[Federal Register Volume 88, Number 219 (Wednesday, November 15, 2023)]
[Proposed Rules]
[Pages 78476-78630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24118]
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Vol. 88
Wednesday,
No. 219
November 15, 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 401, et al.
45 CFR Part 170
Medicare Program; Contract Year 2025 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; Health Information Technology Standards and
Implementation Specifications; Proposed Rule
Federal Register / Vol. 88 , No. 219 / Wednesday, November 15, 2023 /
Proposed Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 401, 405, 417, 422, 423, 455, and 460
Office of the Secretary
45 CFR Part 170
[CMS-4205-P]
RIN 0938-AV24
Medicare Program; Contract Year 2025 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; Health Information Technology Standards and
Implementation Specifications
AGENCY: Centers for Medicare & Medicaid Services (CMS), Office of the
National Coordinator for Health Information Technology (ONC),
Department of Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would revise the Medicare Advantage (Part
C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan,
and Programs of All-Inclusive Care for the Elderly (PACE) regulations
to implement changes related to Star Ratings, marketing and
communications, agent/broker compensation, health equity, dual eligible
special needs plans (D-SNPs), utilization management, network adequacy,
and other programmatic areas. This proposed rule also includes
proposals to codify existing sub-regulatory guidance in the Part C and
Part D programs.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on January 5, 2024.
ADDRESSES: In commenting, please refer to file code CMS-4205-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission. Comments, including mass comment
submissions, must be submitted in one of the following three ways
(please choose only one of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-4205-P, P.O. Box 8013,
Baltimore, MD 21244.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-4205-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Carly Medosch, (410) 786-8633--General Questions.
Naseem Tarmohamed, (410) 786-0814--Part C and Cost Plan Issues.
Lucia Patrone, (410) 786-8621--Part D Issues.
Kristy Nishimoto, (206) 615-2367--Beneficiary Enrollment and Appeal
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) 786-1984--D-SNP Issues.
Joe Strazzire, (410) 786-2775--RADV Audit Appeals Issues.
Alexander Baker, (202) 260-2048--Health IT Standards.
[email protected]--Parts C and D Star Ratings
Issues.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the commenter will take actions to harm an individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this proposed rule may be found at https://www.regulations.gov/.
I. Executive Summary
A. Purpose
The primary purpose of this proposed rule is to amend the
regulations for the Medicare Advantage (Part C) program, Medicare
Prescription Drug Benefit (Part D) program, Medicare cost plan program,
and Programs of All-Inclusive Care for the Elderly (PACE). This
proposed rule includes a number of new policies that would improve
these programs beginning with contract year 2025 and proposes to codify
existing Part C and Part D sub-regulatory guidance. Please note that
the new marketing and communications policies in this rule are proposed
to be applicable for all contract year 2025 marketing and
communications, beginning September 30, 2024. This proposed rule also
includes revisions to existing regulations in the Risk Adjustment Data
Validation (RADV) audit appeals process and the appeals process for
quality bonus payment determination that would take effect and apply 60
days after publication of a final rule. Revisions to existing
regulations for the use and release of risk adjustment data would also
take effect and apply 60 days after publication of a final rule. A
limited number of the provisions in this rule are proposed to be
applicable beginning with coverage on and after January 1, 2026.
Additionally, this proposed rule would implement certain sections
of the following Federal laws related to the Parts C and D programs:
The Bipartisan Budget Act (BBA) of 2018.
The Consolidated Appropriations Act (CAA), 2023.
B. Summary of the Major Provisions
1. Improving Access to Behavioral Health Care Providers
We propose regulatory changes that would improve access to
behavioral health care by adding certain behavioral health provider
specialties to our MA network adequacy standards. Specifically, we
propose to add a new facility-specialty type to the existing list of
facility-specialty types evaluated as part of our network adequacy
reviews. The new facility-specialty type, ``Outpatient Behavioral
Health,'' would be included in network adequacy
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evaluations and can include: Marriage and Family Therapists (MFTs),
Mental Health Counselors (MHCs), Opioid Treatment Program (OTP)
providers, Community Mental Health Centers or other behavioral health
and addiction medicine specialists and facilities. MFTs and MHCs will
be eligible to enroll in Medicare and start billing for services
beginning January 1, 2024, due to the new statutory benefit category
established by the Consolidated Appropriations Act (CAA) 2023. We aim
to strengthen network adequacy requirements and improve beneficiary
access to behavioral health services and providers by expanding our
network adequacy requirements for MA organizations.
2. Special Supplemental Benefits for the Chronically Ill (SSBCI)
We are proposing regulatory changes that would help ensure that
SSBCI items and services offered are appropriate and improve or
maintain the health or overall function of chronically ill enrollees.
First, we are proposing to require that an MA organization must be able
to demonstrate through relevant acceptable evidence that an item or
service offered as SSBCI has a reasonable expectation of improving or
maintain the health or overall function of a chronically ill enrollee,
and must, by the date on which it submits its bid to CMS, establish a
bibliography of this evidence. Second, we are proposing to clarify that
an MA plan must follow its written policies based on objective criteria
for determining an enrollee's eligibility for an SSBCI when making such
eligibility determinations. Third, we are proposing to require that the
MA plan document its denials of SSBCI eligibility rather than its
approvals. Additionally, we are proposing to codify CMS's authority to
review and deny approval of an MA organization's bid if the MA
organization has not demonstrated, through relevant acceptable
evidence, that its proposed SSBCI has a reasonable expectation of
improving or maintaining the health or overall function of the
chronically ill enrollee. Finally, we propose to codify CMS's authority
to review SSBCI offerings annually for compliance, considering the
evidence available at the time. These proposals, if implemented, would
better ensure that the benefits offered as SSBCI are reasonably
expected to improve health or overall function of the chronically ill
enrollee while also guarding against the use of MA rebate dollars for
SSBCI that are not supported by evidence.
In addition, we are proposing new policies to protect beneficiaries
and improve transparency regarding SSBCI so that beneficiaries are
aware that SSBCI are only available to enrollees who meet specific
eligibility criteria. We propose to modify and strengthen the current
requirements for the SSBCI disclaimer that MA organizations offering
SSBCI must use whenever SSBCI are mentioned. Specifically, we propose
that the SSBCI disclaimer list the relevant chronic condition(s) the
enrollee must have to be eligible for the SSBCI offered by the MA
organization. We propose that the MA organization must convey in its
SSBCI disclaimer that even if the enrollee has a listed chronic
condition, the enrollee may not receive the benefit because other
coverage criteria also apply. We also propose to establish specific
font and reading pace parameters for the SSBCI disclaimer in print,
television, online, social media, radio, other voice-based ads, and
outdoor advertising (including billboards). Finally, we propose to
clarify that MA organizations must include the SSBCI disclaimer in all
marketing and communications materials that mention SSBCI. We believe
that imposing these new SSBCI disclaimer requirements will help to
ensure that the marketing of and communication about these benefits is
not misleading or potentially confusing to enrollees who rely on these
materials to make enrollment decisions.
3. Mid-Year Enrollee Notification of Available Supplemental Benefits
In addition, over the past several years, the number of MA plans
offering supplemental benefits has increased. The benefits offered are
broader in scope and variety and we are seeing an increasing amount of
MA rebate dollars directed towards these benefits. At the same time,
plans have reported that enrollee utilization of many of these benefits
is low. It is not clear whether MA plans are actively encouraging
utilization of these benefits by their enrollees. We propose requiring
MA plans to notify enrollees mid-year of the unused supplemental
benefits available to them. The notice would list any supplemental
benefits not utilized by the beneficiary during the first 6 months of
the year (1/1 to 6/30). Currently, MA plans are not required to send
any communication specific to an enrollee's usage of supplemental
benefits which could be an important part of a plan's overall care
coordination efforts. This policy aims to educate enrollees on their
access to supplemental benefits to encourage greater utilization of
these benefits and ensure MA plans are better stewards of the rebate
dollars directed towards these benefits.
4. Enhance Guardrails for Agent and Broker Compensation
Section 1851(j) of the Act requires that CMS develop guidelines to
ensure that compensation to agents and brokers creates incentives to
enroll individuals in MA plans that are intended to best meet their
health care needs. To that end, for many years CMS has set upper limits
on the amount of compensation agents and brokers can receive for
enrolling Medicare beneficiaries into MA and PDP plans. We have
learned, however, that many MA and PDP plans, as well as third-party
entities with which they contract (such as Field Marketing
Organizations (FMOs)) have structured payments to agents and brokers
that have the effect of circumventing compensation caps. We also note
that that these additional payments appear to be increasing. In this
rule, we are proposing to generally prohibit contract terms between MA
organizations and agents, brokers or other third party marketing
organizations (TPMOs) that may interfere with the agent's or broker's
ability to objectively assess and recommend the plan that best fits a
beneficiary's health care needs; set a single compensation rate for all
plans; revise the scope of items and services included within agent and
broker compensation; and eliminate the regulatory framework which
currently allows for separate payment to agents and brokers for
administrative services. We are also proposing to make conforming edits
to the Part D agent broker compensation rules at Sec. 423.2274.
Collectively, we believe the impact of these proposed changes will
better align with statutory requirements and intent: to ensure that the
use of compensation creates incentives for agents and brokers to enroll
individuals in the plan that best fits a beneficiary's health care
needs. Further, such changes align with the Biden-Harris
Administration's commitment to promoting fair, open, and competitive
markets and ensuring beneficiaries can make fully informed choices
among a robust set of health insurance options.
5. Annual Health Equity Analysis of Utilization Management Policies and
Procedures
We are proposing regulatory changes to the composition and
responsibilities of the Utilization Management (UM) committee. We
propose to require that a member of the UM committee have expertise in
health equity. We also propose that the UM committee conduct an annual
health equity analysis of the use of prior authorization. The proposed
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analysis would examine the impact of prior authorization on enrollees
with one or more of the following social risk factors (SRFs): (i)
receipt of the low-income subsidy or being dually eligible for Medicare
and Medicaid (LIS/DE); or (ii) having a disability. To enable a more
comprehensive understanding of the impact of prior authorization
practices on enrollees with the specified SRFs, the proposed analysis
must compare metrics related to the use of prior authorization for
enrollees with the specified SRFs to enrollees without the specified
SRFs. Finally, we propose to require MA organizations to make the
results of the analysis publicly available on their website in a manner
that is easily accessible and without barriers.
6. Amendments to Part C and Part D Reporting Requirements
We are proposing to affirm our authority to collect detailed
information from MA organizations and Part D plan sponsors under
current regulations, in keeping with the Biden-Harris administration's
focus on improving transparency and data in Medicare Advantage and Part
D. This proposal would lay the groundwork for new data collection to be
established through the Paperwork Reduction Act (PRA) process, which
would provide advance notice to interested parties and be subject to
public comment. An example of increased data collection could be
service level data for all initial coverage decisions and plan level
appeals, such as decision rationales for items, services, or diagnosis
codes to have better line of sight on utilization management and prior
authorization practices, among many other issues.
7. Enhance Enrollees' Right To Appeal an MA Plan's Decision To
Terminate Coverage for Non-Hospital Provider Services
Beneficiaries enrolled in Traditional Medicare and MA plans have
the right to a fast-track appeal by an Independent Review Entity (IRE)
when their covered skilled nursing facility (SNF), home health, or
comprehensive outpatient rehabilitation facility (CORF) services are
being terminated. Currently, Quality Improvement Organizations (QIO)
act as the IRE and conduct these reviews. Under current regulations, MA
enrollees do not have the same access to QIO review of a fast-track
appeal as Traditional Medicare beneficiaries. We are proposing to (1)
require the QIO, instead of the MA plan, to review untimely fast-track
appeals of an MA plan's decision to terminate services in an HHA, CORF,
or SNF; and (2) fully eliminate provision requiring the forfeiture of
an enrollee's right to appeal a termination of services decision when
they leave the facility. These proposals would bring MA regulations in
line with the parallel reviews available to beneficiaries in
Traditional Medicare and expand the rights of MA beneficiaries to
access the fast-track appeals process.
8. Additional Changes to an Approved Formulary--Substituting Biosimilar
Biological Products
Under current policy, Part D sponsors must obtain explicit approval
from CMS prior to making a midyear formulary change that removes a
reference product and replaces it with a biosimilar biological product
other than an interchangeable biological product. If such a change is
approved, the Part D sponsor may apply the change only to enrollees who
begin therapy after the effective date of the change. In other words,
enrollees currently taking the reference product can remain on the
reference product until the end of the plan year without having to
obtain an exception. To increase access to biosimilar biological
products, including interchangeable biological products, in the Part D
program, consistent with the Biden-Harris Administration's commitment
to competition as outlined in Executive Order (E.O.) 14036: ``Promoting
Competition in the American Economy,'' we previously proposed to permit
Part D sponsors either to immediately substitute interchangeable
biological products for their reference products and/or to treat such
substitutions as changes applicable to all enrollees following 30 days'
notice.\1\ As we continue to consider comments received on that
proposal, we are now also proposing to add substitutions of biosimilar
biological products other than interchangeable biological products to
the type of formulary changes that apply to all enrollees (including
those already taking the reference product prior to the effective date
of the change) following a 30-day notice. This proposed policy
regarding formulary substitution of biosimilar biological products
would parallel our current notice policy for formulary changes that
cannot take place immediately. Under current Sec. 423.120(b)(5)(i),
Part D sponsors must give 30 days' advance notice to affected enrollees
before removing or changing the tiered cost-sharing status of a Part D
drug, unless, for instance, the formulary change qualifies for an
immediate substitution. This proposal would not permit immediate
formulary substitution of biosimilar biological products other than
interchangeable biological products.
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\1\ See section III.Q., Changes to an Approved Formulary, of the
proposed rule titled ``Medicare Program; Contract Year 2024 Policy
and Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicare Cost Plan Program,
Medicare Parts A, B, C, and D Overpayment Provisions of the
Affordable Care Act and Programs of All-Inclusive Care for the
Elderly; Health Information Technology Standards and Implementation
Specifications,'' which appeared in the December 27, 2022 Federal
Register (87 FR 79452) (hereinafter referred to as the December 2022
proposed rule).
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9. Increasing the Percentage of Dually Eligible Managed Care Enrollees
Who Receive Medicare and Medicaid Services From the Same Organization
We are proposing interconnected proposals to (a) replace the
current quarterly special enrollment period (SEP) with a one-time-per
month SEP for dually eligible individuals and others enrolled in the
Part D low-income subsidy program to elect a standalone PDP, (b) create
a new integrated care SEP to allow dually eligible individuals to elect
an integrated D-SNP on a monthly basis, (c) limit enrollment in certain
D-SNPs to those individuals who are also enrolled in an affiliated
Medicaid managed care organization (MCO), and (d) limit the number of
D-SNP plan benefit packages an MA organization, its parent
organization, or entity that shares a parent organization with the MA
organization, can offer in the same service area as an affiliated
Medicaid MCO. This proposed rule would increase the percentage of
dually eligible MA enrollees who are in plans that are also contracted
to cover Medicaid benefits, thereby expanding access to integrated
materials, unified appeal processes across Medicare and Medicaid, and
continued Medicare services during an appeal. It would also reduce the
number of plans overall that can enroll dually eligible individuals
outside the annual coordinated election period, thereby reducing the
number of plans deploying aggressive marketing tactics toward dually
eligible individuals throughout the year.
10. For D-SNP PPOs, Limit Out-of-Network Cost Sharing
We are proposing to limit out-of-network cost sharing for D-SNP
preferred provider organizations (PPOs) for specific services. The
proposed rule would reduce cost shifting to Medicaid, increase payments
to safety net providers, expand dually eligible enrollees' access to
providers, and protect dually eligible enrollees from unaffordable
costs.
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11. Contracting Standards for Dual Eligible Special Needs Plan Look-
Alikes
Under existing regulations, CMS does not contract with and will not
renew the contract of a D-SNP look-alike--that is, an MA plan that is
not a SNP but in which dually eligible enrollees account for 80 percent
or more of total enrollment. We are proposing to lower the D-SNP look-
alike threshold from 80 percent to 70 percent for plan year 2025 and 60
percent for plan year 2026. This proposal would help address the
continued proliferation of MA plans that are serving high percentages
of dually eligible individuals without meeting the requirements to be a
D-SNP.
12. Standardize the Medicare Advantage (MA) Risk Adjustment Data
Validation Appeals Process
We propose regulatory language to address gaps and operational
constraints included in existing RADV appeal regulations. Currently, if
MA organizations appeal both medical record review determinations and
payment error calculations resulting from RADV audits, both issues must
be appealed and move through the appeals process concurrently, which we
foresee could result in inconsistent appeal adjudications at different
levels of appeal that impact recalculations of the payment error. This
has the potential to cause burden, confuse MA organizations, and
negatively impact the operations and efficiency of CMS's appeals
processes. This proposal would standardize and simplify the RADV
appeals process for CMS and MA organizations, as well as address
operational concerns at all three levels of appeal. We are proposing
that MA organizations must exhaust all three levels of appeal for
medical record review determinations before beginning the payment error
calculation appeals process. This will ensure adjudication of medical
record review determinations are final before a recalculation of the
payment error is completed and subject to appeal. We also propose
several other revisions to our regulatory appeals process to conform
with these proposed changes to our procedures.
C. Summary of Costs and Benefits
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
II. Strengthening Current Medicare Advantage and Medicare Prescription
Drug Benefit Program Policies: Past Performance
We established at Sec. Sec. 422.502(b) and 423.503(b) that we may
deny an application submitted by MA organizations and Part D sponsors
that failed to comply with the requirements of a previous MA or Part D
contract, which we refer to as ``past performance.'' We are proposing
several technical changes to the regulation text related to past
performance. These changes are intended to clarify the basis for
application denials due to past performance and to ensure that the
factors adequately account for financial difficulties that should
prevent an organization from receiving a new or expanded MA or Part D
contract.
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\2\ We previously proposed that would provide Part D sponsors
(choosing not to or unable to qualify to make immediate
substitutions as proposed) the option to treat substitutions of
interchangeable biological products for their reference products as
changes applicable to all enrollees requiring 30 days' notice for
those currently taking a related reference product. See section
III.Q. of the December 2022 proposed rule. These and other proposals
discussed in section III.Q. of the December 2022 proposed rule have
not been finalized and remain under consideration.
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One factor we consider regarding the past performance of MA
organizations and Part D sponsors is their record of imposition of
intermediate sanctions, because intermediate sanctions represent
significant non-compliance with MA or Part D contract requirements. To
clarify the basis for application denials due to intermediate
sanctions, at Sec. Sec. 422.502(b)(1)(i)(A) and 423.503(b)(1)(i)(A) we
propose to
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change ``Was subject to the imposition of an intermediate sanction'' to
``Was under an intermediate sanction.'' We are proposing this revision
because MA organizations and Part D sponsors may have a sanction
imposed in one 12-month past performance review period and effective
for all or part of the subsequent 12-month review period. For instance,
CMS could impose a sanction in December 2022 that remains in effect
until September 2023. The sanction would be in effect for the past
performance review period that runs from March 2022 through February
2023 (for Contract Year 2024 MA and Part D applications filed in
February 2023) and for the past performance review period that runs
from March 2023 through February 2024 (for Contract Year MA and Part D
applications filled in February 2024). Our proposal reflects our stated
intent to deny applications from MA organizations and Part D sponsors
when an active sanction existed during the relevant 12-month review
period when we previously codified that intermediate sanctions are a
basis for denial of an application from an MA organization or Part D
sponsor in ``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.'' When
we codified this requirement, a commenter requested that sanctions
lifted during the 12 months prior to the application denial be excluded
from past performance. We responded that ``The applying organization
will receive credit for resolving the non-compliance that warranted the
sanction during the next past performance review period, when,
presumably, the organization will not have an active sanction in place
at any time during the applicable 12-month review period'' (86 FR 6000
through 6001). Since an intermediate sanction may be active during
multiple consecutive review periods, our proposed language clarifies
that an organization's application may be denied as long as the
organization is under sanction, not just during the 12-month review
period when the sanction was imposed.
An additional factor we consider regarding the past performance of
MA organizations and Part D sponsors is involvement in bankruptcy
proceedings. At Sec. Sec. 422.502(b)(1)(i)(C) and 423.503(b)(1)(i)(C)
we propose to incorporate Federal bankruptcy as a basis for application
denials due to past performance and to conform the two paragraphs by
changing the text to ``Filed for or is currently in Federal or State
bankruptcy proceedings'' from ``Filed for or is currently in State
bankruptcy proceedings,'' at Sec. 422.502(b)(1)(i)(C) and ``Filed for
or is currently under State bankruptcy proceedings'' at Sec.
423.503(b)(1)(i)(C). We codified State bankruptcy as a basis for an
application denial for the past performance of an MA or Part D Sponsor
in ``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 (87 FR 27704). We codified that
requirement because bankruptcy may result in the closure of an
organization's operations and entering into a new or expanded contract
with such an organization is not in the best interest of the MA or
Prescription Drug program or the beneficiaries they serve. This concern
is equally applicable to both Federal and State bankruptcy, so we
propose to revise the regulation so that applications from MA
organizations or Part D sponsors that have filed for or are in State or
Federal bankruptcy proceedings may be denied on the basis of past
performance.
In addition, we are also proposing to correct two technical issues
identified since the final rule was published in May 2022. At Sec.
422.502(b)(1)(i)(B), we propose to change the reference to the
requirement to maintain fiscally sound operations from Sec.
422.504(b)(14) to the correct reference at Sec. 422.504(a)(14). We
also propose to remove the duplication of Sec. 422.502(b)(1)(i)(A) and
(B).
III. Enhancements to the Medicare Advantage and Medicare Prescription
Drug Benefit Programs
A. Expanding Network Adequacy Requirements for Behavioral Health
Section 1852(d)(1) of the Act allows 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 assures continuity in the provision of
benefits. Further, our regulation at Sec. 422.112(a), requires that a
coordinated care plan maintain a network of appropriate providers that
is sufficient to provide adequate access to covered services to meet
the needs of the population served. To establish standards for these
requirements, CMS codified network adequacy criteria and access
standards 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. Further, as part of the ``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) proposed rule,
hereinafter referred to as the ``January 2022 proposed rule,'' we
solicited comments through a Request for Information (RFI), regarding
challenges in building MA behavioral health networks and opportunities
for improving access to services. In response to the RFI, 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.
As a result, in the ``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, which
appeared in the Federal Register on April 12, 2023 (88 FR 22120)
hereinafter referred to as the ``April 2023 final rule,'' CMS finalized
the addition of two new specialty types to the provider-specialty types
list at Sec. 422.116(b)(1), Clinical Psychology and Clinical Social
Work, to be subject to the specific time and distance and minimum
provider number requirements used in CMS's network adequacy evaluation.
While our regulation at Sec. 422.116(b)(3) authorizes the removal
of a specialty or facility type from the network evaluation criteria
for a specific year without rulemaking, CMS did not implement a process
in Sec. 422.116 to add
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new provider types without rulemaking. In a continued effort to address
access to behavioral health services within MA networks, we are
proposing to add to the list of provider specialties at Sec.
422.116(b) and add corresponding time and distance standards at Sec.
422.116(d)(2).
In addition to meeting the network adequacy evaluation
requirements, MA organizations are required at Sec. 422.112(a) to
maintain and consistently monitor their provider networks to ensure
they are sufficient to provide adequate access to covered services that
meet the needs of enrollees. This also helps MA organizations maintain
a complete and accurate health plan provider directory as required
under Sec. Sec. 422.111(b)(3) and 422.120(b). The Health Plan
Management System (HPMS) provides MA organizations with access to the
``Evaluate my Network'' functionality, which allows MA organizations
the opportunity to test their provider networks against the evaluation
standards in Sec. 422.116 outside of a formal network review. The
``Evaluate my Network'' functionality provides MA organizations the
ability to test their networks using the standards in Sec.
422.116(a)(2) in different scenarios, including at the Plan Benefit
Package (PBP) level, to consistently monitor whether their provider
networks are meeting the current network adequacy standards. We
encourage MA organizations to utilize the HPMS ``Evaluate my Network''
tool to monitor their PBP-level active provider networks and keep
abreast of any network issues that could hinder access to care for
enrollees. We also remind MA organizations to report any compliance
issues or significant changes in their provider network to their CMS
Account Manager.
With the revisions applicable beginning January 1, 2024, MA
organizations are required to demonstrate that they meet network
adequacy for four behavioral health specialty types: psychiatry,
clinical psychology, clinical social work, and inpatient psychiatric
facility services. The Consolidated Appropriations Act (CAA), 2023
(Pub. L. 117-328) amended the Act to authorize payment under Medicare
Part B for services furnished by a Marriage and Family Therapist (MFT)
and by a Mental Health Counselor (MHC), effective January 1, 2024.
Specifically, section 4121 of the CAA amends section 1861(s)(2) of the
Act by adding a new subparagraph (II) that establishes a new benefit
category under Part B for MFT services (as defined in section 1861(lll)
of the Act) and MHC services (as defined in section 1861(lll) of the
Act). MA organizations are required to cover virtually all Part B
covered services. As such, these new services must be covered as
defined and furnished, respectively, by MFTs, as defined in section
1861(lll)(2) of the Act, and MHCs, as defined in section 1861(lll)(4)
of the Act. As a practical matter, MA organizations need to ensure
access to these new Medicare-covered services that can only be provided
by these types of individual providers and therefore must contract with
these types of providers in order to furnish basic benefits as required
by section 1852 of the Act (when furnished by different providers, the
services would be supplemental benefits covered by the MA plan.)
In addition, we discussed in the April 2023 final rule, that the
responses CMS received to the January 2022 proposed rule RFI emphasized
the importance of expanding network adequacy standards to include other
outpatient behavioral health physicians and health professionals that
treat substance use disorders (SUDs) to better meet behavioral health
care needs of enrollees. Medicare fee-for-service claims data for 2020
shows that Opioid Treatment Program (OTP) providers had the largest
number of claims for SUD services during that timeframe. At the time of
publishing our April 2023 final rule, we indicated that while we were
not able to finalize adding a combined specialty type called
``Prescribers of Medication for Opioid Use Disorder,'' which included
OTPs and Medication for Opioid Use Disorder (MOUD) waivered providers
to the facility-specialty type list in Sec. 422.116(b)(2) as proposed,
we would consider the appropriateness of setting network adequacy
standards for OTPs in future rulemaking.
Considering the statutory changes to section 1861 of the Act as
mentioned, and our interest in establishing network adequacy standards
for SUD providers, CMS is proposing to amend the MA network adequacy
requirements to address the new provider types and SUD provider types
through a combined behavioral health specialty type to include MFTs,
MHCs, OTPs, Community Mental Health Centers and other behavioral health
and addiction medicine specialty providers that will help us enhance
behavioral health access for enrollees. This is consistent with the
explanation in our April 2023 final rule that setting a meaningful
access standard for the OTP specialty type would be possible under a
combined behavioral health specialty type.
CMS is committed to improving access to behavioral health care
services for enrollees in the MA program. The CMS Behavioral Health
Strategy,\3\ aims to improve access and quality of mental health care
and services, including, access to substance use disorder prevention
and treatment services. We propose to extend network adequacy
requirements to additional behavioral health and substance use disorder
providers and facilities by adding time and distance and minimum
provider number requirements for a combined provider category.
Specifically, we are proposing to add Outpatient Behavioral Health as a
new type of facility-specialty in Sec. 422.116(b)(2) and to add
Outpatient Behavioral Health to the time and distance requirements in
Sec. 422.116(d)(2). For purposes of network adequacy evaluations under
Sec. 422.116, Outpatient Behavioral Health can include, MFTs (as
defined in section 1861(lll) of the Act), MHCs (as defined in section
1861(lll) of the Act), OTPs (as defined in section 1861(jjj) of the
Act), Community Mental Health Centers (as defined in section
1861(ff)(3)(B) of the Act), or those of the following who regularly
furnish or will regularly furnish behavioral health counseling or
therapy services, including, but not limited to, psychotherapy or
prescription of medication for substance use disorders: physician
assistants, nurse practitioners, and clinical nurse specialists (as
defined in section 1861(aa)(5) of the Act); addiction medicine
physicians; or outpatient mental health and substance use treatment
facilities. Per Sec. 422.2, the term ``provider'' means (1) any
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 (2) any 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. Although we are not using the
term ``provider'' specifically here in listing the type of healthcare
professionals that we expect to be available to furnish services in
order to count for purposes of the proposed new network evaluation
standard, all applicable laws about the practice of medicine and
delivery of health care services must be met and specific healthcare
professionals must be appropriately licensed or certified to furnish
the applicable services.
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\3\ https://www.cms.gov/cms-behavioral-health-strategy.
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We are proposing to add this combined facility-specialty type
instead
[[Page 78485]]
of adding individual provider-specialty types for a few reasons. First,
data from the U.S. Department of Labor, Bureau of Labor Statistics show
that currently MFTs and MHCs are generally providing services in
outpatient behavioral health settings, such as community mental health
centers, substance abuse treatment centers, hospitals, and some private
practices.4 5 These types of clinical settings offer a
fuller range of services and usually provide access to additional
providers, such as advanced practice nurses and physician assistants
who provide counseling and other therapeutic services to individuals
with behavioral health conditions; our review of the Place of Service
codes recorded on professional claims for behavioral health services in
the Medicare FFS program illustrates this. In addition, currently,
there are a limited number (if any) claims in the Medicare FFS program
from MFTs and MHCs; combining the MFT and MHC provider types into the
``Outpatient Behavioral Health'' facility type provides time for CMS to
develop additional data as FFS claims are submitted by MFTs and MHCs to
show patterns of access to these provider types across the country. CMS
needs such claims and utilization data to support the development of
time and distance standards for these particular provider-specialty
types. Finally, categorizing these provider specialties as a facility
type is consistent with our practice, under Sec. 422.116, wherein
physical therapy (PT), occupational therapy (OT), and speech therapy
(ST) providers have traditionally been categorized as facility types,
even though care is typically furnished by individual health care
providers. These provider types (that is, PT, OT, ST) are reported for
network adequacy purposes under facility specialty types on Health
Service Delivery (HSD) tables.
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\4\ Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Outlook Handbook, Marriage and Family Therapists, at
https://www.bls.gov/ooh/community-and-social-service/marriage-and-family-therapists.htm (visited July 03, 2023).
\5\ Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Outlook Handbook, Substance Abuse, Behavioral Disorder,
and Mental Health Counselors, at https://www.bls.gov/ooh/community-and-social-service/substance-abuse-behavioral-disorder-and-mental-health-counselors.htm (visited July 06, 2023).
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As mentioned previously, the statutory change under the CAA will
allow MFTs and MHCs to bill Medicare directly for services provided
beginning January 1, 2024. We acknowledge that these provider types may
not always be located in facilities and provide facility-based
services. As such, we will continue to monitor the appropriateness of
maintaining this proposed new behavioral health specialty type as a
facility-specialty type (that is, under Sec. 422.116(b)(2)) for
network adequacy review purposes. Similarly, as the list \6\ of OTPs
enrolled in Medicare continues to expand, we will continue to monitor
whether network adequacy for OTPs is best measured under a combined
facility type for the purpose of network adequacy reviews. Thus, we may
engage in future rulemaking to revise this requirement if the landscape
of providers changes such that access would be best evaluated
separately for MFTs, MHCs, or OTPs instead of under the one facility-
specialty type we are proposing in this rule. Any related changes would
be proposed in future rulemaking. At this time, we are proposing that
MA organizations are allowed to include on their facility HSD tables
the following: contracted individual practitioners, group practices, or
facilities that are applicable under this specialty type. Under this
proposal, MA organizations may not submit a single provider, for
purposes of meeting more than one of our provider network requirements,
for example, they cannot submit a single provider as a psychiatry,
clinical social work, or clinical psychologist provider specialty and
also as an Outpatient Behavioral Health facility.
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\6\ https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/opioid-treatment-program-providers.
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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 facility
specialty types under Sec. 422.116(b)(2), we are proposing base time
and distance standards in each county type for the new specialty type
as follows:
[GRAPHIC] [TIFF OMITTED] TP15NO23.009
In the proposed rule titled ``Medicare and Medicaid Programs;
Contract Year 2021 and 2022 Policy and Technical Changes to the
Medicare Advantage Program, Medicare Prescription Drug Benefit Program,
Medicaid Program, Medicare Cost Plan Program, and Programs of All-
Inclusive Care for the Elderly'' 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). Further, we explained
in the February 2020 proposed rule how CMS determines the minimum
number requirement for all provider and facility specialty types, which
is now codified in Sec. 422.116(e). We codified at Sec.
422.116(e)(2)(iii) that all facilities, except for acute inpatient
hospitals facilities, have a minimum number requirement of one. Because
we had previously established paragraph (e)(2)(iii) to refer to all
facility types listed in paragraphs (b)(2)(ii) through (xiv) and are
proposing to add Outpatient Behavioral Health as a facility type at
paragraph (b)(2)(xiv), we are not proposing any revisions to paragraph
(e)(2)(iii). We followed the analysis and methodology described in the
February 2020 proposed rule to
[[Page 78486]]
develop the time and distance standards that we propose to apply to the
new behavioral health facility-specialty type described here. However,
we utilized updated data, including outpatient facility and
professional Part B claims data from August 1, 2021, through July 31,
2022, to inform our proposed standard.
Finally, as we indicated in the April 2023 final rule, 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
(88 FR 22170). Per Sec. 422.116(d)(5), MA plans may receive a 10-
percentage point credit towards the percentage of beneficiaries that
reside within published time and distance standards for certain
providers 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. Currently, Sec.
422.116(d)(5) specifies 14 specialty types for which the 10-percentage
point credit is available. Because we understand from stakeholders who
commented on our April 2023 final rule that they were supportive of
usage of the 10-percentage point credit for behavioral health specialty
types, we also propose to add the new Outpatient Behavioral Health
facility-specialty type to the list at Sec. 422.116(d)(5) of the
specialty types that that will receive the credit if the MA
organization's contracted network of providers includes one or more
telehealth providers of that specialty type that provide additional
telehealth benefits, as defined in Sec. 422.135, for covered services.
We welcome comment on this proposal.
B. Standards for Electronic Prescribing (Sec. 423.160)
1. Legislative Background
Section 1860D-4(e) of the Act requires the adoption of Part D e-
prescribing standards. Part D sponsors are required to establish
electronic prescription drug programs that comply with the e-
prescribing standards that are adopted under this authority. For a
further discussion of the statutory requirements at section 1860D-4(e)
of the Act, refer to the proposed rule titled ``Medicare Program; E-
Prescribing and the Prescription Drug Program,'' which appeared in the
February 4, 2005 Federal Register (70 FR 6255). Section 6062 of the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and
Treatment for Patients and Communities Act (Pub. L. 115-271),
hereinafter referred to as the SUPPORT Act, amended section 1860D-
4(e)(2) of the Act to require the electronic transmission of ePA
requests and responses for the Part D e-prescribing program to ensure
secure ePA request and response transactions between prescribers and
Part D sponsors for covered Part D drugs prescribed to Part D-eligible
individuals. Such electronic transmissions must comply with technical
standards adopted by the Secretary. There is generally no requirement
that Part D prescribers or dispensers implement e-prescribing, with the
exception of required electronic prescribing of Schedule II, III, IV,
and V controlled substances that are Part D drugs, consistent with
section 2003 of the SUPPORT Act and as specified at Sec.
423.160(a)(5). However, prescribers and dispensers who electronically
transmit and receive prescription and certain other information
regarding covered Part D drugs prescribed for Medicare Part D eligible
beneficiaries, directly or through an intermediary, are required to
comply with any applicable standards that are in effect.
2. Regulatory History
As specified at Sec. 423.160(a)(1), Part D sponsors are required
to support the Part D e-prescribing program transaction standards as
part of their electronic prescription drug programs. Likewise, as
specified at Sec. 423.160(a)(2), prescribers and dispensers that
conduct electronic transactions for covered Part D drugs for Part D
eligible individuals for which a program standard has been adopted must
do so using the adopted standard. Transaction standards are
periodically updated to take new knowledge, technology, and other
considerations into account. As CMS adopted specific versions of the
standards when it initially adopted the foundation and final e-
prescribing standards, there was a need to establish a process by which
the standards could be updated or replaced over time to ensure that the
standards did not hold back progress in the healthcare industry. CMS
discussed these processes in the final rule titled ``Medicare Program;
E-Prescribing and the Prescription Drug Program,'' (hereinafter
referred to as ``the November 2005 final rule'') which appeared in the
November 7, 2005 Federal Register (70 FR 67579). An account of
successive adoption of new and retirement of previous versions of
various e-prescribing standards is described in the final rule titled
``Medicare Program; Revisions to Payment Policies Under the Physician
Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to
Part B for CY 2014,'' which appeared in the December 10, 2013 Federal
Register (78 FR 74229); the proposed rule titled ``Medicare Program;
Contract Year 2019 Policy and Technical Changes to the Medicare
Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare
Prescription Drug Benefit Programs, and the PACE Program,'' which
appeared in the November 28, 2017 Federal Register (82 FR 56336); and
the corresponding final rule (83 FR 16440), which appeared in the April
16, 2018 Federal Register. The final rule titled ``Medicare Program;
Secure Electronic Prior Authorization For Medicare Part D,'' which
appeared in the December 31, 2020 Federal Register (85 FR 86824),
codified the requirement that Part D sponsors support the use of NCPDP
SCRIPT standard version 2017071 for certain ePA transactions (85 FR
86832).
The final rule titled ``Modernizing Part D and Medicare Advantage
To Lower Drug Prices and Reduce Out-of-Pocket Expenses,'' which
appeared in the May 23, 2019 Federal Register (84 FR 23832), codified
at Sec. 423.160(b)(7) the requirement that Part D sponsors adopt an
electronic RTBT capable of integrating with at least one prescriber's
electronic prescribing or electronic health record (EHR) system, but
did not name a standard since no standard had been identified as the
industry standard at the time (84 FR 23851). The electronic standards
for eligibility transactions were codified in the final rule titled
``Medicare and Medicaid Program; Regulatory Provisions to Promote
Program Efficiency, Transparency, and Burden Reduction,'' which
appeared in the May 16, 2012 Federal Register (77 FR 29001), to align
with the applicable Health Insurance Portability and Accountability Act
of 1996 (HIPAA) standards.
The Part D program has historically adopted electronic prescribing
standards independently of other HHS components that may adopt
electronic prescribing standards under separate authorities; however,
past experience has demonstrated that duplicative adoption of health IT
standards by other agencies within HHS under separate authorities can
create significant burden on the healthcare industry as well as HHS
when those standards impact the same technology systems. Notably,
independent adoption of the NCPDP SCRIPT standard version 2017071 by
CMS in various subsections of Sec. 423.160 (83 FR 16638) in 2018,
which required use of the standard beginning in 2020, led to a period
where ONC had to exercise special enforcement discretion
[[Page 78487]]
in its Health Information Technology (IT) Certification Program until
the same version was incorporated into regulation at 45 CFR
170.205(b)(1) through the final rule titled ``21st Century Cures Act:
Interoperability, Information Blocking, and the ONC Health IT
Certification Program,'' which appeared in the May 1, 2020 Federal
Register (85 FR 25679). This resulted in significant impact on both ONC
and CMS program resources. See section III.C. of this proposed rule for
additional discussion of ONC's proposal and authority. Similarly, the
final rule titled ``Medicare and Medicaid Program; Regulatory
Provisions to Promote Program Efficiency, Transparency, and Burden
Reduction,'' which appeared in the May 16, 2012 Federal Register (77 FR
29002), noted that, in instances in which an e-prescribing standard has
also been adopted as a HIPAA transaction standard in 45 CFR part 162,
the process for updating the e-prescribing standard would have to be
coordinated with the maintenance and modification of the applicable
HIPAA transaction standard (77 FR 29018).
3. Withdrawal of Previous Proposals and Summary of New Proposals
CMS published a proposed rule, ``Medicare Program; Contract Year
2024 Policy and Technical Changes to the Medicare Advantage Program,
Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program,
Medicare Parts A, B, C, and D Overpayment Provisions of the Affordable
Care Act and Programs of All-Inclusive Care for the Elderly; Health
Information Technology Standards and Implementation Specifications''
(hereinafter referred to as ``the December 2022 proposed rule''), which
appeared in the Federal Register December 27, 2022 (87 FR 79452), in
which we proposed updates to the standards to be used by Medicare Part
D prescription drug plans for electronic prescribing (e-prescribing).
The proposals in the December 2022 proposed rule included a novel
approach to updating e-prescribing standards by proposing to cross-
reference Part D requirements with standards adopted by the Office of
the National Coordinator for Health Information Technology (ONC) and
the standards adopted by HHS for electronic transactions under HIPAA
\7\ rather than the historical approach of adopting e-prescribing
standards in the Part D regulations independently or making conforming
amendments to the Part D regulations in response to updated HIPAA
standards for eligibility transactions. We proposed this approach in
concert with ONC in order to mitigate potential compliance challenges
for the healthcare industry and enforcement challenges for HHS that
could result from independent adoption of such standards.\8\
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\7\ HIPAA mandated the adoption of standards for electronically
conducting certain health care administrative transactions between
certain entities. HIPAA administrative requirements are codified at
45 CFR part 162. See also: https://www.cms.gov/about-cms/what-we-do/administrative-simplification.
\8\ Due to discrepancies between prior regulatory timelines,
adoption of the NCPDP SCRIPT standard version 2017071 in different
rules led to a period where ONC had to exercise special enforcement
discretion in the ONC Health IT Certification Program. See section
III.C.5. for additional discussion.
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In summary, the proposals in the December 2022 proposed rule
included the following:
Requiring the National Council for Prescription Drug Plans
(NCPDP) SCRIPT standard version 2022011, proposed for adoption at 45
CFR 170.205(b), and retiring the current NCPDP SCRIPT standard version
2017071, as the e-prescribing standard for transmitting prescriptions
and prescription-related information, medication history, and
electronic prior authorization (ePA) transactions using electronic
media for covered Part D drugs for Part D eligible individuals. This
proposal included a transition period from July 1, 2023 up to January
1, 2025, when either version of the NCPDP SCRIPT standard could be
used. The cross citation to 45 CFR 170.205(b) included an expiration
date of January 1, 2025 for NCPDP SCRIPT standard version 2017071
meaning that this version would expire for the purposes of HHS use and
entities named at Sec. 423.160(a)(1) and (2) could use only NCPDP
SCRIPT standard version 2022011 as of that date;
Requiring the NCPDP Real-Time Prescription Benefit (RTPB)
standard version 12, proposed for adoption at 45 CFR 170.205(c), as the
standard for prescriber real-time benefit tools (RTBTs) supported by
Part D sponsors beginning January 1, 2025; and
Revising regulatory text referring to standards for
eligibility transactions (87 FR 79548) to cross reference standards
adopted for electronic eligibility transactions in the HIPAA
regulations at 45 CFR 162.1202.
We received 24 comments related to these proposals by the close of
the comment period on February 13, 2023. Commenters largely supported
the proposals; however, several commenters, including NCPDP,
recommended that CMS require use of NCPDP SCRIPT standard version
2023011, rather than NCPDP SCRIPT standard version 2022011. Similarly,
NCPDP and other commenters recommended that CMS require NCPDP RTPB
standard version 13, rather than NCPDP RTPB standard version 12.
Several commenters expressed concerns about being able to
successfully transition to NCPDP SCRIPT standard version 2022011 by
January 1, 2025, and requested at least 2 years from publication of a
final rule to sunset NCPDP SCRIPT standard version 2017071. Several
commenters noted that if the implementation of NCPDP SCRIPT standard
version 2022011 (or NCPDP SCRIPT standard version 2023011, as
recommended by some commenters) is delayed, the January 1, 2025
compliance deadline for electronic prescribing of controlled substances
(EPCS) in long-term care (LTC) facilities, as codified at Sec.
423.160(a)(5), should also be delayed accordingly, since the new
versions of the NCPDP SCRIPT standard permit 3-way communication
between the prescriber, LTC pharmacy, and LTC facility, enabling EPCS
to occur reliably in the LTC setting.
A commenter expressed concern that requiring use of the NCPDP
SCRIPT standard imposes a financial barrier for independent pharmacies
since NCPDP membership is required to access standards. CMS's
requirements at Sec. 423.160(a)(2) do not require that all pharmacies
transmit, directly or through an intermediary, prescriptions and
prescription-related information using electronic media for Part D
drugs for Part D-eligible individuals, but (subject to exemptions in
Sec. 423.160(a)(3)) Sec. 423.160(a)(2) does require that when
pharmacies do so, they must comply with the Part D electronic
prescribing standards. CMS's understanding is that a pharmacy
management system vendor or software developer is the entity that
incurs the direct costs associated with accessing the code and
implementation guide associated with updating standards, not the
pharmacy itself. We acknowledge that these costs may be passed on
through license fees that the vendor charges to the pharmacy as normal
costs of doing business. We are not aware of any open-source standards
that could replace the NCPDP standards in the Part D program, but we
invite comments on this topic. We also note in section III.C.10. of
this proposed rule that interested parties may view materials proposed
for incorporation by reference for free by following the instructions
provided.
CMS has considered these comments, reviewed NCPDP SCRIPT standard
[[Page 78488]]
version 2023011 and NCPDP RTPB standard version 13, and identified
areas where we can reorganize the regulatory text in Sec. 423.160.
Consequently, CMS is withdrawing all proposals contained in section
III.S. Standards for Electronic Prescribing (87 FR 79548) of the
December 2022 proposed rule. This approach will allow CMS to
incorporate the feedback we received on prior proposals, seek comment
on concerns raised in response to prior proposals, add new proposals,
reorganize and make technical changes to the electronic prescribing
regulations at Sec. 423.160, and allow the public to comment on all
Medicare Part D electronic prescribing-related proposals
simultaneously.
In sections III.B.4. through III.B.9. of this proposed rule, the
new proposals related to standards for electronic prescribing that we
are putting forth encompass the following:
Requiring use of NCPDP SCRIPT standard version 2023011,
proposed for adoption at 45 CFR 170.205(b)(2), and retiring use of
NCPDP SCRIPT standard version 2017071 for communication of a
prescription or prescription-related information supported by Part D
sponsors. This proposal includes a transition period beginning on the
effective date of the final rule during which either version of the
NCPDP SCRIPT standard may be used. The transition period would end on
January 1, 2027, which is the date that ONC has proposed that NCPDP
SCRIPT standard version 2017071 would expire for the purposes of HHS
use, as described in section III.C.8.a. of this proposed rule. If
finalized as proposed, starting January 1, 2027, NCPDP SCRIPT standard
version 2023011 would be the only version of the NCPDP SCRIPT standard
available for HHS use and for purposes of the Medicare Part D
electronic prescribing program;
Requiring use of NCPDP RTPB standard version 13 for
prescriber RTBTs implemented by Part D sponsors beginning January 1,
2027;
Requiring use of NCPDP Formulary and Benefit (F&B)
standard version 60, proposed for adoption at 45 CFR 170.205(u), and
retiring use of NCPDP F&B version 3.0 for transmitting formulary and
benefit information between prescribers and Part D sponsors. This
proposal includes a transition period beginning on the effective date
of the final rule and ending January 1, 2027, during which entities
would be permitted to use either NCPDP F&B version 3.0 (currently named
in regulation at Sec. 423.160(b)(5)(iii) and proposed to be named at
Sec. 423.160(b)(3) consistent with the proposed technical changes in
this rule) or NCPDP F&B standard version 60, proposed for adoption at
45 CFR 170.205(u). If finalized as proposed, starting January 1, 2027,
only a version of the standard adopted for HHS use at 45 CFR 170.205(u)
would be permitted for use in Part D electronic prescription drug
program, which would be NCPDP F&B standard version 60 if the proposal
in section III.C.8.c. of this rule is finalized as proposed;
Cross-referencing standards adopted for eligibility
transactions in HIPAA regulations at 45 CFR 162.1202 for requirements
related to eligibility inquiries; and
Making multiple technical changes to the regulation text
throughout Sec. 423.160 by removing requirements and incorporations by
reference that are no longer applicable, re-organizing existing
requirements, and correcting a technical error.
