access
measures, we are diverting attention away from improving health
outcomes. The most recent Star Ratings show there is a need for
sponsors to refocus efforts on clinical care measures, as multiple
clinical measures' performances have declined over the last few years.
Given the pandemic's impacts on health care, we believe better
balancing the proportion of the different measure types in the Star
Ratings will encourage Part C and D sponsors to also balance their
investments on patient experience/access as well as clinical care.
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\151\ Quigley DD, Elliott MN, Setodji CM, Hays RD. (2018)
``Quantifying Magnitude of Group-Level Differences in Patient
Experiences with Health Care.'' Health Services Research, 53: 3027-
3051.
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Comment: A commenter raised concerns about the CAHPS survey's
ability to adequately and appropriately capture and measure patient
experiences. This commenter encouraged CMS to focus on improving the
quality and representativeness of the data itself by making it more
representative of all racial and ethnic groups.
Response: CMS agrees that it is important to hear the voice of all
beneficiaries. CAHPS surveys follow scientific principles in survey
design and development. The surveys are designed to reliably assess the
experiences of a large sample of patients. The MA and PDP CAHPS surveys
use standardized protocols to collect data from random samples of
contract enrollees. Extensive quality control mechanisms are employed
to collect valid, reliable survey data. The implementation protocols
are designed to increase the likelihood of survey participation and
achieve as high a response rate as possible. For the MA and PDP CAHPS
survey, we currently require a mixed mode survey (mail with telephone
follow-up) since telephone outreach helps improve response rates for
some groups. In the Advance Notice of Methodological Changes for
Calendar Year (CY) 2024 for Medicare Advantage (MA) Capitation Rates
and Part C and Part D Payment Policies published on February 1, 2023
and the Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA)
Capitation Rates and Part C and Part D Payment Policies published on
March 31, 2023, we announced that starting with the 2024 survey
administration we will be adding the web mode of data collection to the
mixed mode methodology. Offering the survey sequentially in multiple
modes helps improve response rates and the representativeness of the
data. In the CAHPS field test we found that for enrollees with email
addresses, the web-mail-phone protocol increased MA response rates by 4
percentage points. We believe that the availability of better email
addresses across all contracts will help improve response rates
overall.
In addition to English, CMS provides survey materials in Chinese,
Korean, Spanish, Tagalog, and Vietnamese. Offering the survey in
multiple languages helps improve response rates for Asian and Pacific
Islander and Hispanic respondents. CMS issues an annual HPMS memo about
the Medicare CAHPS survey that includes strategies contracts can use to
promote member participation in the survey, including providing survey
vendors with language preference data and current phone numbers for all
enrollees as well as avoiding fielding other surveys of beneficiaries
during or close to the MA and PDP CAHPS survey administration period.
Finally, the scoring methodology takes into account reliability, and
there are extensive quality control checks to ensure programming is
accurate. More information on CMS guidelines for MA and PDP CAHPS and
recommendations to achieve high survey response rates is also available
at https://ma-pdpcahps.org/.
Comment: A commenter recommended the weight change be delayed until
marketing complaints decline.
Response: With the weight of 4 for patient experience/complaints
and access measures, we are diverting attention away from improving
health outcomes. A weight of 2 will still incentivize plans to address
marketing issues that may be reflected in the complaints measures, but
it ensures that the weighting of patient experience/complaints and
access measures is appropriate relative to outcome measures. There are
other efforts being made by CMS to address marketing misrepresentation
and other marketing issues.
Comment: A couple of commenters supported testing of a new CAHPS
question about whether an enrollee's personal doctor dismisses symptoms
that are important to them.
Response: CMS appreciates the support for the testing of this CAHPS
question. We are continuing to analyze the data from our field test.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the weight
[[Page 22277]]
change for patient experience/complaints and access measures at Sec.
422.166 at paragraphs (e)(1)(iii) and (iv) and Sec. 423.186 at
paragraphs (e)(1)(iii) and (iv) as proposed without modification.
F. Health Equity Index Reward (Sec. Sec. 422.166(f)(3) and
423.186(f)(3))
As discussed in section III.A. of this final rule, advancing health
equity is the first pillar of the 2022 CMS Strategic Plan and a goal of
the CMS National Quality Strategy. In reports on accounting for social
risk factors (SRFs) in value-based purchasing programs, the National
Academies of Sciences, Engineering, and Medicine (NASEM) define SRFs as
factors related to health outcomes that are evident before care is
provided, are not consequences of the quality of care, and are not
easily modified by health care providers.\152\ CMS agrees with the
NASEM definition of SRFs because it captures the elements we consider
important in defining SRFs. There are often disparities in health care
and outcomes between groups with and without SRFs. For example, the
within-contract LIS/DE and non-LIS/DE differences in performance for
Part C and D Star Ratings measures can be found at: https://www.cms.gov/files/document/2023-categorical-adjustment-index-measure-supplement.pdf or https://www.cms.gov/files/document/2024-categorical-adjustment-index-measure-supplement.pdf.
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\152\ Social Risk Factors: Definitions and Data [bond]
Accounting for Social Risk Factors in Medicare Payment [bond] The
National Academies Press [bond] https://nap.nationalacademies.org/read/23635/chapter/4.
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As discussed in the proposed rule, the current approach to
addressing SRFs in the Part C and Part D Star Ratings program has
focused on adjusting for the average within-contract disparities in
performance through the CAI, as described at Sec. Sec. 422.166(f)(2)
and 423.186(f)(2), in order to not inappropriately penalize or reward
health and drug plans for factors that are difficult for plans to
control. For certain current Star Ratings measures, it may be more
difficult for most plans to achieve the same level of care for groups
that are socioeconomically disadvantaged, disabled, or more complex due
to a variety of issues, including transportation issues, lower health
literacy, communication challenges, and residential instability. The
CAI is a factor that can be positive or negative and is added to a
contract's overall and summary Star Ratings and that adjusts for the
average within-contract performance disparity based on a contract's
composition of LIS/DE and disability status enrollees.
The CAI was implemented in the Part C and Part D Star Ratings
program to address SRFs while measure stewards evaluated adjustment on
a measure-specific basis. The CAI is a data-driven approach to account
for within-contract disparities in performance associated with SRFs in
Star Ratings measures that are not already adjusted according to the
measure specifications developed by measure stewards. The CAI does not
incentivize contracts to focus on reducing disparities. Although all
contracts have incentives in the Star Ratings program to improve
performance, prior to the proposed HEI reward, there were no
methodological adjustments that specifically created incentives to
address disparities of care among a contract's enrollees.
In addition to adjusting for within-contract disparities through
the CAI, we also want to encourage MA organizations, cost plans, and
Part D plan sponsors to better identify and then address disparities in
care provided to enrollees with a particular SRF, with the ultimate
goal of reaching equity by eliminating health disparities or
differences in contract performance by SRFs, consistent with CMS
efforts to advance health equity.
CMS developed a health equity index (HEI) factor that we proposed
for use in the Part C and Part D Star Ratings to reward contracts for
obtaining high measure-level scores for the subset of enrollees with
specified SRFs. Our intent in implementing an HEI reward is to improve
health equity by incentivizing MA, cost, and PDP contracts to perform
well among enrollees with specified SRFs. The CAI is designed to
improve the accuracy of performance measurement, while not masking true
differences in performance between contracts; in contrast, our proposed
HEI reward is specifically designed to create an incentive to reduce
disparities in care. As discussed in the proposed rule, the HEI reward,
therefore, would not replace the CAI but rather assist plan sponsors in
better identifying and then addressing disparities in care provided to
members with a particular SRF, with the ultimate goal of reaching
equity in the level and quality of care provided to enrollees with
SRFs. We explained in the proposed rule that there would be no changes
to the current CAI with the implementation of the HEI reward.
We proposed to replace the current reward factor described at
Sec. Sec. 422.166(f)(1) and 423.186(f)(1) with the new HEI reward at
proposed Sec. Sec. 422.166(f)(3) and 423.186(f)(3) starting with the
2027 Star Ratings; the HEI reward for the 2027 Star Ratings would be
calculated using data collected or used for the 2026 and 2027 Star
Ratings (2024 and 2025 measurement years). As discussed in the preamble
to the proposed rule, the current reward factor was included in the
Part C and Part D Star Ratings program beginning with the 2009 Star
Ratings with the purpose of creating additional incentives for high and
stable relative performance across measures by discouraging contracts
from having a lot of variation in performance across measures (that is,
a mix of low performance and high performance across measures). We
proposed that the removal of the current reward factor would be
contingent on finalizing the addition of the proposed HEI reward.
CMS proposed to add the HEI reward as a methodological enhancement
to the Part C and Part D Star Ratings program starting with the 2027
Star Ratings because, similar to the current reward factor, it provides
a summary of how performance varies across existing Star Ratings
measures. However, our proposed HEI reward is intended to be a
methodological enhancement using data from existing Star Ratings
measures rather than a new measure with additional burden for
contracts. In the case of the HEI reward, however, this summary of
performance would be based on performance related to a subset of
enrollees with specified SRFs. Adding the HEI as a reward also would
allow for the methodology to include a performance threshold below
which contracts will not be eligible for the HEI reward, which would
incentivize improved performance by contracts for their enrollees with
the specified SRFs and help reduce disparities. CMS could also
potentially increase this performance threshold over time to
incentivize continued efforts to reduce disparities in care.
In developing the proposed HEI reward, we considered a number of
goals to ensure the incentives of the HEI and the associated reward
were in line with our intent. We aim to improve health equity by
incentivizing MA plans, cost plans, and Part D plan sponsors to perform
well among enrollees with certain SRFs. These goals include the
following:
Avoiding rewarding large contracts over small contracts
that may be providing high quality care for enrollees with the SRFs
included in the HEI but lack the number of enrollees needed to reliably
calculate the HEI.
Avoiding rewarding contracts that may do well among
enrollees with the SRFs included in the HEI but serve very
[[Page 22278]]
few enrollees with those SRFs, making it easier to do well.
Only rewarding contracts that have high relative
performance among enrollees with the SRFs included in the HEI compared
to other contracts to incentivize high performance for enrollees with
the SRFs included in the HEI.
Ease of use and understanding for contracts and other
interested parties.
Minimizing the number of years of data needed to calculate
the HEI and HEI reward such that the data used are as current as
possible.
Allowing for updates to the measure set included in the
HEI and updates to accommodate the addition of other SRFs to the HEI
over time.
Promoting improvement in performance among individuals
with certain SRFs and enrollment of individuals with certain SRFs in
high quality MA plans, cost plans, and Part D plans.
Accurately reflecting true performance among contracts
serving enrollees with certain SRFs and minimizing sensitivity to
measurement error.
The proposed HEI would summarize contract performance in relation
to enrollees with certain SRFs across multiple existing Star Ratings
measures into a single score using data from the most recent 2
measurement years. We proposed at Sec. Sec. 422.166(f)(3)(i)(A) and
423.186(f)(3)(i)(A) to initially include LIS/DE or having a disability
as the group of SRFs used to calculate the HEI. Prior research has
shown that dual eligibility for Medicare and Medicaid is one of the
most influential predictors of poor health outcomes, and disability is
also an important risk factor linked to health outcomes.\153\ The SRFs
included in the HEI may be expanded over time. For purposes of the HEI,
we proposed to define an LIS/DE beneficiary as one who was designated
as a full-benefit or partial-benefit dually eligible individual or who
received a low-income subsidy (LIS) at any time during the applicable
measurement period, as we do currently for the calculation of the CAI.
If a person meets the criteria for only one of the two measurement
years included in the HEI, the data for that person for just that year
are used. We proposed to use the original reason for entitlement to the
Medicare program to identify enrollees with a disability for purposes
of the HEI as we do for the calculation of the CAI.
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\153\ https://www.aspe.hhs.gov/sites/default/files/migrated_legacy_files/171041/ASPESESRTCfull.pdf?_ga=2.49530854.1703779054.1662938643-470268562.1638986031.
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We solicited feedback on potential additional ways to identify
enrollees who have a disability that could be incorporated over time
and whether the same process and standards should be used for the CAI
adjustment as well. In particular, we noted our interest in how we
could expand the definition to include enrollees who develop a
disability after aging into the Medicare program. LIS/DE and disability
are the SRFs that have been used in the CAI for many years and are
included in the confidential Part C and D Stratified Reports provided
to MA and Part D contracts in HPMS as of 2022. We proposed that
enrollees with these SRFs would be identified for the HEI the same way
they are identified for the CAI at Sec. Sec. 422.166(f)(2)(i)(B) and
423.186(f)(2)(i)(B).
BILLING CODE 4120-01-C
We also considered including the Area Deprivation Index (ADI) in
the HEI. The ADI is a measure of socioeconomic neighborhood
deprivation, including measures of income, employment, housing,
education, social environment, and readmissions. As discussed in the
preamble to the proposed rule, we will continue to explore the
feasibility of adding other SRFs to the HEI over time. As we noted in
the proposed rule, the addition of other SRFs or other mechanisms to
identify enrollees with one or more of the SRFs that are part of the
HEI reward methodology would be proposed through future notice-and-
comment rulemaking.
We proposed that the HEI would examine performance among those with
certain SRFs for all Star Ratings measures unless they meet one of the
specified exclusions. As we proposed in Sec. Sec.
422.166(f)(3)(ii)(A)-(D) and 423.186(f)(3)(ii)(A)-(D), measures would
be excluded from the HEI if one or more of the following criteria are
met:
The focus of the measurement is not the enrollee but
rather the plan or provider (for example, the appeals and call center
measures focus on the plan and its operations rather than on the
enrollee). Measures meeting this criterion would be excluded because
enrollee-level SRF information for these measures is not available for
inclusion in the HEI.
The measure is retired, moved to display, or has a
substantive specification change in either year of data used to
construct the HEI. Measures meeting these criteria would be excluded
because there are not enough data to calculate the HEI for these
measures.
The measure is applicable only to SNPs. Measures meeting
this criterion would be excluded because these measures are not
relevant for all contracts.
At least 25 percent of contracts are unable to meet the
criteria described at proposed paragraph (f)(3)(iv), which provides
that a measure is only included for the HEI for a contract if the
measure has a reliability of at least 0.7 for the contract when
calculated for the subset of enrollees with the specified SRF(s) and
the contract meets the measure denominator requirement when the measure
is calculated for only the enrollees with the specified SRF(s) (that
is, the SRFs included in the HEI). For Part D measures, these criteria
are assessed separately for MA-PDs and cost contracts, and PDPs
consistent with how the Part D measure cut points and CAI are
calculated separately for MA-PDs and cost contracts, and PDPs for the
Part D summary rating. We proposed to exclude any measures from the HEI
that less than 25 percent of contracts can have reliably calculated
because scores would be missing for most contracts.
We proposed, at Sec. Sec. 422.166(f)(3)(iii) and
423.186(f)(3)(iii), that the measures being evaluated for inclusion in
the HEI would be announced annually in the process described for
changes in and adoption of payment and risk adjustment policies in
section 1853(b) of the Act. These announcements (of the measures being
evaluated for inclusion in the HEI) would not include the final list of
measures used in the HEI for the upcoming Star Ratings because the data
to determine that final set will not yet be available. In general,
measures from HEDIS, HOS, and CAHPS would be included unless they meet
one of the four exclusion criteria, proposed at Sec. Sec.
422.166(f)(3)(ii)(A)-(D) and 423.186(f)(3)(ii)(A)-(D). Additionally,
medication adherence, MTM Program Completion for CMR, and Statin Use in
Persons with Diabetes measures would be included as long as they meet
the requirements for inclusion for more than 25 percent of contracts as
proposed at Sec. Sec. 422.166(f)(3)(i)(B) and 423.186(f)(3)(i)(B).
We described in the proposed rule the five steps that CMS would
take to analyze the measure-level scores for each contract and to roll
up to the HEI scores in order to assess when an adjustment is available
for a contract's ratings.
Step 1: For each measure included in the HEI, measure-level scores
calculated for each contract among enrollees with the included SRFs
(that is, all enrollees who are DE, LIS, or disabled combined into one
group) would be combined over the two most recent measurement years.
CMS carefully considered the
[[Page 22279]]
number of years of data needed for the proposed HEI. We believe that
using 2 years of data allows for a balance between increasing measure-
level reliability so that smaller contracts may still have enough data
to have the HEI calculated and minimizing the number of years of data
used. As outlined in our goals in designing the HEI, it is important to
minimize the number of years of data used to avoid carrying forward
very old data in the Star Ratings and to allow new measures and newer
contracts to more quickly be included in the HEI.
As proposed at Sec. Sec. 422.166(f)(3)(i)(B) and
423.186(f)(3)(i)(B), the scores for the subset of enrollees with SRFs
of interest included in the HEI would be calculated using a modeling
approach that includes year (that is, an indicator for whether the data
are from year 1 or year 2) as an adjustor to account for potential
differences in performance across years and to adjust the data to
reflect performance in the second of the 2 years of data used. Scores
are adjusted for year to account for situations where mean scores were,
for the average contract, different in the 2 years (for example, higher
in year 2 than year 1, or vice versa) and for contracts that have
measure sample sizes that differ across years. In the calculation of
the HEI, the measure-level scores will be used for contracts that have
data for only the most recent year of the 2 years, but measure-level
scores will not be used for contracts that have data for only the first
of the 2 years in order to ensure use of the most current data
possible.
Step 2: Measures that are case-mix adjusted in the Star Ratings
would be adjusted using all standard case-mix adjustors for the measure
except for those adjusters that are the SRFs of interest in the index,
are strongly correlated with the SRFs of interest, or are conceptually
similar to the SRFs of interest. The CAHPS measures included in the
Star Ratings are currently adjusted for DE and LIS but are not adjusted
for disability as defined by the original reason of entitlement. For
the proposed HEI, for the subset of enrollees who identified as having
the SRFs of interest in Step 1 (that is, the enrollees who are DE or
LIS), we would not include the case-mix adjustment for DE and LIS when
calculating the scores over the 2-year period for the CAHPS measures.
For the three Star Ratings medication adherence measures based on the
PQA specifications that will be risk adjusted as described in section
V.D.2.a. of this rule, we would not include the measure-based risk
adjustment for DE, LIS, and disabled enrollees when calculating the
scores for these measures over the 2-year period as described in Step 1
if these measures meet the inclusion criteria for the HEI.
Step 3: For a measure to be included in the HEI score for a
specific contract, both of the following inclusion criteria in proposed
Sec. Sec. 422.166(f)(3)(iv) and 423.186(f)(3)(iv) would need to be
met: (1) reliability of at least 0.7 when the measure is calculated for
the combined subset of enrollees with the specified SRFs across 2 years
of data, and (2) measure-specific denominator criterion (for example,
most HEDIS measures require a minimum denominator of at least 30) is
met when the measure is calculated for the combined subset of enrollees
with the specified SRFs across 2 years of data. We proposed at
paragraph (f)(3)(vi) that contracts would also need to have at least
500 total enrollees at the contract level in the most recent
measurement year used in the HEI. We proposed a minimum in order to
have reliable measure-level scores. For many of the Star Ratings
measures (for example, HEDIS and HOS measures) at least 500 enrollees
are needed to have a sufficient number of enrollees to reliably measure
the performance of the contract.
Step 4: As we proposed in Sec. Sec. 422.166(f)(3)(v) and
423.186(f)(3)(v), to calculate the HEI score assigned to a contract,
the distribution of contract performance on each eligible measure among
enrollees with the specified SRFs (that is, all enrollees who are DE,
LIS, or disabled combined into one group) would be calculated and
separated into thirds, with the top third of contracts receiving 1
point, the middle third of contracts receiving 0 points, and the bottom
third of contracts receiving -1 point for each measure. For example,
for the Breast Cancer Screening measure, we would calculate performance
for all contracts for the enrollees with one or more of the specified
SRFs (that is, for the enrollees who are DE, qualify for LIS, and/or
are disabled) using the two most recent measurement years. We would
then look at the distribution of scores for this measure for all
contracts that have at least 0.7 reliability and meet the minimum
denominator size for the measure. Contracts that score in the top third
of all contracts would receive 1 point for this measure, the middle
third of contracts would receive 0 points for this measure, and the
bottom third of contracts would receive 1 negative point for this
measure. The same analysis would be repeated for each measure included
in the HEI.
Step 5: For each contract, the HEI would then be calculated as the
weighted average of these points using the Star Ratings measure weights
and including only measures for which the contract met all of the
inclusion criteria specified at Sec. Sec. 422.166(f)(3)(iv) and
423.186(f)(3)(iv). The weighted average would be the weighted sum of
points across all included measures divided by the weighted sum of the
number of included measures. We proposed to use the weight for the
measure in the current Star Ratings year. For example, if the HEI were
being calculated using data from the 2026 and 2027 Star Ratings year,
the measure weight used would be the weight for the 2027 Star Ratings.
To ensure that the HEI is not driven by a very small number of measures
for some contracts, we proposed at Sec. Sec. 422.166(f)(3)(vi) and
423.186(f)(3)(vi) that a contract must meet the reliability and
denominator criteria for at least half of the measures included in the
HEI in order to have the HEI calculated for the contract. Contract
performance on the HEI will vary from -1.0 (performance was in the
bottom third for each included measure) to 1.0 (performance was in the
top third for each included measure).
Table 3 is a high-level summary of the steps CMS proposed to take
to calculate the HEI.
BILLING CODE 4120-01-P
[[Page 22280]]
[GRAPHIC] [TIFF OMITTED] TR12AP23.009
As discussed in the proposed rule, the HEI would be calculated
separately for the overall and summary ratings, as we proposed at
Sec. Sec. 422.166(f)(3)(i) and 423.186(f)(3)(i), since the set of
included measures differs for the overall, Part C summary, and Part D
summary ratings. The HEI calculated for the overall rating would be
based on all of the Part C and Part D measures that meet the inclusion
criteria for the HEI for each MA-PD contract. The HEI for the Part C
summary rating would include all of the Part C measures that meet the
inclusion criteria for the HEI for the contract. The HEI for the Part D
summary rating would be calculated separately for MA-PD (including
cost) and PDP contracts and would include all of the Part D measures
that meet the inclusion criteria for the HEI for the contract.
In order to qualify for an HEI reward, we proposed at Sec. Sec.
422.166(f)(3)(vii) and 423.186(f)(3)(vii) that contracts must have a
minimum rating-specific HEI score of greater than zero. We also
proposed a tiered HEI reward structure based on the percentage of
enrollees in each contract who have the specified SRFs. Requiring both
a minimum HEI score and a minimum percentage of enrollees in a contract
with the specified SRFs is intended to avoid rewarding contracts that
serve very few enrollees with the specified SRFs or do not perform well
among enrollees with the specified SRFs relative to other contracts.
We proposed that contracts that have percentages of enrollees with
any of the specified SRFs in a given year that are greater than or
equal to one-half of the contract-level median percentage of enrollees
with the specified SRFs up to, but not including, the contract-level
median would qualify for one-half of the potential HEI reward.
Contracts that have percentages of enrollees with any of the specified
SRFs greater than or equal to the contract-level median would qualify
for the full potential HEI reward. Table 4 is a high-level summary of
how we proposed that the HEI score would be converted into the HEI
reward.
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[GRAPHIC] [TIFF OMITTED] TR12AP23.010
BILLING CODE 4120-01-C
We also considered an alternative non-tiered HEI reward structure,
where all contracts with percentages of enrollees with any of the
specified SRFs greater than or equal to one-half of the contract-level
median would qualify for the full HEI reward. As we discussed in the
proposed rule preamble, both the tiered and non-tiered HEI reward
structures align with our goal of not rewarding contracts that may do
well among enrollees with SRFs but serve very few enrollees in this
population, although the tiered HEI reward structure goes further in
aligning with this goal. The non-tiered HEI reward structure aligns
better with the goal of ease of use and understanding for contracts and
other stakeholders.
We proposed at Sec. Sec. 422.166(f)(3)(vii) and 423.186(f)(3)(vii)
that the contract percentages of enrollees with SRFs included in the
HEI would be based on enrollment in the most recent of the 2 years of
data used to calculate the HEI. For example, if the HEI includes data
from measurement years 2024 and 2025, the enrollment used would be from
2025. We recognize D-SNP only contracts would meet the enrollment
thresholds under either the tiered or non-tiered HEI reward structure;
however, other plans that do not initially meet the thresholds can also
work to increase enrollment of people with SRFs to meet the enrollment
thresholds. D-SNP only contracts would also need to perform
sufficiently well among enrollees with the specified SRFs to qualify
for a reward based on the HEI. One consideration in developing the
proposed thresholds for the minimum percentages of enrollees with SRFs
included in the HEI needed to qualify for an HEI reward was that higher
thresholds could potentially create geographic barriers in certain
parts of the country to qualifying for the HEI reward because there is
variation by State in the percent of enrollees who are LIS/DE or
disabled. Both the tiered HEI reward and non-tiered HEI reward
structures account for this as all states have percentages of LIS/DE/
disabled enrollees that are greater than one-half the contract-level
median based on 2019 data, although the non-tiered structure goes
further in addressing this concern, as many states do not have
percentages of LIS/DE/disabled enrollees that are greater than the
contract-level median. As specified at Sec. Sec. 422.166(f)(3)(vii)
and 423.186(f)(3)(vii) the contract-level median and half of the
contract-level median would be calculated and assessed separately for
MA (that is, Part C) and standalone Part D (that is, PDP) contracts.
Because enrollees in Puerto Rico are not eligible for LIS, we
believe that a different approach is necessary for contracts with
services areas wholly located in Puerto Rico. We proposed at Sec. Sec.
422.166(f)(3)(vii)(A) and (B) and 423.186(f)(3)(vii)(A) and (B) to use
a modified calculation to determine the percentage of enrollees with
SRFs included in the HEI for contracts with service areas wholly
located in Puerto Rico. We proposed to limit this treatment to
contracts with service areas wholly in Puerto Rico because our analysis
indicates that for plans with service areas that include Puerto Rico
and other locations, only a small portion of the enrollment is in
Puerto Rico. We proposed to estimate the number of enrollees with the
specified SRFs in these contracts differently. We would start with the
percentage of DE/disabled enrollees calculated from administrative
data, and then add the estimated percentage LIS by taking the LIS/DE
percentage calculated for the CAI for contracts with service areas
wholly in Puerto Rico as described at Sec. Sec. 422.166(f)(2)(vi) and
(vii) and 423.186(f)(2)(vi) and (vii) and subtracting the percentage of
DE enrollees. We need to estimate the number of LIS enrollees because
LIS is not available in Puerto Rico; we would use the estimated LIS/DE
information from the CAI calculations since these are the only data
available on the estimated percentage of enrollees in Puerto Rico
contracts that would qualify for LIS. We would then add the estimated
LIS percentage to the DE/disabled percentage calculated from
administrative data to get the LIS/DE/disabled percentage of enrollees
in Puerto Rico. This calculation could result in a slight overestimate
since some disabled enrollees may also be captured in the estimated LIS
percentage; therefore, contracts with service areas wholly in Puerto
Rico would be excluded from our calculations to determine one-half of
the contract-level median and the contract-level median of enrollees
with SRFs included in the HEI. We believe that this approach would
ensure equitable treatment of contracts with service areas outside of
Puerto Rico. In our simulations of the HEI, we found that the slight
overestimate had little impact on whether contracts with service areas
wholly in Puerto Rico met the one-half of the contract-level median or
contract-level median thresholds.
We also proposed that contracts would need to have an HEI score
greater than zero on the HEI calculated for the given rating (overall
or summary rating) to qualify for a reward for that rating. We proposed
at Sec. Sec. 422.166(f)(3)(i) and 423.186(f)(3)(i) that the HEI score
for the overall rating would include the applicable Part C and D
measures, the HEI score for the Part C summary rating would include
only the applicable Part C measures, and the HEI score for the Part D
summary rating would include only the applicable Part D measures. An
HEI score of greater than zero means that the contract on average
scored in the middle third or better across measures included in the
HEI for enrollees with the SRF(s). HEI scores closer to 1.0 indicate
better performance for enrollees with the SRFs included in
[[Page 22282]]
the HEI. While we proposed to require a minimum HEI score of greater
than zero for contracts to receive an HEI reward, we may consider
increasing this minimum score over time to continue to encourage
improved contract performance for enrollees with SRFs included in the
HEI. Any such increase to the minimum HEI score would be proposed
through subsequent notice-and-comment rulemaking.
We proposed at Sec. Sec. 422.166(f)(3)(viii) and
423.186(f)(3)(viii) that the HEI reward would vary from 0 to 0.4 on a
linear scale for contracts that meet the threshold for the median
percentage of enrollees with SRFs included in the HEI, with a contract
receiving 0 reward if the contract received a score of 0 or less on the
HEI and a 0.4 reward if the contract received a score of 1 on the HEI.
Similarly, the HEI reward would vary from 0 to 0.2 on a linear scale
for contracts that meet the threshold for one-half of the contract-
level median percentage of enrollees with SRFs included in the HEI, but
do not meet or exceed the contract-level median percentage of enrollees
with SRFs included in the HEI. Contracts that cannot have an HEI score
calculated (that is, contracts that do not have reliable measure scores
or do not meet the denominator criteria for at least half of the
measures included in the HEI or contracts that do not have at least 500
enrollees) would not receive an HEI reward.
As an example, if a contract meets the contract-level median
percentage of LIS/DE/disabled enrollees and receives an HEI score of
0.722325, this would translate on a linear scale to a reward of
0.288930. That is, the size of the HEI reward would equal 0.4 times the
difference between the HEI score and the threshold, divided by the
difference between the maximum HEI score and the threshold. In this
example, this would be 0.4*(0.722325-0)/(1-0), which equals 0.288930.
As another example, if a contract meets one-half the contract-level
median percentage of LIS/DE/disabled enrollees but does not meet the
contract-level median percentage of LIS/DE/disabled enrollees and
receives an HEI score of 0.722325, this would translate on a linear
scale to a reward of 0.144465. That is, the size of the HEI reward
would equal 0.2 times the difference between the HEI score and the
threshold, divided by the difference between the maximum HEI score and
the threshold. In this example, this would be 0.2*(0.722325-0)/(1-0),
which equals 0.144465. The HEI reward would be rounded and displayed
with 6 decimal places similar to how the CAI values are displayed.
As we proposed at Sec. Sec. 422.166(f)(3)(ix) and
423.186(f)(3)(ix), once each of the HEI rewards are calculated, the
applicable HEI reward would be added to the unrounded overall and Part
C and D summary ratings after the addition of the CAI and the
application of the improvement measures described in Sec. Sec.
422.166(g)(1) and 423.186(g)(1) and before the final overall and Part C
and D summary ratings are calculated by rounding to the nearest half
star. For example, if the HEI reward was 0.288930, as previously
described in the example, and the unrounded overall rating was 4.234210
after the addition of the CAI and the application of the improvement
measure hold harmless rule, the unrounded overall rating would be
4.523140 (4.234210 + 0.288930) resulting in a final, rounded overall
rating of 4.5.
We also proposed changes in the following sections to revise
references to the existing reward factor or to limit application of the
current reward factor to the Star Ratings through the 2026 Star
Ratings: Sec. Sec. 422.166(c)(1), 422.166(d)(1) 422.166(f)(1),
422.166(f)(2)(i), 422.166(g)(1), 423.186(c)(1), 423.186(d)(1)
423.186(f)(1), 423.186(f)(2)(i), and 423.186(g)(1). We proposed that
the new HEI reward would be implemented for the 2027 Star Ratings
covering primarily the 2024 and 2025 measurement years. The existing
reward factor would continue to be calculated through the 2026 Star
Ratings.
We simulated the impact of removing the current reward factor and
adding the proposed HEI reward and summarized those results in the
proposed rule. In simulations using data from the 2020 and 2021 Star
Ratings,\154\ the median percentage of LIS, DE, and disabled enrollees
was 41.645 percent and one-half the median was 20.822 percent for MA
and cost contracts. Half of MA and cost contracts were at or above the
median, 33 percent were at or above one-half the median up to but not
including the median, and 17 percent were below one-half the median. In
the simulations, 88 percent of MA-PD contracts that received an overall
rating received an HEI score, 42 percent received an HEI score greater
than zero, and 34 percent received an HEI reward. The range of HEI
scores among MA-PD contracts for the overall rating was -0.888889 to
1.000000. The average reward for the overall rating among MA-PD
contracts with an HEI score greater than zero was 0.109. When
simulating the removal of the current reward factor and addition of the
proposed new HEI reward, 7 (1.7 percent) MA-PD contracts gained one-
half star on the overall rating and 54 (13.4 percent) MA-PD contracts
lost one-half star on the overall rating compared to the 2021 Star
Ratings. Among PDP contracts, the median percentage of LIS, DE, and
disabled enrollees was 13.848 percent and one-half the median was 6.924
percent. Fifty-one percent of PDP contracts were at or above the
median, 39 percent were at or above one-half the median up to but not
including the median, and 11 percent were below one-half the median.
Among PDP contracts that received a Part D summary rating, 91 percent
received an HEI score, 47 percent received an HEI score greater than
zero, and 40 percent received an HEI reward. The range of HEI scores
among PDP contracts was -1.000000 to 1.000000. The average reward among
PDP contracts with an HEI score greater than zero was 0.160. Compared
to the 2021 Star Ratings, 3 (5.3 percent) PDP contracts gained one-half
star on the Part D summary rating and 7 (12.3 percent) PDP contracts
lost one-half star on the Part D summary rating.
---------------------------------------------------------------------------
\154\ Since data collections for HEDIS and CAHPS were curtailed
for the 2021 Star Ratings due to the COVID-19 pandemic (CMS-1744-
IFC), these simulations used HEDIS and CAHPS measure data from the
2019 and 2020 Star Ratings.
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We solicited comments on these proposals.
Comment: Nearly all commenters supported advancing health equity,
and a majority of commenters supported the HEI reward as proposed,
including replacing the current reward factor. A few commenters also
specifically endorsed the tiered threshold structure for the percentage
of enrollees with the specified SRFs that we proposed contracts must
meet to qualify for the HEI reward. Some commenters provided reasons
for supporting the HEI reward, such as it is in line with CMS's goal of
advancing health equity, it will help to shed light on deep-seated
disparities in the health care system, and it will drive reductions in
disparities in care and result in better health outcomes for
populations with SRFs. Other commenters noted that the HEI will allow
for clearer comparisons among and between plans and remove any
disincentives plans may have for serving populations with SRFs, and
adding the HEI to the Star Ratings will help make health equity part of
the fabric of quality programs.
Response: CMS thanks these commenters for their support of the HEI
reward.
Comment: A commenter stated they do not believe that the HEI aligns
with CMS's health equity definition or the ultimate goal of improved
and more
[[Page 22283]]
equal health outcomes. The commenter suggested that CMS create a more
wholistic and systemic approach to improving health equity, including
accurately capturing data, aligning incentives not just for MA
organizations but across other demonstrations, and providing mechanisms
to address at-risk populations through benefits and plan design.
Response: CMS developed the HEI reward to further incentivize Part
C and D plans, as part of the Star Ratings, to focus on improving care
for enrollees with specified SRFs and reward contracts for excellent
care for these populations with the goal of reducing disparities in
care. As such, CMS believes the HEI reward aligns with CMS's health
equity definition. We agree that it is important to capture accurate
data to identify beneficiaries with SRFs, and there are ongoing efforts
to improve data accuracy, as well as efforts across multiple CMS
programs to create similar incentives to improve care for more
vulnerable enrollees. For example, starting in 2023, a health equity
adjustment to an accountable care organization's quality score as part
of the Medicare Shared Savings Program (MSSP) was added to incentivize
improvement in the care for vulnerable beneficiaries.\155\ In addition,
proposals to address improved access to benefits for MA enrollees and
require MA coordinated care plans ensure that services are provided in
a culturally competent manner are addressed in sections II.A.2. and
III.A. of this rule.
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\155\ HHS Finalizes Physician Payment Rule Strengthening Access
to Behavioral Health Services and Whole-Person Care [verbar] CMS.
---------------------------------------------------------------------------
Comment: A commenter recommended CMS not proceed with the HEI
reward proposal and instead release a white paper describing a range of
possible methodologies and approaches for addressing health equity for
stakeholders to react to. This commenter also requested CMS to detail
the relationship between the HEI and the Health Equity Summary Score
(HESS) and to illustrate exactly how the HEI is calculated using
specific examples.
Response: CMS first requested feedback on a possible HEI reward in
the spring of 2022 through the Advance Notice of Methodological Changes
for Calendar Year (CY) 2023 for Medicare Advantage (MA) Capitation
Rates and Part C and Part D Payment Policies. CMS considered the
feedback received on the Advance Notice as we continued to develop the
HEI reward for the proposed rule. Considering the feedback we received
on the proposed rule, CMS believes there has been sufficient
opportunity for stakeholder input on the HEI reward methodology. We
note that, to prepare health plans for implementation of the HEI
reward, CMS will calculate the HEI reward beginning with the 2024 Star
Ratings and will share the results in confidential contract-level
reports in HPMS.
The HESS is a quality improvement tool developed by the CMS Office
of Minority Health with a similar goal of improving health equity. The
HESS differs from the HEI developed for the Part C and D Star Ratings
program in that it currently focuses on CAHPS and HEDIS measures, while
the HEI focuses on a broader set of measures included in the Part C and
D Star Ratings. The HESS examines differences by race and ethnicity and
LIS/DE status and assigns each contract composite scores for CAHPS and
HEDIS (translated to diamonds, ranging from 1-5, with 5 being the best)
based on a combination of current performance and improvement in
performance over a four-year period. The HEI only requires two years of
data and focuses on the specified SRFs. The HESS is separate from the
Part C and D Star Ratings program and has no link to payment.
Comment: A couple of commenters supported including LIS/DE and
disability as the SRFs in the HEI reward methodology and supported the
proposed definitions of these populations used in the HEI reward.
Response: CMS thanks these commenters for their support.
Comment: A commenter supported using the proposed methodology to
calculate the percentage of LIS/DE enrollees for contracts in Puerto
Rico because LIS is not available in Puerto Rico.
Response: CMS thanks this commenter for their support.
Comment: A commenter requested that CMS provide clarification on
whether the HEI reward applies to standalone PDPs or just MA-PD plans.
Response: The HEI reward applies to both standalone PDP and MA-PD
contracts as proposed and finalized at Sec. Sec. 422.166(f)(3)(i) and
423.186(f)(3)(i). The HEI is a rating-specific factor added to the
summary and overall ratings of contracts that qualify. We proposed and
finalized calculating the HEI separately for the Part D summary rating
for MA-PDs and cost contracts, and PDPs.
Comment: A commenter requested that CMS provide clarification on
how the HEI reward would impact a contract's Star Rating and whether it
would help or harm a contract's Star Rating.
Response: The HEI reward is an upside only reward, incentivizing
high quality care for underserved populations. Any applicable HEI
reward would be added to the unrounded overall and Part C and D summary
ratings after the addition of the CAI and the application of the
improvement measures described in Sec. Sec. 422.166(g)(1) and
423.186(g)(1) and before the final overall and Part C and D summary
ratings are calculated by rounding to the nearest half star. Since it
is an upside only reward, it avoids penalizing contracts.
Comment: Several commenters questioned how measure reliability will
be calculated.
Response: Measure reliability is a measure of the fraction of the
variation among the observed measure values that is due to real
differences in quality (``signal'') rather than random variation
(``noise''). In order to calculate this signal to noise ratio for each
measure included in the HEI, measure reliability is calculated based on
the combined subset of enrollees with the specified SRFs across two
years of data. Reliability calculations for MA and PDP CAHPS patient
experience measures are provided in the ``Quality Assurance Protocols &
Technical Specifications,'' available at https://ma-pdpcahps.org/en/quality-assurance, in section IX Data Analysis and Public Reporting,
sub-section Significance Testing, Reliability and Star Assignment. The
reliability calculations for all other measures are implemented using
SAS PROC MIXED as documented in the report ``The Reliability of
Provider Profiling--A Tutorial,'' available at https://www.rand.org/pubs/technical_reports/TR653.html, which is consistent with the
reliability calculations used to determine inclusion for Part C HEDIS
measures in the Star Ratings for low enrollment contracts (500 to <1000
enrollees).
Comment: A commenter did not support a measure reliability of 0.7
in the HEI reward. This commenter also did not support requiring that a
contract must meet the reliability criteria for at least half the
measures in the HEI because measure rates will increase over time with
the introduction of the HEI reward, and it may take several years for
the measure rates to stabilize such that they can be included in the
HEI reward.
Response: Measure reliability will be calculated based on the
combined two measurement years of data for the subset of enrollees with
the specified SRFs. Reliability assesses variability in performance
that is attributable to real differences in performance versus
measurement error. CMS's intent with
[[Page 22284]]
the introduction of the HEI reward is to incentivize improvements in
performance among populations with SRFs. Such performance improvements
do not mean that measures are not reliable or that measures should not
be included in the HEI reward.
Comment: A few commenters suggested that CMS provide clarification
on how rates will be calculated for the 2-year combined rate.
Response: As specified at Sec. Sec. 422.166(f)(3)(i)(B) and
423.186(f)(3)(i)(B), measure-level scores for the subset of enrollees
with the SRFs of interest included in the HEI will be calculated using
a regression model that includes year (that is, an indicator for
whether the data are from year 1 or year 2) as an adjustor or
independent variable to account for potential differences in
performance across years and to adjust the data to reflect performance
in the second of the two years of data used. Through this modeling
approach, data can be combined across the two years for each contract
and can be adjusted to account for situations where mean scores were,
for the average contract, different in the two years.
Comment: A commenter questioned how the HEDIS hybrid measures will
be addressed.
Response: The HEI reward is calculated using patient-level data.
The HEDIS hybrid measures combine administrative claims data with data
abstracted through medical record review. The patient-level data
submitted for these patients correspond to the summary-level data from
administrative claims and medical record review. In order to calculate
the HEI reward, no additional steps are necessary for HEDIS hybrid
measures compared to HEDIS administrative measures.
Comment: A commenter questioned how survey measures will be
addressed since LIS/DE stratification reports do not include calculated
values for CAHPS measures.
Response: The CAHPS measures included in the Star Ratings are
currently adjusted for DE and LIS status. For the HEI reward, case-mix
adjustment is recalculated without adjustment for DE and LIS when
calculating the CAHPS measure scores for the purposes of the HEI over
the 2-year period as described at Sec. Sec. 422.166(f)(3)(i)(A) and
423.186(f)(3)(i)(A). Case-mix adjustment of the CAHPS measures used for
the measure-level Star Ratings is not affected.
Comment: A commenter questioned how enrollees in a health plan for
one year will be handled.
Response: As proposed and finalized at Sec. Sec. 422.166(f)(3)(B)
and 423.186(f)(3)(B), the HEI is calculated by combining data across
the two most recent measurement years. Data from enrollees in a health
plan for one of the two measurement years will be included for the year
in which they are enrolled in the plan.
Comment: A commenter requested that CMS provide clarification on
which measures are included and why certain measures are removed from
the calculation.