In these proposals, we propose a novel approach to updating e-
prescribing standards by cross-referencing Part D e-prescribing
requirements with standards, including any expiration dates, adopted by
ONC, as discussed in section III.C.5. of this proposed rule, and the
standards adopted by HHS for electronic transactions under HIPAA. This
approach differs from our historical approach of adopting e-prescribing
standards in the Part D regulations independently or undertaking
rulemaking to make conforming amendments to the Part D regulations in
response to updated HIPAA standards for eligibility transactions.\9\ As
ONC notes in section III.C.5., independent adoption of the NCPDP SCRIPT
standard version 2017071 in different rules \10\ led to a period where
ONC had to exercise special enforcement discretion in the ONC Health IT
Certification Program. We believe the proposed approach would mitigate
potential compliance challenges for the healthcare industry and
enforcement challenges for HHS that could result from independent
adoption of such standards or asynchronous rulemaking cycles across
programs. CMS invites comment on all aspects of these proposals. We
also solicit comment on our proposals to cross-reference ONC
regulations adopting NCPDP SCRIPT standard version 2023011, NCPDP RTPB
standard version 13, and NCPDP F&B standard version 60. We solicit
comment on the effect of the proposals that, taken together, would
require use of these standards by January 1, 2027, as a result of ONC's
proposals to adopt these standards and retire previous versions, as
well as our proposal to require use NCPDP F&B standard version 60 by
that date.
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\9\ HIPAA eligibility transaction standards were updated in
final rule titled ``Health Insurance Reform; Modifications to the
Health Insurance Portability and Accountability Act (HIPAA)
Electronic Transaction Standards,'' which appeared in the January
16, 2009 Federal Register (74 FR 3296). Conforming amendments to the
Part D regulation were made in the final rule titled ``Medicare and
Medicaid Program; Regulatory Provisions to Promote Program
Efficiency, Transparency, and Burden Reduction,'' which appeared in
the May 16, 2012 Federal Register (77 FR 29002).
\10\ 21st Century Cures Act: Interoperability, Information
Blocking, and the ONC Health IT Certification Program final rule,
which appeared in the May 1, 2020 Federal Register (85 FR 25642),
and 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 April 16, 2018
Federal Register (83 FR 16440).
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The NCPDP SCRIPT standards are used to exchange information among
prescribers, dispensers, intermediaries, and Medicare prescription drug
plans (PDPs). NCPDP has requested that CMS adopt NCPDP SCRIPT standard
version 2023011 because this version provides a number of enhancements
to support electronic prescribing and transmission of prescription-
related information.\11\ Accordingly, we propose to update Sec.
423.160 to specify where transactions for electronic prescribing,
medication history, and ePA are required to utilize the NCPDP SCRIPT
standard. The proposal, in conjunction with ONC's proposal as described
in section III.C.8.a. of this proposed rule, will allow for a
transition period where either NCPDP SCRIPT standard version 2017071 or
2023011 can be used, with exclusive use of NCPDP SCRIPT standard
version 2023011 required by January 1, 2027. As described in section
III.B.7., we solicit comment on the date by which use of the updated
version of this and other standards proposed in this proposed rule
would be required, if finalized as proposed.
---------------------------------------------------------------------------
\11\ National Council for Prescription Drug Programs (NCPDP)
SCRIPT Standard, Implementation Guide, Version 2023011, April 2023.
NCPDP SCRIPT standard implementation guides are available to NCPDP
members for free and to non-members for a fee at ncpdp.org. The
NCPDP SCRIPT standard version 2023011 implementation guide proposed
for incorporation by reference in section III.C.10. of this proposed
rule can be viewed by interested parties for free by following the
instructions provided in that section.
---------------------------------------------------------------------------
The NCPDP RTPB standard enables the real-time exchange of patient-
specific eligibility, product coverage (including any restrictions and
alternatives), and estimated cost sharing so prescribers have access to
this information through a RTBT application
[[Page 78489]]
at the point-of-prescribing.12 13 As discussed in section
III.B.5. of this proposed rule, as currently codified at Sec.
423.160(b)(7), CMS requires that Part D sponsors implement one or more
electronic RTBTs that are capable of integrating with at least one
prescriber's electronic prescribing system or electronic health record,
as of January 1, 2021; however, at the time CMS established this
requirement, no single industry RTPB standard was available. NCPDP has
since developed an RTPB standard. We propose to require the most
current version, NCPDP RTPB standard version 13, as the standard for
prescriber RTBTs at Sec. 423.160(b)(5) starting January 1, 2027.
---------------------------------------------------------------------------
\12\ National Council for Prescription Drug Programs (NCPDP)
Real-Time Prescription Benefit Standard, Implementation Guide,
Version 13, July 2023. NCPDP RTPB standard implementation guides are
available to NCPDP members for free and to non-members for a fee at
ncpdp.org. The NCPDP RTPB standard version 13 implementation guide
proposed for incorporation by reference in section III.C.10. of this
proposed rule can be viewed by interested parties for free by
following the instructions provided in that section.
\13\ Bhardwaj S, Miller SD, Bertram A, Smith K, Merrey J,
Davison A. Implementation and cost validation of a real-time benefit
tool. Am J Manag Care. 2022 Oct 1;28(10):e363-e369. doi: 10.37765/
ajmc.2022.89254.
---------------------------------------------------------------------------
The NCPDP F&B standard is a batch standard that provides formulary
and benefit information at the plan level rather than at the patient
level. The NCPDP F&B standard complements other standards utilized for
electronic prescribing, electronic prior authorization, and real-time
prescription benefit applications.14 15 We propose to
require use of NCPDP F&B standard version 60, and retire NCPDP F&B
standard version 3.0, beginning January 1, 2027, and after a transition
period during which either version may be used.
---------------------------------------------------------------------------
\14\ National Council for Prescription Drug Programs (NCPDP)
Formulary and Benefit Standard, Implementation Guide, Version 60,
April 2023. NCPDP F&B standard implementation guides are available
to NCPDP members for free and to non-members for a fee at ncpdp.org.
The NCPDP F&B standard version 60 implementation guide proposed for
incorporation by reference in section III.C.10. of this proposed
rule can be viewed by interested parties for free by following the
instructions provided in that section.
\15\ Babbrah P, Solomon MR, Stember L, Hill JW, Weiker M.
Formulary & Benefit and Real-Time Pharmacy Benefit: Electronic
standards delivering value to prescribers and pharmacists. J Am
Pharm Assoc. 2023 May-June;63(3):725-730. https://doi.org/10.1016/j.japh.2023.01.016.
---------------------------------------------------------------------------
Eligibility inquiries utilize the NCPDP Telecommunication standard
or Accredited Standards Committee X12N 270/271 inquiry and response
transaction for pharmacy or other health benefits, respectively. The
Part D program has adopted standards based on the HIPAA electronic
transaction standards, which have not been updated for more than a
decade. HHS has proposed updates to the HIPAA electronic transaction
standards for retail pharmacies (87 FR 67638) in the proposed rule
titled ``Administrative Simplification: Modifications of Health
Insurance Portability and Accountability Act of 1996 (HIPAA) National
Council for Prescription Drug Programs (NCPDP) Retail Pharmacy
Standards; and Adoption of Pharmacy Subrogation Standard,''
(hereinafter referred to as ``the November 2022 Administrative
Simplification proposed rule''), which appeared in the Federal Register
November 9, 2022 (87 FR 67634). We propose to update the Part D
regulation at Sec. 423.160(b)(3) to require that eligibility
transactions utilize the applicable standard named as the HIPAA
standard for electronic eligibility transactions at 45 CFR 162.1202.
Since 45 CFR 162.1202 currently identifies the same standards that are
named at Sec. 423.160(b)(3)(i) and (ii), we anticipate no immediate
impact from this proposed change in regulatory language. Our proposal,
however, would ensure that Part D electronic prescribing requirements
for eligibility transactions align with the HIPAA standard for
electronic eligibility transactions should a newer version of the NCPDP
Telecommunication (or other) standards be adopted as the HIPAA standard
for these types of electronic transactions, if HHS' proposals in the
November 2022 Administrative Simplification proposed rule are finalized
or as a result of any future HHS rules.
4. Requiring NCPDP SCRIPT Standard Version 2023011 as the Part D
Electronic Prescribing Standard, Retirement of NCPDP SCRIPT Standard
Version 2017071, and Related Conforming Changes in Sec. 423.160
The NCPDP SCRIPT standard has been the adopted electronic
prescribing standard for transmitting prescriptions and prescription-
related information using electronic media for covered Part D drugs for
Part D eligible individuals since foundation standards were named in
the final rule titled ``Medicare Program; E-Prescribing and the
Prescription Drug Program,'' which appeared in the November 7, 2005
Federal Register (70 FR 67568), at the start of the Part D program. The
NCPDP SCRIPT standard is used to exchange information among
prescribers, dispensers, intermediaries, and Medicare prescription drug
plans. In addition to electronic prescribing, the NCPDP SCRIPT standard
is used in electronic prior authorization (ePA) and medication history
transactions.
Although electronic prescribing is optional for physicians, except
as to Schedule II, III, IV, and V controlled substances that are Part D
drugs prescribed under Part D, and pharmacies, the Medicare Part D
statute and regulations require drug plans participating in the
prescription benefit to support electronic prescribing, and physicians
and pharmacies who elect to transmit prescriptions and related
communications electronically must utilize the adopted standards except
in limited circumstances, as codified at Sec. 423.160(a)(3).
NCPDP's standards development process involves a consensus-based
approach to solve emerging needs of the pharmacy industry or to adapt
NCPDP standards to changes made by other standards development
organizations.\16\ Emerging needs of the pharmacy industry may be the
result of legislative or regulatory changes, health IT innovations,
patient safety issues, claims processing issues, or electronic
prescribing-related process automation.\17\ Changes to standards are
consensus-based and driven by the NCPDP membership, which includes
broad representation from pharmacies, insurers, pharmacy benefit
managers, Federal and State government agencies, and vendors serving
all the stakeholders.18 19
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\16\ https://standards.ncpdp.org/Our-Process.aspx.
\17\ NCPDP University. How Industry Needs Drive Changes in
Standards. Accessed August 15, 2023, from https://member.ncpdp.org
(member-only content).
\18\ NCPDP University. Voting: The Life Cycle of Standards
Approval. Accessed August 15, 2023, from https://member.ncpdp.org
(member-only content).
\19\ https://www.ncpdp.org/Membership-diversity.aspx.
---------------------------------------------------------------------------
In a letter to CMS dated January 14, 2022, NCPDP requested that CMS
adopt NCPDP SCRIPT standard version 2022011, given the number of
updates and enhancements that had been added to the standard since
NCPDP SCRIPT standard version 2017071 was adopted.\20\ NCPDP summarized
the major enhancements in NCPDP SCRIPT standard version 2022011
relative to the currently required NCPDP SCRIPT standard version
2017071. Those summarized enhancements include--
---------------------------------------------------------------------------
\20\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2022/202201NCPDP-SCRIPTNextVersionLetter.pdf.
---------------------------------------------------------------------------
General extensibility; \21\
---------------------------------------------------------------------------
\21\ Extensibility is a term in software engineering that is
defined as the quality of being designed to allow the addition of
new capabilities or functionality. See: Ashaolu B. What is
Extensibility? Converged. February 17, 2021. Available from: https://converged.propelsoftware.com/blogs/what-is-extensibility.
---------------------------------------------------------------------------
Redesign of the Product/Drug groupings requiring National
Drug Code
[[Page 78490]]
(NDC) for DrugCoded element, but not for NonDrugCoded element;
Addition of Observation elements to Risk Evaluation and
Mitigation Strategies (REMS) transactions;
Addition of ProhibitRenewalRequest to RxChangeResponse and
RxRenewalResponse;
Modification of Structured and Codified Sig Structure
format; and
Additional support related to dental procedure codes,
RxBarCode, PatientConditions, patient gender and pronouns,
TherapeuticSubstitutionIndicator, multi-party communications, and
withdrawal/retracting of a previous sent message using the
MessageIndicatorFlag.
Subsequently, in the December 2022 proposed rule, CMS proposed to
require NCPDP SCRIPT standard version 2022011 and retire NCPDP SCRIPT
standard version 2017071, after a transition period, by cross
referencing the standards as proposed for adoption by ONC. In response
to this proposal, NCPDP and many other commenters recommended that CMS
instead adopt the more current NCPDP SCRIPT standard version 2023011.
NCPDP SCRIPT standard version 2023011, like NCPDP SCRIPT standard
version 2022011, includes the functionality that supports a 3-way
transaction (that is, multi-party communication) among prescriber,
facility, and pharmacy, which will enable EPCS in the LTC setting.\22\
In its comments on the December 2022 proposed rule,\23\ NCPDP
highlighted specific enhancements within NCPDP SCRIPT standard version
2023011 that are not present in NCPDP SCRIPT standard version 2022011,
which include:
---------------------------------------------------------------------------
\22\ National Council for Prescription Drug Programs (NCPDP)
SCRIPT Standard, Implementation Guide, Version 2023011, April 2023.
NCPDP SCRIPT standard implementation guides are available to NCPDP
members for free and to non-members for a fee at ncpdp.org. The
NCPDP SCRIPT standard version 2023011 implementation guide proposed
for incorporation by reference in section III.C.10. of this proposed
rule can be viewed by interested parties for free by following the
instructions provided in that section.
\23\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2023/20230213_To_CMS_CMS_4201_P_NPRM.pdf.
---------------------------------------------------------------------------
Addition of an optional element in the header for
OtherReferenceNumber for multi-party communication transactions, such
as those in LTC;
Addition of a response type of Pending for
RxChangeResponse and RxRenewalResponse for communicating when to expect
an approval or denial of the request or delays in approval or denial of
requests;
Addition of a new RequestExpirationDate element to
NewRxRequest, RxChangeRequest, and RxRenewalRequest to notify the
prescriber to not send a response after this date;
Addition of a new a new element NoneChoiceID to
PASelectType so that a ``none of the above'' answer can be selected by
the provider and allow branching to the next question in a series;
Addition of a new element for REMSReproductivePotential
replacing REMSPatientRiskCategory in the prescribed medication element
group in the NewRx and RxChangeRequest message and in the replace
medication element group for the RxRenewalResponse;
Addition of a new element group of ReviewingProvider to
the Resupply and Recertification messages to allow for the reporting of
the provider who reviewed the chart and certified continued need of a
specific medication; and
Revised guidance in the SCRIPT Implementation Guide.
NCPDP SCRIPT standard version 2023011 is fully backwards compatible
with NCPDP SCRIPT standard version 2017071. This allows for a less
burdensome implementation process and flexible adoption timeline for
pharmacies, payers, prescribers, health IT vendors, and intermediaries
involved in electronic prescribing, since backwards compatibility
permits a transition period where both versions of the NCPDP SCRIPT
standards may be used simultaneously without the need for entities
involved to utilize a translator program.
Even though we are withdrawing the proposals contained in section
III.S. Standards for Electronic Prescribing in the December 2022
proposed rule (87 FR 79548), we have considered comments we received on
the December 2022 proposed rule when crafting our proposals for this
proposed rule. For instance, several commenters asked that CMS clearly
indicate that the proposed version of the NCPDP SCRIPT standard will
apply to medication history functions. Several commenters noted that
the regulation text at Sec. 423.160(b)(4)(ii) does not list the NCPDP
SCRIPT standard-specific medication history transactions. Commenters
asked that CMS list the corresponding medication history transactions
(RxHistoryRequest and RxHistoryResponse) in the regulation text so as
to minimize ambiguity. After considering these comments, we propose to
list the RxHistoryRequest and RxHistoryResponse transactions at Sec.
423.160(b)(1)(i)(U) subsequent to our technical reorganization of the
section proposed in section III.B.9. of this rule, rather than list the
transactions under Sec. 423.160(b)(4).
With respect to ePA transactions in the NCPDP SCRIPT standard
currently listed at Sec. 423.160(b)(8)(i)(A) through (D)
(PAInitiationRequest, PAInitiationResponse, PARequest, PAResponse,
PAAppealRequest, PAAppealResponse, PACancelRequest, PACancelResponse)
and a new ePA transaction (PANotification) available in NCPDP SCRIPT
standard version 2023011, we propose to list all transactions at Sec.
423.160(b)(1)(i)(V) through (Z). We are proposing new language at Sec.
423.160(b)(1) to indicate that the transactions listed must comply with
a standard in proposed 45 CFR 170.205(b) ``as applicable to the version
of the standard in use'' since an older version of a standard may not
support the same transactions as the newer version of the standard. For
example, during the proposed transition period where either NCPDP
SCRIPT version 2017071 or NCPDP SCRIPT standard version 2023011 may be
used, entities that are still using NCPDP SCRIPT standard version
2017071 would not be expected to use the PANotification transaction
because the PANotification transaction is only supported in the NCPDP
SCRIPT standard version 2023011.
Since the NCPDP SCRIPT standard version 2023011 is fully backwards
compatible with NCPDP SCRIPT standard version 2017071, the pharmacies,
payers, prescribers, health IT vendors, and intermediaries involved in
electronic prescribing can accommodate a transition period when either
version may be used. That is, during a transition period, transactions
taking place between entities using different versions of the same
standard maintain interoperability without the need for entities to
utilize (that is, purchase) a translator software program. The cross
reference to proposed 45 CFR 170.205(b) permits a transition period
starting as of the effective date of a final rule during which either
NCPDP SCRIPT standard version 2017071 or NCPDP SCRIPT standard version
2023011 may be used. If finalized as proposed, the transition period
will end and exclusive use of NCPDP SCRIPT standard version 2023011
will be required starting January 1, 2027, when NCPDP SCRIPT standard
version 2017071 will expire for the purposes of HHS use.
Instead of independently naming the NCPDP SCRIPT standard version
2023011 and incorporating the corresponding implementation guide by
[[Page 78491]]
reference at Sec. 423.160(c), we propose at Sec. 423.160(b)(1) to
cross reference a standard in 45 CFR 170.205(b). ONC proposes to adopt
NCPDP SCRIPT standard version 2023011 in 45 CFR 170.205(b)(2) as
described in section III.C.8.a. of this proposed rule. The proposed
approach would enable CMS and ONC to avoid misalignment from
independent adoption of NCPDP SCRIPT standard version 2023011 for their
respective programs. Updates to the standard would impact requirements
for both programs at the same time, ensure consistency, and promote
alignment for providers, payers, and health IT developers participating
in and supporting the same prescription transactions. See section
III.C.5. of this proposed rule for additional discussion of this
coordination effort.
In its letter to CMS requesting CMS to adopt NCPDP SCRIPT standard
version 2022011, NCPDP requested that CMS identify certain transactions
for prescriptions for which use of the standard is mandatory.\24\ As
previously mentioned in this preamble, in response to the December 2022
proposed rule, NCPDP and other commenters requested additional
transactions be named in regulation. As part of our proposed
reorganization of Sec. 423.160, we propose to list all transactions
associated with the NCPDP SCRIPT standard requirements in one place in
the regulation. We propose the transactions for prescriptions, ePA, and
medication history for which use of the standard is mandatory at Sec.
423.160(b)(1)(i)(A) through (Z), as described in Table C-C1.
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\24\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2022/202201NCPDP-SCRIPTNextVersionLetter.pdf.
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BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP15NO23.010
[[Page 78492]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.011
[[Page 78493]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.012
BILLING CODE 4120-01-C
The transactions specific to electronic prescribing remain the same
as those required for NCPDP SCRIPT standard version 2017071 (currently
codified at Sec. 423.160(b)(2)(iv)(A) through (Z)), except where
renamed as noted in Table C-C1. The transactions specific to ePA are
also the same as those required with NCPDP SCRIPT standard version
2017071, with one additional transaction (PA Notification), which was
incorporated into the standard after NCPDP SCRIPT standard version
2017071. As discussed in section III.C.8.a. of this proposed rule,
NCPDP SCRIPT standard version 2023011 is proposed for adoption at 45
CFR 170.205(b)(2), and NCPDP SCRIPT standard version 2017071 is
proposed to expire January 1, 2027, at 45 CFR 170.205(b)(1).
Consequently, should we finalize our proposal, use of NCPDP SCRIPT
standard version 2023011 for the transactions related to electronic
prescribing, medication history, and ePA (proposed at Sec.
423.160(b)(1)(i)(A) through (Z)) will be mandatory starting January 1,
2027, if ONC's proposed adoption of NCPDP SCRIPT version 2023011 and
proposed expiration date for NCPDP SCRIPT version 2017071 are adopted
as proposed.
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\25\ Section 4. Business Functions, and Section 5. Transactions.
National Council for Prescription Drug Programs (NCPDP) SCRIPT
Standard, Implementation Guide, Version 2023011, April 2023. NCPDP
SCRIPT standard implementation guides are available to NCPDP members
for free and to non-members for a fee at ncpdp.org. The NCPDP SCRIPT
standard version 2023011 implementation guide proposed for
incorporation by reference in section III.C.10. of this proposed
rule can be viewed by interested parties for free by following the
instructions provided in that section.
---------------------------------------------------------------------------
As stated previously, in response to the December 2022 proposed
rule, several commenters pointed out that if mandatory use of an
updated version of the NCPDP SCRIPT standard is delayed, then the EPCS
requirement in LTC facilities should also be delayed accordingly, since
NCPDP SCRIPT standard version 2017071 lacks appropriate guidance for
LTC facilities. CMS was aware of this limitation in the NCPDP SCRIPT
standard version
[[Page 78494]]
2017071, and acknowledged the challenges to EPCS faced by LTC
facilities in the proposed rule ``Medicare Program; CY 2022 Payment
Policies Under the Physician Fee Schedule and Other Changes to Part B
Payment Policies; Medicare Shared Savings Program Requirements;
Provider Enrollment Regulation Updates; Provider and Supplier
Prepayment and Post-Payment Medical Review Requirements'' (hereinafter
referred to as ``the July 2022 proposed rule''), which appeared in the
Federal Register July 23, 2021 (86 FR 39104). However, in the July 2022
proposed rule, CMS also stated that we understood that NCPDP was in the
process of creating specific guidance for LTC facilities within the
NCPDP SCRIPT standard version 2017071, which would allow willing
partners to enable 3-way communication between the prescriber, LTC
facility, and pharmacy to bridge any outstanding gaps that impede
adoption of the NCPDP SCRIPT standard version 2017071 in the LTC
setting (86 FR 39329).
Similarly, in the ``Medicare Program; CY 2022 Payment Policies
Under the Physician Fee Schedule and Other Changes to Part B Payment
Policies; Medicare Shared Savings Program Requirements; Provider
Enrollment Regulation Updates; and Provider and Supplier Prepayment and
Post-Payment Medical Review Requirements'' final rule (hereinafter
referred to as ``the November 2021 final rule''), which appeared in the
Federal Register November 19, 2021 (86 FR 64996), CMS acknowledged that
although 3-way communication is not as seamless in NCPDP SCRIPT
standard version 2017071 as it was expected to be in later versions,
EPCS was still possible with some modifications (86 FR 65364). CMS
delayed EPCS compliance for prescribers' prescriptions written for
beneficiaries in a LTC facility from January 1, 2022, to no earlier
than January 1, 2025, in order to give prescribers additional time to
make the necessary changes to conduct electronic prescribing of covered
Part D controlled substance prescriptions for Part D beneficiaries in
LTC facilities using NCPDP SCRIPT standard version 2017071 (86 FR
65365). We are not proposing a change in the EPCS compliance date for
covered Part D controlled substance prescriptions for Part D
beneficiaries in LTC on the basis of the proposed adoption of NCPDP
SCRIPT standard version 2023011; however, we invite comment on the
status of EPCS in LTC and the degree to which LTC facilities have been
able to implement guidance from NCPDP to meet the EPCS requirement.
As proposed, Sec. 423.160(b)(1) would require use of the version
or versions of the NCPDP SCRIPT standard adopted in 45 CFR 170.205(b)
to carry out the transactions listed in Sec. 423.160(b)(1)(i)(A)
through (Z). However, it would not require that all transactions be
utilized if they are not needed or are not relevant to the entity. We
refer readers to ONC's Interoperability Standards Advisory (ISA)
website for descriptions and adoption level of transactions in the
NCPDP SCRIPT standard.\26\ For example, we have been informed that the
``GetMessage'' transaction described in Table C-C1 is not widely used
among prescribers. For this reason, we are reiterating guidance \27\
that the NCPDP SCRIPT standard transactions named are not themselves
mandatory, but rather they are to be used as applicable to the entities
specified at Sec. 423.160(a)(1) and (2) when they are completing or
supporting the transmission of information related to electronic
prescriptions, electronic prior authorization, or medication history.
We believe the pharmacies, payers, prescribers, health IT vendors, and
intermediaries involved in electronic prescribing have been utilizing
the standards in this manner, based on discussions with NCPDP.
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\26\ https://www.healthit.gov/isa/section/pharmacyinteroperability.
\27\ Supporting Electronic Prescribing Under Medicare Part D.
September 19, 2008. https://www.hhs.gov/guidance/document/supporting-electronic-prescribing-under-medicare-part-d.
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In summary, with respect to changes related to adopting, via cross-
reference to ONC proposals in section III.C.8.a., NCPDP SCRIPT standard
version 2023011 and retiring NCPDP SCRIPT standard version 2017071, we
propose a revised paragraph Sec. 423.160(b)(1) to:
Consolidate all transactions for electronic prescribing,
ePA, and medication history for which use of the NCPDP SCRIPT standard
is mandatory at Sec. 423.160(b)(1)(i)(A) through (Z); and
Indicate that communication of prescriptions and
prescription-related transactions listed must comply with a standard in
45 CFR 170.205(b). In conjunction with ONC proposals in section
III.C.8.a., this cross-reference would permit a transition period when
either NCPDP SCRIPT standard versions 2017071 or 2023011 may be used
beginning as of the effective date of a final rule and ending January
1, 2027, because, as ONC has proposed at 45 CFR 170.205(b)(1), the
NCPDP SCRIPT standard version 2017071 would expire January 1, 2027,
after which only NCPDP SCRIPT standard version 2023011 would be
available for HHS use.
We solicit comment on these proposals.
5. Requiring NCPDP Real-Time Prescription Benefit (RTPB) Standard
Version 13
In the May 2019 final rule (84 FR 23832), which implemented the
statutory provision at section 1860D-4(e)(2)(D) of the Act, CMS
required at Sec. 423.160(b)(7) that Part D plan sponsors implement, by
January 1, 2021, one or more electronic real-time benefit tools (RTBT)
capable of integrating with at least one prescriber's e-prescribing
system or electronic health record (EHR) to provide prescribers with
complete, accurate, timely, clinically appropriate, patient-specific
formulary and benefit information. CMS indicated that the formulary and
benefit information provided by the tool should include cost,
clinically appropriate formulary alternatives, and utilization
management requirements because, at that time, an industry standard for
RTBTs had not been identified (84 FR 23833). NCPDP has since developed
and tested an RTPB standard for use with RTBT applications. The NCPDP
RTPB standard enables the real-time exchange of information about
patient eligibility and patient-specific formulary and benefit
information. For a submitted drug product, the RTPB standard will
indicate coverage status, coverage restrictions, and estimated patient
financial responsibility. ``Estimated'' financial responsibility
accounts for the fact that the RTPB transaction transmits the patient's
cost sharing at that particular moment in time, which could later
change if the claim is processed at a later date or in a different
sequence relative to other claims (for example, an RTPB transaction
could show a cost sharing that reflects a deductible or particular
stage in the Part D benefit which could be different from when the
prescription claim is actually processed by the pharmacy if other
claims were processed in the interim). The RTPB standard also supports
providing information on alternative pharmacies and products. In an
August 20, 2021 letter to CMS, NCPDP described these features and
recommended adoption of RTPB standard version 12.\28\ Subsequently, in
the December 2022 proposed rule, CMS proposed that Part D sponsors'
RTBTs comply with NCPDP RTPB standard version 12. In response
[[Page 78495]]
to that proposal, NCPDP and many other interested parties provided
comments to CMS recommending that CMS instead require NCPDP RTPB
standard version 13. In their comments on the December 2022 proposed
rule,\29\ NCPDP listed enhancements in NCPDP RTPB standard version 13
that improve the information communicated between the payer and the
prescriber. These enhancements include:
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\28\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2021/20210820_To_CMS_RTPBandFandBStandardsAdoptionRequest.pdf.
\29\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2023/20230213_To_CMS_CMS_4201_P_NPRM.pdf.
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Addition of a Coverage Status Message to enable the payer
to communicate at the product level additional clarifying coverage
information which is not codified;
Addition of values to the Coverage Restriction Code and
data elements to codify information communicated in the Message to
reduce the number of free text messages on the response;
Addition of a next available fill date to communicate when
the patient is eligible to receive a prescription refill in a discrete
field instead of via a free text message;
Addition of fields to communicate formulary status and
preference level of both submitted and alternative products in order to
clarify pricing; and
Addition of data elements on the request transaction to
convey the patient's address, State/province, zip/postal code and
country to aid in coverage determinations.
Even though we are withdrawing the proposals contained in section
III.S. Standards for Electronic Prescribing in the December 2022
proposed rule (87 FR 79548), we have considered comments we received on
the December 2022 proposed rule when crafting our proposals related to
RTBTs for this proposed rule. A commenter on the December 2022 proposed
rule requested that CMS specify that adoption of the NCPDP RTPB
standard should not impede what the commenter refers to as the industry
standard of sending 4 drugs or 4 pharmacies for pricing in a single
transaction. We understand that each transaction between a prescriber
EHR and the payer or processor is associated with a degree of latency
(that is, the amount of time it takes for the RTBT request to travel
from the electronic prescribing system to the payer or processor and
return a response with the patient's cost sharing and formulary status
information for the submitted drug). In order to populate information
on alterative formulary drugs or alternative pharmacies, if one
alternative is submitted per transaction, then the latency associated
with each transaction becomes additive. If the total latency is too
long, then either the RTBT request may ``time out'' and a response may
never be presented to the prescriber, or the prescriber may simply not
wait long enough for the RTBT response before moving on through the
electronic prescribing process. To illustrate the concept at the center
of this issue, if each RTBT transaction is associated with 1 second of
latency, then 1 transaction containing the submitted drug, plus 3
alternatives should return the patient-specific cost and formulary
status information for all 4 drugs within 1 second. However, if the
submitted drug and each alternative are sent as separate transactions,
then the total time to return the RTBT response becomes 4 seconds (1
second x 4 transactions). This longer response time increases the
likelihood that the prescriber will not wait for the information to
populate or that that EHR system will cause the transaction to time
out, meaning the patient-specific cost and formulary status information
are not presented to the prescriber. CMS takes interest in how adoption
of the proposed NCPDP RTPB standard version 13 could alter
functionality of RTBTs already in use. CMS created requirements for
RTBTs in the absence of an industry-wide standard because of their
potential to increase drug price transparency and lower out-of-pocket
costs for Medicare Part D enrollees. The impact of RTBTs is contingent
on prescribers actually receiving the patient-specific information in
the response from the payer. CMS appreciates that this is relatively
new technology and that there are multiple factors that contribute to
the overall impact of RTBTs in real-world settings.30 31 32
Nevertheless, we seek comment on the issue raised by the commenter. We
ask interested parties for their perspective on whether requiring the
NCPDP RTPB standard version 13 would limit the ability to send more
than one drug or pharmacy per RTBT transaction, and if so, whether the
benefit of adopting a standard for prescriber RTBTs in order to enable
widespread integration across EHRs and payers outweighs such
limitation.
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\30\ Everson J, Dusetzina SB. Real-time Prescription Benefit
Tools--The Promise and Peril. JAMA Intern Med. 2022;182(11):1137-
1138. Doi:10.1001/jamainternmed.2022.3962.
\31\ Real-Time Benefit Check: Key Insights and Challenges. May
2021. Accessed January 1, 2023. Available at: https://www.hmpgloballearningnetwork.com/site/frmc/cover-story/real-time-benefit-check-key-insights-and-challenges.
\32\ American Medical Association. Council on Medical Service.
Access to Health Plan Information regarding Lower-Cost Prescription
Options (Resolution 213-NOV-20). Available from https://councilreports.ama-assn.org/councilreports/downloadreport?uri=/councilreports/n21_cms_report_2.pdf.
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The NCPDP RTPB standard version 13 standard is designed for
prescriber, not beneficiary (that is, consumer), RTBTs. CMS emphasizes
that we are not proposing a required standard for beneficiary RTBTs.
Beneficiary RTBTs are made available directly to Part D plan enrollees
by the Part D sponsor; therefore, beneficiary RTBT applications do not
necessarily interface with an electronic prescribing system or EHR, as
prescriber RTBTs must. Consequently, CMS believes that Part D sponsors
can retain the flexibility to use beneficiary RTBTs that are based on
an available standard or a custom application, as long as the
information presented to enrollees meets CMS's requirements codified at
Sec. 423.128(d)(4). The requirements for the beneficiary RTBT are
discussed in the final rule titled ``Medicare and Medicaid Programs;
Contract Year 2022 Policy and Technical Changes to the Medicare
Advantage Program, Medicare Prescription Drug Benefit Program, Medicaid
Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care
for the Elderly,'' which appeared in the January 19, 2021 Federal
Register (86 FR 5864). We decline to propose a standard for beneficiary
RTBTs at this time, however we welcome comments on this topic which we
may consider for future rulemaking.
As discussed in section III.C.8.b. of this proposed rule, ONC
proposes to adopt the NCPDP RTPB standard version 13 at 45 CFR
170.205(c)(1). We therefore propose at Sec. 423.160(b)(5) to require
that beginning January 1, 2027, Part D sponsors' prescriber RTBT must
comply with a standard in 45 CFR 170.205(c).
We solicit comment on these proposals and the related issues
raised.
6. Requiring NCPDP Formulary and Benefit Standard Version 60 and
Retirement of NCPDP Formulary and Benefit Standard Version 3.0
The NCPDP Formulary and Benefit (F&B) standard provides a uniform
means for prescription drug plan sponsors to communicate plan-level
formulary and benefit information to prescribers through electronic
prescribing/EHR systems. The NCPDP F&B standard transmits, on a batch
basis, data on the formulary status of drugs, preferred alternatives,
coverage restrictions (that is, utilization management requirements),
and cost sharing consistent with the benefit design (for example, cost
sharing for drugs on a particular tier). The NCPDP
[[Page 78496]]
F&B standard serves as a foundation for other electronic prescribing
functions including ePA, real-time benefit check, and specialty
medication eligibility when used in conjunction with other
standards.\33\ NCPDP F&B standard version 3.0 is required for
transmitting formulary and benefits information between prescribers and
Medicare Part D sponsors, consistent with the existing text of Sec.
423.160(b)(1)(v) and (b)(5)(iii). In an April 4, 2023 letter to CMS,
NCPDP requested that CMS adopt NCPDP F&B standard version 60 to replace
NCPDP F&B standard version 3.0.\34\ A detailed change log was attached
to the letter and is available at the link in the footnote. As
described in the letter, compared with NCPDP F&B standard version 3.0,
NCPDP F&B standard version 60 includes all of the following major
enhancements:
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\33\ Babbrah P, Solomon MR, Stember LA, Hill JW, Weiker M.
Formulary & benefit and real-time pharmacy Benefit: Electronic
standards delivering value to prescribers and pharmacists. J Am
Pharm Assoc (2003). 2023 May-Jun;63(3):725-730. doi: 10.1016/
j.japh.2023.01.016.
\34\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2023/20230404-to-CMS-Formulary-and-Benefit-V60-Request.pdf.
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Normalization of all files (lists), which allows for
smaller files and reusability.
All files have expiration dates.
Redesigned alternative and step medication files to reduce
file sizes and to include support for reason for use (that is,
diagnosis).
Step medication files support a more complex step
medication program.
Updated coverage files to include support for electronic
prior authorization and specialty drugs.
Updated copay files to allow a minimum and maximum copay
range without a percent copay and to support deductibles and pharmacy
networks.
In its letter to CMS, NCPDP requested mandatory use of NCPDP F&B
version 60 24 months after the effective date of a final rule adopting
the standard. NCPDP F&B standard version 60 is backwards compatible
with NCPDP F&B standard version 3.0, permitting a transition period
where both versions of the NCPDP F&B standard may be used
simultaneously without the need for entities involved to utilize a
translator program.
Following an approach similar to those proposed in sections
III.B.4. and III.B.5. of this proposed rule, CMS proposes at Sec.
423.160(b)(3) that transmitting formulary and benefit information
between prescribers and Medicare Part D sponsors must either utilize
NCPDP F&B standard version 3.0 or comply with a standard in 45 CFR
170.205(u), where ONC proposes to adopt, at 45 CFR 170.205(u)(1), NCPDP
F&B standard version 60 as described in section III.C.8.c. of this
proposed rule. After January 1, 2027, entities transmitting formulary
and benefit information would be required to comply with a standard in
45 CFR 170.205(u) exclusively, if finalized as proposed. Since ONC did
not previously adopt NCPDP F&B standard version 3.0, we are maintaining
the incorporation by reference of that version in the Part D regulation
at Sec. 423.160(c)(1)(i) to permit a transition period where either
NCPDP F&B standard version 3.0 or NCPDP F&B version 60 could be used
until January 1, 2027.
We solicit comment on these proposals.
7. Date for Required Use of NCPDP SCRIPT Standard Version 2023011,
NCPDP RTPB Standard Version 13, and NCPDP F&B Standard Version 60
CMS has received feedback on a number of practical considerations
for determining a realistic timeframe to implement new or update
existing electronic prescribing standards. We have been informed that
organizations generally do not budget for new requirements until a
final rule has been published establishing a particular new requirement
and, therefore, the timing of when a final rule is finalized relative
to budget approval cycles can determine if a requirement can be
accounted for in the organization's next annual budget. The health IT
industry has indicated to CMS that it requires at least 2 years to
design, develop, test, and certify software with trading partners;
perform DEA audits for EPCS compliance; and roll out updated software
to provider organizations and partners who then must train end users
before a transition to a new or updated version of a standard is
complete. This account is consistent with NCPDP's requests for up to
24-month implementation timeframes for new standards.35 36 A
commenter on the December 2022 proposed rule requested that CMS either
permit 3 years from a final rule before requiring use of a new or
updated version of a standard, or use enforcement discretion if
requiring use of a new or updated version of a standard less than 3
years from a final rule. CMS will generally aim to provide entities
with at least 2 years from when a final rule is finalized; however, we
qualify that in some cases less time may be provided if determined to
be necessary.
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\35\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2021/20210820_To_CMS_RTPBandFandBStandardsAdoptionRequest.pdf.
\36\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2022/202201NCPDP-SCRIPTNextVersionLetter.pdf.
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CMS routinely receives feedback requesting that we do not require
the use of new or updated electronic prescribing standards starting on
January 1 due to end-of-year ``code freezes,'' which prohibit updates
to internal systems and plan enrollment changes that contribute to a
general high workload at the start of a new plan year. CMS reminds
entities impacted by the proposed regulatory changes that, consistent
with Sec. 423.516, CMS is prohibited from imposing new, significant
regulatory requirements on Part D sponsors midyear. If the approach
proposed in this proposed rule to align CMS's requirements for certain
Part D electronic prescribing standards by cross-referencing standards
adopted in ONC regulations is finalized, CMS and ONC will coordinate to
establish appropriate timeframes for updating adopted standards and
expiration dates for prior versions of adopted standards. CMS, working
with ONC, will consider transition periods longer than 24 months
following publication of a final rule to permit a sufficient transition
period prior to January 1. Since a new, significant requirement must be
effective January 1, a new or updated version of a standard could be
required January 1 of the year following 24 months after a final rule
is effective. For example, if a final rule containing a provision to
update an electronic prescribing standard to a new version were
effective May 30, 2024, then CMS would anticipate requiring the new
version of the standard by January 1, 2027. This would allow for a 31-
month transition period during which either version of a required
standard could be used. Part D sponsors would need to plan accordingly
to completely transition to the updated version of the standard ahead
of the January 1 date to meet their internal production calendars.
Using the prior example, we would assume that to avoid implementing the
updated version of a standard on January 1, 2027, Part D sponsors would
transition to the updated version of the standard by approximately May
30, 2026.
ONC is proposing January 1, 2027, as the date NCPDP SCRIPT standard
version 2023011 would be the required version of this standard, as a
product of the proposed expiration for NCPDP SCRIPT standard version
2017071 and our proposed cross-reference, in Sec. 423.160(b)(1), to a
standard in 45 CFR 170.205(b). We are proposing the required use of
NCPDP F&B standard version 60 and NCPDP RTPB standard version 13 by
January 1, 2027, in the
[[Page 78497]]
text of Sec. 423.160(b)(3) and (5), respectively, as previously
discussed. We are also aware that Part D sponsors and the health IT
industry are awaiting HHS' final rule on the proposals to update the
NCPDP Telecommunication standard from version D.0 to version F6 (87 FR
67638), update the equivalent NCPDP Batch Standard version 15 (87 FR
67639), and implement the NCPDP Batch Standard Pharmacy Subrogation
version 10 (87 FR 67640) proposed in the November 2022 Administrative
Simplification proposed rule.
Taking all of these proposals into consideration, we ask interested
parties to comment on the proposed January 1, 2027, date for the
required use of NCPDP SCRIPT standard version 2023011, NCPDP RTPB
standard version 13, and NCPDP F&B standard version 60. It is expressly
outside the scope of this proposed rule, and we do not seek comment on,
the compliance date for the proposals in HHS' November 2022
Administrative Simplification proposed rule; however, we ask for
comments on the feasibility of updating multiple standards
simultaneously.
8. Standards for Eligibility Transactions
We propose to revise the Part D requirements to indicate that
eligibility transactions must comply with 45 CFR 162.1202. The
requirements for eligibility transactions currently codified at Sec.
423.160(b)(3)(i) and (ii) name the Accredited Standards Committee X12N
270/271-Health Care Eligibility Benefit Inquiry and Response, Version
5010, April 2008, ASC X12N/005010x279 and the NCPDP Telecommunication
Standard Specification, Version D, Release 0 (Version D.0), August
2007, and equivalent NCPDP Batch Standard Batch Implementation Guide,
Version 1, Release 2 (Version 1.2), January 2006 supporting
Telecommunications Standard Implementation Guide, Version D, Release 0
(Version D.0), August 2007. We adopted these standards to align with
those adopted at 45 CFR 162.1202, pursuant to the final rule titled
``Health Insurance Reform; Modifications to the Health Insurance
Portability and Accountability Act (HIPAA) Electronic Transaction
Standards,'' which appeared in the January 16, 2009, Federal Register
(74 FR 3326).
The November 2022 Administrative Simplification proposed rule
proposes to update the HIPAA standards used for eligibility
transactions (87 FR 67638). We therefore propose to update the Part D
regulation by proposing, at Sec. 423.160(b)(2), that eligibility
inquiries and responses between the Part D sponsor and prescribers and
between the Part D sponsor and dispensers must comply with the
applicable HIPAA regulation in 45 CFR 162.1202, as opposed to naming
standards independently, which would ensure, should the HIPAA standards
for eligibility transactions be updated as a result of HHS rulemaking
or in the future, that the Part D regulation would be synchronized with
the required HIPAA standards. We foresee no immediate impact of this
proposed change since the HIPAA regulation at 45 CFR 162.1202 currently
identifies the same standards as those named in the Part D regulation
at Sec. 423.160(b)(3)(i) and (ii), but we believe establishing a
cross-reference would help avoid potential future conflicts and
mitigate potential compliance challenges for the healthcare industry
and enforcement challenges for HHS.
Thus, we propose to delete existing Sec. 423.160(b)(3)(i) and (ii)
and modify Sec. 423.160(b)(2) (as renumbered per the technical
proposals in section III.B.9. of this proposed rule) to require that
eligibility transactions must comply with 45 CFR 162.1202.
We solicit comment on these proposals.
9. Technical Changes Throughout Sec. 423.160
In the spirit of alignment with ONC's approach to adopting
standards, we reviewed Sec. 423.160 in its entirety and identified
areas where we can reorganize text throughout this section. We do not
believe we should continue to list historical requirements that are no
longer relevant and have resulted in repetitive content being added to
the regulation. We propose removing reference to old effective dates
(for example, ``After January 1, 2009 . . .'' at Sec.
423.160(a)(3)(ii)). Additionally, certain exemptions have long since
expired. For example, at Sec. 423.160(a)(3)(iv), entities transmitting
prescriptions or prescription-related information where the prescriber
is required by law to issue a prescription for a patient to a non-
prescribing provider (such as a nursing facility) that in turn forwards
the prescription to a dispenser have not been exempt from using the
SCRIPT standard since November 1, 2014.
We are proposing a correction at Sec. 423.160(a)(3)(iii), where
regulation text refers to prescriptions and prescription-related
information transmitted ``internally when the sender and the
beneficiary are part of the same legal entity.'' The exemption
currently at Sec. 423.160(a)(3)(iii) was previously codified at Sec.
423.160(a)(3)(ii) as ``Entities may use either HL7 messages or the
NCPDP SCRIPT Standard to transmit prescriptions or prescription-related
information internally when the sender and the recipient are part of
the same legal entity . . .'' as finalized in the November 2005 final
rule, which codified the foundation standards for Medicare Part D
electronic prescription drug programs (70 FR 67594). Section
423.160(a)(3)(ii) was redesignated as Sec. 423.160(a)(3)(iii)
subsequent to changes made in the final rule titled ``Medicare Program;
Revisions to Payment Policies Under the Physician Fee Schedule, and
Other Part B Payment Policies for CY 2008; Revisions to the Payment
Policies of Ambulance Services Under the Ambulance Fee Schedule for CY
2008; and the Amendment of the E-Prescribing Exemption for Computer
Generated Facsimile Transmissions,'' (hereinafter referred to as ``the
November 2007 final rule'') which appeared in the November 27, 2007
Federal Register (72 FR 66222). There is no indication of intent in the
November 2007 final rule to change the wording in Sec.
423.160(a)(3)(iii) when it was redesignated, nor can we find evidence
of when this paragraph may have been altered in subsequent rules.
Therefore, we believe the word ``recipient'' was inadvertently changed
to ``beneficiary'' in the distant past and we are proposing to change
this back to ``recipient.''
Section 423.160(a)(1) and (2) already indicate that the entities
listed must comply with the applicable standards in Sec. 423.160(b);
therefore, the language currently at Sec. 423.160(b)(1), ``Entities
described in paragraph (a) of this section must comply with the
following adopted standards for transactions under this section,'' is
redundant. We propose to remove it from the text of Sec.
423.160(b)(1). Moreover, Sec. 423.160(b)(1)(i) through (iv) and
(b)(2)(i) through (iii) contain long-outdated requirements going back
to the start of the electronic prescribing program in Medicare Part D.
We propose to delete references to outdated requirements so that the
regulation text will include only relevant and applicable requirements.
Transition periods would no longer be specifically spelled out as
starting at a particular date (historically, 6 months after the
effective date of a final rule). Rather, the transition period would
begin as of the effective date of a final rule effectuating a change
from one version of a standard to a new version and would last until
the prior version of the standard is expired, as proposed to be
codified in ONC regulation, or until the date specified in Part D
regulation. For
[[Page 78498]]
versions of standards adopted by ONC, CMS would consider the necessary
transition period when working with ONC to establish the appropriate
expiration date for prior versions of standards in rulemaking. This
would align the Part D approach with the approach that ONC has used in
its own regulations.
As currently organized, separate sections for ``Prescription'' at
Sec. 423.160(b)(2), ``Medication history'' at Sec. 423.160(b)(4), and
``Electronic prior authorization'' at Sec. 423.160(b)(8) has resulted
in multiple versions of the NCPDP SCRIPT standard, and relevant
transactions, being repeated in these sections. Because Sec.
423.160(a)(1) and (2) state that the entities listed must comply ``with
the applicable standards in paragraph (b),'' we believe that we can
group the functions in paragraph (b) according to the standard used for
those functions to avoid repetition. Therefore, we propose to combine
``Prescriptions, electronic prior authorization, and medication
history'' at Sec. 423.160(b)(1), which will require the use of the
NCPDP SCRIPT standard version or versions as proposed via cross-
reference to ONC regulations. We propose to delete Sec. 423.160(b)(4)
and (8). The ePA transactions previously listed at Sec.
423.160(b)(8)(i)(A) through (D) are proposed at Sec.
423.160(b)(1)(i)(V) through (Y). We are proposing to delete reference
to versions of the NCPDP F&B standard, currently codified at Sec.
423.160(b)(5) introductory text and (b)(5)(i) and (ii), that are no
longer applicable. The remaining paragraphs in Sec. 423.160(b) are
renumbered such that Sec. 423.160(b)(2) refers to eligibility, Sec.
423.160(b)(3) refers to formulary and benefits, Sec. 423.160(b)(4)
refers to provider identifier, and Sec. 423.160(b)(5) refers to real-
time benefit tools.
We are proposing to delete standards incorporated by reference at
Sec. 423.160(c) that are: no longer applicable (that is, were
associated with outdated requirements that we have proposed to delete);
are being proposed for incorporation by reference by ONC at 45 CFR
170.299; or are already incorporated by reference by HHS at 45 CFR
162.920. The standards incorporated by reference at Sec.
423.160(c)(1)(i), (ii), and (v) are no longer applicable, and we
propose to delete them. The standards for eligibility transactions
currently incorporated by reference at Sec. 423.160(c)(1)(iii) and
(c)(2)(i) and (ii) have already been incorporated by reference by HHS
at 45 CFR 162.920. We propose to delete these specified Sec.
423.160(c)(1) and (2) incorporations by reference in light of our
proposals in section III.B.8. of this proposed rule to indicate that
entities must comply with 45 CFR 162.1202 for eligibility transactions.
In section III.B.11. of this proposed rule, we discuss how we propose
to renumber the applicable standards currently incorporated by
reference and where we propose to incorporate by reference the proposed
new versions of standards as discussed in sections III.B.4., III.B.5.,
and III.B.6. of this proposed rule.
We believe these changes improve the overall readability of the
section. With the exception of proposed changes described in sections
III.B.4., III.B.5., III.B.6., and III.B.8., we do not intend for
technical changes to alter current requirements.
We solicit comment on these proposals.
10. Summary of Standards for Electronic Prescribing Proposals
Sections III.B.4. though III.B.9. of this proposed rule include the
following proposals:
Requiring, via cross-reference to a standard in 45 CFR
170.205(b), use of NCPDP SCRIPT standard version 2023011, which ONC
proposes for adoption at 45 CFR 170.205(b)(2), and retiring use of
NCPDP SCRIPT standard version 2017071, via the same proposed cross-
reference, for communication of a prescription or prescription-related
information supported by Part D sponsors. This proposal includes a
transition period beginning on the effective date of the final rule
when either version of the NCPDP SCRIPT standard may be used. The
transition period would end on January 1, 2027, which is the date that
ONC has proposed that NCPDP SCRIPT standard version 2017071 would
expire for the purposes of HHS use, as described in section III.C.8.a.
of this proposed rule. If finalized as proposed, starting January 1,
2027, NCPDP SCRIPT standard version 2023011 would be the only version
of the NCPDP SCRIPT standard available for HHS use and for purposes of
the Medicare Part D electronic prescribing program;
Requiring, beginning January 1, 2027, prescriber RTBTs
implemented by Part D sponsors to comply with a standard in 45 CFR
170.205(c), where ONC proposes to adopt NCPDP RTPB standard version 13;
Requiring transmission of formulary and benefit
information between prescribers and Medicare Part D sponsors to comply
with a standard in 45 CFR 170.205(u), where ONC proposes to adopt NCPDP
F&B standard version 60, and retiring use of NCPDP F&B version 3.0 for
transmitting formulary and benefit information between prescribers and
Part D sponsors. This proposal includes a transition period beginning
on the effective date of the final rule and ending January 1, 2027,
where entities would be permitted to use either NCPDP F&B version 3.0
(currently named in regulation at Sec. 423.160(b)(5)(iii) and proposed
to be named at Sec. 423.160(b)(3) consistent with the proposed
technical changes in this rule) or NCPDP F&B standard version 60,
proposed for adoption at 45 CFR 170.205(u). If finalized as proposed,
starting January 1, 2027, only a version of the standard adopted for
HHS use at 45 CFR 170.205(u) would be permitted for use in Part D
electronic prescription drug program, which would be NCPDP F&B standard
version 60 if the proposal in section III.C.8.c. of this rule is
finalized as proposed;
Cross-referencing standards adopted for eligibility
transactions in HIPAA regulations at 45 CFR 162.1202 for requirements
related to eligibility inquiries; and
Making multiple technical changes to the regulation text
throughout Sec. 423.160 for clarity by removing requirements and
incorporations by reference that are no longer applicable or redundant,
re-organizing existing requirements, and correcting a technical error.
CMS invites comment on all aspects of these proposals, including the
proposed date of January 1, 2027, for required use of NCPDP SCRIPT
standard version 2023011, NCPDP RTPB standard version 13, and NCPDP F&B
standard version 60.
11. Incorporation by Reference and Availability of Incorporation by
Reference Materials
The Office of the Federal Register (OFR) has regulations concerning
incorporation by reference (IBR) at 1 CFR part 51. If the regulations
reference a standard, either in general or by name, in another section,
IBR approval is required. In order for CMS to require use of standards
in Sec. 423.160 by cross citation to 45 CFR 170.205(b), those
standards must be published in full in the Federal Register or CFR.
Therefore, CMS must incorporate by reference the materials referenced
in the proposals in sections III.B.4., III.B.5., and III.B.6. of this
proposed rule which cross cite standards in ONC regulations.
For a proposed rule, agencies must discuss in the preamble to the
proposed rule ways that the materials the agency proposes to
incorporate by reference are reasonably available to interested parties
or how the agency worked to make the materials reasonably available.
[[Page 78499]]
Additionally, the preamble to the proposed rule must summarize the
materials. See also section III.C.10. of this proposed rule for
summaries of the standards proposed for incorporation by reference by
ONC.
Consistent with those requirements CMS has established procedures
to ensure that interested parties can review and inspect relevant
materials. The proposals related to the Part D electronic prescribing
standards have relied on the following materials which we propose to
incorporate by reference where specified:
NCPDP SCRIPT Standard, Implementation Guide Version
2017071, approved July 28, 2017, which is currently incorporated by
reference at Sec. 423.160(c)(1)(vii). We propose to renumber this
incorporation by reference as Sec. 423.160(c)(2);
NCPDP SCRIPT Standard, Implementation Guide Version
2023011, published April 2023, (Approval Date for American National
Standards Institute [ANSI]: January 17, 2023). We propose to
incorporate by reference at Sec. 423.160(c)(3);
NCPDP Real-Time Prescription Benefit Standard,
Implementation Guide Version 13, published July 2023 (Approval Date for
ANSI: May 19, 2022). We propose to incorporate by reference at Sec.
423.160(c);
NCPDP Formulary and Benefits Standard, Implementation
Guide, Version 3, Release 0 (Version 3.0), published April 2012, which
is currently incorporated by reference at Sec. 423.160(c)(1)(vi). We
propose to renumber this incorporation by reference at Sec.
423.160(c)(1); and
NCPDP Formulary and Benefit Standard, Implementation Guide
Version 60, published April 2023 (Approval Date for ANSI: April 12,
2023). We propose to incorporate by reference at Sec. 423.160(c)(5).
NCPDP members may access these materials through the member portal
at www.ncpdp.org. Non-NCPDP members may obtain these materials for
information purposes by contacting the CMS at 7500 Security Boulevard,
Baltimore, Maryland 21244 by calling (410) 786-4132 or (877) 267-2323
(toll free), or emailing [email protected].
C. Adoption of Health IT Standards and Incorporation by Reference (45
CFR 170.205 and 170.299)
1. Overview
In this section, ONC proposes to adopt standards for electronic
prescribing and related activities on behalf of HHS under the authority
in section 3004 of the Public Health Service Act (42 U.S.C. 300jj-14).
ONC is proposing these standards for adoption by HHS as part of a
nationwide health information technology infrastructure that supports
reducing burden and health care costs and improving patient care. ONC
proposes to adopt these standards on behalf of HHS in one location
within the Code of Federal Regulations for HHS use, including by the
Part D Program as proposed in section III.B. of this proposed rule.
These proposals reflect a unified approach across the Department to
adopt standards for electronic prescribing (e-prescribing) activities
that have previously been adopted separately by CMS and ONC under
independent authorities. This approach is intended to increase
alignment across HHS and reduce regulatory burden for interested
parties subject to program requirements that incorporate these
standards.
In the Medicare Program; Contract Year 2024 Policy and Technical
Changes to the Medicare Advantage Program, Medicare Prescription Drug
Benefit Program, Medicare Cost Plan Program, Medicare Parts A, B, C,
and D Overpayment Provisions of the Affordable Care Act and Programs of
All-Inclusive Care for the Elderly; Health Information Technology
Standards and Implementation Specifications'' (December 2022 proposed
rule), which appeared in the Federal Register December 27, 2022 (87 FR
79552 through 79557), we proposed the adoption of NCPDP SCRIPT standard
version 2022011 and NCPDP Real-Time Prescription Benefit standard
version 13, as well as related proposals. We considered whether to
issue a final rule based on that proposed rule, but considering the
concerns raised by the commenters regarding which version of the
standards to use, we have opted not to do so. Specifically, some
commenters recommended adoption of NCPDP SCRIPT standard version
2023011, rather than the proposed NCPDP SCRIPT standard version
2022011. Other commenters recommended adoption of NCPDP RTPB standard
version 13, rather than the proposed NCPDP RTPB standard version 12.
See additional discussion in section III.B.5. of this rule. Therefore,
we are withdrawing the proposals in sections III.T. and III.U. of the
December 2022 proposed rule (87 FR 79552 through 79557). We are issuing
a series of new proposals in this proposed rule that take into
consideration the feedback we received from commenters on the December
2022 proposed rule and further build on these proposals. Additionally,
summaries of the standards we propose to adopt and subsequently
incorporate by reference in the Code of Federal Regulations can be
found below in section III.C.10. of this rule.
2. Statutory Authority
The Health Information Technology for Economic and Clinical Health
Act (HITECH Act), Title XIII of Division A and Title IV of Division B
of the American Recovery and Reinvestment Act of 2009 (the Recovery
Act) (Pub. L. 111-5), was enacted on February 17, 2009. The HITECH Act
amended the Public Health Service Act (PHSA) and created ``Title XXX--
Health Information Technology and Quality'' (Title XXX) to improve
health care quality, safety, and efficiency through the promotion of
health IT and exchange of electronic health information (EHI).
Subsequently, Title IV of the 21st Century Cures Act (Pub. L. 114-255)
(Cures Act) amended portions of the HITECH Act by modifying or adding
certain provisions to the PHSA relating to health IT.
3. Adoption of Standards and Implementation Specifications
Section 3001 of the PHSA directs the National Coordinator for
Health Information Technology (National Coordinator) to perform duties
in a manner consistent with the development of a nationwide health
information technology infrastructure that allows for the electronic
use and exchange of information. Section 3001(b) of the PHSA
establishes a series of core goals for development of a nationwide
health information technology infrastructure that--
Ensures that each patient's health information is secure
and protected, in accordance with applicable law;
Improves health care quality, reduces medical errors,
reduces health disparities, and advances the delivery of patient-
centered medical care;
Reduces health care costs resulting from inefficiency,
medical errors, inappropriate care, duplicative care, and incomplete
information;
Provides appropriate information to help guide medical
decisions at the time and place of care;
Ensures the inclusion of meaningful public input in such
development of such infrastructure;
Improves the coordination of care and information among
hospitals, laboratories, physician offices, and other entities through
an effective infrastructure for the secure and authorized exchange of
health care information;
[[Page 78500]]
Improves public health activities and facilitates the
early identification and rapid response to public health threats and
emergencies, including bioterror events and infectious disease
outbreaks;
Facilitates health and clinical research and health care
quality;
Promotes early detection, prevention, and management of
chronic diseases;
Promotes a more effective marketplace, greater
competition, greater systems analysis, increased consumer choice, and
improved outcomes in health care services; and
Improves efforts to reduce health disparities.
Section 3004 of the PHSA identifies a process for the adoption of
health IT standards, implementation specifications, and certification
criteria, and authorizes the Secretary to adopt such standards,
implementation specifications, and certification criteria. As specified
in section 3004(a)(1) of the PHSA, the Secretary is required, in
consultation with representatives of other relevant Federal agencies,
to jointly review standards, implementation specifications, and
certification criteria endorsed by the National Coordinator under
section 3001(c) of the PHSA and subsequently determine whether to
propose the adoption of any grouping of such standards, implementation
specifications, or certification criteria. The Secretary is required to
publish all determinations in the Federal Register.
Section 3004(b)(3) of the PHSA, which is titled ``Subsequent
Standards Activity,'' provides that the Secretary shall adopt
additional standards, implementation specifications, and certification
criteria as necessary and consistent with the schedule published by the
Health IT Advisory Committee (HITAC). As noted in the final rule,
``2015 Edition Health Information Technology (Health IT) Certification
Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition,
and ONC Health IT Certification Program Modifications,'' which appeared
in the October 16, 2015 Federal Register, we consider this provision in
the broader context of the HITECH Act and the Cures Act to grant the
Secretary the authority and discretion to adopt standards,
implementation specifications, and certification criteria that have
been recommended by the HITAC and endorsed by the National Coordinator,
as well as other appropriate and necessary health IT standards,
implementation specifications, and certification criteria (80 FR
62606).
Under the authority outlined in section 3004(b)(3) of the PHSA, the
Secretary may adopt standards, implementation specifications, and
certification criteria as necessary even if those standards have not
been recommended and endorsed through the process established for the
HITAC under section 3002(b)(2) and (3) of the PHSA. Moreover, while HHS
has traditionally adopted standards and implementation specifications
at the same time as adopting certification criteria that reference
those standards, the Secretary's authority under section 3004(b)(3) of
the PHSA is not limited to adopting standards or implementation
specifications at the same time certification criteria are adopted.
Finally, the Cures Act amended the PHSA by adding section 3004(c),
which specifies that in adopting and implementing standards under
section 3004, the Secretary shall give deference to standards published
by standards development organizations and voluntary consensus-based
standards bodies.
4. Alignment With Federal Advisory Committee Activities
The HITECH Act established two Federal advisory committees, the HIT
Policy Committee (HITPC) and the HIT Standards Committee (HITSC). Each
was responsible for advising the National Coordinator on different
aspects of health IT policy, standards, implementation specifications,
and certification criteria.
Section 4003(e) of the Cures Act amended section 3002 of the PHSA
and replaced the HITPC and HITSC with one committee, the HITAC. After
that change, section 3002(a) of the PHSA establishes that the HITAC
advises and recommends to the National Coordinator standards,
implementation specifications, and certification criteria relating to
the implementation of a health IT infrastructure, nationally and
locally, that advances the electronic access, exchange, and use of
health information. The Cures Act specifically directed the HITAC to
advise on two areas: (1) A policy framework to advance an interoperable
health information technology infrastructure (section 3002(b)(1) of the
PHSA); and (2) priority target areas for standards, implementation
specifications, and certification criteria (section 3002(b)(2) of the
PHSA).
For the policy framework, as described in section 3002(b)(1)(A) of
the PHSA, the Cures Act tasked the HITAC with providing recommendations
to the National Coordinator on a policy framework for adoption by the
Secretary consistent with the Federal Health IT Strategic Plan under
section 3001(c)(3) of the PHSA. In February of 2018, the HITAC made
recommendations to the National Coordinator for the initial policy
framework \37\ and subsequently published a schedule in the Federal
Register and an annual report on the work of the HITAC and ONC to
implement and evolve that framework.\38\ For the priority target areas
for standards, implementation specifications, and certification
criteria, section 3002(b)(2)(A) of the PHSA identified that in general,
the HITAC would recommend to the National Coordinator, for purposes of
adoption under section 3004 of the PHSA, standards, implementation
specifications, and certification criteria and an order of priority for
the development, harmonization, and recognition of such standards,
specifications, and certification criteria. In October of 2019, the
HITAC finalized recommendations on priority target areas for standards,
implementation specifications, and certification criteria.\39\
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\37\ HITAC Policy Framework Recommendations, February 21, 2018:
https://www.healthit.gov/sites/default/files/page/2019-07/2018-02-21_HITAC_Policy-Framework_FINAL_508-signed.pdf.
\38\ Health Information Technology Advisory Committee (HITAC)
Annual Report for Fiscal Year 2019 published March 2, 2020: https://www.healthit.gov/sites/default/files/page/2020-03/HITAC%20Annual%20Report%20for%20FY19_508.pdf.
\39\ HITAC recommendations on priority target areas, October 16,
2019: https://www.healthit.gov/sites/default/files/page/2019-12/2019-10-16_ISP_TF_Final_Report_signed_508.pdf.
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5. Aligned Approach to Standards Adoption
Historically, the ONC Health IT Certification Program and the Part
D Program have maintained complementary policies of aligning health IT
certification criteria and associated standards related to electronic
prescribing, medication history, and electronic prior authorization for
prescriptions. While CMS and ONC have worked closely together to ensure
consistent adoption of standards through regulatory actions, we
recognize that the practice of different HHS components conducting
parallel adoption of the same standards may result in additional
regulatory burden and confusion for interested parties. For instance,
due to discrepancies between regulatory timelines, adoption of the
NCPDP SCRIPT standard version 2017071 in different rules (respectively,
21st Century Cures Act: Interoperability, Information Blocking, and the
ONC
[[Page 78501]]
Health IT Certification Program final rule (85 FR 25642) and 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 April 16, 2018 Federal Register (83 FR
16440)) led to a period where ONC had to exercise special enforcement
discretion in the ONC Health IT Certification Program.\40\ Given these
concerns, ONC and CMS proposals in the December 2022 proposed rule (87
FR 79552 through 79557) reflected a new approach to alignment of
standards under which ONC proposed to adopt and incorporate by
reference, on behalf of HHS, the NCPDP SCRIPT standard version 2022011
and the NCPDP RTPB standard version 12 in a single Code of Federal
Regulations location at 45 CFR 170.205, where CMS proposed to cross-
reference these standards for requirements in the Part D program.
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\40\ See the archived version of the Certification Companion
Guide for the ``electronic prescribing'' certification criterion in
45 CFR 170.315(b)(3): https://www.healthit.gov/sites/default/files/page/2020-12/b3_ccg.pdf.
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For additional discussion of this approach see the December 2022
proposed rule (87 FR 79552 through 79557) and CMS's discussion in
sections III.B.3 through III.B.7. of this proposed rule. We note that
the proposals in this rule continue to reflect an aligned approach with
CMS to adoption of health IT standards for e-prescribing and related
purposes. We believe our proposed adoption of these standards in a
single CFR location for HHS use will help to address concerns around
alignment across HHS programs.
6. Regulatory History
For a summary of past standards adoption activities under section
3004 of the PHSA intended to ensure alignment for electronic
prescribing and related activities across the ONC Health IT
Certification Program and the Part D Program, we refer readers to the
December 2022 proposed rule (87 FR 79553). In this proposed rule, we
also propose to adopt the NCPDP Formulary and Benefit (F&B) standard
version 60, which was not previously discussed in the December 2022
proposed rule (87 FR 79553). For a summary of previous notice-and-
comment rulemaking related to formulary and benefit management
capabilities in the ONC Health IT Certification Program, we refer
readers to the ``Health Data, Technology, and Interoperability:
Certification Program Updates, Algorithm Transparency, and Information
Sharing'' proposed rule (HTI-1 Proposed Rule) (88 FR 23853 through
23854).
7. Interoperability Standards Advisory
ONC's Interoperability Standards Advisory (ISA) supports the
identification, assessment, and public awareness of interoperability
standards and implementation specifications that can be used by the
health care industry to address specific interoperability needs.\41\
The ISA is updated on an annual basis based on recommendations received
from public comments and subject matter expert feedback. This public
comment process reflects ongoing dialogue, debate, and consensus among
industry interested parties when more than one standard or
implementation specification could be used to address a specific
interoperability need.
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\41\ See https://www.healthit.gov/isa.
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ONC currently identifies the standards proposed for adoption in
this section within the ISA as available standards for a variety of
potential use cases. The NCPDP SCRIPT standard version 2023011, the
NCPDP Real-Time Prescription Benefit standard version 13, and the NCPDP
Formulary and Benefits standard version 60 are currently identified in
sections of the ISA including the ``Pharmacy Interoperability'' \42\
and ``Administrative Transactions--Non-Claims.'' \43\ We encourage
interested parties to review the ISA to better understand key
applications for the implementation specifications proposed for
adoption in this proposed rule.
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\42\ See https://www.healthit.gov/isa/section/pharmacyinteroperability.
\43\ See https://www.healthit.gov/isa/section/administrative-transactions-non-claims.
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8. Proposal To Adopt Standards for Use by HHS
Consistent with section 3004(b)(3) of the PHSA and the efforts, as
previously described, to evaluate and identify standards for adoption,
we propose to adopt the following implementation specifications in 45
CFR 170.205(b)(2), (c)(1), and (u)(1), on behalf of the Secretary, to
support the continued development of a nationwide health information
technology infrastructure as described under section 3001(b) of the
PHSA, and to support Federal alignment of standards for
interoperability and health information exchange. Specifically, we
propose to adopt the following standards:
NCPDP SCRIPT Standard, Implementation Guide, Version
2023011.
NCPDP Real-Time Prescription Benefit (RTPB) Standard,
Implementation Guide, Version 13.
NCPDP Formulary and Benefits (F&B) Standard,
Implementation Guide, Version 60.
In addition to comments on the individual proposals below, we
invite comments on whether there are alternative versions, including
any newer versions, of these or other standards that we should consider
for adoption for HHS use. In particular, we would be interested in, and
would consider for adoption in a final rule, any newer version of the
proposed standard(s) that may correct any unidentified errors or
clarify ambiguities that would support successful implementation of the
standard(s) and the interoperability of health IT.
a. NCPDP SCRIPT Standard Version 2023011 (45 CFR 170.205(b))
ONC has previously adopted three versions of the NCPDP SCRIPT
standard in 45 CFR 170.205. Most recently, we adopted NCPDP SCRIPT
standard version 2017071 in the ONC 21st Century Cures Act final rule
to facilitate the transfer of prescription data among pharmacies,
prescribers, and payers (85 FR 25678).
The updated NCPDP SCRIPT standard version 2023011 includes
important enhancements relative to NCPDP SCRIPT standard version
2017071. Enhancements have been added to support electronic prior
authorization functions as well as electronic transfer of prescriptions
between pharmacies. NCPDP SCRIPT standard version 2023011 also includes
functionality that supports a 3-way transaction among prescriber,
facility, and pharmacy, which will enable electronic prescribing of
controlled substances in the long-term care (LTC) setting.\44\
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\44\ See https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2023/20230213_To_CMS_CMS_4201_P_NPRM.pdf.
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We propose to adopt NCPDP SCRIPT standard version 2023011 in 45 CFR
170.205(b)(2), replacing NCPDP SCRIPT standard version 10.6 which is
currently in 170.205(b)(2). We propose to incorporate NCPDP SCRIPT
standard version 2023011 by reference in 45 CFR 170.299. Regarding
NCPDP SCRIPT standard version 2017071, we propose to revise the
regulatory text in 45 CFR 170.205(b)(1) to specify that adoption of
this standard will expire on January 1, 2027. If these proposals are
finalized, this would mean that both the 2017071 and 2023011 versions
of the NCPDP SCRIPT standard would be available for
[[Page 78502]]
HHS use from the effective date of a final rule until January 1, 2027.
On and after January 1, 2027, only the 2023011 version of the NCPDP
SCRIPT standard would be available for HHS use, for instance, where use
of a standard in 45 CFR 170.205(b) is required. We refer readers to
section III.B.4. of this proposed rule, where CMS discusses its
proposal at Sec. 423.160(b)(1) to require use of a standard in 45 CFR
170.205(b) for communication of a prescription or prescription-related
information to fulfill the requirements for prescriptions, electronic
prior authorization, and medication history.
We request comment on these proposals.
b. NCPDP Real-Time Prescription Benefit (RTPB) Standard Version 13 (45
CFR 170.205(c))
The NCPDP Real-Time Prescription Benefit standard version 13
enables the exchange of coverage status and estimated patient financial
responsibility for a submitted product and pharmacy, and identifies
coverage restrictions and alternatives when they exist. See section
III.B.5. of this proposed rule for a description of Real-Time
Prescription Benefit standard functionality and enhancements of NCPDP
Real-Time Prescription Benefit standard version 13 relative to NCPDP
Real-Time Prescription Benefit standard version 12.
Our proposal to adopt this standard supports the requirements of
Division CC, Title I, Subtitle B, section 119 of the Consolidated
Appropriations Act, 2021 (CAA), Public Law 116-260, which required
sponsors of Medicare prescription drug plans to implement a real-time
benefit tool that meets technical standards named by the Secretary, in
consultation with ONC. In addition, section 119(b) of the CAA amended
the definition of a ``qualified electronic health record'' in section
3000(13) of the PHSA to specify that a ``qualified electronic health
record'' must include or be capable of including a real-time benefit
tool. ONC intends to address this provision in future rulemaking for
the ONC Health IT Certification Program and will ensure alignment with
the proposed NCPDP Real-Time Prescription Benefit standard version 13,
if finalized, and related proposals in the Part D program where
appropriate.
We also note that the HITAC has previously addressed real-time
prescription benefit standards, consistent with its statutory role to
recommend standards. In 2019, the HITAC accepted the recommendations
included in the 2018 report of the Interoperability Priorities Task
Force, including recommendations to continue to monitor standards then
being developed for real-time prescription benefit transactions, and,
when the standards are sufficiently validated, to require EHR vendors
to provide functionality that integrates real time patient-specific
prescription benefit checking into the prescribing workflow.\9\ In
early 2020, the National Committee on Vital and Health Statistics
(NCVHS) and HITAC convened another task force, the Intersection of
Clinical and Administrative Data (ICAD) Task Force, which was charged
with convening industry experts and producing recommendations related
to electronic prior authorizations. The task force report was presented
to HITAC in November 2020 \10\ and discussed the NCPDP Real-Time
Prescription Benefit standard as an important tool for addressing
administrative transactions around prescribing.
We are proposing in 45 CFR 170.205(c) to add a new section heading
``Real-Time Prescription Benefit.'' We are also proposing to adopt the
NCPDP Real-Time Prescription Benefit standard version 13 \45\ in 45 CFR
170.205(c)(1) and to incorporate this standard by reference in 45 CFR
170.299. We refer readers to section III.B.5. of this rule, where CMS
proposes at Sec. 423.160(b)(5) to require Part D sponsors' RTBTs to
comply with a standard in 45 CFR 170.205(c) by January 1, 2027, to
fulfill the requirements for real-time benefit tools. As previously
noted, ONC will consider proposals to require use of this standard to
support real-time benefit tool functionality in the ONC Health IT
Certification Program, consistent with section 119 of the CAA, in
future rulemaking.
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\45\ See https://standards.ncpdp.org/Access-to-Standards.aspx.
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We request comment on these proposals.
c. NCPDP Formulary and Benefit (F&B) Standard Version 60 (45 CFR
170.205(u))
The NCPDP Formulary and Benefit (F&B) standard version 60 \46\
provides a uniform means for prescription drug plan sponsors to
communicate plan-level formulary and benefit information to prescribers
through electronic prescribing/EHR systems. The NCPDP F&B standard
transmits, on a batch basis, data on the formulary status of drugs,
preferred alternatives, coverage restrictions (that is., utilization
management requirements), and cost sharing consistent with the benefit
design for example, cost sharing for drugs on a particular tier). The
NCPDP F&B standard serves as a foundation for other electronic
prescribing transactions including ePA, real-time benefit check, and
specialty medication eligibility when used in conjunction with other
standards.
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\46\ See https://standards.ncpdp.org/Access-to-Standards.aspx.
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We propose to add a new paragraph heading at 45 CFR 170.205(u),
``Formulary and benefit.'' We propose to adopt the NCPDP Formulary and
Benefit standard version 60 at 45 CFR 170.205(u)(1) and to incorporate
this standard by reference in 45 CFR 170.299. We refer readers to
section III.B.6. of this proposed rule, where CMS proposes at Sec.
423.160(b)(3) to require, by January 1, 2027, use of a standard in 45
CFR 170.205(u) by Part D plan sponsors to fulfill the requirements for
exchange of formulary and benefit information with prescribers.
9. ONC Health IT Certification Program
We are not proposing new or revised certification criteria based on
the proposed adoption of standards within this rulemaking. We note that
section 119 of the CAA does not require ONC to adopt certification
criteria for real-time prescription benefit capabilities at the same
time as a standard is adopted by HHS. We are therefore proposing to
adopt the standard for HHS use and, as previously discussed, ONC would
address new or revised certification criteria referencing the standard,
if finalized, in separate rulemaking. ONC recently published a Request
for Information in the HTI-1 Proposed Rule seeking information related
to a real-time prescription benefit criterion (88 FR 23853 through
23854). ONC will continue to collaborate with CMS to ensure that any
future proposals in the ONC Health IT Certification Program continue to
advance alignment with program requirements under the Part D Program.
We believe the approach reflected in the standards proposals in
this proposed rule will support Federal alignment and coordination of
Federal activities with adopted standards and implementation
specifications for a wide range of systems, use cases, and data types
within the broad scope of health information exchange. Historically,
State, Federal, and local partners have leveraged the standards adopted
by ONC on behalf of HHS to inform program requirements, technical
requirements for grants and funding opportunities, and systems
implementation for health information
[[Page 78503]]
exchange. We believe the adoption of these standards will support HHS
partners in setting technical requirements and advancing the use of
innovative health IT solutions for electronic prescribing and related
activities.
10. Incorporation by Reference (45 CFR 170.299)
The Office of the Federal Register has established requirements for
materials (for example, standards and implementation specifications)
that agencies propose to incorporate by reference in the Code of
Federal Regulations (79 FR 66267; 1 CFR 51.5(a)). Specifically, 1 CFR
51.5(a) requires agencies to discuss, in the preamble of a proposed
rule, the ways that the materials it proposes to incorporate by
reference are reasonably available to interested parties or how it
worked to make those materials reasonably available to interested
parties; and summarize, in the preamble of the proposed rule, the
material it proposes to incorporate by reference.
To make the materials we intend to incorporate by reference
reasonably available, we provide a uniform resource locator (URL) for
the standards and implementation specifications. In many cases, these
standards and implementation specifications are directly accessible
through the URLs provided. In instances where they are not directly
available, we note the steps and requirements necessary to gain access
to the standard or implementation specification. In most of these
instances, access to the standard or implementation specification can
be gained through no-cost (monetary) participation, subscription, or
membership with the applicable standards developing organization (SDO)
or custodial organization. In certain instances, where noted, access
requires a fee or paid membership. As an alternative, a copy of the
standards may be viewed for free at the U.S. Department of Health and
Human Services, Office of the National Coordinator for Health
Information Technology, 330 C Street SW, Washington, DC 20201. Please
call (202) 690-7171 in advance to arrange inspection.
The National Technology Transfer and Advancement Act (NTTAA) of
1995 (15 U.S.C. 3701 et seq.) and the Office of Management and Budget
(OMB) Circular A-119 require the use of, wherever practical, technical
standards that are developed or adopted by voluntary consensus
standards bodies to carry out policy objectives or activities, with
certain exceptions. The NTTAA and OMB Circular A-119 provide exceptions
to selecting only standards developed or adopted by voluntary consensus
standards bodies, namely when doing so would be inconsistent with
applicable law or otherwise impractical. We have followed the NTTAA and
OMB Circular A-119 in proposing standards and implementation
specifications for adoption, and note that the technical standards
proposed for adoption in 45 CFR 170.205 in this proposed rule were
developed by NCPDP, which is an ANSI-accredited, not-for-profit
membership organization using a consensus-based process for standards
development.
As required by 1 CFR 51.5(a), we provide summaries of the standards
we propose to adopt and subsequently incorporate by reference in the
Code of Federal Regulations. We also provide relevant information about
these standards and implementation specifications in the preamble where
these standards are proposed for adoption. We propose to revise Sec.
170.299(k) with the following updated standards:
National Council for Prescription Drug Programs (NCPDP) SCRIPT
Standard, Implementation Guide, Version 2023011, April 2023 (Approval
Date for ANSI: January 17, 2023)
URL: https://standards.ncpdp.org/Access-to-Standards.aspx.
Access requires registration, a membership fee, a user account, and
a license agreement to obtain a copy of the standard.
Summary: SCRIPT is a standard created to facilitate the transfer of
prescription data between pharmacies, prescribers, and payers. The
current standard supports transactions regarding new prescriptions,
prescription changes, renewal requests, prescription fill status
notification, and prescription cancellation. Enhancements have been
added for drug utilization review/use (DUR/DUE) alerts and formulary
information as well as transactions to relay medication history and for
a facility to notify a pharmacy of resident information. Enhancements
have been added to support electronic prior authorization functions as
well as electronic transfer of prescriptions between pharmacies.
National Council for Prescription Drug Programs (NCPDP) Real-
Time Prescription Benefit Standard, Implementation Guide, Version 13,
July 2023 (Approval Date for ANSI: May 19, 2022)
URL: https://standards.ncpdp.org/Access-to-Standards.aspx.
Access requires registration, a membership fee, a user account, and
a license agreement to obtain a copy of the standard.
Summary: The NCPDP Real-Time Prescription Benefit Standard
Implementation Guide is intended to meet the industry need within the
pharmacy services sector to facilitate the ability for pharmacy benefit
payers/processors to communicate to providers and to ensure a
consistent implementation of the standard throughout the industry. The
Real-Time Prescription Benefit (RTPB) Standard enables the exchange of
patient eligibility, product coverage, and benefit financials for a
chosen product and pharmacy, and identifies coverage restrictions, and
alternatives when they exist.
National Council for Prescription Drug Programs (NCPDP)
Formulary and Benefit Standard, Implementation Guide, Version 60, April
2023 (Approval Date for ANSI: April 12, 2023)
URL: https://standards.ncpdp.org/Access-to-Standards.aspx.
Access requires registration, a membership fee, a user account, and
a license agreement to obtain a copy of the standard.
Summary: The NCPDP Formulary and Benefit Standard Implementation
Guide is intended to provide a standard means for pharmacy benefit
payers (including health plans and Pharmacy Benefit Managers) to
communicate formulary and benefit information to prescribers via
technology vendor systems.
D. Improvements to Drug Management Programs (Sec. Sec. 423.100 and
423.153)
Section 1860D-4(c)(5)(A) of the Social Security Act (the Act)
requires that Part D sponsors have a drug management program (DMP) for
beneficiaries at risk of abuse or misuse of frequently abused drugs
(FADs), currently defined by CMS as opioids and benzodiazepines. CMS
codified the framework for DMPs at Sec. 423.153(f) in the April 16,
2018 final rule ``Medicare Program; Contract Year 2019 Policy and
Technical Changes to the Medicare Advantage, Medicare Cost Plan,
Medicare Fee-for-Service, the Medicare Prescription Drug Programs, and
the PACE Program'' (83 FR 16440),
[[Page 78504]]
hereafter referred to as the April 2018 final rule.
Under current DMP policy, CMS identifies potential at-risk
beneficiaries (PARBs) who meet the clinical guidelines described at
Sec. 423.153(f)(16), which CMS refers to as the minimum
Overutilization Monitoring System (OMS) criteria. CMS, through the OMS,
reports such beneficiaries to their Part D plans for case management
under their DMP. There are also supplemental clinical guidelines, or
supplemental OMS criteria, which Part D sponsors can apply themselves
to identify additional PARBs. Under Sec. 423.153(f)(2), sponsors are
required to conduct case management for PARBs, which must include
informing the beneficiary's prescribers of their potential risk for
misuse or abuse of FADs and requesting information from the prescribers
relevant to evaluating the beneficiary's risk, including whether they
meet the regulatory definition of exempted beneficiary.
If the sponsor determines through case management that the enrollee
is an at-risk beneficiary (ARB), after notifying the beneficiary in
writing, the sponsor may limit their access to opioids and/or
benzodiazepines to a selected prescriber and/or network pharmacy(ies)
and/or through a beneficiary-specific point-of-sale claim edit, in
accordance with the requirements at Sec. 423.153(f)(3). CMS
regulations at Sec. 423.100 define exempted beneficiary, at-risk
beneficiary, potential at-risk beneficiary, and frequently abused drug.
1. Definition of Exempted Beneficiary Sec. 423.100
Section 1860D-4(c)(5)(C)(ii) of the Act defines an exempted
individual as one who receives hospice care, who is a resident of a
long-term care facility for which frequently abused drugs are dispensed
for residents through a contract with a single pharmacy, or who the
Secretary elects to treat as an exempted individual. At Sec. 423.100
CMS defines an exempted beneficiary as an enrollee being treated for
active cancer-related pain, or has sickle-cell disease, residing in a
long-term care facility, has elected to receive hospice care, or is
receiving palliative or end-of-life care.
The OMS criteria finalized in the April 2018 final rule were
developed to align with available information and guidelines, such as
the Centers for Disease Control and Prevention (CDC) Guideline for
Prescribing Opioids for Chronic Pain (2016 CDC Guideline) issued in
March 2016.\47\ The current policy to exempt beneficiaries with cancer
from DMPs was developed through feedback from interested parties and
alignment with the 2016 CDC Guideline's active cancer treatment
exclusion. Patients within the scope of the 2016 CDC Guideline included
cancer survivors with chronic pain who have completed cancer treatment,
were in clinical remission, and were under cancer surveillance only.
The 2022 CDC Clinical Practice Guideline for Prescribing Opioids for
Pain (2022 CDC Guideline) \48\ expands and updates the 2016 CDC
Guideline to provide evidence-based recommendations for prescribing
opioid pain medication for acute, subacute, and chronic pain for
outpatients aged >=18 years, excluding pain management related to
sickle cell disease, cancer-related pain treatment, palliative care,
and end-of-life care.
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\47\ https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm.
\48\ https://www.cdc.gov/mmwr/volumes/71/rr/rr7103a1.htm.
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In the interest of alignment with the 2022 CDC Guideline regarding
applicability in individuals with cancer, we are proposing to amend the
regulatory definition of ``exempted beneficiary'' at Sec. 423.100 by
replacing the reference to ``active cancer-related pain'' with
``cancer-related pain.'' With this proposal we expand the definition of
exempted beneficiary to more broadly refer to enrollees being treated
for cancer-related pain to include beneficiaries undergoing active
cancer treatment, as well as cancer survivors with chronic pain who
have completed cancer treatment, are in clinical remission, or are
under cancer surveillance only.
2. Drug Management Program Notices: Timing and Exceptions Sec.
423.153(f)(8)
As discussed above, sponsors must provide case management for any
PARB that meets the OMS criteria to determine whether the individual is
an ARB and whether to implement a limitation on their access to FADs.
Under section 1860D-4(c)(5)(B)(i)(I) of the Act, a sponsor must send an
initial and second notice to such beneficiary prior to imposing such
limitation. In the April 2018 final rule (83 FR 16440), CMS adopted
requirements for the initial and second notices at Sec. 423.153(f)(5)
and (6). The initial notice must inform the beneficiary that they have
been identified as a PARB and must include information outlined in
Sec. 423.153(f)(5)(ii). The second notice must inform the beneficiary
that they have been identified as an ARB and of the limitations on the
beneficiary's coverage of FADs, as specified in Sec.
423.153(f)(6)(ii). In the event that, after sending an initial notice,
a sponsor determines that a PARB is not an ARB, a second notice would
not be sent; instead, an alternate second notice would be sent. Though
not required by the Act, CMS codified a requirement at Sec.
423.153(f)(7) to provide an alternate second notice for the purpose of
informing the beneficiary that they are not an ARB and that no
limitation on their coverage of FADs will be implemented under the DMP.
Section 1860D-4(c)(5)(B)(iv) of the Act establishes that sponsors
must send a second notice on a date that is not less than 30 days after
the initial notice. The 30 days allow sufficient time for the
beneficiary to provide information relevant to the sponsor's
determination, including their preferred prescribers and pharmacies.
CMS codified at Sec. 423.153(f)(8) the timing for providing both the
second notice and alternate second notice. Currently, CMS requires
sponsors to send either the second or alternate second notice on a date
not less than 30 days from the date of the initial notice and not more
than the earlier of the date the sponsor makes the determination or 60
days after the date of the initial notice.
Based on program experience during the first several years of DMPs,
we propose to change the timeframe within which a sponsor must provide
an alternate second notice to a beneficiary who is determined to be
exempt from the DMP subsequent to receiving an initial notice.
Specifically, we propose to redesignate existing Sec.
423.153(f)(8)(ii) as Sec. 423.153(f)(8)(iii), and to revise the text
at Sec. 423.153(f)(8)(ii) to specify that, for such exempted
beneficiaries, the sponsor must provide the alternate second notice
within 3 days of determining the beneficiary is exempt, even if that
occurs less than 30 days from the date of the initial notice. In other
words, we propose to remove the requirement that sponsors wait at least
30 days from the date of the initial notice to send the alternate
second notice to exempted beneficiaries.
Through program oversight, including audits of Part D sponsors, CMS
has observed that initial notices are sometimes sent to Part D
enrollees who meet the definition of an exempted beneficiary at Sec.
423.100, often because the sponsor does not have the necessary
information--for example, that the enrollee has a cancer diagnosis or
is receiving palliative care or end-of-life care--at the time the
sponsor sends the initial notice. However, this information may be
provided later by the enrollee or their prescriber in response to the
initial notice. In some cases, sponsors identify exemptions very
quickly after issuing
[[Page 78505]]
the initial notice, prior to 30 days elapsing. Under current CMS
regulations, if a beneficiary meets the definition of an exempted
beneficiary, the beneficiary does not meet the definition of a PARB.
For this reason, exempted beneficiaries cannot be placed in a Part D
sponsor's DMP. Therefore, as stated in the preamble to the April 2018
final rule (83 FR 16455), a sponsor must remove an exempted beneficiary
from a DMP as soon as it reliably learns that the beneficiary is exempt
(whether that be via the beneficiary, their representative, the
facility, a pharmacy, a prescriber, or an internal or external data
source, including an internal claims system). CMS understands that
sponsors may have already been sending alternate second notices after
determining that a beneficiary is exempt, without waiting for 30 days
to elapse. This proposed change would specify that it is required to
send such notices to exempted beneficiaries sooner than 30 days after
the provision of the initial notice.
CMS reminds Part D sponsors that, during their review and during
case management, they are expected to use all available information to
identify whether a PARB is exempt in advance of sending an initial
notice to protect these vulnerable beneficiaries from unnecessary
burden, anxiety, and disruptions in medically necessary drug therapy.
Thorough review of plan records and robust outreach efforts to
prescribers during case management help to minimize the risk that an
exempted beneficiary would receive an initial notice.
On April 20, 2023, CMS released updated DMP guidance.\49\ Sections
8.1 and 8.2.2 of the guidance state that if a sponsor learns that a
beneficiary is exempt after sending an initial notice, the sponsor
should inform the beneficiary that the initial notice is rescinded. If
less than 30 days have passed since the initial notice, a sponsor
should send a Part D Drug Management Program Retraction Notice for
Exempted Beneficiaries. The model retraction notice addresses the
required 30-day timing issue in the current regulation. If this
proposal to require sponsors to provide an alternate second notice to a
beneficiary who is determined to be exempt from the DMP prior to the
required 30 days elapsing since the initial notice is finalized, the
Part D Drug Management Program Retraction Notice for Exempted
Beneficiaries would no longer be used because sponsors would instead
send the alternate second notice. We are not estimating any reduction
of burden for sponsors no longer using the Retraction Notice. The
Retraction Notice was implemented as a temporary solution for Part D
sponsors to use for exempted beneficiaries in place of the alternate
second notice, which had been accounted for in the latest version of
CMS-10141 (OMB control number 0938-0964).
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\49\ https://www.cms.gov/files/zip/cy-2023-part-d-dmp-guidance-april-20-2023.zip.
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We note that sponsors may determine that a PARB is not an ARB prior
to 30 days elapsing for reasons other than the beneficiary being
exempted. However, we believe the current 30-day requirement before a
sponsor may send an alternate second notice in such situations is
important to maintain because it allows the beneficiary and other
prescribers enough time to provide the sponsor with information that
may influence the sponsor's determination.
We propose an additional technical change related to the timeframe
for providing second and alternate second notices. The current
regulation at Sec. 423.153(f)(8)(i) requires that a sponsor provide a
second or alternate second notice not more than the earlier of the date
the sponsor makes the relevant determination or 60 days after the date
of the initial notice. It is critical that beneficiaries receive timely
written notice about changes to their access to Part D drugs, as well
as information about appeal rights, and the second and alternate second
notices are tied to the date of the plan's determination. However, CMS
understands that sponsors may not always be able to issue printed
notices on the exact day they make a determination for a variety of
reasons, such as they made the determination on a day when there is no
USPS mail service, or later in the day after files have been sent to a
print vendor.