Response: As proposed and finalized, CMS will take five steps to
analyze the measure-level scores for each contract and to roll up to
the HEI scores in order to assess when an adjustment is available for a
contract's ratings. As proposed and finalized in Sec. Sec.
422.166(f)(3)(ii) and 423.186(f)(3)(ii), all Star Ratings measures
would be included in the HEI unless a measure meets one or more of the
four exclusion criteria listed in paragraphs (f)(3)(ii)(A) through (D):
(A) the focus of measurement is not the enrollee but rather the plan or
provider; (B) the measure is retired, moved to display, or has a
substantive specification change in either year of data used to
construct the HEI; (C) the measure is applicable only to SNPs; or (D)
at least 25 percent of contracts do not meet the measure-level
denominator and reliability criteria. These exclusion criteria ensure
we have enrollee-level data for most contracts to include these
measures in the HEI.
For a contract's HEI score, measures are included if the two
criteria in paragraphs (f)(3)(iv)(A) and (B) are met. To meet the
measure-level denominator and reliability criteria, a measure for a
contract must have a reliability of at least 0.7 and meet the measure
denominator requirement when calculated for the subset of enrollees
with the specified SRFs across the two years of data. These criteria
for determining when a measure would be used for a contract's HEI score
are necessary to ensure the HEI is reliably calculated for each
contract.
Comment: A commenter questioned if the data layout used for
presenting information about the HEI reward will be the same layout
used in the Part C and D Star Ratings Stratified Reports shared through
the May 11, 2022 HPMS memo titled, ``Stratified Reporting for Part C
and D Star Ratings Measures,'' and whether data from the stratified
reports will be used to determine which third of the distribution a
contract is in for each measure.
Response: The stratified reports are for quality improvement
purposes and are not used in calculating Star Ratings or otherwise used
in the Star Ratings methodology. Both the HEI reward methodology and
the stratified reports use data from measures included in the Star
Ratings program. The stratified reports may be useful to sponsoring
organizations for identifying opportunities for improvement for the
Star Ratings measures included in the HEI because the data are
stratified by LIS/DE and disability status and the reports provide
national performance scores to help inform and target quality
improvement initiatives.
Comment: A commenter questioned how the percentage of enrollees
with SRFs will be calculated for the tiered HEI reward structure.
Response: As proposed and finalized, Sec. Sec. 422.166(f)(3)(vii)
and 423.186(f)(3)(vii) address this. The contract percentages of
enrollees with SRFs included in the HEI will be based on enrollment in
the most recent of the two years of data used to calculate the HEI. For
example, if the HEI includes data from measurement years 2024 and 2025,
CMS would use enrollment from 2025. The percentage of enrollees with
SRFs would include any enrollees who are LIS/DE or have a disability.
This is treated as one group of enrollees with SRFs. As specified at
Sec. Sec. 422.166(f)(3)(vii) and 423.186(f)(3)(vii), the contract-
level median and half of the contract-level median enrollment
percentages will be calculated and assessed separately for contracts
that offer Part C and standalone Part D contracts.
Comment: A commenter suggested that CMS provide clarification
regarding whether the three specified SRFs would be treated
independently and thus the HEI score would be calculated separately for
each SRF or, alternatively, if they would be combined in a manner
similar to the calculation of the CAI. This commenter also recommended
that CMS clarify whether the weights of selected measures would be used
when calculating the final HEI reward. A commenter stated that CMS did
not specify which SRFs would be included in the HEI.
Response: As described in the proposed rule, all enrollees who are
DE, LIS, or disabled would be combined into one group as described at
Sec. Sec. 422.166(f)(3)(i)(A), 422.166(f)(3)(i)(B),
423.186(f)(3)(i)(A), and 423.186(f)(3)(i)(B). See also 87 FR 79628. We
believe combining the enrollees with these specified SRFs into one
group will help ensure that measure-level contract performance can be
reliably measured for most contracts. The measure weights will be used
when
[[Page 22285]]
calculating the final HEI as described at Sec. Sec. 422.166(f)(3)(v)
and 423.186(f)(3)(v).
Comment: A commenter questioned whether a contract's measure-level
score will be included for purposes of the performance thresholds to
determine if a contract's measure score is in the bottom third, middle
third, or top third if the contract does not meet the minimum
enrollment percentage of enrollees.
Response: For all contracts, the scores meeting the criteria in
Sec. Sec. 422.166(f)(3)(iv) and 423.183(f)(3)(iv) will be included in
the calculations to determine the distribution of contract performance
for each eligible measure. Similarly, only the scores for each
contract's performance that meet those criteria will be used to
determine the contract's HEI score.
Comment: Another commenter noted that there are no Z-codes to
identify issues around social determinants of health and recommended
that the HEI reward should not be implemented until data collection
improves.
Response: While there are no Z-codes to identify issues around
social determinants of health, CMS administrative data (that is, the
Medicare Advantage Prescription Drug System (MARx)) currently includes
data about DE, LIS, and disability status for the specified SRFs we
proposed and finalized for the HEI. As more data are available to
identify beneficiaries with additional SRFs, we will explore adding
other SRFs to the HEI reward methodology through future notice-and-
comment rulemaking, but in the meantime, we believe it is important to
start incentivizing improved care with the data we have to identify
beneficiaries with SRFs.
Comment: While a majority of commenters supported replacing the
current reward factor with the HEI reward, some did not support
removing the current reward factor even if they supported adding the
HEI reward. A handful of commenters stated that removing the reward
factor would penalize and lower Star Ratings for high-performing plans
and adversely impact Medicare enrollees by reducing funding for
supplemental benefits offered by plans or increasing cost-sharing
requirements. A few commenters recommended combining the HEI reward and
the reward factor, with each reward having a maximum value of 0.2, and
several commenters recommended a transition period before fully
removing the reward factor. A couple of commenters recommended
including both the HEI reward and the current reward factor in the Star
Ratings in order to reward contracts for overall positive performance.
A couple of commenters suggested taking the better of the HEI reward
and the current reward factor.
Response: Contracts are already rewarded for high and consistent
performance when they do well on the measure-level Star Ratings and the
Part C and D improvement measures. We believe contracts will still have
incentives to perform well and improve on all measures if the reward
factor is removed because high performance on individual Star Ratings
measures, as well as the improvement measures that incentivize
improvements in performance from the prior year (Health Plan Quality
Improvement and the Drug Plan Quality Improvement), translate into
better overall and summary ratings.
The current reward factor was included in the Part C and Part D
Star Ratings program beginning with the 2009 Star Ratings with the
purpose of creating additional incentives for high and stable relative
performance across measures by discouraging contracts from having a lot
of variation in performance across measures (that is, a mix of low
performance and high performance across measures). At the beginning of
the Star Ratings program, the distribution of ratings across contracts
looked very different, with overall performance much lower than it is
today. At that time, 38 percent of MA contracts received less than 3
stars for the Part C summary rating (the overall rating was not
implemented yet at that time). Over time, we have established
additional methodological enhancements to incentivize performance
improvement across measures, such as the addition of the Health Plan
Quality Improvement and the Drug Plan Quality Improvement measures as
described at Sec. Sec. 422.164(f) and 423.184(f). MA organizations
have also responded to the incentive to perform well across measures as
a result of the link between Star Ratings and QBP ratings for MA
contracts. As contract performance has improved and stabilized over
time, different incentives are needed to continue to drive quality
improvement so that all Medicare beneficiaries are receiving high
quality care. CMS believes that even with the removal of the current
reward factor from the Star Ratings methodology, contracts will still
have incentives to perform well and improve because high performance on
individual Star Ratings measures, including the Health Plan Quality
Improvement and the Drug Plan Quality Improvement measures, translates
into better overall and summary ratings.
As noted in the April 2018 final rule, the Star Ratings are
designed to provide information to beneficiaries that is a true
reflection of plan quality and encompasses multiple dimensions of high
quality care. The goals of the Star Ratings are to publicly display
quality information to inform plan choice, to provide information for
public accountability, incentivize quality improvement, provide
information to oversee and monitor quality, and accurately measure and
calculate scores and stars to reflect true performance. (83 FR 16519).
QBPs, as defined in Sec. 422.260(b), tie increases in payment
benchmarks and rebate percentage to providing high quality care, as
reflected in quality ratings and performance data. CMS's goal is to
continue to evolve the Star Ratings methodology over time to ensure
that the methodology encourages continued improved plan performance
across beneficiaries.
In simulations using data from the 2023 Star Ratings, even before
factoring in the HEI reward, the majority of contracts (80 percent of
MA and cost contracts, and 82 percent of PDP contracts) would have no
change in their overall rating as a result of taking away the reward
factor, and no contracts would lose QBPs. Simulations replacing the
current reward factor with the HEI reward using data from the 2021 Star
Ratings show that no contracts would lose QBPs and only 9.4 percent of
contracts would lose rebate dollars. Further, we note that the reward
factor should not be seen as an extra funding source; removing the
reward factor supports our efforts to continue to evolve the Star
Ratings program to incentivize improved plan performance for all
enrollees. We did not consider a transition or blend to use both the
current reward and the new HEI reward over a period of time because
that approach would dilute the impact of the health equity incentives
and be methodologically complex to implement. Based on this, we are
finalizing the proposed removal of the current reward factor with
additional revisions to the regulation text at Sec. Sec. 422.162(b)(1)
and 423.182(b)(1) and to the definition of ``highly rated contract'' in
Sec. Sec. 422.162(a) and 423.182(a) to remove references to the
current reward factor.
Comment: A couple of commenters suggested that the HEI reward
methodology focus on within-contract differences. A commenter stated
the HEI reward sets separate and unequal performance benchmarks for
different SRF groups. The commenter also stated a contract could widen
its internal inequities while doing well on the HEI.
[[Page 22286]]
Response: If the HEI focused on within-contract inequities based on
the reduction of disparities between members with and without SRFs
within a contract, this would be problematic because disparities could
be reduced when performance is poor for both groups. Additionally,
rewarding a reduction in disparities for within-contract disparities
only would disproportionately reward those contracts with historical
inequities. The inclusion of thresholds based on the percentage of
enrollees with the specified SRFs is important to ensure that contracts
are not being rewarded if they serve relatively few enrollees with the
specified SRFs, making it easier to do well among this population.
Further, CMS expects contracts to perform well among all enrollees with
SRFs; there should be no incentive to perform worse among any groups
with SRFs, as that would be detrimental to the contract's measure-level
and overall and summary Star Ratings. The HEI reward methodology does
not set performance benchmarks. Contracts will be evaluated based on
the distribution of performance on each measure in the given
measurement years. These distributions may change from year to year and
contracts will not know a priori which third of the distribution their
performance will be in; therefore, contracts should be incentivized to
continue to improve year over year.
Comment: A couple of commenters stated the HEI reward would have a
disproportionately negative impact on rural beneficiaries, given that
members with SRFs in rural communities will likely perform lower than
similar members in non-rural locations due to the general disparities
in care. These commenters expressed concern that contracts that consist
mainly of metropolitan areas with many forms of accessible
transportation and robust provider networks will find remaining in the
top third of industry contracts to receive their HEI reward much more
achievable compared to contracts in rural areas with limited
transportation and provider options. These commenters were concerned
that rural Medicare beneficiaries report lower satisfaction with their
care than their urban counterparts. They also raised a concern that any
changes to benefits may worsen patient experiences and cause less
favorable health outcomes.
Response: We do not see significant differences in quality scores
for urban versus rural beneficiaries, which suggests that any potential
differences in provider networks or transportation do not impact
quality scores. For CAHPS measures, in fact, we see the opposite, with
scores in rural locations being slightly higher than urban
locations.\156\ We have also seen significant improvements for rural
residents on HEDIS scores when comparing performance from 2009 to 2018.
By 2018, most of the large inequities we had previously observed were
eliminated on the measures analyzed.\157\ Further, we understand that
rural areas may have different transportation challenges relative to
urban areas and that contracts serving rural populations may need to
have different approaches for addressing transportation needs, such as
ride sharing and volunteer driver models.\158\
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\156\ https://www.cms.gov/about-cms/agency-information/omh/research-and-data/stratified-reporting.
\157\ Trends in Racial, Ethnic, Sex, and Rural-Urban Inequities
in Health Care in Medicare Advantage: 2009-2018 (cms.gov).
\158\ https://www.ruralhealthinfo.org/toolkits/transportation.
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Comment: A commenter stated that many plans will need to increase
the number of enrollees with SRFs after the current reward factor is
removed in order to qualify for the HEI reward, even in rural areas
where this may not be a possibility, and that this consequence is not
aligned with CMS's goal to close the Star Ratings performance disparity
among existing membership.
Response: In our simulations using data from the 2021 Star Ratings,
no contracts lost QBPs when the HEI reward replaced the current reward
factor. Contracts may earn the highest rating of 5 stars without
qualifying for the HEI reward. Further, the minimum percentage
enrollment threshold to qualify for the HEI reward is one-half the
median percentage of contract-level enrollees with SRFs. This is a
relatively low bar and is intended to accommodate areas and
circumstances which may make it more difficult to enroll individuals
with the specified SRFs. In our simulations using data from the 2021
Star Ratings, only 17 percent of MA and cost contracts and 11 percent
of PDPs did not meet this threshold.
Comment: A few commenters stated the HEI reward would drastically
change the current reward factor so that it becomes a two-sided, net-
zero approach. A commenter recommended that CMS not finalize the HEI
reward and instead propose an improved framework that continues to take
a reward-only approach.
Response: CMS does not agree with this characterization of the HEI
reward. The HEI reward is an upside only reward. Contracts that perform
well across the Star Ratings measures included in the HEI reward and
that serve a minimum percentage of enrollees with the specified SRFs
will be eligible for the reward. Contracts that do not qualify for the
reward will not be penalized and can still earn the highest rating of 5
stars without the current reward factor.
Comment: A commenter recommended the HEI reward methodology include
a subset of measures initially, such as HEDIS measures, and gradually
expand to include other measures. Another commenter recommended that
CMS allow for notice and public comment on the exact measures that will
be used in the HEI reward to ensure there is an opportunity for
stakeholders to prioritize measures that are most meaningful to
achieving equitable care among beneficiaries with SRFs. A commenter did
not support including HOS measures in the HEI reward. Another commenter
recommended that SRF researchers, community leaders, and patients be
engaged to determine which subset of Star Ratings measures should be
included in the HEI.
Response: CMS believes it is appropriate to incentivize high
performance among enrollees with the specified SRFs across all of the
Star Ratings measures included in the HEI reward rather than only a
subset of measures since there are interactions across measurement
sets. For example, improving care coordination as measured through
CAHPS will impact other more clinical measures. CMS proposed, and is
finalizing, the criteria that will be used to determine which Star
Ratings measures are included in the HEI reward. Therefore, the public
has had an opportunity to review and comment on the HEI reward
methodology, including the rules for determining which measures are
included in the calculation of the HEI. As specified at Sec. Sec.
422.166(f)(3)(iii) and 423.186(f)(3)(iii), the measures being evaluated
for inclusion in the HEI will be announced annually in the process
described for changes in and adoption of payment and risk adjustment
policies in section 1853(b) of the Act. These announcements (of the
measures being evaluated for inclusion in the HEI) will not include the
final list of measures used in the HEI for the upcoming Star Ratings
because the data to determine that final set will not yet be available.
Comment: A commenter suggested adjusting the Star Ratings to
account for SRFs by setting different cut points for contracts with
higher levels of enrollees who are dually eligible. Another commenter
recommended risk-adjusting the Star Ratings thresholds (cut points)
[[Page 22287]]
to account for high numbers of dually eligible enrollees.
Response: CMS does not believe it would be appropriate to set
different cut points for contracts based on the proportion of dually
eligible enrollees. We do not want to set lower standards of care for
treating underserved populations.
Comment: A commenter recommended ensuring additional resources,
such as payments from the HEI reward, flow through to providers that
serve higher proportions of dually eligible individuals and ensuring
funds earned from the HEI reward are directly allocated to patient
care.
Response: CMS cannot require that sponsoring organizations pay
their contracted providers or pharmacies how the commenter suggested.
Section 1854(a)(6)(B)(iii) of the Act prohibits the Secretary (and CMS)
from ``require[ing] any MA organization to contract with a particular
hospital, physician, or other entity or individual to furnish items and
services under this title or require[ing] a particular price structure
for payment under such a contract to the extent consistent with the
Secretary's authority under this part.'' There is a similar, but
broader, prohibition on interference with the negotiations between drug
manufacturers and pharmacies and Part D sponsors in section 1860D-11(i)
of the Act.
Comment: A commenter suggested that it may be useful to include
performance benchmarks in calculating the HEI reward rather than
distributing performance into thirds to ensure that equity performance
does not lag.
Response: CMS believes that contracts will continue to be
incentivized to improve performance among populations with SRFs because
contracts will continue to strive to earn a sufficiently high score on
the HEI to be eligible for a reward. A contract that is in the top
third of the distribution in one year will not know how well other
contracts will perform from year to year and therefore will be
incentivized to continue to improve in order to stay in the top third
of the distribution.
Comment: A commenter suggested including SNP-only measures in the
calculation of the HEI reward because these measures are important for
health equity goals. The commenter noted that leaving the measures out
of the HEI reward reduces their importance and does not provide an
opportunity to recognize excellence.
Response: CMS thanks this commenter for this suggestion and will
take this comment into consideration. We proposed and are finalizing
the exclusion of SNP-only measures, however, because they apply only to
a subset of contracts. Additionally, based on our simulations, we do
not believe that addition of these measures would have a significant
impact on the HEI reward distribution. However, if SNP-only measures
were to be added to the calculation of the HEI reward, we would first
propose this change through notice-and-comment rulemaking.
Comment: A commenter stated CMS should look for opportunities to
encourage plans to serve enrollees with SRFs and that they were not
aware of any new incentives to serve this population.
Response: The HEI reward provides an incentive to serve this
population, since to be eligible for the full HEI reward contracts must
meet the median percentage threshold of enrollees with the specified
SRFs, and to be eligible for one-half of the reward, contracts must
meet the one-half median percentage threshold of enrollees with the
specified SRFs.
Comment: A commenter suggested that CMS incorporate historical data
in the HEI reward methodology prior to the 2024 measurement year to
account for equity efforts already undertaken by some health plans that
opted to care for historically underserved populations prior to the
implementation of the HEI reward. A couple of commenters recommended
CMS implement the HEI reward beginning with the 2026 Star Ratings
rather than the 2027 Star Ratings.
Response: We appreciate these suggestions; we propose substantive
and methodological changes to the Part C and D Star Ratings and
finalize them prior to the measurement year. This approach ensures that
sponsoring organizations are aware of the quality measures that will be
used and have an opportunity to change or improve performance before
the contract is rated on specific performance measures. Since the HEI
reward includes two years of data, the earliest measurement year data
it can use is from 2024 and 2025, and the earliest it can be
implemented is the 2027 Star Ratings.
Comment: A commenter suggested that CMS could adjust the HEI reward
relative to the change in LIS/DE enrollee percentages in the 2024 and
2025 measurement years compared to a baseline in order to limit health
plans seeking to benefit from the new rewards of the HEI from crowding
out health plans that currently serve underserved populations.
Response: CMS appreciates this suggestion; however, we do not
believe it would be appropriate. With the HEI reward, CMS aims to
improve health equity by incentivizing all MA plans, cost plans, and
Part D plan sponsors to perform well among enrollees with certain SRFs.
Any plans that enroll more members who are LIS, DE, or disabled will
also have to perform well among these enrollees to be eligible for the
HEI reward. The HEI reward methodology focuses on performance in the
measurement years when contracts are actually serving LIS/DE or
disabled enrollees. The HEI reward would not create the same incentives
if we adjusted for changes in LIS/DE and disabled enrollment compared
to a baseline before the HEI was implemented.
Comment: A commenter recommended CMS implement a temporary approach
for the 2025 Star Ratings to account for plans that have already been
working to reduce disparities by taking the better of a plan's measure-
level Star Rating or the HESS for those measures for which there is
overlap between the two programs, or by incorporating the HESS as a
bonus component to account for plans that scored well on the HESS.
Another commenter recommended adding the HESS to the Star Ratings as
soon as possible beginning with the 2026 Star Ratings.
Response: We appreciate these suggestions; however, we make such
substantive and methodological changes to the Part C and D Star Ratings
through rulemaking and generally finalize them prior to the measurement
year. At this time, we are not considering adding the HESS to the Star
Ratings program as a basis for a reward factor since it is
methodologically complex to calculate HESS scores within the tight
timeframes for producing the Star Ratings. The HESS also requires 4
years of data, which would exclude a number of newer contracts from a
reward based on the HESS. Additionally, given the 4 years of data
needed, it would be more complex to implement as measure specifications
are updated.
Comment: Some commenters suggested adding additional SRFs to the
HEI such as race and ethnicity, gender, language, gender identity,
sexual orientation, enrollee self-reported social needs, cultural
context, social relationships, residential and community context,
rurality, and enrollees with housing, food, or transportation needs
identified using data from the NCQA Social Need Screening and
Intervention measure. A commenter stated that the SRFs proposed to be
included in the HEI reward do not adequately capture the population of
members included in CMS's health equity definition and
[[Page 22288]]
those who experience SRFs. A commenter stated that focusing on limited
SRFs ignores other SRFs where there are disparities and requested a
timeline for the inclusion of additional SRFs in the HEI reward.
Another commenter recommended including additional SRFs beginning with
the 2027 Star Ratings or as soon as possible.
Response: CMS appreciates these suggestions and will consider
including additional SRFs with data readily available at this time,
such as rurality and gender, in the HEI reward methodology in the
future. Other SRFs will be considered over time as data become
available to measure the specified SRFs. The addition of SRFs would be
proposed through notice-and-comment rulemaking. While it is true that
not all populations with SRFs are captured in the HEI reward we
proposed and are finalizing in this rule, CMS does not believe this
biases the HEI reward. Health plans should strive to perform well among
all populations with SRFs regardless of whether they are included in
the HEI reward. We see differences in performance for the SRFs included
in the HEI reward. For example, prior research has shown that dual
eligibility is one of the most influential predictors of poor health
outcomes, and disability is also an important risk factor linked to
health outcomes.\159\
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\159\ https://www.aspe.hhs.gov/sites/default/files/migrated_legacy_files/171041/ASPESESRTCfull.pdf?_ga=2.49530854.1703779054.1662938643-470268562.1638986031.
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Comment: Several commenters suggested using the ADI, the Social
Vulnerability Index (SVI), or the Social Deprivation Index (SDI) in the
HEI instead of LIS/DE and disabled status. A commenter recommended that
CMS continue to monitor different indices that measure socioeconomic
status and adopt them if they are found to be more accurate measures
than the ADI.
Response: We will continue to consider additional SRFs for the HEI
reward over time through notice-and-comment rulemaking. As we noted in
the preamble to the proposed rule, consistent with literature on the
ADI, and other neighborhood-based indices,\160\ our analyses showed
that for the Part C and D Star Ratings measures, the ADI explains very
little of the variation in the quality of care received beyond
enrollee-level LIS/DE and disability information. The ADI is more
useful in situations where there is a lack of beneficiary-level quality
performance data, which is the case for the MSSP, for example. The
MSSP's health equity adjustment applies to Accountable Care
Organizations (ACOs) that report the all-payer/patient electronic
clinical quality measures (eCQMs) or Merit-based Incentive Payment
System (MIPS) CQMs; these measures are reported in aggregate, so
beneficiary-level data are not readily available. The MSSP adopted a
health equity adjustment that will upwardly adjust an ACO's quality
performance score to reward ACOs that report all-payer eCQMs/MIPS CQMs,
and are high performing on quality and serve a high proportion of
underserved beneficiaries. The health equity adjustment adds up to 10
bonus points to the ACO's MIPS quality performance category score based
on the percentage of the ACO's assigned beneficiaries who are LIS and/
or DE and reside in census blocks with high ADI as described at 87 FR
69781.\161\ Since the MSSP does not have Medicare-only beneficiary-
level data linked to the quality performance data, CMS does not
stratify the quality measure data by LIS/DE and disability status and
analyze performance like we can for the Part C and D Star Ratings
program.
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\160\ Beckett MK, Martino SC, Agniel D, Mathews M, Hudson
Scholle S, James C, Wilson-Frederick S, Orr N, Darabidian B, Elliott
MN. (2021). ``Distinguishing neighborhood and individual social risk
factors in health care'' Health Services Research: 1-14.
\161\ https://www.govinfo.gov/content/pkg/FR-2022-11-18/pdf/2022-23873.pdf.
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In the CY 2023 Advance Notice, we solicited feedback on the use of
the ADI in the HEI reward methodology. At that time there was limited
support for adding the ADI to the index. A number of concerns were
raised, including that the ADI does not always reflect some of the more
deprived areas; it does not adequately distinguish between areas that
have both extreme poverty and extreme wealth; and it is not fully
representative of systemic disparities for historically marginalized
communities. There was also concern that including the ADI may create
incentives for plans to focus on certain geographic areas versus
focusing on improving care for those with the greatest needs.
The SVI was designed to identify communities at increased risk of
negative impacts from natural disasters and infectious disease
outbreaks that require community-level response and is calculated at
both the census tract and county level. Similar to other geography-
based measures of social risk, the SVI is constructed using census data
on socioeconomic status, household composition and disability, minority
status and language, and housing and transportation characteristics.
The Social Deprivation Index (SDI) was developed to identify the extent
of disadvantage in small geographic areas and assess the association of
level of disadvantage with health outcomes and health inequities. The
SDI is a composite of sociodemographic characteristics, including
poverty, education, unemployment, housing characteristics, household
composition, and car ownership.\162\ It is constructed at the county,
census tract, aggregated Zip Code Tabulation Areas, and Primary Care
Service Area \163\ levels using 5-year estimates from the American
Community Survey. Studies have shown that different geography-based
measures of social risk have very similar associations with measures of
quality of care and health outcomes.\164\ However, for the Part C and D
Star Ratings measures, geography-based indices of social risk do not
substantively explain variation in care received beyond beneficiary-
level SRFs such as dual-eligibility for Medicare and Medicaid, receipt
of the Part D LIS, and disability as the original reason for Medicare
eligibility,\165\ which are used in the HEI.
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\162\ Social deprivation index (SDI). Robert Graham Center--
Policy Studies in Family Medicine & Primary Care. (2018, November
5). Accessed 2/23/23, from https://www.graham-center.org/rgc/maps-data-tools/sdi/social-deprivation-index.html.
\163\ Goodman DC, Mick SS, Bott D, et al. Primary care service
areas: a new tool for the evaluation of primary care services.
Health Services Research 2002; 38(1 Pt 1):287-309. doi: 10.1111/
1475-6773.00116.
\164\ Herb J, Dunham L, and Stitzenberg K. A comparison of area-
level socioeconomic status indices in colorectal cancer care. J Surg
Res 2022; 280:304-311.
\165\ Social deprivation index (SDI). Robert Graham Center--
Policy Studies in Family Medicine & Primary Care. (2018, November
5). Accessed 2/23/23, from https://www.graham-center.org/rgc/maps-data-tools/sdi/social-deprivation-index.html.
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Comment: A commenter questioned why CMS decided against using the
ADI in the HEI reward but is using the ADI as a factor in calculating
the health equity adjustment in the MSSP.
Response: The ADI is more useful in situations where there is a
lack of beneficiary-level quality performance data, which is the case
for the MSSP. Unlike for the Part C and D Star Ratings program, the
MSSP's health equity adjustment is only available to those ACOs that
report aggregate quality data for all-payer eCQMs/MIPS CQMs. For the
HEI reward, CMS has access to beneficiary-level data on each quality
measure included in the HEI and can match that beneficiary-level
information to dual eligibility, LIS, and disability status. As we
noted in the proposed rule, our analyses suggest that ADI explains
little variation in care received beyond beneficiary-level LIS/DE and
disability information for the Part C and D Star Ratings measures.
[[Page 22289]]
Similar to our goals for the HEI reward in terms of creating
incentives for MA plans, cost plans, and Part D plan sponsors to
perform well among enrollees with certain SRFs, the MSSP adopted a
health equity adjustment that will upwardly adjust an ACO's quality
performance score to reward high quality performance across all
populations served by an ACO; encourage all ACOs to treat underserved
populations; provide an incentive for ACOs to provide high quality care
to all of the populations they serve; and ensure there are not
incentives for ACOs to avoid underserved populations as CMS transitions
to all-payer eCQMs/MIPS CQMs as described at 87 FR 69839.
Comment: A commenter raised concerns about using dual eligibility,
LIS, and disability as the SRFs including in the HEI reward. The
commenter stated there is mixed evidence on the effectiveness of these
variables as indicators for health equity and noted issues with
comparability given state-by-state differences in Medicaid eligibility
criteria.
Response: The HEI reward methodology we proposed not only includes
dual eligibility (which could differ by state), but it also includes
enrollees who apply for an LIS subsidy (which allows us to capture
enrollees whose income and resources are limited) and disability
status. Prior research has shown that dual eligibility is one of the
most influential predictors of poor health outcomes, and disability is
also an important risk factor linked to health outcomes.\166\ Further,
we set the minimum percentage of enrollees with the specified SRFs at
the relatively low bar of one-half the contract-level median in part to
address geographic variation in enrollment.
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\166\ https://www.aspe.hhs.gov/sites/default/files/migrated_legacy_files/171041/ASPESESRTCfull.pdf?_ga=2.49530854.1703779054.1662938643-470268562.1638986031.
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Comment: Some commenters stated that large plans may serve many
enrollees with SRFs but not meet the percentage of enrollees with the
specified SRFs thresholds to qualify for the HEI reward, and some
commenters recommended including thresholds for both the total number
of enrollees as well as the percentage of enrollees. A commenter stated
that larger plans not meeting the enrollment thresholds set for the HEI
for enrollees with specified SRFs may be disincentivized from improving
health equity even if they have a significant number of members
experiencing SRFs, and another commenter stated that enrollees with
SRFs will be overlooked if they are in plans that serve a significant
SRF population but do not meet the thresholds. A commenter believes
that an unintended consequence of our proposed methodology is that
plans will not be eligible for an HEI reward due to the limited number
of beneficiaries with those SRFs, and recommended that all plans be
eligible for an HEI reward even if the proportion of their members with
the specified SRFs is low. This commenter also stated that all plans
should be working to improve the care for members with SRFs even if the
proportion of enrollees with the specified SRFs does not meet the
specifications to be eligible for the HEI reward.
Response: CMS believes all plans should work to improve health
equity regardless of whether they qualify for the HEI reward. Further,
improving performance among members with SRFs will improve performance
on Star Ratings measures even in the case where plans do not qualify
for the HEI reward. One of the goals CMS considered when developing the
HEI reward was to avoid rewarding contracts that may do well among
enrollees with the SRFs included in the HEI but serve few enrollees
with those SRFs relative to their total enrollment, making it easier to
do well. If a number, rather than a percentage, of enrollees with the
specified SRFs were used as the threshold for qualifying for the HEI
reward, this goal would not be met. Larger contracts might be able to
meet a minimum number threshold even though they serve a relatively
small number of enrollees with the specified SRFs compared to their
total enrollment. This would make it easier for these contracts to do
well among these enrollees.
Additionally, based on current data, few contracts that do not meet
the percentage of enrollees with the specified SRFs threshold serve a
large number of LIS/DE/disabled enrollees. In simulations using data
from the 2021 Star Ratings data, we see that, on average, 15 percent of
enrollees are LIS/DE/disabled in MA and cost contracts that do not meet
the minimum percentage of LIS/DE/disabled enrollees to be eligible for
the HEI reward; 5 percent of enrollees are LIS/DE/disabled in PDP
contracts that do not meet the minimum percentage of LIS/DE/disabled
enrollees to be eligible for the HEI reward. Thus, most contracts that
do not meet the percentage of enrollees with the specified SRFs
threshold would also not meet a threshold based on a number of
enrollees with the specified SRFs. Additionally, we note that contracts
that serve a low percentage of LIS/DE/disabled enrollees tend to
perform well in Star Ratings. Contracts are not penalized for not
meeting the percentage of enrollees with the specified SRFs threshold.
As the HEI reward only has an upside, we expect that these contracts
will continue to perform well even if they do not qualify for the HEI
reward. Contracts will still have the HEI score calculated and will be
able to see how they perform on the HEI even if they do not meet the
enrollment thresholds. To prepare health plans for implementation of
the HEI reward, CMS will calculate the HEI reward beginning with the
2024 Star Ratings and will share the results in confidential contract-
level reports in HPMS.
Comment: Some commenters stated it would be more challenging for
employer group contracts to meet the proposed enrollment thresholds
because this population is less likely to be LIS/DE or disabled, and
that the HEI reward could undermine advances in health equity in these
plans. A commenter recommended this could be addressed by using a total
enrollment threshold rather than a percentage enrollment threshold.
Another commenter suggested that enrollment in employer group plans be
excluded from the determination of whether a contract meets the
percentage enrollment thresholds.
Response: CMS believes that since enrollees in employer group plans
contribute to contracts' performance scores, these enrollees also
should contribute to the contract's enrollees with the specified SRFs
percentage. While employer group plans on average enroll a smaller
percentage of LIS/DE/disabled enrollees than other plans, most
contracts are a mix of different plan types, and contracts that include
employer group plans may still meet the percentage enrollment
thresholds we proposed and are finalizing for the HEI. In addition,
contracts that serve a low percentage of LIS/DE/disabled enrollees tend
to perform well in Star Ratings since they are serving a less
vulnerable population. Contracts are not penalized for not meeting the
percentage enrollment threshold. As the HEI reward only has an upside,
we expect that these contracts will continue to perform well even if
they do not qualify for the HEI reward. The HEI reward is structured so
as to support our goals to avoid rewarding contracts that do not serve
many enrollees with specified SRFs, making it easier for them to do
well. For that reason, we are finalizing the HEI reward methodology
such that contracts with employer groups plans will be treated like all
other contracts.
[[Page 22290]]
Comment: Some commenters raised various concerns around some
contracts possibly having more difficulty meeting the percentage of
enrollees with the specified SRFs threshold to qualify for the HEI
reward, including contracts in states that require sponsors to
establish separate contracts that only include dual eligible special
needs plans (D-SNPs). These commenters raised concerns that other MA
organizations may be less likely to meet the threshold of enrollees
with specified SRFs to qualify for an HEI reward.
Response: There is currently a limited number of states that
require MA organizations to have separate D-SNP-only contracts under
Sec. 422.107(e), and the provisions of Sec. 422.107(e) only apply
when specific minimum conditions are met, including a requirement that
D-SNPs in the state have exclusively aligned enrollment with an
affiliated Medicaid managed care organization and a requirement that D-
SNPs use certain materials that integrate Medicare and Medicaid
content. Further, even in states that require MA organizations to have
separate D-SNP-only contracts, dually eligible individuals may still
enroll in other MA organization contracts, and such contracts may still
meet the minimum threshold of enrollees with SRFs (which includes not
only LIS/DE individuals but also those with disability status). Based
on our simulations, other contracts would meet the minimum percentage
to qualify for an HEI reward in these States. We estimate that
approximately 3 million LIS/DE individuals were enrolled in non-D-SNP
MA plans in 2022.\167\
---------------------------------------------------------------------------
\167\ We approximated the percentage of LIS/DE individuals
enrolled in non-D-SNP MA plans based on the number of LIS enrollees
per PBP, as listed in the 2022 Low Income Subsidy Enrollment by Plan
report: https://www.cms.gov/research-statistics-data-and-systemsstatistics-trends-and-reportsmcradvpartdenroldatalis-enrollment/2022-low-income-subsidy-enrollment-plan.
---------------------------------------------------------------------------
Comment: A commenter raised a concern that the percentage of
enrollees with the specified SRFs thresholds would make it difficult
for plans to receive an HEI reward, as the percentage of members with
SRFs falls under the national median for the majority of contracts.
Response: Contracts may still qualify for half of the HEI reward if
they have at least one-half the median and up to but not including the
median percentage of enrollees with the specified SRFs. CMS believes
one-half the median enrollment is a relatively low bar for a minimum
enrollment threshold. In simulations using data from the 2021 Star
Ratings, only 17 percent of MA and cost contracts and 11 percent of
PDPs did not meet the one-half the median threshold.
Comment: A couple of commenters recommended using one-half the
median percentage of enrollees with the specified SRFs as the threshold
to be eligible for the full HEI reward rather than the tiered threshold
that uses both one-half the median and the median percentage of
enrollees with the specified SRFs.
Response: CMS believes the tiered threshold structure is more
appropriate because it allows for a greater maximum HEI reward among
contracts that have larger proportions of enrollees with the specified
SRFs and smaller rewards for contracts with smaller proportions of
enrollees with the specified SRFs.
Comment: A commenter raised a concern that D-SNP look-alikes may
benefit more from the HEI reward because these plans are permitted to
crosswalk members from these plans to other standard plans.
Response: In order to qualify for the HEI reward, contracts must
not only meet the minimum percentage of enrollees with the specified
SRFs thresholds but also meet the minimum performance threshold. CMS
adopted contracting limitations for D-SNP look-alike plans at Sec.
422.514(d), which provides that starting with Contract Year 2023, CMS
will not renew a contract for a MA plan--other than a SNP--that has
actual enrollment in the January of the prior contract year of 80
percent or more of enrollees who are entitled to Medicaid, unless the
MA plan has been active for less than one year and has enrollment of
200 or fewer individuals at the time of such determination. D-SNP look-
alikes have the opportunity to transition enrollees under Sec.
422.514(e). The number of D-SNP look-alike plans is relatively small
compared to the overall number of MA plans. For Contract Year 2022,
there were 47 D-SNP look-alike plans and for Contract Year 2023, there
are 15 D-SNP look-alike plans. While D-SNP look-alikes do have the
opportunity to transition membership under Sec. 422.514(e), we do not
have reason to expect that D-SNP look-alikes would benefit more from
the HEI reward than other MA plans that transition membership using
crosswalk authority at Sec. 422.530(b) or crosswalk exception
authority at Sec. 422.530(c).
Comment: A commenter recommended using regional or service area
medians instead of national medians for the percentage enrollment
thresholds. The commenter also recommended CMS conduct an assessment
based on service areas to determine whether all contracts would have
the ability to enroll a sufficient number of individuals in the target
SRF groups.
Response: We believe our proposed minimum percentage enrollment
threshold of one-half the median percentage of contract-level enrollees
with SRFs to qualify for the HEI reward is a relatively low bar and is
intended to accommodate areas and circumstances that may make it more
difficult to enroll individuals with the specified SRFs.
Comment: A commenter stated the HEI reward would disqualify smaller
contracts because of the percentage enrollment thresholds and that this
would discourage the enrollment of beneficiaries with SRFs in smaller
tailored plans that best meet their needs, such C-SNPs.
Response: The minimum enrollment thresholds are one of the ways in
which we have designed the HEI reward to avoid rewarding large
contracts over small contracts. If a total number, rather than a
percentage, of enrollees were used as the threshold, this would
disadvantage small contracts. In simulations using data from the 2021
Star Ratings, there were small contracts that met both tiers of the
percentage enrollee thresholds, including contracts with fewer than
1,000 enrollees. The median contract size for contracts meeting the
median percentage enrollee threshold in our simulations is 12,000
enrollees for MA and cost contracts and 14,000 for PDP contracts, the
median contract size for contracts meeting the one-half median
percentage enrollee threshold is 23,000 enrollees for MA and cost
contracts and 26,000 for PDP contracts, and the median contract size
for contracts with less than one-half the median is 20,000 enrollees
for MA and cost contracts and 64,000 for PDP contracts. Setting the
minimum enrollment percentage threshold at one-half the contract-level
median is a relatively low bar. Additionally, we proposed and are
finalizing using two years of data to calculate the HEI reward to allow
smaller contracts to be reliably evaluated. Using two years of data
increases the sample size when calculating the measure-level scores
among the subset of enrollees with the specified SRFs and makes it more
likely that smaller contracts can meet the criteria for a measure to be
included in the calculation of the HEI score as described at Sec. Sec.
422.166(f)(3)(iv) and 423.186(f)(3)(iv).
Comment: A commenter recommended that CMS not exclude contracts
with less than 500 enrollees
[[Page 22291]]
from the HEI reward as proposed at Sec. Sec. 422.166(f)(vi) and
423.186(f)(vi).
Response: In general, contracts with less than 500 enrollees are
too small to have Star Ratings calculated because the data are not
reliable. In general, the measure-level data for these contracts do not
meet a reliability of 0.7. Contracts with less than 500 enrollees also
often do not meet measure-level minimum denominator requirements. These
issues are further exacerbated with the HEI since the HEI requires the
calculation of measure-level scores for a subset of the contract's
enrollees with the specified SRFs and, thus, these very small contracts
do not meet the criteria in Sec. Sec. 422.166(f)(3)(iv) and
423.186(f)(3)(iv).
Comment: A commenter was concerned that measures with lower minimum
denominator requirements would invalidate the HEI results.
Response: The HEI reward methodology includes several steps to
ensure the measure data used are reliable. A measure is only included
for the HEI for a contract if the measure has a reliability of at least
0.7 when calculated for the subset of enrollees with SRFs in the
contract with the specified SRF(s), and the contract meets the measure
denominator requirement when the measure is calculated for only the
enrollees with the specified SRF(s). In addition, if at least 25
percent of contracts are unable to meet these criteria, the measure
will be excluded from the HEI.
Comment: Some commenters requested more information about the HEI
reward methodology and that CMS share data and simulations prior to
implementing the HEI reward. A handful of commenters suggested
including the HEI on the Star Ratings display page with the detailed
methodology. A few commenters requested that the implementation of the
HEI reward methodology be delayed to allow contracts more time to
prepare. A commenter also requested that CMS provide data on D-SNPs or
other SNP types with a high proportion of LIS/DE or disabled
individuals to demonstrate the effect of the HEI reward among these
contracts compared to contracts with lower proportions of LIS/DE or
disabled members. A commenter requested the expected measure-level
performance thresholds for each of the thirds.
Response: To prepare health plans for implementation of the HEI
reward, CMS will calculate the HEI reward beginning with the 2024 Star
Ratings and will share the results in confidential contract-level
reports in HPMS. Contracts will have these data for 3 years prior to
the HEI being implemented as part of the 2027 Star Ratings. Each
sponsoring organization will be able to see its contract-level
percentage of enrollees with the specified SRFs; whether each measure
included in the HEI met the reliability and denominator criteria to be
included in the HEI; whether contract performance was in the upper,
middle, or lower third of performance for each measure included in the
HEI; the HEI value; and the HEI reward for contracts that qualify. The
performance thresholds for each of the thirds at the measure level will
be dependent on the distributions of measure data for the measurement
years of data being used to calculate the HEI reward for each Star
Ratings year. This information will also be available in the HPMS
reports. We will share the percentage of enrollees with the specified
SRFs thresholds, including for Puerto Rico contracts. CMS will also
share summary-level results by type of contract for informational
purposes.
CMS does not intend to display these results as display measures.
Since the HEI is not a measure, we believe that sharing the information
through HPMS will allow us to provide contracts with more detailed
information about the HEI for their quality improvement efforts.