Specifically, we propose to add at Sec. 423.153(f)(8)(i)(A) a
window of up to 3 days to allow for printing and mailing the second
notice or alternate second notice. We note a 3-day window would align
with requirements for providing written notice of a standard or
expedited Part D coverage determination after initial oral notice, as
described at Sec. Sec. 423.568(d) and (f) and 423.572(b),
respectively, and is therefore familiar to sponsors. However, unlike
the circumstances covered by those regulatory provisions, sponsors
would not be providing an initial oral notice, as it would be
impracticable to verbally convey the details of a second notice or
alternate second notice to an enrollee. This proposed change would
provide sponsors sufficient time to print and mail the notices while
ensuring that beneficiaries receive timely information about DMP
limitations. Sponsors must continue to issue these notices as soon as
possible when a determination is made, and CMS does not expect that
sponsors will routinely take the maximum amount of time.
We are not proposing to change the requirement in Sec.
423.153(f)(8)(i)(B) that the second notice or alternate second notice
must be provided no later than 60 days from the date of the initial
notice. This is because sponsors have ample time to account in advance
for the days needed to print and mail these notices.
3. OMS Criteria Request for Feedback
CMS regulations at Sec. 423.153(f)(16) specify that PARBs and ARBs
are identified using clinical guidelines that are developed with
stakeholder consultation, derived from expert opinion backed by
analysis of Medicare data, and include a program size estimate. In
addition, the clinical guidelines (also referred to as the ``OMS
criteria'') are based on the acquisition of FADs from multiple
prescribers, multiple pharmacies, the level of FADs used, or any
combination of these factors, or a history of opioid-related overdose.
PARBs are the Part D beneficiaries whom CMS believes are
potentially at the highest risk of opioid-related adverse events or
overdose. The current minimum OMS criteria \50\ identifies PARBs who
(1) use opioids with an average daily morphine milligram equivalents
(MME) of greater or equal to 90 mg for any duration during the most
recent six months, who have received opioids from 3 or more opioid
prescribers and 3 or more opioid dispensing pharmacies, or from 5 or
more opioid prescribers regardless of the number of dispensing
pharmacies (also referred to as ``MIN1'' minimum OMS criteria), or (2)
have a history of opioid-related overdose, with a medical claim with a
primary diagnosis of opioid-related overdose within the most recent 12
months and a Part D opioid prescription (not including Medication for
Opioid Use Disorder \51\ (MOUD)) within the most recent 6 months (also
referred to as ``MIN2'' minimum OMS criteria). The current supplemental
OMS criteria are for sponsors to address plan members who are receiving
opioids from a large number of prescribers or
[[Page 78506]]
pharmacies, but who do not meet a particular MME threshold. These are
(1) use of opioids (regardless of average daily MME) during the most
recent 6 months; AND (2) 7 or more opioid prescribers OR 7 or more
opioid dispensing pharmacies.
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\50\ April 20, 2023 HPMS memorandum, CORRECTION--Contact Year
2023 Drug Management Program Guidance available at: https://www.cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovcontra/rxutilization.
\51\ Referred to as medication-assisted treatment (MAT) in past
guidance.
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In 2019, CMS assigned the Health Federally Funded Research and
Development Center (FFRDC) to develop evidence-based recommendations
for improving the OMS criteria for the future. The Health FFRDC
conducted a literature review, facilitated a Technical Expert Panel
(TEP), and performed data analyses. All three activities served as
inputs into the evidence-based recommendations. The Health FFRDC
recommended that the results of the literature review and data analysis
support the continued inclusion of average MME, number of opioid
dispensing pharmacies, and number of opioids prescribers as indicators
for PARBs. In addition, they recommended that further data analysis
would be necessary to determine which additional criteria would be
appropriate to potentially adopt. CMS conducted subsequent literature
reviews and analysis.
In recent years, there has been a marked decrease in Medicare Part
D prescription opioid overutilization, but opioid-related overdose
deaths continue to be a growing problem throughout the United
States.\52\ While the CDC found synthetic opioids (other than
methadone) to be the main driver of opioid overdose deaths, accounting
for 82 percent of all opioid-involved deaths in 2020,\53\ we must
remain vigilant regarding the risks of prescription opioids including
misuse, opioid use disorder (OUD), overdoses, and death. CMS tracks
prevalence rates for Medicare Part D beneficiaries with an OUD \54\
diagnosis and beneficiaries with an opioid poisoning (overdose). While
overall opioid-related overdose prevalence rates among Medicare Part D
enrollees have declined over the period from contract year 2017 through
2021 at about 6.5 percent per annum, overall opioid-related overdose
prevalence rates increased by 1.0 percent between 2020 and 2021.
Furthermore, about 1.6 percent of all Part D enrollees had a provider
diagnosed OUD in contract year 2021 and the OUD prevalence rate has
grown by 3.2 percent per annum since contract year 2017.
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\52\ Spencer, Merianne R. et al. (2022). Drug Overdose Deaths in
the United States, 2001-2021. (457).
\53\ https://www.cdc.gov/drugoverdose/deaths/synthetic/index.html.
\54\ CMS used a modified version of the Chronic Condition
Warehouse (CCW) definition that excludes undiagnosed OUD
beneficiaries such as those with an opioid OD event and also limits
analysis to the particular measurement period instead of the prior
two years.
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A past overdose is the risk factor most predictive for another
overdose or suicide-related event.\55\ CMS finalized regulations to
implement section 2004 of the Substance Use-Disorder Prevention that
Promotes Opioid Recovery and Treatment for Patients and Communities
(SUPPORT) Act to include beneficiaries with a history of opioid-related
overdose as PARBs in DMPs. While the implementation of the SUPPORT ACT
enables identification of beneficiaries with a history of opioid-
related overdose and continues to identify PARBs who receive high
levels of opioids through multiple providers who may be more likely to
misuse prescription opioids,\56\ CMS is working on models that can
identify beneficiaries potentially at risk before their risk level is
diagnosed as an OUD or the person experiences an opioid-related
overdose.
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\55\ Bohnert K.M., Ilgen M.A., Louzon S., McCarthy J.F., Katz
I.R., Substance use disorders and the risk of suicide mortality
among men and women in the U.S. Veterans Health Administration.
Addiction. 2017 Jul;112(7):1193-1201. doi: 10.1111/add.13774.
\56\ Over 30,000 Part D enrollees met the minimum OMS criteria
and were reported to sponsors through OMS reports in 2022 (18
percent met the level of opioid use though multiple provider
criteria, and 82 percent met the history of history of opioid-
related overdose criteria).
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A recently published article that evaluated the use of machine
learning algorithms for predicting opioid overdose risk among Medicare
beneficiaries taking at least one opioid prescription concluded that
the machine learning algorithms appear to perform well for risk
prediction and stratification of opioid overdose especially in
identifying low-risk groups having minimal risk of overdose.\57\
Machine learning is a method of data analysis that automates analytical
model building, based on the idea that systems can learn from data,
identify patterns and make decisions with minimal human intervention.
---------------------------------------------------------------------------
\57\ Lo-Ciganic WH, Huang J.L., Zhang H.H., Weiss J.C., Wu Y.,
Kwoh C.K., Donohue J.M., Cochran G., Gordon A.J., Malone D.C., Kuza
C.C., Gellad W.F. Evaluation of Machine-Learning Algorithms for
Predicting Opioid Overdose Risk Among Medicare Beneficiaries With
Opioid Prescriptions. JAMA Netw Open. 2019 Mar 1;2(3):e190968. doi:
10.1001/jamanetworkopen.2019.0968. Erratum in: JAMA Netw Open. 2019
Jul 3;2(7):e197610. PMID: 30901048; PMCID: PMC6583312.
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While we are not proposing changes to the clinical guidelines or
OMS criteria in this proposed rule, we provide information on our data
analysis to date and welcome feedback for future changes. Using
predictor variables identified through the literature reviews, CMS
performed a data analysis to determine the top risk factors for Part D
enrollees at high-risk for one of two outcomes: (1) having a new opioid
poisoning (overdose) or (2) developing newly diagnosed OUD. Since Part
D enrollees with a known opioid-related overdose are already identified
in OMS, CMS focused on individuals at high risk for a new opioid-
related overdose or OUD. We anticipate no burden since, as indicated,
we are not proposing regulatory changes and are soliciting feedback.
In this analysis, we utilize Medicare data and traditional logistic
regression as well as machine learning models like Random Forest, Least
Absolute Shrinkage and Selection Operator (LASSO), and Extreme Gradient
Boosting (XGBoost) \58\ Cross Validation (CV) to examine and evaluate
performance in predicting risk of opioid overdose and OUD. The models
were compared based on the following criteria: Area Under the Curve
(AUC), sensitivity, specificity, positive predictive value (PPV),
negative predictive value (NPV), and number needed to examine (NNE). An
XGBoost model with CV performed best according to the specified
criteria and was selected as the model of choice for predicting a
beneficiary with a new opioid overdose or OUD diagnosis.
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\58\ Extreme Gradient Boosting (XGBoost) model--data mining
technique that is similar to Random Forest that combines multiple
decision trees into a single strong prediction model, but it differs
in doing so in an iterative manner by building one tree at a time
and optimizing a differentiable loss function.
---------------------------------------------------------------------------
The model population included 6,756,152 Medicare beneficiaries
contemporaneously enrolled in Part D and Parts A, B, or C during the
period from January to June 2019, who were prescribed at least one non-
MOUD prescription opioid during the measurement period and did not have
a DMP exemption (that is, cancer, sickle cell disease, hospice, LTC
facility resident, palliative care, or end-of-life care). We excluded
beneficiaries with a prior opioid-related overdose or an OUD diagnosis
in the year prior to the prediction period. The training dataset used
to build the model consisted of a random 75 percent sample of the study
population (5,067,114). The remaining 25 percent of the population
(1,689,038) was used for validating the prediction performance of the
model. The measurement period to obtain information for the predictor
variables (for example, opioid use patterns, demographics,
comorbidities, etc.) was from January 1 to June 30, 2019, and the
prediction period we used to identify beneficiaries with a new opioid
[[Page 78507]]
overdose event or new OUD diagnosis was from July 1 to December 31,
2019.
The following risk factors \59\ were incorporated into the XGBoost
model:
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\59\ Multicollinearity tests were undertaken in order to ensure
that there was no collinearity among the explanatory variables used
in the model.
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BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP15NO23.013
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\60\ The Generic Product Identifier (GPI) designates any or all
of a drug's group, class, sub-class, name, dosage form, and
strength.
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[[Page 78508]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.014
We evaluated the performance of the model using the confusion
matrix generated by applying the prediction model to the validation
dataset to calculate various metrics.
[[Page 78509]]
Confusion Matrix and Performance Metrics for the XGBoost model:
[GRAPHIC] [TIFF OMITTED] TP15NO23.015
[GRAPHIC] [TIFF OMITTED] TP15NO23.016
The top 15 risk factors that were highly associated with a new OUD
or opioid-related overdose diagnosis were:
[[Page 78510]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.017
The number of short-acting prescription opioid fills and the
average daily MME were found to contribute most to XGBoost model
predictions of a new OUD or opioid-related overdose diagnosis. Risk was
present across a range of MME levels and increased with higher MME
levels. The risk of developing a new OUD or opioid-related overdose
diagnosis also increased with the number of diagnosed mental health or
substance use disorders. Utilization of opioids with other high-risk
medications like anticonvulsants, benzodiazepines, anti-psychotics, and
anti-anxiety medications were positively associated with higher risk.
Also, utilization of opioids like oxycodone and morphine were
positively associated with higher risk, while utilization of codeine,
tramadol, and opioids in the other category were positively associated
with lower risk.
Lastly, we applied our finalized model to data from October 1,
2021, through March 31, 2022, to predict future new opioid-related
overdose events and OUD diagnoses during the period from April 1, 2022,
to September 30, 2022, to understand program size estimates and NNE
values.
[[Page 78511]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.018
BILLING CODE 4120-01-C
Between 9 percent and 15 percent of the beneficiaries with a
predicted new opioid-related overdose/OUD actually experienced a new
overdose or OUD diagnosis during the evaluation period (April 1, 2022,
through September 30, 2022) depending on the Risk Probability
Threshold. The Top 1 percent threshold (n = 62,571) reported the lowest
precision score, while the Top 1,000 threshold showed the highest
precision. Among those who had a new opioid-related overdose/OUD in the
evaluation period, about 92 percent developed a new OUD; the proportion
with a new opioid overdose increased from 10 percent to 17 percent as
the risk probability threshold increased from the Top 1 percent to the
Top 1,000; and, as the risk probability threshold increased, about 2
percent to 8 percent had both a new opioid overdose and were identified
as having a newly diagnosed OUD. Among the different Risk Probability
Thresholds, between 93 to 98 percent of the correctly predicted new
overdoses/OUDs do not meet the current OMS criteria. The percentage
that meets the current OMS criteria decreases as the Risk Probability
Threshold becomes more restrictive. Thus, our analysis shows that there
is very little overlap between the population identified through this
model and beneficiaries already identified through the OMS.\61\
Furthermore, our analysis confirms that machine learning models can
analyze large datasets and identify complex patterns that are not
easily discernible by current non-statistical approaches. This makes
them a powerful tool for identifying new opioid-related overdose or OUD
risk and capturing an additional population of potential at-risk
beneficiaries who have not been identified through our current OMS
criteria.
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\61\ CMS also notes that historically, only about 1.6 percent of
the beneficiaries meeting the history of opioid-related overdose
(MIN2) OMS criteria also meet the (MIN1) minimum OMS criteria.
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CMS next plans to assess risk in the model, validate the stability
of the model as new data become available, and develop guidelines on
how to feasibly implement the model into the existing DMP and OMS
processes. We solicit feedback on the following:
Potentially using such a model to enhance the minimum or
supplemental OMS criteria in the future (either in addition to the
current criteria or as a replacement).
How to avoid the stigma and/or misapplication of
identification of a PARB at high risk for a new opioid-related overdose
or OUD using the variables in the model.
Implementation considerations, such as effectively
conducting case management, as described in Sec. 423.153(f)(2), with
prescribers of PARBs identified by the model; opportunities to promote
MOUD, co-prescribing of naloxone, or care coordination; or potential
unintended consequences for access to needed medications.
[[Page 78512]]
Other factors to consider.
E. Codification of Complaints Resolution Timelines and Other
Requirements Related to the Complaints Tracking Module (CTM) (42 CFR
417.472(l), 422.125, 423.129, and 460.119)
CMS maintains the CTM in the Health Plan Management System (HPMS)
as the central repository for complaints received by CMS from various
sources, including, but not limited to the Medicare Ombudsman, CMS
contractors, 1-800-MEDICARE, and CMS websites. The CTM was developed in
2006 and is the system used to comply with the requirement of section
3311 of the Affordable Care Act for the Secretary to develop and
maintain a system for tracking complaints about MA and Part D plans
received by CMS, CMS contractors, the Medicare Ombudsman, and others.
Complaints from beneficiaries, providers, and their representatives
regarding their Medicare Advantage (MA) organizations, Cost plans,
Programs of All-inclusive Care for the Elderly (PACE) organizations,
and Part D sponsors are recorded in the CTM and assigned to the
appropriate MA organization, Cost plan, PACE organization, and Part D
sponsor if CMS determines the plan, organization, or sponsor is
responsible for resolving the complaint. Unless otherwise noted,
``plans'' applies to Medicare Advantage (MA) organizations, Part D
sponsors, Cost plans, and PACE organizations for purposes of this
proposal.
We are proposing to codify existing guidance for the timeliness of
complaint resolution by plans in the CTM. Currently, Sec. Sec.
422.504(a)(15) and 423.505(b)(22) require MA organizations and Part D
sponsors to address and resolve complaints received by CMS against the
MA organization and Part D sponsor through the CTM; we are proposing to
codify the expectation in guidance that Cost plans and PACE
organizations also address and resolve complaints in the CTM. We are
proposing to codify the existing priority levels for complaints based
on how quickly a beneficiary needs to access care or services and to
codify a new requirement for plans to make first contact with
individuals filing non-immediate need complaints within three (3)
calendar days. This time frame would not apply to immediate need
complaints because those complaints need to be resolved within two
calendar days.
CMS codified the requirement for MA organizations and Part D
sponsors to address and resolve complaints in the CTM at Sec. Sec.
422.504(a)(15) and 423.505(b)(22) in the ``Medicare Program; Changes to
the Medicare Advantage and the Medicare Prescription Drug Benefit
Programs for Contract Year 2012 and Other Changes'' (76 FR 21431),
which appeared in the April 15, 2011 Federal Register (hereafter
referred to as the ``April 2011 final rule''). As described in the
April 2011 final rule, the regulation requires that MA organizations
and Part D sponsors provide a summary of the resolution in the CTM when
a complaint is resolved. (76 FR 21470)
As Part D sponsors, Cost plans and PACE organizations that offer
Part D coverage have been required to comply with Sec. 423.505(b)(22).
We are proposing to add language to Sec. Sec. 417.472(l) and 460.119
to codify in the Cost plan regulations and PACE regulations,
respectively, the requirement that Cost plans and PACE organizations
address and resolve complaints in the CTM. This proposed new
requirement would apply to all complaints in the CTM for Cost plans and
PACE organizations, not just complaints about Part D.
In addition, CMS has issued guidance describing our expectations
for how complaints should be handled. In the Complaints Tracking Module
Plan Standard Operational Procedures (CTM SOP), the most recent version
of which was released on May 10, 2019, via HPMS memo,\62\ CMS provides
detailed procedures for plans to use when accessing and using the CTM
to resolve complaints. This includes describing the criteria CMS uses
in designating certain complaints as ``immediate need'' or ``urgent''
(all other complaints are categorized ``No Issue Level'' in the CTM),
setting forth our expectation that plans should review all complaints
at intake, and documentation requirements for entering complaint
resolutions in the CTM. The CTM SOP defines an ``immediate need
complaint'' for MA organizations, Cost plans, and PACE organizations as
``a complaint where a beneficiary has no access to care and an
immediate need exists.'' For Part D sponsors, ``an immediate need
complaint is defined as a complaint that is related to a beneficiary's
need for medication where the beneficiary has two or less days of
medication remaining.'' The CTM SOP defines an ``urgent complaint'' for
MA organizations, Cost plans, and PACE organizations as a complaint
that ``involves a situation where the beneficiary has no access to
care, but no immediate need exists.'' For Part D sponsors, ``an urgent
complaint is defined as a complaint that is related to the
beneficiary's need for medication where the beneficiary has 3 to 14
days of medication left.''
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\62\ Available at https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/ctm%20plan%20sop%20eff053019.pdf.
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In chapter 7, section 70.1 of the Prescription Drug Benefit Manual,
``Medication Therapy Management and Quality Improvement Program,'' \63\
CMS requires Part D sponsors to resolve any ``immediate need''
complaints within two (2) calendar days of receipt into the CTM and any
``urgent'' complaints within seven (7) calendar days of receipt into
the CTM. Chapter 7, section 70.1 also sets forth CMS's expectation that
Part D sponsors promptly review CTM complaints and notify the enrollee
of the plan's action as expeditiously as the case requires based on the
enrollee's health status.
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\63\ Available at https://www.cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovcontra/downloads/dwnlds/chapter7pdf.
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Requirements for resolution of complaints received in the CTM do
not override requirements related to the handling of appeals and
grievances set forth in 42 CFR part 422, subpart M (which apply to cost
plans as well as MA organizations per Sec. 417.600), part 423, subpart
M, for Part D sponsors, and Sec. Sec. 460.120 through 460.124 for PACE
organizations. Rather, CTM requirements supplement the appeals and
grievance requirements by specifying how organizations must handle
complaints received by CMS in the CTM and passed along to the plan. The
requirement for organizations to enter information on the resolution of
complaints in the CTM within specified time periods allows CMS to track
and ensure accountability for complaints CMS itself received, either
directly from beneficiaries or via entries in the CTM from the Medicare
ombudsman, CMS contractors, or others. A beneficiary who filed a
complaint directly with CMS may later contact CMS to find out the
status of the complaint and the plan's use of the system would allow
CMS to answer the beneficiaries inquires more expeditiously. In order
to comply with the applicable regulations, plans must handle any CTM
complaint that is also an appeal or grievance within the meaning of the
regulation in such a way that complies with the notice, timeliness,
procedural, and other requirements of the regulations governing appeals
and grievances.
We are proposing to codify the timeliness requirements for MA
organizations and Part D plans at new Sec. Sec. 422.125 and 423.129,
both titled ``Resolution of Complaints in Complaints Tracking Module.''
We are
[[Page 78513]]
proposing to codify these requirements for Cost plans and PACE
organizations at Sec. Sec. 417.472(l) and 460.119 by incorporating
Sec. Sec. 422.504(a)(15) and 422.125 by reference into the
requirements for Cost plans and PACE organizations, respectively.
Specifically, we propose to codify at Sec. Sec. 422.125(a) and
423.129(a) the definitions of ``immediate need'' and ``urgent''
complaints in substantially the same way as they are currently defined
in guidance for MA and Part D-related complaints. However, we propose
to specify that immediate need and urgent complaints for MA plans (as
well as Cost plans, and PACE) also include situations where a
beneficiary has access to enough of a drug or supply to last fewer than
2 days or from 3 to 14 days, respectively, as part of the definition
that these complaints are about situations that prevent the beneficiary
from accessing care or a service. This proposed change recognizes that
some complaints to an MA organization (or Cost plan or PACE
organization) may overlap with Part D access, such as when a
beneficiary reports a problem with their enrollment in an MA-PD plan
that is blocking access to Part D coverage. The change also recognizes
that non-Part D MA, Cost plan, and PACE complaints relate not just to
access to physician services but to drugs and supplies that may be
covered by the MA plan, Cost plan, or PACE organization's non-Part D
benefit (for example, Part B drugs or diabetic test strips covered
under the medical benefit of an MA plan). Further, MA plans, Cost
plans, and PACE also cover Part B drugs.
We also propose to codify at Sec. Sec. 422.125(b) and 423.129(b)
the current timeframes reflected in section 70.2 of chapter 7 of the
Prescription Drug Benefit Manual for resolving immediate need and
urgent complaints. A two (2) calendar day deadline for resolving plan-
related immediate need complaints is both consistent with current
practice by plans and logically follows from the definition of an
``immediate need'' complaint. By its nature, an immediate need
complaint requires swift action. Because we define immediate need, in
part, as a situation where a beneficiary has access to two or fewer
days' worth of a drug or supply they need, a timeline greater than two
calendar days for resolving a complaint would represent an unacceptable
risk to beneficiaries.
Similarly, a seven (7) calendar day deadline for ``urgent''
complaints reflects the importance of not delaying resolution of a
situation that is preventing access to care or services a beneficiary
needs. Because we define ``urgent'' in part as a situation where a
beneficiary has 3 to 14 days' worth of a drug or supply they need,
allowing more than a week to elapse before resolving the complaint
would put beneficiaries at unacceptable risk of not receiving
replacement drugs or supplies timely.
For all other Part D and non-Part D complaints in the CTM, we
propose requiring resolution within 30 days of receipt. This is
consistent with current practice and the guidance in section 70.2 of
chapter 7 of the Prescription Drug Benefit Manual, and we believe would
prevent complaints from lingering for months without resolution in the
CTM. Further, a 30-day timeframe for resolving complaints in the CTM
aligns with the 30-day period provided in Sec. Sec. 422.564(e) and
423.564(e) for resolution of grievances. Although those regulations
permit an extension of up to 14 days for resolving the grievance if the
enrollee requests the extension or if the organization justifies a need
for additional information and documents how the delay is in the
interest of the enrollee, we do not believe that including the
authority to extend the deadline to resolve complaints in the CTM is
appropriate because complaints received into the CTM are often the
result of failed attempts to resolve issues directly with the plan.
Allowing plans to further extend the time to resolve the complaint only
allows further delays in addressing beneficiary concerns. Moreover,
recent evidence indicates that the vast majority of non-immediate need
or urgent complaints are resolved within 30 days--98% of such
complaints were resolved by plans within 30 days in 2022.
All timeframes for resolution would continue to be measured from
the date a complaint is assigned to a plan in the CTM, rather than the
date the plan retrieves the complaint from the CTM. This is consistent
with current guidance and practice. Measuring the timeframe in this
manner is the best way to protect beneficiaries from delayed resolution
of complaints and encourages organizations to continue retrieving CTM
complaints in a timely manner so that they have sufficient time to
resolve complaints.
We do not anticipate that plans will have difficulty meeting these
timeframes. The vast majority of complaints are currently resolved in
the timelines specified for the priority level of the complaint. For
example, in 2022, plans resolved 97 percent of complaints within the
required time frames for the level of complaint. Plans resolved 94
percent of immediate need complaints within 2 calendar days, 97 percent
of urgent complaints within 7 calendar days, and 98 percent of
complaints with no issue level designated within 30 calendar days.
Codifying the timeframes as proposed merely formalizes CMS's current
expectations and the level of responsiveness currently practiced by
plans.
We are also proposing to create a new requirement for plans to
contact individuals filing non-immediate need complaints. At Sec. Sec.
422.125(c) and 423.129(c), we propose to require plans to contact the
individual filing a complaint within three (3) calendar days of the
complaint being assigned to a plan. While current guidance generally
includes the expectation that organizations inform individuals of the
progress of their complaint, CMS has never specified a timeframe for
reaching out to a complainant. CMS has observed that, particularly for
complaints that are not assigned a priority level, plans sometimes wait
until the timeframe for resolution has almost elapsed to contact the
complainant. Because the timeframe for resolving uncategorized
complaints is 30 days, an individual who files a complaint may wait
weeks to hear back from the plan responsible for resolving it. We
believe that such delays cause unnecessary frustration for
beneficiaries and are inconsistent with the customer service we expect
from plans.
We acknowledge that our proposed timeframe for reaching out to the
complainant concerning a CTM complaint is more specific than our
requirement at Sec. Sec. 422.564(b) and 423.564(b) for plans to
``promptly inform the enrollee whether the complaint is subject to its
grievance procedures or its appeals procedures.'' We are proposing a
specific timeframe for contacting the beneficiary regarding a CTM
complaint because, unlike with complaints received by the plans outside
the CTM, the complainant has not reached out directly to the plan and
may not know that their complaint has been passed on to the plan by CMS
via the CTM. Moreover, as previously noted, CMS monitors the handling
of complaints it receives through the CTM in real time. Part of
handling CTM complaints through the CTM, as required by Sec. Sec.
422.504(a)(15) and 423.505(b)(22), is entering information into the CTM
when the plan reaches out to the complainant. CMS would therefore be
able to monitor whether a plan has reached out to a beneficiary within
the required timeframe and follow up with the plan well before
timeframe for resolving the complaint has elapsed.
We are proposing a 3 calendar day timeframe for reaching out to the
[[Page 78514]]
individual filing the complaint because it would provide a timely
update to individuals filing both urgent and uncategorized complaints
without delaying resolution of immediate need complaints. We expect
that a plan would indicate in this communication that the plan has
received and is working on the complaint, and that they provide contact
information that the individual filing the complaint could use to
follow up with the plan regarding the complaint. We solicit comment on
whether this timeframe is appropriate and whether a longer or shorter
timeframe would better balance the needs of beneficiaries with the
capacity of plans to respond to complaints.
We are also proposing conforming changes to Sec. Sec.
422.504(a)(15) and 423.505(b)(22) to incorporate the proposed new
requirements into the existing contractual requirements for MA
organizations and Part D sponsors. The proposed revisions to Sec. Sec.
417.472(l) and 460.119 incorporate both the requirements in proposed
Sec. 422.125 and the requirement for a contract term for resolving
complaints received by CMS through the CTM for Cost plans and PACE
organizations and their contracts with CMS.
F. Additional Changes to an Approved Formulary--Biosimilar Biological
Product Maintenance Changes and Timing of Substitutions (Sec. Sec.
423.4, 423.100, and 423.120(e)(2))
1. Introduction
Section 1860D-11(e)(2) of the Act provides that the Secretary may
only approve Part D plans if certain requirements are met, including
the provision of qualified prescription drug coverage. Section 1860D-
11(e)(2)(D) of the Act specifically permits approval only if the
Secretary does not find that the design of the plan and its benefits,
including any formulary and tiered formulary structure, are likely to
substantially discourage enrollment by certain Part D eligible
individuals. Section 1860D-4(c)(1)(A) of the Act requires ``a cost-
effective drug utilization management program, including incentives to
reduce costs when medically appropriate.'' Lastly, section 1860D-
4(b)(3)(E) of the Act requires Part D sponsors to provide ``appropriate
notice'' to the Secretary, affected enrollees, physicians, pharmacies,
and pharmacists before removing a covered Part D drug from a formulary
or changing the preferred or tiered cost-sharing status of such a drug.
In section III.Q., Changes to an Approved Formulary, of the
proposed rule titled ``Medicare Program; Contract Year 2024 Policy and
Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicare Cost Plan Program, Medicare
Parts A, B, C, and D Overpayment Provisions of the Affordable Care Act
and Programs of All-Inclusive Care for the Elderly; Health Information
Technology Standards and Implementation Specifications,'' which
appeared in the December 27, 2022 Federal Register (hereinafter
referred to as the December 2022 proposed rule), we proposed
regulations related to (1) Part D sponsors obtaining approval to make
changes to a formulary already approved by CMS, including extending the
scope of immediate formulary substitutions (also generally referred to
as immediate substitutions herein); \64\ and (2) Part D sponsors
providing notice of such changes.
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\64\ We note the distinction between formulary substitutions
made by a plan sponsor and product substitutions made by a
pharmacist at the point-of-dispensing. As we describe in section
III.F.2.a.(2) of this proposed rule, State laws govern the ability
of pharmacists to substitute biological products at the point-of-
dispensing. By contrast, the Secretary's statutory authority under
section 1860D-11(e)(2) of the Act governs approval of, and by
extension any changes to, Part D formularies. The provisions we
describe throughout section III.F of this proposed rule strictly
apply to changes to Part D formularies made by plan sponsors, and do
not apply to substitutions made by pharmacists at the point-of-
dispensing.
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The December 2022 proposed rule proposed to reorganize current
regulatory text to incorporate and as necessary conform with
longstanding sub-regulatory guidance and operations with respect to
changes to an approved formulary and associated notice provisions. For
example, Sec. 423.120(b)(5)(iv) currently permits a plan sponsor to
immediately remove a brand name drug from its formulary when adding a
therapeutically equivalent generic drug, subject to certain
requirements. If finalized, the December 2022 proposed rule would
expand immediate substitutions in a new Sec. 423.120(e)(2)(i) to allow
plan sponsors to substitute an authorized generic for a brand name
drug, an interchangeable biological product for a reference product, or
an unbranded biological product for its corresponding brand name
biological product under the same biologics license application (BLA).
These and other proposals discussed in section III.Q., Changes to
an Approved Formulary, of the December 2022 proposed rule have not been
finalized and remain under consideration. As we noted in the April 2023
final rule, CMS intends to address remaining proposals from the
December 2022 proposed rule in subsequent rulemaking, which would be
effective no earlier than January 1, 2025. As we continue to consider
comments we received in response to the December 2022 proposed rule, we
identified a limited number of changes that we would like to make to
the proposed regulatory text relating to section III.Q. of the December
2022 proposed rule. Accordingly, this proposed rule reflects our intent
to consider section III.Q. of the December 2022 proposed rule, as
updated by the limited proposed changes discussed herein, for inclusion
in future rulemaking. While we discuss below certain comments regarding
the December 2022 proposed rule that informed the limited proposed
changes herein, we will respond to comments received in response to
section III.Q. of the December 2022 proposed rule, as well as comments
received in response to the changes proposed below, if we decide to
move forward with such proposals in future rulemaking.
Commenters on section III.Q. of the December 2022 proposed rule did
not agree on the requirements that should apply to formularies
substituting Food and Drug Administration (FDA) approved and licensed
biosimilar biological products. Different commenters submitted
divergent requests that substitutions of biosimilar biological products
other than interchangeable biological products be treated as immediate
substitutions, be treated as maintenance changes, or not be permitted
whatsoever. Our proposed regulatory text in the December 2022 proposed
rule only addressed substitution of interchangeable biological products
and did not specify how Part D sponsors could treat substitution of
biosimilar biological products other than interchangeable biological
products, and we believe, in part because of the interest in the topic,
that it would be appropriate to propose to do so now in order to
solicit comment directly on the subject.
Accordingly, we are proposing to update the regulatory text we
proposed in the December 2022 proposed rule to the extent necessary to
permit Part D sponsors to treat substitutions of biosimilar biological
products other than interchangeable biological products as
``maintenance changes,'' as defined in the December 2022 proposed rule,
for the reasons discussed below. We are also proposing to define a new
term, ``biosimilar biological product,'' distinct from our previously
proposed term ``interchangeable biological products.'' (We propose some
technical changes to the latter term as well.)
[[Page 78515]]
We propose to define biosimilar biological products consistent with
sections 351(i) and (k) of the Public Health Service Act to include
interchangeable biological products. In section III.Q (87 FR 79536) of
the December 2022 proposed rule, we proposed to permit maintenance
changes and immediate substitutions involving interchangeable
biological products, and that proposal is still under consideration. In
this proposed rule, we are also proposing to allow substitution of
biosimilar biological products other than interchangeable biological
products for reference products as a maintenance change. To ensure
clarity, we are proposing to address the application of these policies
to interchangeable biological products and to biosimilar biological
products other than interchangeable biological products in separate
paragraphs of the proposed definition of maintenance change in Sec.
423.100.
Further, in considering a comment on immediate formulary
substitutions, we also determined it would be appropriate to propose
providing Part D sponsors with additional flexibility with respect to
maintenance changes and immediate substitutions than as originally
proposed in the December 2022 proposed rule. Rather than requiring a
Part D sponsor to add a ``corresponding drug'' and make a ``negative
formulary change'' (as both such terms are defined in the December 2022
proposed rule) to its related drug ``at the same time,'' we are
proposing additional flexibility. Specifically, we propose to allow
Part D sponsors to make a negative formulary change to the related drug
within a certain period of time following the addition of the
corresponding drug--rather than at the same time they add the
corresponding drug.
Additionally, we propose a technical change to our proposed
definition of ``corresponding drug'' in Sec. 423.100 included in the
December 2022 proposed rule to specify that the reference to an
``unbranded biological product of a biological product'' is intended to
be a reference to ``an unbranded biological product marketed under the
same BLA as a brand name biological product.''
Lastly, we are taking this opportunity to address a technical
change to the regulatory text proposed in the December 2022 proposed
rule to specify in introductory language to the Sec. 423.100 proposed
definition of ``maintenance change'' that changes apply with respect to
``a covered Part D drug.''
Our goal in this proposed rule is to focus only on these specific
changes to the original proposals in the December 2022 proposed rule
that remain under consideration, but as updated below. We are re-
proposing in this proposed rule only the regulatory text in the
December 2022 proposed rule necessary to address new policy
considerations and, therefore, we include only the updated parts of the
three following sections of proposed regulatory text in the December
2022 proposed rule: Sec. Sec. 423.4; 423.100; and 423.120(e)(2).
Section III.F.2.a. of tis proposed rule includes both language and
synopses of the preamble to the December 2022 proposed rule as
necessary to provide context for the updates we are proposing in this
proposed rule. Except as specified in this proposed rule, stakeholders
should assume, as does the discussion in this proposed rule, that the
proposals for regulatory text regarding changes to approved formularies
otherwise remain under consideration as proposed in the December 2022
proposed rule. If any provisions regarding this topic are finalized,
the final rule would include the provisions proposed in the December
2022 proposed rule, as revised by the proposed changes in this proposed
rule and taking into consideration any potential changes in response to
comments.
We received numerous comments on section III.Q. of the December
2022 proposed rule on changes to an approved formulary, comments which
we have carefully reviewed and continue to consider (and some of which
are discussed in this proposed rule). We solicit comments on any
aspects regarding the changes we are proposing in this rule to the
December 2022 proposed rule's provisions.
2. Substituting Biosimilar Biological Products for Their Reference
Products as Maintenance Changes
a. Previously Proposed Provisions
(1) Certain Previously Proposed Provisions Related to Maintenance and
Non-Maintenance Changes
In section III.Q.2.b., Proposed Provisions for Approval of
Formulary Changes, of the December 2022 proposed rule, we proposed to
define terms such as ``negative formulary change'' and ``affected
enrollee.'' In categorizing negative formulary changes, we discussed
the fact that chapter 6 of the Prescription Drug Benefit Manual also
classifies negative formulary changes as either maintenance or non-
maintenance changes. Maintenance changes are changes generally expected
to pose a minimal risk of disrupting drug therapy or are warranted to
address safety concerns or administrative needs (for example, drug
availability due to shortages and determining appropriate payment such
as coverage under Part B or Part D). We noted that in our experience
the vast majority of negative formulary changes are ``maintenance''
changes that CMS routinely approves, and the vast majority of
maintenance changes are generic substitutions, in which the Part D
sponsor removes a brand name drug and adds its generic equivalent.
We then noted that consistent with our current manual policy and
operations, we were proposing at Sec. 423.100 to define ``maintenance
changes'' to mean the following negative formulary changes: (1) making
any negative formulary changes to a drug and at the same time adding a
corresponding drug at the same or lower cost-sharing tier and with the
same or less restrictive prior authorization (PA), step therapy (ST),
or quantity limits (QL) requirements (other than those meeting the
requirements of immediate substitutions currently permitted and that we
proposed to permit in the December 2022 proposed rule); (2) removing a
non-Part D drug; (3) adding or making more restrictive PA, ST, or QL
requirements based upon a new FDA-mandated boxed warning; (4) removing
a drug deemed unsafe by FDA or withdrawn from sale by the manufacturer
if the Part D sponsor chooses not to treat it as an immediate negative
formulary change; (5) removing a drug based on long-term shortage and
market availability; (6) making negative formulary changes based upon
new clinical guidelines or information or to promote safe utilization;
or (7) adding PA to help determine Part B versus Part D coverage. We
additionally stated that we intended through the use of the plural
tense to clarify that Part D sponsors may request to apply more than
one negative formulary change simultaneously to that drug.
We noted that non-maintenance changes, which are infrequently
warranted, are negative formulary changes that limit access to a
specific drug without implementing a corresponding offset (such as
adding an equivalent drug) or addressing safety or administrative
needs. We proposed to define ``non-maintenance change'' at Sec.
423.100 to mean a negative formulary change that is not a maintenance
change or (as discussed in the next paragraph) an immediate negative
formulary change.
We also introduced a third category of negative formulary changes
in Sec. 423.100 to capture negative formulary changes
[[Page 78516]]
that fall within certain parameters and that may be made immediately.
We proposed to define ``immediate negative formulary changes'' as those
which meet the requirements as either an immediate substitution or
market withdrawal under Sec. 423.120(e)(2)(i) or (ii) respectively. We
noted, however, that while such changes may be made immediately, Part D
sponsors retain the option to implement such changes as maintenance
changes. This means that those Part D sponsors that can meet all
applicable requirements would have a choice as to whether to make such
changes immediately and thereafter provide notice of specific changes
or submit a negative change request and provide specific notice of such
changes to affected enrollees at least 30 days before they occur.
We also proposed to define ``corresponding drug'' in Sec. 423.100
to mean, respectively, a generic or authorized generic of a brand name
drug, an interchangeable biological product of a reference product, or
an unbranded biological product of a biological product and to move and
retain our current regulatory description of ``other specified
entities'' currently in Sec. 423.120(b)(5)(i) to be a standalone
definition of the term in Sec. 423.100.
We proposed in Sec. 423.120(e) that Part D sponsors may not make
any negative formulary changes to the CMS-approved formulary except as
specified in the regulation.
We proposed to codify our existing policy with respect to
maintenance changes, which would, at proposed Sec. 423.120(e)(3)(i),
permit Part D sponsors that have submitted a maintenance change request
to assume that CMS has approved their negative change request if they
do not hear back from CMS within 30 days of submission. We proposed to
codify our existing policy with respect to non-maintenance changes as
well, which would specify at Sec. 423.120(e)(3)(ii) that Part D
sponsors must not implement non-maintenance changes until they receive
notice of approval from CMS. We also proposed to codify our
longstanding policy that affected enrollees are exempt from approved
non-maintenance changes for the remainder of the contract year at Sec.
423.120(e)(3)(ii).
In section III.Q.3.b., Alignment of Approval and Notice Policy, of
the December 2022 proposed rule, we noted in relevant part that: we
first proposed in Sec. 423.120(f)(1) to specify that only maintenance
and non-maintenance negative formulary changes would require 30 days'
advance notice to CMS and other specified entities, and in writing to
affected enrollees. We also proposed to retain at Sec. 423.120(f)(1)
an alternative option for Part D sponsors to provide an affected
enrollee who requests a refill of an approved month's supply of the
Part D drug under the same terms as previously allowed, as well as
written notice of the change. We further proposed in Sec.
423.120(f)(5)(i) to require Part D sponsors to provide advance general
notice of other formulary changes to all current and prospective
enrollees and other specified entities, in formulary and other
applicable beneficiary communication materials, advising that the
formulary may change subject to CMS requirements; providing information
about how to access the plan's online formulary and contact the plan;
and stating that the written notice of any change made when provided
would describe the specific drugs involved. For immediate
substitutions, we indicated we would require information on the steps
that enrollees may take to request coverage determinations and
exceptions. We noted that our current model documents already largely
provide advance general notice of such changes. Section
423.120(f)(5)(ii) as proposed in the December 2022 proposed rule would
further require that Part D sponsors provide enrollees and other
specified entities notice of specific formulary changes by complying
with Sec. 423.128(d)(2) and provide CMS with notice of specific
changes through formulary updates.
We proposed to revise and renumber the existing regulation to
specify that, except for immediate negative formulary changes, negative
formulary changes require at least 30 days advance notice. Consistent
with our proposal for approval of maintenance changes, we proposed that
a Part D sponsor could submit the negative change request, which would
constitute its notice to CMS, and notice to other specified entities at
the same time. We explained this would permit the Part D sponsor to
implement the maintenance change once it is deemed approved under
proposed Sec. 423.120(e)(3)(i)--although facing the risk of sending
notice of a change that is subsequently disapproved by CMS.
We also noted that Part D sponsors currently submit negative change
requests to CMS via HPMS that specify the negative change's intended
effective date, which under our proposed approach, would have to be at
least 30 days after submission for a maintenance change. However,
consistent with our previous proposal under Sec. 423.120(f)(3)(ii) to
prohibit Part D sponsors from implementing non-maintenance changes
until they receive notice of approval from CMS, Part D sponsors would
not be permitted to provide notice to other specified entities or
affected enrollees, or to otherwise update formularies or other
materials, until CMS has approved the non-maintenance change. We also
discussed updating online notice of negative formulary changes at Sec.
423.128(d)(2)(iii).
(2) Certain Previously Proposed Provisions Related to Interchangeable
Biological Products as Immediate Negative Formulary Changes
In section III.Q.2.b.(3), Immediate Negative Formulary Changes, of
the December 2022 proposed rule, we proposed to permit immediate
substitutions of interchangeable biological products for their
reference products. In our preamble, we reviewed how, under the current
Sec. 423.120(b)(5)(iv), we permit immediately substituting new generic
drugs for brand name drugs, and that current Sec. 423.120(b)(5)(iii)
permits the immediate removal of drugs deemed unsafe by FDA or
withdrawn from sale by their manufacturers. We then discussed our
proposal to broaden the scope of permitted immediate substitutions at
Sec. 423.120(e)(2)(i) to include authorized generics as defined at
Sec. 423.4.
We noted that when we first adopted the immediate substitution
policy, we stated that the regulation would not apply to biological
products, but that we would reconsider the issue when interchangeable
biological products became available in Part D. In the December 2022
proposed rule, we noted there was at least one interchangeable
biological product and also an unbranded biological product marketed
under the same license, and that other licensed interchangeable
biological products may become available in Part D in the future.\65\
Accordingly, we stated we believed it appropriate to expand our policy
to include interchangeable biological products and unbranded biological
products marketed under the same license as the brand name biological
products when immediate substitution would not disrupt existing
therapy. We noted that as discussed in the preamble to the proposed
rule titled, ``Medicare Program; Contract Year 2019 Policy and
Technical Changes to the Medicare Advantage, Medicare Cost Plan,
Medicare Fee-for-Service, the
[[Page 78517]]
Medicare Prescription Drug Benefit Programs, and the PACE Program,''
which appeared in the November 28, 2017 Federal Register (82 FR 56413),
in deciding to permit immediate generic substitutions without advance
direct notice of specific changes to affected enrollees, CMS, or other
specified entities, we weighed the need to maintain the continuity of a
plan's formulary for beneficiaries who enroll in plans based on the
drugs offered at the time of enrollment against the need to provide
Part D sponsors more flexibility to facilitate the use of new generics.
We stated that key to our decision to permit such substitutions was the
fact that the rule would apply only to therapeutically equivalent
generics of the affected brand name drug because such generics are the
same as an existing approved brand name drug in dosage form, safety,
strength, route of administration, and quality. Congress, we noted,
defined ``interchangeable'' in reference to biological products,
stating that interchangeable biological products ``may be substituted
for the reference product without the intervention of the health care
professional who prescribed the reference product.'' \66\ We also
explained that FDA reports that this is similar to how generic drugs
are routinely substituted for brand name drugs.\67\
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\65\ The December 2022 proposed rule cited Semglee[supreg]
(insulin glargine-yfgn). Other interchangeable biological products
now available include Cyltezo[supreg] (adalimumab-adbm) and
Rezvoglar\TM\ (insulin glargine-aglr).
\66\ Public Health Service Act section 351(i)(3) (42 U.S.C.
262(i)(3)).
\67\ ``Biosimilar and Interchangeable Biologics: More Treatment
Choices'' at the following FDA website: https://www.fda.gov/consumers/consumer-updates/biosimilar-and-interchangeable-biologics-more-treatment-choices. Accessed April 26, 2022.
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We then noted that all 50 States now permit or require pharmacists
to substitute interchangeable biological products when available, for
prescribed reference products at the point-of-dispensing, subject to
varying requirements regarding patient and prescriber notice,
documentation of the substitution, and patient savings as a result of
the substitution, among other safeguards.\68\ In the context of a
growing market for interchangeable biological products, to follow the
lead of FDA in encouraging uptake of these products, and to provide
flexibility that could lead to better management of the Part D benefit
that does not impede State pharmacy practices, we proposed at Sec.
423.120(e)(2)(i) to permit Part D sponsors meeting the applicable
requirements to immediately substitute an interchangeable biological
product for the reference product on its formulary. In support of that
proposal, we also proposed the following definitions at Sec. 423.4: An
``interchangeable biological product'' would mean a product licensed
under section 351(k) of the Public Health Service Act (PHSA) (42 U.S.C.
262(k)) that FDA has determined to be interchangeable with a reference
product in accordance with sections 351(i)(3) and 351(k)(4) of the PHSA
(42 U.S.C. 262(i)(3) and 262(k)(4)).\69\ We stated that a ``biological
product'' would mean a product licensed under section 351 of the PHSA,
and a ``reference biological product'' would mean a product as defined
in section 351(i)(4) of the PHSA.
---------------------------------------------------------------------------
\68\ Cardinal Health. Biosimilar Interchangeability Laws by
State. Updated July 2021. Available from: https://www.cardinalhealth.com/content/dam/corp/web/documents/publication/Cardinal-Health-Biosimilar-Interchangeability-Laws-by-State.pdf.
\69\ See section 351(k)(4) of the PHSA (42 U.S.C. 262(k)(4)). We
cited as current at the time, ``Considerations in Demonstrating
Interchangeability With a Reference Product Guidance for Industry''
at the following FDA website: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/considerations-demonstrating-interchangeability-reference-product-guidance-industry. Accessed September 2, 2022. See also section 351(i)(3) of
the PHSA (42 U.S.C. 262(i)(3)) for the statutory definition of the
term ``interchangeable'' or ``interchangeability.''
---------------------------------------------------------------------------
We also noted that in addition to interchangeable biological
products, unbranded biological products have recently been marketed. We
explained that in the frequently asked questions of FDA's ``Purple Book
Database of Licensed Biological Products,'' available at https://purplebooksearch.fda.gov/faqs#11, FDA describes an ``unbranded
biologic'' or ``unbranded biological product'' as an approved brand
name biological product that is marketed under its approved BLA without
its brand name on its label. Thus, like an authorized generic, an
unbranded biological product is the same product as the brand name
biological product. Accordingly, since we proposed in the December 2022
proposed rule to permit Part D sponsors to immediately substitute an
authorized generic for a brand name drug, we similarly proposed at
Sec. 423.120(e)(2)(i) in that proposed rule to permit immediately
substituting, as specified, unbranded biological products for
corresponding brand name biological products. We further proposed at
Sec. 423.4 to define ``brand name biological products'' to mean
biological products licensed under section 351(a) or 351(k) of the PHSA
and marketed under a brand name. We also proposed at Sec. 423.4 to
define ``unbranded biological products'' as biological products
licensed under a BLA under section 351(a) or 351(k) of the PHSA and
marketed without a brand name.
We also noted we were not proposing to permit Part D sponsors to
immediately substitute all ``biosimilar products'' (87 FR 79539)
because not all biosimilar biological products have met additional
requirements to support a demonstration of interchangeability, as
outlined by the Biologics Price Competition and Innovation (BPCI) Act
of 2009.\70\ Nevertheless, we encouraged Part D plan sponsors to offer
such products on their formularies.
---------------------------------------------------------------------------
\70\ We note that in the December 2022 proposed rule, the actual
statement read: ``Biosimilar products have not met additional
requirements to support a demonstration of interchangeability based
on further evaluation and testing of the product, as outlined by the
Biologics Price Competition and Innovation (BPCI) Act.'' This
statement failed to capture the nuances that the definition of a
biosimilar biological product includes interchangeable biological
products, and that a determination of interchangeability may not
require additional testing.
---------------------------------------------------------------------------
The remainder of the section covered a variety of topics including
proposed changes to terminology; use of plural tense for negative
formulary changes to reflect the possibility of concurrent changes;
exemption of immediate negative formulary changes from negative change
request and approval processes and inclusion in formulary updates;
market withdrawals including renumbering; and exemption of all
immediate negative formulary changes from transition requirements.
In section III.Q.3.c., Notice of Negative Immediate Changes, of the
December 2022 proposed rule, we noted that, consistent with our
existing requirements for immediate generic substitutions (which we
proposed to broaden to include other corresponding drugs), we were
proposing to require advance general notice of immediate substitutions
and market withdrawals at Sec. 423.120(f)(2), followed by written
notice to affected enrollees as soon as possible under Sec.
423.120(f)(3), but by no later than the end of the month following any
month in which a change takes effect. We provided details on the
content of the direct written notice at Sec. 423.120(f)(4), noted it
could be provided for both maintenance and non-maintenance changes, and
noted that we were renumbering some current regulatory requirements.
b. Current Proposals
(1) Substituting Biosimilar Biological Products for Their Reference
Products as Maintenance Changes
In the December 2022 proposed rule, we indicated that biosimilar
biological products \71\ other than interchangeable
[[Page 78518]]
biological products did not qualify for immediate substitutions but
nonetheless encouraged their inclusion on formularies. However, neither
the preamble at section III.Q., Changes to an Approved Formulary, in
the December 2022 proposed rule, nor the accompanying proposed
regulatory text, explicitly discussed whether we would treat the
substitution of biosimilar biological products other than
interchangeable biological products for their reference products as
non-maintenance changes or as maintenance changes, as respectively
proposed to be defined in section Sec. 423.100 in the December 2022
proposed rule. Our current guidance treats such substitutions as non-
maintenance changes.
---------------------------------------------------------------------------
\71\ We propose a definition of ``biosimilar biological
product'' later in this section.
---------------------------------------------------------------------------
Nevertheless, we received multiple comments regarding this issue
with a range of views. Commenters asking CMS to treat substitutions of
reference products with biosimilar biological products, including
interchangeable biological products, as immediate formulary changes or
maintenance changes noted, for example, that FDA states that biosimilar
biological products, including interchangeable biological products, are
as safe and effective as the reference product they were compared
to,\72\ and that beneficiaries could benefit from additional treatment
options and the potential for savings. Commenters asking CMS to
restrict immediate substitutions to interchangeable biological products
noted, among other things, that the PHSA distinguishes between
biosimilar biological products based on interchangeability. Commenters
asking us not to permit immediate substitutions, or even any
substitutions, of biosimilar biological products, including
interchangeable biological products, for reference products noted, for
instance, that established drug therapies should not be changed for
non-clinical reasons to avoid risk to patient safety and that
prescribers need to be consulted before changing medications.
---------------------------------------------------------------------------
\72\ FDA. Overview of Biosimilar Products. Available from:
https://www.fda.gov/media/151058/download?attachment.
---------------------------------------------------------------------------
We appreciate all the comments we received. In response thereto,
and after further consideration of these issues, we have revisited our
current policy, which treats substitutions of biosimilar biological
products for reference products as non-maintenance changes, as well as
our proposal in the December 2022 proposed rule. Upon further
consideration, we are now proposing in this rule to include
substitutions of biosimilar biological products other than
interchangeable biological products \73\ for their reference products
as maintenance changes. All FDA-licensed biosimilar biological
products, including FDA-licensed interchangeable biological products,
must be highly similar to and have no clinically meaningful differences
from the reference product in terms of safety and effectiveness
notwithstanding minor differences in clinically inactive components.
Thus, based on FDA's standards for approval, health care providers and
patients can be confident in the safety and effectiveness of all
biosimilar biological products, just as they would be for their
reference products. The FDA has noted that all biosimilar biological
products are as safe and effective as their reference product:
---------------------------------------------------------------------------
\73\ We would note that in our December 2022 proposed rule, we
already proposed the option for Part D sponsors to treat
substitution of interchangeable biological products for their
reference products as maintenance changes: We proposed in paragraph
(1) of the proposed definition of ``maintenance change'' in Sec.
423.100 to mean, in part, making any negative formulary changes to a
drug and at the same time adding a corresponding drug as specified.
In turn, we proposed to define ``corresponding drug'' in Sec.
423.100 to include an interchangeable biological product of a
reference product. In this proposed rule, we are proposing to add a
new paragraph (2) to the proposed definition of ``maintenance
change'' in Sec. 423.100 to treat substitution of biosimilar
biological products other than interchangeable biological products
for their reference products as maintenance changes.
---------------------------------------------------------------------------
Both are rigorously and thoroughly evaluated by the FDA before
approval. For [biosimilar biological products] to be approved by the
FDA, manufacturers must show that patients taking [biosimilar
biological products] do not have any new or worsening side effects as
compared to people taking the [reference products].
As it does with all medication approvals, the FDA carefully reviews
the data provided by manufacturers and takes several steps to ensure
that all [biosimilar biologic products] meet standards for patient use.
The FDA's thorough evaluation makes sure that all [biosimilar
biological products] are as safe and effective as their [reference
products] and meet the FDA's high standards for approval. This means
[consumers] can expect the same safety and effectiveness from the
[biosimilar biological product] over the course of treatment as [they]
would from the original product.
In addition, the FDA closely regulates the manufacturing of
[biosimilar biological products]. The same quality manufacturing
standards that apply to the [reference product] also apply to the
[biosimilar biological product]. It must be manufactured in accordance
with Current Good Manufacturing Practice[\74\] requirements, which
cover: Methods, Facilities, and Controls for the manufacturing,
processing, packaging, or holding of a medication. This helps to
prevent manufacturing mistakes or unacceptable impurities, and to
ensure consistent product quality.
---------------------------------------------------------------------------
\74\ https://www.fda.gov/drugs/pharmaceutical-quality-resources/current-good-manufacturing-practice-cgmp-regulations. Accessed
October 18, 2023.
---------------------------------------------------------------------------
* * * * *
[All biosimilar biological products, not just interchangeable
biological products,] are as safe and effective as the [reference
product] they were compared to, and they can both be used in its place.
This means that health care professionals can prescribe either a
biosimilar [biological product] or interchangeable [biological] product
instead of the [reference product].\75\
---------------------------------------------------------------------------
\75\ See FDA website entitled ``Biosimilar and Interchangeable
Biologics: More Treatment Choices'' at: https://www.fda.gov/
consumers/consumer-updates/biosimilar-and-interchangeable-biologics-
more-treatment-
choices#:~:text=Biosimilars%20are%20a%20type%20of,macular%20degenerat
ion%2C%20and%20some%20cancers. Accessed October 18, 2023.
---------------------------------------------------------------------------
However, we note that under the PHSA an FDA determination that a
biological product is interchangeable with the reference product means
that the interchangeable biological product may be substituted without
the intervention of the health care provider who prescribed the
reference product. A manufacturer of a proposed interchangeable
biological product must show that the product is biosimilar to its
reference product and that it can be expected to produce the same
clinical results as the reference product in any given patient and
there are no greater risks in terms of safety or diminished efficacy
with alternating or switching between the reference product and the
interchangeable biological product.\76\ We appreciate the importance of
provider and patient education to advance uptake and acceptance as the
development and market for biosimilar biological products, including
interchangeable biological products, continues to grow.
---------------------------------------------------------------------------
\76\ See 42 U.S.C. 262(i)(3) and (k)(4).
---------------------------------------------------------------------------
We believe that including substitutions of biosimilar biological
products other than interchangeable biological products for their
reference products as maintenance changes would strike the right
balance between promoting utilization of more biosimilar biological
products and providing enrollees with sufficient advance notice
[[Page 78519]]
of such changes. This proposal would provide Part D sponsors with more
flexibility than the current policy of treating such changes as non-
maintenance changes (which do not apply to enrollees who are currently
taking a reference product when the change takes effect \77\) but would
not extend the flexibility to what is permitted for immediate
substitutions (which apply to all enrollees, including those currently
taking a reference product, but only require direct notice of specific
changes made to affected enrollees after the fact \78\). We realize now
that not addressing in the December 2022 proposed rule the treatment of
biosimilar biological products other than interchangeable biological
products suggested that we wanted to continue our sub-regulatory policy
of treating substitution of reference products by biosimilar biological
products other than interchangeable biological products as non-
maintenance changes. However, continuing to treat such changes as non-
maintenance would not support our goal to encourage greater use of
biosimilar biological products.
---------------------------------------------------------------------------
\77\ See proposed Sec. 423.120(e)(3)(ii), of the December 2022
proposed rule, which would codify longstanding policy regarding non-
maintenance changes.
\78\ See Sec. 423.120(b)(5)(iv).
---------------------------------------------------------------------------
At the same time, we are not convinced that it is appropriate at
this time to propose to permit immediate substitutions of reference
products for biosimilar biological products other than interchangeable
biological products without 30 days advance notice. In this regard, we
would note that, pharmacists generally cannot substitute a biosimilar
biological product other than an interchangeable biological product for
its reference product without first consulting the prescribing health
care provider, subject to State pharmacy laws. If a biosimilar
biological product other than an interchangeable biological product
were able to be immediately substituted, the result is that any
enrollee seeking a refill on their prescription for a reference product
after a Part D sponsor has substituted a biosimilar biological product
for that reference product (regardless of whether such a formulary
change were permitted to take place as an immediate substitution or a
maintenance change) would be told that their plan no longer covers the
reference product. And, subject to State pharmacy laws, a pharmacist in
most cases would not be able to provide the corresponding biosimilar
biological product to the enrollee unless they receive a new
prescription from a prescriber.
The above would mean that, were we to treat substitutions of
biosimilar biological products other than interchangeable biological
products as immediate substitutions, enrollees currently taking a
reference product would receive no direct advance notice of specific
changes made and would likely find themselves at the pharmacy counter
unable to obtain coverage for their reference product and needing to
either request an exception or obtain a new prescription for the
biosimilar biological product. Such enrollees would receive a notice at
the point of sale telling them what they or their prescriber would need
to do to request an exception to stay on the reference product and that
they can call their plan for more information. To avoid a situation in
which the enrollee might not have medication on hand and need to take
quick action, but at the same time still encourage the use of all
biosimilar biological products, we are proposing to treat such
substitutions as maintenance changes. Given that maintenance changes
would apply to all enrollees under proposed Sec. 423.120(e)(3) in the
December 2022 proposed rule, permitting Part D sponsors to substitute
such biosimilar biological products for their reference products as
maintenance changes would presumably result in more widespread use of
such products than continuing our current sub-regulatory policy that
treats such substitutions as non-maintenance changes. Further, under
current sub-regulatory policy and proposed Sec. 423.120(e)(3)(i) in
the December 2022 proposed rule, Part D sponsors that submit a
maintenance change request are able to assume that CMS has approved
their negative change request if they do not hear back from CMS within
30 days of submission, which could result in changes that take place
more quickly.
Additionally, we believe that the 30-day notice period is
appropriate for a variety of reasons. We have applied the 30-day time
frame in other contexts (such as notice of changes required under
current Sec. 423.120(b)(5)(i)(A) and for changes proposed in our
December 2022 proposed rule) and are hesitant to create more confusion
by carving out certain biosimilar biological products. We understand
the nature of the change is different from, for instance, substituting
generic drugs for brand name drugs, in that in most states the
enrollees that are prescribed reference products must at this time
obtain new prescriptions for biosimilar biological products other than
interchangeable biological products. However, this would not be the
only time an enrollee has 30 days' notice within which to obtain a new
prescription. For instance, in the final rule titled ``Medicare
Program; Contract Year 2019 Policy and Technical Changes to the
Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the
Medicare Prescription Drug Benefit Programs, and the PACE Program,''
which appeared in the April 16, 2018 Federal Register, we reduced the
time for advance direct notice of certain formulary changes from 60 to
30 days and since its effective date, Sec. 423.120(b)(5)(i)(A) has
required only 30 days' notice of changes to the formulary that are not
immediate. A similar period applies to the transition process for
enrollees prescribed Part D drugs that are not on the Part D plan's
formulary: under Sec. 423.120(b)(3)(iii), enrollees receive a month's
supply of a drug after which they must obtain a new prescription for an
alternate drug or apply for an exception. If we required Part D
sponsors to issue notice earlier, for instance to provide advance
notice 90 days prior to the formulary change, the lengthened notice
period would provide Part D sponsors less time within a year for a
change to be effective and might unintentionally motivate them to wait
until the next plan year--which would defeat the goal of this proposal
to encourage uptake of biosimilar biological products other than
interchangeable biological products sooner than would otherwise be the
case.
If a Part D sponsor were to implement a maintenance change for a
biosimilar biological product other than an interchangeable biological
product under our proposal, then it would work as follows: Part D
sponsors removing or making any negative changes to a reference product
would be required to add a biosimilar biological product other than an
interchangeable biological product at the same or a lower cost-sharing
tier and with the same or less restrictive PA, ST, or QL requirements
as the reference product. Part D sponsors adding a biosimilar
biological product other than an interchangeable biological product
would also be required to provide 30 days' advance written notice
before making any negative change to the reference product. The written
notice under proposed Sec. 423.120(f)(4) would include details
regarding the change, including the specific biosimilar biological
product to be added to the formulary; whether the sponsor will be
removing the related reference product, subjecting it to a new or more
restrictive PA, ST,
[[Page 78520]]
or QL, or moving it to a higher cost-sharing tier; and identification
of whether appropriate alternatives, other than the biosimilar
biological product that is the subject of the notice, are available on
the formulary at the same or lower cost-sharing tier as the reference
product. The written notice would also include the means by which the
affected enrollee can request a coverage determination under Sec.
423.566 or an exception to a coverage rule under Sec. 423.578.
Specifically, under Sec. 423.566, the enrollee can always ask for a
coverage determination, including an exception to a coverage rule, and
might choose to do so after receiving their notice of a specific change
due to occur within 30 days. Furthermore, the enrollee can also request
an expedited determination if their health requires. Again, treating
the change as a maintenance change would mean enrollees have 30 days to
take action before the change becomes effective.
We would note that the Part D transition policy does not apply to
midyear maintenance changes. An enrollee is only entitled to a
transition supply under Sec. 423.120(b)(3)(i)(A) if the enrollee is
new to the plan or stayed in the plan until the next contract year and
a drug they are taking is affected by formulary changes in the next
contract year. Formulary changes from one contract year to the next do
not constitute changes to an approved formulary since formularies are
submitted for review and approval annually as part of the Part D bid
submission process. Rather, the advance direct notice of changes
currently required under Sec. 423.120(b)(5)(i), and which we proposed
to require in the December 2022 proposed rule at the proposed Sec.
423.120(f)(1), provides an affected enrollee with time to obtain a new
prescription for that biosimilar biological product other than an
interchangeable biological product or to seek an exception, before the
reference product comes off the formulary.
We assume that in most cases, substituting a biosimilar biological
product other than an interchangeable biological product for the
reference product on the formulary will be more financially favorable
to enrollees since biosimilar biological products are generally lower
cost than reference products and must be added to the same or lower
cost-sharing tier as the reference product. However, differences in
plan benefit designs make it challenging to predict the degree of
savings an enrollee may experience. For example, if a Part D sponsor
removes a reference product from the formulary and adds a biosimilar
biological product other than an interchangeable biological product to
the formulary on the same tier, the affected enrollee likely would
experience savings if the cost sharing for the tier is based on a
percent coinsurance, but not if the cost sharing for the tier is a
fixed copay. If an affected enrollee pursues a formulary exception to
continue to take the non-formulary reference product, these enrollees
may be faced with higher out-of-pocket costs, depending on the tier
that the Part D sponsor designates for Part D drugs obtained through
formulary exceptions and the tier that the reference product was
originally on. If the reference product was on a preferred tier, but
the formulary exception tier designated in the plan benefit package is
the non-preferred tier, then affected enrollees who obtain a formulary
exception may be subject to higher cost sharing than previously.
For the reasons discussed above, we are now proposing to update the
proposed definition of ``maintenance changes'' at Sec. 423.100 in the
December 2022 proposed rule to include a new paragraph (2) on making
any negative formulary changes to a reference product when adding a
biosimilar biological product other than an interchangeable biological
product to the same or a lower cost-sharing tier and with the same or
less restrictive PA, ST, or QL requirements. We would renumber the
remaining maintenance changes listed in the proposed definition in the
December 2022 proposed rule.
We are also proposing in this proposed rule at Sec. 423.4 to
define ``biosimilar biological product'' to mean a biological product
licensed under section 351(k) of the PHSA that, in accordance with
section 351(i)(2) of the PHSA, is highly similar to the reference
product, notwithstanding minor differences in clinically inactive
components, and has no clinically meaningful differences between the
biological product and the reference product, in terms of the safety,
purity, and potency of the product. The proposed term, biosimilar
biological product, includes interchangeable biological products as we
proposed to define them in our December 2022 proposed rule. We are also
proposing a technical correction to the proposed definition of an
interchangeable biological product to mean a product licensed under
section 351(k) of the PHSA (42 U.S.C. 262(k)) that FDA has determined
meets the standards described in section 351(k)(4) of the PHSA (42
U.S.C. 262(k)(4)).
We solicit comment on our proposal to treat formulary substitutions
of biosimilar biological products other than interchangeable biological
products for reference products as maintenance changes, as well as our
proposed definition of biosimilar biological product. We also would be
interested in any comments on our proposal that enrollees taking a
reference product would receive 30 days' notice before the change is
made and whether that is sufficient time to obtain a new prescription
for the biosimilar biological product other than an interchangeable
biological product, as well as how that 30-day notice period relates to
the timing of other notice requirements. We also solicit comment on our
proposal that the biosimilar biological product other than the
interchangeable biological product be placed on the same or a lower
cost-sharing tier as the reference product it replaces or that is
subject to negative formulary changes.
(2) Updated Proposal Related to Timing of Substitutions
In reexamining our proposed definition of ``maintenance changes''
in Sec. 423.100 in the December 2022 proposed rule to add a new
category for biosimilar biological products other than interchangeable
biological products in paragraph (2), as discussed above, we also
revisited paragraph (1) of the proposed definition, in which we
proposed to require Part D sponsors making a negative formulary change
to a drug to ``at the same time'' add a corresponding drug at the same
or lower cost-sharing tier and with the same or less restrictive PA,
ST, or QL requirements (excluding immediate substitutions permitted
under the proposed Sec. 423.120(e)(2)(i) of the December 2022 proposed
rule). Considering that our current sub-regulatory guidance does not
require maintenance substitutions to occur ``at the same time,'' we
have reconsidered and do not believe it is necessary to propose
imposing such strict timing requirements for a maintenance change--
whether it be related to plan sponsors removing or making negative
changes (1) to a brand name or reference product when adding a
corresponding drug that is not an immediate substitution, or (2) to a
reference product when adding a biosimilar biological product other
than an interchangeable biological product. We would like to encourage
plans to offer more choices by adding corresponding drugs (the proposed
definition of which in the December 2022 proposed rule includes
interchangeable biological products) and biosimilar biological products
other than interchangeable
[[Page 78521]]
biological products to their formularies as soon as possible. We are
concerned that requiring such an addition to occur ``at the same time''
as the negative formulary change to the brand name drug or reference
product could cause a Part D sponsor to delay adding a corresponding
drug or biosimilar biological product other than an interchangeable
biological product until the Part D sponsor has taken the steps it
deems necessary to operationalize the negative changes that would be
made to the brand name drug or reference product currently on the
formulary, which in turn would delay enrollee access to the
corresponding drug or biosimilar biological product other than an
interchangeable biological product.
Therefore, we propose to remove the requirement to have changes
take place ``at the same time'' in the December 2022 proposed rule's
definition of ``maintenance change'' at proposed Sec. 423.100, and
will not add that modifier for the change for biosimilar biological
products other than interchangeable biological products that we are
proposing in this proposed rule, with the understanding that the
addition of the corresponding drug or biosimilar biological product
other than an interchangeable biological product would need to come
before the negative change is applied to the brand name drug or
reference product. Further, this proposed update to the definition of a
maintenance change does not alter other proposed requirements for
maintenance changes in the December 2022 proposed rule, including that
CMS must be provided a 30-day opportunity to review any such changes
and in all cases enrollees will receive at least 30 days' notice before
a drug is removed or subject to any other negative formulary change.
At the same time, we are not proposing an unlimited window in which
to make a negative formulary change to the related drug after adding a
corresponding drug under paragraph (1) or adding a biosimilar
biological product other than an interchangeable biological product
under paragraph (2) of the proposed Sec. 423.100 definition of a
``maintenance change.'' We believe Part D sponsors should make such
negative changes within a reasonable amount of time after adding
corresponding drugs and biosimilar biological products other than
interchangeable biological products as specified in order to best
achieve the goal of increasing their utilization. We understand that
Part D sponsors may be eager to add, for example, a newly approved
generic drug or biosimilar biological product to their formularies, but
may need additional time to operationalize the negative formulary
change to the brand name or reference product, respectively; however,
we do not believe that Part D sponsors should have an unlimited amount
of time to effectuate the negative formulary change because this
presents challenges for CMS to monitor and deviates from the idea that
such formulary changes are in many cases substitutions of one drug for
another. In other words, the addition of a corresponding drug or a
biosimilar biological product other than an interchangeable biological
product justifies the negative formulary change to the brand name or
reference product. Nevertheless, we do not want to establish too short
a timeframe requirement to make the negative change to the brand name
drug or reference product because it could increase the chance that
Part D sponsors will miss the formulary update opportunity, resulting
in more continued utilization of the brand name drug or reference
product and less utilization of the corresponding drug or biosimilar
biological product other than an interchangeable biological product
than otherwise could be achieved. To strike a balance, we are proposing
to codify our longstanding operational limitation of a 90-day timeframe
for a Part D sponsor to remove a brand name drug from the formulary
when a generic drug is added. Our experience suggests that this
timeframe would provide Part D sponsors with sufficient time to
implement the negative formulary change for a brand name drug or
reference product after adding a corresponding drug or biosimilar
biological product other than an interchangeable biological product,
but still ensure the removal of the brand name drug or reference
product is timely enough to help increase utilization of the
corresponding drug or biosimilar biological product other than an
interchangeable biological product. Accordingly, we believe negative
formulary changes to the brand name drug or reference product should
have to take effect within 90 days after a generic or other
corresponding drug, or biosimilar biological product other than an
interchangeable biological product, is added as specified to the
formulary.
To provide Part D sponsors with more flexibility, we propose to
remove from paragraph (1) of the proposed definition of ``maintenance
change'' in Sec. 423.100 of the December 2022 proposed rule the
requirement that the corresponding drug be added and the related drug
be subject to negative formulary changes ``at the same time.'' Rather,
we now propose to revise paragraph (1) to require Part D sponsors to
make any negative formulary changes ``within 90 days of'' adding a
corresponding drug. Similarly, the newly proposed paragraph (2) of the
proposed definition of ``maintenance change'' in Sec. 423.100, as
discussed above, would require Part D sponsors to make negative
formulary changes to a reference product ``within 90 days of'' adding a
biosimilar biological product other than an interchangeable biological
product.
In this vein, we note that a commenter on the December 2022
proposed rule requested that we remove the requirement in the proposed
Sec. 423.120(e)(2)(i) of the December 2022 proposed rule (currently
appearing at Sec. 423.120(b)(5)(iv)(A)) that Part D sponsors making
immediate substitutions remove or make any other negative formulary
changes to a related drug ``at the same time'' they add its
corresponding drug. The commenter suggested that this requirement might
discourage them from adding new corresponding drugs, which could be
lower in cost than related drugs, as soon as possible because they
often need more time to implement the changes with respect to the
related drug. For instance, they suggested it takes time to evaluate
new products; check their availability; communicate changes; update
operations; and assess suitability for substitution among
interchangeable biological products. We appreciate the comment and
reiterate that we favor expeditious access for enrollees to Part D
drugs that could be lower in cost. The purpose of the immediate
substitutions policy is to encourage quick action with respect to
immediately placing a corresponding drug on the formulary after it is
released.
Accordingly, with respect to the proposed Sec. 423.120(e)(2)(i) in
the December 2022 proposed rule, we now propose to remove the
requirement that immediate substitutions occur ``at the same time'' and
instead state that negative formulary changes may still qualify as
immediate substitutions if made within 30 days of adding a
corresponding drug to a formulary. As proposed in the December 2022
proposed rule, for immediate substitutions, Part D sponsors would be
required to submit such changes to CMS, in a form and manner specified
by CMS, in their next required or scheduled formulary update.
We note that we are proposing different windows of time in which
Part D sponsors can make negative formulary changes to the related drug
based on whether there is an immediate substitution (that is, within 30
days after
[[Page 78522]]
adding the corresponding drug) or a maintenance change (that is, within
90 days after adding the corresponding drug). The different
requirements reflect a distinction in the nature of the changes
themselves. As noted earlier, the entire purpose of immediate
substitutions is quick action, such that Part D sponsors can put a
newer corresponding drug on the formulary and remove the related drug
it is replacing as soon as possible. For that reason, we continue to
encourage that immediate substitutions take place ``at the same time,''
but propose setting a 30-day limit. To encourage this, Part D sponsors
implementing immediate substitutions may provide notice to affected
enrollees of the specific changes after they have taken effect.
For the reasons discussed above, for other kinds of maintenance
changes that are not immediate, we propose that we would approve only
negative formulary changes to the related drug that take effect within
90 days after a corresponding drug is added to the formulary.
We invite comment on these proposed changes, the reasons why Part D
sponsors would need a period of time after adding a corresponding drug
or biosimilar biological product other than an interchangeable
biological product in which to take action, and any other appropriate
window of time in which to permit maintenance changes or immediate
substitutions to take place, including whether we should maintain a
distinction between the two.
(3) Miscellaneous Changes
In re-examining our proposed definition of ``maintenance change''
in the December 2022 proposed rule at Sec. 423.100, we found a
technical error, in that we did not specify in the introductory clause
that the changes would apply with respect to ``a covered Part D drug.''
We hereby propose to make that correction in this proposed rule.
We propose a technical change to our proposed definition of
``corresponding drug'' included in the December 2022 proposed rule in
Sec. 423.100 to specify that the reference to ``an unbranded
biological product of a biological product'' is intended to be a
reference to ``an unbranded biological product marketed under the same
BLA as a brand name biological product.''
3. Summary
In conclusion, we are proposing the changes below to three sections
of regulatory text originally proposed in the December 2022 proposed
rule. We are currently not proposing updates to the other proposed
regulatory text in the December 2022 proposed rule related to section
III.Q., Changes to an Approved Formulary, which, as noted above,
remains under consideration.
In Sec. 423.4, to add a definition of ``biosimilar
biological product;''
In Sec. 423.4, to make technical corrections to the
proposed definition of an ``interchangeable biological product;''
In Sec. 423.100, to revise the proposed definition of
``maintenance change'' as follows: to add an introductory clause noting
its application to covered Part D drugs; to revise paragraph (1) to
require changes ``within 90 days of,'' rather than ``at the same time
as,'' adding a corresponding drug; to add a new paragraph (2) to
include substitution of biosimilar biological products other than
interchangeable biological products as a type of maintenance change;
and to renumber the remaining maintenance changes listed;
In Sec. 423.100, to revise the proposed definition of
``corresponding drug'' to specify that the reference to ``an unbranded
biological product of a biological product'' is intended to be a
reference to ``an unbranded biological product marketed under the same
BLA as a brand name biological product;'' and
In proposed Sec. 423.120(e)(2)(i), to require changes
``within 30 days of,'' rather than ``at the same time as,'' adding a
corresponding drug.
G. Parallel Marketing and Enrollment Sanctions Following a Contract
Termination (Sec. Sec. 422.510(e) and 423.509(f))
Sections 1857(c)(2) and 1860D-12(b)(3)(B) of the Act provide CMS
with the ability to terminate MA (including MA-PD) and PDP contracts if
we determine that a contract(s) has met any of the following
thresholds:
Has failed substantially to carry out the contract.
Is carrying out the contract in a manner that is
inconsistent with the efficient and effective administration of,
respectively, Part C or Part D of Title XVIII of the Act (that is, the
Medicare statute).
No longer substantially meets the applicable conditions of
the applicable part of the statute.
This termination authority is codified at 42 CFR 422.510(a)(1)
through (3) and 423.509(a)(1) through (3), respectively. In addition,
section 1857(g)(3) of the Act (incorporated for Part D sponsors under
section 1860D-12(b)(3)(F)) specifies that intermediate sanctions and
civil money penalties (CMPs) can be imposed on the same grounds upon
which a contract could be terminated (63 FR 34968 and 70 FR 4193). CMS
codified this authority at Sec. Sec. 422.752(b) and 423.752(b) with
respect to intermediate sanctions, and Sec. Sec. 422.752(c)(1)(i) and
423.752(c)(1)(i) with respect to CMPs.
If CMS terminates an MA organization or Part D sponsor contract(s)
during the plan year but the termination is not effective until January
1 of the following year, the MA organization or Part D sponsor could
potentially continue to market and enroll eligible beneficiaries (as
described in part 422, subpart B, and part 423, subpart B) into plans
under the terminating contract(s) unless CMS imposes separate marketing
and enrollment sanctions on the terminating contract(s).\79\ A
terminating contract that continues to market to and enroll eligible
beneficiaries would cause confusion and disruption for beneficiaries
who enroll in the period of time between when the termination action is
taken and the January 1 effective date of the termination.
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\79\ Regulations in 42 CFR part 422, subpart B, and part 423,
subpart B, permit enrollees to enroll in a plan mid-year during
their initial election period or special election periods.
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For these reasons, we propose to add paragraph (e) to Sec. 422.510
and paragraph (f) to Sec. 423.509 that, effective contract year 2025,
marketing and enrollment sanctions will automatically take effect after
a termination is imposed. At paragraph (e)(1) of Sec. 422.510 and
paragraph (f)(1) of Sec. 423.509, we propose to state that the
marketing and enrollment sanctions will go into effect 15 days after
CMS issues a contract termination notice. This timeframe is consistent
with the number of days CMS often designates as the effective date for
sanctions after CMS issues a sanction notice.
At paragraph (e)(2) of Sec. 422.510 and paragraph (f)(2) of Sec.
423.509, we propose that MA organizations and Part D sponsors would
continue to be afforded the same appeals rights and procedures specific
to contract terminations under subpart N of 42 CFR parts 422 and 423,
however, there would not be a separate appeal for the sanction (in
other words the appeal of the termination would include the associated
marketing and enrollment sanctions). In addition, at paragraph (e)(3)
of Sec. 422.510 and paragraph (f)(3) of Sec. 423.509 we propose that
if an MA organization or Part D sponsor appeals the contract
termination, the marketing and enrollment sanctions would not be stayed
pending the appeal consistent with Sec. Sec. 422.756(b)(3) and
423.756(b)(3). Finally, at paragraph (e)(4) of Sec. 422.510 and
paragraph (f)(4) of Sec. 423.509 we
[[Page 78523]]
propose that the sanction would remain in effect until the effective
date of the termination, or if the termination decision is overturned
on appeal, until the final decision to overturn the termination is made
by the hearing officer or Administrator.
CMS rarely terminates MA organization and Part D sponsor contracts
and, on average, contract terminations affect less than one MA
organization or Part D sponsor a year. Therefore, we anticipate that
this proposal would not result in additional costs or additional
administrative burden for affected MA organizations and Part D
sponsors. For example, an MA organization and Part D sponsor would not
be required to submit a corrective action plan, and if appealed there
would only be one appeal rather than multiple. MA organizations and
Part D sponsors would continue to be required to comply with existing
regulations that require public and beneficiary notice that their
contract is being terminated under this proposal.
H. Update to the Multi-Language Insert Regulation (Sec. Sec. 422.2267
and 423.2267)
Individuals with limited English proficiency (LEP) experience
obstacles to accessing health care in the United States. Language
barriers negatively affect the ability of patients with LEP to
comprehend their diagnoses and understand medical instructions when
they are delivered in English, and impact their comfort with post-
discharge care regimens.\80\ For example, Hispanic/Latino individuals
with LEP report worse access to care and receipt of fewer preventive
services than Hispanic/Latino individuals who speak English
proficiently. For Asian Americans who are not proficient in English,
language barriers are one of the most significant challenges to
accessing health care, including making an appointment, communicating
with health care professionals, and gaining knowledge about an illness;
this is even more pronounced among older Asian Americans, who are more
likely to have limited English proficiency.\81\ Studies show that
patients with LEP experience longer hospital stays--leading to a
greater risk of line infections, surgical infections, falls, and
pressure ulcers--when compared to English-speaking patients; because
patients with LEP have greater difficulty understanding medical
instructions when those instructions are given in English, they are at
higher risk of surgical delays and readmissions.\82\ Although the use
of qualified interpreters is effective in improving care for patients
with LEP, some clinicians choose not to use them, fail to use them
effectively, or rely instead on ad hoc interpreters--such as family
members or untrained bilingual staff.\83\ However, in addition to
posing legal and ethical concerns, ad hoc interpreters are more likely
to make mistakes than professional interpreters.\84\ Also, clinicians
with basic or intermediate non-English spoken language skills often
attempt to communicate with the patient on their own without using an
interpreter, increasing patient risk.\85\ These barriers contribute to
disparities in health outcomes for individuals with LEP, which likely
worsened during the COVID-19 pandemic.\86\
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\80\ Espinoza, J. and Derrington, S. ``How Should Clinicians
Respond to Language Barriers that Exacerbate Health Inequity?'', AMA
Journal of Ethics (February 2021) E109. Retrieved from https://journalofethics.ama-assn.org/sites/journalofethics.ama-assn.org/files/2021-02/cscm3-2102.pdf; Karliner, L., Perez-Stable, and E.,
Gregorich, S. ``Convenient Access to Professional Interpreters in
the Hospital Decreases Readmission Rates and Estimated Hospital
Expenditures for Patients with Limited English Proficiency'', Med
Care (March 2017) 199-206. Retrieved from https://pubmed.ncbi.nlm.nih.gov/27579909/.
\81\ Wooksoo, K. and Keefe, R. ``Barriers to Healthcare Among
Asian Americans'', Social Work in Public Health (2010) 286-295.
Retrieved from https://www.tandfonline.com/doi/pdf/10.1080/19371910903240704?needAccess=true.
\82\ U.S. Department of Health & Human Services, Agency for
Healthcare Research & Quality. ``Executive Summary: Improving
Patient Safety Systems for Patients with Limited English
Proficiency'', (September 2020). Retrieved from https://www.ahrq.gov/health-literacy/professional-training/lepguide/index.html.
\83\ Espinoza, J. and Derrington, S. ``How Should Clinicians
Respond to Language Barriers that Exacerbate Health Inequity?'', AMA
Journal of Ethics (February 2021) E110. Retrieved from https://journalofethics.ama-assn.org/sites/journalofethics.ama-assn.org/files/2021-02/cscm3-2102.pdf.
\84\ Glenn Flores et al., Errors of Medical Interpretation and
Their Potential Clinical Consequences: A Comparison of Professional
Versus Ad Hoc Versus No Interpreters, 5 Annals of Emerg. Med. 545
(Nov. 1, 2012), https://pubmed.ncbi.nlm.nih.gov/22424655/; Ali Labaf
et al., The Effect of Language Barrier and Non-Professional
Interpreters on the Accuracy of Patient-Physician Communication in
Emergency Department, 3 Adv. J. Emerg. Med., June 6, 2019, at p. 4,
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6789075/pdf/AJEM-3-e38.pdf.
\85\ U.S. Department of Health & Human Services, Agency for
Healthcare Research & Quality. ``Executive Summary: Improving
Patient Safety Systems for Patients with Limited English
Proficiency'', (September 2020). Retrieved from https://www.ahrq.gov/health-literacy/professional-training/lepguide/exec-summary.html#what.
\86\ Lala Tanmoy Das et al., Addressing Barriers to Care for
Patients with Limited English Proficiency During the COVID-19
Pandemic, Health Affairs Blog (July 29, 2020), https://www.healthaffairs.org/do/10.1377/hblog20200724.76821/full/.
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The multi-language insert (MLI) required at Sec. Sec.
422.2267(e)(31) and 423.2267(e)(33) is a standardized communications
material that informs enrollees and prospective enrollees that
interpreter services are available in Spanish, Chinese, Tagalog,
French, Vietnamese, German, Korean, Russian, Arabic, Italian,
Portuguese, French Creole, Polish, Hindi, and Japanese. These are the
15 most common non-English languages in the United States.
Additionally, Sec. Sec. 422.2267(e)(31)(i) and 423.2267(e)(33)(i)
require plans to provide the MLI in any non-English language that is
the primary language of at least five percent of the individuals in a
plan benefit package (PBP) service area but is not already included on
the MLI. These regulations also provide that a plan may opt to include
the MLI in any additional languages that do not meet the five percent
threshold, where it determines that including the language would be
appropriate. The MLI states, ``We have free interpreter services to
answer any questions you may have about our health or drug plan. To get
an interpreter, just call us at [1-xxx-xxx-xxxx]. Someone who speaks
[language] can help you. This is a free service.'' The issuance of the
MLI is independent of the Medicare written translation requirements for
any non-English language that meets the five percent threshold, as
currently required under Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2),
and the additional written translation requirements for fully
integrated D-SNPs (FIDE SNPs) and highly integrated D-SNPs (HIDE SNPs)
provided in Sec. Sec. 422.2267(a)(4) and 423.3367(a)(4).\87\
Additionally, we note that pursuant to CMS's authority in section
1876(c)(3)(C) to regulate marketing and the authority in section
1876(i)(3)(D) to specify new section 1876 contract terms, we have also
established in Sec. 417.428 that most of the marketing and
communication regulations in subpart V of part 422, including the MLI
requirement in Sec. 422.2267(e)(31), also apply to section 1876 cost
plans.
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\87\ This proposal pertains only to the MLI requirements in
Sec. Sec. 422.2267(e)(31) and 423.2267(e)(33), not Sec. Sec.
422.2267 and 423.2267 broadly.
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On May 18, 2016, the Office for Civil Rights (OCR) published a
final rule (81 FR 31375; hereinafter referenced to as the section 1557
final rule) implementing section 1557 of the Patient Protection and
Affordable Care Act (ACA).\88\ Section 1557 of the ACA provides that an
individual shall not be excluded from participation in, be denied the
benefits of, or be subjected to discrimination on the grounds
prohibited under Title VI of the Civil Rights Act of 1964, 42 U.S.C.
2000d et
[[Page 78524]]
seq. (race, color, national origin), Title IX of the Education
Amendments of 1972, 20 U.S.C. 1681 et seq. (sex), the Age
Discrimination Act of 1975, 42 U.S.C. 6101 et seq. (age), or section
504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 (disability),
under any health program or activity, any part of which is receiving
Federal financial assistance; any health program or activity
administered by the Department; or any program or activity administered
by any entity established under Title I of the Act. The 2016
regulations implementing section 1557 included the requirement that all
covered entities include taglines with all ``significant
communications.'' The sample tagline provided by the Department
consisted of a sentence stating, in the 15 most common non-English
languages in a State or States, ``ATTENTION: If you speak [insert
language], language assistance services, free of charge, are available
to you. Call 1-xxx-xxx-xxxx (TTY: 1-xxx-xxx-xxxx).'' Because of the
inherent duplication with the MLI, CMS issued an HPMS email on August
25, 2016, to revise the Medicare Marketing Guidelines (MMG) at that
time to remove the then-applicable MLI requirements.
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\88\ Public Law 111-148.
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On June 19, 2020, OCR published a second section 1557 final rule
(2020 OCR Rule) (85 FR 37160), which is currently in effect, that
repealed the notice and tagline requirements, citing costs, confusion,
and waste, but stated that covered entities are still required ``to
provide taglines whenever such taglines are necessary to ensure
meaningful access by LEP individuals to a covered program or
activity.'' In the February 2020 proposed rule (85 FR 9002), we
proposed to require plans to use a disclaimer tagline about the
availability of non-English translations in all required materials.
However, we did not finalize that proposal in the January 2021 final
rule (86 FR 5864). We based this decision on our belief that future
rulemaking regarding non-English disclaimers, if appropriate, would be
best addressed by OCR, as those requirements would be HHS-wide instead
of limited to CMS. We also stated that deferring to OCR's oversight and
management of any requirements related to non-English disclaimers is in
the best interest of the Medicare program (86 FR 5995).
It is important to note that none of the actions impacting the
various notifications of interpreter services changed the requirement
that MA organizations, Part D sponsors, or cost plans must provide
these services under applicable law. Plans have long been required to
provide interpreters when necessary to ensure meaningful access to
individuals with LEP, consistent with existing civil rights laws. In
implementing and carrying out the Part C and D programs under sections
1851(h), 1852(c), 1860-1(b)(1)(B)(vi), 1860D-4(a), and 1860D-4(l) of
the Act, 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 LEP 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. For a more detailed discussion of previous rulemaking related
to section 1557, the MLI, and non-English translation and interpreter
requirements, we direct readers to the August 4, 2022 HHS notice of
proposed rulemaking regarding section 1557 of the Affordable Care Act
(87 FR 47853 through 47856) (hereinafter referred to as the August 2022
proposed rule) and the January 2022 proposed rule (87 FR 1899 through
1900).\89\
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\89\ Specifically, we highlight pages 1899-1900 and 1926-1927 of
the August 2022 proposed rule and 87 FR 1899 through 1900 of the
January 2022 proposed rule.
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In the 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 final
rule (87 FR 27704) (hereafter referred to as the May 2022 final rule),
we reinstituted the requirement to use the MLI at Sec. Sec.
422.2267(e)(31) and 423.2267(e)(33). We noted that we gained additional
insight regarding the void created by the lack of any notification
requirement associated with the availability of interpreter services
for Medicare beneficiaries (87 CFR 27821). We stated that we consider
the materials required under Sec. Sec. 422.2267(e) and 423.2267(e) to
be vital to the beneficiary decision-making process. We also noted that
we reviewed complaint tracking module (CTM) cases in the Health Plan
Management System (HPMS) related to ``language'' and found a pattern of
beneficiary confusion stemming from not fully understanding materials
based on a language barrier. We noted that solely relying on the
requirements delineated in the 2020 OCR Rule for covered entities to
convey the availability of interpreter services is insufficient for the
MA, cost plan, and Part D programs and is not in the best interest of
Medicare beneficiaries who are evaluating whether to receive their
Medicare benefits through these plans and who are enrolled in these
plans. We stated that we believed that informing Medicare beneficiaries
that interpreter services are available is essential to realizing the
value of our regulatory requirements for interpreter services.
On August 4, 2022, OCR published a proposed rule (87 FR 47824) that
proposed to require covered entities to notify the public of the
availability of language assistance services and auxiliary aids and
services for their health programs and activities using a ``Notice of
Availability.'' Proposed Sec. 92.11(b) would require the Notice of
Availability to be provided in English and at least in the 15 most
common languages spoken by individuals with LEP in the relevant State
or States, and in alternate formats for individuals with disabilities
who request auxiliary aids and services to ensure effective
communications. If finalized, these proposed provisions would result in
misalignment with the MLI requirement under Sec. Sec. 422.2267(e)(31)
and 423.2267(e)(33) which require that notice be provided in the 15
most common non-English languages in the United States. At the time
this proposed rule is published, OCR has not issued a final rule on its
August 2022 proposed rule, and the 2020 OCR Rule remains in effect.
In addition, per Sec. 438.10(d)(2), States must require managed
care organizations (MCOs), prepaid inpatient health plans (PIHPs),
prepaid ambulatory health plans (PAHPs), and primary care case
management programs to include taglines in written materials that are
critical to obtaining services for potential enrollees in the prevalent
non-English languages in the State explaining the availability of oral
interpretation to understand the information provided, information on
how to request auxiliary aids and services, and the toll-free telephone
number of the entity providing choice counseling services in the State.
Several States that use integrated Medicare and Medicaid materials for
D-SNPs and Medicare-Medicaid Plans have contacted CMS and requested
that we change the MLI to be based on the 15 most common languages in
the State rather than the 15 most common languages nationally because
the most common languages in the State are often not the same as the
most common 15 languages nationally. For example, while French Creole
is included in the current MLI list for the most common languages
nationally, it is not a common
[[Page 78525]]
language in Minnesota. In Minnesota, Hmong and Somali, which are not
included in the MLI, are two of the most prevalent languages. In fact,
Minnesota informed CMS that only seven of the languages on the national
list were included in their list of the 15 most common languages in
their State.
As a result of this conflict between the MLI requirements at
Sec. Sec. 422.2267(e)(31) and 423.2267(e)(33) and the Medicaid
requirement at Sec. 438.10(d)(2), any applicable integrated plans
(AIPs), as defined at Sec. 422.561, that provide integrated Medicare
and Medicaid materials for enrollees must currently include the MLI in
the 15 most common languages nationally as well as the Medicaid tagline
in the prevalent non-English languages in the State if they want to
comply with both Medicare and Medicaid regulatory requirements.