Sections 422.164(c)(3) and (d)(2) and 423.184(c)(3) and (d)(2) require
only new measures and measures with substantive specifications changes
to be on the display page for two years prior being in the Star
Ratings. Historically, we have not displayed methodological changes on
the display page since it would be confusing to the public to have two
sets of ratings, one on Medicare Plan Finder on www.medicare.gov and an
alternative rating on cms.gov.
In simulations using data from the 2021 Star Ratings, the percent
of enrollees who have the specified SRFs for the HEI (that is LIS/DE/
disability status) is 15 percent for MA and cost contracts and 5
percent for PDPs that do not meet the enrollment threshold to be
eligible for a reward (that is, one-half of the contract-level
enrollment median); 28 percent for MA and cost contracts and 10 percent
for PDPs that meet one-half of the contract-level median up to but not
including the median; and 61 percent for MA and cost contracts and 37
percent for PDPs that meet the median enrollment threshold. The percent
of enrollees who are LIS/DE/disabled is 42 percent for MA and cost
contracts and 13 percent for PDP contracts that received an HEI reward
(that is, met an enrollment threshold to be eligible for a reward and
received an HEI score of greater than zero).
Comment: A commenter requested more time so that regional plans
would not be penalized for not having the minimum enrollment amount
yet.
Response: In simulations using data from the 2021 Star Ratings,
many regional plans met the minimum percentage enrollment thresholds.
No plans will be penalized by the HEI reward if they do not have enough
enrollees to qualify for the reward since it is an upside only reward.
Comment: Some commenters suggested the HEI should be a measure
rather than a reward.
Response: CMS believes including the HEI as a reward in place of
the current reward factor will better incentivize MA, cost plan, and
PDP contracts to perform well among enrollees with specified SRFs than
if the HEI were included as a Star Ratings measure. The HEI reward is
upside only and is focused on those contracts serving a
disproportionate percentage of enrollees in underserved populations in
order to incentivize high quality care for these populations. If the
HEI was a measure, contracts could have their overall and summary
ratings negatively impacted if they did not do well serving these
enrollees because they would earn low measure-level Star Ratings on an
HEI measure, which could bring down their overall and summary ratings.
Additionally, contracts that serve a small percentage of enrollees with
the specified SRFs may do well on a measure because they serve
relatively few of these beneficiaries, making it easier for them to do
well. Adding the HEI as a reward rather than a measure also allows for
the methodology to include a performance threshold below which
contracts will not be eligible for the HEI reward, which will
incentivize improved performance by contracts for their enrollees with
the specified SRFs and help reduce disparities.
Comment: A commenter recommended that the HEI reward replace the
CAI rather than the current reward factor. Another commenter stated
that eliminating the reward factor and replacing it with the HEI reward
while retaining the CAI would create a duplication in ratings and that
plans may be penalized by having both the CAI and the HEI.
Response: The HEI reward serves a different purpose than the CAI.
The CAI is a data-driven approach to account for within-contract
disparities in performance associated with SRFs in Star Ratings
measures that are not already adjusted according to the measure
specifications developed by measure stewards. As we stated in the April
2018 rule, the CAI accounts for
[[Page 22292]]
within-contract disparities and adjusts for those disparities in order
to allow fair comparisons among contracts; it also addresses the
sensitivity of the Star Ratings to the composition of the enrollees in
a contract. The CAI is designed to improve the accuracy of performance
measurement, while not masking true differences in performance between
contracts; in contrast, the HEI reward is designed to create incentives
to reduce disparities in care. The HEI, therefore, will not replace the
CAI but rather will assist plan sponsors in better identifying and then
addressing disparities in care provided to members with a particular
SRF, with the ultimate goal of reaching equity in the level and quality
of care provided to enrollees with SRFs. Neither the CAI nor the HEI
reward penalize plans. The CAI adjusts for the within-contract
differences in performance to create a level playing field across
contracts, and the HEI reward is an upside only reward.
Comment: A commenter stated continued support for the CAI and
stated that they assume the CAI will continue to be implemented.
Response: CMS appreciates the continued support for the CAI and, as
stated in the proposed rule, CMS will continue to implement the CAI.
Comment: A couple of commenters raised concerns that replacing the
current reward factor with the HEI reward would dilute the
effectiveness of the current quality incentive structure or not achieve
CMS's goal of driving quality improvement and minimizing unintended
consequences. A commenter stated that replacing the current reward
factor with the HEI reward would risk undermining market competition
and disincentivizing quality improvement investments.
Response: CMS believes there is still an incentive within the
current Star Ratings methodology for sponsoring organizations to invest
in quality improvement. Any such investments will be reflected in high
measure-level Star Ratings and higher improvement measure stars.
Further, contracts can still do well on the Star Ratings and achieve
the highest rating of 5 stars without receiving either the current
reward factor or the HEI reward. CMS's goal is to continue to evolve
the Star Ratings methodology over time to ensure that the methodology
encourages continued improved plan performance across beneficiaries.
Comment: One commenter stated that Star Ratings for high-performing
contracts with a disproportionately high share of enrollees with SRFs
could be adversely impacted with the addition of the HEI and removal of
the reward factor. Another commenter stated that D-SNP-only contracts
are more adversely impacted by the removal of the reward factor.
Another commenter requested that CMS study the impact of removing the
reward factor on contracts with high LIS/DE/disabled enrollment.
Response: In our simulations, we have not found that D-SNP-only
contracts or contracts that include D-SNPs along with other MA plans
will be more adversely impacted by the removal of the reward factor. In
the 2023 Star Ratings, the reward factor was lower on average for both
D-SNP-only contracts and contracts offering any D-SNPs compared to
contracts without D-SNPs. When the reward factor is removed in our
simulations, 17 percent of contracts with any D-SNPs have a decrease in
overall Star Ratings versus 22 percent of all other contracts. This
indicates that contracts with D-SNPs are less impacted than other
contracts by the removal of the reward factor.
Comment: A commenter stated most plans at the 5-star level earn 5
stars due to the addition of the reward factor and that removal of the
reward factor will result in many plans losing their 5-star rating.
Response: While it is true that the reward factor bumps up some 4.5
star contracts to 5 stars, the replacement of the current reward factor
with the HEI reward will provide contracts with additional
opportunities for an upside reward. This means there are still
opportunities for contracts to increase their Star Rating from 4.5 to 5
stars. Additionally, we note that there is nothing that would prevent a
contract from still earning 5 stars even if it did not earn an HEI
reward.
Comment: A few commenters suggested alternatives to using the
original reason for Medicare entitlement to identify enrollees who have
a disability and are therefore included in the HEI as having a SRF. A
commenter suggested using diagnoses in claims data. A commenter noted a
need to expand the identification of enrollees with a disability beyond
the original reason for entitlement and recommended CMS only allow the
physician who is treating the patient to make the determination that
the patient has become disabled after Medicare enrollment. A commenter
recommended additional ways to identify enrollees with a disability in
future years, including the HEDIS Advanced Illness and Frailty
Exclusions and enrollee self-reported disability in Health Risk
Assessments. The commenter also recommended CMS include additional
fields to enrollment forms to collect information on disability. A
commenter suggested CMS could explore using the disability definition
under the Americans with Disabilities Act. Another commenter supported
the proposed definition of disability and recommended limiting to this
definition for consistency.
Response: CMS appreciates these comments, and we will continue to
evaluate how we could expand the ways we identify individuals who have
a disability for purposes of calculating and applying the HEI reward
and CAI. Any changes would need to be proposed through notice-and-
comment rulemaking.
Comment: A commenter suggested CMS compare disability eligibility
data with the Medicare Current Beneficiary Survey (MCBS) to assess the
gap in measuring disability under the current definition included in
the HEI reward, which identifies individuals with a disability based on
original reason for entitlement.
Response: While looking at data from the MCBS would show some of
the gap in our identification of enrollees with a disability using the
original reason for entitlement compared to those enrollees who
developed a disability after enrolling in Medicare, we would not be
able to use data from the MCBS for the HEI reward. In order to include
data on functional limitations in the HEI reward, we would need
national data at the beneficiary level, which the MCBS does not
provide.
Comment: A few commenters stated that there were many changes
proposed to the Star Ratings and recommended more incremental change. A
commenter requested that CMS consider distributing the implementation
of the proposed changes to the Star Ratings over the next three years.
Response: As discussed in section I.B.1. of this final rule, not
all of the proposed changes to the Star Ratings regulations in the
December 2022 proposed rule are being finalized at this time. Also, as
proposed and finalized, the HEI reward will be implemented beginning
with the 2027 Star Ratings, whereas most of the other Star Ratings
changes finalized in this rule will be implemented beginning with the
2026 Star Ratings.
Comment: Some commenters raised concerns about the possibility that
some plans may more heavily market to dually eligible enrollees in
order to have them enroll in non-D-SNP products, so that such plans may
meet the threshold of having enough members to be eligible for the HEI
reward, or that the HEI reward would discourage enrollment in D-SNPs
and Chronic Condition SNPs. Another commenter stated the HEI
[[Page 22293]]
reward would create an incentive for gaming contract enrollment where
plans could target or avoid cohorts of beneficiaries, particularly
dually eligible beneficiaries and beneficiaries with chronic
conditions, because CMS is not proposing any corrections (similar to
risk adjustment) that would ensure contracts are fairly scored relative
to the different populations in each contract.
Response: There are already existing adjustments in the Star
Ratings program to account for contracts serving enrollees with SRFs.
Some Star Ratings measures are case-mix adjusted, and this is accounted
for in the HEI reward methodology. As discussed earlier in this
preamble, the CAI also accounts for within-contract disparities in
performance associated with SRFs in Star Ratings measures that are not
already adjusted according to the measure specifications developed by
measure stewards. CMS does not believe contracts will avoid enrolling
dually eligible beneficiaries, as enrolling duals would lead to a
greater likelihood of meeting the percentage enrollment thresholds for
contracts to be eligible for the HEI reward. If contracts increase
their enrollment of LIS/DE and disabled enrollees, they must also do
well serving this population to receive the HEI reward.
Comment: A commenter expressed concern that the HEI reward could
conceal overall quality shortcomings and noted that implementation of
the HEI reward must be carefully monitored. Another commenter
encouraged CMS to study the use of the HEI reward and modify it based
on experience.
Response: CMS does not believe the HEI reward will conceal overall
quality shortcomings, as overall quality will continue to be assessed
by the measure-level Star Ratings and contracts will not be able to
receive high overall Star Ratings without performing well overall. CMS
will evaluate the HEI reward over time as it does with the entire Star
Ratings methodology and would propose any potential modifications
through notice-and-comment rulemaking.
Comment: A commenter recommended CMS consider allowing plans to
rely upon one year of data to encourage earlier adoption of HEI reward
and in order to avoid penalizing new contracts from earning HEI
rewards.
Response: CMS appreciates this suggestion. Use of two years of data
is designed to ensure that smaller contracts have sufficient data to
produce reliable results and that smaller contracts are not excluded
from the HEI. We will explore other options, such as the commenter's
recommendation to use only one year of data for contracts that would
have enough enrollees to calculate reliable measure scores; however, we
will need to consider whether HEI scores for contracts using one year
of data are comparable to the scores for contracts using two years of
data and whether using one year of data advantages or disadvantages
contracts in any way. Any changes related to the HEI methodology would
have to be proposed through future notice-and-comment rulemaking.
Commenter: A commenter stated that quality measures should be
evaluated carefully to ensure they do not inadvertently create biases
and mask or worsen health disparities that lead to care stinting. The
commenter also stated that measures should also be appropriately
stratified or adjusted to recognize population differences.
Response: CMS is committed to accurately measuring and calculating
scores and stars to reflect true performance in the Star Ratings. Some
Star Ratings measures are case-mix adjusted, and this is accounted for
in the HEI reward methodology. As discussed earlier in this preamble,
the CAI accounts for within-contract disparities in performance
associated with SRFs in Star Ratings measures that are not already
adjusted according to the measure specifications developed by measure
stewards. Beginning with the 2022 Star Ratings, CMS also began
providing contracts with confidential stratified reports through HPMS
that include the Star Ratings measures stratified by LIS/DE and
disability status that plans can use for quality improvement purposes.
Further, the HEI reward specifically focuses on performance among
enrollees with the specified SRFs.
Comment: A commenter suggested CMS stratify health outcomes by
five-digit zip codes in order to help understand SRFs based in
particular localities.
Response: CMS appreciates this suggestion. It is not possible to
stratify the Star Ratings measures by zip code because the sample sizes
would be insufficient to provide reliable data.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the removal of the reward factor and addition of the HEI
reward to the 2027 Star Ratings as proposed, with additional revisions
to Sec. Sec. 422.162(a) and 423.182(a) to modify the definition of
``highly-rated contract'' to remove references to CAI and reward factor
and to instead reference applicable adjustments in Sec. Sec.
422.166(f) and 423.186(f); to Sec. Sec. 422.162(b)(1) and
423.182(b)(1) to remove references to the current reward factor and to
instead reference applicable adjustments in Sec. Sec. 422.166(f) and
423.186(f); and to Sec. Sec. 422.166(f)(3)(i)(B) and
423.186(f)(3)(i)(B) to clarify that, for purposes of calculating the
HEI, measure-level scores are used for contracts that have data for
only the most recent year of the 2 years, but measure-level scores are
not used for contracts that have data for only the first of the 2
years. We are finalizing changes to the following sections to revise
references to the reward factor or to limit application of the current
reward factor to the Star Ratings through the 2026 Star Ratings:
Sec. Sec. 422.166(c)(1), 422.166(d)(1) 422.166(f)(1),
422.166(f)(2)(i), 422.166(g)(1), 423.186(c)(1), 423.186(d)(1)
423.186(f)(1), 423.186(f)(2)(i), and 423.186(g)(1). We are also
finalizing the addition of the HEI reward at Sec. Sec. 422.166(f)(3)
and 423.186(f)(3).
G. Extreme and Uncontrollable Circumstances (Sec. Sec. 422.166(i) and
423.186(i))
1. 60 Percent Rule
Currently, the Star Rating for each non-CAHPS measure score is
determined by applying a clustering algorithm to the numeric value
scores from all contracts required to submit the measure. The cut
points for non-CAHPS measures are derived from this clustering
algorithm. As discussed in the April 2019 final rule and described at
Sec. Sec. 422.166(i)(9), 422.166(i)(10), 423.186(i)(7), and
423.186(i)(8), we exclude from this clustering algorithm and from the
reward factor calculations (under Sec. Sec. 422.166(f)(1) and
423.186(f)(1)) the numeric values for affected contracts with 60
percent or more of their enrollees in Federal Emergency Management
Agency (FEMA) designated Individual Assistance areas at the time of an
extreme and uncontrollable circumstance (84 FR 15776-15777). Affected
contracts are contracts that meet all of the criteria in Sec. Sec.
422.166(i)(1) and 423.166(i)(1). We generally call this the ``60
percent rule'' to distinguish it from the adjustments provided under
Sec. Sec. 422.166(i) and 423.186(i) for affected contracts with 25
percent or more of their enrollment residing in a FEMA-designated
Individual Assistance area at the time of the extreme and
uncontrollable circumstance.
This exclusion ensures that any impact of the extreme and
[[Page 22294]]
uncontrollable circumstance on certain affected contracts' measure-
level scores does not have an impact on the cut points or reward factor
for other contracts. When this rule was first implemented, the concern
was that a contract impacted by an extreme and uncontrollable
circumstance would have significantly different scores than other
contracts and that these significantly different scores would shift the
cut points and/or reward factor thresholds for non-affected contracts.
Our analyses since the rule was implemented show the measure scores for
affected contracts do not tend to be outliers and that this 60 percent
rule can have adverse effects when extreme and uncontrollable
circumstances affect nearly all contracts, as we saw with the COVID-19
PHE.
We proposed to limit to the 2025 and earlier Star Ratings,
application of the rule at Sec. Sec. 422.166(i)(9)(i),
422.166(i)(10)(i), 423.186(i)(7)(i), and 423.186(i)(8)(i) that excludes
numeric values for affected contracts with 60 percent or more of their
enrollees residing in FEMA-designated Individual Assistance areas at
the time of an extreme and uncontrollable circumstance from cut point
calculations and reward factor determinations. During the COVID-19
pandemic, we adopted a change to remove these rules temporarily since
all contracts qualified for the extreme and uncontrollable
circumstances policy as a result of COVID-19 in 2020; this change was
adopted in the interim final rule titled ``Medicare and Medicaid
Programs, Clinical Laboratory Improvement Amendments (CLIA), and
Patient Protection and Affordable Care Act; Additional Policy and
Regulatory Revisions in Response to the COVID-19 Public Health
Emergency'' which appeared in the Federal Register and was effective on
September 2, 2020, and 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 on May 9, 2022 and was effective on June 28, 2022 (hereinafter
referred to as the May 2022 final rule). The removal of the 60 percent
rule was necessary to calculate measure stars for most measures for the
2022 Star Ratings and for HEDIS measures that are based on the Health
Outcomes Survey (HOS) (HEDIS-HOS measures) for the 2023 Star Ratings.
Without the removal of the rule, CMS would not have been able to
calculate stars for most measures for 2022 Star Ratings and for the
HEDIS-HOS measures for the 2023 Star Ratings because all contracts
qualified for the extreme and uncontrollable circumstances policy as a
result of COVID-19 in 2020.
Beginning with the 2024 Star Ratings, measure scores that are
extreme outliers will be removed through Tukey outlier deletion, a
standard statistical method to remove extreme outliers, as codified at
Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i), prior to applying the
clustering methodology to determine the cut points. The combination of
mean resampling (implemented with the 2022 Star Ratings and described
at Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i)) and Tukey outlier
deletion will alleviate the impact of any extreme outliers. Thus, if a
contract is impacted by an extreme and uncontrollable circumstance and
as a result has a significantly lower score on a measure, the score
will be removed if it is an extreme outlier. Removing extreme outliers
will eliminate the concern that other contracts are inappropriately
impacted by changes in scores for contracts impacted by disasters. By
removing the 60 percent rule, we will also simplify the Star Ratings
calculations and continue to allow measure-level Star Ratings to be
calculated if all or most contracts qualify for an extreme or
uncontrollable circumstance in the future.
We proposed to amend Sec. Sec. 422.166(i)(9)(i),
422.166(i)(10)(i), 423.186(i)(7)(i), and 423.186(i)(8)(i) to remove the
60 percent rule beginning with the 2026 Star Ratings for non-CAHPS
measures, including the HOS measures, even though the measurement
period is slightly different for these measures. We solicited comments
on this proposal.
Comment: Most commenters supported the removal of the 60 percent
rule.
Response: CMS appreciates the support.
Comment: A commenter recommended delaying implementation of the 60
percent rule until Tukey outlier deletion is implemented.
Response: Starting with the 2024 Star Ratings, CMS will be
including Tukey outlier deletion. Removing the 60 percent rule will
begin with the 2026 Star Ratings. See section V.H. later in this rule
for a discussion of the codification of the Tukey outlier deletion
provision.
Comment: A commenter was concerned that enrollees in affected
contracts would be impacted by this change.
Response: The removal of the 60 percent rule will only impact which
contracts are included when we calculate the measure-level cut points.
It will not impact which contracts receive the extreme and
uncontrollable circumstances adjustment. For MA plans, Sec. 422.100(m)
addresses special requirements for when a disaster or emergency is
declared as described in Sec. 422.100(m)(2) and there is a disruption
of access to health care as described in Sec. 422.100(m)(6). The
changes in the Star Ratings extreme and uncontrollable circumstances
adjustment will not change application of Sec. 422.100(m) and the
beneficiary protections required under that regulation.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the revision at Sec. Sec. 422.166(i)(9)(i),
422.166(i)(10)(i), 423.186(i)(7)(i), and 423.186(i)(8)(i) to remove the
60 percent rule beginning with the 2026 Star Ratings for non-CAHPS
measures as proposed without modification.
2. Health Outcomes Survey (HOS) Measures
We adopted regulations for how Star Ratings would be calculated in
the event of extreme and uncontrollable circumstances in the April 2019
final rule. We explained in the April 2019 final rule (CMS-4185-F) that
for most measures, the extreme and uncontrollable circumstance
adjustment applies for disasters from 2 years prior to the Star Ratings
year (that is, a disaster that begins \168\ during the 2020 measurement
period results in a disaster adjustment for the 2022 Star Ratings). For
Part C measures derived from HOS, the disaster adjustment is delayed an
additional year due to the timing of the survey and 1-year recall
period. That is, for measures derived from the HOS, the disaster policy
adjustment is for 3 years after the extreme and uncontrollable
circumstance. For example, we noted at 84 FR 15772-15773 that the 2023
Star Ratings would adjust measures derived from the HOS for 2020
extreme and uncontrollable circumstances. We proposed to clarify in
Sec. 422.166(i)(3)(iv) the timing for HOS measure adjustments for
extreme and uncontrollable circumstances.
---------------------------------------------------------------------------
\168\ We use the start date of the incident period to determine
which year of Star Ratings could be affected, regardless of whether
the incident period lasts until another calendar year.
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[[Page 22295]]
We solicited comments on this proposal.
Comment: All commenters supported our proposal to clarify the
timing for HOS disaster adjustments.
Response: CMS appreciates the support for clarifying the timing of
the HOS measure adjustments for extreme and uncontrollable
circumstances at Sec. 422.166(i)(3)(iv).
Comment: A commenter suggested that CMS provide additional
clarification on the recall period for HOS measures and the ``hold
harmless'' timing for the adjustment for extreme and uncontrollable
circumstances.
Response: The measurement period or ``recall period'' is defined by
the measure steward. NCQA is the measure steward for the three HEDIS-
HOS measures derived from the HOS. As noted by the title of NCQA's
technical manual for the 2021 HOS data collection, HEDIS MY 2020 Volume
6: Specifications for the Medicare Health Outcomes Survey, the
measurement period is one year prior to data collection. Since 2020,
HOS survey administration occurs in late summer through fall. HOS is
currently fielded from late July through early November.
For Part C measures derived from HOS, the disaster adjustment is
three years after the extreme and uncontrollable circumstance. That is,
contracts affected by an extreme and uncontrollable circumstance in the
year prior to data collection are essentially ``held harmless'' and
receive the higher of the previous or current year's Star Rating for
each HOS and HEDIS-HOS measure (and corresponding measure score) for
the Star Ratings 3 years after the eligible extreme and uncontrollable
circumstance. For example, contracts affected by an extreme and
uncontrollable circumstance in 2021 will receive the higher of their
2023 or 2024 measure-level Star Rating (and corresponding measure
score) for each HOS and HEDIS-HOS measure in the 2024 Star Ratings as
described at Sec. 422.166(i)(3)(iv).
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the clarification at Sec. 422.166(i)(3)(iv) as proposed
without modification.
H. Calculation of Star Ratings (Sec. Sec. 422.166(a)(2)(i) and
423.186(a)(2)(i))
In the June 2020 final rule, we finalized use of Tukey outlier
deletion effective for the Star Ratings issued in October 2023 and
subsequent years. (85 FR 33833-36). In the rulemakings since that time,
we have not proposed to eliminate the Tukey outlier deletion aspect of
the Star Ratings methodology. In a final rule that appeared in the
Federal Register on January 19, 2021, we noted how the Tukey outlier
deletion provision had been adopted for the Part C and Part D Quality
Star Ratings. (86 FR 5917). As we stated in May 2022 final rule (87 FR
27766), we will implement Tukey outlier deletion beginning with the
2024 Star Ratings to help improve stability of cut points and prevent
cut points from being influenced by outliers. We further stated that
with Tukey outlier deletion, extreme outliers will be removed from
measure scores prior to clustering to prevent outliers from impacting
cut points for all contracts. However, it appears that the sentence in
Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i) (``Effective for the
Star Ratings issued in October 2023 and subsequent years, prior to
applying mean resampling with hierarchal clustering, Tukey outer fence
outliers are removed.'') was inadvertently removed from the codified
regulation text. At no point did CMS propose removal of the Tukey
outlier provision and CMS has, since its adoption in the June 2020
final rule, discussed implementation and application of the Tukey
outlier provision when applicable. We proposed a technical amendment to
fix this codification error from the May 2022 final rule. In addition,
although the provision regarding application of the Tukey outlier
deletion policy was originally at the end of paragraph (a)(2)(i) in
each regulation, we also proposed a non-substantive technical change to
move the sentence about removal of Tukey outer fence outliers earlier
in Sec. Sec. 422.166(a)(2)(i) and 423.186(a)(2)(i) since Tukey outlier
deletion is applied prior to the other steps. We believe that this
makes the regulation text clearer.
We solicited comments on this proposal.
Comment: Some commenters were concerned that Tukey outlier deletion
would result in disproportionate losses of QBPs among D-SNPs. They cite
an analysis performed by ZAHealth that found that the outlier policy
would result in 14 percent of D-SNP contracts losing their QBPs
compared to 7 percent of non-D-SNPs, and 27 percent of D-SNPs losing
rebate dollars compared to 20 percent of non-D-SNPs.
Response: We are unable to replicate the findings of ZAHealth.
Based on our simulations, we do not believe that contracts with D-SNPs
will be disproportionately impacted by Tukey outlier deletion. Using
the 2023 Star Ratings data, we examined the impact of introducing Tukey
outlier deletion assuming no guardrails. In the simulation,
approximately 8.2 percent of contracts with D-SNPs and 9.5 percent of
contracts without D-SNPs would lose a QBP by their overall rating
decreasing from 4 to 3.5 stars overall with Tukey outlier deletion
compared to without Tukey outlier deletion. The percentage of contracts
losing a QBP is slightly higher for non-D-SNP contracts. In the
simulation, 13.6 percent of contracts with D-SNPs would have a decrease
in rebates or lose rebates compared to 10.5 percent of contracts
without D-SNPs, a very small difference.
Comment: A commenter stated that CMS should withdraw its proposed
Tukey outlier deletion for the 2024 Star Ratings as it will create new
hurdles for plans that are trying to improve their ratings. Another
commenter supported Tukey outlier deletion but raised challenges in the
industry implementing multiple changes in the Star Ratings over the
next few years, while another commenter suggested CMS delay
implementation.
Response: Tukey outlier deletion is the only methodological
enhancement to the 2024 Star Ratings. The only other changes for the
2024 Star Ratings are the addition of two new measures, Transitions of
Care and Follow-up after Emergency Department Visit for Patients with
Multiple Chronic Conditions measures, to the Part C Star Ratings that
have been on the display page since the 2020 Star Ratings (2018
measurement year) finalized in the January 2021 final rule (86 FR 5921-
26) and the return of the updated Plan All-Cause Readmissions measure
finalized in the April 2019 final rule,\169\ a measure that has been
included in the Star Ratings program since the 2012 Star Ratings. CMS
finalized the application of Tukey outlier deletion for non-CAHPS
measures beginning with the 2024 Star Ratings in the CY 2021 final rule
published in June 2020 so this is not a new enhancement and contracts
have been on notice of this upcoming change. For the 2025 Star Ratings,
there are no additional measures or methodological enhancements. The
primary goal of setting cut points is to disaggregate the distribution
of scores into discrete categories such that each grouping accurately
reflects true performance. (85 FR 15752). Tukey outlier deletion
supports this goal by helping stabilize
[[Page 22296]]
measure-level cut points since they will not be influenced by one or
more contracts with outlier scores. Tukey outlier deletion does not
change what contracts need to do to improve. Interested parties have
requested that CMS minimize changes in cut points from year to year;
the implementation of Tukey outlier deletion supports this goal, so we
do not believe that the implementation of Tukey outlier deletion needs
to be delayed.
---------------------------------------------------------------------------
\169\ See the Announcement of Calendar Year (CY) 2022 Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment
Policies, page 97, which delayed the return of the Plan All-Cause
Readmissions measure to the Star Ratings for an additional year due
to the disruption to data collection posed by the COVID-19 pandemic.
---------------------------------------------------------------------------
Comment: A commenter stated that an agency must use the same
procedures when they amend or repeal a rule as they used to issue the
rule. Additionally, this commenter noted that CMS cannot make a change
in the substantive rules that apply to Star Ratings without undertaking
rulemaking and cannot rely on the Regulatory Impact Analysis used in
2020, given that other policies related to the mechanism for
calculating the Star Ratings continue to evolve.
Response: CMS proposed and provided public notice and an
opportunity to comment on revising Sec. Sec. 422.166(a)(2)(i) and
423.186(a)(2)(i) to include the Tukey outlier deletion provision that
was inadvertently removed from the regulation text in a May 2022 final
rule. The commenter responded to that proposal and had the opportunity
to submit comments on the substance of the Tukey outlier deletion.
Comments on the proposed correction were submitted and are being
addressed in this final rule. After the adoption of the Tukey outlier
deletion provision in the June 2022 final rule (85 FR 33833-36), CMS
would need additional rulemaking to change that policy and change the
Star Ratings methodology to eliminate that provision, which did not
happen.
In addition, the June 2020 final rule adopting the Tukey outlier
deletion step in the Star Ratings methodology (85 FR 33891-33893)
adequately discussed the cost estimates for the implementation of Tukey
outlier deletion. Those estimates were projected based on initial
implementation for the 2024 Star Ratings, which the regulation text
adopted in this rule at Sec. Sec. 422.166(a)(2)(i) and
423.186(a)(2)(i) provides for, so the projected cost analysis remains
relevant and accurate. We still measure performance in the same way at
the measure-level and calculate the Star Ratings in a similar manner.
We believe more recent data from 2020 and 2021 performance years would
be less useful to simulate the impact of the Tukey outlier deletion
process in future years. First, the performance data from the early
years of the pandemic have been more impacted by COVID-19, and we would
expect that there would be more fluctuations in scores during this
time, including potentially more outliers. Second, some of the changes
we made to the Star Ratings to account for the uncertainties caused by
COVID-19, including expanding the existing hold harmless provision for
the Part C and D improvement measures to include all contracts for the
2022 Star Ratings,\170\ and all contracts qualifying for the disaster
adjustment for the 2022 Star Ratings, make it difficult to use more
recent data to predict future performance.
---------------------------------------------------------------------------
\170\ See COVID-19 interim final rule (IFC) (CMS-1744-IFC)
issued on March 31, 2020.
---------------------------------------------------------------------------
Comment: A commenter claimed there would be significant impact on
3, 4, and 5-star cut points.
Response: Outlier deletion does not significantly impact 3, 4, and
5-star cut points for most measures. For example, we examined the 2023
Star Ratings data with no guardrails to focus on the effect of Tukey
outlier deletion at the measure level. While we note that the 2023 Star
Ratings data may still show some impacts of the COVID-19 pandemic and
therefore may have more outliers than data not impacted by the
pandemic, we still found that outlier deletion did not significantly
impact 3, 4, and 5-star cut points for most measures. In our analyses,
8 Part C measures (40 percent of the non-CAHPS measures) have no
changes across all Star Rating thresholds. Similarly, for Part D
measures, there are 4 measures (44 percent of the non-CAHPS measures)
with no changes for MA-PD contracts and 4 measures (44 percent) with no
changes for PDP contracts. Of the remaining measures, most of the
changes were for the 1-2 star cut points, with most measures having no
significant impact at the 3, 4, and 5-star cut points. The Tukey
outlier approach lessens the influence of a few outliers on cut point
formation, leading to more reliable and stable thresholds, especially
for the 1-2 star cut points. This analysis is based on data available
at https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovGenIn/PerformanceData in the Downloads section under
the Tukey Outlier Deletion Simulations.
Comment: A couple of commenters claimed that Tukey outlier deletion
will decrease predictability and stability of cut points. A commenter
gave as an example the Plan Makes Timely Decisions about Appeals
measure where there would have been more significant changes to cut
points with outliers removed for the 2023 Star Ratings.
Response: The primary effect of Tukey outlier deletion is to make
thresholds more accurate, reliable, and stable. Outlying contract
scores can have undue influence on cut points, and this can lead to a
single contract having a major influence on cut point values used to
assign stars for all contracts. Removing outliers means the thresholds
are more stable since they are not influenced by scores on either
extreme of the distribution. The commenter cited the Plan Makes Timely
Decisions about Appeals measure where there were more significant
changes to the thresholds in CMS's simulation using 2023 Star Ratings;
this is an extreme example of how outliers influence cut points and is
rare in nature. For Part C measures in the 2023 simulations, 8 measures
(40 percent of the non-CAHPS measures) had no observed outliers, while
only 2 measures (10 percent), including Plan Makes Timely Decisions
about Appeals, had greater than 4 percent of contracts being classified
as outliers, and the remaining 50 percent of measures had 3.5 percent
or less (and generally less than 1 percent) of contracts being
classified as outliers; similar trends were observed for Part D
measures.
Additionally, we compared year over year stability of thresholds
between simulations that included outlier deletion and simulations that
did not remove outliers (without guardrails). The changes in thresholds
between 2022 and 2023 were much smaller when outliers were removed as
compared to when they were not removed. For 10 of the 20 non-CAHPS Part
C measures, there were thresholds that changed by more than 5
percentage points if outliers were not removed, whereas only 5 measures
had this property when outliers were removed. Outlier deletion does
stabilize Part C cut points, and results in more year-to-year stability
when outliers are deleted compared to simulations that do not use
outlier deletion. For MA-PD contracts, 4 of 9 Part D measures had
thresholds that change by more than 5 percentage points if outliers are
not removed compared to only 2 measures with thresholds that change by
more than 5 percentage points if outliers were removed. Outlier
deletion stabilizes Part D cut points for MA-PD contracts, and results
in more year-to-year stability when outliers are deleted compared to
simulations that do not use outlier deletion. Outlier deletion had a
smaller effect on Part D thresholds for PDP contracts.
Comment: A couple of commenters claimed that outlier deletion will
increase all cut points significantly and
[[Page 22297]]
move them closer together, decreasing reliability.
Response: Outlier deletion may increase or decrease cut point
thresholds, depending on the shape of the measure's score distribution.
Closer cut points do not necessarily imply lower reliability or lessen
the ability to distinguish between contracts. Tukey outlier deletion
does not increase thresholds for all measures. In a simulation using
the 2023 Star Ratings data, we calculated Tukey outlier deletion before
applying guardrails as will be done when Tukey outlier deletion is
implemented. This also allows us to distinguish the impact of Tukey
outlier deletion from the impact of applying guardrails. In this
simulation, there were 8 Part C measures (40 percent of measures) that
had no change at all in the thresholds. For Part D there were 4
measures (44 percent of measures) with no changes for MA-PD contracts
and 4 measures (44 percent) with no changes for PDP contracts.
Tukey outlier deletion refines measurement by ensuring cut points
reflect true variation in performance and are not unduly influenced by
low or high performance of a few outlying contracts. Lessening the
influence of outliers on cut point formation leads to more reliable and
stable cut points.
Comment: A commenter claimed that Tukey outlier removal will harm
plans performing at lower star levels.
Response: Tukey outlier removal's primary effect is to make
thresholds (that is, cut points) more accurate, reliable, and stable.
Removing outliers means the thresholds are more stable and more
accurately categorize performance across the industry into measure-
level Star Ratings, especially at lower levels, since they are not
influenced by outlier scores, and means that a single contract has
limited impact on thresholds. These are desirable properties of
thresholds. Contracts performing at the lower level are still
incentivized to improve performance through the improvement measure,
which is highly weighted in the calculation of Star Ratings.
Additionally, the more such contracts improve their performance on any
given measure, the higher their measure rating can be.
Comment: A commenter recommended replacing the clustering
methodology with percentile thresholds.
Response: The Star Ratings system uses the clustering methodology
for non-CAHPS measures because this groups contracts into natural
clusters based on the distribution of performance, whereas percentile
thresholds would force a certain percent of contracts to receive each
star level, regardless of how similar or different those contracts
perform. There are situations where it would not make sense to force a
fixed percent of contracts into the highest star level, and other
contracts into lower star levels, because there may not be meaningful
differences between the top group of contracts based on percentile
ranking and the next few contracts. The clustering methodology avoids
the need to specify percentile thresholds and instead places contracts
into their natural groupings based on actual plan performance.
After considering the comments we received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the technical amendment to fix the Tukey outlier deletion
codification error from the May 2022 final rule and the non-substantive
technical change to move the sentence about removal of Tukey outer
fence outliers earlier in Sec. Sec. 422.166(a)(2)(i) and
423.186(a)(2)(i), since Tukey outlier deletion is applied prior to the
other steps. The Tukey outlier deletion will be applied beginning with
the 2024 Star Ratings.
VI. Updates to Programs of All-Inclusive Care for the Elderly (PACE)
Policy
A. Contract Year Definition (Sec. 460.6)
Sections 1894(a)(9) and 1934(a)(9) of the Act define the trial
period for PACE organizations as the first 3 contract years operating a
PACE program under a PACE program agreement. Sections 1894(e)(4) and
1934(e)(4) of the Act require CMS, in cooperation with the State
administering agency, to conduct a comprehensive annual review of the
PACE organization's operation of the PACE program during the trial
period to assure compliance with all significant requirements. The rule
titled ``Medicare and Medicaid Programs; Programs of All-Inclusive Care
for the Elderly (PACE)'', which appeared in the November 24, 1999 issue
of the Federal Register (64 FR 66234) (hereinafter referred to as the
1999 PACE interim final rule) defined a contract year at Sec. 460.6 as
the term of the PACE program agreement, which is a calendar year,
except that a PACE organization's initial contract year may be from 12
to 23 months, as determined by CMS. This enables CMS to adjust the
length of the initial contract year so that it always ends on December
31 and subsequent contract years align with a standard annual calendar
year consisting of 12 months (64 FR 66236).
As discussed in the proposed rule (87 FR 79635), CMS is required to
conduct comprehensive reviews during a PACE organization's trial period
to assess all significant regulatory requirements, and these reviews
must be conducted on an annual basis for the first 3 contract years.
CMS must conduct the first trial period review (for example, audit)
within the first contract year in order to comply with the statutory
and regulatory requirements. However, CMS's ability to schedule and
conduct the first trial period audit is limited by when a PACE
organization enters into a program agreement, when the PACE
organization begins enrolling participants during their first contract
year, and the initial contract year timeframe in the current contract
year definition in Sec. 460.6. The timing of the initial contract year
audit impacts the timing of subsequent audits, leaving CMS with
increasingly narrow timeframes to audit within statutory and regulatory
requirements.
We proposed to amend the definition of contract year at Sec. 460.6
to state that a PACE organization's initial contract year may be 19 to
30 months, as determined by CMS, but in any event will end on December
31. Under the proposed contract year definition, although the duration
of the initial contract year of the trial period would change, the
initial contract year would continue to begin when the program
agreement goes into effect on the first day of the relevant month and
end on December 31 to ensure subsequent contract years follow the
standard annual calendar year cycle. For PACE organizations with an
initial contract year start date of January 1 through June 1, CMS would
extend the initial contract year through the following year, and for
PACE organizations with an initial contract year start date of July 1
through December 1, CMS would extend the initial contract year through
the second succeeding year.
The proposed rule solicited comment on whether we should consider a
different timeframe for the initial contract year, such as 25 to 36
months.
As explained in the proposed rule at 87 FR 79636, we do not believe
revising the definition of contract year as proposed would create any
additional burden for PACE organizations, as the effect of the proposed
change would be to provide CMS with more flexibility when scheduling
initial trial period audits without placing new requirements on CMS or
PACE organizations, and we do not anticipate that the proposed change
would have an impact on the Medicare Trust Fund.
[[Page 22298]]
Comment: Comments on CMS's proposal to amend the contract year
definition at Sec. 460.6 varied. A commenter supported the contract
year definition change as proposed. Another commenter agreed with CMS's
need for greater flexibility with scheduling PACE organizations' first
year trial period audits, but recommended a longer initial contract
year timeframe of 25 to 36 months to allow for even more flexibility
with scheduling PACE organizations' first trial period audits than the
19 to 30 month timeframe. However, the majority of commenters expressed
concern with the proposal to amend the definition of contract year
Sec. 460.6 to state that a PACE organization's initial contract year
may be 19 to 30 months, as determined by CMS, but in any event will end
on December 31. These commenters agreed with CMS's rationale for the
proposed changes to the contract year definition, particularly CMS's
concern that PACE organizations should have sufficient time to operate
before their first trial period audit, which must take place during the
initial contract year. However, most of these commenters recommended
that CMS keep the current contract year definition, which has an
initial contract year timeframe of 12 to 23 months, as determined by
CMS, and utilize current administrative flexibilities to schedule trial
year audits. They expressed concern that the proposed contract year
definition's longer initial contract year could delay service area
expansions, since PACE organizations must successfully complete their
first trial period audit and implement acceptable corrective action
plans, if applicable, before CMS and the State administering agency
will approve a service area expansion or PACE center site expansion, as
required at Sec. 460.12(d). Another commenter suggested that CMS
should amend the contract year definition to allow PACE organizations
to choose their initial contract year timeframe, either the codified
timeframe of 12 to 23 months, as determined by CMS, or the proposed
timeframe of 19 to 30 months, as determined by CMS, and ending on
December 31. This commenter recommended providing both options to PACE
organizations for reasons similar to those discussed by other
commenters. They suggested that the proposed initial contract year
definition timeframe may give PACE organizations more time to stabilize
operations before their first trial period audit, but expressed concern
about the longer timeframe's consequences for PACE organizations'
growth and expansion.
Response: Although a majority of commenters expressed support for
flexibility when scheduling PACE organizations' first trial period
audit, they also expressed concern that amending the definition of
contract year at Sec. 460.6 to lengthen the initial contract year
timeframe to 19 to 30 months, as proposed, could affect the timing of
the first trial period audit, and subsequently, the PACE organizations'
ability to expand their service areas. As a result, the commenters
recommended that CMS maintain the current initial contract year
timeframe of 12 to 23 months to balance the timing of the first trial
period audit, such that PACE organizations have sufficient time to
operate before their first trial period audit, with consideration for
services area expansions. We are not persuaded to maintain the current
initial contract year timeframe of 12 to 23 months, as the majority of
commenters recommended. As discussed in the proposed rule, CMS has
limited flexibility when scheduling audits under the current contract
year definition at Sec. 460.6. This presents significant operational
challenges for CMS, since CMS must review PACE organizations within the
timeframes required by statute and regulation. These operational
challenges are especially prevalent for shorter initial contract year
durations, such as 12 to 18 months, which would be alleviated under the
proposed longer initial contract year timeframe of 19 to 30 months. As
stated in the proposed rule, we understand how the timing of the first
trial period audit affects service area and PACE center site expansion
applications, and we reiterate our commitment to ensuring timely
completion of PACE organizations' first trial year audit in order to
balance the impact on those applications with CMS's responsibilities
related to program integrity and ensuring the wellbeing of PACE
participants. Although our proposal, if finalized, would lengthen the
initial contract year timeframe to 19 to 30 months, we still intend to
promptly schedule first year reviews taking into consideration when
organizations begin enrolling participants and whether an organization
has had sufficient time to operate. We are also not persuaded to modify
the proposal to lengthen the initial contract year timeframe to 25 to
36 months, as suggested by a commenter. Although the commenter
expressed general support for the flexibility of a longer initial
contract year timeframe, the commenter did not provide a specific
justification for lengthening the initial contract year timeframe to 25
to 36 months. We do not believe this additional time is necessary to
ensure that PACE organizations have sufficient time to operate before
their first year trial period audits, nor that it is necessary in order
for CMS to have sufficient flexibility in scheduling first year trial
period audits. Additionally, since the current contract year definition
and initial contract year timeframe do not offer CMS necessary
flexibility for scheduling PACE organization's first trial period
annual review, we are unable to provide PACE organizations with the
option to choose their preferred timeframe between the current and
proposed initial contract timeframes. Therefore, we are finalizing our
proposed changes to the definition of contract year at Sec. 460.6
without modification.