Specifically, these plans that provide integrated materials must comply
with the MLI requirements at Sec. Sec. 422.2267(e)(31) and
423.2267(e)(33) and the Medicaid requirement at Sec. 438.10(d)(2) to
include taglines in written materials that are critical to obtaining
services for potential enrollees in the prevalent non-English languages
in the State. In the enrollee materials, this can result in a very long
multi-page list of statements noting the availability of translations
services in many languages. This lengthy list can be a distraction from
the main information conveyed in the material. As discussed in greater
detail below, we are proposing to update Sec. Sec. 422.2267(e)(31) and
423.2267(e)(33) to instead require that notice of availability of
language assistance services and auxiliary aids and services be
provided in the 15 most common languages in a State; we expect that
this proposed policy would better align with the Medicaid translation
requirements at Sec. 438.10(d)(2).\90\
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\90\ We expect the 15 most common languages for a given State to
include any language required by the Medicaid program at Sec.
438.10(d)(2). Therefore, our proposed rule would reduce burden on
fully integrated dual eligible special needs plans and highly
integrated dual eligible special needs plans, as defined at Sec.
422.2, and applicable integrated plans, as defined at Sec. 422.561,
to comply with regulations at Sec. Sec. 422.2267(a)(4) and
423.2267(a)(4).
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We believe rulemaking regarding a non-English notice of the
availability of language assistance services and auxiliary aids and
services is needed to more closely reflect the actual languages spoken
in the service area. We also believe it is in the best interest of
enrollees for the requirements to align with the Medicaid translation
requirements because it will allow D-SNPs that are AIPs to provide a
more applicable, concise Notice of Availability to enrollees that does
not distract from the main purpose of the document.
Noting that while OCR has yet to finalize the Notice of
Availability policy described in its August 2022 proposed rule, and
thus that OCR's proposed policy could be subject to change or not be
finalized, alignment of Medicare and OCR rules would help to prevent
confusion among MA organizations, Part D sponsors, and cost plans
regarding which requirements they must comply with. Should the OCR
final rule differ from the original August 2022 proposed rule, we will
consider modifying our final rule to align with OCR's final rule.
Therefore, we propose to amend Sec. Sec. 422.2267(e)(31) and
423.2267(e)(33). First, we propose to replace references to the MLI
with references to a Notice of Availability. We propose to modify the
language to reflect CMS's proposal that this notice be a model
communication material rather than a standardized communication
material and thus that CMS would no longer specify the exact text that
must be used in the required notice. We propose to change paragraphs
(e)(31) and (33) to require MA organizations and Part D sponsors to
provide enrollees a notice of availability of language assistance
services and auxiliary aids and services that, at a minimum, states
that MA organizations and Part D sponsors provide language assistance
services and appropriate auxiliary aids and services free of charge. We
are proposing, in new paragraphs (e)(31)(i) and (e)(33)(i), that the
Notice of Availability must be provided in English and at least the 15
languages most commonly spoken by individuals with limited English
proficiency of the relevant State and must be provided in alternate
formats for individuals with disabilities who require auxiliary aids
and services to ensure effective communication. This proposed State-
specific standard would ensure that a significant proportion of each
State's particular LEP population receives key information in the
appropriate languages. The U.S. Census Bureau's ACS 2009-2013 multi-
year data show that the top languages spoken in each State can vary
significantly.\91\ State-specific language translations provide for
flexibility to maximize access to care for individuals with LEP. This
updated notice must also include a statement regarding the availability
of appropriate auxiliary aids and services to reduce barriers to access
for individuals with disabilities.
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\91\ https://www2.census.gov/library/data/tables/2008/demo/language-use/2009-2013-acs-lang-tables-nation.xls.
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We believe this proposal would make it easier for individuals 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. As an additional benefit, our proposed changes would
mitigate the risk that Sec. Sec. 422.2267(e)(31) and 423.2267(e)(33)
could conflict with Sec. 438.10(d)(2) and the forthcoming OCR final
rule, if finalized, requiring applicable Medicare plans to comply with
two, disparate sets of requirements. Such an outcome adds undue burden
on plans. Further, requiring MA organizations and Part D sponsors to
provide multiple sets of translated statements accompanying enrollee
materials could lead to enrollee confusion and detract from the
enrollee material message. Notwithstanding OCR's final rule policy, we
believe our proposed changes are appropriate given the benefits of a
non-English notice of availability of language assistance services and
auxiliary aids and service more closely reflecting the actual languages
spoken in the service area and alignment with the Medicaid translation
requirements.
Additionally, we propose in Sec. Sec. 422.2267(e)(31)(ii) and
423.2267(e)(33)(ii) that if there are additional languages in a
particular service area that meet the 5-percent service area threshold,
described in paragraph Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2),
beyond the languages described in Sec. Sec. 422.2267(e)(31)(i) and
423.2267(e)(33)(i), the Notice of Availability must also be translated
into those languages, similar to the current MLI requirements at
Sec. Sec. 422.2267(e)(31)(i) and 423.2267(e)(33)(i). While Sec. Sec.
422.2267(a)(2) and 423.2267(a)(2) apply to the Notice of Availability
since it is a required material under Sec. Sec. 422.2267(e) and
423.2267(e), we wanted to clarify this in the regulation text. MA
organizations and Part D sponsors may also opt to translate the Notice
of Availability in any additional languages that do not meet the five
percent service area threshold at Sec. Sec. 422.2267(a)(2) and
423.2267(a)(2), where the MA organization or Part D sponsor determines
that such inclusion would be appropriate, which is also included in the
current MLI requirements at Sec. Sec. 422.2267(e)(31)(i) and
423.2267(e)(33)(i). It is possible that
[[Page 78526]]
there may be a subpopulation in the plan benefit package service area
that uses a language that does not fall within the top 15 languages or
meet the five percent service area of a plan benefit package threshold
that the plan determines can benefit by receiving the notice. We again
note that pursuant to CMS's authority in section 1876(c)(3)(C) to
regulate marketing and the authority in section 1876(i)(3)(D) to
specify new section 1876 contract terms, and as established in Sec.
417.428, this proposal would also apply to section 1876 cost plans.
To assist plans with fulfilling their requirements under Sec. Sec.
422.2267(a)(2) and 423.2267(a)(2) to translate required materials into
any non-English language that is the primary language of at least 5
percent of the population of a plan service area, since 2009 CMS has
provided plans with a list of all languages that are spoken by five
percent or more of the population for every county in the U.S. Each
fall, we release an HPMS memorandum announcing that MA organizations
and Part D sponsors can access this list in the HPMS marketing review
module.\92\ However, plans can also use Census Bureau ACS data to
determine the top languages spoken in a given State or service area.
The September 2023 Medicare Part C & D Language Data Technical Notes
\93\ outlines our methodology for calculating the percentage of the
population in a plan's service area speaking a language other than
English and provides plans with instructions to make these calculations
on their own.
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\92\ We released the contract year 2024 version of this HPMS
memorandum titled, ``Corrected Contract Year 2024 Translated Model
Materials Requirements and Language Data Analysis'' on September 25,
2023. This memorandum can be retrieved at: https://www.cms.gov/about-cms/information-systems/hpms/hpms-memos-archive-weekly/hpms-memos-wk-4-september-18-22.
\93\ Found in HPMS as described in the September 25, 2023 HPMS
memo, ``Corrected Contract Year 2024 Translated Model Materials
Requirements and Language Data Analysis.'' This memo can be
retrieved at https://www.cms.gov/about-cms/information-systems/hpms/hpms-memos-archive-weekly/hpms-memos-wk-4-september-18-22.
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I. Expanding Permissible Data Use and Data Disclosure for MA Encounter
Data (Sec. 422.310)
Section 1853(a) of the Act requires CMS to risk-adjust payments
made to Medicare Advantage (MA) organizations. In order to carry out
risk adjustment, section 1853(a)(3)(B) of the Act requires submission
of data by MA organizations regarding the services provided to
enrollees and other information the Secretary deems necessary. The
implementing regulation at Sec. 422.310(b) requires that MA
organizations submit to CMS ``the data necessary to characterize the
context and purposes of each item and service provided to a Medicare
enrollee by a provider, supplier, physician, or other practitioner.''
Currently, Sec. 422.310(d)(1) provides that MA organizations submit
risk adjustment data equivalent to Medicare fee-for-service (FFS) data
to CMS as specified by CMS. MA encounter data, which are comprehensive
data equivalent to Medicare FFS data, are risk adjustment data.\94\
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\94\ See System of Records Notices for the CMS Encounter Data
System (EDS), System No. 09-70-0506, published June 17, 2014 (79 FR
34539), as amended at February 14, 2018 (83 FR 6591); and for the
CMS Risk Adjustment Suite of Systems (RASS), System No. 09-70-0508,
published August 17, 2015 (80 FR 49237), as amended at February 14,
2018 (83 FR 6591).
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Section 1106(a)(1) of the Act authorizes the Secretary to adopt
regulations governing release of information gathered in the course of
administering programs under the Act. In addition, section 1856(b) of
the Act authorizes CMS to adopt standards to carry out the MA statute,
and section 1857(e)(1) of the Act authorizes CMS to add contract terms
that are not inconsistent with the Part C statute and are necessary and
appropriate for the program. Currently, Sec. 422.310(f)(1) establishes
permissible CMS uses of MA encounter data (referred to as ``risk
adjustment data'' in the regulation), while Sec. 422.310(f)(2) and (3)
establish rules for CMS release of data. Prior to 2008, Sec.
422.310(f) provided for CMS to use MA risk adjustment data to risk
adjust MA payments and, except for any medical record data also
collected under Sec. 422.310, for other purposes. Over time, we
subsequently refined the regulatory language describing the scope of
permissible uses and releases of the MA risk adjustment data, including
MA encounter data, to (i) risk adjusting MA payments, (ii) updating
risk adjustment models, (iii) calculating Medicare disproportionate
share hospital percentages, (iv) conducting quality review and
improvement activities, (v) for Medicare coverage purposes, (vi)
conducting evaluations and other analysis to support the Medicare
program (including demonstrations) and to support public health
initiatives and other health care-related purposes, (vii) for
activities to support administration of the Medicare program, (viii)
for activities to support program integrity, and (ix) for purposes
authorized by other applicable laws (70 FR 4588; 73 FR 48650 through
48654; 79 FR 50325 through 50334).
Section 422.310(f)(2) permits the release of MA encounter data to
other HHS agencies, other Federal executive branch agencies, States,
and external entities, while Sec. 422.310(f)(3) of our current
regulation specifies circumstances under which we may release MA
encounter data for the purposes described in Sec. 422.310(f)(1).
Currently, we may release the data only after risk adjustment
reconciliation for the applicable payment year has been completed or
under certain emergency preparedness or extraordinary circumstances. We
note that we included a proposal to publicly report aggregated counts
of procedures performed by providers, based on MA encounter data,
before risk adjustment reconciliation is complete in the Medicare and
Medicaid Programs in the CY 2024 Payment Policies Under the Physician
Fee Schedule and Other Changes to Part B Payment and Coverage Policies;
Medicare Shared Savings Program Requirements; Medicare Advantage;
Medicare and Medicaid Provider and Supplier Enrollment Policies; and
Basic Health Program proposed rule (hereafter referred to as the August
2023 proposed rule; 88 FR 52262).
Here, we are proposing to allow MA encounter data to be used to
support the Medicaid program for certain purposes already specified for
use to support the Medicare program in Sec. 422.310(f)(1)(vi) and
(vii). Under our proposal, MA risk adjustment data could be used for
supporting either program separately or in conjunction. In addition, we
are proposing to allow release of MA encounter data to State Medicaid
agencies (States) in advance of the completion of risk adjustment
reconciliation for the specific purpose of care coordination for
individuals who are dually eligible for Medicare and Medicaid, also
known as dually eligible individuals. These proposals related to
disclosure of MA encounter data are focused on expanding allowable
disclosures of these data to support not only the Medicare program or
Medicare-Medicaid demonstrations, but also the Medicaid program in the
interest of improving care for individuals who are eligible for
Medicaid.
We believe disclosure for the purpose of improving States' ability
to understand and improve care provided to dually eligible individuals
is appropriate and consistent with our intention in prior rulemaking.
We clarified that States may access and use MA encounter data while
``in the administration of Medicare-Medicaid demonstrations'' in the
Medicare Program; Hospital Inpatient Prospective
[[Page 78527]]
Payment Systems for Acute Care Hospitals and the Long-Term Care
Hospital Prospective Payment System and Fiscal Year 2015 Rates; Quality
Reporting Requirements for Specific Providers; Reasonable Compensation
Equivalents for Physician Services in Excluded Hospitals and Certain
Teaching Hospitals; Provider Administrative Appeals and Judicial
Review; Enforcement Provisions for Organ Transplant Centers; and
Electronic Health Record (EHR) Incentive Program final rule (hereafter
referred to as the August 2014 final rule; 79 FR 50325). Additionally,
current regulation text at Sec. 422.310(f)(1)(vi) permits CMS to
release MA encounter data to third parties, including States, to
``conduct evaluations and other analysis to support the Medicare
program (including demonstrations).'' This proposal would expand
certain allowable use and disclosures of MA encounter data to support
the Medicaid program, which would thereby enable State access to
comprehensive data for all dually eligible individuals in the State
regardless of their enrollment in a demonstration, dual eligible
special needs plan (D-SNP), or other MA plan. Our proposal to further
expand MA encounter data sharing to include support for the Medicaid
program would also be consistent with the goals of the Federal
Coordinated Health Care Office, as established in statute. Section 2602
of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-
148) (Affordable Care Act) established the office within CMS to better
integrate benefits and improve coordination for dually eligible
individuals, including specific goals and responsibilities such as:
Providing dually eligible individuals full access to the
benefits to which such individuals are entitled under the Medicare and
Medicaid programs.
Improving the quality of health care and long-term
services for dually eligible individuals.
Improving care continuity and ensuring safe and effective
care transitions for dually eligible individuals.
Improving the quality of performance of providers of
services and suppliers under the Medicare and Medicaid programs.
Supporting State efforts to coordinate and align acute
care and long-term care services for dually eligible individuals with
other items and services furnished under the Medicare program.
MA enrollment has grown to approximately half of all Medicare
beneficiaries; a trend also seen in the enrollment of dually eligible
individuals. For example, 51 percent of all dually eligible individuals
were enrolled in an MA plan in 2021 (up from 12 percent in December
2006).95 96 Such individuals experience the health care
system and incur health outcomes as individuals regardless of which
health care program pays for the service. But currently, the States'
ability to obtain MA encounter data for program analysis and
evaluations or program administration for dually eligible individuals
enrolled in an MA plan is limited to support of a Medicare-Medicaid
demonstration. Our current regulation text does not specify that we may
make MA encounter data available to States for Medicaid program
administration, or to conduct evaluations and other analyses for the
Medicaid program, with the exception of those evaluations and analyses
used to support demonstrations. Therefore, previous rulemaking limits
opportunities for States to effectively perform functions such as
coordination of care, quality measure design, and program evaluation
and analysis by allowing them access to MA encounter data for these
activities only for those dually eligible individuals enrolled in
Medicare-Medicaid demonstrations.
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\95\ 2023 Medicare Trustees Report https://www.cms.gov/oact/tr.
\96\ https://www.cms.gov/files/document/managedcareenrollmenttrendsdatabrief2012-2021.pdf.
---------------------------------------------------------------------------
We are proposing changes to Sec. 422.310(f) to improve access for
States to MA encounter data, including making a specific exception to
the timing of sharing MA encounter data. We do not intend for our
proposals to impact the terms and conditions governing CMS release of
MA risk adjustment data as described in Sec. 422.310(f)(2), in
accordance with applicable Federal laws and CMS data sharing
procedures. As discussed in the August 2014 final rule, CMS data
sharing procedures require each recipient of data from CMS to sign and
maintain a CMS data sharing agreement, ``which addresses privacy and
security for the data CMS discloses'' and ``contains provisions
regarding access to and storage of CMS data to ensure that beneficiary
identifiable information is stored in a secure system and handled
according to CMS's security policies,'' which encompasses the
limitations for additional disclosure of CMS data (79 FR 50333). Such
provisions would similarly apply to States that receive MA encounter
data under the proposed amendments to Sec. 422.310(f) here.
As stated in the August 2014 final rule, the data described in
paragraphs (a) through (d) would include those elements that constitute
an encounter data record, including contract, plan, and provider
identifiers, with the exception of disaggregated payment data (79 FR
50325). In accordance with Sec. 422.310(f)(2)(iv), we aggregate
payment data to protect commercially sensitive information.
1. Expanding and Clarifying the Programs for Which MA Encounter Data
May Be Used for Certain Allowable Purposes
As we stated in the Medicare Program; Hospital Inpatient
Prospective Payment Systems for Acute Care Hospitals and the Long-Term
Care Hospital Prospective Payment System and Fiscal Year 2015 Rates;
Quality Reporting Requirements for Specific Providers; Reasonable
Compensation Equivalents for Physician Services in Excluded Teaching
Hospitals; Provider Administrative Appeals and Judicial Review;
Enforcement Provisions for Organ Transplant Centers; and Electronic
Health Record (EHR) Incentive Program proposed rule (hereafter referred
to as the May 2014 proposed rule; 79 FR 27978), using MA encounter data
enables us, our contractors, and external entities to support Medicare
program evaluations, demonstration designs, and effective and efficient
operational management of the Medicare program, encourages research
into better ways to provide health care, and increases transparency in
the administration of the Medicare program (79 FR 28281 through 28282).
However, because States lack access to MA encounter data, States'
ability to conduct activities for dually eligible individuals enrolled
in MA plans is limited. As Medicare is the primary payer for dually
eligible individuals, States generally lack comprehensive data on care
provided to dually eligible individuals enrolled in MA. Over the years,
various States have requested that CMS share MA encounter data for
dually eligible individuals to better coordinate care, conduct quality
improvement activities, support program design, conduct evaluations,
and improve efficiency in the administration of the Medicaid program.
Our current regulation text at Sec. 422.310(f)(1)(vi) (evaluations
and analysis to support the Medicare program) and (vii) (activities to
support administration of the program) specifies that for these
purposes, the encounter data must be used for the Medicare program.
Therefore, though Sec. 422.310(f)(2) permits CMS to release
[[Page 78528]]
MA encounter data to States for the purposes listed in paragraph
(f)(1), Sec. 422.310(f)(1)(vi) and (vii) do not clearly permit CMS to
release MA encounter data to States to support Medicaid program
evaluations and analysis or to support administration of the Medicaid
program.
We are proposing to add ``and Medicaid program'' to the current MA
encounter data use purposes codified at Sec. 422.310(f)(1)(vi) and
(vii). These additions would enable CMS to use the data and release it
(in accordance with Sec. 422.310(f)(2) and (3)) for the purposes of
evaluation and analysis and program administration for Medicare,
Medicaid, or Medicare and Medicaid combined purposes. We believe that
our release of MA encounter data for these data use purposes that
support the Medicare and Medicaid programs would generally be to the
States and would support our responsibility to improve the quality of
health care and long-term services for dually eligible individuals;
improve care continuity, ensuring safe and effective care transitions
for dually eligible individuals; improve the quality of performance of
providers of services and suppliers under the Medicare and Medicaid
programs for dually eligible individuals; and support State efforts to
coordinate and align acute care and long-term care services for dually
eligible individuals with other items and services furnished under the
Medicare program.
As stated above, CMS data sharing procedures apply to the release
of MA encounter data in accordance with Sec. 422.310(f)(2) and contain
provisions regarding access to and storage of CMS data to ensure that
beneficiary identifiable information is protected. We make other data
available to external entities, including States, in accordance with
CMS data sharing procedures and Federal laws, including but not limited
to the Privacy Act of 1974. We review data requests for appropriate use
justifications, including updated or amended use justifications for
existing data requests. We employ data sharing agreements, such as a
Data Use Agreement and Information Exchange Agreement, that limit
external entities to CMS-approved data uses and disclosure of CMS data.
For example, States that request data from CMS for care coordination
and program integrity initiatives may disclose the data to State
contractors, vendors, or other business associates. In accordance with
CMS data sharing agreements, these State contractors, vendors, or other
business associates must also follow the terms and conditions for use
of the CMS data, including limiting use of the CMS-provided data only
for approved purposes. This would mean that, under this proposal, a
State receiving MA encounter data for care coordination may disclose MA
encounter data to Medicaid managed care plans to coordinate services
for enrolled dually eligible individuals. Comments submitted on the
August 2014 final rule cited concerns that access to MA encounter data
by competitors of the various MA organizations that are required to
submit data could permit a competitor to gain an advantage by trending
cost and utilization patterns over a number of years. Given that Sec.
422.310(f)(2)(iv) provides for aggregation of dollar amounts reported
for the associated encounter to protect commercially sensitive data and
that any release of MA encounter data to States would comply with
applicable statutes, regulations, and processes including those
described above, we believe that concern around potential competitive
advantage is mitigated if the risk exists at all. As stated in the
August 2014 final rule, we believe that CMS data sharing procedures and
review of use justifications ``strikes an appropriate balance between
the significant benefits of furthering knowledge'' and concerns
regarding the release of risk adjustment data, including for
beneficiary privacy or commercially sensitive information of MA plans
(79 FR 50328). Consistent with what we stated in the August 2014 final
rule, CMS data sharing agreements have enforcement mechanisms, and data
requestors acknowledge these mechanisms. For example, penalties under
section 1106(a) of the Social Security Act [42 U.S.C. 1306(a)],
including possible fines or imprisonment, and criminal penalties under
the Privacy Act [5 U.S.C. 552a(i)(3)] may apply, as well as criminal
penalties may be imposed under 18 U.S.C. 641 (79 FR 50333). Requestors
of CMS data, such as States, are responsible for abiding by the law,
policies, and restrictions of the data sharing agreements--which
extends to any downstream disclosures of the data to State contractors,
vendors, or other business associates--as condition of receiving the
data. We intend to only approve requests for MA encounter data that
have clear written data use justifications and identify any downstream
disclosure--such as to State contractors, vendors, or other business
associates--for each requested purpose. We have not identified any
issues regarding competitive harm or disadvantage in our current data
sharing programs.
Under this proposal, we would be able to use MA encounter data and
disclose it--subject to the other limitations and protections specified
in Sec. 422.310(f) and other applicable laws and regulations--to
States to perform evaluations and analysis, which would include program
planning for dually eligible individuals. For example, access to MA
encounter data could support States' analysis of geographic trends to
create targeted community outreach and education, including
identification of geographic areas with higher rates of dementia,
diabetes, or emergency room visit overutilization; and evaluation of
current Medicaid initiatives, including tracking efficacy of opioid
overuse and misuse programs by monitoring service utilization for those
with opioid dependency, evaluating appropriate and inappropriate use of
antibiotic and psychotropic medications, and analyzing deaths among
individuals with opioid use disorder. Currently, States generally only
receive Medicare FFS data from CMS under current authorities, which
results in an incomplete assessment of the dually eligible population.
Under this proposal, States could request MA encounter data for all of
the dually eligible enrollees they serve and include this growing
portion of the dually eligible population in their data analysis and
efforts to improve outcomes for low-income older adults and people with
disabilities who are enrolled in the Medicaid program.
We are taking this opportunity to make a clarification related to
the existing program administration purpose, as specified in Sec.
422.310(f)(1)(vii). In the August 2014 final rule, we stated that, in
addition to use of these data for review of bid validity and MLR, we
expected there would be additional potential uses for these data as
part of the program administration purpose, such as the development of
quality measures (79 FR 50326). Consistent with our expectation at that
time, we are clarifying here that care coordination would be an
allowable use for these data as part of the purpose currently codified
at Sec. 422.310(f)(1)(vii)--for activities to support the
administration of the Medicare program--which includes activities that
are not within the scope of the other permitted uses defined at Sec.
422.310(f)(1). Similar to quality measure development, a use we
explicitly named, care coordination is critical to ensuring that
individuals receive effective and efficient care, especially when
services may be covered under multiple health care
[[Page 78529]]
programs, as is the case for dually eligible individuals who are
enrolled in Medicaid and an MA plan. We believe use and release of MA
encounter data to States to support administering the Medicaid program,
including to coordinate care and improve quality of care for Medicaid-
covered individuals, is appropriate. For example, in administering the
Medicaid program, a State may need MA encounter data to coordinate care
for dually eligible individuals, which may include identification of
individuals at high risk of institutional placement or other
undesirable outcomes based on past service utilization; coordination of
services from the MA plan's coverage of an inpatient stay to Medicaid
coverage of subsequent home and community-based services; coordination
of Medicaid-covered services in a skilled nursing facility for a dually
eligible individual after reaching the limits of the individual's
coverage through the MA plan; monitoring nursing facility quality of
care, including through tracking rates of hospitalization and emergency
room visits; and coordination of physical health services with
behavioral health services, where Medicaid coverage differs from the MA
plan's coverage.
We welcome public comment on this proposal.
2. Adding an Additional Condition Under Which MA Encounter Data May Be
Released Prior to Reconciliation
Section 422.310(f)(3) describes the circumstances under which we
may release MA encounter data. Specifically, our current regulation
provides that MA encounter data will not become available for release
unless the risk adjustment reconciliation for the applicable payment
year has been completed or under certain emergency preparedness or
extraordinary circumstances. Section 422.310(g) specifies the deadlines
that we use to determine which risk adjustment data submissions we
consider when assigning the risk adjustment factors for payment in a
given payment year. This section also establishes a reconciliation
process to adjust payments for additional data submitted after the end
of the MA risk adjustment data collection year (meaning the year the
item or service was furnished to the MA enrollee) but before the
established deadline for the payment year, which can be no earlier than
January 31 of the year following the payment year. This reconciliation
period provides MA organizations an opportunity to update or submit
encounter data records and chart review records to be considered for
risk adjustment and payment in the applicable payment year. Section
422.310(b)(1) requires MA organizations to submit data for all items
and services provided; therefore, MA organizations must continue to
submit encounter data records and data corrections after the final
submission deadline if needed. (We note that there are limitations on
which submissions after the final reconciliation deadline may be used
in risk adjustment. See Sec. 422.310(g).) The timing limitation on
release of MA encounter data in our current regulation is tied to the
established deadline for the payment year, and it results in a data lag
of at least 13 months after the end of the MA risk adjustment data year
(that is, the year during which the services were furnished), before
CMS may release the MA risk adjustment data for the purposes described
in Sec. 422.310(f)(1).\97\ We believe there will be increased utility
of MA encounter data for Medicaid programs if the data is released
before final reconciliation for coordination of care under the
allowable purpose in Sec. 422.310(f)(1)(vii). We believe that the
reasons and concerns we identified when adopting the delay in release
of MA encounter data can be sufficiently taken into account by CMS as
part of evaluating a request to use the data for specific purposes and
determining whether to release the data. Further, in many cases, those
reasons and concerns likely do not sufficiently apply in the context of
care coordination to require a delay in releasing the data as discussed
further below.
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\97\ ``Deadline for Submitting Risk Adjustment Data for Use in
Risk Score Calculation Runs for Payment Years 2021, 2022, 2023, and
2024'' HPMS memo. https://www.cms.gov/files/document/py20202021202220232024paymentrunnotice508g.pdf.
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In order to improve utility of MA encounter data for certain
approved purposes, we propose to add a new subsection Sec.
422.310(f)(3)(v) to allow for MA encounter data to be released to
States for the purpose of coordinating care for dually eligible
individuals when CMS determines that releasing the data to a State
Medicaid agency before reconciliation is necessary and appropriate to
support activities and uses authorized under paragraph (f)(1)(vii). As
discussed above, the proposed amendments to Sec. 422.310(f)(1)(vii)
would expand the scope of that provision to include using the data to
support administration of the Medicaid program, and in our discussion
we clarified that coordination of care activities are within the scope
of activities that support administration of these health care
programs. We are specifying care coordination for our proposal for
release of MA encounter data prior to reconciliation as we believe
providing States access to this more timely data is critical to
effectively coordinating care, is directly tied to our responsibility
to support States' efforts to coordinate and align care and services
for dually eligible individuals, and furthers our goal to improve care
continuity and ensure safe and effective care transitions for dually
eligible individuals (see 42 U.S.C. 1315B) while accommodating the
concerns that led us to adopt the time limits in Sec. 422.310(f)(3).
Together, the proposed changes to Sec. 422.310(f)(1)(vii) and
(f)(3)(v) would improve timeliness of the MA encounter data we make
available to States for coordination of care for dually eligible
individuals.
As discussed above, a growing number of dually eligible individuals
are enrolled in MA plans. To ensure that these individuals are
receiving high quality, efficient care, it is essential that States
have access to information on their service utilization in a timely
manner. Without timely, comprehensive beneficiary data, which are not
currently available to States for all MA enrollees, States cannot
conduct care coordination for dually eligible individuals in MA. For
example:
A State looks to coordinate care related to the COVID-19
pandemic for individuals concurrently enrolled in Medicaid and MA
plans, such as by identifying people who had COVID-related
hospitalizations. In accordance with Sec. 422.310(f)(3), our current
release schedule of MA encounter data for research purposes limits
available MA encounter data to between 13 and 25 or more months after
the service was rendered.\98\ Therefore, with the exception of those
dually eligible individuals enrolled in an MA plan under a
demonstration or in an MA D-SNP, where the State can use the contract
with the plan in accordance with Sec. 422.107 to obtain MA encounter
data or other notifications under Sec. 422.107(d)(1) from the D-SNP,
States could not access service utilization data for MA enrollees to
coordinate care for dually eligible individuals who had a COVID-related
hospitalization in a timely manner. Instead, the States would need to
wait for the MA encounter data until after risk adjustment
reconciliation for the applicable payment year has been completed--
which would be months after a dually eligible individual required post-
hospitalization follow-up
[[Page 78530]]
care. However, if States could access timely MA encounter data, then
Medicaid care coordinators could follow up after a COVID-related
hospitalization to ensure adequate care related to mental health
treatment, coordinate approval of durable medical equipment, or ensure
physical or rehabilitation therapy while reducing redundant visits or
delays in care to the dually eligible individual.
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\98\ https://resdac.org/cms-news/2021-preliminary-medicare-encounter-data-now-available.
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A State uses a predictive modeling algorithm--using past
service utilization, diagnosis, and other data--to identify people at
high risk for poor outcomes or institutional placement. The State then
targets those high-risk individuals in the Medicaid program for an
intensive care management intervention and helps connect such
individuals to necessary supports and services. In this case, the
timeliness of information on service utilization (for example, an
individual discharged from a skilled nursing facility stay could
benefit by transition to Medicaid home and community-based services) is
more important than the completeness of the available data (that is,
whether additional subsequent encounters may later become available) so
the State can coordinate care and deliver the intervention when an
individual most needs it.
We believe the two examples above represent cases where we would
consider sharing MA encounter data with State Medicaid agencies prior
to reconciliation as necessary and appropriate to support coordinating
care for dually eligible individuals. States cannot rely on MA
encounter data after final reconciliation because coordinating services
requires access to timely data. For these activities, States rely more
on timely data about service utilization than on complete data.
Improving access to timely MA encounter data and ensuring Medicaid
programs can coordinate care for dually eligible individuals supports
our goal to providing dually eligible individuals full access to the
benefits to which they are entitled (42 U.S.C. 1315B(d)).
As discussed above, State Medicaid agencies cannot effectively
coordinate care for individuals using data that is more than one or two
years old. We recognize that the MA encounter data may be subject to
edits before final reconciliation given the deadline for submission of
risk adjustment data under Sec. 422.310(g), which states that the
final submission deadline is a date no earlier than January 31 of the
year following the payment year, or that data from some MA
organizations or for some enrollees may not be available as quickly as
data from or for others. However, we believe that earlier release of MA
encounter data to States for the purpose of care coordination for
dually eligible individuals would be appropriate and, as stated above,
many of the reasons and concerns to require a delay releasing MA
encounter data likely do not sufficiently apply in the context of care
coordination. Care coordination activities require State Medicaid
agencies, or their contractors, to identify and contact individuals who
have received, or are in need of, services from their providers. Since
States would use the MA encounter data to identify opportunities for
care improvement such as improving transitions of care or to promote
the use of underutilized services, we do not foresee any risk to
individuals from States using data that may be subject to change in the
future. States would be able to use the data to identify more dually
eligible individuals who are potentially in need of Medicaid-covered
services. States are not required to act on the data and can address
potential data concerns arising from using MA encounter data before
final reconciliation as States have experience using Medicare data that
may not be final for effective care coordination. In fact, many States
already obtain timely Medicare FFS claims with a lag between 14 days to
three months, depending on the data file, for uses such as care
coordination, quality improvement, and program integrity in the
Medicaid program. These Medicare FFS claims may also be subject to
change subsequent to the States' receipt of the data, yet we are not
aware of any problems in these use cases caused by CMS sharing data
that is still subject to change. Because the MA encounter data released
to States would be for care coordination purposes, we do not anticipate
any negative impacts from any potential subsequent changes to the
encounters. MA encounter data made available to States prior to
reconciliation would not contain disaggregated payment information, in
accordance with Sec. 422.310(f)(2)(iv). Unlike MA encounter data used
for CMS payment purposes, the pre-reconciliation MA encounter data
would have no impact on plan payment. Under this proposal, release of
the MA encounter data for care coordination purposes must be necessary
and appropriation to support administration of the Medicaid program; we
do not believe it would be appropriate or necessary to use the MA data
released on this accelerated schedule for payment purposes.
Coordination of care is a clear situation where more timely MA
encounter data is needed for effective intervention without invoking
risks that we have cited in the past about sharing MA risk adjustment
data before final reconciliation. The timing limits in Sec.
422.310(f)(3) were adopted in the August 2014 final rule in response to
comments expressing concern about release of the MA risk adjustment
data (79 FR 50331 through 50332). In that prior rulemaking, some
commenters cited concerns about release of MA encounter data submitted
in the initial years due to concerns regarding systems development and
submission challenges. We believe these concerns are mitigated by the
subsequent years since the implementation of the August 2014 final rule
that have resulted in accumulation of experience submitting, reviewing,
and using MA encounter data in accordance with Sec. 422.310(f). In
addition, CMS maintains several checks and edits in the encounter data
system to minimize duplicate, incomplete, or inappropriate data stored
in the encounter data system. We reiterate that this proposal to amend
paragraph (f)(3) would only permit the release of MA encounter data to
State Medicaid agencies for care coordination for dually eligible
individuals.
We also noted in prior rulemaking that our approach to reviewing
requests for MA encounter data from external entities would incorporate
the Medicare Part A/B and Part D minimum necessary data policy, with
additional restrictions to protect beneficiary privacy and commercially
sensitive information of MA organizations and incorporated that
limitation into paragraph (f)(2) (79 FR 50327). Therefore, this
limitation would also apply when reviewing State requests for MA
encounter data under the proposed expansion of Sec. 422.310(f)(1)(vi)
and (vii), as well as to any State requests for MA encounter data
before the reconciliation deadline to support coordination of care. CMS
data sharing procedures include a review team that assesses data
requests for minimum data necessary and appropriate use justifications
for care coordination, and we would only approve release of MA
encounter data for any data requests where the requestor has
sufficiently demonstrated that the request satisfies all requirements
of Sec. 422.310(f). Other commenters on the August 2014 final rule
expressed concerns that MA organizations are able to delete, replace,
or correct MA encounter data before the reconciliation deadline, which
could potentially result in inaccurate or incomplete MA encounter data
and that incomplete or inaccurate data should
[[Page 78531]]
not be used or released for the purposes outlined in Sec. 422.310(f).
As noted in the prior rulemaking, we consider what disclaimers are
appropriate to provide to requestors to understand the limitations of
the MA encounter data (79 FR 50329 through 50330).\99\ As noted above,
States, or their contractors, are not required to act on the data and
have experience using Medicare FFS claims that may not be final for
effective care coordination. We are not aware of any care coordination
issues that have arisen as a result of our sharing more Medicare FFS
current data with States under our current data sharing processes.
Additionally, CMS makes available technical assistance to States to
help with State use and understanding of Medicare data; we intend to
extend this technical assistance to States requesting MA encounter data
to mitigate issues arising from non-final data. We will evaluate the
potential concerns arising from using MA encounter data before final
reconciliation when determining whether to release MA encounter data to
States for care coordination activities for dually eligible individuals
to support administration of the Medicare and Medicaid programs.
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\99\ For example, see the CCW Medicare Encounter Data User
Guide: https://www2.ccwdata.org/web/guest/user-documentation.
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Finally, we propose that these amendments to Sec. 422.310(f) would
be applicable upon the effective date of the final rule if these
proposals are finalized as proposed. As outlined in section I.A., the
majority of the proposals in this rule are proposed to be applicable
beginning January 1, 2025. We do not believe that delaying the
applicability of these proposed amendments beyond the effective date of
the final rule is necessary because these proposals address CMS's
authority to use and share MA encounter data but do not impose any
additional or new obligations on MA organizations.
We welcome public comment on this proposal.
3. Solicitation of Comments on Use of MA Encounter Data To Support
Required Medicaid Quality Reporting
In the final rule titled ``Medicaid Program and CHIP; Medicaid and
Children's Health Insurance Program (CHIP) Core Set Reporting,'' which
appeared in the Federal Register on August 31, 2023 (88 FR 60278)
(``August 2023 final rule''), we established mandatory Core Set
reporting requirements for States, as set forth in the Bipartisan
Budget Act of 2018 (Pub. L. 115-123, enacted February 9, 2018) and the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and
Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-
271, enacted October 24, 2018). The new Core Set reporting requirements
apply to all States with Medicaid and CHIP programs and include all
Medicaid and CHIP participants, including dually eligible individuals
enrolled in MA plans.
States can only report certain Child and Adult Core Set measures by
using utilization data. For reporting related to dually eligible
individuals, this means accessing Medicare data. For dually eligible
individuals in Medicare FFS, we make available Medicare FFS claims and
events data to States to support, among other purposes, quality
reporting for Child and Adult Core Set measures. But we do not
currently make available MA encounter data to States in the same way.
Although we have not shared MA encounter data broadly for Medicaid
quality performance and quality improvement purposes through existing
CMS data sharing programs, States may use their contracts with MA D-
SNPs, which are required under Sec. 422.107, to obtain Medicare data
about the dually eligible individuals enrolled in those plans; this
contractual ability to obtain MA encounter data through contracts with
plans is specific to D-SNPs and does not include all MA plans.
Therefore, we anticipate that reporting on dually eligible individuals
enrolled in MA plans will be optional (that is, not mandatory) for
States to include in reporting of the Child and Adult Core Sets. As we
acknowledged in the August 2023 final rule, ``We recognize that States
must obtain, link, and analyze Medicare data in order to report the
Child and Adult Core Sets of measures for fee-for-service
beneficiaries, and that States do not have access to encounter data for
Medicare Part C (Medicare Advantage), and we expect to phase in
required reporting of Child and Adult Core Set measures for dually
eligible beneficiaries'' (88 FR 60298 through 60299).
In accordance with current regulation text at Sec. 422.310(f)(2),
States may request MA encounter data for the purpose described at Sec.
422.310(f)(1)(iv)--to conduct quality review and improvement
activities--which could support Medicaid Child and Adult Core Set
reporting. However, the limitations in paragraph (f)(3) on sharing MA
encounter data before final reconciliation would frustrate our desire
for States to use the data to support timely Child and Adult Core Set
reporting. The August 2023 final rule establishes a schedule through
which Core Set reporting to CMS begins in the fall of 2024, applicable
to data collected during the 2024 reporting period. However, as stated
above, our current release schedule of MA encounter data in accordance
with Sec. 422.310(f)(3) limits available MA encounter data to between
13 and 25 or more months after the service was rendered. Therefore, in
the fall of 2024, during the 2024 Core Set reporting period, we
anticipate only making available MA encounter data for services
furnished in the 2022 year. This means that based on the current
limitations in paragraph (f)(3), States would be unable to report on
2023 services received by dually eligible individuals enrolled in an MA
plan to CMS in the fall of 2024 for the Child and Adult Core Set
measures. With over half of dually eligible individuals enrolled in MA
plans, we believe it is essential that State Child and Adult Core Set
reporting eventually include that population. We are soliciting
comments on making MA encounter data available to States to support
Child and Adult Core Set reporting as efficiently as possible while
complying with Sec. 422.310(f) and balancing considerations related to
the timeliness of quality reporting with accuracy and completeness. We
intend to take such comments into account in developing future policies
and potential additional proposed revisions to Sec. 422.310.
J. Standardize the Medicare Advantage (MA) Risk Adjustment Data
Validation (RADV) Appeals Process
In this proposed rule, we are proposing to revise certain timing
issues in terms of when RADV medical record review determination and
payment error calculation appeals can be requested and adjudicated.
Specifically, we are proposing that Medicare Advantage (MA)
organizations must exhaust all levels of appeal for medical record
review determinations before the payment error calculation appeals
process can begin. We believe that this clarification is necessary
because RADV payment error calculations are directly based upon the
outcomes of medical record review determinations. We also propose
several other changes to our regulatory appeals process to conform with
these proposed revisions.
Section 1853(a)(1)(C) of the Act requires that CMS risk-adjust
payments made to MA organizations. Risk adjustment strengthens the MA
program by ensuring that accurate payments are made to MA organizations
based on the health status and demographic characteristics of their
enrolled beneficiaries, and that MA organizations are paid
appropriately for their plan
[[Page 78532]]
enrollees (that is, less for healthier enrollees who are expected to
incur lower health care costs, and more for less healthy enrollees who
are expected to incur higher health care costs). Making accurate
payments to MA organizations also ensures we are safeguarding Federal
taxpayer dollars.
Contract-level RADV audits are CMS's main corrective action for
overpayments made to MA organizations when there is a lack of
documentation in the medical record to support the diagnoses reported
for risk adjustment. CMS conducts RADV audits of MA organization-
submitted diagnosis data from a selection of MA organizations for
specific payment years to ensure that the diagnoses they submitted are
supported by their enrollees' medical records. CMS can collect the
improper payments identified during CMS and Department of Health and
Human Services Office of Inspector General (HHS-OIG) audits, including
the extrapolated amounts calculated by the OIG. The RADV audit appeals
process, as outlined in 42 CFR 422.311, is applicable to both CMS and
HHS-OIG audits and is therefore referred to as the ``MA RADV audit
appeals process.'' Additional information regarding CMS's contract
level RADV audits was outlined in the RADV final rule, CMS-4185-F2,
published on February 1, 2023.\100\
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\100\ 88 FR 6643; https://www.federalregister.gov/documents/2023/02/01/2023-01942/medicare-and-medicaid-programs-policy-and-technical-changes-to-the-medicare-advantage-medicare.
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1. Current MA RADV Appeals Process
CMS previously established a process after notice and comment
rulemaking for MA organizations to appeal RADV audit findings as
outlined by provisions at 42 CFR 422.311(c)(6) through (8). Once review
of the medical records submitted by MA organizations to support audited
HCCs is completed and overpayment amounts are calculated, HHS (CMS or
HHS-OIG) issues an audit report to each audited MA organization
contract. In accordance with Sec. 422.311(b)(1), this audit report
includes the following:
Detailed enrollee-level information relating to confirmed
enrollee HCC discrepancies.
The contract-level RADV-payment error estimate in dollars.
The contract-level payment adjustment amount to be made in
dollars.
An approximate timeframe for the payment adjustment.
A description of the MA organization's RADV audit appeal
rights.
The MA RADV audit appeals process begins once MA organizations are
notified of their audit findings via a RADV audit report. MA
organizations have 60 days from the date of issuance of a RADV audit
report to file a written request for appeal and must follow the
Secretary's RADV audit appeals procedures and requirements under Sec.
422.311. MA organizations may appeal RADV medical record review
determinations and/or the MA RADV payment error calculation and must
specify which findings the MA organization is appealing when requesting
an appeal of a RADV audit finding.
Under CMS's existing RADV audit appeals regulations under 42 CFR
422.311(c)(6) through (8), the MA RADV administrative audit appeals
process consists of three levels: reconsideration, hearing, and CMS
Administrator review. Below is a summary of the three levels of appeal
for background information only. This regulation is not proposing to
revise the basic structure of these three levels of appeal.
a. Reconsideration
Reconsideration is the first stage of the RADV audit appeals
process. When appealing a medical record review determination, the MA
organization's written request must specify the audited HCC(s) that it
wishes to appeal and provide a justification of why the audited HCC(s)
should not have been identified as an error. When appealing a payment
error calculation, the MA organization's written request must include
its own RADV payment error calculation that clearly indicates where
HHS' payment error calculation was erroneous, as well as additional
documentary evidence pertaining to the calculation of the error that
the MA organization wishes the reconsideration official to consider.
For payment error calculation appeals, a third-party who was not
involved in the initial RADV payment error calculation reviews the HHS
and MA organization's RADV payment error calculations and recalculates,
as appropriate, the payment error using the appropriate payment error
calculation method for the relevant audit.
The reconsideration official issues a written reconsideration
decision to the MA organization, and this decision is considered final
unless the MA organization disagrees with the reconsideration
official's decision and submits a valid request for CMS hearing officer
review. A new audit report is subsequently issued for either a medical
record review determination reconsideration or a payment error
calculation reconsideration only if the reconsideration official's
decision is considered final.
b. Hearing Officer Review
An MA organization that disagrees with the reconsideration decision
may request a hearing officer review in accordance with procedures and
timeframes established by CMS under 42 CFR 422.311(c)(7). If the MA
organization appeals the medical record review reconsideration
determination, the written request for RADV hearing must include a copy
of the written decision of the reconsideration official, specify the
audited HCC(s) that the reconsideration official confirmed as being in
error, and explain why the MA organization disputes the reconsideration
official's determination. If the MA organization appeals a RADV payment
error calculation, the written request for RADV hearing must include a
copy of the written decision of the reconsideration official and the MA
organization's RADV payment error calculation that clearly specifies
where the MA organization believes the Secretary's payment error
calculation was erroneous.
The hearing officer has the authority to decide whether to uphold
or overturn the reconsideration official's decision and, pursuant to
this decision, sends a written determination to CMS and the MA
organization explaining the basis for the decision. If necessary, a
third party who was not involved in the initial RADV payment error
calculation recalculates the RADV payment error and issues a new RADV
audit report to the MA organization. For MA organizations appealing the
RADV payment error calculation only, a third party not involved in the
initial RADV payment error calculation recalculates the MA
organization's RADV payment error and issues a new RADV audit report to
the appellant MA organization and CMS. The hearing officer's decision
is final unless the decision is reversed or modified by the CMS
Administrator.
c. CMS Administrator Review
Under the existing RADV audit appeals regulation at 42 CFR
422.311(c)(8), a request for CMS Administrator review must be made in
writing and filed with the CMS Administrator within 60 days of receipt
of the hearing officer's decision. After receiving a request for
review, the CMS Administrator has the discretion to elect to review the
hearing officer's decision or decline to review the hearing officer's
decision. If the CMS Administrator elects to review the hearing
decision, the CMS Administrator then will
[[Page 78533]]
acknowledge the decision to review the hearing officer's decision in
writing and notify CMS and the MA organization of their right to submit
comments within 15 days of the date of the notification. The CMS
Administrator renders his or her final decision in writing to the
parties within 60 days of acknowledging his or her decision to review
the hearing officer's decision. The decision of the hearing officer
becomes final if the CMS Administrator declines to review the hearing
officer's decision or does not render a decision within 60 days.