B. Clarification of PACE Enforcement Authority for Civil Money
Penalties and Intermediate Sanctions (Sec. 460.40(b))
In the final rule titled ``Medicare and Medicaid Programs; Programs
of All-Inclusive Care for the Elderly (PACE)'' (84 FR 25610), which
appeared in the June 3, 2019 issue of the Federal Register, CMS amended
Sec. 460.40 by adding paragraph (b), which establishes that CMS has
the discretion to take alternative enforcement actions in the form of
civil money penalties (CMP) or a suspension of enrollment of Medicare
beneficiaries by, or payment to, a PACE organization if CMS makes a
determination that could lead to a termination of a PACE program
agreement under Sec. 460.50. In order to terminate a contract under
paragraph (b) of Sec. 460.50, CMS or the State administering agency
must determine that both of the following circumstances exist: (1)
there are significant deficiencies in the quality of care furnished to
participants; or the PACE organization failed to comply substantially
with conditions for a PACE program or PACE organization under this
part, or with terms of its PACE program agreement, including making
payment to an individual or entity that is included on the preclusion
list, defined in Sec. 422.2; and (2) within 30 days of the date of the
receipt of written notice of a determination made under paragraph Sec.
460.50(b)(1), the PACE organization failed to develop and successfully
initiate a plan to correct the deficiencies, or failed to continue
implementation of the plan of correction.
In circumstances where CMS has made a determination under Sec.
460.50 that could lead to termination, CMS
[[Page 22299]]
would likely impose a CMP or suspension of enrollment and/or payment on
a PACE organization prior to terminating the PACE organization, as
authorized by Sec. 460.40(b) (unless there was imminent risk to a PACE
participant). This is because CMS views CMPs and suspensions of
enrollment and/or payment as corrective in nature, since they are
imposed when the PACE organization has been found noncompliant, and
they provide time for the PACE organization to correct the issue(s)
that led to the noncompliance with the ultimate goal of mitigating any
actual or potential harm for PACE participants.
As previously stated, in order for CMS to take any enforcement
action (CMP, suspension of enrollment or payment, termination) on a
PACE organization based on the grounds for termination set forth in
Sec. 460.50(b), the PACE organization must fail to develop and
successfully initiate a plan to correct the deficiencies, or fail to
continue implementation of the plan of correction within 30 days of
receiving notice. Given that CMPs and suspensions of enrollment and/or
payment are corrective in nature and imposed prior to termination, CMS
believes that providing PACE organizations an opportunity to correct
prior to imposing a CMP or suspensions of enrollment and/or payment is
unnecessary and most importantly an impediment to CMS' ability to
protect PACE participants from potential harm.
For these reasons, we proposed to revise Sec. 460.40(b) by adding
the following: ``If CMS or the State administering agency determines
that the circumstances in Sec. 460.50(b)(1) exist, neither CMS nor the
State administrating agency has to determine that the circumstances in
460.50(b)(2) exist prior to imposing a CMP or enrollment and/or payment
suspension.''
Comment: A few commenters suggested that this proposal would shift
from a collaborative process of informing and providing PACE
organizations an opportunity to self-disclose and self-correct
deficiencies to a process that is overly punitive and has the potential
to affect PACE organizations' ability to render services due to the
financial risk of CMPs and suspension of enrollment and/or payments.
Response: We disagree with this comment. CMS has spent considerable
time over the years increasing the amount of collaboration between CMS
and PACE organizations before determining whether an enforcement action
is warranted. This due diligence occurs both during the audit process,
as well when CMS is reviewing a violation for a potential enforcement
action. In addition, the proposal if finalized would not negatively
impact PACE organizations' ability to self-disclose and self-correct
compliance deficiencies to CMS at any time, including during the audit
and enforcement analysis stages. PACE organizations will continue to be
permitted, and encouraged to self-disclose and self-correct issues
found before or during audits, as well as issues discovered by PACE
organizations outside of the audit. CMS considers such self-disclosure
and self-correction as potential mitigating factors for violations/
failures of the PACE program agreement and/or requirements. CMS also
considers the financial condition of PACE organizations when
determining whether to impose an enforcement action.
Comment: A few commenters incorrectly stated that current
regulations require CMS to provide PACE organizations 30 days to
correct deficiencies prior to imposing a CMP or suspension of
enrollment and/or payment in all cases.
Response: We would like to clarify that CMS has the authority to
impose enforcement actions without first providing a 30-day notice to
PACE organizations under Sec. 460.40.
We received comments on the following topics which were outside the
scope of our proposal and to which we are therefore not responding: (1)
the circumstances that exist prior to CMS imposing an enforcement
action; and (2) the thresholds CMS uses in determining whether to
impose an enforcement action.
After consideration of the comments received, we are finalizing our
proposed changes to Sec. 460.40(b) without modification.
C. PACE Contracted Services (Sec. 460.70)
As discussed in the proposed rule at 87 FR 79646, CMS originally
included a list of required medical specialties at Sec. 460.92 as part
of the 1999 PACE interim final rule. The proposed rule explained that,
in the 2006 final rule, CMS removed the list of medical specialties
that appeared at Sec. 460.92 based on the rationale that it was not
possible to include an exhaustive list of all required services in PACE
in the regulation and that PACE organizations might misconstrue the
omission of any medical specialty from the list of required services at
Sec. 460.92 to mean that that type of specialty service was not
required (Id.). The proposed rule further explained how, in the 2006
final rule, CMS revised Sec. 460.92 to state that PACE organizations
are required to cover all Medicare-covered services, all Medicaid-
covered services included in the State plan, and any other services
determined necessary by the IDT (Id.). The proposed rule noted that,
when CMS removed the list of medical specialties from Sec. 460.92, we
stressed that PACE organizations were still expected to have
contractual arrangements with primary care physicians (PCPs) and
specialists to meet the needs of their participants (Id.).
As explained in the proposed rule, we have seen through our
monitoring and oversight efforts that some PACE organizations are not
providing timely access to medical specialists (87 FR 79646). The
proposed rule noted that we have found through our oversight activities
that delays in accessing medical specialists sometimes occur as a
result of PACE organizations not having contracts in effect for the
medical specialties commonly utilized by PACE participants (Id.). We
believe the delays experienced by participants may be reduced by PACE
organizations effectuating contracts with medical specialists before a
participant needs a particular medical specialty service. To address
this issue, we proposed to add back into the PACE regulations the list
of medical specialty services identified in the original PACE protocol
as services that PACE organizations must ensure access to as a minimum
requirement. Specifically, we proposed to amend Sec. 460.70(a) to
specify that the written contracts that PACE organizations are required
to have with each outside organization, agency, or individual that
furnishes administrative or care-related services not furnished
directly by the PACE organization must include, at a minimum, the
medical specialties listed in Sec. 460.70(a)(1). We proposed to
establish at new Sec. 460.70(a)(1) that, at minimum, except as
provided for in Sec. 460.70(a)(4), PACE organizations must have
contracts in place for the following medical specialties:
anesthesiology, audiology, cardiology, dentistry, dermatology,
gastroenterology, gynecology, internal medicine, nephrology,
neurosurgery, oncology, ophthalmology, oral surgery, orthopedic
surgery, otorhinolaryngology, plastic surgery, pharmacy consulting
services, podiatry, psychiatry, pulmonary disease, radiology,
rheumatology, general surgery, thoracic and vascular surgery, and
urology. We considered adding this list of medical specialties to Sec.
460.92, where it was originally located;
[[Page 22300]]
however, as explained in the proposed rule, the requirement is better
suited in Sec. 460.70(a)(1) for several reasons. First, most, if not
all, medical specialists do not work directly for the PACE
organization, and rather are contracted providers that would need to
adhere to the other requirements in Sec. 460.70. Second, by adding
this requirement into the contracted services provision of the
regulation, we believe it will allow CMS and State administering
agencies to better assess PACE organizations' readiness to enroll by
ensuring these contracts are in place prior to participants enrolling
in the organization.
While we proposed to add a list of medical specialty services back
into the PACE regulations, we continue to maintain that this is not an
exhaustive list of all medical specialists that the PACE organization
may be required to provide access to. For example, if the IDT
determines that a participant needs to see a hematologist, the PACE
organization would be required to provide access to that specialist in
a timely manner. The specialties we proposed to add in Sec.
460.70(a)(1) would represent a minimum requirement for all PACE
organizations; each PACE organization should consider the needs of its
participants to determine what additional medical specialists may be
necessary for its network to be sufficient. While we proposed to add
back into regulation the 25 medical specialty services identified in
the original PACE protocol, we solicited comment on whether CMS should
include the following additional specialty services in the list of
minimum required services: endocrinology, hematology, immunology,
neurology, colorectal surgery, palliative medicine, infectious disease,
physical medicine and rehabilitation. Additionally, we solicited
comment on whether the proposed list of medical specialties should
include any types of behavioral health specialties in addition to
psychiatry such as psychologists or licensed clinical social workers.
When submitting comments on this proposal, we requested that commenters
indicate whether they have any concerns with CMS adding any or all of
the previously discussed specialty services to the list, and that
commenters describe any such concerns with specificity to help us
understand the nature and basis of those concerns. We believe a PACE
organization must be able to provide access to all of these specialty
services when a participant needs them and, based on our oversight
experience, that additional specialty services are often necessary for
the PACE population.
We proposed at new Sec. 460.70(a)(2) to require a PACE
organization to execute contracts with specialists prior to enrollment
of participants, and to require the PACE organization to maintain such
contracts on an ongoing basis to ensure participants receive
appropriate and timely access to all necessary care and services. We
clarified that we are not requiring PACE organizations to contract with
individual specialists in situations where the PACE organization has
contracted with a provider or practice that offers multiple
specialties. In an instance of a medical provider or practice offering
multiple specialties, the contract between the practice or provider,
such as a hospital group, and the PACE organization would meet the
requirement to have contracts in place for whatever specialties are
included under the contract between the practice or provider group and
the PACE organization. In the event a hospital group only contracts
with a PACE organization to provide some of the specialty services it
offers within its practice, the PACE organization would be expected to
contract separately for any services not covered under the contract.
We believe it is appropriate for PACE organizations to be able to
demonstrate that they have contracts in place that provide participants
with sufficient and direct access to these commonly needed specialists
prior to participants enrolling in the organization, and that PACE
organizations maintain sufficient and direct access to these commonly
needed specialists for enrolled participants on an ongoing basis.
Through our auditing and oversight efforts, we have seen lengthy delays
in specialist referrals when an organization has to contract with a new
specialist, and waiting until a participant enrolls or has need of the
specialist may create unreasonable delays in the participant being able
to access that specialist. Additionally, as we noted in the 2006 PACE
final rule (71 FR 71296), PACE organizations are financially
responsible for all of their participants' health care needs, and
delays in referrals for specialist services may have a significant
impact on the PACE organization's financial viability. Failure to
provide timely specialist referrals may lead to more expensive care,
including the need for institutionalization, which can drive up
operating costs for a PACE organization.
We proposed to establish at Sec. 460.70(a)(3) that a PACE
organization must make reasonable and timely attempts to contract with
medical specialists. PACE organizations are responsible for ensuring
that participants have reasonable and timely access to medical
specialty services, and that PACE organizations are responsible for
taking appropriate steps in ensuring that they have suitable contracts
in place in order to facilitate timely access to medical specialty
services. We did not propose to establish specific criteria for
determining whether ``reasonable'' attempts have been made for purposes
of proposed Sec. 460.70(a)(3), as what is reasonable would depend on
the facts and circumstances of the case. For example, in an area with
multiple providers in a specific medical specialty, it would not be
reasonable to only attempt to contract with a single provider, if that
provider indicated they were unwilling to contract with the PACE
organization.
We further proposed to establish at Sec. 460.70(a)(3)(i) that if
at any time a PACE organization is unable to directly contract with a
specific entity to provide specialist services to participants, the
PACE organization must still ensure ongoing access to necessary care
and services that would otherwise be provided to participants by a
contracted specialist, and that the participant's needs are met,
through a different mechanism which may include hospitalization. As
noted in the 2006 PACE final rule (71 FR 71296), we understand that in
certain circumstances executing multiple contracts for a specific
specialty may be difficult due, in part, to a limited number of
specialists in certain geographic areas; however, we stress that PACE
organizations continue to be responsible for meeting all of the
participant's needs, even if there is not a direct contract in place.
Additionally, under our proposal at Sec. 460.70(a)(3)(ii) we expect an
organization to promptly report any contracting problems to CMS and the
SAA, and include information on what attempts were made, the reason why
a contract was not effectuated, and the PACE organization's plan to
provide access to the necessary services. This reporting may be
initiated by the PACE organization when reasonable attempts to contract
have been made, and were unsuccessful; or it may be done in response to
CMS or the SAA inquiring as to the status of the contracts. For
example, during the State readiness review, the SAA may inquire as to
the status of the PACE organization's contracts with medical
specialists. When reporting these contracting issues to CMS or the SAA,
the PACE organization should be prepared to
[[Page 22301]]
describe its attempt(s) to contract with medical specialists, why a
contract was not able to be effectuated, and how the PACE organization
plans to ensure participants' needs are met. For example, if there is
only one specialist in a service area, and they are not accepting new
participants, the PACE organization must show it attempted to contract
and how it will ensure participants are able to receive the services
that the specialist would have provided. In other words, in this
example, the PACE organization must show that it reached out to the one
specialist in the area, attempted to contract with that specialist, and
was unsuccessful.
Finally, in order to account for PACE organizations that may choose
to employ some medical specialists directly, such as dentists and
podiatrists, proposed Sec. 460.70(a)(4) exempts a PACE organization
from the contract requirements in Sec. 460.70(a)(1) and (2) with
respect to a particular medical specialty if a PACE organization
employs one or more individuals prior to contracting who are legally
authorized and, if applicable, board certified, in that medical
specialty. While we generally expect that PACE organizations would have
contracts in place for most of the specialties in this list, we
understand that there are times when a PACE organization may directly
employ a provider in one of the listed specialties. In those instances,
assuming the participants have sufficient access to the type of
specialist that is employed by the PACE organization, the PACE
organization would not be required to contract with additional
providers in that specialty. However, the organization must have the
specialist actively employed prior to enrollment of participants in
order for the exception to be met and cannot rely on future employment
to satisfy this requirement. We believe that by modifying this
provision as proposed we would not increase the burden on PACE
organizations as they are already required to either obtain and
maintain contracts with or employ medical specialists.
Comment: The majority of commenters supported the proposal to add
the 25 specialty types back into regulation under Sec. 460.70(a)(1),
but requested that CMS consider ways PACE organizations can meet the
requirement to contract with the specialties listed. Methods suggested
include contracting with telehealth providers and/or contracting for a
specified duration of time with an out-of-network specialist to provide
a limited service (or services) to a participant when that specialty
provider is not immediately available in the PACE organization's
network. Commenters specifically quoted Sec. 422.116(d)(5), which
allows MA organizations 10 percentage point credits for telehealth when
the plans contract with certain specified providers to meet network
adequacy requirements. These commenters indicated that Sec.
422.116(d)(5) supports the spirit of allowing telehealth providers into
contracted networks as a tool to provide benefits.
Response: We thank commenters for their support for our proposal to
add the list of 25 medical specialties for which PACE organizations
must have written contracts in place prior to enrolling participants.
PACE organizations are already permitted flexibility in providing
required services with specialists via alternative methods. Nothing in
current regulation prohibits PACE organizations from contracting with
telehealth specialists, contracting with providers outside of the
service area, or creating temporary contracts to meet participant
needs. PACE is distinctive from Medicare Advantage because PACE covers
more than the Medicare benefit under Sec. 460.92, which requires PACE
to cover all Medicare-covered services, all Medicaid-covered services
per the State's approved Medicaid plan, and any other necessary
services approved by the IDT. Additionally, Sec. 460.90(a) states that
Medicare and Medicaid benefit limitations and conditions relating to
amount, duration, scope of services, deductibles, copayments,
coinsurance, or other cost-sharing do not apply.
While we do not believe that telehealth services are prohibited in
PACE, PACE organizations must ensure that all other regulatory
requirements are met when providing services in that manner. For
example, decisions to provide a service must be based on the
participant's current medical, physical, emotional, and social needs as
required under Sec. 460.92(b)(1). When considering the participant's
condition, the IDT should also consider the service in question. The
IDT may determine telehealth is appropriate for one participant in one
situation, but not another participant based on the participant's
condition. For example, a dental visit would very rarely be appropriate
for telehealth services; however, a behavioral health visit may be
appropriate depending on the participant's condition. Additionally, the
PACE organization would have to ensure all other regulatory
requirements are met, including contracting requirements for telehealth
providers, and the PACE organization would not be able to utilize
telehealth for services that are specifically required to be in-person
per the regulations, such as routine assessments under Sec. 460.104.
Additionally, if a PACE organization determines that a participant
needs a service, and the PACE organization does not have a long-term
contract in place, organizations may utilize flexibilities such as
Letters of Agreement or Memoranda of Understanding with out-of-network
providers, in order to ensure participants have access to the care and
services they need.
Comment: Numerous commenters requested that CMS add palliative
medicine to the list of contracted services in response to our
solicitation for comment. Several commenters also requested that CMS
consider adding other specialties to the proposed list of 25 medical
specialties, including physical medicine and rehabilitation, infectious
disease, and neurology. Another commenter requested that the list of
required medical specialties include other behavioral health
specialties in addition to psychiatry, as well as all eight specialties
for which we solicited comment, namely: endocrinology, hematology,
immunology, neurology, colorectal surgery, palliative medicine,
infectious disease, physical medicine and rehabilitation.
Response: We agree with the addition of palliative medicine to the
list of required specialties based on the needs of the population in
PACE, and we are modifying the proposed regulation to include
palliative medicine. We are not persuaded to require any of the
additional proposed specialties at this time due to the often-limited
availability of specialty providers, particularly in rural areas.
However, as we stated in the proposed rule, the specialties included at
Sec. 460.70 are not an exhaustive list of all medical specialties that
the PACE organization may be required to provide access to (87 FR
79647). While we are not including endocrinology, hematology,
immunology, neurology, colorectal surgery, infectious disease, physical
medicine and rehabilitation, or additional behavioral health
specialties in the required contracted services, nothing precludes the
PACE organization from contracting with any specialty, nor does this
provision eliminate or change the requirement for a PACE organization
to have in place a written contract for a specialty service when the
IDT has deemed the service necessary to meet the needs of participants.
Ultimately, PACE organizations are required to provide
[[Page 22302]]
services that are necessary for participants, even if the PACE
organization does not have a specific contract in place for that
service.
Additionally, in the proposed rule, we identified neurosurgery as
one of the 25 required medical specialties; however, it was
inadvertently left out of the proposed regulation text. We are
therefore adding it back in to the regulation text at Sec.
460.70(a)(1)(x).
Comment: Another commenter suggested that CMS define ``reasonable
and timely attempts to contract'' and ``timely access to services''.
Response: As we stated in the proposed rule, we specifically chose
not to include language defining reasonable and timely attempts to
contract ``as what is reasonable would depend on the facts and
circumstances of the case'' (87 FR 79647). It is not possible for CMS
to anticipate every circumstance that may arise which may prevent or
substantially impact a PACE organization's ability to contract with one
of the required specialties. Our intent is to work with PACE
organizations and review their efforts to contract with the required
specialties, as well as their ability to provide medically necessary
services to meet participant needs in the event the PACE organization
is unable to contract with one of the required specialty services.
The meaning of ``timely access to services'' also depends on the
facts and circumstances of each case and the participant's condition
and assessed needs. The PACE organization will need to consider the
nature of the participant's condition and the urgency with which it
must be treated when determining what constitutes ``timely access to
services.''
Comment: A commenter did not support the proposed requirements for
PACE organizations to have contracts in place for the listed 25 medical
specialties because the commenter did not believe the proposal
addressed the issue of ensuring timely access to services identified as
necessary. The commenter noted that even enrollees of larger insurers
with broad and diverse networks have struggled to obtain necessary
specialist appointments in a timely manner.
Response: While we acknowledge that not all cited instances of a
PACE organization failing to provide medically necessary services in a
timely manner were a direct result of not having contracts with
specialists, the proposed requirement is meant to mitigate situations
where not having an executed contract in place with specialists caused
significant delay in participants accessing necessary services. For
instance, we have seen on audit where PACE organizations did not have a
contract with a specialty service prior to enrollment, and delays in
obtaining services for participants were exacerbated because of a lack
of a contract. We believe the failure to execute contracts until the
need for the service arises substantially contributes to the delay in
participants receiving medically necessary care.
We also acknowledge that specialty provider availability continues
to be a struggle across some health care settings. However, because of
the time and effort required in negotiating contracts, we believe it is
best practice to complete contract negotiations prior to participant
enrollment to reduce additional delays in receiving services and that
it is imperative for PACE organizations to maintain contracts on an
ongoing basis to mitigate delays in participants receiving timely care.
Comment: Several commenters expressed concern regarding CMS's
reliance on 2021 audit data when determining to include the list of 25
medical specialties in the contracted services provision. These
commenters noted that this audit data was collected during the COVID-19
pandemic which impacted medical specialty services on a national level
and, therefore, is not an accurate reflection of failures on the part
of PACE organizations but evidence of a broader issue in health care
nationally.
Response: The discussion of the approximately 70 percent of
organizations that were cited during the 2021 audit cycle for a failure
to provide necessary services was meant to serve as the most recent
example of concerning trends seen as part of our oversight and
monitoring efforts where participants experienced delays in access to
necessary care. It was not intended to be understood as the only data
CMS reviewed when determining to engage in rulemaking and deciding
which medical specialties to include in the required contracted
services provision. We considered all oversight efforts, including
audits, when drafting these provisions. We have seen through those
oversight efforts that a lack of contracts with medical specialists
have resulted in unnecessary delays in participants receiving medically
necessary care. While we recognize the difficulties PACE organizations
and other health care providers experienced during the COVID-19
pandemic, the delays in access to medically necessary services caused
by a lack of contracts with medical specialists were occurring prior to
the pandemic.
After consideration of the comments received and for the reasons
outlined in the proposed rule and our responses to comments, we are
finalizing the changes at Sec. 460.70(a)(2), (3), and (4) as proposed.
We are finalizing the changes at Sec. 460.70(a)(1) with two slight
modifications: first, by adding neurosurgery, which was inadvertently
left out of the proposed regulation text, and second, by adding
palliative medicine to the list of required contracted services.
D. Service Determination Request (Sec. 460.121)
Sections 1894(b)(2)(B) and 1934(b)(2)(B) of the Act specify that
PACE organizations must have in effect written safeguards of the rights
of enrolled participants, including procedures for grievances and
appeals. Along with the regulations at Sec. 460.120 related to
grievances, and Sec. 460.122 related to appeals, CMS created a process
for service determination requests, the first stage of an appeal, at
Sec. 460.121, including the extension requirements as specified in
Sec. 460.121(i)(1). In the February 2020 proposed rule (85 FR 9002),
CMS proposed to add a requirement at Sec. 460.121(i)(2) that required,
in part, that the IDT notify the participant or the designated
representative of a service determination request extension in writing.
The proposed requirement was based on the MA organization determination
requirements in Sec. 422.568, which require written notification when
an extension is taken. In response to our proposal, PACE organizations
and industry advocacy groups recommended we modify the proposal to
allow either oral or written notification when the IDT extends the
timeframe for a service determination request, rather than requiring
written notification only. When CMS responded to these comments in the
January 2021 final rule, we expressed that we were not persuaded to
modify the requirement to allow PACE organizations to notify
participants orally instead of in writing, because we believed written
notification of the extension was important in order to ensure the
participant received a full explanation (86 FR 6022), and as a result,
we finalized our proposal to require that the IDT notify the
participant or their designated representative in writing when the IDT
extends the timeframe for a service determination request.
As discussed in the December 2022 proposed rule preamble (87 FR
79670), since finalizing this requirement in the January 2021 final
rule (86 FR 5864), CMS has received additional feedback from PACE
organizations, particularly
[[Page 22303]]
regarding their experiences engaging and communicating with
participants in different ways during the COVID-19 pandemic. In light
of that feedback and experience, CMS has determined that allowing the
IDT to provide either oral or written notice of service determination
request extensions should not adversely impact participants, as both
oral and written communication can be an effective means of
communication when providing notice of a service determination request
extension.
Therefore, we proposed to revise the requirement at Sec.
460.121(i)(2) to allow the IDT to provide notification either orally or
in writing to the participant or their designated representative when
the IDT extends the timeframe for a service determination request, as
permitted under Sec. 460.121(i)(1) (87 FR 79670). Additionally, the
proposed rule discussed that allowing the IDT to provide either oral or
written notice of service determination request extensions increases
operational flexibility for PACE organizations (87 FR 79670).
As stated in the proposed rule (87 FR 79670), in order to ensure
participants are fully informed of the reason(s) for an extension, CMS
would expect oral notice of the service determination request
extensions to meet the same requirements as written notice, including
the expectations that notices will explain the reason(s) for the delay
and be issued as expeditiously as the participant's condition requires,
but no later than 24 hours after the IDT decides to extend the
timeframe. CMS would expect that PACE organizations document the
content of oral notifications of service determination request
extensions in accordance with Sec. 460.121(m). An IDT may choose to
provide the extension notification both orally and in writing if it
believes that is necessary to ensure the participant's understanding.
We estimate ongoing burden reduction due to the expected decrease
in written notifications of service determination request extensions in
favor of oral notification. We discuss and account for the burden
reduction resulting from the expected decrease in written notification
of service determination request extensions in the Collection of
Information Requirements section. We will submit these changes to OMB
for approval under control number 0938-0790 (CMS-R-244).
Comment: All commenters that addressed the proposed change to Sec.
460.121(i)(2) supported allowing the IDT to provide either oral or
written notice of service determination request extensions. They noted
that this provision would increase operational flexibility, which would
reduce burden for PACE organizations.
Response: We thank the commenters for their support of this
provision and are finalizing this requirement as proposed.
E. PACE Maintenance of Records (Sec. Sec. 460.200 and 460.210)
Under sections 1894(b) and 1934(b) of the Act, PACE organizations
are required to provide all items and services covered under Medicare
and Medicaid, and all additional items and services specified in
regulations and determined necessary by the interdisciplinary team to
improve and maintain the participant's overall health status.
Currently, PACE organizations are required to safeguard data and
records in accordance with Sec. 460.200(d). PACE organizations must
also maintain a single comprehensive medical record for each
participant in accordance with accepted professional standards (Sec.
460.210(a)(1)).
In the February 2020 proposed rule (85 FR 9002), CMS proposed to
add a new requirement at Sec. 460.200(d)(2) for PACE organizations to
maintain in the medical record all written communications received from
participants or other parties in their original form when the
communications relate to a participant's care, health, or safety in
accordance with Sec. 460.210(b)(6). We explained in that proposed rule
that we had found through our monitoring of PACE organizations that
they do not always maintain and safeguard important records such as
communications related to a participant's care from family members,
caregivers, and the participant's community (85 FR 9134). We stated
that maintaining a comprehensive, complete, and accurate medical record
allows a PACE organization to remain alert to all information that is
relevant to a participant's care, health and safety, and to provide
appropriate and timely care to the participant (85 FR 9140). Therefore,
we also proposed a new requirement at Sec. 460.210(b)(6) for PACE
organizations to maintain in a participant's medical record original
documentation of any written communication the PACE organization
receives relating to the care, health or safety of a participant, in
any format (for example, emails, faxes, letters, etc.) and including,
but not limited to (i) communications from the participant, his or her
designated representative, a family member, a caregiver, or any other
individual who provides information pertinent to a participant's health
or safety or both; and (ii) communications from an advocacy or
governmental agency such as State-based Adult Protective Services.
In the January 2021 final rule, CMS summarized and responded to the
comments received on these proposed record maintenance requirements (86
FR 6039 through 6040). We noted that some commenters recommended we
allow PACE organizations to maintain original communications outside of
the medical record systems, as they believed that maintaining original
documentation of any written communication relating to the care, health
or safety of a participant in any format in the medical record would
compromise the usefulness of the medical record, due to the quantity of
information that would be required to be stored (86 FR 6040). Based on
these comments, we contemplated allowing original documentation of
communications to be summarized in the medical record, so long as PACE
organizations maintained the original documentation of the
communication in a separate system. Ultimately, we chose not to modify
our proposal with the contemplated change of permitting PACE
organizations to summarize written communications relating to the care,
health, or safety of a participant in the medical record. We did,
however, modify our original proposal to allow PACE organizations to
maintain in a participant's medical record original documentation, or
an electronic copy, of any written communication the PACE organization
receives relating to the care, health or safety of a participant. In
finalizing this provision, we explained that we were not establishing
specific requirements governing where affected communications must be
stored within a participant's medical record. We also explained that
PACE organizations may operationalize these requirements in accordance
with the capabilities of their medical record systems (86 FR 6040).
Participants, their family members, and representatives have a
longstanding right to file a grievance expressing dissatisfaction with
the delivery of PACE services or the quality of care furnished as part
of the PACE benefit package (see Sec. Sec. 460.112(g)(1) and 460.120).
A PACE organization must have a formal written process to evaluate and
resolve medical and non-medical grievances by PACE participants (Sec.
460.120(a)). A PACE organization's grievance process must include a
written procedure for maintaining the confidentiality of a
participant's grievance (Sec. 460.120(c)(4)).
[[Page 22304]]
PACE participants routinely file grievances with a PACE
organization under the assumption that the details of their grievance
will be kept confidential. This is especially important to PACE
participants when a grievance involves a particular staff member of the
PACE organization (for example, a home care aide, a driver, or a
specific member of the interdisciplinary team). PACE organizations have
typically maintained confidentiality of this information by only
allowing access to the information, that is, the details of the
complaint, to a limited number of PACE organization staff and/or by
storing this information outside of the medical record in a secure
location (for example, a separate electronic application or paper-based
system).
Since we finalized the January 2021 final rule, PACE organizations
have had an opportunity to implement this provision, and we have
continued to receive questions related to maintaining original
communications in the medical record. These questions and comments
indicate that as PACE organizations have begun to operationalize this
requirement, they have been challenged with maintaining the
confidentiality of grievances and managing the volume of these
communications in the medical record. Other inquires include whether it
would be permissible for PACE organizations to scan communications and
store them electronically in the medical record.
In addition to the concerns around maintaining the confidentiality
of grievances, PACE organizations have also pointed out that there are
instances when written communications sent to the PACE organization by
the individuals and entities listed at Sec. 460.210(b)(6)(i) and (ii)
may contain sensitive information about a PACE participant, their
caregivers, and/or family members, and that these communications are
often accompanied by a request to keep the information private. For
example, information shared with a PACE organization may pertain to a
caregiver's health, and may have implications for the participant's
care, and the caregiver may only want the details of this information
shared among employees and contractors who need to know the information
rather than all individuals with access to the participant's medical
record. There are also instances when the communications include
contents or language that may be inappropriate for inclusion in the
medical record, such as vulgar comments directed towards individual
PACE staff. PACE organization staff have indicated that maintaining
written communications related to participant grievances in the medical
record allows access to the information by all PACE organization staff,
thereby jeopardizing the confidentiality of such communications, and
have therefore requested clarification from CMS on how to adhere to
comply with the requirement in Sec. 460.210(b)(6) when the original
communication is part of a participant grievance and contains sensitive
or confidential information.
Sections 1894(f)(3) and 1934(f)(3) of the Act provide authority for
the establishment of certain additional beneficiary and program
protections applicable to MA and Medicaid managed care programs under
prepaid capitation agreements under section 1903(m) of the Act.
Sections 1894(b)(2) and 1934(b)(2) of the Act require that the PACE
program agreement have written safeguards of the rights of enrolled
participants, including a bill of rights and procedures for grievances
and appeals, in accordance with regulations and with other Federal and
State laws designed for the protection of beneficiaries. This authority
allows CMS to implement regulations to ensure that PACE participants'
rights are protected, including the right to file a grievance
anonymously.
To uphold participant rights and help PACE organizations to
safeguard anonymity to the extent possible during the grievance process
and in other circumstances that involve sensitive information, CMS
proposed, using the authority at sections 1894(f)(3) and 1934(f)(3) of
the Act, to amend the PACE regulations at Sec. Sec. 460.200(d)(2) and
460.210(b)(6) to allow for more administrative flexibility in how PACE
organizations maintain written communications relating to the care,
health, or safety of a participant.
Specifically, we proposed to amend Sec. 460.200(d)(2) to require
that a PACE organization must maintain all written communications
received in any format (for example, emails, faxes, letters, etc.) from
participants or other parties in their original form when the
communications relate to a participant's care, health, or safety,
including, but not limited to, the following: (i) communications from
the participant, his or her designated representative, a family member,
a caregiver, or any other individual who provides information pertinent
to a participant's care, health or safety; and (ii) communications from
an advocacy or governmental agency, such as Adult Protective Services.
This proposal moves and revises language located at Sec. 460.210(b)(6)
that requires PACE organizations to maintain original documentation, or
an unaltered electronic copy, of any written communication the PACE
organization receives relating to the care, health or safety of a
participant, in any format. By moving this language to Sec.
460.200(d)(2), with the proposed modifications, we retained the
requirement for PACE organizations to maintain these important
communications in their original form, while removing the requirement
that these communications be stored in the participant's medical
record. At Sec. 460.210(b)(6), we proposed to replace the current
language with a new requirement that states that original documentation
or an unaltered electronic copy, of any written communication as
described in Sec. 460.200(d)(2), must be maintained in the
participant's medical record unless the following requirements are met:
(i) the medical record contains a thorough and accurate summary of the
communication including all relevant aspects of the communication, (ii)
original documentation of the communication is maintained outside of
the medical record and is accessible by employees and contractors of
the PACE organization when necessary, and in accordance with Sec.
460.200(e), and (iii) original documentation of the communication is
available to CMS and the SAA upon request. This provision continues to
require PACE organizations ensure that these important communications
relating to the care, health, or safety of a participant are included
in the medical record, but it allows PACE organizations operational
flexibility on how these communications are included. PACE
organizations would be permitted, under this proposal, to summarize the
information in the medical record, as long as the summary is accurate
and thorough, and the original documentation of the communication is
maintained outside the medical record and is accessible by the PACE
organization's employees and contractors as needed, and available to
CMS and the SAA upon request. We believe this proposal balances CMS'
interest in ensuring these communications are safeguarded with PACE
organizations' interest in ensuring the medical record is usable and
that confidential information is protected to the extent possible. A
PACE organization would be able to include a summary of the information
but could now choose to exclude names or other potentially sensitive
information, provided the requirements under proposed Sec.
460.210(b)(6)(i) through (iii) are met.
[[Page 22305]]
We summarize the comments received on the proposals at Sec. Sec.
460.200(d)(2) and 460.210(b)(6) and provide our responses to those
comments in this section of this rule.
Comment: CMS received several comments expressing overwhelming
support for our proposals at Sec. Sec. 460.200(d)(2) and
460.210(b)(6), allowing for more administrative flexibility in how PACE
organizations maintain written communications relating to the care,
health, or safety of PACE participants. Commenters conveyed their
appreciation and believed that the ability to maintain these
communications in a more appropriate location will help to safeguard
participant anonymity during the grievance process and reduce burden on
PACE organizations.
Response: CMS appreciates the comments and agrees that this
flexibility will safeguard participant anonymity and sensitive
information, and help PACE organizations more easily comply with the
requirements at the new 460.200(d)(2) to maintain all written
communications received in any format from participants or other
parties in their original form when the communications relate to a
participant's care, health, or safety.
Comment: CMS received a comment stating that they were not
supportive of our proposals at Sec. Sec. 460.200(d)(2) and
460.210(b)(6) as they believed this flexibility was unnecessary and
could lead to confusion and variation amongst the industry regarding
practices for medical record access and storage.
Response: CMS appreciates the comment, however disagrees that this
will lead to variation and confusion in the industry regarding medical
record access and storage practices. As described in the proposed rule,
when the January 2021 final rule became effective, CMS received
concerns from PACE organizations regarding the requirement to maintain
original communications in the medical record, due to the challenges
associated with maintaining the confidentiality of grievances, and
managing the volume of communications in the medical record.
Furthermore, PACE organizations indicated that maintaining written
communications related to participant grievances in the medical record
allows access to the information by all PACE organization staff,
thereby jeopardizing the confidentiality of such communications,
especially when confidentially is requested by a participant and/or
caregiver, and requested that CMS provide clarification on how to
adhere to the requirements at the former Sec. 460.210(b)(6), while
maintaining the confidentiality of participant grievances, as required
at Sec. 460.120(c)(4).
CMS believes that allowing these communications be stored outside
of the medical record, when certain conditions are met, balances the
need to keep grievance and sensitive information confidential, while
appropriately maintaining communications related to participant care,
health or safety, as part of the medical record. CMS also points out
that PACE organizations may choose to maintain these communications
outside of the medical record in a secure location when certain
conditions are met, however, they can also choose to maintain the
communications in the medical record in accordance with the new Sec.
460.200(d)(2). PACE organizations have the option to exercise this
flexibility, but are not required to do so. Lastly, CMS believes these
changes will be welcomed by the industry.
After consideration of the comments received, we are finalizing our
proposed changes to Sec. Sec. 460.200(d)(2) and 460.210(b)(6) without
modification.
F. Out of Scope Comments and Summary
We received comments on the following topics which were out of
scope of our proposal and to which we are therefore not responding: (1)
The passage of the 117th Congress' proposed legislation entitled ``PACE
Plus Act'' (S. 1162/H.R. 6770), ``PACE Part D Choice Act'' (S. 5106/
H.R. 4941), and ``Improving Senior's Timely Access to Care Act'' (S.
3018/H.R. 3173); and (2) Allowing the PACE program to utilize gift
cards in marketing.
VII. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), we are required to provide 60-day notice in the Federal Register
and solicit public comment before a ``collection of information,'' as
defined under 5 CFR 1320.3(c) of the PRA's implementing regulations, is
submitted to the Office of Management and Budget (OMB) for review and
approval. In order to fairly evaluate whether an information collection
requirement should be approved by OMB, section 3506(c)(2)(A) of the PRA
requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
On December 27, 2022 (87 FR 79452) we solicited public comment on
each of these issues for the following sections of the proposed rule
(CMS-4201-P, RIN 0938-AU96) that contained information collection
requirements. Such comments were received as indicated under ICR #5
(Regarding [the] Clarifications of Coverage Criteria for Basic Benefits
and Use of Prior Authorization) and ICR #11 (Regarding the PACE Service
Determination Process) in this rule. This final rule is only finalizing
some of the provisions of the proposed rule. The remaining provisions
may be finalized in subsequent rulemaking.
A. Wage Data
1. Wage Changes
For the provisions being finalized in this rule, the proposed
rule's burden estimates are being carried over without change except
that the beneficiary's wage is adjusted from $28.01/hr to $20.71/hr.
The adjustment is based on internal review as we changed the source of
the wage figure from BLS at $28.01/hr to HHS at $20.71/hr. See ``Wage
for Beneficiaries'' and ICR #2, in this rule.
2. Private Sector Wages
To derive average costs, we are using data from the most current
U.S. Bureau of Labor Statistics' (BLS's) National Occupational
Employment and Wage Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 5 presents
BLS' mean hourly wage, our estimated cost of fringe benefits and other
indirect costs (calculated at 100 percent of salary), and our adjusted
hourly wage.
[[Page 22306]]
[GRAPHIC] [TIFF OMITTED] TR12AP23.011
As indicated, except for enrollees, we are adjusting our employee
hourly wage estimates by a factor of 100 percent. This is necessarily a
rough adjustment, both because fringe benefits and other indirect costs
vary significantly from employer to employer and because methods of
estimating these costs vary widely from study to study. We believe that
doubling the hourly wage to estimate total cost is a reasonably
accurate estimation method.
3. Wage for Beneficiaries
We believe that the cost for beneficiaries undertaking
administrative and other tasks on their own time is a post-tax wage of
$20.71/hr. The Valuing Time in U.S. Department of Health and Human
Services Regulatory Impact Analyses: Conceptual Framework and Best
Practices identifies the approach for valuing time when individuals
undertake activities on their own time. To derive the costs for
beneficiaries, a measurement of the usual weekly earnings of wage and
salary workers of $998, divided by 40 hours to calculate an hourly pre-
tax wage rate of $24.95/hr. This rate is adjusted downwards by an
estimate of the effective tax rate for median income households of
about 17 percent, resulting in the post-tax hourly wage rate of $20.71/
hr. Unlike our private sector wage adjustments, we are not adjusting
beneficiary wages for fringe benefits and other indirect costs since
the individuals' activities, if any, would occur outside the scope of
their employment.
B. Information Collection Requirements (ICRs)
The following ICRs are listed in the order of appearance within the
preamble (see sections II. through VI.) of this final rule.
1. ICRs Regarding Applying D-SNP Look-Alike Requirements to Plan
Benefit Package Segments (Sec. 422.514)
This rule adds a new paragraph at Sec. 422.514(g) to clarify that
the D-SNP look-alike contracting limitations at Sec. 422.514(d)
through (f) apply to segments of the MA plan. This new paragraph will
address instances we have seen since adopting Sec. 422.514(d) through
(f) where a specific segment of an MA plan 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. 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 data, we expect
that this rule will result in three MA plan segments being identified
as D-SNP look-alikes, and these D-SNP look-alikes would likely
transition the approximately 3,000 current enrollees into another MA-PD
plan offered by the same MA organization (or by another MA organization
with the same parent organization as the MA organization) using the
transition process described in Sec. 422.514(e). Based on 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 7,000 D-SNP look-alike enrollees into
two new non-SNP MA plan segments, which could create two new D-SNP
look-alikes for contract year 2023.
In the June 2020 final rule (85 FR 33877 through 33880), we
estimated each D-SNP look-alike would take a one-time effort of 2 hours
for a business operations specialist to submit all enrollment changes
to CMS necessary to complete the transition process. We also stated
that, after the prohibition on D-SNP look-alikes was implemented, at
most five plans per year would be identified as D-SNP look-alikes under
Sec. 422.514(d) due to meeting the enrollment threshold for dually
eligible individuals or operating in a State that will begin
contracting with D-SNPs or other integrated plans. In association with
our June 2020 final rule, the requirement and burden estimates (5
respondents, 5 total responses, and 10 total hours) were approved by
OMB under control number 0938-0753 (CMS-R-267).
This rule's clarification under Sec. 422.514(g) does not change
the transition process nor our currently approved burden estimates.
Similarly, the addition of non-SNP MA plan segments to the contracting
limitations at Sec. 422.514 has no impact on our currently approved
burden estimates that at most five plans (including PBP segments) per
year would be identified as D-SNP look-alikes; therefore, the currently
approved number of respondents and burden estimates in control number
0938-0753 would not change.
2. ICRs Regarding Transitional Coverage and Retroactive Medicare Part D
Coverage for Certain Low-Income Beneficiaries Through the LI NET
Program (Sec. 423.2500 Through Sec. 423.2536)
The following changes will be submitted to OMB for approval under
control number 0938-1441 (CMS-10831). OMB will set out an expiration
date upon their approval of this final rule's new collection of
information request. The issuance of the expiration date can be
monitored at reginfo.gov.
We did not receive any comments specific to the private sector
proposed ICRs and, therefore, are finalizing the proposed private
sector requirements and burden estimates as is. As previously indicated
under Wage Data, we have adjusted the proposed beneficiary wage
resulting in adjusted cost estimates under this final rule.
As described in section II.D.2 of this final rule, we expect that
some beneficiaries will enroll in LI NET using
[[Page 22307]]
methods that may entail providing information. Some beneficiaries may
enroll in LI NET at the point-of-sale (POS) at a pharmacy because: (1)
they are likely eligible for the low-income subsidy (LIS), have
immediate need for their prescription, and do not have Part D coverage
or (2) present documentation with their LIS status at the pharmacy and
do not have Part D coverage. Some beneficiaries submit receipts for
reimbursement for claims paid out of pocket; if they are eligible for
LI NET they will be retroactively enrolled into the LI NET program by
the LI NET sponsor. Another way for beneficiaries to potentially enroll
into LI NET is by completing an LI NET application form.
To estimate the total burden, we consider the burden for enrollees,
pharmacists, and Part D sponsors separately. Each consideration entails
counting the number of documents arising from point of sale
enrollments, direct reimbursement forms, and LI NET application forms.
a. Beneficiaries
To estimate the information collection burden for beneficiaries, we
have estimated the number of beneficiaries submitting information to LI
NET and time related to handling the information. We have not included
burden estimates for individuals who would not be providing
documentation, such as those CMS automatically enrolls into LI NET,
individuals whose eligibility for LI NET is confirmed independently by
the LI NET sponsor, or for those who opt not to provide evidence.
When enrolling in LI NET at POS, possible forms of evidence for LIS
eligibility include but are not limited to, a Medicaid card or a letter
from the State or SSA showing LIS or ``Extra Help'' status. We estimate
that it would take an individual approximately 15 minutes (0.25 hr) to
gather supporting documentation. There are 36,722 individuals enrolled
in the LI NET demonstration at POS in 2021 who applied at the point of
sale. Based on our experience with the LI NET demonstration, we
estimate approximately 250 beneficiaries would submit receipts for
reimbursement for claims paid out of pocket. These beneficiaries may
complete a direct reimbursement request form available online, and
return by mail, email, or fax, together with their receipt, to the LI
NET sponsor. In the LI NET demonstration, approximately ten
beneficiaries per year completed the LI NET application form, which is
available online, and returned it to the LI NET sponsor by mail, email,
or fax. Thus, in total we expect 36,982 beneficiaries (36,722 at point
of sale plus 250 through direct reimbursement plus 10 applying via the
LI NET application form) to spend 15 minutes (0.25 hr) resulting in an
aggregate burden of 9,246 hours (36,982 enrollees * 0.25 hr) at an
aggregate cost of $191,485 (9,246 hr * $20.71/hr).
b. Private Sector (Pharmacists)
We estimate that it will take 2 minutes (0.0333 hr) for a pharmacy
to fax the documentation to the LI NET sponsor. However, pharmacists
will not process the forms of enrollees who use direct reimbursement or
the LI NET application form. Thus, pharmacists will only process the
36,722 enrollees at point of sale. Thus, the aggregate burden for
pharmacists is 1,223 hours (36,722 enrollees * 0.0333 hr) at an
aggregate cost of $147,812 (1,223 hr * $120.86/hr).
c. Part D Sponsors
The Part D sponsors will process the documents received from all
36,982 enrollees. Part D sponsors are estimated to spend about 2
minutes (0.0333 hr) to process information from point of sale, direct
reimbursement requests, and application forms. Thus, the aggregate
burden for Part D sponsors is 1,232 hours (36,982 enrollees * 0.0333
hr) at an aggregate cost of $93,878 (1,232 hr * $76.20/hr).
3. ICRs Regarding Adding New Behavioral Health Specialty Types Subject
to Network Adequacy Evaluation (Sec. 422.116)
The following changes will be submitted to OMB for approval under
control number 0938-1346 (CMS-10636).
To ensure that MA enrollees have access to provider networks
sufficient to provide covered services, including behavioral health
service providers, this rule adds new specialty types that will be
subject to network adequacy evaluation under Sec. 422.116. This rule
adds Clinical Psychology and Clinical Social Work under Sec.
422.116(b)(1). However, we are not finalizing our proposed addition of
the Prescribers of Medication for Opioid Use Disorder specialty type.
Section 1262 of Division FF of the Consolidated Appropriations Act
of 2023 (CAA) (Pub. L. 117-328) amended section 303(g) of the
Controlled Substances Act to remove the statutory requirement for
providers to obtain a valid waiver from SAMHSA and the DEA to
administer, dispense, or prescribe MOUD. Therefore, we will not be
finalizing this portion of our proposal. Because we planned to use
SAMHSA's list of waivered providers to populate the Provider Supply
file, we are no longer able to accurately track the providers that
prescribe medications like buprenorphine in order to create and
maintain a network adequacy standard.
We have determined that there is no cost for MA organizations in
regards to reporting new specialty types to CMS for their network
adequacy reviews as this rule requires. However, we have determined
that there is a minimal one-time cost for MA organizations to update
their policies and procedures associated with this rule.
First, regarding reporting the proposed new specialty types to CMS,
MA organizations are already conducting ongoing work related to network
adequacy reviews that happen during the initial or service area
application, or every three years for the triennial review. Further,
organizations should already have these specialty provider types within
network, as these are services covered by Medicare Part A and B and
which are furnished by these specialty types, so there is no burden
related to contracting with new provider types. This will only require
that the specialty types be added to the Health Services Delivery (HSD)
tables during any network adequacy evaluation requested by CMS. As
determined by our contractors, the time to conduct tasks related to
adding additional specialty types on the HSD tables is negligible.
We understand that MA organizations will need to update their
policies and procedures related to submission of HSD tables to ensure
that the new required behavioral health specialty types are included.
We estimate that a business operations specialist working at an hourly
wage of $76.20/hr will take 5 minutes (0.0833 hr) for a one-time update
of policies and procedures related to this task, at a cost of $6.35
(0.0833 hr * $76.20/hr). The aggregate burden is 62 hours (742 MA
contracts * 0.0833) at a cost $4,724 (62 hr. * 76.20/hr).
We did not receive any comments specific to the proposed ICRs and,
therefore, are finalizing the proposed requirements and burden
estimates as is.
4. ICRs Regarding Enrollee Notification Requirements for Medicare
Advantage (MA) Provider Contract Terminations (Sec. Sec. 422.111 and
422.2267)
The following changes were submitted to OMB for review under
control number 0938-0753 (CMS-R-267).
[[Page 22308]]
As described in section III.D. of this final rule, we are revising:
(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 are finalizing this provision as
proposed with some modifications based on public comment. We are
modifying the proposed changes to Sec. 422.111(e) by requiring only
one telephonic notice attempt to enrollees who have not opted out of
plan calls and by specifying a three-year lookback period to determine
which enrollees of terminating primary care and behavioral health
providers must be notified. However, these modifications have no impact
on our proposed burden estimates.
This amendment to Sec. Sec. 422.111(e) and 422.2267(e)(12) impacts
MA organizations in terms of the burden required to identify those
enrollees who must be notified of provider contract terminations per
CMS requirements, to develop and send the required written notices, to
develop the scripts for the required telephonic notices, and to make
the required enrollee telephone calls. However, CMS does not currently
collect data regarding the widely variable number of provider contract
terminations an MA organization undergoes in a given contract year, nor
the number of enrollees affected by each termination. Therefore, in the
proposed rule, we did not have information that would have allowed us
to estimate the extent of MA provider contract terminations, how many
enrollees are affected and need to be notified per Sec. 422.111(e), or
how the MA program will be impacted as we see the effects of this
regulation. Although we solicited comment, we received no comments to
help us derive such estimates.
The actual direct burden of this provision arises from MA
organization staff hours spent, resources purchased, and enrollee
notifications provided. MA organizations may also differ in how their
spending for the requirements evolves over time as they test strategies
and redevelop their approaches to complying with the regulation.
Despite our inability to quantify certain burden for this
provision, we were able to estimate the one-time burden on MA
organizations to update their existing written provider termination
notice in compliance with the new required notice content that we are
finalizing at Sec. 422.2267(e)(12)(ii). We stated in the proposed rule
that we expect MA organizations to engage in some routine software
development to update their notice template and related systems to
incorporate the new requirements, which will be delineated in a
provider termination model document developed by CMS staff (thus not
incurring COI burden). This proposed model was posted for public review
and comment in conjunction with the proposed rule's 0938-0753 ICR. We
estimated that one or two software developers working at a wage of
$92.92/hr will spend a total of 8 hours updating an MA organization's
existing provider termination notice template and related systems based
on CMS's model. With approximately 697 MA organizations impacted by
this change, this results in a total of 5,576 hours (697 MA
organizations * 8 hours), at an aggregate cost across all MA
organizations of $518,122 (5,576 hours * $92.92/hr). In the proposed
rule, we were unable to estimate the burden for the telephonic notice
requirement at Sec. Sec. 422.111(e)(1)(i) and 422.2267(e)(12)(iii)
because the number of primary care and behavioral health provider
contract terminations an MA organization undergoes in a given contract
year is unknown, as are the number of affected enrollees per
termination. We did not receive any comments related to our projected
burden estimates for this provision, therefore, we are finalizing the
proposed burden without change.
5. ICRs Regarding Clarifications of Coverage Criteria for Basic
Benefits and Use of Prior Authorization (Sec. 422.101)
The following changes be submitted to OMB for approval under
control number (0938-0753) (CMS-R-267).
As explained in section III.E. of this rule, 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 when making
medical necessity determinations. Under this rule, MA plans must follow
Traditional Medicare coverage criteria as specified in NCDs, LCD, or
Medicare laws (that is, in Medicare statutes and regulations).
Additionally, 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 when
coverage criteria are not fully established in applicable Medicare
statutes, regulations, NCDs or LCDs.
This rule also provides that when creating these internal policies,
MA organizations must provide in a publicly accessible way: the
internal coverage criteria in use and a 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 an explanation of the rationale that supports the
adoption of the coverage criteria used to make a medical necessity
determination, which includes, when applicable, identifying the general
provisions that are being supplemented or interpreted and explaining
how the additional criteria provide clinical benefits that are highly
likely to outweigh any clinical harms, including from delayed or
decreased access to items or services.
We expect that each plan will have new policies that they create
annually.
We believe that the public accessibility of a plan's internal
coverage criteria, a summary of evidence that was considered; a list of
the sources of such evidence; and an explanation of the rationale that
supports the adoption of the coverage criteria will require 16 hours
per contract. We believe this is an adequate estimate of time needed
for a business operations specialist to make all postings. Thus the per
contract burden is 16 hours at a cost of $1,219 (16 hr * $76.20) and
the aggregate burden over 697 contracts is 11,152 hours (697 contracts
* 16 hr/contract) at a cost of $849,782 (11,152 hr * $76.20/hr)
We invited stakeholder comment on all aspects of this proposal.
More specifically, we questioned (1) is our assumption that plans are
already complying with the requirement of creating new guidance
correct? (2) is our assumption of 16 hours annually sufficient? (3) Are
there any other aspects of this proposal or its estimates upon which
stakeholders have comments?
Comments were received. Some commenters stated that publicly
posting a summary of evidence considered during the development of the
criteria would require significant administrative effort. However, we
did not receive specific comments on our estimates and are therefore
finalizing our burden estimates for public posting of guidance as
proposed. However, the stakeholder comments of increased administrative
burden are consistent with our statement in the preamble and RIA, that
due to its complexity and many unknowns we cannot quantify the burden
of the requirement to create new policies when existing guidance does
not exist.
[[Page 22309]]
6. ICRs Regarding Utilization Management (UM) Committee (Sec. 422.137)
The following changes will be submitted to OMB for approval under
control number 0938-0964 (CMS-10141) (reference to this package was
inadvertently left out of the proposed rule). We are correcting that
oversight in this final rule.
This rule adds protections to help ensure that beneficiaries
maintain access to medically necessary Part A and B services and drugs,
while permitting MA plans to use utilization management tools, such as
prior authorization. This rule requires that MA plans establish and use
a committee (similar to a P&T committee) that reviews UM policies
annually to ensure the policies are consistent with current traditional
Medicare coverage and guidelines in Medicare statutes and regulations,
NCDs, and LCDs. This final rule also requires that the committee review
all medical services that require PA and other utilization management
policies, at least on an annual basis and to document their findings.
Additionally, the committee will be responsible for revising and
updating the MA plan's utilization management policies as needed.
In this rule, 422.137(c)(1) through (4) specifies that the UM
committee must clearly articulate and document processes to determine
that the committee membership requirements under 422.137(c)(1) through
(4) 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. We estimate it would
take 1 hour at $76.20/hr for an UM Committee business specialist to
perform the tasks enumerated in the previous paragraph and review and
retain documentation and information on an annual basis. Additionally,
at Sec. 422.137(d)(4) and (5) specifies that the 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. We estimate that it will take 2 hours at $76.20/hr for a
UM Committee business specialist to capture and retain this required
documentation on an annual basis.
In aggregate, the burden for 697 MA plans is 2,091 hours (697 plans
* 3 hr) at a cost of $159,334 (2,091 hr * $76.20/hr).
We did not receive any comments related to our proposed provisions
and projected burden estimates. Consequently, we are finalizing the
proposed provisions and burden without change.
7. ICRs Regarding 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 (Sec. Sec. 422.566 and
422.629)
The following changes will be submitted to OMB for approval under
control number 0938-0753 (CMS-R-267).
In section III.G. of this final rule, we are finalizing the
proposal to strengthen the current requirement at Sec. Sec. 422.566(d)
and 422.629(k)(3) for who must review an organization determination or
an integrated organization determination when the MA organization or
AIP expects to issue a partially or fully adverse medical necessity
decision.
Under this new requirement, the reviewing physician or health care
professional must have expertise in the field appropriate to the
requested service. This requirement will also apply to coverage denials
from section 1876 cost plans and healthcare prepayment plans because
Sec. Sec. 417.600 and 417.840 require those plans to comply with the
requirements in the MA regulations regarding organization
determinations.
As stated in the proposed rule, we do not believe this requirement
imposes additional staffing burden on plans. In light of existing
review requirements applicable to organization determinations and
integrated organization determinations, coupled with the requirements
at Sec. 422.152 for MA plans (including AIPs) to engage in ongoing
quality improvement (including in processing requests for initial or
continued authorization of services) and the contract requirement
provisions at Sec. 422.504, we believe plans already have the
requisite expertise in staffing to satisfy this requirement. The
requirement that the physician or other appropriate health care
professional have expertise in the field appropriate to the requested
service may at most result in plans reallocating staff resources in
certain cases to ensure that someone with appropriate expertise is
reviewing the request; however, we don't believe that this requirement
will require additional staffing for MA organizations and AIPs.
This requirement is expected to yield savings due to fewer denied
organization determinations getting into the appeals process as a
result of enhanced medical necessity review by appropriate experts.
[[Page 22310]]
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To estimate these savings we considered the following:
Number of unfavorable pre-service organization
determinations: The 2022 CMS-R-267 reports 1,786,733 (Row C of Table 6)
which equals 5.7 percent (Row B), (the percent of unfavorable pre-
service organization determinations), times 31,346,194 (Row A) (the
total number of pre-service organization determinations.) We re-
examined the underlying 2020 MA plan reported data and still believe
this to be correct. You can find this computation in rows A-C of Table
6.
Number of unfavorable pre-service organization
determinations that are appealed. The 2022 CMS-R-267 comes up with 431
per plan or 242,653 appealed pre-service organization determinations.
This number appeared excessively low to us. Additionally, this number
was derived in the 2022 CMS-R-267 by taking 5% * 20% * 24,279,575.
There is no documentation explaining the percentages or the number.
Accordingly, we re-examined the underlying 2020 MA plan data. The
aggregate percentage of unfavorable pre-service organization
determinations that are appealed is 9 percent (Row D). Using this we
calculate 160,806 (Row E) appealed unfavorable decisions (0.09 *
1,786,733). We note that 160,806 is in the ballpark of the 242,795 used
in the 2022 CMS-R-267 package but as noted the documentation for the
calculations is not presented and a reexamination of the data gives
160,806. Accordingly, we are correcting that number from the CMS-R-267
package in the base we use for impact. These calculations are also
conveniently summarized in Table 6 in rows C-E.
Percent of appeals resulting in an overturn: The CMS-R-267
package uses a figure of 75 percent. However, upon reexamination of the
same underlying data we found the percentage to be 81 percent (Row F).
We believe the 81 percent is more accurate and are therefore correcting
the base figures on which we base our impact. We note that in this
Collection of Information Section we are basing all numbers on
aggregate percentages from total appeals rather than the approach used
in the CMS-R-267 package which was based on the per-plan percentage.
The process of using per-plan may result in unintended approximations
which may account for some of the inaccuracies discovered.
Time for a single appeal notification: The CMS-R-267
package lists 4 hours as the time necessary to totally process an
appeal including notification. The amount of time from this 4 hours
targeted specifically to notification is not listed in the package. We
believe 15 minutes (Row H) (0.25 hr) is an adequate and reasonable
allocation of time for notification. This requirement has no impact on
the time required for an appeal notification. The calculations are
summarized in Table 6 and are summarized as follows.
As just explained, according to 2020 MA plan reported data,
1,786,733 (5.7 percent of all 31,346,194 Medicare pre-service
organization determination decisions) are unfavorable coverage
decisions (the decision is fully or partially unfavorable to the
enrollee). Of this universe of unfavorable pre-service organization
determinations, 160,806 cases (9 percent * 1,786,733) are appealed and
subject to reconsideration by the plan. Of the cases reviewed on
appeal, 130,253 cases (81 percent * 160,806 cases) of the
reconsiderations resulted in a plan overturning its unfavorable
organization determination (Rows A-G of Table 6).
Thus, the total burden is 32,563 hr (Row I) (130,253 cases * 0.25
hr/case) at a cost of $2,481,317 (Row K) (32,563 hr * $76.20/hr for a
business operations specialist).
While we don't know with certainty what the reduction in existing
denied organization determinations will be under this new requirement,
we believe
[[Page 22311]]
it is reasonable to estimate that 50 percent (Row B) of the existing
volume of denials will result in a favorable decision given the
enhanced standard of review. In other words, having a physician or
other health care professional with expertise in the field of medicine
appropriate to the requested service will result in a favorable
organization determination decision, thereby reducing the number of
cases potentially subject to appeal. In the absence of further
information, we believe this a reasonable assumption. We also
explicitly note that given that a decision is still unfavorable, even
with an expert review, we believe the other percentages (such as the
overturn rate and rate of appeals) remains unchanged.
Savings: To estimate savings associated with this finalized
rulemaking, we note that Table 6 estimates 50 percent of the burden of
the current practice and hence the savings is also 50 percent. That is,
the numbers in Table 6 in the column with this rule's burden estimates
are numerically equal to the savings: 16,281 hours (32,563 hr - 16,282
hr) and $1,240,688 ($2,481,301 - $1,240,688) (Row L).
We received no comments on our proposed requirement and burden
estimates and are finalizing them as is.
8. ICRs Regarding Strengthening Translation Requirements for Medicare
Advantage, Part D, and D-SNP Enrollee Marketing and Communication
Materials: Standing Request for Translated Materials or Materials in
Alternate Formats (Sec. Sec. 422.2267 and 423.2267)
This rule requires that FIDE SNPs, HIDE SNPs, and AIPs translate
materials into any languages required by the Medicare translation
standard plus any additional languages required by the Medicaid
translation standard as specified through their Medicaid capitated
contracts.
This rule slightly modifies existing policy, so the impact to FIDE
SNPs, HIDE SNPs, and AIPs depends upon whether, and to what extent,
these plans are already translating materials in ways that would meet
this rule's requirements. We note that translation requirements vary by
State. Therefore, we expect no impact in States where the applicable
Medicare and Medicaid translation requirements result in the same
outcome. We expect marginal impacts where State requirements result in
translation into languages not required by the current MA rules at
Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2). However, even in these
States, FIDE SNPs, HIDE SNPs, and AIPs (in combination with their
affiliated Medicaid managed care plans) have translators on staff or
access them via contractors because of existing Medicare and Medicaid
translation requirements.
Consistent with our April 15, 2011 final rule (76 FR 21536), (CMS-
4144-F, RIN 0938-AQ00), we continue to claim that the Medicare
translation requirement is exempt from the requirements of the PRA
since the time, effort, and financial resources necessary to comply
with this rule's translation requirements is a usual and customary
business practice (see 5 CFR 1320.3(b)(2)). FIDE SNPs, HIDE SNPs, and
AIPs are already required to translate all Medicare materials listed in
Sec. Sec. 422.2267(e) and 423.2267(e) into language(s) required by the
Medicare translation standard at Sec. 422.2267(a) and meet obligations
for translation or interpretation services under 45 CFR 92.101. The
requirements we are finalizing as proposed at Sec. Sec. 422.2267(a)(4)
and 423.2267(a)(4) would require that these Medicare materials also be
translated into any additional languages required by Medicaid. Since
FIDE SNPs, HIDE SNPs, and AIPs are already translating these Medicare
materials for enrollees on their language preferences as part of their
usual and customary business practice, the finalized requirements do
not establish any new disclosure, information collection, or record
keeping requirements. For a full accounting of the translation burden,
please see section IX.D.3.b. of this final rule.
9. ICRs Regarding Medicare Advantage (MA) and Part D Communications and
Marketing (Subpart V of Parts 422 and 423)
The following changes will be submitted to OMB for approval under
control number 0938-1442 (CMS-10837). The control number and expiration
date have yet to be issued. The issuance can be monitored at
reginfo.gov.
The proposed rule mistakenly set out CMS-10260 (0938-1051) as the
collection of information request's CMS and OMB identification numbers,
respectively. We are correcting that oversight in this final rule.
This rule sets forth several changes to the marketing policies in
subpart V of parts 422 and 423. Each of these changes will require
updates to policies and procedures on the part of a business operations
specialist, entailing the addition of a phrase or sentence and, as
such, not requiring much time.
For this rule's reinstatement of the prohibition on MAOs and Part D
sponsors marketing outside of their service areas (unless unavoidable),
we estimate 30 minutes (0.5 hr) to implement the change to policies and
procedures (0.5 hr x $76.20/hr = $38.10).
For our reinstatement of the prohibition on sales presentations
following educational events, we estimate 15 minutes (0.25 hr) to
implement the change to policies and procedures (0.25 hr x $76.20/hr =
$19.05).
For our reinstatement of the prohibition on distribution and
collection of Scope of Appointment and Business Reply Cards by agents
at educational events, we estimate 0.25 hours to implement the change
to policies and procedures (0.25 hr. x $76.20/hr = $19.05).
For our reinstatement of the prohibition on conducting a sales/
marketing or enrollment meeting with a beneficiary before 48 hours
after the beneficiary's initial consent to the meeting (via scope of
appointment), we estimate 0.25 hours to implement the change to
policies and procedures (0.25 hr x $76.20/hr = $19.05).
For the clarification of the requirement of a plan to notify CMS of
any agent that fails to adhere to CMS requirements, we estimate 0.5
hours to implement the change to policies and procedures (0.5 hr x
$76.20/hr = $38.10). We estimate that this policy change does have
burden, however we have no way of estimating the number of agents and
frequency of which they will violate CMS requirements. Therefore, we
cannot estimate it.
For the requirement that agents/brokers inform beneficiaries that
the beneficiaries can obtain complete Medicare information from 1-800-
MEDICARE, SHIPs, or Medicare.gov, we estimate \1/2\ hour to implement
the change to policies and procedures (0.5 hr x $76.20/hr = $38.10).
For the requirement that agents/brokers ask a standardized list of
questions prior to enrolling the beneficiary in a plan, we estimate 0.5
hours to implement the change to policies and procedures (0.5 hr x
$76.20/hr = $38.10). CMS has already developed the questions as part of
the Pre-Enrollment Check List. CMS does not require agents/brokers to
develop the questions themselves. As the questions were already
developed, and the development was by CMS staff, development of the
questions does not incur COI burden.
For the requirement that agents/brokers inform beneficiaries of all
the plans the agent/broker actually sells, we estimate 0.25 hours to
implement the
[[Page 22312]]
change to policies and procedures (0.25 hr. x $76.20/hr. = $19.05).
For the changes that clarify the prohibition of the use of the term
``Medicare'' or CMS's logos in a way that is misleading or confusing or
which misrepresents the plan, we estimate \1/4\ hour to implement the
change to policies and procedures (0.25 hr x $76.20/hr = $19.05).
Thus, the total one-time burden per contract for these marketing
provisions is 3.25 hours (0.5 hr + 0.25 hr + 0.25 hr + 0.25 hr + 0.5 hr
+ 0.5 hr + 0.5 hr + 0.25 hr + 0.25 hr for the time required to update
policies and procedures on the prohibitions of marketing outside the
service area, of sales following educational events, of distribution of
business cards, as well as the required 48-hour wait time for agents,
reporting to CMS delinquent agents, disclosing 800-Medicare, using a
standardized list of questions, for agents to notify beneficiaries of
all plans they represent, and to avoid misleading use of the Medicare
log respectively) at $76.20/hr for a total of $247.65. The aggregate
burden across 697 contracts is 2,265 hr (3.25 hr * 697 contracts) at a
cost of $172,593 ($76.20/hr * 2,265 hr).
10. ICRs Regarding Medicare Advantage/Part C and Part D Prescription
Drug Plan Quality Rating System (Sec. Sec. 422.162, 422.164, 422.166,
423.182, 423.184, and 423.186)
As discussed in section V. of this final rule, this rule adds,
removes, and updates certain measures, replaces the current reward
factor with a new HEI reward to further incentivize Part C and D plans
to focus on improving care for enrollees with specific SRFs, reduces
the weight of patient experience/complaints and access measures, adds a
rule for the sub-regulatory removal of Star Ratings measures when a
measure steward other than CMS retires the measure, and removes the 60
percent rule that is applied when adjusting Star Ratings for extreme
and uncontrollable circumstances (for example, natural disasters like
hurricanes or public health emergencies). The HEI is a different way
for CMS to analyze existing data and will not increase plan burden.
Most of the new measures will be calculated from administrative data
and, as such, there will be no increase in plan burden. The other
measure-level change we are finalizing in this rule entails moving an
existing measure from the display page to Star Ratings, which also will
have no impact on plan burden. This rule also sets out a series of
technical clarifications related to adjusting Star Ratings for extreme
and uncontrollable circumstances and consolidations. The provisions
will not change any respondent requirements or burden pertaining to any
of CMS's Star Ratings related PRA packages, including: OMB control
number 0938-0732 for CAHPS (CMS-R-246), OMB control number 0938-0701
for HOS (CMS-10203), OMB control number 0938-1028 for HEDIS (CMS-
10219), OMB control number 0938-1054 for Part C Reporting Requirements
(CMS-10261), and OMB control number 0938-0992 for Part D Reporting
Requirements (CMS-10185). Since the provisions will not impose any new
or revised information collection requirements or burden, we are not
making any changes under any of the aforementioned control numbers.
11. ICRs Regarding the PACE Service Determination Process (Sec.
460.121)
The following changes will be submitted to OMB for approval under
control number 0938-0790 (CMS-R-244).
Section 460.121 currently includes the service determination
process PACE organizations are required to follow and only allows PACE
organizations to notify participants and/or their representatives of
service determination extensions in writing. Per the burden estimate
currently approved by OMB (CMS-R-244), we estimate the burden of the
current extension notification requirements at Sec. 460.121 to be
2,350 hours and $140,812 in aggregate. As discussed in section VI.E. of
this final rule, we are finalizing our proposal to allow PACE
organizations to notify the participant or their designated
representative either orally or in writing when the PACE organization
extends the timeframe for making a service determination. We expect
that PACE organizations will prefer to provide oral notification more
frequently than written notification, because oral notification is less
time consuming. This belief is further supported by commenters on this
proposal, who unanimously agreed the proposed change would reduce
burden for PACE organizations. Due to PACE organizations' preference
for oral notification over written notification and the 45 minutes per
response reduction in burden oral notification offers, we estimate that
the proposed change will reduce the burden of the extension
notification requirements at Sec. 460.121.
To estimate the decreased burden, we considered: (1) the annual
number of extension notifications; (2) the estimated proportions of
extension notifications that are provided orally or in writing; and (3)
the estimated time required to complete oral and written notification.
First, we reviewed extended service determination requests (SDRs)
from 2019 through 2021 and found that there were 6,564 total extended
SDRs nationally (3,942 in 2019 + 773 in 2020 + 1,849 in 2021). Then we
averaged the number of extended SDRs from 2019-2021 to calculate 2,188
extended SDRs annually (6,564 total extended SDRs/3 years), which is
about 15 extended SDRs per PACE organization annually (2,188 extended
SDRs annually/149 PACE organizations).
Secondly, we estimate, based on our experience with audits of
similar areas of PACE requirements where PACE organizations have an
option of oral or written notification, that 80 percent of extension
notifications will be provided orally, at 15 minutes per notification,
and 20 percent will be provided in writing at 1 hour per notification.
The hourly wage for notification by an MSW in both cases is $59.92/hr.
In aggregate, the new burden is 875 hours ((2,188 extension
notifications * 0.2 written notifications * 1 hr) + (2,188 extension
notifications * 0.8 oral notifications * 0.25 hr)) at a cost of $52,430
(875 hours * $59.92/hr).
Thus, the aggregate annual time and cost savings for the change is
minus 1,475 hours (2,350 hours under current provisions minus 875 hours
as documented in the pending OMB package) and minus $88,382 ($140,812
cost under current provisions minus $52,430 under the pending OMB
package). Additionally, at the individual service determination request
extension level, PACE organizations that choose to provide oral
notification instead of written notification will save minus 0.75 hours
and $44.94 per extension notification.
We did not receive any comments related to our proposed provisions
and burden estimates. Consequently, we are finalizing them without
change.
12. ICRs Regarding Safeguarding Data and Records and Medical Record
Requirements (Sec. Sec. 460.200 and 460.210)
PACE organizations are currently required to retain original
communications related to a participant's care, health, or safety in
the medical record. In this proposal, we are removing the requirement
that these communications be stored in the participant's medical
record, provided certain conditions are met. Therefore, our burden
estimates include costs incurred related to staff (1) training; (2)
software development; (3) file cabinets for document storage; and (4)
updating/
[[Page 22313]]
maintaining the organizations' policies and procedures.
Training: We estimate that a PACE organization will spend
40 hours at a cost of $2,916 (40 hours x $72.90/hr) for a compliance
specialist to establish training materials. In aggregate, we estimate a
one-time burden of 5,960 hours (40 hours x 149 POs) at a cost of
$434,484 (5,800960 hours x $72.90/hr).
Software development: We estimate that PACE organizations
will spend 40 hours at a cost of $4,654 (40 hours x $116.34/hr) for a
software developer to make the appropriate software updates. In
aggregate, we estimate a one-time burden of 5,960 hours (40 hours x 149
POs) at a cost of $693,386 (5,960 hours x $116.34/hr).
Storage: We estimate that a PACE organization will spend a
total of $300 (2 x $150/each) for 2 four-drawer locking file cabinets.
In aggregate, we estimate a one-time non-labor cost of $44,700 ($300 x
149 POs).
Update policies and procedures: We estimate that PACE
organizations will spend 10 hours at a cost of $729 (10 hours x $72.90/
hr) for a compliance specialist to update and maintain related policies
and procedures. In aggregate, we estimate a one-time burden of 1,490
hours (10 hours x 149 POs) at a cost of $108,621 (1,490 hours x $72.90/
hr).
The aggregate of this provision is a one-time impact of 13,410
hours (5,960 hours (training materials) + 5,960 hours (software
development) + 1,490 hours (policy updates) at a cost of $1,282,191
($434,484 (training materials) + $693,386 (software updates) + $44,700
(nonlabor purchase of storage) + $108,621 (policy updates).)
These changes will be submitted to OMB for approval under control
number 0938-0790 (CMS-R-244). Since PACE organizations are already
required to retain original communications related to a participant's
care, health, or safety, and to make these communications accessible to
CMS and the SAA upon request, this proposal does not impose any new
information collection requirements for PACE organizations.
13. ICRs Regarding Expanding Eligibility for Low-Income Subsidies Under
Part D of the Medicare Program (Sec. Sec. 423.773 and 423.780)
In this rule, we revise the Part D LIS income and resource
standards at Sec. 423.773 to expand eligibility for the full benefit
to individuals who currently have the partial benefit and make a
coordinating change in Sec. 423.780. This will change the level of
assistance that an individual could qualify for in paying their Part D
premiums, copays and deductibles. While there will be no change in the
number of individuals eligible for the Part D LIS, it will create a
transition of people from partial subsidy status to full subsidy
status.
The burden associated with determining eligibility for the Part D
LIS is the time and effort for States or SSA to verify the income and
resources and report eligibility to beneficiaries and CMS annually.
Most individuals who qualify for the Part D LIS do so because they
qualify for Medicaid or other assistance in their State. The burden for
States to determine and report eligibility is currently approved by OMB
under control number 0938-0467 (CMS-R-74) at 54 respondents, 3,241
annual responses, a variable amount of time per response, and 1,082
estimated annual hours.
We did not receive any comments related to our proposed provisions
and burden estimates. Consequently, we are not making any changes to
any of the requirements or burden estimates that are currently approved
by OMB under control number 0938-0467.
C. Summary of Information Collection Requirements and Associated Burden
Estimates
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
[[Page 22315]]
VIII. Regulatory Impact Analysis
A. Statement of Need
The primary purpose of this final rule is to amend the regulations
for the Medicare Advantage (Part C) and Medicare Prescription Drug
Benefit (Part D) programs, and Programs of All-Inclusive Care for the
Elderly (PACE). This final rule, besides codifying existing Part C and
Part D sub-regulatory guidance also includes a number of new policies
from the Bipartisan Budget Act (BBA) of 2018, the Consolidated
Appropriations Act, 2021 (CAA), and the Inflation Reduction Act of 2022
(IRA), that would improve these programs.
B. Overall Impact
We examined the impact of this final rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), Executive Order 13272 on Proper Consideration of
Small Entities in Agency Rulemaking (August 13, 2002), section 1102(b)
of the Act, section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA) (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f)(1) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or Tribal governments or communities ; (2)
creating a serious inconsistency or otherwise interfering with an
action taken or planned by another agency; (3) materially altering the
budgetary impacts of entitlement grants, user fees, or loan programs or
the rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order.
Based on our estimates, OMB's Office of Information and Regulatory
Affairs has determined this rulemaking is significant per section
3(f)(1) as measured by having an annual effect of $100 million or more
in any 1 year, and hence also a major rule under Subtitle E of the
Small Business Regulatory Enforcement Fairness Act of 1996 (also known
as the Congressional Review Act). Accordingly, we have prepared a
Regulatory Impact Analysis that to the best of our ability presents the
costs and benefits of the rulemaking.
Section 202 of UMRA also requires that agencies assess anticipated
costs and benefits before issuing any rule whose mandates require
spending in any 1 year of $100 million in 1995 dollars, updated
annually for inflation. In 2022, that threshold is approximately $177
million. This final rule is not anticipated to have an unfunded effect
on State, local, or Tribal governments, in the aggregate, or on the
private sector of $177 million or more.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a final rule that imposes
substantial direct requirement costs on State and local governments,
preempts State law, or otherwise has federalism implications. Since
this final rule does not impose any substantial costs on State or local
governments, preempt State law or have federalism implications, the
requirements of Executive Order 13132 are not applicable.
If regulations impose administrative costs on reviewers, such as
the time needed to read and interpret this final rule, then we should
estimate the cost associated with regulatory review. There are
currently 795 contracts (which includes MA, MA-PD, and PDP contracts),
55 State Medicaid Agencies, and 300 Medicaid MCOs. We also expect a
variety of other organizations to review (for example, consumer
advocacy groups, major PBMs). We expect that each organization will
designate one person to review the rule. A reasonable maximal number is
2,000 total reviewers. We note that other assumptions are possible.
Using the BLS wage information for medical and health service
managers (code 11-9111), we estimate that the cost of reviewing this
final rule is $115.22 per hour, including fringe benefits, overhead,
and other indirect costs (http://www.bls.gov/oes/current/oes_nat.htm).
Assuming an average reading speed, we estimate that it will take
approximately 19 hours for each person to review this final rule. For
each entity that reviews the rule, the estimated cost is therefore
$2,200 (19 hours x $115.22). Therefore, we estimate that the maximum
total cost of reviewing this final rule is $5.3 million ($2,200 x 2,000
reviewers). However, we expect that many reviewers, for example
pharmaceutical companies and PBMs, will not review the entire rule but
just the sections that are relevant to them. We expect that on average
(with fluctuations) 10 percent of the rule will be reviewed by an
individual reviewer; we therefore estimate the total cost of reviewing
to be $0.5 million.
Note that this analysis assumes one reader per contract. Some
alternatives include assuming one reader per parent organization. Using
parent organizations instead of contracts will reduce the number of
reviewers. However, we believe it is likely that review will be
performed by contract. The argument for this is that a parent
organization might have local reviewers assessing potential region-
specific effects from this final rule.
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by OMB.
C. Impact on Small Businesses--Regulatory Flexibility Analysis (RFA)
The RFA, as amended, requires agencies to analyze options for
regulatory relief of small businesses if a rule has a significant
impact on a substantial number of small entities. For purposes of the
RFA, small entities include small businesses, nonprofit organizations,
and small governmental jurisdictions.
We proposed a wide range of policies in the proposed rule. These
policies codify, modify, and update current guidance governing MA
organization bid requirements.
This rule has several affected stakeholders. They include: (1) MA
organizations such as HMOs, local and regional PPOs, MSAs, PFFS and
Part D sponsors, PACE plans, and Stand Alone Part D plans (PDP) (2)
providers, including institutional providers, outpatient providers,
clinical laboratories, and pharmacies; and (3) enrollees. Some
descriptive data on these stakeholders are as follows:
Pharmacies and Drug Stores, NAICS 446110, have a $30
million threshold for ``small size'' with 88 percent of pharmacies,
those with under 20 employees, considered small.
Direct Health and Medical Insurance Carriers, NAICS
524114, have a $41.5 million threshold for ``small size,'' with 75
percent of insurers having under 500 employees meeting the definition
of small business. Several Medicare Advantage plans (about 30-40
[[Page 22316]]
percent) are not-for-profit resulting in a ``small entity'' status.
Ambulatory Health Care Services, NAICS 621, including
about 2 dozen subspecialties, including Physician Offices, Dentists,
Optometrists, Dialysis Centers, Medical Laboratories, Diagnostic
Imaging Centers, have a threshold ranging from $8 to $35 million
(Dialysis Centers, NAICD 621492, have a $41.5 million threshold).
Almost all firms are big, and this also applies to sub-specialties. For
example, for Physician Offices, NAICS 621111, receipts for offices with
under 9 employees exceed $34 million.
Hospitals, NAICS 622, including General Medical and
Surgical Hospitals, Psychiatric and Substance Abuse Hospitals,
Specialty Hospitals have a $41.5 million threshold for small size, with
half of the hospitals (those with between 20-500 employees) considered
small.
Skilled Nursing Facilities (SNFs), NAICS 623110, have a
$30 million threshold for small size, with half of the SNFs (those with
under 100 employees) considered small.
We are certifying that this FC does not have a significant economic
impact on a substantial number of small entities. To explain our
position, we explain certain operational aspects of the Medicare
program.
Each year, MA plans, including Part D sponsors, submit a bid for
furnishing Part A and B benefits and the entire bid amount is paid by
the government to the plan if the plan's bid is below an
administratively set benchmark. If the plan's bid exceeds that
benchmark, the beneficiary pays the difference in the form of a basic
premium (note that a small percentage of plans bid above the benchmark,
whereby enrollees pay basic premium, thus this percentage of plans is
not ``significant'' as defined by the RFA and as justified in this
section of this rule). The costs of stand-alone Part D plans, PDPs, is
also covered by the Medicare Trust Fund. PACE plans have their costs
covered by both the Medicare Trust Fund as well as the States they
negotiate with.
MA plans and Part D Sponsors can also offer enhanced benefits, that
is, benefits not covered under Original Medicare. These enhanced
benefits are paid for through enrollee premiums, extra government
payments or a combination. Under the statutory payment formula, if the
bid submitted by an MA plan (including Part D sponsors) for furnishing
Part A and B benefits is lower than the administratively set benchmark,
the government pays a portion of the difference to the plan in the form
of a rebate. The rebate must be used to provide supplemental benefits
(that is, benefits not covered under Original Medicare) and or/lower
beneficiary Part B or Part D premiums. Some examples of these
supplemental benefits include vision, dental, and hearing, fitness and
worldwide coverage of emergency and urgently needed services.
To the extent that the government's payments to plans for the bid
plus the rebate exceeds costs in Original Medicare, those additional
payments put upward pressure on the Part B premium which is paid by all
Medicare beneficiaries, including those in Original Medicare who do not
have the additional health services available in many MA plans.
Part D plans, including MA-PD plans, submit bids and those amounts
are paid to plans through a combination of Medicare funds and
beneficiary premiums. In addition, for enrolled low-income
beneficiaries, Part D plans receive special government payments to
cover most of premium and cost sharing amounts those beneficiaries
would otherwise pay.
Thus, the cost of providing services by these insurers is funded by
a variety of government funding and in some cases by enrollee premiums.
As a result, MA plans, Part D plans, Prescription Drug Plans, and PACE
plans are not expected to incur burden or losses since the private
companies' costs are being supported by the government and enrolled
beneficiaries. This lack of expected burden applies to both large and
small health plans.
Small entities that must comply with MA regulations, such as those
in this final rule, are expected to include the costs of compliance in
their bids, thus avoiding additional burden, since the cost of
complying with any final rule is funded by payments from the government
and, if applicable, enrollee premiums.
For the insurance plans classified in category Direct Health and
Medical Insurance Carriers, NAICS 524114, which include MA plans, Part
D sponsors, standalone PDPs, and PACE plans, the plans estimate their
costs for the upcoming year and submit bids and proposed plan benefit
packages. Upon approval, the plan commits to providing the proposed
benefits, and CMS commits to paying the plan either--(1) the full
amount of the bid, if the bid is below the benchmark, which is a
ceiling on bid payments annually calculated from original Medicare
data; or (2) the benchmark, if the bid amount is greater than the
benchmark.