2. Proposed Policies
In this proposed rule, we are revising the timing of when a medical
record review determination and a payment error calculation appeal can
be requested and adjudicated. Specifically, we are proposing that MA
organizations must exhaust all levels of appeal for medical record
review determinations before beginning the payment error calculation
appeals process. We believe that this change is necessary because RADV
payment error calculations are based upon the outcomes of medical
record review determinations and the current regulatory language is
somewhat ambiguous regarding this point. Adjudicating medical record
review determination appeals prior to payment error calculation appeals
alleviates operational concerns for CMS and burden on MA organizations
by preventing unnecessary appeals of payment error calculations that
will be moot if revisions must be made to payment error calculations
based on medical record review determination appeal decisions.
Section 422.311(c)(5)(iii) states that, ``for [MA organizations]
that appeal both medical record review determination appeal and RADV
payment error calculation appeal [,] . . . the Secretary adjudicates
the request for the RADV payment error calculation following conclusion
of reconsideration of the MA organization's request for medical record
review determination appeal.'' The regulations also state that, for
cases in which an MA organization requests both a medical record review
determination appeal and payment error calculation appeal, ``. . . an
[MA organization's] request for appeal of its RADV payment error
calculation will not be adjudicated until appeals of RADV medical
record review determinations filed by the MA organization have been
completed and the decisions are final for that stage of appeal''
[emphasis added]. This language arguably addresses both those cases in
which the final adjudication is reached during the reconsideration
phase, as well as those that proceed to the second and third level of
appeal. We propose to delete Sec. 422.311(c)(5)(ii)(C), which requires
MA organizations requesting both a medical record review determination
appeal and payment error calculation appeal to file their written
requests for both appeals within 60 days of the issuance of the RADV
audit report before the reconsideration level of administrative appeal.
Instead, we propose that MA organizations may request only a medical
record review determination appeal or payment error calculation appeal
for purposes of reconsideration, and not both at the same time. We
propose to amend Sec. 422.311(c)(5)(iii) by providing that MA
organizations who request a medical record review determination appeal
may only request a payment error calculation appeal after the
completion of the medical record review determination administrative
RADV appeal process.
An MA organization may also choose to only appeal the payment error
calculation, and therefore, no preceding medical record review
determination appeal would occur. MA organizations choosing to only
file a payment error calculation appeal will not be able to file a
medical record review determination appeal after the adjudication of
payment error calculation appeal. At Sec. 422.311(c)(5)(ii)(B), we
propose to specify that MA organizations will forgo their medical
record review determination appeal if they choose to only file a
payment error calculation appeal, because medical record review appeals
decisions need to be final prior to adjudicating a payment error
calculation appeal.
At Sec. 422.311(c)(5)(iii)(A) and (B), we propose to specify that
this process is complete when the medical record review determination
appeals process has been exhausted through the three levels of appeal,
or when the MA organization does not timely request a medical record
review determination appeal at the hearing officer or CMS Administrator
review stage. At proposed Sec. 422.311(c)(5)(iii)(B), we propose that
an MA organization whose medical record review determination appeal has
been completed has 60 days from the issuance of a revised RADV audit
report to file a written request for payment error calculation appeal,
which specifies the issues with which the MA organization disagrees and
the reasons for the disagreements. If, as a result of the medical
record review determination appeals process, no original determinations
are reversed or changed, then the original audit report will be
reissued and the MA organization will have 60 days from the date of
issuance to submit a payment error calculation appeal if it so chooses.
We also propose to revise Sec. 422.311(c)(6)(i)(A) to clarify that
an MA organization's request for medical record review determination
reconsideration must specify any and all audited HCCs from an audit
report that the MA organization wishes to dispute. The intent of this
revision is to permit an MA organization to submit only one medical
record review determination reconsideration request per audited
contract, which includes all disputed audited HCCs, given that the
results of all audited HCCs for a given audited contract are
communicated as part of a single audit report.
We also propose to revise Sec. 422.311(c)(6)(iv)(B) to clarify
that the reconsideration official's decision is final unless it is
reversed or modified by a final decision of the hearing officer as
defined at Sec. 422.311(c)(7)(x).
We also propose to add Sec. 422.311(c)(6)(v) to clarify that the
reconsideration official's written decision will not lead to the
issuance of a revised audit report until the decision is considered
final in accordance with Sec. 422.311(c)(6)(iv)(B). If the
reconsideration official's decision is considered final in accordance
with Sec. 422.311(c)(6)(iv)(B), the Secretary will recalculate the MA
organization's RADV payment error and issue a revised RADV audit report
superseding all prior RADV audit reports to the appellant MA
organization.
We also propose to revise Sec. 422.311(c)(7)(ix) to clarify that
if the hearing officer's decision is considered final in accordance
with Sec. 422.311(c)(7)(x), the Secretary will recalculate the MA
organization's RADV payment error and issue a revised RADV audit report
superseding all prior RADV audit reports for the specific MA contract
audit. Once the medical record review determination decision of the
adjudicator is final, we believe the same entity that issued the audit
report will be able to revise the audit report by applying any medical
record review determination findings that may have changed through the
medical record review determination appeal process, and issue a revised
audit report in the most efficient and streamlined manner. Issuing a
revised audit report is a standard process and neutrally applies the
final adjudicator's medical record review determination findings. This
process is consistent with other long standing CMS appeals program,
such as the Provider Reimbursement Review Board (PRRB), where post-
adjudication revised determinations are issued by the
[[Page 78534]]
same entity (e.g., the Medicare Administrative Contractor for PRRB
cases) that issued the original determination.
We also propose the following to provide clarity to the
Administrator's level of appeal:
To revise Sec. 422.311(c)(8)(iii) to add a requirement
that if the CMS Administrator does not decline to review or does not
elect to review within 90 days of receipt of either the MA organization
or CMS's timely request for review (whichever is later), the hearing
officer's decision becomes final.
To revise Sec. 422.311(c)(8)(iv)(A) to clarify that CMS
and the MA organization may submit comments within 15 days of the date
of the issuance of the notification that the Administrator has elected
to review the hearing decision.
To revise Sec. 422.311(c)(8)(v) to clarify that the
requirement of the Administrator to render a final decision in writing
within 60 days of the issuance of the notice acknowledging the decision
to elect to review the hearing officer's decision and the 60 day time
period is determined by the date of the final decision being made by
the Administrator, not by the date it is delivered to the parties.
To revise Sec. 422.311(c)(8)(vi) to clarify the scenarios
in which the hearing officer's decision becomes final after a request
for Administrator review has been made.
To add new Sec. 422.311(c)(8)(vii) that states once the
Administrator's decision is considered final in accordance with Sec.
422.311(c)(8)(vi), the Secretary will recalculate the MA organization's
RADV payment error and issue a revised RADV audit report superseding
all prior RADV audit reports to the appellant MA organization.
We also propose to add new Sec. 422.311(c)(9) to specify what
actions related to the RADV audit appeals process constitute final
agency action. Specifically, in cases when an MA organization appeals a
payment error calculation subsequent to an MRRD appeal that has
completed the administrative appeals process, the MRRD final decision
and the payment error calculation final decision will not be considered
a final agency action until the related payment error calculation
appeal has completed the administrative appeals process and a final
revised audit report has been issued.
We also propose to revise Sec. 422.311(a) to remove the word
``annually'' for clarity, as the Secretary may conduct RADV audits on
differing cadences between the CMS and HHS-OIG RADV audits.
IV. Benefits for Medicare Advantage and Medicare Prescription Drug
Benefit Programs
A. Definition of ``Basic Benefits'' (Sec. 422.2)
Section 1852(a)(1)(B)(i) of the Act defines the term ``benefits
under the original Medicare Fee-for-Service program option'' for
purposes of the requirement in subparagraph (a)(1)(A) that each MA
organization provide enrollees such benefits. Section 17006(c)(1) of
the 21st Century Cures Act (Pub. L. 114-255) (hereafter referred to as
``the Cures Act'') amended section 1852(a)(1)(B)(i) of the Act by
inserting ``or coverage for organ acquisitions for kidney transplants,
including as covered under section 1881(d)'' after ``hospice care.''
Per section 17006(c)(3) of the Cures Act, this amendment applies with
respect to plan years beginning on or after January 1, 2021. Thus,
effective January 1, 2021, MA plans no longer cover organ acquisitions
for kidney transplants, including the costs for living donors covered
by Medicare pursuant to section 1881(d) of the Act.
In the ``Medicare and Medicaid Programs; Policy and Technical
Changes to the Medicare Advantage, Medicare Prescription Drug Benefit,
Programs of All-Inclusive Care for the Elderly (PACE), Medicaid Fee-
For-Service, and Medicaid Managed Care Programs for Years 2020 and
2021,'' final rule (84 FR 15680), hereinafter referred to as the April
2019 final rule and the January 2021 final rule, we amended the
definition of ``basic benefits'' at Sec. 422.100(c)(1) to exclude
coverage for organ acquisitions for kidney transplants, effective
beginning in 2021, in addition to the existing exclusion for hospice
care. In the June 2020 final rule, we also amended several regulations
to address coverage of organ acquisition for kidney transplants for MA
enrollees, with amendments to Sec. Sec. 422.258, 422.322, and 422.306.
However, we inadvertently omitted making the same type of revision to
the ``basic benefits'' definition at Sec. 422.2. We propose to correct
the definition of basic benefits at Sec. 422.2 to add the exclusion of
coverage for organ acquisitions for kidney transplants to Sec. 422.2.
Specifically, we propose to revise the ``basic benefits''
definition at Sec. 422.2 to change the phrase ``all Medicare-covered
benefits'' to ``Part A and Part B benefits'' and correct the phrase
``(except hospice services)'' to include, beginning in 2021, organ
acquisitions for kidney transplants (which includes costs covered under
section 1881(d) of the Act).
This proposal is a technical change to align the definition of
basic benefits with existing law; therefore, neither an economic impact
beyond current operating expenses nor an associated paperwork burden
are expected.
B. Evidence as to Whether a Special Supplemental Benefit for the
Chronically Ill Has a Reasonable Expectation of Improving the Health or
Overall Function of an Enrollee (42 CFR 422.102(f)(3)(iii) and (iv) and
(f)(4))
The Balanced Budget Act (BBA) of 2018 included new authorities
concerning supplemental benefits that may be offered to chronically ill
enrollees in Medicare Advantage (MA) plans. We addressed these new
supplemental benefits extensively 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 (hereafter referred to as ``June 2020 final rule'') (85 FR
33796, 33800-05), where we referred to them as Special Supplemental
Benefits for the Chronically Ill (SSBCI).
As we summarized in the June 2020 final rule, we interpreted the
intent of this new category of supplemental benefits as enabling MA
plans to better tailor benefit offerings, address gaps in care, and
improve health outcomes for chronically ill enrollees who meet the
definition established by the statute. Section 1852(a)(3)(D)(ii)(II) of
the Act authorizes the Secretary to waive the uniformity requirements
generally applicable to the benefits covered by MA plans with respect
to SSBCI. Therefore, CMS may allow MA plans to offer SSBCI that are not
uniform across the entire population of chronically ill enrollees in
the plans but that are tailored and covered for an individual
enrollee's specific medical condition and needs (83 FR 16481-82).
In addition to limiting the eligibility of enrollees who can
receive SSBCI to chronically ill enrollees, section
1852(a)(3)(D)(ii)(I) of the Act requires that an item or service
offered as an SSBCI have a reasonable expectation of improving or
maintaining the health or overall function of the chronically ill
enrollee. We codified this statutory requirement as part of the
definition of SSBCI at Sec. 422.102(f)(1)(ii).
As we provided in a Health Plan Management System (HPMS) memorandum
dated April 24, 2019 (``2019 HPMS memo'' hereafter), SSBCI can be in
the form of:
Reduced cost sharing for Medicare-covered benefits;
[[Page 78535]]
Reduced cost sharing for primarily health-related
supplemental benefits;
Additional primarily health-related supplemental benefits;
and/or
Non-primarily health-related supplemental benefits.
To offer an item or service as an SSBCI to an enrollee, an MA plan
must make at least two separate determinations with respect to that
enrollee in order to satisfy the statutory and regulatory requirements
for these benefits. First, the MA plan must determine that an enrollee
meets the definition of ``chronically ill enrollee.'' Section
1852(a)(3)(D)(iii) of the Act defines ``chronically ill enrollee'' as
an individual enrolled in the MA plan who meets all of the following:
(I) has one or more comorbid and medically complex chronic conditions
that is life-threatening or significantly limits the overall health or
function of the enrollee; (II) has a high risk of hospitalization or
other adverse health outcomes; and (III) requires intensive care
coordination. Per Sec. 422.102(f)(1)(i)(B), CMS may publish a non-
exhaustive list of conditions that are medically complex chronic
conditions that are life-threatening or significantly limit the overall
health or function of an individual. This list is currently the same as
the list of chronic conditions for which MA organizations may offer
chronic condition special needs plans, which can be found in section
20.1.2 of chapter 16-B of the Medicare Managed Care Manual. We require,
at Sec. 422.102(f)(3)(i), the MA plan to have written policies for
making this determination and to document each determination that an
enrollee is a chronically ill enrollee. Documentation of this
determination must be available to CMS upon request according to Sec.
422.102(f)(3)(ii).
Second, the MA plan must determine that the SSBCI has a reasonable
expectation of improving or maintaining the health or overall function
of the enrollee. Per Sec. 422.102(f)(3)(iii), the MA plan ``must have
written policies based on objective criteria for determining a
chronically ill enrollee's eligibility to receive a particular SSBCI
and must document these criteria.'' We also require the MA plan to
document ``each determination that an enrollee is eligible to receive
an SSBCI and make this information available to CMS upon request'' at
Sec. 422.102(f)(3)(iv).
We do not define or definitively interpret the phrase ``has a
reasonable expectation of improving or maintaining the health or
overall function of the enrollee'' in regulation or policy guidance.
Rather, in a Health Plan Management System (HPMS) memorandum dated
April 24, 2019 (``2019 HPMS memo'' hereafter), we provided MA plans
with ``broad discretion in determining what may be considered `a
reasonable expectation' when choosing to offer specific items and
services as SSBCI.'' We granted MA plans this discretion so that they
might effectively tailor their SSBCI offerings and the eligibility
standards for those offerings to the specific chronically ill
population upon which the plan is focusing.
We further indicated that ``CMS will provide supporting evidence or
data to an MA organization if CMS determines that an MA plan may not
offer a specific item or service as an SSBCI because it does not have a
reasonable expectation of improving or maintaining the health or
overall function of a chronically ill enrollee.'' In other words, we
placed the burden on CMS, and not the MA plan, to generate evidence
demonstrating whether the ``reasonable expectation'' standard--a
standard that we granted broad discretion for an MA plan to determine--
has been met when offering items or services as SSBCI.
Supplemental benefits, including SSBCI, are generally funded using
MA plan rebate dollars.\101\ When submitting an annual bid to
participate in the MA program, an MA organization includes in its bid a
Plan Benefit Package (PBP) and Bid Pricing Tool for each of its plans,
where the MA organization provides information to CMS on the premiums,
cost sharing, and supplemental benefits (including SSBCI) it proposes
to offer. Since issuing the 2019 HPMS memo, the number of MA plans that
offer SSBCI--and the number and scope of SSBCI offered by an individual
plan--has significantly increased. We have observed these trends in
reviewing PBPs from MA plans submitted in the past few years.
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\101\ MA plan rebates are a portion of the amount by which the
bidding benchmark or maximum MA capitation rate for a service area
exceeds the plan's bid; MA plans are obligated to use the MA rebates
for the purposes specified in 42 CFR 422.266: payment of
supplemental benefits (including reductions in cost sharing) or
reductions in Part B or Part D premiums.
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Based on our internal data, 101 MA plans offered a food and produce
benefit in contract year 2020, while 929 MA plans are offering this as
an SSBCI in contract year 2023.\102\ Similarly, 88 MA plans offered
transportation for non-medical needs as an SSBCI in contract year 2020.
In contract year 2023, 478 MA plans are offering this as an SSBCI.\103\
MA plans are also continuing to identify items or services as SSBCI
that were not included as examples in the 2019 HPMS memo. When an MA
plan is offering such a benefit, it indicates this in the PBP \104\
that it submits with its bid. The MA plan categorizes the benefit
within our PBP submission system as an ``other'' SSBCI (a benefit
designation within the PBP submission system) and describes the
proposed new benefit in a ``free text'' field. While 51 MA plans
offered an ``other'' non-primarily health-related supplemental benefit
in contract year 2020, 440 plans are offering at least one ``other''
non-primarily health related SSBCI in contract year 2023--and 226 plans
are offering at least two.\105\
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\102\ Taken from internal data.
\103\ Taken from internal data.
\104\ A PBP is a set of benefits for a defined MA (or
Prescription Drug Plan) service area. The PBP is submitted by MA
organizations and PDP sponsors to CMS for benefit analysis,
marketing, and beneficiary communication purposes.
\105\ Taken from internal data.
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Through SSBCI, MA organizations can design and implement benefits,
including non-primarily health-related benefits, that may be able to
holistically address various needs of chronically ill enrollees. As
these benefits become a more significant part of the MA program, we
believe it is important to update our processes for reviewing and
approving SSBCI to manage the growth and development of new SSBCI
offerings, as well as to ensure compliance with the statutory
requirements at section 1852(a)(3)(D). Additionally, section
1854(b)(1)(C) of the Act requires that MA plans offer the value of MA
rebates back to enrollees in the form of payment for supplemental
benefits, cost sharing reductions, or payment of Part B or D premiums.
As an increasing share of Medicare dollars is going toward MA rebates
that plans are using to offer SSBCI, we believe that revising the
regulation to adopt greater review and scrutiny of these benefits is
important for CMS to maintain good stewardship of Medicare dollars,
including the MA rebates used to pay for these benefits, and for
ensuring that the SSBCI offered are consistent with applicable law and
those most likely to improve or maintain the health or overall function
of chronically ill enrollees. Therefore, we propose to update our
processes to simultaneously ensure effective program administration and
oversight, while enabling MA organizations to offer SSBCI and improve
health outcomes for chronically ill enrollees.
Currently, the burden is on CMS to review SSBCI included in an MA
organization's bid and determine whether sufficient evidence or data
exists to demonstrate that it has a
[[Page 78536]]
reasonable expectation of improving or maintaining the health or
overall function of a chronically ill enrollee. Given the growth in the
quantity and type of SSBCI offerings and given the associated burden
increase on CMS in reviewing and approving bids that include SSBCI, we
believe that it would be more efficient for the MA organization, rather
than CMS, to demonstrate that the reasonable expectation standard has
been met.
When CMS provides MA organizations with broad latitude in offering
items or services as SSBCI and in establishing what a ``reasonable
expectation'' means for a given SSBCI, we believe that it is
appropriate for the MA organization, rather than CMS, to identify
supporting evidence or data to support an SSBCI and to establish
compliance with the applicable law.
We are proposing that an MA organization that includes an item or
service as SSBCI in its bid must be able to demonstrate through
relevant acceptable evidence that the item or service has a reasonable
expectation of improving or maintaining the health or overall function
of a chronically ill enrollee. As part of shifting responsibility this
way, we are proposing, as relevant to an MA organization that includes
SSBCI in its bid, to: (1) require the MA organization to establish, by
the date on which it submits its bid, a bibliography of ``relevant
acceptable evidence'' related to the item or service the MA
organization would offer as an SSBCI during the applicable coverage
year; (2) require that an MA plan follow its written policies (that
must be based on objective criteria) for determining eligibility for an
SSBCI when making such determinations; (3) require the MA plan to
document denials of SSBCI eligibility rather than approvals; and (4)
codify CMS's authority to decline to accept a bid due to the SSBCI the
MA organization includes in its bid and to review SSBCI offerings
annually for compliance, taking into account the evidence available at
the time. In addition, we propose to make a technical edit to Sec.
422.102(f)(1)(i)(A)(2) to correct a typographical error. We describe
each proposal in greater detail below.
First, we propose to redesignate what is currently Sec.
422.102(f)(3) to Sec. 422.102(f)(4), and to address, at new Sec.
422.102(f)(3), new requirements for each MA plan that includes an item
or service as SSBCI in its bid. The MA organization must be able to
demonstrate through relevant acceptable evidence that the item or
service to be offered as SSBCI has a reasonable expectation of
improving or maintaining the health or overall function of a
chronically ill enrollee and must, by the date on which it submits its
bid to CMS, establish a bibliography of all ``relevant acceptable
evidence'' concerning the impact that the item or service has on the
health or overall function of its recipient. The bibliography must be
made available to CMS upon request. As part of this proposal, an MA
organization would be required to include, for each citation in its
written bibliography, a working hyperlink to or a document containing
the entire source cited. This proposal would apply only to SSBCI
offered in the form of additional primarily health-related supplemental
benefits or SSBCI offered in the form of non-primarily health-related
supplemental benefits. It would not apply to an SSBCI offered in the
form of reduced cost sharing, regardless of the benefit for which it is
offered. We also intend, at this time, that the proposal not apply to
supplemental benefits offered under the Value-Based Insurance Design
(VBID) Model administered by the Center for Medicare and Medicaid
Innovation (CMMI), unless CMMI incorporates this policy within the VBID
Model.
We also propose, in new paragraph (f)(3)(iv), that the MA
organization must make its bibliography of relevant acceptable evidence
available to CMS upon request. CMS may request and use this
bibliography, without limitation, during bid review to assess whether
SSBCI offerings comply with regulatory requirements, or during the
coverage year as part of CMS's oversight activities. CMS does not
intend, at this time, to require MA organizations to submit these
bibliographies as a matter of course in submitting bids.
We propose that the term ``relevant acceptable evidence'' would
include large, randomized controlled trials or prospective cohort
studies with clear results, published in a peer-reviewed journal, and
specifically designed to investigate whether the item or service (that
is proposed to be covered as an SSBCI) impacts the health or overall
function of a population, or large systematic reviews or meta-analyses
summarizing the literature of the same. We further propose that the MA
plan must include in its bibliography all relevant acceptable evidence
published within the 10 years preceding the month in which the MA plan
submits its bid. Ideally, relevant acceptable evidence should include
studies and other investigations specific to the chronic conditions for
which the MA organization intends to target the SSBCI, but we are not
proposing to make this a requirement at this time. We are concerned
that relevant acceptable evidence applicable to many SSBCI will already
be limited, and that requiring a bibliography be limited to only
studies concerning certain chronic conditions would discourage the
development of new SSBCI. Similarly, to the extent there exists
sufficient relevant acceptable evidence that the item or service meets
the reasonable expectation standard for a sample of a population, an MA
organization may still offer an SSBCI to enrollees with a specific
chronic condition even in the absence of any studies addressing the
connection between an item or service and its effect on the health or
overall function of individuals with that condition.
We propose that, in the absence of publications that meet these
standards, ``relevant acceptable evidence'' for purposes of the MA
plan's bibliography could include case studies, Federal policies or
reports, and internal analyses or any other investigation of the impact
that the item or service has on the health or overall function of its
recipient. By ``bibliography,'' we mean a list, and not a description,
of scholarly publications or other works, as we describe below.
In our April 2023 final rule, we discussed what constituted
sufficiently high-quality clinical literature in the context of an MA
organization establishing internal clinical criteria for certain
Medicare basic benefits (88 FR 22189, 22197). We believe that those
standards are also applicable for identifying ``relevant acceptable
evidence'' in the context of supporting whether an item or service
offered as SSBCI has a reasonable expectation of improving or
maintaining the health or overall function of a chronically ill
enrollee. Therefore, our proposal for Sec. 422.102(f)(3)(ii) largely
tracks the language in Sec. 422.101(b)(6) describing acceptable
clinical literature for purposes of establishing internal coverage
criteria, but with revisions to be specific to the context of SSBCI and
the reasonable expectation standard.
Literature that CMS considers to be ``relevant acceptable
evidence'' for supporting an SSBCI offering 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 a question relevant to the requirements for offering
and covering SSBCI and how the MA plan will implement the coverage--
such as the impact of structural home modifications on health or
overall function. Literature might also include that which involves
large systematic
[[Page 78537]]
reviews or meta-analyses summarizing the literature specifically
related to the subject of the SSBCI--such as meal delivery,
availability of certain food or produce, or access to pest control--
published in a peer-reviewed journal with clear and consistent results.
Under this proposal, an MA organization would be required to cite all
such available evidence in its bibliography, and not just studies that
present findings favorable to its SSBCI offering.
We also propose that, in the absence of literature that conforms to
these standards for relevant acceptable evidence, an MA organization
would be required to include in its bibliography evidence that is
unpublished, is a case series or report, or derived solely from
internal analyses within the MA organization. In this way, our proposed
policy would deviate from the standard we established for the type of
evidence necessary to support an MA organization's internal coverage
criteria for Medicare basic benefits. We believe this deviation is
appropriate as there is relatively less research into the impact of the
provision on items or services commonly offered as SSBCI on health or
overall function of chronically ill individuals.
We are not proposing that relevant acceptable evidence must
directly address whether there is a reasonable expectation of improving
or maintaining the health or overall function of a chronically ill
enrollee with a specific chronic illness or condition (conditions that
the MA plan would have identified in its PBP submission), but such
materials may be more persuasive than materials that only describe the
impact of certain items and services--particularly non-primarily
health-related items and services--on healthier individuals or
populations. Further, our proposal is limited to SSBCI offered as
additional primarily health-related supplemental benefits and non-
primarily health-related supplemental benefits. We are not proposing to
require a bibliography for SSBCI that are exclusively cost sharing
reductions for Medicare-covered benefits or primarily health-related
supplemental benefits, so the regulation text is limited to SSBCI that
are items or services. Although we are not proposing to apply this new
documentation requirement to cost sharing reductions offered as SSBCI,
that type of SSBCI must also meet the reasonable expectation standard
to be offered as SSBCI.
We believe that this proposal would serve our goal of ensuring that
SSBCI regulatory standards are met--specifically, that an item or
service covered as an SSBCI has a reasonable expectation of improving
or maintaining the health or overall function of a chronically ill
enrollee. We expect that rigorous research like that we describe above
might be limited, and that some studies may not produce results
favorable to the offering of an SSBCI. However, when there are also
favorable studies, the existence of such unfavorable studies does not
necessarily mean that there could not be a ``reasonable expectation''
that the SSBCI would improve or maintain the health or overall function
of a chronically ill enrollee. And it is not our goal that mixed
results in current literature--or the lack of rigorous research at
all--would reduce innovation in SSBCI offerings. We wish to continue to
see MA organizations identify new ways to deliver helpful benefits to
chronically ill enrollees that can address their social needs while
also improving or maintain the health or overall function of these
chronically ill enrollees. Our goal is to ensure that SSBCI innovation
occurs in a manner that is grounded to the extent possible in research,
and that MA organizations and CMS alike are tracking to the most
current research relevant to SSBCI offerings. We believe this proposal
would continue to promote SSBCI innovation while helping to ensure that
when Medicare funds are used to offer SSBCI, such offerings meet
statutory requirements.
We solicit comments on our proposed requirement that an MA
organization that includes an item or service as SSBCI in its bid must,
by the date on which it submits its bid to CMS, establish in writing a
bibliography of all relevant acceptable evidence concerning the impact
that the item or service has on the health or overall function of its
recipient. We also solicit comments on our definition of ``relevant
acceptable evidence,'' including the specific parameters or features of
studies or other resources that would be most appropriate to include in
our definition. We also solicit comments on our proposal that, for each
citation in the written bibliography, the MA organization would be
required to include a working hyperlink to or a document containing the
entire source cited. Additionally, we solicit comments on whether we
should apply this requirement to all items or services offered as
SSBCI, or whether there are certain types or categories of SSBCI for
which this requirement should not apply.
Second, for clarity, we propose to explicitly require at
redesignated Sec. 422.102(f)(4)(iii) that an MA plan apply its written
policies, which must be based on objective criteria, that it
establishes for determining whether an enrollee is eligible to receive
an SSBCI. The regulation currently requires MA organizations to have
written policies based on objective criteria for determining a
chronically ill enrollee's eligibility to receive a particular SSBCI
and must document these criteria. While we anticipate that MA plans are
already applying their written policies that identify the eligibility
criteria when making these determinations, we propose to make clear
that an MA plan must apply its written policies when making SSBCI
eligibility determinations.
We are considering whether to exclude the policies required by
current Sec. 422.102(f)(3) (that is, the requirements we are proposing
to redesignate to new paragraph (f)(4)) from the general rule reflected
in Sec. 422.111(d) that MA plans may change plan rules during the year
so long as notice is provided to enrollees. We solicit comments on
whether CMS should permit changes in SSBCI eligibility policies during
the coverage year, and, if so, the limitations or flexibilities that
CMS should implement that would still allow CMS to provide effective
oversight over SSBCI offerings. The ability to change plan rules during
the year does not permit changes in benefit coverage but would include
policies like utilization management requirements, evidentiary
standards for a specific enrollee to be determined eligible for a
particular SSBCI, or the specific objective criteria used by a plan as
part of SSBCI eligibility determinations.
Third, we are proposing to amend redesignated paragraph (f)(4)(iv)
to require that an MA plan document each instance wherein the plan
determines that an enrollee is ineligible to receive an SSBCI. Denials
of coverage when an enrollee requests an SSBCI are organization
determinations subject to the rules in subpart M, including the
requirements related to the timing and content of denial notices in
Sec. 422.568. By fully documenting denials as required by this
proposal, MA organizations should be better placed to address any
appeals, including when an adverse reconsideration must be sent to the
independent review entity for review. Similarly, requiring robust
documentation of denials of SSBCI by MA organizations will make
oversight and monitoring by CMS easier and more productive, should CMS
request documentation.
We solicit comments on our proposal to require an MA plan to
document its findings that a chronically ill enrollee is ineligible,
rather than eligible, for an SSBCI.
[[Page 78538]]
Fourth, we are proposing to add Sec. 422.102(f)(5) to codify CMS's
authority to decline to approve an MA organization's bid, if CMS
determines that the MA organization has not demonstrated, through
relevant acceptable evidence, that an SSBCI has a reasonable
expectation of improving or maintaining the health or overall function
of the chronically ill enrollees that the MA organization is targeting.
We clarify that while this proposal would establish a specific basis on
which CMS may decline to approve an MA organization's bid, our
authority to enforce compliance with other regulations and to negotiate
bids (see section 1854(a) of the Act and subpart F) would not be
limited by this provision. As described in section 1854(a)(5)(C) of the
Act, CMS is not obligated to accept any or every bid submitted by an MA
organization, and CMS may reject bids that propose significant
increases in cost sharing or decreases in benefits offered under the
plan. Similarly, CMS's authority to review benefits to ensure non-
discrimination is not limited or affected under this proposal. This
proposal is intended to clarify and establish that CMS's review of bids
that include SSBCI could include specific evaluation of SSBCI and that
CMS may decline to approve bids based on a lack of relevant acceptable
evidence in support of the SSBCI offering the MA organization includes
in its bid.
We also propose to codify that, regardless of whether an SSBCI
offering was approved in the past, CMS may annually review the items or
services that an MA organization includes as SSBCI in its bid for
compliance with all applicable requirements, considering the relevant
acceptable evidence applicable to each item or service at the time the
bid is submitted. Under this proposal, CMS would have clear authority
to evaluate an SSBCI included in a bid each year based on the evidence
available at that time. CMS would not be bound to approve a bid that
contains a certain SSBCI only because CMS approved a bid with the same
SSBCI in the past. We believe this provision, if finalized, would help
ensure sound use of Medicare dollars by establishing a clear connection
between an SSBCI and the most current evidence addressing whether there
is a reasonable expectation that the SSBCI will improve or maintain the
health or overall function of a chronically ill enrollee.
We believe that codifying that CMS may decline to approve a bid for
an MA organization to offer certain SSBCI is appropriate to support
CMS's programmatic oversight function. CMS already possesses the
authority to negotiate and reject bids under section 1854 of the Act,
and to establish certain minimum requirements related to SSBCI under
section 1852 of the Act. We can rely on these bases to decline to
approve bids that include SSBCI that lack evidence to support the MA
organization's expectations related to the SSBCI, but we believe it
prudent to establish clearly how our evaluation of individual SSBCI
offerings and the evidence supporting these offerings fit within our
bid negotiation and approval authority. We believe that SSBCI provide a
critical source of innovation, and we wish to see MA organizations
continue to develop impactful benefits tailored to their chronically
ill enrollees. However, we must also ensure that benefits offered
within the MA program comply with all applicable statutory and
regulatory standards. We believe it is critical for effective program
administration that CMS be able to obtain, upon request, relevant
acceptable evidence from an MA organization to support CMS's review of
SSBCI each year in light of the information and evidence available at
that point in time.
We solicit comment on this proposal to codify CMS's authority to
decline to approve an MA organization's bid if the MA organization
fails to demonstrate, through relevant acceptable evidence, that an
SSBCI included in the bid has a reasonable expectation of improving or
maintaining the health or overall function of the chronically ill
enrollees that the MA organization is targeting.
The policies proposed in this section work together to place the
burden of showing whether an item or service offered as SSBCI has a
reasonable expectation of improving the health or overall function of a
chronically ill enrollee onto the MA organization. Implementing these
proposals would change the policy set forth in the 2019 HPMS memo
requiring CMS to provide supporting evidence or data to an MA
organization if CMS determines that an MA plan may not offer a specific
item or service as an SSBCI because it has not met the reasonable
expectation standard. Under these proposals, the MA organization must,
in advance of including an SSBCI in its bid, have already conducted
research on the evidence establishing a reasonable expectation that the
item or service would improve or maintain the health or overall
function of the recipient of the item or service. By the time the MA
organization submits its bid, it must be able to show CMS, upon
request, the relevant applicable evidence that supports the reasonable
expectation that the item or service would improve or maintain the
health or overall function of the chronically ill enrollees it is
targeting. We expect that MA plans are already proactively conducting
similar research and establishing written policies for implementing
SSBCI based on this research when designing them. Additionally, MA
plans may seek guidance from CMS regarding SSBCI items or services not
defined in the PBP or in previous CMS guidance prior to bid submission.
As such, we believe this proposal, if implemented, would create
efficiency while imposing relatively little burden on MA plans.
In addition, under this proposal, MA plans would be required to
document and submit to CMS upon request each determination that an
enrollee is not eligible to receive an SSBCI. We believe that requiring
an MA organization to support its SSBCI offerings with a written
bibliography of relevant acceptable evidence and an MA plan to document
denials of SSBCI work together to ensure that SSBCI are being
implemented in an evidence-based, non-discriminatory, and fair manner.
The evidence base established by an MA organization could serve to
inform an MA plan's objective criteria for determining eligibility. By
requiring an MA plan to document instances of SSBCI denials, we believe
this proposal would improve the experience of MA plans, enrollees, and
CMS in managing and oversight of appeals of such denials. Further, it
would help ensure that MA plans are not denying access to SSBCI based
on factors that are biased or discriminatory or unrelated to the basis
on which the SSBCI are reasonably expected to improve or maintain the
health or overall function of the chronically ill enrollees. For
example, researchers have identified that certain algorithms that have
been used to decide who gets access to additional services can have
clear racial bias, when factors such as expected future cost or
expected future utilization are incorporated into the algorithm.\106\
By codifying CMS' authority to decline to approve a bid that includes
an SSBCI not supported by evidence, this proposal also serves to ensure
appropriate program administration and oversight.
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\106\ See, e.g., Ziad Obermeyer et al., Dissecting racial bias
in an algorithm used to manage the health of populations. Science
366, 447-453 (2019). DOI:10.1126/science.aax2342.
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Finally, we propose to make a technical edit to Sec.
422.102(f)(1)(i)(A)(2) to correct a typographical error. In our June
2020 final rule, we noted that section 1852(a)(3)(D)(ii) of the Act, as
[[Page 78539]]
amended, defines a chronically ill enrollee as an individual who, among
other requirements, ``[h]as a high risk of hospitalization or other
adverse health outcomes[.]'' We then indicated that ``we proposed to
codify this definition of a chronically ill enrollee'' at Sec.
422.102(f)(1)(i). However, our regulation at Sec.
422.102(f)(1)(i)(A)(2) currently reads: ``Has a high risk of
hospitalization of other adverse outcomes[.]'' We propose to substitute
``or'' for the second ``of'' in this provision, such that it aligns
with the statutory language that we intended to codify in our
regulation.
C. Mid-Year Notice of Unused Supplemental Benefits (Sec. Sec.
422.111(l) and 422.2267(e)(42))
Per CMS regulations at Sec. 422.101, MA organizations are
permitted to offer mandatory supplemental benefits, optional
supplemental benefits, and special supplemental benefits for the
chronically ill (SSBCI). When submitting an annual bid to participate
in the MA program, an MA organization includes a Plan Benefit Package
(PBP) and Bid Pricing Tool (BPT) for each of its plans where the MA
organization provides information to CMS on the premiums, cost sharing,
and supplemental benefits (including SSBCI) it proposes to offer. The
number of supplemental benefit offerings has risen significantly in
recent years, as observed through trends identified in CMS's annual PBP
reviews. In 2023, roughly $61 billion was directed towards supplemental
benefits in MA. At the same time, CMS has received reports that MA
organizations have observed low utilization of these benefits by their
enrollees, and it is unclear whether plans are actively encouraging
utilization of these benefits by their enrollees, which could be an
important part of a plan's overall care coordination efforts.
CMS remains concerned that utilization of these benefits is low and
has taken multiple steps to obtain more complete data in this area. For
example, in the May 2022 final rule, we finalized expanded Medical Loss
Ratio (MLR) reporting requirements, requiring MA organizations to
report expenditures on popular supplemental benefit categories such as
dental, vision, hearing, transportation, and the fitness benefit (87 FR
27704, 27826-28).\107\ In addition, in March 2023, as a part of our
Part C reporting requirements, we announced our intent to collect data
to better understand the utilization of supplemental benefits, which if
finalized, would include requiring MA plans to report utilization and
cost data for all supplemental benefit offerings (88 FR 15726).
Currently, there is no specific requirement for MA organizations,
beyond more general care coordination requirements, to conduct outreach
to enrollees to encourage utilization of supplemental benefits.
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\107\ Available at https://www.federalregister.gov/documents/2022/05/09/2022-09375/medicare-program-contract-year-2023-policy-and-technical-changes-to-the-medicare-advantage-and.
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CMS understands that projected supplemental benefit utilization,
that is, the extent to which an MA organization expects a particular
supplemental benefit to be accessed during a plan year, is estimated by
an MA organization in part by the type and extent of outreach conducted
for the benefit.\108\ We are concerned that beneficiaries may make
enrollment decisions based on the allure of supplemental benefits that
are extensively marketed by a given MA plan during the annual election
period (AEP) only to not fully utilize, or utilize at all, those
supplemental benefits during the plan year. This underutilization may
be due to a lack of effort by the plan to help the beneficiary access
the benefits or a lack of easy ability to know what benefits have not
been accessed and are still available to the enrollee throughout the
year. Such underutilization of supplemental benefits may nullify any
potential health value offered by these extra benefits.
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\108\ U.S. Government Accountability Office (GAO). ``MEDICARE
ADVANTAGE Plans Generally Offered Some Supplemental Benefits, but
CMS Has Limited Data on Utilization.'' Report to Congressional
Committee, 31 Jan. 2023, p. 20, www.gao.gov/products/gao-23-105527.
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Additionally, section 1854(b)(1)(C) requires that MA plans offer
the value of MA rebates back to enrollees in the form of payment for
supplemental benefits, cost sharing reductions, or payment of Part B or
D premiums. Therefore, CMS has an interest in ensuring that MA rebates
are provided to enrollees in a way that they can benefit from the value
of these rebate dollars. For example, analysis indicates that while
supplemental dental benefits are one of the most widely offered
supplemental benefits in MA plans, enrollees in these plans are no more
likely to access these services than Traditional Medicare
enrollees.\109\
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\109\ https://www.cms.gov/research-statistics-data-and-systems/research/mcbs/data-briefs/dental-coverage-status-and-utilization-preventive-dental-services-medicare-beneficiaries-poster.
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As discussed, MA organizations are given the choice of how to
provide MA rebates to their enrollees. Organizations may, instead of
offering supplemental benefits in the form of covering additional items
and services, use rebate dollars to further reduce Part B and Part D
premiums, reduce cost sharing for basic benefits compared to cost
sharing in Traditional Medicare, and reduce cost sharing in other ways,
such as reducing maximum out-of-pocket (MOOP) amounts.
Over the last several years, CMS has observed upticks in (1) the
number and variety of supplemental benefits offered by MA plans, (2)
plan marketing activities by MA organizations, and (3) overall MA
enrollment; we presume that an enrollee's plan choice is influenced, at
least in part, by the supplemental benefits an MA plan offers because
the absence or presence of a particular supplemental benefit represents
a distinguishable and easily understood difference between one plan and
another. We are also concerned that some MA plans may be using these
supplemental benefits primarily as marketing tools to steer enrollment
towards their plan and are not taking steps to ensure that their
enrollees are using the benefits being offered or tracking if these
benefits are improving health or quality of care outcomes or addressing
social determinants of health. We believe targeted communications
specific to the utilization of supplemental benefits may further ensure
that covered benefits (including those that are heavily marketed) are
accessed and used by plan enrollees during the plan year. This
outreach, in conjunction with the improved collection of utilization
data for these supplemental benefits through MLR and our proposed
collection through Part C reporting, should help inform whether future
rulemaking is warranted.
Finally, CMS is also 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. Several studies have pointed to
disparities in health care utilization. For example, a Kaiser Family
Foundation (KFF) study \110\ found that there are significant racial
and ethnic disparities in utilization of care among individuals with
health insurance. Additionally, underserved populations tend to have a
disproportionate prevalence of unmet social determinants of health
needs,
[[Page 78540]]
which can adversely affect health. We believe that the ability to offer
supplemental benefits provides MA plans the unique opportunity to use
Trust Fund dollars (in the form of MA rebates) to fill in coverage gaps
in Traditional Medicare, by offering additional health care benefits or
SSBCI that address unmet social determinants of health needs, and as
such, all eligible MA enrollees should benefit from these offerings.
Targeted outreach specific to the utilization of supplemental benefits
may also serve to further ensure more equitable utilization of these
benefits.
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\110\ https://www.kff.org/report-section/racial-and-ethnic-disparities-in-access-to-and-utilization-of-care-among-insured-adults-issue-brief/.
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The establishment of a minimum requirement for targeted outreach
with respect to supplemental benefits that have not been accessed by
enrollees would standardize a process to ensure all enrollees served
under MA are aware of and utilizing, as appropriate, the supplemental
benefits available to them. Section 1852(c)(1) of the Act requires, in
part, that MA organizations disclose detailed descriptions of plan
provisions, including supplemental benefits, in a clear, accurate, and
standardized form to each enrollee of a plan at the time of enrollment
and at least annually thereafter. We propose to use our authority to
establish standards under Part C in section 1856(b)(1) of the Act to
ensure adequate notice is provided to enrollees regarding supplemental
benefits coverage. This proposal will further implement the disclosure
requirement in section 1852(c)(1)(F) of the Act. Specifically, we
propose that MA organizations must provide a model notification to
enrollees of supplemental benefits they have not yet accessed. We
propose to meet this goal by adding new provisions at Sec. Sec.
422.111(l) and 422.2267(e)(42) to establish this new disclosure
requirement and the details of the required notice, respectively.
This proposed requirement would ensure that a minimum outreach
effort is conducted by MA organizations to inform enrollees of
supplemental benefits available under their plan that the enrollee has
not yet accessed. We propose that, beginning January 1, 2026, MA
organizations must mail a mid-year notice annually, but not sooner than
June 30 and not later than July 31 of the plan year, to each enrollee
with information pertaining to each supplemental benefit available
during that plan year that the enrollee has not begun to use. We
understand that there may be a lag between the time when a benefit is
accessed and when a claim is processed, so we would require that the
information used to identify recipients of this notice be as up to date
as possible at the time of mailing. MA organizations are not required
to include supplemental benefits that have been accessed, but are not
yet exhausted, in this proposed mid-year notice.
Understanding that not all Medicare beneficiaries enroll in an MA
plan during the AEP, we are specifically seeking comment on how CMS
should address the timing of the notice for beneficiaries that have an
enrollment effective date after January 1. One possible approach we are
considering is to require the notice to be sent six months after the
effective date of the enrollment for the first year of enrollment, and
then for subsequent years, revert to mailing the notice between the
proposed delivery dates of June 30 and July 31. Another option CMS is
considering is to not require the notice to be mailed for the first
year of enrollment for those beneficiaries with an effective date of
May 1 or later, as they would be receiving their Evidence of Coverage
(EOC) at around this same time but will not have had significant time
in which to access these benefits. Those enrollees who would be exempt
from the mailing, based on their enrollment effective date, would then
receive the notice (if applicable because one or more supplemental
benefits have not been accessed by the enrollee) between June 30 and
July 31 in subsequent enrollment years.
For each covered mandatory supplemental benefit and optional
supplemental benefit (if the enrollee has elected) the enrollee is
eligible for, but has not accessed, the MA organization must list in
the notice the information about each such benefit that appears in EOC.
For SSBCI, MA organizations must include an explanation of the SSBCI
covered under the plan (including eligibility criteria and limitations
and scope of the covered items and services) and must also provide
point-of-contact information (which can be the customer service line or
a separate dedicated line), with trained staff that enrollees can
contact to inquire about or begin the SSBCI eligibility determination
process and to address any other questions the enrollee may have about
the availability of SSBCI under their plan. When an enrollee has been
determined by the plan to be eligible for one or more specific SSBCI
but has not accessed the SSBCI benefit by June 30 of the plan year, the
notice must also include a description of the SSBCI to which the
enrollee is entitled and must describe any limitations on the benefit.
Note the proposals at section VI.A of this proposed rule that, if
finalized, would require specific SSBCI disclaimers for marketing and
communications materials that discuss the limitations of the SSBCI
benefit being offered; we also propose that this mid-year notice must
include the SSBCI disclaimer to ensure that the necessary information
provided in the disclaimer is also provided to the enrollee in the
notice.
Furthermore, we are proposing that each notice must include the
scope of the supplemental benefit(s), applicable cost sharing,
instructions on how to access the benefit(s), applicable information on
the use of network providers for each available benefit, list the
benefits consistent with the format of the EOC, and a toll-free
customer service number and, as required, a corresponding TTY number to
call if additional help is needed. We solicit comments on the required
content of the mid-year notice.
We request comment on our proposal to require MA plans to provide
enrollees with mid-year notification of covered mandatory and optional
supplemental benefits (if elected) that have not been at least
partially accessed by that enrollee, particularly the appropriate
timing (if any) of the notice for MA enrollees who enroll in the plan
mid-year.