If an MA plan or Part D sponsor bids above the benchmark, section
1854 of the Act requires the MA plan to charge enrollees a premium for
that amount. Historically, only 2 percent of plans bid above the
benchmark, and they contain roughly 1 percent of all plan enrollees.
The CMS threshold for what constitutes a substantial number of small
entities for purposes of the RFA is 3 to 5 percent. Since the number of
plans bidding above the benchmark is 2 percent, this is not considered
substantial for purposes of the RFA. Note that PACE plans while not
submitting bids (except for Part D) in the same sense as MA plans,
estimate their costs and these amounts are covered by a combination of
funding from the Trust Fund and the States in which they operate.
The preceding analysis shows that meeting the direct cost of this
final rule does not have a significant economic impact on a substantial
number of small entities, as required by the RFA.
Besides the direct costs, as previously discussed, are certain
indirect consequences of these provisions which also create impact. We
have already explained that 98 percent of MA plans (including MA-PD
plans) bid below the benchmark. Thus, their estimated costs for the
coming year are fully paid by the Federal Government. However, the
government additionally pays the plan a ``beneficiary rebate'' amount
that is an amount equal to a percentage (between 50 and 70 percent
depending on a plan's quality rating) multiplied by the amount by which
the benchmark exceeds the bid. The rebate is used to provide additional
benefits to enrollees in the form of reduced cost-sharing or other
supplemental benefits, or to lower the Part B or Part D premiums for
enrollees. (Supplemental benefits may also partially be paid by
enrollee premiums.) However, as noted previously, the number of plans
bidding above the benchmark to whom this burden applies do not meet the
RFA criteria of a significant number of plans.
It is possible that if the provisions of this rule would otherwise
cause bids to increase, plans will reduce their profit margins, rather
than substantially change their benefit package. This may be in part
due to market forces; a plan lowering supplemental benefits even for 1
year may lose its enrollees to competing plans that offer these
supplemental benefits. Thus, it can be advantageous to the plan to
temporarily reduce profit margins, rather than reduce supplemental
benefits.
We note that we do not have definitive data on this. Plans do not
report to CMS the strategies behind their bids. More specifically, when
supplemental benefits are reduced, we
[[Page 22317]]
have no way of knowing the cause for this reduction, whether it be new
provisions, market forces, or other causes. Notably, it may be
inappropriate to consider the relevant regulatory impacts (and thus the
profit considerations) as temporary because the issuance of a series of
regulations sustains the effects.\171\ As a result, changes in benefits
packages may be plausible and we requested comment on the assessment of
this outcome in association with this final rule.
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\171\ Indeed, see similar discussion in previous regulatory
impact analyses: https://www.federalregister.gov/documents/2022/05/09/2022-09375/medicare-program-contract-year-2023-policy-and-technical-changes-to-the-medicare-advantage-and and https://www.federalregister.gov/documents/2022/04/14/2022-07642/medicare-program-maximum-out-of-pocket-moop-limits-and-service-category-cost-sharing-standards.
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We next examine in detail each of the other stakeholders and
explain how they can bear cost. Each of the following are providers
(inpatient, outpatient, or pharmacy) that furnish plan-covered services
to plan enrollees for: (1) Pharmacies and Drug Stores, NAICS 446110;
(2) Ambulatory Health Care Services, NAICS 621, including about two
dozen sub-specialties, including Physician Offices, Dentists,
Optometrists, Dialysis Centers, Medical Laboratories, Diagnostic
Imaging Centers, and Dialysis Centers, NAICD 621492; (3) Hospitals,
NAICS 622, including General Medical and Surgical Hospitals,
Psychiatric and Substance Abuse Hospitals, and Specialty Hospitals; and
(4) SNFs, NAICS 623110.
If these providers are contracted with the plan, their aggregate
payment for services is the sum of the enrollee cost sharing and plan
payments.
The rules for non-contracted providers servicing plan enrollees
depends on the plan type involved. Non-contracted providers in both MA
and MA PD plans are not expected to incur burden from a final rule
because the regulations (42 CFR 422.214 and sections 1852(k)(1) and
1866(a)(1)(O) of the Act) require they be paid at least the FFS Rate.
PACE must provide only contracted providers to its participants (42 CFR
460.70(a)). Similarly non-contracted pharmacies are a sporadic issue in
stand-alone drug plans which are encouraged to limit out of network
access to those situations when it is required (42 CFR 423.124). PACE
plan participants must obtain services either from the PACE
organization of from its contracted providers (42 CFR 470(a)).
Consequently, non-contracted providers have no additional cost burden
above the already existing burden in original Medicare.
Consequently, consistent with our conclusions stated earlier, the
Secretary has certified that this final rule will not have a
significant impact on a substantial number of small entities.
D. Anticipated Effects
Many provisions of this final rule have negligible impact either
because they are technical provisions or are provisions that codify
existing guidance. Other provisions have an impact that cannot be
quantified or whose estimated impact is zero. Throughout the preamble,
we have noted when we estimated that provisions have no impact.
Additionally, this Regulatory Impact Analysis discusses several
provisions with either zero impact or impact that cannot be quantified.
The remaining provisions are estimated in section VIII of this final
rule and in this Regulatory Impact Analysis. Where appropriate, when a
group of provisions have both paperwork and non-paperwork impact, this
Regulatory Impact Analysis cross-references impacts from section VIII.
of this final rule in order to arrive at total impact. Additionally,
this Regulatory Impact Analysis provides pre-statutory impact of
several provisions whose additional current impact is zero because
their impact has already been experienced as a direct result of the
statute. For further discussion of what is estimated in this Regulatory
Impact Analysis, see Tables 13 and 14 and the discussion afterwards.
1. Transitional Coverage and Retroactive Medicare Part D Coverage for
Certain Low-Income Beneficiaries Through the LI NET Program (Sec.
423.2500 Through Sec. 423.2536)
This rule implements section 118 of the CAA, which amends section
1860D-14 of the Act, to establish the Limited Income Newly Eligible
Transition (LI NET) Program as a permanent part of Medicare Part D.
This will ensure that the transitional drug coverage currently provided
to low-income Medicare beneficiaries under the LI NET demonstration
will continue indefinitely. Therefore, we anticipate this rule will
advance health equity by improving low income individuals' access to
continuous, affordable health coverage, consistent with Executive Order
13985, issued January 20, 2021, on Advancing Racial Equity and Support
for Underserved Communities Through the Federal Government. We also
believe it will improve the customer service experience of low-income
beneficiaries consistent with the goals of the Executive Order 14058,
Transforming Federal Customer Experience and Service Delivery to
Rebuild Trust in Government.
Using drug cost data from 2021, the CMS Office of the Actuary
(OACT) projects the following program costs (in millions of dollars)
over the next 10 years:
[GRAPHIC] [TIFF OMITTED] TR12AP23.014
We note that OACT has provided cost/savings estimates each year
under the LI NET demonstration, and it has not altered its methodology
based on the program becoming permanent. Therefore, these projected
costs are the same as what the government would have incurred if the
demonstration continued. Further, the costs of the payments provided
for under the LI NET program will continue, as under the demonstration,
to be covered through the Medicare Prescription Drug Account within the
Federal Supplementary Medical Insurance (SMI) Trust Fund. Also note
that we are classifying these payments of the Medicare Trust Fund as
transfers from the Trust Fund to the LI NET sponsor.
We received no comments on this section and therefore are
finalizing this provision without modification.
[[Page 22318]]
2. 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 (Sec. Sec. 422.566 and 422.629)
The provision that a physician or other health professional with
expertise in the field of medicine appropriate to the requested service
review any decision about medical necessity before an MA plan may issue
an adverse organization determination was intended to provide a more
meaningful clinical review informed by specific expertise. As stated in
the proposed rule, we believe this enhanced level of review will reduce
unnecessary appeals, delays in treatment and the potential for adverse
outcomes.
In the proposed rule, we quantified the expected reduced appeals in
the Collection of Information section, quantifying the costs of effects
of delay in treatment and consequent possible adverse medical
complications is not possible because we lack adequate data. In
addition to requesting comment on these effects, we sought feedback on
the opportunity cost of medical experts' time when reallocated for the
purpose of compliance with this provision. We did not receive comments
on this impact analysis. We are finalizing this provision without
modification.
3. Strengthening Translation Requirements for Medicare Advantage and D-
SNP Enrollee Marketing and Communication Materials: Require HIDE SNPs
and FIDE SNPs To Translate Materials Into the More Stringent of the
Medicare or Medicaid Translation Standards (Sec. Sec. 422.2267 and
423.2267)
a. Standing Request for Translated Materials and Materials in
Accessible Formats
We proposed to specify in Medicare regulations that MA
organizations, cost plans, and Part D sponsors must provide materials
to enrollees on a standing basis in an accessible format or any non-
English languages that is the primary language of at least 5 percent of
the individuals in a plan benefit package service area upon receiving a
request for the materials or otherwise learning of the enrollee's
preferred language. The proposal would also extend to individualized
plans of care for special needs plans.
Our final rule clarifies existing policy. Therefore, the impact to
MA organizations, cost plans, and Part D plan sponsors depends on
whether, and to what extent, they currently have processes in place to
note an enrollee's language preference and need for an alternate
format. As described in this section of this final rule, we believe
many plans would not incur significant cost from the proposed
requirement because plans currently comply with the proposal.
Enrollees who need translated materials or materials in an
accessible format who are enrolled in MA, cost, or Part D plans that do
not currently create a standing request for these materials would
likely spend less time contacting their plan to request these materials
as a result of this proposal. Any MA, cost, or Part D plan that has not
created a standing request for enrollees requiring translated materials
or materials in an accessible format would likely reduce their efforts
to accept requests and resend the translated materials or materials in
an accessible format.
CMS received information from Medicare-Medicaid Plans (MMPs) in
Ohio and California about their requests for translated materials in
2021 and 2022. We include our assumptions from these discussions, but
we sought comment on additional information that may better inform our
estimates. Of the five MMPs in Ohio in 2021, only one of the plans
accepted standing requests for translated materials or materials in an
accessible format. A higher proportion (86 percent) of seven California
MMPs that responded had established standing requests due to State
oversight ensuring California MMPs followed the State-specific
marketing guidance; however, we believe the Ohio MMPs landscape betters
represents MA organizations as a whole. Therefore, we estimate that 20
percent or 171 \172\ MA organization, cost plan, and Part D plan
sponsor contracts are currently accepting standing requests and would
not be impacted by this proposal. Therefore, an estimated 80 percent or
683 MA organization, cost plan, and Part D plan sponsor contracts would
need to implement this proposed requirement. We believe our analysis of
MMP plans, which cover Part C and Part D benefits, also applies to MA
organization, cost plan, and Part D plan sponsors. We requested comment
on whether MA organization, cost plan, and Part D plan sponsors accept
standing requests for translated materials or materials in an
accessible format at a greater or lesser extent than MMPs.
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\172\ Based on 854 MA, cost, and Part D plan sponsor contracts
in the May 2022 Monthly Contract and Enrollment Summary Report.
Retrieved from https://www.cms.gov/research-statistics-data-and-systemsstatistics-trends-and-reportsmcradvpartdenroldatamonthly/contract-summary-2022-05.
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Based on the information we received from MMPs, we are uncertain if
establishing a standing request for translated material or materials in
an accessible format will increase or decrease administrative cost for
the estimated 683 MA organization, cost plan, and Part D plan sponsor
contracts impacted by our proposal. Based on information from MMPs who
have implemented a standing request, we believe establishing a process
for standing requests would require about 200 hours of business
operations specialist \173\ time during the first year or 136,600 hours
(200 hr * 683 MA, cost, and Part D contracts) at a cost of $10,408,920
(136,600 hr * $76.20/hr wage for a business operations specialist).
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\173\ Based on the BLS wage information for business operations
specialist (code 13-1199) whose wage we estimate at $76.20 per hour,
including fringe benefits and overhead costs (http://www.bls.gov/oes/current/oes_nat.htm).
---------------------------------------------------------------------------
We assume that this initial cost would be offset by a reduction in
cost for MA organizations, cost plans, and Part D plan sponsors to
resend materials in the correct translated or accessible format. We
also expect that implementing a standing request process would reduce
future costs to MA organizations, cost plans, and Part D sponsors by
decreasing rework of sending two sets of information, one in the
incorrect language or format and the other in the correct format.
However, establishing a standing request for translated material or
materials in an accessible format could result in more enrollees
requesting to consistently receive these materials at an additional
cost to MA organizations, cost plans, and Part D plan sponsors. We
requested comment on our assumptions and the potential savings or costs
to MA organizations, cost plans, and Part D plan sponsors.
b. Require FIDE SNPs and HIDE SNPs and Applicable Integrated Plans To
Translate Materials Into the Medicare Translation Standard Plus
Additional Medicaid Languages
We proposed to require that FIDE SNPs, HIDE SNPs, and AIPs
translate materials into any languages required by the Medicare
translation standard plus any additional languages required by the
Medicaid translation standard as specified through their Medicaid
capitated contracts.
Our final rule slightly modifies existing policy, so the impact to
FIDE SNPs, HIDE SNPs, and AIPs depends upon whether, and to what
extent, these plans are already translating materials in ways that
would meet our proposed requirements. We note that translation
requirements vary by State. Therefore, we expect no impact in States
where the
[[Page 22319]]
applicable Medicaid and Medicaid translation requirements result in the
same outcome. We expect marginal impacts where State requirements
result in translation into languages not required by the current MA
rules at Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2). However, even in
these States, FIDE SNPs, HIDE SNPs, and AIPs (in combination with their
affiliated Medicaid managed care plans) have translators on staff or
access them via contractors because of existing translation
requirements.
For contract year 2022, MA organizations sponsor 292 FIDE SNPs,
HIDE SNPs, and AIPs. We expect that some portion of these FIDE SNPs,
HIDE SNPs, and AIPs already translate their Medicare materials in ways
that meet our proposed requirement, but we do not have a good estimate
of how many. While HPMS identifies the Medicare translation
requirements for each MA and Part D plan sponsor at the plan level, we
do not have a good source of the State-specific Medicaid translation
requirements since they differ by State and there is no one source of
information outlining these requirements. For purposes of this
analysis, we estimate that 75 percent of the FIDE SNPs, HIDE SNPs, and
AIPs currently translate their Medicare materials in ways that would
meet our proposed requirement and 25 percent or 73 of these FIDE SNPs,
HIDE SNPs, and AIPs do not.
Section 422.2267(e) requires MA plans to provide 29 materials to
current and prospective MA plan enrollees, as applicable and Sec.
423.2267(e) requires Part D sponsors to provide an additional 18
materials to current and prospective enrollees for a total of 47
materials. We estimate that the proposed provision would require 73
FIDE SNPs, HIDE SNPs, and AIPs to translate 47 materials into one
additional language. On average, we expect these plans to translate
materials into one additional language based on our experience with
MMPs where, out of nine States, only two States (California and Rhode
Island) required translation of materials into additional languages
that exceeds the Medicare translation standard. California required
MMPs to translate materials into nine additional languages in certain
counties and Rhode Island required MMPs to translate materials into two
additional languages. Collectively, these 47 materials include an
estimated 253,311 words.\174\ At a cost of $56.16/hr,\175\ we estimate
a translator could translate 500 words/hr.\176\ The aggregate cost is
$2,076,988, which is the product of the following:
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\174\ Extrapolated based on data from CMS-4144-F (76 CFR 21549)
that estimated 91,623 words for translation of approximately 17 plan
materials.
\175\ Mean hourly wage for interpreters and translators, May
2021 retrieved from: https://www.bls.gov/oes/current/oes273091.htm
The mean rate of $28.08 was doubled to include fringe benefits and
overwork time.
\176\ Translation rates vary widely and also depend on the
technical nature of what is translated as well as whether adequate
review time is included. The consensus of multiple websources: (i)
https://www.proz.com/forum/money_matters/300163-words_per_hour.html;
(ii) https://www.pactranz.com/translation-times/; (iii) https://www.getblend.com/blog/output-words-per-day/; (iv) https://www.trainingfortranslators.com/2011/01/20/webinar-question-how-many-words-per-day/ provides ranges from 200 words/hour to 1000 words per
hour. We have selected 500 as a reasonable average and invite
stakeholder feedback on the reasonableness of this assumption.
---------------------------------------------------------------------------
253,311 words for one set of 47 materials.
500 words translated per hour.
73 FIDE SNPs, HIDE SNPs, and AIPs.
$56.16/hr wage.
Translating one set of 47 materials into one other language would
cost an estimated $28,452 (253,311 words/500 words/hr * $28.08/hr * 2
(for 100 percent for fringe benefits)). Based on these assumptions, it
would cost $2,076,996 for 73 FIDE SNPs, HIDE SNPs, and AIPs to
translate one set of materials into one other language. Any additional
documents needing translation would be a one-time cost with a smaller
cost to update the documents in future contract years.
Comment: A number of commenters expressed concern over the
financial investment that would be needed in developing an
organization-wide process for capturing language and alternate format
preference and implementing the requirement on a standing basis,
including an investment in IT and vendor contracts. Numerous commenters
also noted that it would take time to implement these processes
including the system updates, updating vendor contracts, staff
training, etc., and requested that CMS delay implementation until CY
2025. A commenter also requested a delay in implementing this
requirement since these materials are often prepared well in advance of
open enrollment for the following plan year. A few commenters expressed
concern over the cost of translating materials into several languages
on a standing basis. A commenter believed the proposed requirement
would necessitate plans translating materials into more than 30
languages. Another commenter noted that they will still have to provide
English versions of the materials for providers, even when enrollees
request information in other languages.
Response: We appreciate the commenters' concerns regarding the
infrastructure updates that will be needed to capture an enrollee's
preference for receiving materials in non-English languages and/or
accessible formats and then using this information to send out
materials in the requested format on a standing basis.
We also understand that some commenters are concerned about the
cost of translating materials into several languages on a standing
basis. Each fall, we release an HPMS memorandum announcing that plans
can access in the HPMS marketing review module a list of all languages
that meet the 5 percent threshold for plan service areas, which is the
threshold for translation.\177\ For contract year 2023, the threshold
requires few contracts to translate into languages that exceeds
Spanish: 16 MA contracts meet the threshold that requires translating
materials into Chinese, and 19 MA and PDPs meet the threshold that
requires translating materials into other Asian languages. There are no
other service areas with additional languages that currently meet the 5
percent threshold for translation. As a result, there are very few MA
organizations or PDPs that will be required to translate required
materials and, for MA SNPs, ICPs into more than one language.
Therefore, we do not agree that plans will be required to translate
materials into several languages. Also, the current regulations at
Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2) already require plans to
translate required materials into languages that meet the 5 percent
threshold. We also remind MA organizations and Part D sponsors that, as
recipients of Federal financial assistance, they have independent
language access requirements under Title VI of the Civil Rights Act of
1964 and section 1557 of the Affordable Care Act and implementing
regulations at 45 CFR parts 80 and 92, respectively.
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\177\ 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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For auxiliary aids and services, section 504 of the Rehabilitation
Act of 1973, section 1557 of the ACA, and the regulations at 45 CFR
92.102(b) already require plans to provide appropriate auxiliary aids
and services in alternate formats to individuals with impaired
[[Page 22320]]
sensory, manual, or speaking skills, where necessary to afford such
persons an equal opportunity to benefit from the service in question.
The requirement we are finalizing at Sec. Sec. 422.2267(a)(3) and
423.2267(a)(3) only clarifies that plans must provide the materials
based on the enrollee's preference on a standing basis.
While we understand that plans may need to make some adjustments to
vendor contracts and make system updates, plans should already have
resources in place to provide these materials translated into the
languages required currently under Sec. Sec. 422.2267(a)(2) and
423.2267(a)(2) and accessible formats. In addition, plans should have
systems in place that can be adjusted to track standing requests since
they are already required to track a request for hard copy materials as
described in Sec. Sec. 422.2267(d)(2)(i)(E) and 423.2267(d)(2)(i)(E).
We believe the benefit of ensuring access to materials that can be
easily understood by enrollees so that they can receive timely access
to care outweighs any additional effort that plans may need to
undertake. As stated earlier in this section and in the proposed rule
at 87 FR 79522, we believe it is a substantial burden for enrollees to
have to request each material in a non-English language or request
accessible formats for each material and that requiring enrollees to do
so could cause a critical delay to timely access to care. Thus, we are
finalizing the provisions at Sec. Sec. 422.2267(a)(3) and
423.2267(a)(3) as proposed, without a delay in implementation.
4. Medicare Advantage (MA) and Part D Prescription Drug Program Quality
Rating System (Sec. Sec. 422.162, 422.164, 422.166, 423.182, 423.184,
and 423.186)
We proposed to add, remove, and update certain measures and to make
methodological clarifications (to codify current practice and policies)
to the Part C and D Star Ratings program. These measure additions,
removals, and updates and methodological clarifications are routine,
and routine changes have historically had very little or no impact on
the highest ratings (that is, overall rating for MA-PD contracts, Part
C summary rating for MA-only contracts, and Part D summary rating for
PDPs). Hence, we anticipate there will be no, or negligible, impact on
the Medicare Trust Fund from these routine changes we are finalizing in
this rule. Beyond the Trust Fund, there may be effects on supplemental
benefits, premiums, and plan profits. These impacts will likely vary
significantly from plan to plan (or contract to contract) based on the
business strategies and the competitive landscape for each plan and
contract.
We also proposed some methodological enhancements to the Star
Ratings as follows: replacing the current reward factor with an HEI
reward, reducing the weight of patient experience/complaints and access
measures, adding a rule for the sub-regulatory removal of Star Ratings
measures when a measure steward other than CMS retires the measure, and
removing the 60 percent rule that is applied when adjusting Star
Ratings for extreme and uncontrollable circumstances (for example,
natural disasters like hurricanes or public health emergencies). We
anticipate that removing the 60 percent rule and adding a rule for
subregulatory measure removal would each have a negligible impact on
the highest ratings. Two of our enhancements have the potential to
cause a contract's Star Rating to change: (1) decreasing the weight of
patient experience, complaints, and access measures from four to two;
and (2) replacing the current reward factor with an HEI that would
reward contracts for doing well serving enrollees with specified social
risk factors.
We also simulated the cumulative impact of the proposed changes to
the overall rating by geographical area--specifically, by state, DC,
and Puerto Rico. Since the service area of a contract can include
multiple states, we assigned to each enrollee the rating of their MA
contract and calculated the average rating across all enrollees
residing in each state. The average change in the overall rating is a
decrease of 0.099, with the changes ranging from 0.01 to -0.33 across
geographic areas. Table 9 below shows the simulated changes by state,
DC, and Puerto Rico. The second column is the number of MA enrollees in
each state in contracts that received the 2021 overall rating. In most
cases, but not all, there are larger declines in areas that had on
average higher 2021 overall ratings.
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We calculated the cost impacts summarized in Tables 10 and 11 due
to these proposed Star Ratings updates by quantifying the difference in
the MA organization's (including Part D for MA-PDs) final Star Rating
with the proposed changes and without the proposed changes. We assume
Medicare Trust Fund impacts due to the Star Ratings changes associated
with these two revisions to the methodology. The first change,
decreasing the weight of patient experience, complaints, and access
measures, will be effective for the 2026 Star Ratings and will impact
the 2027 plan payments and 2027 Quality Bonus Payments. The
introduction of the HEI reward in lieu of the current reward factor
will impact the 2027 Star Ratings and will impact the 2028 plan
payments and 2028 Quality Bonus Payments.
These impacts are considered transfers, but we requested comment on
the extent to which provision of goods or services would increase or
decrease in association with the payment changes. The impact analysis
for the Star Ratings updates takes into consideration the final quality
ratings for those contracts that would have Star Ratings changes under
this final rule. There are two ways that Star Ratings changes will
impact the Medicare Trust Fund:
A Star Rating of 4.0 or higher will result in a Quality
Bonus Payment for the MA contract, which, in turn, leads to a higher
benchmark for the MA plans offered by the MA organization under that
contract. MA organizations that achieve an overall Star Rating of at
least 4.0 qualify for a Quality Bonus Payment that is capped at 5
percent (or 10 percent for certain counties).
The rebate share of the savings will be higher for those
MA organizations that achieve a higher Star Rating. The rebate share of
savings amounts to 50 percent for plans with a rating of 3.0 or fewer
stars, 65 percent for plans with a rating of 3.5 or 4.0 stars, and 70
percent for plans with a rating of 4.5 or 5.0 stars.
In order to estimate the impact of the Star Ratings updates, the
Private Health Baseline assumptions are updated with the assumed Star
Ratings changes described in this final rule. We first estimated the
two changes to the Star Ratings calculations as independent of each
other and, since there are likely overall Star Rating interactions
between the two changes, the impacts, as shown in Table 10, should be
viewed separately and should not be summed. The negative values in this
section of this final rule represent net savings to the Medicare Trust
Funds. The patient experience/complaints and access measure weight
provision is expected to result in net savings of between $330 million
in 2027 and $580 million in 2033, resulting in a 10 year savings
estimate of $3.28 billion. This amount equates to 0.05 percent of the
Private Health Baseline for 2024-2033. The replacement of the current
reward factor with the HEI reward is expected to result in net savings
of between $670 million in 2028 and $1,050 million in 2033 resulting in
a 10-year savings estimate of $5.12 billion. $5.12 billion represents
0.08 percent of the Private Health Baseline for the years 2024-
[[Page 22323]]
2033. These projections are based on simulations using data from the
2020 and 2021 Star Ratings.
[GRAPHIC] [TIFF OMITTED] TR12AP23.017
We also estimated the cumulative impact of the changes to the Star
Ratings calculations we are finalizing in this rule since there are
interactions between those changes. The impacts are showing in Table
11. The negative values represent net savings to the Medicare Trust
Funds. For the Star Ratings updates, net savings are estimated to be
between $330 million in 2027 and $1.24 billion in 2033, resulting in a
10-year savings estimate of $6.41 billion, which equates to 0.10
percent of the Private Health Baseline for the years 2024 through 2033.
[GRAPHIC] [TIFF OMITTED] TR12AP23.018
We did not received comments on our impact analysis and therefore
are finalizing these provisions without modification.
5. Expanding Eligibility for Low-Income Subsidies Under Part D of the
Medicare Program (Sec. Sec. 423.773 and 423.780)
In this final rule, we will revise the Part D LIS income and
resource standards at Sec. 423.773 to expand eligibility for the full
benefit to individuals who currently have the partial benefit and make
a coordinating change in Sec. 423.780. This will change the level of
assistance that an individual could qualify for in paying their Part D
[[Page 22324]]
premiums, copays and deductibles. While there would be no change in the
number of individuals eligible for the Part D LIS, it will create a
transition of people from partial subsidy status to full subsidy
status.
The result of this change is the Federal Government providing more
subsidies to low income Medicare beneficiaries for Part D coverage,
which would result in additional costs to the Medicare Trust Fund. The
following table reflects the scored government costs for expanding the
full low income subsidy to the current partly subsidized LIS
beneficiaries starting January 1, 2024. Included in this table are the
breakdown of increases for both the low income cost-sharing subsidy
(LICS) and the low income premium subsidy (LIPS). OACT arrived at the
cost estimate by assuming that the ratio of post-LICS-out-of-pocket as
a percentage to the total drug cost for the partial subsidy
beneficiaries would be close, possibly equal, to the drug cost of the
full subsidy beneficiaries. Therefore, the impact analysis assumed that
the ratio (plan benefits + LICS)/total drug cost for the partial
subsidy beneficiaries was the same as the ratio for the full subsidy
beneficiaries., We are classifying these payments of the Medicare Trust
Fund as transfers from the Trust Fund to the LI NET sponsors. We
received no comments on our regulatory impact analysis and are
finalizing this impact as is.
[GRAPHIC] [TIFF OMITTED] TR12AP23.019
6. Adding New Behavioral Health Specialty Types Subject to Network
Adequacy Evaluation (Sec. 422.116)
To ensure that MA enrollees have access to provider networks
sufficient to provide covered services, including behavioral health
service providers, this rule adds new specialty types that will be
subject to network adequacy evaluation under Sec. 422.116. This rule
adds Clinical Psychology, Clinical Social Work and Prescribers of
Medication for Opioid Use Disorder under Sec. 422.116(b)(1). However,
we are not finalizing our proposed addition of Prescribers of
Medication for Opioid Use Disorder for the reasons presented in section
VII.C.3.
To determine the potential burden regarding this proposal, we
considered cost estimates for CMS making programming updates to the
HPMS system, which is utilized to conduct automated reviews; additional
burden, including updating policies and procedures, for CMS contractor;
and additional burden, including updating policies and procedures, for
MA organizations.
We have determined that there is a $0 cost for programming HPMS
with regard to this rule. Adding new specialty types to the automated
review conducted by HPMS would be covered under funding currently in
place for updating the system.
The CMS contractor does not indicate any additional or reduced
costs to carry out the work required by this rule; therefore, there is
no impact.
E. Alternatives Considered
In this section, CMS includes discussions of Alternatives
Considered for several provisions. Several provisions of this final
rule reflect a codification of existing policy where we have evidence,
as discussed in the appropriate preamble sections, that the
codification of this existing policy would not affect compliance. In
such cases, the preamble typically discusses the effectiveness metrics
of these provisions for public health. Also, in these cases, different
enforcement methods and different levels of stringency, are not fully
relevant since the provision is already being complied with adequately.
Alternative analysis is not provided for these provisions.
1. 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. 422.100, 422.101, 422.112, 422.137,
422.138)
Both the reasons for proposing the UM Committee requirement
provisions and the alternatives they are intended to counteract are
discussed in the respective preambles. Because we cannot quantify any
of these we have not included a repetition of this analysis in the RIA.
A brief summary is as follows:
The finalized regulation adopts new and existing standards
and requirements for coverage criteria for basic benefits by requiring
MA plans to make medical necessity determinations based on Traditional
Medicare coverage and benefit criteria as reflected in Medicare
statutes and regulations, NCDs and LCDs and prohibiting the use of
internal coverage criteria or additional medical necessity standards
except in limited situations. This is major policy shift in which MA
plans may only deny coverage for Medicare items and services based on
Traditional Medicare coverage rules unless coverage criteria for the
Part A or Part B benefit are not fully established in applicable
Medicare statutes, regulations, NCDs or LCDs. As stated elsewhere in
this final rule, MA plans are still permitted to use utilization
management policies, such as PA--within the scope of Sec.
422.138(b)(1) through (3)--in situations where they are not permitted
to use internal coverage criteria per 422.101(b)(2) and (b)(6). In
situations where MA plans may not use internal coverage criteria, plans
may still use PA to confirm criteria for determining whether an item or
service is one for which benefits are available under Traditional
Medicare. Additionally, while PA is still permitted, plans must use
coverage criteria consistent with the rules being finalized at Sec.
422.101(b)(2) and (b)(6) and plans must make medical necessity
determinations consistent with the rules at 422.101(c). Finally, in
regards to burden, we understand that this provision will create new
burden which is difficult to quantify.
The finalized regulation also requires plans to follow
specific procedures as part of developing internal coverage policies
and making this these coverage policies publicly
[[Page 22325]]
accessible including a public summary of evidence that was considered
during the development of the internal coverage criteria used to make
medical necessity determinations. We provided an impact analysis in
section VII.C.4 of this final rule of one quantifiable aspect of this
proposal. As part of this analysis, we took into account solicited
stakeholder input on aspects of the proposal and its impact requested
in the NPRM.
The regulation requires a PA approval to be valid for as
long as medically necessary pursuant to 422.101(c), to avoid
disruptions in care . In combination with the requirements to limit
when MA plans may deny coverage (or use internal coverage criteria that
are not used in Traditional Medicare), this will limit an MA
organization's ability to approve only part of what a provider has
ordered or prescribed. In addition, the finalized requirements would
minimize repetitive PA requirements for enrollees on an appropriate,
chronic, stable therapy. It would be qualitatively beneficial for the
enrollee.
The finalized regulation establishes a minimum 90-day
transition period when an enrollee switches to a new plan, or switches
from FFS to an MA plan (including new MA plan members who are also new
to Medicare as well) for any ongoing courses of treatment so that
treatment may not be subjected to prior authorization. This was adopted
from similar transition periods in Part D; we believe it is appropriate
to align the transition period and scope with the current transition
requirements in Part D. We lack adequate data to quantify this
provision. Qualitatively, it may result, in certain cases, in more cost
to plans; but the proposal is beneficial to the enrollee.
The proposed regulation requires MA organizations to
establish a committee (similar to a P&T committee), led by a plan's
Medical Director, that reviews utilization management policies annually
and keeps current of Medicare statutes and regulations, LCDs and NCDs.
This is beneficial for the enrollee. It was modeled on similar
committees used for Part B step therapy programs and by Part D plans.
Its major effect is to ask plans to review their utilization management
policies.
We re-emphasize that we are not able to fully quantify all of these
and the discussion of reasons is discussed in the preamble.
2. Medicare Advantage/Part C and Part D Prescription Drug Plan Quality
Rating System (Sec. Sec. 422.162, 422.164, 422.166, 423.182, 423.184,
and 423.186)
As an alternative to our proposal to have a tiered health equity
index reward, we considered a non-tiered approach. We proposed a tiered
HEI reward structure based on the percentage of enrollees in each
contract who have the specified social risk factors (SRFs). We proposed
that contracts that have percentages of enrollees with any of the
specified SRFs in a given year that are greater than or equal to one-
half of the contract-level median percentage of enrollees with the
specified SRFs up to, but not including, the contract-level median
would qualify for one-half of the HEI reward. Contracts that have
percentages of enrollees with any of the specified SRFs greater than or
equal to the contract-level median would qualify for the full HEI
reward.
We have also considered and solicited comment on an alternative
non-tiered HEI reward structure, where all contracts with percentages
of enrollees with any of the specified SRF greater than or equal to
one-half of the contract-level median would qualify for the full HEI
reward. Both the tiered and non-tiered HEI reward structures align with
our goal of not rewarding contracts that may do well among enrollees
with SRFs but serve very few enrollees in this population, although the
tiered HEI reward structure goes further in aligning with these goals.
The non-tiered HEI reward structure aligns better with the goal of ease
of use and understanding for contracts and other stakeholders. Although
the non-tiered approach would slightly increase the mean HEI reward, it
does not impact the number of contracts qualifying for the reward. We
received a few comments related to the tiered versus non-tiered
approach summarized in Section V. of this rule. Most commenters did not
comment on the tiered versus non-tiered approach and supported the HEI
reward as proposed. For the reasons set forth in the proposed rule and
our responses to the related comments summarized in Section V of this
rule, we are finalizing the HEI reward as proposed without
modification.
F. Accounting Statement and Table
The following Table 14 summarizes costs and transfers by provision.
As required by OMB Circular A-4 (available at https://obamawhitehouse.archives.gov//circulars_a004_a-4/), in Table 13, we
have prepared an accounting statement showing the costs and transfers
associated with the provisions of this final rule for calendar years
2024 through 2033. Table 13 is based on Table 14 which lists transfers
and costs by provision and year. Tables 13 and 14 are expressed in
millions of dollars with costs listed as positive numbers and transfers
of savings (reduction in dollar spending) to the Medicare Trust Fund
listed as a savings. As can be seen, the net annualized cost of this
rule is about $2 million per year. This cost is offset by a reduction
in dollar spending (savings) to the Medicare Trust Fund of about $0.35
billion per year. Minor seeming discrepancies in totals in Tables 13
reflects use of underlying spreadsheets, rather than intermediate
rounded amounts. A breakdown of these costs of this final rule by
provision may be found in Table 14.
[GRAPHIC] [TIFF OMITTED] TR12AP23.020
[[Page 22326]]
The following Table 13 summarizes costs, and transfers by provision
and year and forms a basis for the accounting Table 13. In Table 14,
costs are expressed as positive numbers while savings to the Medicare
Trust Fund (reduced dollar spending) are expressed as negative numbers.
All numbers are in millions. The costs in this table are true costs
reflecting increased consumption of services and goods. However, the
savings (reduced dollar spending) to the Medicare Trust Funds reflect a
transfer from MA plans, Part D sponsors, and enrollees, who increase
their spending, to the Trust Fund.
Table 14 combines related provisions. For example, all PACE
provisions in the COI summary table are combined into one-line item.
Similarly, all provisions dealing with prior authorization have been
combined into one-line item in the summary table. Table 14, also
combines the three provisions with transfers: The Star Ratings
provisions reduce spending by the Trust Fund (TF) to MA plans; the low-
income NET provision and the expansion of low-income subsidy provision
both increase dollar spending by the TF to cover assistance through the
LI NET sponsors to low-income beneficiaries who would otherwise have to
pay for Prescription Drugs. Since the aggregate transfer over all three
provisions is a reduction in dollar spending, Table H6, lists this
transfer as a savings.
[[Page 22327]]
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[[Page 22328]]
G. Conclusion
As indicated in Table 13 the finalized provisions of this rule in
aggregate reduce dollar spending of the Medicare Trust Fund by $4.0
billion over 10 years, with the Star Ratings provisions being the
primary driver of savings. Contrastively, the aggregate paperwork
burden of this rule is small, in aggregate, $17.1 million over 10
years. Except for 2024, the annual cost is $0.3 million. The major
driver of costs are the translation requirements, which although taking
place in 2025, will probably be prepared for by most plans in 2024.
Over an infinite horizon the aggregate costs of this rule expressed in
2016 dollars is $0.8 million per year. In accordance with requirements,
this major rule has been reviewed by OMB.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on March 29, 2023.
List of Subjects
42 CFR Part 417
Administrative practice and procedure, Grant programs--health,
Health care, Health Insurance, Health maintenance organizations (HMO),
Loan programs--health Medicare, and Reporting and recordkeeping
requirements.
42 CFR Part 422
Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Medicare, Penalties, Privacy,
Reporting and recordkeeping requirements.
42 CFR Part 423
Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Incorporation by reference, Medicare,
Penalties, Privacy, Reporting and recordkeeping requirements.
42 CFR Part 460
Aged, Citizenship and naturalization, Civil rights, Health, Health
care, Health records, Individuals with disabilities, Medicaid,
Medicare, Religious discrimination, Reporting and recordkeeping
requirements, Sex discrimination.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR Chapter IV and the Department of
Health and Human Services amends 45 CFR part 170 as set forth below:
PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL
PLANS, AND HEALTH CARE PREPAYMENT PLANS
Subpart K--Enrollment, Entitlement, and Disenrollment Under
Medicare Contract
0
1. The authority citation for part 417 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh, and 300e, 300e-5, and
300e-9, and 31 U.S.C. 9701.
0
2. Section 417.454 is amended by revising paragraph (e)(4) to read as
follows:
Sec. 417.454 Charges to Medicare Enrollees.
* * * * *
(e) * * *
(4) A COVID-19 vaccine and its administration described in section
1861(s)(10)(A) of the Act.
PART 422--MEDICARE ADVANTAGE PROGRAM
0
3. The authority citation for part 422 continues to read as follows:
Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152,
and 1395hh.
0
4. Section 422.62 is amended by:
0
a. Removing and reserving paragraph (b)(18); and
0
b. Redesignating paragraph (b)(26) as paragraph (b)(27) and adding new
paragraph (b)(26) to read as follows:
Sec. 422.62 Election of coverage under an MA plan.
(b) * * *
(26) The individual enrolls in Medicare premium-Part A or Part B
using an exceptional condition SEP, as described in 42 CFR 406.27 and
407.23. The SEP begins when the individual submits their application
for premium-Part A and Part B, or Part B only, if the individual is
already entitled to Part A (or is enrolling in premium-free Part A
within the timeframe for use of this SEP), and continues for the first
2 months beyond the premium-Part A and/or Part B entitlement date. The
MA plan enrollment is effective the first of the month following the
month the MA plan receives the enrollment request.
* * * * *
0
5. Section 422.100 is amended by adding paragraph (n) to read as
follows:
Sec. 422.100 General requirements.
* * * * *
(n) Digital health education program. MA organizations must
establish 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, as defined in Sec. 422.135.
(1) The MA organization must make information about its digital
health literacy screening and digital health education programs
available to CMS upon request. 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
this section.
(2) [Reserved].
0
6. Section 422.101 is amended by:
0
a. Revising paragraph (b)(2);
0
b. Adding paragraph (b)(6); and
0
c. Revising paragraph (c).
The revisions and addition read as follows:
Sec. 422.101 Requirements relating to basic benefits.
* * * * *
(b) * * *
(2) General coverage and benefit conditions included in Traditional
Medicare laws, unless superseded by laws applicable to MA plans. This
includes criteria for determining whether an item or service is a
benefit available under Traditional Medicare. For example, this
includes payment criteria for inpatient admissions at 42 CFR 412.3,
services and procedures that the Secretary designates as requiring
inpatient care under 42 CFR 419.22(n), and requirements for payment of
Skilled Nursing Facility (SNF) Care, Home Health Services under 42 CFR
part 409, and Inpatient Rehabilitation Facilities (IRF) at 42 CFR
412.622(a)(3).
* * * * *
(6) MA organizations may create publicly accessible internal
coverage criteria that are based on current evidence in widely used
treatment guidelines or clinical literature when coverage criteria are
not fully established in applicable Medicare statutes, regulations,
NCDs or LCDs. 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. Acceptable clinical literature includes large, randomized
controlled trials or
[[Page 22329]]
prospective cohort 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.
(i) Coverage criteria not fully established. Coverage criteria are
not fully established when:
(A) additional, unspecified criteria are needed to interpret or
supplement general provisions in order to determine medical necessity
consistently. The MA organization must demonstrate that the additional
criteria provide clinical benefits that are highly likely to outweigh
any clinical harms, including from delayed or decreased access to items
or services;
(B) NCDs or LCDs include flexibility that explicitly allows for
coverage in circumstances beyond the specific indications that are
listed in an NCD or LCD; or
(C) There is an absence of any applicable Medicare statutes,
regulations, NCDs or LCDs setting forth coverage criteria.
(ii) Publicly accessible. For internal coverage policies, the MA
organization must provide in a publicly accessible way the following:
(A) The internal coverage criteria in use and a summary of evidence
that was considered during the development of the internal coverage
criteria used to make medical necessity determinations;
(B) A list of the sources of such evidence; and
(C) An explanation of the rationale that supports the adoption of
the coverage criteria used to make a medical necessity determination.
When coverage criteria are not fully established as described in
paragraph (6)(i)(A), the MA organization must identify the general
provisions that are being supplemented or interpreted and explain how
the additional criteria provide clinical benefits that are highly
likely to outweigh any clinical harms, including from delayed or
decreased access to items or services.
(c) Medical necessity determinations and special coverage
provisions--(1) Medical necessity determinations. (i) MA organizations
must make medical necessity determinations based on all of the
following:
(A) Coverage and benefit criteria as specified at paragraphs (b)
and (c) of this section and may not deny coverage for basic benefits
based on coverage criteria not specified in paragraph (b) or (c) of
this section.
(B) Whether the provision of items or services is reasonable and
necessary under section 1862(a)(1) of the Act.
(C) The enrollee's medical history (for example, diagnoses,
conditions, functional status), physician recommendations, and clinical
notes.
(D) Where appropriate, involvement of the organization's medical
director as required at Sec. 422.562(a)(4).
(ii) [Reserved]
(2) Exception for qualifying hospital stay. MA organizations may
elect to furnish, as part of their Medicare covered benefits, coverage
of posthospital SNF care as described in subparts C and D of this part,
in the absence of the prior qualifying hospital stay that would
otherwise be required for coverage of this care.
0
7. Section 422.109 is amended by revising the section heading and
adding paragraphs (e) and (f) to read as follows:
Sec. 422.109 Effect of national coverage determinations (NCDs) and
legislative changes in benefits; coverage of clinical trials and A and
B device trials.
* * * * *
(e) Clinical trials specified in NCD 310.1. (1) With the exception
specified in paragraph (e)(3) of this section, original Medicare is
responsible for coverage of MA enrollees participating in CMS-approved
clinical trials to include routine costs, as specified in NCD 310.1,
and any coverage for the diagnosis or treatment of complications
related to the clinical trial.
(2) MA enrollees are not charged traditional Medicare Part A and B
deductibles for clinical trial coverage.
(3) MA plans are responsible for paying the difference between
traditional Medicare cost-sharing incurred for qualifying clinical
trial items and services and the MA plan's in-network cost-sharing for
the same category of items and services.
(4) An enrollee's in-network cost-sharing portion must be included
in the MA plan's maximum out-of-pocket calculation.
(5) MA plans may not require prior authorization for participation
in a Medicare-qualified clinical trial not sponsored by the plan, nor
may it create impediments to an enrollee's participation in a non-plan-
sponsored clinical trial.
(f) A and B IDE trials. (1) MA plans are responsible for payment of
routine care items and services in CMS-approved Category A and Category
B IDE studies that are covered under Sec. 405.211(a) of this chapter.
(2) MA plans are responsible for coverage of CMS-approved Category
B devices that are covered under Sec. 405.211(b) of this chapter.
0
8. Section 422.111 is amended by revising paragraphs (b)(3)(i) and (e)
to read as follows:
Sec. 422.111 Disclosure requirements.
* * * * *
(b) * * *
(3) * * *
(i) The number, mix, and distribution (addresses) of providers from
whom enrollees may reasonably be expected to obtain services; 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; any out-of-network
coverage; any point-of-service option, including the supplemental
premium for that option; and how the MA organization meets the
requirements of Sec. Sec. 422.112 and 422.114 for access to services
offered under the plan.
* * * * *
(e) Changes to provider network. The MA organization must provide
enrollees notice of a termination of a contracted provider,
irrespective of whether the termination was for cause or without cause,
in accordance with Sec. 422.2267(e)(12). The MA organization must make
a good faith effort to provide enrollees notice of a for-cause
termination of a contracted provider within the timeframes required by
this paragraph (e). For all terminations, the MA organization must meet
the following requirements:
(1) For contract terminations that involve a primary care or
behavioral health provider:
(i) Provide written notice and make one attempt at telephonic
notice to those enrollees identified in paragraph (e)(1)(iii) of this
section who have not opted out of calls regarding plan business as
described in Sec. 422.2264(b),
(ii) At least 45 calendar days before the termination effective
date, and
(iii) To all enrollees who are currently assigned to that primary
care provider and to enrollees who have been patients of that primary
care or behavioral health provider within the past three years.
(2) For contract terminations that involve specialty types other
than primary care or behavioral health:
(i) Provide written notice,
(ii) At least 30 calendar days before the termination effective
date, and
(iii) To all enrollees who are patients seen on a regular basis by
the provider whose contract is terminating. The phrase ``enrollees who
are patients seen on a regular basis by the provider whose contract is
terminating'' means enrollees who are assigned to, currently receiving
care from, or have received care within
[[Page 22330]]
the past three months from a provider or facility being terminated.
* * * * *
0
9. Section 422.112 is amended by--
0
a. Adding a sentence at the end of paragraph (a)(1)(i);
0
b. Adding paragraph (a)(1)(iii);
0
c. Removing the last sentence of paragraph (a)(3);
0
d. Revising paragraphs (a)(6)(i), (a)(8) and (b)(3); and
0
e. Adding paragraph (b)(8).
The additions and revisions read as follows:
Sec. 422.112 Access to services.
(a) * * *
(1) * * *
(i) * * * The network must include providers that specialize in
behavioral health services.
* * * * *
(iii) Arrange for and cover 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.
* * * * *
(6) * * *
(i) Timeliness of access to care and member services that meet or
exceed standards in this paragraph. The MA organization must
continuously monitor access to care and member services and must take
corrective action as necessary to ensure that appointment wait times in
the provider network comply with these standards. The minimum standards
for appointment wait times for primary care and behavioral health
services are as follows for appointments:
(A) Urgently needed services or emergency--immediately;
(B) Services that are not emergency or urgently needed, but the
enrollee requires medical attention--within 7 business days; and
(C) Routine and preventive care--within 30 business days.
* * * * *
(8) Ensuring equitable access to Medicare Advantage (MA) Services.
Ensure that services are provided in a culturally competent manner and
to promote equitable access to all enrollees, including the following:
(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 living in rural areas and other areas with high levels
of deprivation.
(vii) People otherwise adversely affected by persistent poverty or
inequality.
* * * * *
(b) * * *
(3) Programs for coordination of plan services with community and
social services generally available through contracting or
noncontracting providers in the area served by the MA plan, including
nursing home and community-based services, and behavioral health
services; and
* * * * *
(8)(i) With respect to basic benefits, policies for using prior
authorization that at a minimum include that for enrollees undergoing
an active course of treatment--
(A) Approval of a prior authorization request for a course of
treatment must be valid for as long as medically necessary to avoid
disruptions in care, in accordance with applicable coverage criteria,
the individual patient's medical history, and the treating provider's
recommendation; and
(B) A minimum 90-day transition period for any active course(s) of
treatment when an enrollee has enrolled in an MA plan after starting a
course of treatment, even if the service is furnished by an out-of-
network provider. This includes enrollees new to a plan and enrollees
new to Medicare. 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.
(ii) For purposes of this paragraph (b)(8), the following
definitions apply:
(A) Course of treatment means as a prescribed order or ordered
course of treatment for a specific individual with a specific condition
is 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.
(B) Active course of treatment means a course of treatment in which
a patient is actively seeing the provider and following the course of
treatment.
* * * * *
0
10. Section 422.113 is amended by revising paragraph (b)(1)(i)
introductory text to read as follows:
Sec. 422.113 Special rules for ambulance services, emergency and
urgently needed services, and maintenance and post-stabilization care
services.
* * * * *
(b) * * *
(1) * * *
(i) Emergency medical condition means a medical condition, mental
or physical, 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--
* * * * *
0
11. Section 422.116 is amended by--
0
a. In paragraph (a)(1)(i), removing ``Sec. 422.114(a)(3)(ii)'' and
adding ``Sec. 422.2'' in its place;
0
b. Adding paragraphs (b)(1)(xxviii) and (xxix);
0
c. Adding in alphabetical order entries for ``Clinical Psychology'',
and ``Licensed Clinical Social Work'' to Table 1 to Paragraph (d)(2);
0
d. Adding paragraphs (d)(5)(xiii) and (xxiv); and
0
e. Adding in alphabetical order entries for ``Clinical Psychology'',
and ``Clinical Social Work'' to Table 2 to Paragraph (e)(3)(i)(C).
The revisions and additions read as follows:
Sec. 422.116 Network adequacy.
* * * * *
(b) * * *
(1) * * *
(xxviii) Clinical Psychology.
(xxix) Clinical Social Work.
* * * * *
(d) * * *
(2) * * *
[[Page 22331]]
[GRAPHIC] [TIFF OMITTED] TR12AP23.022
* * * * *
(5) * * *
(xiii) Clinical Psychology.
(xxiv) Clinical Social Work.
* * * * *
(e) * * *
(3) * * *
(i) * * *
(C) * * *
[GRAPHIC] [TIFF OMITTED] TR12AP23.023
* * * * *
0
12. Section 422.137 is added to read as follows:
Sec. 422.137 Medicare Advantage Utilization Management Committee.
(a) General. An MA organization that uses utilization management
(UM) policies and procedures, including prior authorization (PA), must
establish a UM committee that is led by a plan's medical director
(described in Sec. 422.562(a)(4)).
(b) Limit on use of UM policies and procedures. An MA plan may not
use any UM policies and procedures 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.
(c) Utilization Management Committee Composition. The UM committee
must--
(1) Include a majority of members who are practicing physicians.
(2) Include at least one practicing physician who is independent
and free of conflict relative to the MA organization and MA plan.
(3) Include at least one practicing physician who is an expert
regarding care of elderly or disabled individuals.
(4) 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.
(d) Utilization Management Committee Responsibilities. The UM
committee must--
(1) At least annually, review the policies and procedures for all
utilization management, including prior authorization, used by the MA
plan. Such review must consider:
(i) The services to which the utilization management applies;
(ii) Coverage decisions and guidelines for Traditional Medicare,
including NCDs, LCDs, and laws; and
(iii) Relevant current clinical guidelines.
(2) Approve only utilization management policies and procedures
that:
(i) Use or impose coverage criteria that comply with the
requirements and standards at Sec. 422.101(b);
(ii) For prior authorization policies, comply with requirements and
standards at Sec. 422.138;
(iii) Comply with the standards in Sec. 422.202(b)(1); and
(iv) Apply and rely on medical necessity criteria that comply with
Sec. 422.101(c)(1).
(3) Revise the utilization management policies and procedures as
necessary to comply with the standards in this regulation, including
removing requirements for UM for services and items that no longer
warrant UM.
(4) 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.
(5) Document in writing the reason for its decisions regarding the
development of UM policies and make this documentation available to CMS
upon request.
0
13. Section 422.138 is added to read as follows:
Sec. 422.138 Prior authorization.
(a) Requirement. When a coordinated care plan, as specified in
Sec. 422.4(a)(iii) (including MSA network plans), uses prior
authorization processes in connection with basic benefits or
supplemental benefits, the MA organization must comply with the
requirements in this section. (MA PFFS 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 plan in advance that services will be furnished).
Prior authorization processes include all policies and procedures used
in prior authorization unless otherwise noted.
(b) Application. Prior authorization processes for coordinated care
plans may only be used for one or more the following purposes:
[[Page 22332]]
(1) To confirm the presence of diagnoses or other medical criteria
that are the basis for coverage determinations for the specific item or
service; or
(2) For basic benefits, to ensure an item or service is medically
necessary based on standards specified in Sec. 422.101(c)(1), or
(3) For supplemental benefits, to ensure that the furnishing of a
service or benefit is clinically appropriate.
(c) Effect of prior authorization or pre-service approval. If the
MA organization approved the furnishing of a covered item or service
through a prior authorization or pre-service determination of coverage
or payment, it may not deny coverage later on the basis of lack of
medical necessity and may not reopen such a decision for any reason
except for good cause (as provided at Sec. 405.986 of this chapter) or
if there is reliable evidence of fraud or similar fault per the
reopening provisions at Sec. 422.616. The definitions of the terms
``reliable evidence'' and ``similar fault'' in Sec. 405.902 of this
chapter apply to this provision.
0
14. Section 422.152 is amended by adding paragraph (a)(5) to read as
follows:
Sec. 422.152 Quality Improvement Program.
(a) * * *
(5) Incorporate one or more activities that reduce disparities in
health and health care. These activities must be 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 disparities in health and health
care.
* * * * *
0
15. Section 422.162 is amended by--
0
a. In paragraph (a) adding in alphabetical order a definition for
``health equity index'' and a revision to the definition of ``highly-
rated contract''; and
0
b. Revising paragraphs (b)(1) and (b)(3)(iv)(A)(1).
The addition and revisions read as follows:
Sec. 422.162 Medicare Advantage Quality Rating System.
(a) * * *
Health equity index means an index that summarizes contract
performance among those with specified social risk factors (SRFs)
across multiple measures into a single score.
* * * * *
Highly-rated contract means a contract that has 4 or more stars for
its highest rating when calculated without the improvement measures and
with all applicable adjustments in Sec. 422.166(f).
* * * * *
(b) * * * (1) General. CMS calculates an overall Star Rating, Part
C summary rating, and Part D summary rating for each MA-PD contract,
and a Part C summary rating for each MA-only contract using the 5-star
rating system described in this subpart. Measures are assigned stars at
the contract level and weighted in accordance with Sec. 422.166(a).
Domain ratings are the unweighted mean of the individual measure
ratings under the topic area in accordance with Sec. 422.166(b).
Summary ratings are the weighted mean of the individual measure ratings
for Part C or Part D in accordance with Sec. 422.166(c), with the
applicable adjustments provided in paragraph (f) of this section.
Overall Star Ratings are calculated by using the weighted mean of the
individual measure ratings in accordance with Sec. 422.166(d), with
the applicable adjustments provided in paragraph (f) of this section.
CMS includes the Star Ratings measures in the overall and summary
ratings that are associated with the contract type for the Star Ratings
year.
* * * * *
(3) * * *
(iv) * * *
(A)(1) For the first year after consolidation, CMS uses enrollment-
weighted measure scores using the July enrollment of the measurement
period of the consumed and surviving contracts for all measures, except
survey-based measures, call center measures, and improvement measures.
The survey-based measures will use enrollment of the surviving and
consumed contracts at the time the sample is pulled for the rating
year. The call center measures will use average enrollment during the
study period. The Part C and D improvement measures are not calculated
for first year consolidations.
* * * * *
0
16. Section 422.164 is amended by adding paragraph (e)(1)(iii) to read
as follows:
Sec. 422.164 Adding, updating, and removing measures.
* * * * *
(e) * * *
(1) * * *
(iii) The measure steward other than CMS retires a measure.
* * * * *
0
17. Section 422.166 is amended by--
0
a. Revising paragraphs (a)(2)(i), (c)(1), (d)(1), (e)(1)(iii) and (iv),
(f)(1) introductory text, and (f)(2)(i) introductory text;
0
b. Adding paragraph (f)(3); and
0
c. Revising paragraphs (g)(1), (i)(3)(iv), (i)(9)(i), and (i)(10)(i).
The revisions and addition read as follows:
Sec. 422.166 Calculation of Star Ratings.
(a) * * *
(2) * * *
(i) The method maximizes differences across the star categories and
minimizes the differences within star categories using mean resampling
with the hierarchal clustering of the current year's data. Effective
for the Star Ratings issued in October 2023 and subsequent years, prior
to applying mean resampling with hierarchal clustering, Tukey outer
fence outliers are removed. Effective for the Star Ratings issued in
October 2022 and subsequent years, CMS will add a guardrail so that the
measure-threshold-specific cut points for non-CAHPS measures do not
increase or decrease more than the value of the cap from 1 year to the
next. The cap is equal to 5 percentage points for measures having a 0
to 100 scale (absolute percentage cap) or 5 percent of the restricted
range for measures not having a 0 to 100 scale (restricted range cap).
New measures that have been in the Part C and D Star Rating program for
3 years or less use the hierarchal clustering methodology with mean
resampling with no guardrail for the first 3 years in the program.
* * * * *
(c) * * *
(1) CMS will calculate the Part C summary ratings using the
weighted mean of the measure-level Star Ratings for Part C, weighted in
accordance with paragraph (e) of this section and with the applicable
adjustments provided in paragraph (f) of this section.
* * * * *
(d) * * *
(1) The overall rating for a MA-PD contract will be calculated
using a weighted mean of the Part C and Part D measure-level Star
Ratings, weighted in accordance with paragraph (e) of this section and
with the applicable adjustments provided in paragraph (f) of this
section.
* * * * *
(e) * * *
(1) * * *
(iii) Through the 2025 Star Ratings, patient experience and
complaint measures receive a weight of 4. Starting with the 2026 Star
Ratings and subsequent Star Ratings years, patient experience and
complaint measures receive a weight of 2.
[[Page 22333]]
(iv) Through the 2025 Star Ratings, access measures receive a
weight of 4. Starting with the 2026 Star Ratings and subsequent Star
Ratings years, access measures receive a weight of 2.
* * * * *
(f) * * *
(1) Reward factor. Through the 2026 Star Ratings, this rating-
specific reward factor is added to both the summary and overall ratings
of contracts that qualify for this reward factor based on both high and
stable relative performance for the rating level.
* * * * *
(2) * * *
(i) The CAI is added to or subtracted from the contract's overall
and summary ratings and is applied after the reward factor adjustment
described in paragraph (f)(1) of this section (if applicable).
* * * * *
(3) Health equity index. Starting with the 2027 Star Ratings year
and subsequent Star Ratings years, CMS applies a health equity index
rating-specific factor to both the summary and overall ratings of
contracts that qualify based on an assessment of contract performance
on quality measures among enrollees with certain social risk factors
(SRFs).
(i) The health equity index (HEI) is calculated separately for the
overall rating for MA-PDs and cost contracts including the applicable
Part C and D measures; Part C summary rating for MA-only, MA-PD, and
cost contracts including the applicable Part C measures; Part D summary
rating for MA-PDs and cost contracts including the applicable Part D
measures; and Part D summary rating for PDPs including the applicable
Part D measures.
(A) The SRFs included in the HEI are receipt of the low income
subsidy or being dually eligible for Medicare and Medicaid (LIS/DE), or
having a disability. Enrollees will be identified as LIS/DE or as
having a disability as specified in paragraph (f)(2)(i)(B) of this
section. If a person meets the LIS/DE criteria for only one of the two
measurement years included in the HEI, the data for that person for
just that year are used. Measures that are case-mix adjusted in the
Star Ratings are adjusted using all standard case-mix adjustors for the
measure except for those adjusters that are the SRFs of interest in the
index, are strongly correlated with the SRFs of interest, or are
conceptually similar to the SRFs of interest.
(B) The HEI is calculated by combining measure-level scores for the
subset of enrollees with SRFs of interest included in the HEI across
the two most recent measurement years using a modeling approach that
includes year as an adjustor to account for potential differences in
performance across years and to adjust the data to reflect performance
in the second of the 2 years of data used. Measure-level scores are
used for contracts that have data for only the most recent year of the
2 years, but measure-level scores are not used for contracts that have
data for only the first of the 2 years.
(ii) In determining the HEI scores, a measure will be excluded from
the calculation of the index if the measure meets any of the following:
(A) The focus of the measurement is not the enrollee but rather the
plan or provider.
(B) The measure is retired, moved to display, or has a substantive
specification change in either year of data used to construct the HEI.
(C) The measure is applicable only to SNPs.
(D) At least 25 percent of contracts are unable to meet the
criteria specified in paragraph (f)(3)(iv) of this section. For Part D
measures, this criterion is assessed separately for MA-PDs and cost
contracts, and for PDPs.
(iii) The Star Ratings measures that remain after the exclusion
criteria in paragraph (f)(3)(ii) of this section have been applied will
be included in the calculation of the HEI. CMS will announce the
measures being evaluated for inclusion in the calculation of the HEI
under this paragraph (f)(3) through the process described for changes
in and adoption of payment and risk adjustment policies in section
1853(b) of the Act.
(iv) For a measure to be included in the calculation of a
contract's HEI score, the measure must meet both of the following
criteria:
(A) The measure must have a reliability of at least 0.7 for the
contract when calculated for the combined subset of enrollees with the
SRF(s) specified in paragraph (f)(3)(i)(A) of this section across 2
years of data.
(B) The measure-specific denominator criteria must be met for the
contract using only the combined subset of enrollees in the contract
with the SRF(s) specified in paragraph (f)(3)(i)(A) of this section
across 2 years of data.
(v) To calculate the rating-specific HEI score, the distribution of
contract performance on each eligible measure for the subset of
enrollees that have one or more of the specified SRFs will be assessed
and separated into thirds, with the top third of contracts receiving 1
point, the middle third of contracts receiving 0 points, and the bottom
third of contracts receiving -1 point. The rating-specific HEI will
then be calculated as the weighted sum of points across all measures
included in the index using the Star Ratings measure weight for each
measure divided by the weighted sum of the number of eligible measures
for the given contract. The measure weight for each measure is the
weight used for the measure in the current Star Ratings year as
specified in paragraph (e) of this section.
(vi) To have the HEI calculated, contracts must have at least 500
enrollees in the most recent measurement year used in the HEI and have
at least half of the measures included in the HEI meet the criteria
specified under paragraph (f)(3)(iv) of this section.
(vii) In order to qualify for the full HEI reward, contracts must
have percentages of enrollees with the specified SRFs combined greater
than or equal to the contract-level median in the most recent year of
data used to calculate the HEI and a rating-specific minimum index
score of greater than zero. In order to qualify for one-half of the HEI
reward, contracts must have percentages of enrollees with SRFs greater
than or equal to one-half of the contract-level median up to, but not
including, the contract-level median percentage of enrollees with SRFs
in the most recent year of data used to calculate the HEI and a rating-
specific minimum index score of greater than zero. One-half of the
contract-level median and the contract-level median enrollment
percentages are assessed separately for contracts that offer Part C and
stand-alone Part D contracts.
(A) For contracts with service areas wholly located in Puerto Rico,
the percentage of enrollees that are LIS/DE or disabled is calculated
by adding the number of DE/disabled enrollees to the estimated LIS
percentage calculated by taking the percentage LIS/DE as calculated at
Sec. Sec. 422.166(f)(2)(vi) and (vii) and 423.186(f)(2)(vi) and (vii)
and subtracting the percentage of DE enrollees.
(B) Contracts with service areas wholly located in Puerto Rico are
excluded from the calculation of one-half of the contract-level median
and the contract-level median.
(viii) For contracts that have percentages of enrollees with SRFs
greater than or equal to the contract-level median enrollment
percentage, the HEI reward added to the contract's summary and overall
ratings will vary from 0 to 0.4 on a linear scale, with a contract
receiving 0 if the contract receives a score of 0 or less on the HEI
and 0.4 if the contract receives a score
[[Page 22334]]
of 1 on the HEI. For contracts that have percentages of enrollees with
SRFs greater than or equal to one-half the median percentage of
enrollees with SRFs up to, but not including, the contract-level median
percentage of enrollees with SRFs, the HEI reward added to the
contract's summary and overall ratings will vary from 0 to 0.2 on a
linear scale, with a contract receiving 0 if the contract receives a
score of 0 or less on the HEI and 0.2 if the contract receives a score
of 1 on the HEI. The HEI reward is rounded and displayed with 6 decimal
places. Contracts that cannot have an HEI score calculated (that is,
contracts that are not scored on at least half of the measures included
in the index) will not receive an HEI reward.
(ix) The HEI reward is calculated separately for, and then added
to, the overall rating, Part C rating for MA-PDs and MA-only contracts
(and cost contracts), Part D rating for MA-PDs (and cost contracts),
and Part D rating for PDPs after the addition of the CAI as specified
in paragraph (f)(2) of this section and application of the improvement
measures as specified in paragraph (g) of this section and before the
final overall and Part C and D summary ratings are calculated by
rounding to the nearest half star.
(g) * * *
(1) CMS runs the calculations twice for the highest level rating
for each contract-type (overall rating for MA-PD contracts and Part C
summary rating for MA-only contracts), with the reward factor
adjustment if applicable and the CAI adjustment, once including the
improvement measure(s) and once without including the improvement
measure(s). In deciding whether to include the improvement measures in
a contract's final highest rating, CMS applies the following rules:
* * * * *
(i) * * *
(3) * * *
(iv) For an affected contract with at least 25 percent of enrollees
in FEMA-designated Individual Assistance areas at the time of the
extreme and uncontrollable circumstance, the affected contract receives
the higher of the previous year's Star Rating or the current year's
Star Rating (and corresponding measure score) for each HOS and HEDIS-
HOS measure. The adjustment is for 3 years after the extreme and
uncontrollable circumstance.
* * * * *
(9) * * *
(i) Through the 2025 Star Ratings, CMS excludes the numeric values
for affected contracts with 60 percent or more of their enrollees in
the FEMA-designated Individual Assistance area at the time of the
extreme and uncontrollable circumstance from the clustering algorithms
described in paragraph (a)(2) of this section.
* * * * *
(10) * * *
(i) Through the 2025 Star Ratings, CMS excludes the numeric values
for affected contracts with 60 percent or more of their enrollees in
the FEMA-designated Individual Assistance area at the time of the
extreme and uncontrollable circumstance from the determination of the
performance summary and variance thresholds for the reward factor
described in paragraph (f)(1) of this section.
* * * * *
0
18. Section 422.202 is amended by revising paragraph (b)(1)(i) to read
as follows:
Sec. 422.202 Participation procedures.
(b) * * *
(1) * * *
(i) Are based on current evidence in widely used treatment
guidelines or clinical literature;
* * * * *
0
19. Section 422.503 is amended by revising paragraphs (e)(1) and (2) to
read as follows:
Sec. 422.503 General provisions.
* * * * *
(e) * * *
(1) The contract will be amended to exclude any MA plan, MA plan
segment, or State-licensed entity specified by CMS; and
(2) A separate contract for any such excluded plan, segment, or
entity will be deemed to be in place when such a request is made.
0
20. Section 422.504 is amended by adding paragraph (a)(19) to read as
follows:
Sec. 422.504 Contract provisions.
* * * * *
(a) * * *
(19) Not to establish a segment of an MA plan that meets the
criteria in Sec. 422.514(d), as determined in the procedures described
in Sec. 422.514(e)(3), with the addition of the newly enrolled
individuals.
* * * * *
0
21. Section 422.510 is amended by adding paragraph (a)(4)(xvi) to read
as follows:
Sec. 422.510 Termination of contract by CMS.
* * * * *
(a) * * *
(4) * * *
(xvi) Meets the criteria in Sec. 422.514(d)(1) or (2).
* * * * *
0
22. Section 422.514 is amended by revising paragraph (d)(1) and adding
paragraph (g) to read as follows:
Sec. 422.514 Enrollment requirements.
* * * * *
(d) * * *
(1) Enter into or renew a contract under this subpart, for plan
year 2024 and subsequent years, for a MA plan that--
(i) Is not a specialized MA plan for special needs individuals as
defined in Sec. 422.2; and
(ii) Projects enrollment in its bid submitted under Sec. 422.254
that 80 percent or more enrollees of the plan's total enrollment are
enrollees entitled to medical assistance under a State plan under title
XIX.
* * * * *
(g) Applicability to segments. The rules under paragraphs (d)
through (f) of this section also apply to segments of the MA plan as
provided for local MA plans under Sec. 422.262(c)(2).
0
23. Section 422.566 is amended by revising paragraph (d) to read as
follows:
Sec. 422.566 Organization determinations.
* * * * *
(d) Who must review organization determinations. 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 expertise
in the field of medicine or health care that is appropriate for the
services at issue, including knowledge of Medicare coverage criteria,
before the MA organization issues the organization determination
decision. The physician or 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.
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.
0
24. Section 422.590 is amended by revising paragraph (b)(1) to read as
follows:
[[Page 22335]]
Sec. 422.590 Timeframes and responsibility for reconsiderations.
* * * * *
(b) * * *
(1) If the MA organization makes a reconsidered determination that
is completely favorable to the enrollee, the MA organization must issue
its reconsidered determination to the enrollee (and effectuate it in
accordance with Sec. 422.618(a)(2)) no later than 60 calendar days
from the date it receives the request for a standard reconsideration.
* * * * *
0
25. Section 422.629 is amended by revising paragraph (k)(3) to read as
follows:
Sec. 422.629 General requirements for applicable integrated plans.
* * * * *
(k) * * *
(3) Integrated organization determinations. If the applicable
integrated plan expects to issue a partially or fully adverse medical
necessity (or any substantively equivalent term used to describe the
concept of medical necessity) decision based on the initial review of
the request, the integrated organization determination must be reviewed
by a physician or other appropriate health care professional with
expertise in the field of medicine or health care that is appropriate
for the services at issue, including knowledge of Medicare and Medicaid
coverage criteria, before the applicable integrated plan issues the
integrated organization determination decision. The physician or 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. 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.
* * * * *
0
26. Section 422.2261 is amended by revising paragraph (a)(2) and
removing paragraph (a)(3).
The revision reads as follows:
Sec. 422.2261 Submission, review, and distribution of materials.
(a) * * *
(2) Materials must be submitted to the HPMS Marketing Module by the
MA organization or, where materials have been developed by a Third
Party Marketing Organization for multiple MA organizations or plans, by
a Third Party Marketing Organization with prior review of each MA
organization on whose behalf the materials were created or will be
used.
* * * * *
0
27. Section 422.2262 is amended by revising paragraph (a)(1)(ii) and
adding paragraph (a)(1)(xix) to read as follows:
Sec. 422.2262 General communications materials and activity
requirements.
* * * * *
(a) * * *
(1) * * *
(ii) Use of superlatives, unless sources of documentation or data
supportive of the superlative is also referenced in the material. Such
supportive documentation or data must reflect data, reports, studies,
or other documentation that applies to the current or prior contract
year.
(A) Including data older than the prior contract year is permitted
provided the current and prior contract year data are specifically
identified.
(B) [Reserved]
* * * * *
(xix) Use the Medicare name, CMS logo, and products or information
issued by the Federal Government, including the Medicare card, in a
misleading way. Use of the Medicare card image is permitted only with
authorization from CMS.
* * * * *
0
28. Section 422.2263 is amended by adding paragraphs (b)(8) through
(10) to read as follows:
Sec. 422.2263 General marketing requirements.
* * * * *
(b) * * *
(8) Advertise benefits that are not available to beneficiaries in
the service area(s) where the marketing appears, unless the
advertisement is in local media that serves the service area(s) where
the benefits are available and reaching beneficiaries who reside in
other service areas is unavoidable.
(9) Market 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, benefits, or costs are
identified in the marketing material.
(i) MA organization or marketing names must be in 12-point font in
print and may not be in the form of a disclaimer or fine print.
(ii) For television, online, or social media, the MA organization
or marketing name(s) must be either read at the same pace as the phone
number or must be displayed throughout the entire advertisement in a
font size equivalent to the advertised phone number, contact
information, or benefits.
(iii) For radio or other voice-based advertisements, MA
organization or marketing names must be read at the same pace as the
advertised phone numbers or other contact information. (10) MA
organizations may not include 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.
* * * * *
0
29. Section 422.2264 is amended by -
0
a. Adding paragraphs (a)(2)(i)(A) and (B);
0
b. Revising paragraph (b)(2);
0
c. Removing paragraph (c)(1)(ii)(C).
0
d. Redesignating paragraphs (c)(1)(ii)(D) and (E) as paragraphs
(c)(1)(ii)(C) and (D) and revising newly redesignated (c)(1)(ii)(D);
0
f. Revising paragraphs (c)(2)(i), (c)(3)(i), and (c)(3)(iii)(A) and
(B).
The additions and revisions read as follows:
Sec. 422.2264 Beneficiary contact.
* * * * *
(a) * * *
(2) * * *
(i) * * *
(A) Contact is unsolicited door-to-door contact unless an
appointment, at the beneficiary's home at the applicable date and time,
was previously scheduled.
(B) [Reserved].
(b) * * *
(2) If the MA organization reaches out to beneficiaries regarding
plan business, as outlined in this section, the MA organization must
provide notice to all beneficiaries whom the plan contacts as least
once annually, in writing, of the individual's ability to opt out of
future calls regarding plan business.
(c) * * *
(1) * * *
(ii) * * *
(D) Make available and receive beneficiary contact information,
including Business Reply Cards, but not including Scope of Appointment
forms
(c) * * *
(2) * * *
(i) Marketing events are prohibited from taking place within 12
hours of an educational event, in the same location. The same location
is defined as the entire building or adjacent buildings.
* * * * *
(3) * * *
[[Page 22336]]
(i) At least 48 hours prior to the scheduled personal marketing,
the MA plan (or agent or broker, as applicable) must agree upon and
record the Scope of Appointment with the beneficiary(ies), except for:
(A) SOAs that are completed during the last four days of a valid
election period for the beneficiary.
(B) Unscheduled in person meetings (walk-ins) initiated by the
beneficiary.
* * * * *
(iii) * * *
(A) Market any health care related product during a marketing
appointment beyond the scope agreed upon by the beneficiary, and
documented by the plan in a Scope of Appointment, business reply card,
or request to receive additional information, which is valid for 12
months following the date of beneficiary's signature date or the date
of the beneficiary's initial request for information.
(B) Market additional health related lines of plan business not
identified prior to an individual appointment without a separate Scope
of Appointment, identifying the additional lines of business to be
discussed; such Scope of Appointment is valid for 12 months following
the beneficiary's signature date.
* * * * *
0
30. Section 422.2265 is amended by revising paragraph (b)(4) to read as
follows:
Sec. 422.2265 websites.
* * * * *
(b) * * *
(4) A provider directory searchable by every element required in
the model provider directory, such as name, location, specialty.
* * * * *
0
31. Section 422.2267 is amended by--
0
a. Redesignating paragraph (a)(3) as paragraph (a)(5);
0
b. Adding new paragraphs (a)(3) and (4);
0
c. Revising paragraph (e)(4) introductory text;
0
d. Adding paragraph (e)(4)(viii);
0
e. Revising paragraphs (e)(5)(ii)(A) introductory text, (e)(10)
introductory text, (e)(12), (e)(30)(vi) and (e)(41).
The additions and revisions read as follows:
Sec. 422.2267 Required materials and content.
* * * * *
(a) * * *
(3) Be provided to enrollees on a standing basis in any non-English
language identified in paragraphs (a)(2) and (4) of this section or
accessible format upon receiving a request for the materials in anon-
English language or accessible format or when otherwise learning of the
enrollee's primary language or need for an accessible format. This
requirement also applies to the individualized plans of care described
in Sec. 422.101(f)(1)(ii) for special needs plan enrollees.
(4) For any fully integrated dual eligible special needs plan or
highly integrated dual eligible special needs plan, as defined at Sec.
422.2, or applicable integrated plan, as defined at Sec. 422.561, be
translated into the language(s) 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 in paragraph (a)(2) of this section.
(5) * * *
(e) * * *
(4) Pre-Enrollment checklist (PECL). The PECL is a standardized
communications material that plans must provide to prospective
enrollees with the enrollment form, so that the enrollees understand
important plan benefits and rules. For telephonic enrollments, the
contents of the PECL must be reviewed with the prospective enrollee
prior to the completion of the enrollment. It references information on
the following:
* * * * *
(viii) Effect on current coverage.
(5) * * *
(ii) * * *
(A) Information on the following medical benefits, starting in the
top half of the first page and in the order as identified in paragraphs
(A)(1) through (A)(10), including--
* * * * *
(10) Non-renewal Notice. This is a standardized communications
material through which plans must provide the information required
under Sec. 422.506.
* * * * *
(12) Provider Termination Notice. This is a model communications
material through which plans must provide the information required
under Sec. 422.111(e).
(i) The written Provider Termination Notice must be provided in
hard copy via U.S. mail (first class postage is recommended, but not
required).
(ii) The written Provider Termination Notice must do all of the
following:
(A) Inform the enrollee that the provider will no longer be in the
network and the date the provider will leave the network.
(B) Include 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).
(C) Explain how the enrollee may request a continuation of ongoing
medical treatment or therapies with their current provider.
(D) Provide information about the annual coordinated election
period and the MA open enrollment period, as well as 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, as
specified in Sec. 422.62(b)(26), based on the individual's unique
circumstances and consistent with existing parameters for this SEP.
(E) Include the MA organization's call center telephone number, TTY
number, and hours and days of operation.
(iii) The telephonic Provider Termination Notice specified in 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
this section.
* * * * *
(30) * * *
(vi) Is excluded from the translation requirement under paragraphs
(a)(2) through (4) of this section; and
* * * * *
(41) Third-party marketing organization disclaimer. This is
standardized content. If a TPMO does not sell for all MA organizations
in the service area the disclaimer consists of the statement: ``We do
not offer every plan available in your area. Currently we represent
[insert number of organizations] organizations which offer [insert
number of plans] products in your area. Please contact Medicare.gov, 1-
800-MEDICARE, or your local State Health Insurance Program to get
information on all of your options.'' If the TPMO sells for all MA
organizations in the service area the disclaimer consists of the
statement: ``Currently we represent [insert number of organizations]
organizations which offer [insert number of plans] products in your
area. You can always contact Medicare.gov, 1-800-MEDICARE, or your
local State Health Insurance Program for help with plan choices.'' The
MA organization must ensure that the disclaimer is as follows:
(i) Used by any TPMO, as defined under Sec. 422.2260, that sells
plans on behalf of more than one MA organization.
[[Page 22337]]
(ii) Verbally conveyed within the first minute of a sales call.
(iii) Electronically conveyed when communicating with a beneficiary
through email, online chat, or other electronic means of communication.
(iv) Prominently displayed on TPMO websites.
(v) Included in any marketing materials, including print materials
and television advertisements, developed, used or distributed by the
TPMO.
0
32. Section 422.2272 is amended by adding paragraph (e) to read as
follows:
Sec. 422.2272 Licensing of marketing representatives and confirmation
of marketing resources.
* * * * *
(e) Establish and implement an oversight plan that monitors agent
and broker activities, identifies non-compliance with CMS requirements,
and reports non-compliance to CMS.
0
33. Section 422.2274 is amended by adding paragraph (c)(12) and
revising paragraph (g)(2)(ii) to read as follows:
Sec. 422.2274 Agent, broker, and other third-party requirements.
* * * * *
(c) * * *
(12) Ensure that, 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), 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),
costs of health care services, premiums, benefits, and specific health
care needs.
* * * * *
(g) * * *
(2) * * *
(ii) Record all marketing, sales, and enrollment calls, including
the audio portion of calls via web-based technology, in their entirety.
* * * * *
PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT
0
34. The authority citation for part 423 continues to read as follows:
Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152,
and 1395hh.
0
35. Section 423.4 is amended by adding in alphabetical order
definitions for ``Immediate need individual'', and ``Limited Income
Newly Eligible Transition (LI NET) sponsor'' to read as follows:
Sec. 423.4 Definitions.
* * * * *
Immediate need individual means a beneficiary whose enrollment into
LI NET is on the basis of presumed low income subsidy eligibility and
immediate need of a Part D drug.
* * * * *
Limited Income Newly Eligible Transition (LI NET) sponsor means a
Part D sponsor selected by CMS to administer the LI NET program.
* * * * *
0
36. Section 423.38 is amended by--
0
a. Revising paragraph (c)(16).
0
b. Redesignating paragraph (c)(34) as paragraph (c)(35); and
0
c. Adding new paragraph (c)(34).
The revision and addition read as follows:
Sec. 423.38 Enrollment periods.
(c) * * *
* * * * *
(16) The individual who is not entitled to premium free Part A and
enrolls in Part B during the General Enrollment Period for Part B that
starts January 1, 2023, is eligible to request enrollment in a Part D
plan. The special enrollment period begins when the individual submits
their Part B application and continues for the first 2 months of Part B
enrollment. The Part D plan enrollment is effective the first of the
month following the month the Part D sponsor receives the enrollment
request.
* * * * *
(34) The individual enrolls in Medicare premium-Part A or Part B
using an exceptional condition SEP, as described in 42 CFR parts 406.27
and 407.23. The SEP begins when the individual submits their premium-
Part A or Part B application and continues for the first 2 months of
enrollment in premium Part A or Part B. The Part D plan enrollment is
effective the first of the month following the month the Part D plan
receives the enrollment request.
* * * * *
0
37. Section 423.154 is amended by revising paragraph (c) to read as
follows:
Sec. 423.154 Appropriate dispensing of prescription drugs in long-
term care facilities under PDPs and MA-PD plans.
* * * * *
(c) Waivers. CMS waives the requirements under paragraph (a) of
this section, except paragraphs (a)(2) and (3) o this section, for
pharmacies when they service intermediate care facilities for
individuals with intellectual disabilities (ICFs/IID) and institutes
for mental disease (IMDs) as defined in Sec. 435.1010 and for I/T/U
pharmacies (as defined in Sec. 423.100).
* * * * *
0
38. Section 423.182 is amended by--
0
a. In paragraph (a) adding in alphabetical order a definition for
``health equity index'' and revising the definition of ``highly-rated
contract''; and
0
b. Revising paragraphs (b)(1) and (b)(3)(ii)(A)(1).
The addition and revisions read as follows:
Sec. 423.182 Part D Prescription Drug Plan Quality Rating System.
(a) * * *
Health equity index means an index that summarizes contract
performance among those with specified social risk factors (SRFs)
across multiple measures into a single score.
* * * * *
Highly-rated contract means a contract that has 4 or more stars for
its highest rating when calculated without the improvement measures and
with all applicable adjustments in Sec. 423.186(f).
* * * * *
(b) * * *
(1) General. CMS calculates an overall Star Rating, Part C summary
rating, and Part D summary rating for each MA-PD contract and a Part D
summary rating for each PDP contract using the 5-star rating system
described in this subpart. For PDP contracts, the Part D summary rating
is the highest rating. Measures are assigned stars at the contract
level and weighted in accordance with Sec. 423.186(a). Domain ratings
are the unweighted mean of the individual measure ratings under the
topic area in accordance with Sec. 423.186(b). Summary ratings are the
weighted mean of the individual measure ratings for Part C or Part D in
accordance with Sec. 423.186(c), with the applicable adjustments
provided in paragraph (f) of this section. Overall Star Ratings are
calculated by using the weighted mean of the individual measure ratings
in accordance with Sec. 423.186(d), with the applicable adjustments
provided in paragraph (f) of this section. CMS includes the Star
Ratings measures in the overall and summary ratings that are associated
with the contract type for the Star Ratings year.
* * * * *
(3) * * *
(ii) * * *
(A)(1) For the first year after consolidation, CMS uses enrollment-
weighted measure scores using the July enrollment of the measurement
period
[[Page 22338]]
of the consumed and surviving contracts for all measures, except
survey-based measures, call center measures, and improvement measures.
The survey-based measures will use enrollment of the surviving and
consumed contracts at the time the sample is pulled for the rating
year. The call center measures will use average enrollment during the
study period. The Part C and D improvement measures are not calculated
for first year consolidations.
* * * * *
0
39. Section 423.184 is amended by adding paragraph (e)(1)(iii) to read
as follows:
Sec. 423.184 Adding, updating, and removing measures.
* * * * *
(e) * * *
(1) * * *
(iii) The measure steward other than CMS retires a measure.
* * * * *
0
40. Section 423.186 is amended by--
0
a. Revising paragraphs (a)(2)(i), (c)(1), (d)(1), (e)(1)(iii) and (iv),
(f)(1) introductory text, and (f)(2)(i) introductory text;
0
b. Adding paragraph (f)(3); and
0
c. Revising paragraphs (g)(1), (i)(7)(i), and (i)(8)(i).
The revisions and addition read as follows:
Sec. 423.186 Calculation of Star Ratings.
(a) * * *
(2) * * *
(i) The method maximizes differences across the star categories and
minimizes the differences within star categories using mean resampling
with the hierarchal clustering of the current year's data. Effective
for the Star Ratings issued in October 2023 and subsequent years, prior
to applying mean resampling with hierarchal clustering, Tukey outer
fence outliers are removed. Effective for the Star Ratings issued in
October 2022 and subsequent years, CMS will add a guardrail so that the
measure-threshold-specific cut points for non-CAHPS measures do not
increase or decrease more than the value of the cap from 1 year to the
next. The cap is equal to 5 percentage points for measures having a 0
to 100 scale (absolute percentage cap) or 5 percent of the restricted
range for measures not having a 0 to 100 scale (restricted range cap).
New measures that have been in the Part C and D Star Rating program for
3 years or less use the hierarchal clustering methodology with mean
resampling with no guardrail for the first 3 years in the program.
* * * * *
(c) * * *
(1) CMS will calculate the Part D summary ratings using the
weighted mean of the measure-level Star Ratings for Part D, weighted in
accordance with paragraph (e) of this section and with the applicable
adjustments provided in paragraph (f) of this section.
* * * * *
(d) * * *
(1) The overall rating for a MA-PD contract will be calculated
using a weighted mean of the Part C and Part D measure-level Star
Ratings, weighted in accordance with paragraph (e) of this section and
with the applicable adjustments provided in paragraph (f) of this
section.
* * * * *
(e) * * *
(1) * * *
(iii) Through the 2025 Star Ratings, patient experience and
complaint measures receive a weight of 4. Starting with the 2026 Star
Ratings and subsequent Star Ratings years, patient experience and
complaint measures receive a weight of 2.
(iv) Through the 2025 Star Ratings, access measures receive a
weight of 4. Starting with the 2026 Star Ratings and subsequent Star
Ratings years, access measures receive a weight of 2.
* * * * *
(f) * * *
(1) Reward factor. Through the 2026 Star Ratings, this rating-
specific reward factor is added to both the summary and overall ratings
of contracts that qualify for this reward factor based on both high and
stable relative performance for the rating level.
* * * * *
(2) * * *
(i) The CAI is added to or subtracted from the contract's overall
and summary ratings and is applied after the reward factor adjustment
described in paragraph (f)(1) of this section (if applicable).
* * * * *
(3) Health equity index. Starting with the 2027 Star Ratings year
and subsequent Star Ratings years, CMS applies a health equity index
rating-specific factor to both the summary and overall ratings of
contracts that qualify based on an assessment of contract performance
on quality measures among enrollees with certain social risk factors
(SRFs).
(i) The health equity index (HEI) is calculated separately for the
overall rating for MA-PDs and cost contracts including the applicable
Part C and D measures; Part C summary rating for MA-only, MA-PD, and
cost contracts including the applicable Part C measures; Part D summary
rating for MA-PDs and cost contracts including the applicable Part D
measures; and Part D summary rating for PDPs including the applicable
Part D measures.
(A) The SRFs included in the HEI are receipt of the low-income
subsidy or being dually eligible for Medicare and Medicaid (LIS/DE), or
having a disability. Enrollees will be identified as LIS/DE or as
having a disability as specified in paragraph (f)(2)(i)(B) of this
section. If a person meets the LIS/DE criteria for only one of the two
measurement years included in the HEI, the data for that person for
just that year are used. Measures that are case-mix adjusted in the
Star Ratings are adjusted using all standard case-mix adjustors for the
measure except for those adjusters that are the SRFs of interest in the
index, are strongly correlated with the SRFs of interest, or are
conceptually similar to the SRFs of interest.
(B) The HEI is calculated by combining measure-level scores for the
subset of enrollees with SRFs of interest included in the HEI across
the two most recent measurement years using a modeling approach that
includes year as an adjustor to account for potential differences in
performance across years and to adjust the data to reflect performance
in the second of the 2 years of data used. Measure-level scores are
used for contracts that have data for only the most recent of the 2
years, but measure-level scores are not used for contracts that have
data for only the first of the 2 years.
(ii) In determining the HEI scores, a measure will be excluded from
the calculation of the index if the measure meets any of the following:
(A) The focus of the measurement is not the enrollee but rather the
plan or provider.
(B) The measure is retired, moved to display, or has a substantive
specification change in either year of data used to construct the HEI.
(C) The measure is applicable only to SNPs.
(D) At least 25 percent of contracts are unable to meet the
criteria specified in paragraph (f)(3)(iv) of this section. For Part D
measures, this criterion is assessed separately for MA-PDs and cost
contracts, and for PDPs.
(iii) The Star Ratings measures that remain after the exclusion
criteria in paragraph (f)(3)(ii) of this section have been applied will
be included in the calculation of the HEI. CMS will announce the
measures being evaluated for inclusion in the calculation of the HEI
under this paragraph (f)(3) of this section through the process
described for changes in and adoption of payment
[[Page 22339]]
and risk adjustment policies in section 1853(b) of the Act.
(iv) For a measure to be included in the calculation of a
contract's HEI score, the measure must meet both of the following
criteria:
(A) The measure must have a reliability of at least 0.7 for the
contract when calculated for the combined subset of enrollees with the
SRF(s) specified in paragraph (f)(3)(i)(A) of this section across 2
years of data.
(B) The measure-specific denominator criteria must be met for the
contract using only the combined subset of enrollees with the SRF(s)
specified in paragraph (f)(3)(i)(A) of this section across 2 years of
data.
(v) To calculate the rating-specific HEI score, the distribution of
contract performance on each eligible measure for the subset of
enrollees that have one or more of the specified SRFs will be assessed
and separated into thirds, with the top third of contracts receiving 1
point, the middle third of contracts receiving 0 points, and the bottom
third of contracts receiving -1 point. The rating-specific HEI will
then be calculated as the weighted sum of points across all measures
included in the index using the Star Ratings measure weight for each
measure divided by the weighted sum of the number of eligible measures
for the given contract. The measure weight for each measure is the
weight used for the measure in the current Star Ratings year as
specified in paragraph (e) of this section.
(vi) To have the HEI calculated, contracts must have at least 500
enrollees in the most recent measurement year used in the HEI and have
at least half of the measures included in the HEI meet the criteria
specified under paragraph (f)(3)(iv) of this section.
(vii) In order to qualify for the full HEI reward, contracts must
have percentages of enrollees with the specified SRFs combined greater
than or equal to the contract-level median in the most recent year of
data used to calculate the HEI and a rating-specific minimum index
score of greater than zero. In order to qualify for one-half of the HEI
reward, contracts must have percentages of enrollees with SRFs greater
than or equal to one-half of the contract-level median up to, but not
including, the contract-level median percentage of enrollees with SRFs
in the most recent year of data used to calculate the HEI and a rating-
specific minimum index score of greater than zero. One-half of the
contract-level median and the contract-level median enrollment
percentages are assessed separately for contracts that offer Part C and
stand-alone Part D contracts.
(A) For contracts with service areas wholly located in Puerto Rico,
the percentage of enrollees that are LIS/DE or disabled is calculated
by adding the number of DE/disabled enrollees to the estimated LIS
percentage calculated by taking the percentage LIS/DE as calculated at
Sec. Sec. 422.166(f)(2)(vi) and (vii) and 423.186(f)(2)(vi) and (vii)
and subtracting the percentage of DE enrollees.
(B) Contracts with service areas wholly located in Puerto Rico are
excluded from the calculation of one-half of the contract-level median
and the contract-level median.
(viii) For contracts that have percentages of enrollees with SRFs
greater than or equal to the contract-level median enrollment
percentage, the HEI reward added to the contract's summary and overall
ratings will vary from 0 to 0.4 on a linear scale with a contract
receiving 0 if the contract receives a score of 0 or less on the HEI
and 0.4 if the contract receives a score of 1 on the HEI. For contracts
that have percentages of enrollees with SRFs greater than or equal to
one-half the median percentage of enrollees with SRFs up to, but not
including, the contract-level median percentage of enrollees with SRFs,
the HEI reward added to the contract's summary and overall ratings will
vary from 0 to 0.2 on a linear scale, with a contract receiving 0 if
the contract receives a score of 0 or less on the HEI and 0.2 if the
contract receives a score of 1 on the HEI. The HEI reward is rounded
and displayed with 6 decimal places. Contracts that cannot have a HEI
score calculated (that is, contracts that are not scored on at least
half of the measures included in the index) will not receive an HEI
reward.
(ix) The HEI reward is calculated separately for, and then added
to, the overall rating, Part C rating for MA-PDs and MA-only contracts
(and cost contracts), Part D rating for MA-PDs (and cost contracts),
and Part D rating for PDPs after the addition of the CAI as specified
in paragraph (f)(2) of this section and application of the improvement
measures as specified in paragraph (g) of this section and before the
final overall and Part C and D summary ratings are calculated by
rounding to the nearest half star.
(g) * * *
(1) CMS runs the calculations twice for the highest level rating
for each contract-type (overall rating for MA-PD contracts and Part D
summary rating for PDPs), with the reward factor adjustment if
applicable and the CAI adjustment, once including the improvement
measure(s) and once without including the improvement measure(s). In
deciding whether to include the improvement measures in a contract's
final highest rating, CMS applies the following rules:
* * * * *
(i) * * *
(7) * * *
(i) Through the 2025 Star Ratings, CMS excludes the numeric values
for affected contracts with 60 percent or more of their enrollees in
the FEMA-designated Individual Assistance area at the time of the
extreme and uncontrollable circumstance from the clustering algorithms
described in paragraph (a)(2) of this section.
* * * * *
(8) * * *
(i) Through the 2025 Star Ratings, CMS excludes the numeric values
for affected contracts with 60 percent or more of their enrollees in
the FEMA-designated Individual Assistance area at the time of the
extreme and uncontrollable circumstance from the determination of the
performance summary and variance thresholds for the reward factor
described in paragraph (f)(1) of this section.
* * * * *
0
41. Section 423.265 is amended by
0
a. Redesignating paragraphs (b)(2) and (3) as paragraphs (b)(3) and
(4), respectively;
0
b. Adding new paragraph (b)(2).
0
c. Adding a paragraph heading to the newly redesignated paragraph
(b)(4); and
The additions read as follows:
Sec. 423.265 Submission of bids and related information.
* * * * *
(b) * * *
(2) Substantial differences between bids--(i) General rule. Except
as provided in paragraph (b)(2)(ii) of this section, potential Part D
sponsors' bid submissions must reflect differences in benefit packages
or plan costs that CMS determines to represent substantial differences
relative to a sponsor's other bid submissions. In order to be
considered ``substantially different,'' each bid must be significantly
different from the sponsor's other bids with respect to beneficiary
out-of-pocket costs or formulary structures.
(ii) Exception. A potential Part D sponsor's enhanced bid
submission does not have to reflect the substantial differences as
required in paragraph (b)(2)(i) of this section relative to any of its
other enhanced bid submissions.
* * * * *
(4) Bid acceptance. * * *
* * * * *
[[Page 22340]]
0
42. In Sec. 423.308 amend the definition of ``Gross covered
prescription drug costs'' by revising the introductory text and
paragraph (1) to read as follows:
Sec. 423.308 Definitions and terminology.
* * * * *
Gross covered prescription drug costs means those costs incurred
under a Part D plan, excluding administrative costs, but including
dispensing fees, during the coverage year. They equal the sum of the
following:
(1) The share of actual costs (as defined by Sec. 423.100 of this
part) paid by the Part D plan that is received as reimbursement by the
pharmacy, or other dispensing entity, reimbursement paid to indemnify
an enrollee when the reimbursement is associated with an enrollee
obtaining covered Part D drugs under the Part D plan, or payments made
by the Part D sponsor to other parties listed in Sec. 423.464(f)(1) of
this part with which the Part D sponsor must coordinate benefits,
including other Part D plans, or as the result of any reconciliation
process developed by CMS under Sec. 423.464 of this part.
* * * * *
0
43. Section 423.505 is amended by revising paragraph (b)(22) to read as
follows:
Sec. 423.505 Contract provisions.
* * * * *
(b) * * *
(22) Through the CMS complaint tracking system, address and resolve
complaints received by CMS against the Part D sponsor.
* * * * *
0
44. Section 423.773 is amended by:
0
a. Revising paragraph (b)(1);
0
b. In paragraph (b)(2)(ii) removing the phrase ``For subsequent
years,'' and adding in its place the phrase ``For years 2007 through
2023,'';
0
c. Adding paragraph (b)(2)(iii); and
0
d. Revising paragraph (d) introductory text.
The revisions and addition read as follows:
Sec. 423.773 Requirements for eligibility.
* * * * *
(b) * * *
(1) Has income below 135 percent of the FPL applicable to the
individual's family size or, with respect to a plan year beginning on
or after January 1, 2024, has income below 150 percent of the FPL
applicable to the individual's family size; and
(2) * * *
(iii) For plan years beginning on or after January 1, 2024, the
amount of resources specified at paragraph (d)(2) of this section.
* * * * *
(d) Other low-income subsidy individuals. Other low-income subsidy
individuals are subsidy eligible individuals who, for plan years
beginning before January 1, 2024--
* * * * *
0
45. Section 423.780 is amended by revising paragraph (d) introductory
text to read as follows:
Sec. 423.780 Premium subsidy.
* * * * *
(d) Other low-income subsidy eligible individuals--sliding scale
premium. Other low-income subsidy eligible individuals are entitled to
a premium subsidy for plan years beginning before January 1, 2024,
based on a linear sliding scale ranging from 100 percent of the premium
subsidy amount described in paragraph (b) of this section as follows:
* * * * *
0
46. Section 423.2261 is amended by revising paragraph (a)(2) and
removing paragraph (a)(3).
The revision reads as follows:
Sec. 423.2261 Submission, review, and distribution of materials.
* * * * *
(a) * * *
(2) Materials must be submitted to the HPMS Marketing Module by the
Part D sponsor or, where materials have been developed by a Third Party
Marketing Organization for multiple Part D sponsors or plans, by a
Third Party Marketing Organization with prior review of each Part D
sponsor on whose behalf the materials were created or will be used.
* * * * *
0
47. Section 423.2262 is amended by revising paragraph (a)(1)(ii) and
adding paragraph (a)(1)(xviii) to read as follows:
Sec. 423.2262 General communications materials and activity
requirements.
* * * * *
(ii) Use of superlatives, unless sources of documentation or data
supportive of the superlative is also referenced in the material. Such
supportive documentation or data must reflect data, reports, studies,
or other documentation that applies to the current contract year or
prior contract year.
(A) Including data older than the prior contract year is permitted
provided the current and prior contract year data are specifically
identified.
(B) [Reserved]
* * * * *
(xviii) Use of the Medicare name, CMS logo, and products or
information issued by the Federal Government, including the Medicare
card in a misleading way. Use of the Medicare card image is permitted
only with authorization from CMS.
* * * * *
0
48. Section 423.2263 is amended by adding paragraphs (b)(8) through
(10) to read as follows:
Sec. 423.2263 General marketing requirements.
* * * * *
(b) * * *
(8) Advertise benefits that are not available to beneficiaries in
the service area(s) where the marketing appears, unless the
advertisement is in local media that serves the service area(s) where
the benefits are available and reaching beneficiaries who reside in
other service areas is unavoidable.
(9) Market 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, benefits, or costs are
identified in the marketing material.
(i) Part D sponsor or marketing names must be in 12-point font in
print and may not be in the form of a disclaimer or in fine print.
(ii) For television, online, or social media, the Part D sponsor or
marketing name(s) must be either read at the same pace as the phone
number or must be displayed throughout the entire advertisement in a
font size equivalent to the advertised phone number, contact
information or benefits.
(iii) For radio or other voice-based advertisements, Part D sponsor
or marketing names must be read at the same pace as phone numbers or
contact information.
(10) Part D sponsors may not include 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.
* * * * *
0
49. Section 423.2264 is amended by:
0
a. Adding paragraphs (a)(2)(i)(A) and (B);
0
b. Revising paragraphs (b)(2);
0
c. Removing paragraph (c)(1)(ii)(C);
0
d. Redesignating paragraphs (c)(1)(ii)(D) and E as paragraphs
(c)(1)(ii)(C) and (D);
0
e. Revising newly redesignated paragraph (c)(1)(ii)(D); and
0
f. Revising paragraphs (c)(2)(i), (c)(3)(i), and (c)(3)(iii)(A) and
(B).
The addition additions and revisions read as follows:
[[Page 22341]]
Sec. 423.2264 Beneficiary contact.
* * * * *
(a) * * *
(2) * * *
(i) * * *
(A) Contact is unsolicited door-to-door contact unless an
appointment, at the beneficiary's home at the applicable time and date,
was previously scheduled.
(B) [Reserved]
* * * * *
(b) * * *
(2) If the Part D sponsor reaches out to beneficiaries regarding
plan business, as outlined in this section, the Part D sponsor must
provide notice to all beneficiaries whom the plan contacts as least
once annually, in writing, of the individual's ability to opt out of
future calls regarding plan business.
(c) * * *
(1) * * *
(ii) * * *
(D) Make available and receive beneficiary contact information,
including Business Reply Cards, but not including Scope of Appointment
forms
(c) * * *
(2) * * *
(i) Marketing events are prohibited from taking place within 12
hours of an educational event, in the same location. The same location
is defined as the entire building or adjacent buildings.
* * * * *
(3) * * *
(i) At least 48 hours prior to the scheduled personal marketing
appointment, the Part D plan (or agent or broker, as applicable) must
agree upon and record the Scope of Appointment with the
beneficiary(ies), except for:
(A) SOAs that are completed during the last four days prior of a
valid election period for the beneficiary.
(B) Unscheduled in person visits (walk-ins) initiated by the
beneficiary.
* * * * *
(iii) * * *
(A) Market any health care related product during a marketing
appointment beyond the scope agreed upon by the beneficiary, and
documented by the plan in a Scope of Appointment, business reply card,
or request to receive additional information, which is valid for 12
months following the date of beneficiary's signature date or the date
of the beneficiary's initial request for information.
(B) Market additional health related lines of plan business not
identified prior to an individual appointment without a separate Scope
of Appointment, identifying the additional lines of business to be
discussed; such Scope of Appointment is valid for 12 months following
the beneficiary's signature date.
* * * * *
0
50. Section 423.2267 is amended by--
0
a. Redesignating paragraph (a)(3) as paragraph (a)(5);
0
b. Adding new paragraphs (a)(3) and (4);
0
c. Revising paragraph (e)(4) introductory text;
0
d. Adding paragraph (e)(4)(viii);
0
e. Revising paragraphs (e)(13) introductory text, (e)(32)(vi), and
(e)(41); and
0
f. Adding new paragraphs (e)(42) through (e)(44).
The revisions and additions read as follows:
Sec. 423.2267 Required materials and content.
* * * * *
(a) * * *
(3) Be provided to enrollees on a standing basis in any non-English
language identified in paragraphs (a)(2) and (4) of this section and/or
accessible format using auxiliary aids and services upon receiving a
request for the materials in a non-English language or accessible
format or when otherwise learning of the enrollee's primary language
and/or need for an accessible format. This requirement also applies to
the individualized plans of care described in Sec. 422.101(f)(1)(ii)
of this chapter for special needs plan enrollees.
(4) For any fully integrated dual eligible special needs plan or
highly integrated dual eligible special needs plan as defined at Sec.
422.2 of this chapter, or applicable integrated plan as defined at
Sec. 422.561 of this chapter, be translated into the language(s)
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 in paragraph
(a)(2) of this section.
* * * * *
(e) * * *
(4) Pre-enrollment checklist (PECL). The PECL is a standardized
communications material that plans must provide to prospective
enrollees with the enrollment form, so that the enrollees understand
important plan benefits and rules. For telephonic enrollments the
contents of the PECL must be reviewed with the prospective enrollee
prior to the completion of the enrollment. It references information on
the following:
* * * * *
(viii) Effect on current coverage.
* * * * *
(13) Non-renewal notice. This is a standardized communications
material through which plans must provide the information required
under Sec. 423.507.
* * * * *
(32) * * *
(vi) Is excluded from the translation requirement under paragraphs
(a)(2) through (4) of this section; and
* * * * *
(41) Third-party marketing organization disclaimer. This is
standardized content. If a TPMO does not sell for all Part D sponsors
in the service area the disclaimer consists of the statement: ``We do
not offer every plan available in your area. Currently we represent
[insert number of organizations] organizations which offer [insert
number of plans] products in your area. Please contact Medicare.gov, 1-
800-MEDICARE, or your local State Health Insurance Program to get
information on all of your options.'' If the TPMO sells for all Part D
sponsors in the service area the disclaimer consists of the statement:
``Currently we represent [insert number of organizations] organizations
which offer [insert number of plans] products in your area. You can
always contact Medicare.gov, 1-800-MEDICARE, or your local State Health
Insurance Program for help with plan choices.'' The MA organization
must ensure that the disclaimer is as follows:
(i) Used by any TPMO, as defined under Sec. 422.2260, that sells
plans on behalf of more than one MA organization.
(ii) Verbally conveyed within the first minute of a sales call.
(iii) Electronically conveyed when communicating with a beneficiary
through email, online chat, or other electronic means of communication.
(iv) Prominently displayed on TPMO websites.
(v) Included in any marketing materials, including print materials
and television advertisements, developed, used or distributed by the
TPMO.
(42) [Reserved]
(43) Comprehensive medication review--written summary. This is the
standardized communications material Part D sponsors must provide to
all MTM program enrollees who receive a comprehensive medication
review, as required under Sec. 423.153(d)(1)(vii)(B).
(44) Safe disposal information. This is model communications
material Part D sponsors must provide to all enrollees targeted for its
MTM program, as required under Sec. 423.153(d)(1)(vii)(E).
0
51. Section 423.2272 is amended by adding paragraph (e) to read as
follows:
[[Page 22342]]
Sec. 423.2272 Licensing of marketing representatives and confirmation
of marketing resources.
* * * * *
(e) Establish and implement an oversight plan that monitors agent
and broker activities, identifies non-compliance with CMS requirements,
and reports non-compliance to CMS.
0
52. Section 423.2274 is amended by adding paragraph (c)(12) and
revising paragraph (g)(2)(ii):
Sec. 423.2274 Required materials and content.
* * * * *
(c) * * *
(12) Ensure that, 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 or incentives.
* * * * *
(g) * * *
(2) * * *
(ii) Record all marketing, sales, and enrollment calls, including
the audio portion of calls occurring via web-based technology, in their
entirety.
* * * * *
0
53. Subpart Y is added to read as follows:
Subpart Y--Transitional Coverage and Retroactive Medicare Part D
Coverage for Certain Low-Income Beneficiaries Through the Limited
Income Newly Eligible Transition (LI NET) Program
Sec.
423.2500 Basis and scope.
423.2504 LI NET eligibility and enrollment.
423.2508 LI NET benefits and beneficiary protections.
423.2512 LI NET sponsor requirements.
423.2516 Selection of LI NET sponsor and contracting provisions.
423.2518 Intermediate sanctions for the LI NET sponsor.
423.2520 Non-renewal or termination of appointment.
423.2524 Bidding and payments to LI NET sponsor.
423.2536 Waiver of Part D program requirements.
Subpart Y--Transitional Coverage and Retroactive Medicare Part D
Coverage for Certain Low-Income Beneficiaries Through the Limited
Income Newly Eligible Transition (LI NET) Program
Sec. 423.2500 Basis and scope.
(a) Basis. This subpart is based on section 1860D-14 of the Social
Security Act.
(b) Scope. This subpart sets forth the requirements for the Limited
Income Newly Eligible Transition (LI NET) program that begins no later
than January 1, 2024. Under this program, eligible individuals are
provided transitional coverage for Part D drugs.
Sec. 423.2504 LI NET eligibility and enrollment.
(a) Eligibility. An individual is eligible for LI NET coverage if
they satisfy the criteria at paragraph (a)(1) or (2) of this section.
(1) LIS-eligible. The individual is a low-income subsidy eligible
individual as defined at Sec. 423.773 and--
(i) Has not yet enrolled in a prescription drug plan or an MA-PD
plan; or
(ii) Has enrolled in a prescription drug plan or MA-PD plan but
their coverage has not yet taken effect.
(2) Immediate need individuals. An individual who states their
eligibility for LIS and immediate need for their prescription, but
whose eligibility as defined at Sec. 423.773 cannot be confirmed at
the point-of-sale, will be granted immediate need LI NET coverage.
(3) Documentation of LIS eligibility. Individuals may provide
documentation to the LI NET sponsor to demonstrate LIS eligibility.
Documentation may include, but is not limited to:
(i) A copy of the beneficiary's Medicaid card that includes their
name and the eligibility date;
(ii) A copy of a letter from the State or SSA showing LIS or
``Extra Help'' status;
(iii) 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;
(iv) A copy of a State document that confirms active Medicaid
status;
(v) A screen-print from the State's Medicaid systems showing
Medicaid status; or
(vi) Evidence at point-of-sale of recent Medicaid billing and
payment in the pharmacy's patient profile.
(4) Confirmation of LIS eligibility. CMS uses documentation
submitted under paragraph (a)(3) of this section to confirm LIS
eligibility.
(5) Inability to confirmation of eligibility. If CMS cannot confirm
an immediate need individual's eligibility during the period of LI NET
coverage, the individual will not be auto-enrolled into a standalone
Part D plan in accordance with Sec. 423.34(d) following their LI NET
coverage.
(b) Enrollment. Individuals who are eligible for LI NET as defined
in Sec. 423.2504 are enrolled into the LI NET program as follows:
(1) Automatic enrollment. Beneficiaries 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 the beneficiary has affirmatively
declined enrollment in Part D per Sec. 423.34(e);
(2) Point-of-sale enrollment. An individual who is not
automatically enrolled in accordance with paragraph (b)(1) of this
section and whose claim is submitted at the point-of-sale and accepted
by the LI NET sponsor will be enrolled into the LI NET program by the
LI NET sponsor; or
(3) Direct reimbursement request. An individual described in
paragraph (a)(1) of this section who is not automatically enrolled in
accordance with paragraph (b)(1) or at the point-of-sale as provided in
paragraph (b)(2) of this section and who submits a direct reimbursement
request form, receipts for reimbursement for eligible claims paid out
of pocket (with and optional documentation of LIS eligibility listed in
paragraph (a)(3) of this section), will be retroactively enrolled into
the LI NET program by the LI NET sponsor. The LI NET sponsor has 14
calendar days to reply with a coverage decision; or
(4) LI NET application form. An individual who is not enrolled
through one of the methods in paragraphs (b)(1) though (3) of this
section may submit an LI NET application form to the LI NET sponsor
(with optional documentation of LIS eligibility listed in paragraph
(a)(3) of this section). If no documentation is submitted and accepted,
the LI NET sponsor will periodically check for eligibility and enroll
applicants once LIS eligibility is confirmed.
(c) Duration of LI NET enrollment. (1) Enrollment begins on the
first day of the month an individual is identified as eligible under
this section and ends after 2 months, with a longer LI NET enrollment
for those with retroactive coverage per paragraph (c)(2) of this
section.
(2) Retroactive LI NET coverage begins on the date an individual is
identified as eligible for a low-income subsidy as a full-benefit dual
eligible 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. LI NET coverage ends with enrollment into a Part D plan or
opting out of Part D coverage.
(d) Ending LI NET enrollment. An individual's enrollment in the LI
NET program ends when:
[[Page 22343]]
(1) The individual is auto-enrolled into a standalone Part D plan
in accordance with the guidelines at Sec. 423.34(d) and that coverage
has taken effect.
(2) The individual elects another Part D plan and that coverage has
taken effect.
(3) The individual voluntarily disenrolls from the LI NET program.
(4) The individual is involuntarily disenrolled under Sec.
423.44(b).
(5) LIS eligibility for an individual in LI NET due to an immediate
need cannot be confirmed within the period of LI NET coverage.
Sec. 423.2508 LI NET benefits and beneficiary protections.
(a) Formulary. The LI NET program provides access to all Part D
drugs under an open formulary.
(b) Network. The LI NET sponsor must allow its network and out-of-
network pharmacies that are in good standing to process claims under
the program. Licensed pharmacies are considered to be in good standing
for the LI NET program so long as they: are not revoked from Medicare
under Sec. 424.535; do 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 or from Medicare and State health
care programs under section 1156 of the Act (unless waived by the OIG);
do not appear on the preclusion list as defined at Sec. 423.100; and
do not have a determination by the LI NET sponsor of a credible
allegation of fraud as defined at Sec. 423.4.
(c) Safety. The following provisions necessary to improve patient
safety and ensure appropriate dispensing of medication apply to the LI
NET program and LI NET sponsor, as applicable:
(1) Sections 423.153(b) and (c) for dispensing and point-of-sale
safety edits;
(2) Section 423.154 for appropriate dispensing of prescription
drugs in long-term care facilities;
(3) Sections 423.159 and 423.160 for electronic prescribing,
excepting the requirements pertaining to formulary standards in Sec.
423.160(b)(5);
(4) Section 423.162 for QIO activities; and
(5) Section 423.165 for compliance deemed on the basis of
accreditation.
(d) Cost sharing. (1) LI NET beneficiaries under Sec.
423.2504(a)(1) will pay the applicable cost sharing for their low-
income category as established for each year in the Rate Announcement
publication specified in Sec. 422.312 of this chapter.
(2) LI NET beneficiaries under Sec. 423.2504(a)(2) will pay the
cost sharing associated with the category of non-institutionalized
full-benefit dual eligible individuals with incomes above 100% of the
Federal poverty level and full-subsidy-non-FBDE individuals. If the
beneficiary is later confirmed to belong to a different LIS category,
the LI NET sponsor must reimburse the beneficiary for the difference
between the cost sharing they paid versus what they would have paid in
their LIS category.
(e) Appeals. LI NET enrollees have rights with respect to Part D
grievances, coverage determinations, and appeals processes set out in
subpart M of this part.
Sec. 423.2512 LI NET sponsor requirements.
The LI NET program is administered by one or more Part D sponsor(s)
that meet all of the requirements in paragraphs (a) through (c) of this
section.
(a) Pharmacies and access to Part D drugs. (1) The LI NET sponsor
must be a PDP sponsor that has an established contracted pharmacy
network in all geographic areas of the United States in which low-
income subsidies are available.
(2) The LI NET sponsor must meet the requirements for providing
access to Part D drugs under Sec. 423.120(a), (c), and (d).
(b) Experience. The LI NET sponsor must have a minimum of two
consecutive years contracting with CMS as a Part D sponsor.
(c) Other LI NET sponsor requirements. The LI NET sponsor must:
(1) Have the technical capability and the infrastructure to provide
immediate, current, and retroactive coverage for LI NET enrollees;
(2) Have the technical capability to develop the infrastructure
necessary for verifying Medicaid dual eligibility status for presumed
eligible LI NET enrollees.
(3) Identify, develop, and conduct outreach plans in consultation
with CMS targeting key stakeholders to inform them about the LI NET
program.
(4) Establish and manage a toll-free customer call center per Sec.
423.128(d)(1) 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 supporting documentation.
(5) Timely respond to beneficiary requests for reimbursement of
claims by issuing reimbursement for eligible claims submitted by
beneficiaries no later than 30 days after receipt, or, if the drug is
not covered, the LI NET sponsor has 14 days to send communication to
the beneficiary with a reason for the denial.
(6) Adjudicate claims from out-of-network pharmacies that are in
good standing (as defined in Sec. 423.2508(b)) according to the LI NET
sponsor's standard reimbursement for their network pharmacies.
Sec. 423.2516 Selection of LI NET sponsor and contracting provisions.
(a) Appointment by CMS. CMS appoints a Part D sponsor that meets
the requirements at Sec. 423.2512 to serve as the LI NET sponsor.
(b) Selection criteria. In appointing a LI NET sponsor, CMS
evaluates the following:
(1) 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;
(2) Pharmacy access as outlined in Sec. 423.120;
(3) Past performance, including Star Ratings (as detailed in Sec.
423.186), previous intermediate sanctions (as detailed in Sec.
423.750), and consistent with past performance in Sec. 423.503(b); and
(4) Ability to meet the requirements listed in Sec. 423.505 that
are not waived under Sec. 423.2536.
(c) Term of appointment. 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 Sec.
423.2524(b)) to determine payment rates for the upcoming year.
Sec. 423.2518 Intermediate sanctions for the LI NET sponsor.
In the event it is determined that the LI NET sponsor violated its
contract, CMS may impose intermediate sanctions as outlined in subpart
O of this part.
Sec. 423.2520 Non-renewal or termination of appointment.
(a) Notice of non-renewal. 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
notifies the LI NET sponsor by January 1 of the year before the next
contract year.
(b) Selection of successor and transition period. After a notice of
non-renewal or termination, CMS selects a
[[Page 22344]]
successor for the LI NET contract from among potentially eligible
entities (as detailed in Sec. 423.2516). The outgoing LI NET sponsor
must coordinate with the successor for a period of no less than 3
months to ensure seamless transition of the LI NET program, including
timely transfer of any data or files.
(c) Immediate termination for cause. (1) Notwithstanding paragraph
(a) of this section, CMS may immediately terminate the existing LI NET
contract for any of the reasons specified at Sec. 423.509(a)(4)(i) and
(xii) or Sec. (b)(2)(i)(A) and (B).
(2) CMS sends notice of an immediate termination as specified at
Sec. 423.509(b)(2)(ii).
(d) Appeal rights. Subpart N of this part applies to a termination
under paragraph (c) of this section.
Sec. 423.2524 Bidding and payments to LI NET sponsor.
(a) Source of payments. CMS payments under this section are made
from the Medicare Prescription Drug Account.
(b) Submission of bids and related information. (1) The submission
of LI NET bids and related information must follow the requirements and
limitations in Sec. 423.265(b), (c), (d)(1), (d)(2)(i), (ii), (iv),
and (v), (d)(4) and (6), and (e).
(2) The review, negotiation, and approval of the LI NET bid would
follow the provisions in Sec. 423.272(a) and (b)(1) and (4).
(3) Basic rule for bid. The bid must reflect the LI NET sponsor's
estimate of its revenue needs for Payment Rates A and B per paragraph
(c) of this section.
(c) Monthly payments. CMS provides advance monthly LI NET payments
equal to the sum of Payment Rates A and B as established in the LI NET
sponsor's approved bid, as outlined in paragraph (b) of this section.
LI NET payments are made on a prospective per-member, per-month basis.
(1) Payment Rate A is an annual rate of payment for projected
administrative costs. An annual percentage-based cap on Payment Rate A
limiting the year over year increase to Payment Rate A is set as part
of the bid review and negotiation under Sec. 423.272(a).
(i) For the 2024 plan year, the LI NET sponsor includes in its bid
the assumption that Payment Rate A cannot exceed a 2% increase from the
prior year's Payment A, which is a figure CMS will provide to the LI
NET sponsor.
(ii) For the 2025 plan year and subsequent plan years, the LI NET
sponsor will specify its assumption for any increase needed to the
prior year's Payment Rate A, submitting justification to CMS in their
bid if the cap exceeds 2%.
(2) Payment Rate B reflects the projected net costs of the Part D
drugs dispensed to individuals who receive the LI NET benefit.
(d) Payment reconciliation and risk corridors--(1) Reconciliation.
CMS conducts LI NET payment reconciliation each year for Payment Rates
A and B after the annual PDE data submission deadline has passed and
makes the resulting payment adjustment consistent with Sec.
423.343(a).
(2) Risk corridors. As part of LI NET payment reconciliation, CMS
will apply risk corridors to Payment Rate B as follows:
(i) There will be no risk sharing in the symmetrical 1% risk
corridor around the target amount as defined in Sec. 423.308.
(ii) There will be symmetrical risk sharing of 0.1% beyond the 1%
risk corridor.
(iii) To carry out this section, Sec. 423.336(c) applies to LI
NET.
(e) Reopening. The LI NET contract will be subject to payment
reopenings per Sec. 423.346 as applicable.
(f) Payment appeals. The LI NET sponsor can appeal under Sec.
423.350.
(g) Overpayments. The overpayment provisions at Sec. Sec. 423.352
and 423.360 apply to LI NET.
Sec. 423.2536 Waiver of Part D program requirements.
CMS waives the following Part D program requirements for the LI NET
program:
(a) General information. Paragraphs (1) and (3)(B) of section
1860D-4(a) of the Act (relating to dissemination of general
information; availability of information on changes in formulary
through the internet).
(b) Formularies. Subparagraphs (A) and (B) of section 1860D-4(b)(3)
of the Act (relating to requirements on development and application of
formularies; formulary development) and formulary requirements in
Sec. Sec. 423.120(b) and 423.128(e)(5) and (6).
(c) Cost control and quality improvement requirements. Provisions
under subpart D of this part, including requirements about medication
therapy management, are waived except for the provisions in Sec.
423.2508(d)(1) through (5).
(1) Section 423.153(b) and (c) for dispensing and point-of-sale
safety edits;
(2) Section 423.154 for appropriate dispensing of prescription
drugs in long-term care facilities;
(3) Sections 423.159 and 423.160 for electronic prescribing,
excepting the requirements pertaining to formulary standards in Sec.
423.160(b)(5);
(4) Section 423.162 for QIO activities; and
(5) Section 423.165 for compliance deemed on the basis of
accreditation.
(d) Out-of-network access. Section 423.124 Special rules for out-
of-network access to Part D drugs at out-of-network pharmacies, except
for Sec. 423.124(a)(2), which applies to LI NET.
(e) Medicare contract determinations and appeals. Subpart N, except
for the provisions that apply to LI NET in Sec. 423.2520(d).
(f) Risk-sharing arrangements. Section 423.336(a), (b), and (d).
(g) Certification of accuracy of data for price comparison. Section
423.505(k)(6).
(h) Part D communication requirements. Portions of subpart V of
this part related to Part D communication requirements that are
inapplicable to LI NET, including:
(1) Section 423.2265(b)(4), (5), (11), and (13);
(2) Section 423.2265(c);
(3) Section 423.2266(a);
(4) Section 423.2267(e)(3) through (5), (9) through (12), (14)
through (17), (25), (29), and (33); and
(5) Section 423.2274.
(i) Medicare Coverage Gap Discount Program. Subpart W of this part.
(j) Requirements for a minimum medical loss ratio. Subpart X of
this part.
(k) Recovery audit contractor Part C appeals process. Subpart Z of
this part.
0
54. The heading for subpart Z is revised to read as follows:
Subpart Z--Recovery Audit Contractor Part D Appeals Process
PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
0
55. The authority citation for part 460 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395, 1395eee(f), and 1396u-4(f).
0
56. Section 460.6 is amended by revising the definition of ``contract
year'' to read as follows:
Sec. 460.6 Definitions.
* * * * *
Contract year means the term of a PACE program agreement, which is
a calendar year, except that a PACE organization's initial contract
year may be from 19 to 30 months, as determined by CMS, but in any
event will end on December 31.
* * * * *
[[Page 22345]]
0
57. Section 460.40 is amended by revising paragraph (b) to read as
follow:
Sec. 460.40 Violations for which CMS may impose sanctions.
* * * * *
(b) If CMS or the State administering agency makes a determination
under Sec. 460.50 that could lead to termination of a PACE program
agreement, CMS may impose any of the sanctions specified at Sec. Sec.
460.42 and 460.46. If CMS or the State administering agency determines
that the circumstances in Sec. 460.50(b)(1) exist, neither CMS nor the
State administrating agency has to determine that the circumstances in
Sec. 460.50(b)(2) exist prior to imposing a CMP or enrollment and/or
payment suspension.
0
58. Section 460.70 is amended by revising paragraph (a) to read as
follows:
Sec. 460.70 Contracted services.
(a) General rule. The PACE organization must have a written
contract with each outside organization, agency, or individual that
furnishes administrative or care-related services not furnished
directly by the PACE organization, including, at a minimum, the medical
specialties identified in paragraph (a)(1) of this section. The PACE
organization does not need to have a written contract with entities
that provide emergency services as described in Sec. 460.100.
(1) At a minimum, except as noted in paragraph (a)(4) of this
section, PACE organizations must have contracts in place for the
following medical specialties:
(i) Anesthesiology.
(ii) Audiology.
(iii) Cardiology.
(iv) Dentistry.
(v) Dermatology.
(vi) Gastroenterology.
(vii) Gynecology.
(viii) Internal Medicine.
(ix) Nephrology.
(x) Neurosurgery.
(xi) Oncology.
(xii) Ophthalmology.
(xiii) Oral surgery.
(xiv) Orthopedic surgery.
(xv) Otorhinolaryngology.
(xvi) Palliative Medicine.
(xvii) Plastic surgery.
(xviii) Pharmacy consulting services.
(xviv) Podiatry.
(xx) Psychiatry.
(xxi) Pulmonology.
(xxii) Radiology.
(xxiii) Rheumatology.
(xxiv) General Surgery.
(xxv) Thoracic and vascular surgery.
(xxvi) Urology.
(2) Contracts with medical specialists must be executed prior to
enrollment of participants and must be maintained on an ongoing basis
to ensure participants receive appropriate and timely access to all
medically necessary care and services.
(3) A PACE organization is responsible for making all reasonable
and timely attempts to contract with medical specialists. If at any
time a PACE organization is unable to directly contract or maintain a
contract with a specific specialty, the PACE organization must--
(i) Ensure care and services that would otherwise be provided to
participants by a contracted specialist are provided and that the
participant's needs are met through a different mechanism to include
hospitalization; and
(ii) Promptly report the contracting issue to CMS and the SAA,
including the attempts made to contract, the reason why the contract
was not effectuated, and the PACE organization's plan to provide access
to the necessary services.
(4) A PACE organization is not required to have a contract with a
particular medical specialty if the PACE organization directly employs
one or more individuals prior to contracting who are legally
authorized, and if applicable, board certified in the participant
medical specialty.
* * * * *
Sec. 460.121 [Amended]
0
59. Section 460.121 is amended in paragraph (i)(2) by adding the phrase
``either orally or'' after the phrase ``their designated
representative''.
0
60. Section 460.200 is amended by revising paragraph (d)(2) to read as
follows:
Sec. 460.200 Maintenance of records and reporting of data.
* * * * *
(d) * * *
(2) Maintain all written communications received in any format (for
example, emails, faxes, letters, etc.) from participants or other
parties in their original form when the communications relate to a
participant's care, health, or safety including, but not limited to the
following:
(i) Communications from the participant, his or her designated
representative, a family member, a caregiver, or any other individual
who provides information pertinent to a participant's, care, health, or
safety.
(ii) Communications from an advocacy or governmental agency such as
Adult Protective Services.
* * * * *
0
61. Section 460.210 is amended by revising paragraph (b)(6) to read as
follows:
Sec. 460.210 Medical records.
* * * * *
(b) * * *
(6) Original documentation, or an unaltered electronic copy, of any
written communication as described in Sec. 460.200(d)(2) must be
maintained in the participant's medical record unless the following
requirements are met:
(i) The medical record contains a thorough and accurate summary of
the communication including all relevant aspects of the communication,
(ii) Original documentation of the communication is maintained
outside of the medical record and is accessible by employees and
contractors of the PACE organization when necessary, and in accordance
with Sec. 460.200(e), and
(iii) Original documentation of the communication is available to
CMS and the SAA upon request.
* * * * *
Dated: March 31, 2023
Xavier Becerra,
Secretary, Department of Health and Human.
[FR Doc. 2023-07115 Filed 4-5-23; 4:15 pm]
BILLING CODE 4120-01-P