D. Annual Health Equity Analysis of Utilization Management Policies and
Procedures
In recent years, CMS has received feedback from interested parties,
including people with Medicare, patient groups, consumer advocates, and
providers that utilization management (UM) practices in Medicare
Advantage (MA), especially the use of prior authorization, can
sometimes create a barrier for patients in accessing medically
necessary care. Further, some research has indicated that the use of
prior authorization may disproportionately impact individuals who have
been historically underserved, marginalized, and adversely affected by
persistent poverty and inequality,\111\ due to several factors,
including; the administrative burden associated with processing prior
authorization requests (for example, providers and administrative staff
serving historically underserved populations, in particular, may not
have the time or resources to complete the prior authorization process,
including navigating the appeals process \112\), a reduction in
medication adherence, and overall worse medical outcomes due to delayed
or denied care. Research has also shown
[[Page 78541]]
that dual eligibility for Medicare and Medicaid is one of the most
influential predictors of poor health outcomes, and that disability is
also an important risk factor linked to health outcomes.\113\
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\111\ https://www.hmpgloballearningnetwork.com/site/frmc/commentary/addressing-health-inequities-prior-authorization; and
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10024078/.
\112\ http://abcardio.org/wp-content/uploads/2019/03/AB-20190227-PA-White-Paper-Survey-Results-final.pdf.
\113\ 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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On January 20, 2021, President Biden issued Executive Order 13985:
``Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government'' (E.O. 13985).\114\ 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. Consistent with this Executive
order, CMS announced ``Advance Equity'' as the first pillar of its 2022
Strategic Plan.\115\ This pillar emphasizes the importance of advancing
health equity by addressing the health disparities that impact our
health care 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.'' \116\
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\114\ 86 FR 7009 (January 25, 2021); https://www.federalregister.gov/d/2022-26956/p-227.
\115\ 87 FR 79479 fn. 7 (December 27, 2022); https://www.federalregister.gov/d/2022-26956/p-228.
\116\ 87 FR 79479 fn. 8 (December 27, 2022); https://www.federalregister.gov/d/2022-26956/p-229.
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The April 2023 final rule \117\ included several policy changes to
advance health equity, as well as changes to address concerns from
interested parties about the use of utilization management policies and
procedures, including prior authorization, by MA plans. CMS understands
that utilization management is an important means to coordinate care,
reduce inappropriate utilization, and promote cost-efficient care. The
April 2023 final rule adopted several important guardrails to ensure
that utilization management policies and procedures are used, and
associated coverage decisions are made, in ways that ensure timely and
appropriate access to covered items and services for people enrolled in
MA plans. CMS also continues to work to identify regulatory actions
that can help support CMS's goal to advance health equity and improve
access to covered benefits for enrollees.
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\117\ ``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, which
appeared in the Federal Register on April 12, 2023 (88 FR 22120).
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Authority for MA organizations to use utilization management
policies and procedures regarding 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 statutory provisions. In
addition, the MA statute and MA contracts cover both the basic and
supplemental benefits covered under MA plans, so additional contract
terms added by CMS pursuant to section 1857(e)(1) of the Act may also
address supplemental benefits. Additionally, per section 1852(b) of the
Act and Sec. 422.100(f)(2), plan designs and benefits may not
discriminate against beneficiaries, promote discrimination, discourage
enrollment, encourage disenrollment, steer subsets of Medicare
beneficiaries to particular MA plans, or inhibit access to services.
These requirements apply to both basic and supplemental benefits. We
consider utilization management policies and procedures to be part of
the plan benefit design, and therefore they cannot be used to
discriminate or direct enrollees away from certain types of services.
In the April 2023 final rule, CMS finalized a new regulation at
Sec. 422.137, which requires all MA organizations that use UM policies
and procedures to establish a Utilization Management Committee to
review and approve all UM policies and procedures at least annually and
ensure consistency with Traditional Medicare's national and local
coverage decisions and relevant Medicare statutes and regulations. Per
Sec. 422.137, 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. While this requirement will ensure that all UM policies and
procedures are kept up to date, we believe that reviewing and analyzing
these policies from a health equity perspective is an important
beneficiary protection. In addition, such an analysis may assist in
ensuring that MA plan designs do not deny, limit, or condition the
coverage or provision of benefits on a prohibited basis (such as a
disability) and are not likely to substantially discourage enrollment
by certain MA eligible individuals with the organization. For these
reasons, we propose to add health equity-related requirements to Sec.
422.137. First, we propose at Sec. 422.137(c)(5) to require that
beginning January 1, 2025, the UM committee must include at least one
member with expertise in health equity. We are proposing that health
equity expertise includes educational degrees or credentials with an
emphasis on health equity, experience conducting studies identifying
disparities amongst different population groups, experience leading
organization-wide policies, programs, or services to achieve health
equity, or experience leading advocacy efforts to achieve health
equity. Since there is no universally accepted definition of expertise
in health equity, we referred to materials from the Council on Linkages
Between Academia and Public Health Practice \118\ and the National
Board of Public Health Examiners,\119\ to describe ``expertise in
health equity'' in the context of MA and prior authorization.
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\118\ https://www.phf.org/resourcestools/Documents/Core_Competencies_for_Public_Health_Professionals_2021October.pdf.
\119\ https://www.nbphe.org/cph-content-outline/.
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We also propose to add a requirement at Sec. 422.137(d)(6) that
the UM committee must conduct an annual health equity analysis of the
use of prior authorization. We propose that the member of the UM
committee, who has health equity expertise, as required at the proposed
Sec. 422.137(c)(5), must approve the final report of the analysis
before it is posted on the plan's publicly available website. The
proposed analysis would examine the impact of prior authorization at
the plan level, on enrollees with one or more of the following social
risk factors (SRF): (1) receipt of the low-income subsidy or being
dually eligible for Medicare and Medicaid (LIS/DE); or (2) having a
disability. Disability status is determined using the variable original
reason for entitlement code (OREC) for Medicare using the information
from the Social Security Administration and Railroad Retirement Board
record systems. CMS chose these SRFs because they mirror the SRFs that
will be used to measure the Heath Equity Index reward for the 2027 Star
Ratings (see Sec. 422.166(f)(3)), and we believe it is important to
align expectations and metrics across the program. Moreover, CMS is
requiring this analysis to take place at the MA plan level because the
relevant information regarding enrollees with the specified SRFs is
available at
[[Page 78542]]
the plan level, and we believe this level of analysis is important to
discern the actual impact of the use of utilization management on
enrollees that may be particularly subject to health disparities.
To gain a deeper understanding of the impact of prior authorization
practices on enrollees with the specified SRFs, the proposed analysis
must compare metrics related to the use of prior authorization for
enrollees with the specified SRFs to enrollees without the specified
SRFs. This will allow the MA plan and CMS to begin to identify whether
the use of prior authorization causes any persistent disparities among
enrollees with the specified SRFs. The proposed analysis must use the
following metrics, calculated for enrollees with the specified SRFS,
and for enrollees without the specified SRFs, from the prior contract
year, to conduct the analysis:
The percentage of standard prior authorization requests
that were approved, aggregated for all items and services.
The percentage of standard prior authorization requests
that were denied, aggregated for all items and services.
The percentage of standard prior authorization requests
that were approved after appeal, aggregated for all items and services.
The percentage of prior authorization requests for which
the timeframe for review was extended, and the request was approved,
aggregated for all items and services.
The percentage of expedited prior authorization requests
that were approved, aggregated for all items and services.
The percentage of expedited prior authorization requests
that were denied, aggregated for all items and services.
The average and median time that elapsed between the
submission of a request and a determination by the MA plan, for
standard prior authorizations, aggregated for all items and services.
The average and median time that elapsed between the
submission of a request and a decision by the MA plan for expedited
prior authorizations, aggregated for all items and services.
We propose to add at Sec. 422.137(d)(7) that by July 1, 2025, and
annually thereafter, the health equity analysis be posted on the plan's
publicly available website in a prominent manner and clearly identified
in the footer of the website. We propose that the health equity
analysis must be easily accessible to the general public, without
barriers, including but not limited to ensuring the information is
available: free of charge; without having to establish a user account
or password; without having to submit personal identifying information
(PII); in a machine-readable format with the data contained within that
file being digitally searchable and downloadable from a link in the
footer of the plan's publicly available website, and include a .txt
file in the root directory of the website domain that includes a direct
link to the machine-readable file, in a format described by CMS (which
CMS will provide in guidance), to establish and maintain automated
access. We believe that by making this information more easily
accessible to automated searches and data pulls, it will help third
parties develop tools and researchers conduct studies that further aid
the public in understanding the information and capturing it in a
meaningful way across MA plans.
Finally, we welcome comment on this proposal and seek comment on
the following:
Additional populations CMS should consider including in
the health equity analysis, including but not limited to: Members of
racial and ethnic communities, members of the lesbian, gay, bisexual,
transgender, and queer (LGBTQ+) community; individuals with limited
English proficiency; members of rural communities; and persons
otherwise adversely affected by persistent poverty or inequality.
If there should be further definition for what constitutes
``expertise in health equity,'' and if so, what other qualifications to
include in a definition of ``expertise in health equity.''
The proposed requirements for publicly posting the results
on the plan's website under Sec. 422.137(d)(7) to ensure the data will
be easily accessible to both the public and researchers.
Alternatives to the July 1, 2025, deadline for the initial
analysis to be posted to the plan's publicly available website.
CMS is considering adding an additional requirement that
the UM Committee submit to CMS the link to the analysis report. This
would allow CMS to post every link in one centralized location. We
believe this would increase accessibility and transparency.
In addition, we request comment on any specific items or services,
or groups of items or services, subject to prior authorization that CMS
should consider also disaggregating in the analysis to consider for
future rulemaking. If further disaggregation of a group of items or
services is requested, CMS is soliciting comment on what specific items
or services would be included within the group. For example, if CMS
should consider disaggregating a group of items or services related to
behavioral health treatment in the health equity analysis, what items
or services should CMS consider a part of behavioral health treatment.
V. Enrollment and Appeals
A. Revise Initial Coverage Election Period Timeframe To Coordinate With
A/B Enrollment (Sec. 422.62)
Section 4001 of the Balanced Budget Act of 1997 (Pub. L. 105-33)
added sections 1851 through 1859 to the Social Security Act (the Act)
establishing Part C of the Medicare program known originally as
``Medicare+Choice'' (M+C) and later as Medicare Advantage (MA). As
enacted, section 1851(e) of the Act establishes specific parameters in
which elections can be made and/or changed during enrollment and
disenrollment periods under the MA program. Specifically, section
1851(e)(1) of the Act requires that the Secretary specify an initial
coverage election period (ICEP) during which an individual who first
becomes entitled to Part A benefits and enrolled in Part B may elect an
MA plan. The statute further stipulates that if an individual elects an
MA plan during that period, coverage under the plan will become
effective as of the first day on which the individual may receive that
coverage. Consistent with this section of the Act, in the Medicare
Program; Establishment of the Medicare+Choice Program interim final
rule with comment period which appeared in the Federal Register on June
26, 1998, (herein referred to as the June 1998 interim final rule), CMS
codified this policy at Sec. 422.62(a)(1) (63 FR 35072).
In order for an individual to have coverage under an MA plan,
effective as of the first day on which the individual may receive such
coverage, the individual must elect an MA plan before he or she is
actually entitled to Part A and enrolled in Part B coverage. Therefore,
in the June 1998 interim final rule CMS codified the ICEP to begin 3
months prior to the month the individual is first entitled to both Part
A and enrolled in Part B and ends the last day of the month preceding
the month of entitlement (63 FR 35072).
Section 102 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173) revised section
1851(e)(1) of the Act to provide for an ICEP for MA that ends on the
later of, the day it would end under pre-MMA rules as described above,
or the last day of an individual's Medicare Part B initial enrollment
period (IEP). This approach extended an individual's ICEP which
[[Page 78543]]
helped to ensure that an individual who uses their IEP to enroll in
Medicare Part A and B has the opportunity to elect an MA or MA
prescription drug (MA-PD) plan following their first entitlement to
Part A and enrollment in Part B. Consistent with the revised provisions
of section 1851(e)(1) of the Act, CMS codified this policy at Sec.
422.62(a)(1) in the Medicare Program; Establishment of the Medicare
Advantage Program final rule which appeared in the Federal Register on
January 28, 2005 (70 FR 4717).
As described in Sec. 422.50(a)(1), eligibility for MA or MA-PD
enrollment generally requires that an individual first have Medicare
Parts A and B and meet all other eligibility requirements to do so. The
ICEP is the period during which an individual newly eligible for MA may
make an initial enrollment request to enroll in an MA or MA-PD plan.
Currently, once an individual first has both Parts A and B, their ICEP
begins 3 months immediately before the individual's first entitlement
to Medicare Part A and enrollment in Part B and ends on the later of:
The last day of the month preceding entitlement to Part A
and enrollment in Part B, or;
The last day of the individual's Part B IEP.
Individuals who want to enroll in premium-Part A, Part B, or both,
must submit a timely enrollment request during their IEP, the General
Enrollment Period (GEP), or an existing special enrollment period (SEP)
for which they are eligible. Eligible individuals may choose to enroll
in both Part A and B during their first opportunity, that is, during
their IEP. These individuals have an ICEP as described in Sec.
422.62(a)(1)(ii), that is, they can choose to enroll in an MA plan
(with or without drug coverage) at the time of, or after, they have
both Part A and B, up until the last day of their IEP. However, not all
individuals enroll in both Part A and B during their IEP. Other
individuals, such as those who are working past age 65, may not have
both Part A and B for the first time until after their IEP. These
individuals may only have Part A and/or B for the first time when they
use an SEP or a future GEP to enroll. To note, prior to January 1,
2023, individuals who enrolled in Part A and/or Part B during the GEP
had a universal effective date of July 1st. These individuals had an
ICEP as described in Sec. 462.22(a)(1)(i), that is, the ICEP started
April 1st and ended June 30th. Although these individuals had to decide
whether to enroll in an MA or MA-PD plan prior to their July 1st
effective date, they did have time to consider their options, as the
GEP is January 1st-March 31st annually, and their enrollment in Part B,
(and Part A if applicable), was not effective until July 1st. However,
the Consolidated Appropriations Act, 2021, (CAA) (Pub. L. 116-260),
revised sections 1838(a)(2)(D)(ii) and 1838(a)(3)(B)(ii) of the Act to
provide that for individuals who enroll during the GEP in a month
beginning on or after January 1, 2023, their entitlement would begin
with the first day of the month following the month in which they
enroll. For example, if an individual has Part A, but enrolls in Part B
in March, during the GEP, they would first have both Part A and Part B
effective April 1st. Although this provides for an earlier Medicare
effective date, the individual's ICEP would occur prior to that
Medicare effective date, that is, as described in Sec. 422.62(a)(1)(i)
above, and they no longer have that additional time to consider their
options.
Currently, the individuals described above have an ICEP as
described in Sec. 422.62(a)(1)(i) and can only enroll in an MA plan
(with or without drug coverage) prior to the effective date of their
Part A and B coverage. For example, an individual's 65th birthday is
April 20, 2022, and they are eligible for Medicare Part A and Part B
beginning April 1, 2022. They have premium-free Part A; however, the
individual is still working, and has employer health insurance, so they
decide not to enroll in Part B during their IEP. The individual retires
in April 2023, and enrolls in Part B effective May 1, 2023 (using a
Part B SEP). The individual's ICEP would be February 1st through April
30, 2023. These individuals need to decide if they want to receive
their Medicare coverage through an MA plan prior to the effective date
of their enrollment in both Part A and B. In this example, the
individual would have to enroll in an MA plan using the ICEP by April
30, 2023.
Section 422.62(a)(1) was intended to provide beneficiaries who
enroll in both Part A and Part B for the first time with the
opportunity to elect an MA plan at the time that both their Part A and
B coverage were effective. However, in practice, individuals described
above, who do not enroll in Part B during their IEP, do not have an
opportunity to elect to receive their coverage through an MA plan after
their Part A and B coverage goes into effect. When an individual
enrolls in both Part A and B for the first time using an SEP or the
GEP, they have to determine, prior to the start of their coverage, if
they want to receive their coverage through Original Medicare or an MA
plan prior to the effective date of their Part A and B coverage. If
they do not use their ICEP to enroll in an MA plan prior to when their
Part A and B coverage becomes effective, they lose the opportunity to
enroll in an MA plan to receive their Medicare coverage and will
generally have to wait until the next enrollment period that is
available to them to choose an MA plan.
To provide more flexibility, we are proposing to revise the end
date for the ICEP for those who cannot use their ICEP during their IEP.
That is, we are proposing in Sec. 422.62(a)(1)(i) that an individual
would have 2 months after the month in which they are first entitled to
Part A and enrolled in Part B to use their ICEP. Under proposed Sec.
422.62(a)(1)(i), the individual's ICEP would begin 3 months prior to
the month the individual is first entitled to Part A and enrolled in
Part B and would end on the last day of the second month after the
month in which the individual is first entitled to Part A and enrolled
in Part B. Using the example above, we are proposing that the
individual's ICEP would be February 1st through June 30, 2023, instead
of February 1st to April 30th. As described in Sec. 422.68(a)(1), if
an election is made prior to the month of entitlement in both Part A
and Part B, the MA election would be effective as of the first date of
the month that the individual is entitled to both Part A and Part B.
We believe that extending the timeframe for the ICEP under Sec.
422.62(a)(1)(i) would provide beneficiaries that are new to Medicare
additional time to decide if they want to receive their coverage
through an MA plan. We believe that extending this timeframe would help
those new to Medicare to explore their options and select coverage that
best suits their needs and reduce the number of instances where an
individual inadvertently missed their ICEP and has to wait until the
next open enrollment period to enroll in MA or MA-PD plan. This
proposal also supports President Biden's April 5, 2022 Executive Order
on Continuing to Strengthen Americans' Access to Affordable, Quality
Health Coverage,\120\ which, among other things, requires agencies to
examine policies or practices that make it easier for all consumers to
enroll in and retain coverage, understand their coverage options and
select appropriate coverage, and also examine policies or practices
[[Page 78544]]
that strengthen benefits and improve access to health care providers.
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\120\ 87 FR 20689 (April 8, 2022); https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/.
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This proposed change in the ICEP timeframe aligns with the SEP
timeframe that we have established in Sec. 422.62(b)(10), for
individuals to enroll in an MA or MA-PD plan when their Medicare
entitlement determination is made for a retroactive effective date, and
the individual has not been provided the opportunity to elect an MA or
MA-PD plan during their ICEP. It also aligns with the timeframe we have
established in Sec. 422.62(b)(26), effective January 1, 2024, for an
individual to enroll in an MA plan when they enroll in Part A and/or
Part B using an exceptional condition SEP, as described in Sec. Sec.
406.27 and 407.23.
This proposal would extend the timeframe of an existing enrollment
period and would not result in a new or additional paperwork burden
since MA organizations are currently assessing applicants' eligibility
for election periods as part of existing enrollment processes. All
burden impacts of these provisions have already been accounted for
under OMB control number 0938-1378 (CMS-10718). Similarly, we do not
believe the proposed changes would have any impact to the Medicare
Trust Fund.
B. Enhance Enrollees' Right To Appeal an MA Plan's Decision To
Terminate Coverage for Non-Hospital Provider Services (Sec. 422.626)
Medicare Advantage (MA) enrollees have the right to a fast-track
appeal by an Independent Review Entity (IRE) when their covered skilled
nursing facility (SNF), home health, or comprehensive outpatient
rehabilitation facility (CORF) services are being terminated. The
regulations for these reviews at the request of an MA enrollee are
located at 42 CFR 422.624 and 422.626. Section 422.624 requires these
providers of services to deliver a standardized written notice to the
enrollee of the MA organization's decision to terminate the provider's
services for the enrollee. This notice, called the Notice of Medicare
Non-Coverage (NOMNC), must be furnished to the enrollee before services
from the providers are terminated. The NOMNC informs enrollees of their
right to a fast-track appeal of the termination of these provider
services and how to appeal to the IRE. CMS currently contracts with
certain Quality Improvement Organizations (QIOs) that have contracts
under Title XI, Part B and section 1862(g) of the Act to perform as the
IRE for these specific reviews. The NOMNC is subject to the Paperwork
Reduction Act (PRA) process and approval by the Office of Management
and Budget (OMB). There is a parallel appeal process in effect for
Medicare beneficiaries in Original Medicare (42 CFR 405.1200 and
405.1202).
Presently, if an MA enrollee misses the deadline to appeal as
stated on the NOMNC, the appeal is considered untimely, and the
enrollee loses their right to a fast-track appeal to the QIO. Enrollees
may, instead, request an expedited reconsideration by their MA plan, as
described in Sec. 422.584. The QIO is unable to accept untimely
requests from MA enrollees but does perform appeals for untimely
requests from Medicare beneficiaries in Original Medicare as described
at Sec. 405.1202(b)(4).
Further, MA enrollees forfeit their right to appeal to the QIO if
they leave a facility or otherwise end services from one of these
providers before the termination date listed on the NOMNC, even if
their appeal requests to the QIO are timely. (The MA enrollee retains
the right to appeal to their MA plan in such cases because the decision
to terminate the services is an appealable organization determination
per Sec. 422.566(b)(3).) Beneficiaries in Original Medicare retain
their right to appeal to the QIO, regardless of whether they end
services before the termination date on the NOMNC.
This proposed rule would modify the existing regulations regarding
fast-track appeals for enrollees when they untimely request an appeal
to the QIO, or still wish to appeal after they end services on or
before the planned termination date. The proposed changes would bring
the MA program further into alignment with Original Medicare
regulations and procedures for the parallel appeals process. Finally,
these changes were recommended by interested parties in comments to a
previous rulemaking (CMS-4201-P, February 27, 2022).
Specifically, the proposed changes would (1) require the QIO,
instead of the MA plan, to review untimely fast-track appeals of an MA
plan's decision to terminate services in an HHA, CORF, or SNF; and (2)
allow enrollees the right to appeal the decision to terminate services
after leaving an SNF or otherwise ending covered care before the
planned termination date. The proposed changes are modeled after the
parallel process in effect for Original Medicare at 42 CFR 405.1200
through 405.1202.
To implement these changes, we are proposing to revise Sec.
422.626(a)(2) to specify that if an enrollee makes an untimely request
for a fast-track appeal, the QIO will accept the request and perform
the appeal. We would also specify that the IRE decision timeframe in
Sec. 422.626(d)(5) and the financial liability provision in Sec.
422.626(b) would not apply. The provision for untimely appeal requests
by enrollees in proposed Sec. 422.626(a)(2) closely parallel 422 CFR
405.1202(b)(4) which establishes that the QIO will review untimely
appeals of terminations of certain provider services from beneficiaries
in Original Medicare.
Secondly, we propose removing the provision at Sec. 422.626(a)(3)
that prevents enrollees from appealing to the QIO if they end their
covered services on or before the date on their termination notice,
even in instances of timely requests for fast-track appeals. Removal of
this provision preserves the appeal rights of MA enrollees who receive
a termination notice, regardless of whether they decide to leave a
provider or stop receiving their services.
This proposed expedited coverage appeals process would afford
enrollees in MA plans access to similar procedures for fast-track
appeals as for beneficiaries in Original Medicare in the parallel
process. Untimely enrollee fast-track appeals would be absorbed into
the existing process for timely appeals at Sec. 422.626, and thus,
would not necessitate additional changes to the existing fast-track
process. The burden on MA plans would be minimal and would only require
that MA plans provide notices as required at Sec. 422.626(d)(1) for
these appeals. Further MA plans would no longer have to perform the
untimely appeals as currently required at Sec. 422.626(a)(2).
Beneficiary advocacy organizations, in comments to previous rulemakings
on this topic, supported changes that would afford enrollees more time
to appeal and afford access to IRE appeals even for untimely requests.
The burden of conducting these reviews is currently approved under
OMB collection 0938-0953. The proposed changes would require that
untimely fast-track appeals would be performed by the QIO, rather than
the enrollee's health plan; thus, any burden related to this proposal
would result in a shift in fast-track appeals from health plans to
QIOs.
C. Amendments to Part C and Part D Reporting Requirements (Sec. Sec.
422.516 and 423.514)
CMS has authority under sections 1857(e)(1) and 1860D-12(b)(3)(D)
of the Act to require MA organizations and Part D plan sponsors to
provide CMS ``with such information . . . as the Secretary may find
necessary and appropriate.'' CMS also has authority, in
[[Page 78545]]
section 1856(b) of the Act, to establish standards to carry out the MA
program.
Likewise, existing CMS regulations cover a broad range of topics
and data to be submitted to CMS. Under these authorities, CMS
established reporting requirements at Sec. Sec. 422.516(a) (Validation
of Part C reporting requirements) and 423.514(a) (Validation of Part D
reporting requirements), respectively. Pursuant to Sec. Sec.
422.516(a) and 423.514(a), each MA organization and Part D sponsor must
have an effective procedure to develop, compile, evaluate, and report
information to CMS at the times and in the manner that CMS requires. In
addition, Sec. Sec. 422.504(f)(2) and 423.505(f)(2) require MA
organizations and Part D plan sponsors, respectively, to submit to CMS
all information that is necessary for CMS ``to administer and
evaluate'' the MA and Part D programs and to facilitate informed
enrollment decisions by beneficiaries. Part D sponsors are also
required to report all data elements included in all its drug claims by
Sec. 422.505(f)(3). Sections 422.504(f)(2), 422.516(a), 423.505(f)(2),
and 423.514(a) each list general topics of information and data to be
provided to CMS, including benefits, enrollee costs, quality and
performance, cost of operations, information demonstrating that the
plan is fiscally sound, patterns of utilization, information about
beneficiary appeals and grievances, and information regarding actions,
reviews, findings, or other similar actions by States, other regulatory
bodies, or any other certifying or accrediting organization.
For many years, CMS has used this authority to collect
retrospective information from MA organizations and Part D sponsors
according to the Parts C and D Reporting Requirements that we issue
each year, which can be accessed on CMS's website.\121\ In addition to
the data elements, reporting frequency and timelines, and levels of
reporting found in the Reporting Requirements information collection
documents, CMS also issues Technical Specifications, which supplement
the Reporting Requirements and serve to further clarify data elements
and outline CMS's planned data analyses. The reporting timelines and
required levels of reporting may vary by reporting section. While many
of the current data elements are collected in aggregate at the contract
level, such as grievances, enrollment/disenrollment, rewards and
incentives, and payments to providers, the collection of more granular
data is also supported by the regulations. CMS has the ability to
collect more granular data, per the Part C and D Reporting Requirements
as set forth in Sec. Sec. 422.516(a) and 423.514(a), or to collect
more timely data with greater frequency or closer in real-time than we
have historically done. We propose revisions to update Sec. Sec.
422.516(a) and 423.514(a). Section 422.516 currently reads, ``Each MA
organization must have an effective procedure to develop, compile,
evaluate, and report to CMS, to its enrollees, and to the general
public, at the times and in the manner that CMS requires, and while
safeguarding the confidentiality of the doctor-patient relationship,
statistics and other information.'' We propose to strike the term
``statistics,'' as well as the words ``and other,'' with the
understanding that the broader term ``information'' which is already at
Sec. 422.516(a), includes statistics, Part C data, and information on
plan administration. In a conforming proposal to amend Sec.
423.514(a), we propose to strike the term ``statistics'' and add
``information.'' CMS does not interpret these regulations to limit data
collection to statistical or aggregated data and we are using this
rulemaking as an opportunity to ensure that we are clear and consistent
with our interpretation of these rules.
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\121\ Part C Reporting Requirements are at https://www.cms.gov/medicare/health-plans/healthplansgeninfo/reportingrequirements and
Part D Reporting Requirements are at https://www.cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovcontra/rxcontracting_reportingoversight.
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Additionally, we propose to amend Sec. Sec. 422.516(a)(2) and
423.514(a)(2) to make an affirmative change regarding CMS's collection
of information related to what occurs from beginning to end when
beneficiaries seek to get coverage from their health and drug plans for
specific services. In other words, under the existing requirements CMS
has the ability to collect information related to all plan activities
regarding adjudicating requests for coverage and plan procedures
related to making service utilization decisions, and we aim to make
this more transparent through this proposal. This could include, for
example, information on pharmacy rejections, initial determinations,
decision rationales, and plan level appeals. Both Sec. Sec.
422.516(a)(2) and 423.514(a)(2) currently require plans to report ``The
patterns of utilization of services.'' We propose to amend both
sections to read, ``The procedures related to and utilization of its
services and items'' to be clear that these regulations authorize
reporting and data collection about MA and Part D plan procedures
related to coverage, utilization in the aggregate, and beneficiary-
level utilization, including the steps beneficiaries may need to take
to access covered benefits. Such information will ensure that CMS may
better understand under what circumstances plans choose whether to
provide or pay for a service or item.
CMS is not proposing to change specific current data collection
efforts through this rulemaking. Any future information collection
would be addressed through the Office of Management and Budget (OMB)
Paperwork Reduction Act (PRA) process, which would provide advance
notice to interested parties and provides both a 60- and 30-day public
comment period on drafts of the proposed collection.
We do not believe the proposed changes to Sec. Sec. 422.516(a) and
423.514(a) have either paperwork burden or impact on the Medicare Trust
Fund at this time. These proposed changes allow CMS, in the future, to
add new burden to plans in collection efforts; however, any such new
burden associated with a new data collection would be estimated through
the PRA process.
D. Amendments To Establish Consistency in Part C and Part D Timeframes
for Filing an Appeal Based on Receipt of the Written Decision
(Sec. Sec. 422.582, 422.584, 422.633, 423.582, 423.584, and 423.600)
Based on general feedback CMS has received from interested parties
regarding a variance in the regulatory timeframe for beneficiaries to
file an appeal with an MA organization or Part D plan sponsor, we are
proposing to amend the Parts C and D regulations at Sec. Sec.
422.582(b), 422.584(b), 422.633(d)(1), 423.582(b), 423.584(b), and
423.600(a) with respect to how long an enrollee has to file an appeal
with a plan or the Part D Independent Review Entity (IRE). These
proposed amendments aim to ensure consistency with the regulations at
Sec. Sec. 422.602(b)(2), 423.2002(d), 422.608, and 423.2102(a)(3),
applicable to Administrative Law Judge (ALJ) and Medicare Appeals
Council (Council) reviews, that either state or cross-reference the
Medicare FFS regulations at 42 CFR part 405 that prescribe that the
date of receipt of the notice of decision or dismissal is presumed to
be 5 calendar days after the date of the notice, unless there is
evidence to the contrary. These proposals would also apply to
integrated organization determinations and reconsiderations. In
addition, because cost plans are required, by Sec. Sec. 417.600 and
417.840, to comply with the MA appeal regulations,
[[Page 78546]]
these proposed changes will also apply to cost plan appeals.
Pursuant to our authority under section 1856(b) and 1860D-12 of the
Act to adopt standards to carry out the Part C and Part D programs and
in order to implement sections 1852(g)(2) and 1860D-4(g) and (h) of the
Act regarding coverage decisions and appeals, CMS established
procedures and minimum standards for an enrollee to file an appeal
regarding benefits with an MA organization, Part D plan sponsor, and
IREs. These requirements are codified in regulation at 42 CFR parts 422
and 423, subpart M. See also section 1876(c)(5) of the Act regarding
cost plans' obligations to have appeal processes.
Specifically, section 1852(g)(2)(A) of the Act requires that an MA
organization shall provide for reconsideration of a determination upon
request by the enrollee involved. The reconsideration shall be made no
later than 60 days after the date of the receipt of the request for
reconsideration. Section 1860D-4(g)(1) of the Act requires that a Part
D plan sponsor shall meet the requirements of paragraph (2)(A) of
section 1852(g) with respect to providing for reconsideration of a
determination upon request by the enrollee involved.
While section 1852 of the Act does not specify the timeframe in
which an enrollee must request an appeal of an unfavorable organization
determination, integrated organization determination or coverage
determination, the timeframe for filing an appeal in the Part C and
Part D programs is established in regulations. Sections 422.582(b),
422.633(d)(1), and 423.582(b) state that an appeal must be filed within
60 calendar days from the date of the notice issued as a result of the
organization determination, integrated organization determination,
coverage determination, or at-risk determination. Plans are permitted
to extend this filing deadline for good cause.
We continue to believe that a 60 calendar day filing timeframe
strikes an appropriate balance between due process rights and the goal
of administrative finality in the administrative appeals process.
However, to establish consistency with the regulations applicable to
ALJ and Council reviews with respect to receipt of the notice of
decision or dismissal and how that relates to the timeframe for
requesting an appeal, we are proposing to account for a presumption
that it will generally take 5 calendar days for a notice to be received
by an enrollee or other appropriate party. Therefore, we are proposing
to revise Sec. Sec. 422.582(b), 422.633(d)(1)(i), 423.582(b), and
423.600(a) to state that a request for a Part C reconsideration, Part D
redetermination, Part D at-risk redeterminations and Part D IRE
reconsiderations must be filed within 60 calendar days after receipt of
the written determination notice. The proposal also includes adding new
Sec. Sec. 422.582(b)(1), 422.633(d)(1)(i), and 423.582(b)(1), which
would provide that the date of receipt of the organization
determination, integrated organization determination, coverage
determination, or at-risk determination is presumed to be 5 calendar
days after the date of the written organization determination,
integrated organization determination, coverage determination or at-
risk determination, unless there is evidence to the contrary. Based on
CMS's experience with audits and other similar review of plan
documents, we realize that it is standard practice that the date of the
written decision notice is the date the plan sends the notice. The
presumption that the notice is received 5 calendar days after the date
of the decision is a long-standing policy with respect to IRE appeals
and has been codified in regulation at Sec. Sec. 422.602(b)(2),
423.2002(d), and 423.2102(a)(3) regarding hearings before an ALJ and
Council; further, Sec. 422.608 regarding MA appeals to the Medicare
Appeals Council provides that the regulations under part 405 regarding
Council review apply to such MA appeals, which would include the
provision at Sec. 405.1102(a)(2) that applies the same 5 day rule. To
ensure consistency throughout the administrative appeals process, we
believe it is appropriate and practical to adopt this approach for plan
and Part D IRE appeals in Sec. Sec. 422.582(b), 422.633(d)(1),
423.582(b), 423.584, and 423.600(a).
In addition to the aforementioned proposals related to when an
organization determination, integrated organization determination,
coverage determination, or at-risk determination is presumed to be
received by an enrollee of other appropriate party, we are also
proposing to add language to Sec. Sec. 422.582, 422.633, 423.582, and
423.600(a) that specifies when an appeal is considered filed with a
plan and the Part D IRE. Specifically, we are proposing to add new
Sec. Sec. 422.582(b)(2), 422.633(d)(1)(ii), 423.582(b)(2), and
423.600(a) to provide that for purposes of meeting the 60 calendar day
filing deadline, the appeal request is considered filed on the date it
is received by the plan, plan-delegated entity or Part D IRE specified
in the written organization determination, integrated organization
determination, coverage determination, at-risk determination, or
redetermination. The inclusion of when a request is considered filed
would codify what currently exists in CMS's sub-regulatory guidance and
the Part D IRE procedures manual. CMS's sub-regulatory guidance
indicates that a standard request is considered filed when any unit in
the plan or delegated entity receives the request. An expedited request
is considered filed when it is received by the department responsible
for processing it. Pursuant to existing manual guidance, plan material
should clearly state where requests should be sent, and plan policy and
procedures should clearly indicate how to route requests that are
received in an incorrect location to the correct location as
expeditiously as possible.
These proposed revisions related to when a notice is presumed to
have been received would ensure that the time to request an appeal is
not truncated by the time it takes for a coverage decision notice to
reach an enrollee by mail or other delivery method. If these proposals
are finalized, corresponding changes would be made to the Part C and
Part D standardized denial notices so that enrollees are accurately
informed of the timeframe for requesting an appeal.
We are also proposing clarifications to Sec. Sec. 422.584(b) and
423.584(b) to explicitly state the timeframe in which an enrollee must
file an expedited plan appeal for it to be timely. The current text of
Sec. Sec. 422.584 and 423.584 does not include the 60-calendar day
timeframe for filing an expedited appeal request, but CMS manual
guidance for Part C and Part D appeals has long reflected this 60-
calendar day timeframe. We also note that this timeframe for filing an
appeal is consistent with the current regulations at Sec. Sec.
422.582(b) and 423.582(b) for filing a request for a standard appeal.
Neither sections 1852 and 1860D-4 of the Act, nor Sec. Sec. 422.584
and 423.584 specify the timeframe in which an enrollee must request an
expedited appeal of an unfavorable organization determination, coverage
determination or at-risk determination in the Part C and Part D
programs. This provision would codify existing guidance. We are certain
that plans already comply as this long-standing policy is reflected in
CMS's sub-regulatory guidance \122\ and
[[Page 78547]]
standardized denial notices \123\ that explain an enrollee's right to
appeal. Additionally, we have not received any complaints on this
matter. In proposing new Sec. Sec. 422.584(b)(3) and (4) and
423.584(b)(3) and (4), we also propose to add the procedure and
timeframe for filing expedited organization determinations and coverage
determinations consistent with proposed requirements at Sec. Sec.
422.582(b)(1) and (2) and 423.582(b)(1) and (2).
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\122\ https://www.cms.gov/medicare/appeals-and-grievances/mmcag/downloads/parts-c-and-d-enrollee-grievances-organization-coverage-determinations-and-appeals-guidance.pdf.
\123\ https://www.cms.gov/medicare/medicare-general-information/bni/madenialnotices.
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If finalized, we believe these proposals would enhance consistency
in the administrative appeals process and provide greater clarity on
the timeframe for requesting an appeal and when an appeal request is
considered received by the plan. Theoretically, the proposed amendments
may result in a small increase in the number of appeals from allowing
65 versus 60 days to appeal an organization determination, integrated
organization determination, coverage determination or at-risk
determination. However, we believe, based on the low level of
dismissals at the plan level due to untimely filing, that most
enrollees who wish to appeal a denial do so immediately, thereby
mitigating the impact of 5 additional days for a plan to accept an
appeal request if this proposal is finalized. Consequently, we are not
associating impact to the Medicare Trust Fund. We solicit interested
party input on the accuracy of this assumption.
E. Authorized Representatives for Parts C/D Elections (Sec. Sec.
422.60 and 423.32)
Section 1851(c)(1) of the Act gives the Secretary the authority to
establish a process through which MA elections, that is, enrollments
and disenrollments, are made and changed. This authority includes
establishing the form and manner in which elections are made. Section
1860D-1(b)(1)(A) of the Act gives the Secretary the authority to
establish a process for enrollment, disenrollment, termination, and
change of enrollments in Part D prescription drug plans. Likewise,
section 1860D-1(b)(1)(B)(ii) of the Act directs CMS to use rules
similar to those established in the MA context pursuant to 1851(c) for
purposes of establishing rules for enrollment, disenrollment,
termination, and change of enrollment with an MA-PD plan.
Consistent with these sections of the Act, Parts C and D
regulations set forth our election processes under Sec. Sec. 422.60
and 423.32. These enrollment processes require that Part C/D eligible
individuals wishing to make an election must file an appropriate
enrollment form, or other approved mechanism, with the plan. The
regulations also provide information for plans on the process for
accepting election requests, notice that must be provided, and other
ways in which the plan may receive an election on behalf of the
beneficiary.
Though the term ``authorized representative'' is not used in the
context of the statutory provisions within the Act governing MA and
Part D enrollment and eligibility (for example, sections 1851 and
1860D-1), ``authorized representative''--and other similar terms--are
used in other contexts throughout the Act. Section 1866(f)(3) of the
Act defines the term ``advance directive,'' deferring to applicable
State law to recognize written instructions such as a living will or
durable power of attorney for health care. Section
1862(b)(2)(B)(vii)(IV) of the Act recognizes that an individual may be
represented by an ``authorized representative'' in secondary payer
disputes. Section 1864(a) of the Act allows a patient's ``legal
representative'' to stand in the place of the patient and give consent
regarding use of the patient's medical records.
In the June 1998 interim final rule that first established the M+C
program, now the MA program (63 FR 34985), we acknowledged in Part C
enrollment regulations at Sec. 422.60(c) that there are situations
where an individual may assist a beneficiary in completing an
enrollment request and required the individual to indicate their
relationship to the beneficiary. In the ``Medicare Program; Medicare
Prescription Drug Benefit'' final rule which appeared in the Federal
Register on January 28, 2005 (70 FR 4194), we first recognized in Sec.
423.32(b) that an authorized representative may assist a beneficiary in
completing an enrollment request, and required authorized
representatives to indicate that they provided assistance. In response
to public comments about the term ``authorized representative'' in that
rule, we indicated that CMS would recognize and rely on State laws that
authorize a person to effect an enrollment on behalf of a Medicare
beneficiary for purposes of this provision. We also stated that the
authorized representative would constitute the ``individual'' for
purposes of making the enrollment or disenrollment request.
Historically, we have provided the definition and policies related
to authorized representatives in our sub-regulatory manuals.\124\ We
are now proposing to add new paragraphs Sec. Sec. 422.60(h) and
423.32(h) to codify our longstanding guidance on authorized
representatives making Parts C and D elections on behalf of
beneficiaries.
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\124\ This guidance can be found in chapter 2, sections 10 and
40.2.1 of the Medicare Managed Care Manual and chapter 3, sections
10 and 40.2.1 of the Prescription Drug Benefit Manual.
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Current regulation in Sec. 423.32(b)(i) acknowledges that an
``authorized representative'' may assist a beneficiary in completing an
enrollment form, but it does not define who an ``authorized
representative'' is. A similar term, ``representative,'' is currently
defined under Sec. Sec. 422.561 and 423.560; however, that definition
is used only in the appeals context and applies only to subpart M of
the MA and Part D regulations. Therefore, we are defining the term
``authorized representative'' for subpart B (eligibility, election, and
enrollment).
Our proposal defers to the law of the State in which the
beneficiary resides to determine who is a legal representative.
Deference to State law on these matters is consistent with other
similar practices within CMS, including in the MA appeals definition of
``representative'' (Sec. 422.561) and Medicaid's definition of
``authorized representative'' (Sec. Sec. 435.923; 438.402), as well as
in the HIPAA privacy regulations' description of ``personal
representative'' (45 CFR 164.502(g)).
For those with State legal authority to act and make health care
decisions on behalf of a beneficiary, our proposal would codify at
paragraph (h)(1) of Sec. Sec. 422.60 and 423.32 that authorized
representatives will constitute the ``beneficiary'' or the ``enrollee''
for the purposes of making an election, meaning that CMS, MA
organizations, and Part D sponsors will consider the authorized
representative to be the beneficiary/enrollee during the election
process. Any mention of beneficiary/enrollee in our enrollment and
eligibility regulations would be considered to also include
``authorized representative,'' where applicable. Our proposal at
paragraph (h)(2) of Sec. Sec. 422.60 and 423.32 would clarify that
authorized representatives under State law may include court-appointed
legal guardians, durable powers of attorney for health care decisions
and State surrogate consent laws as examples of those State law
concepts that allow the authorized representative to make health care
decisions on behalf of the individual. This is not a complete list; we
would defer to applicable State law granting authority to act and make
[[Page 78548]]
health care decisions on behalf of the beneficiary.
Codifying this longstanding guidance provides plans, beneficiaries
and their caregivers, and other interested parties clarity and
transparency on the requirements when those purporting to be the
representatives of the beneficiary attempt to make election decisions
on their behalf. We have not received negative public feedback on this
longstanding policy. However, we have recently answered questions on
plan procedures when dealing with authorized representatives. We are
proposing to codify this longstanding guidance in order to clarify our
policy regarding the role of authorized representatives in the MA and
Part D enrollment process, including the applicability of State law in
this context.
This proposal represents the codification of longstanding MA and
Part D sub-regulatory guidance. Based on questions from plans and
beneficiaries related to current guidance, we conclude that the
guidance has been previously implemented and is currently being
followed by plans. Therefore, there is no additional paperwork burden
associated with codifying this longstanding sub-regulatory policy, and
there is also no impact to the Medicare Trust Fund. All information
impacts related to the current process for determining a beneficiary's
eligibility for an election period and processing election requests
have already been accounted for under OMB control numbers 0938-0753
(CMS-R-267), 0938-1378 (CMS-10718), and 0938-0964 (CMS-10141).
F. Open Enrollment Period for Institutionalized Individuals (OEPI) End
Date (Sec. 422.62(a)(4))
Section 1851(e) of the Act establishes the coverage election
periods for making or changing elections in the Medicare+Choice (M+C),
later known as Medicare Advantage (MA), program. Section 501(b) of the
Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) amended
section 1851(e)(2) of the Act by adding a new subparagraph (D), which
provides for continuous open enrollment for institutionalized
individuals after 2001. CMS published a final rule with comment period
(65 FR 40317) in June 2000 implementing section 1851(e)(2)(D) by
establishing a new continuous open enrollment period for
institutionalized individuals (OEPI) at then Sec. 422.62(a)(6). In
subsequent rulemaking (83 FR 16722), the OEPI regulations were further
updated to reflect conforming changes related to implementation of
Title II of The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173) (70 FR 4717) and to
redesignate this provision from Sec. 422.62(a)(6) through (4).
As noted above, the OEPI is continuous. Individuals may use the
OEPI to enroll in, change, or disenroll from a plan. Individuals are
eligible for the OEPI if they move into, reside in, or move out of an
institution. Longstanding sub-regulatory guidance has stated that the
OEPI ends 2 months after an individual moves out of an institution, but
this has not been articulated in regulations.\125\
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\125\ This guidance can be found in chapter 2, section 30.3 of
the Medicare Managed Care Manual.
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To provide transparency and stability for plans, beneficiaries and
their caregivers, and other interested parties about this aspect of MA
enrollment, we propose to codify current sub-regulatory guidance that
defines when the OEPI ends. Specifically, we propose to codify at new
Sec. 422.62(a)(4)(ii) that the OEPI ends on the last day of the second
month after the month the individual ceases to reside in one of the
long-term care facility settings described in the definition of
``institutionalized'' at Sec. 422.2.
This proposal would define when the OEPI ends and would not result
in a new or additional paperwork burden since MA organizations are
currently implementing the policy related to the OEPI end date as part
of existing enrollment processes. All burden impacts related to an
applicant's eligibility for an election period have already been
accounted for under OMB control number 0938-0753 (CMS-R-267).
Similarly, we do not believe the proposed changes would have any impact
to the Medicare Trust Fund.
G. Beneficiary Choice of C/D Effective Date if Eligible for More Than
One Election Period (Sec. Sec. 422.68 and 423.40)
Section 1851(f) of the Act establishes the effective dates of
elections and changes of elections for MA plans. In the June 1998
interim final rule, we specified the effective dates for elections and
changes of elections of M+C (now MA) plan coverage made during various
specified enrollment periods (63 FR 34968). The effective date
requirements for the initial coverage election period (ICEP), annual
election period (AEP), MA open enrollment period (MA-OEP), open
enrollment period for institutionalized individuals (OEPI), and special
election periods (SEP) are codified in regulation at Sec. 422.68. For
Part D plans, section 1860D-1(b)(1)(B)(iv) of the Act directs us to
establish similar rules for effective dates of elections and changes of
elections to those provided under the MA program statute at section
1851(f). In the January 2005 Part D final rule, we specified the
effective dates for elections and changes of elections of Part D
coverage made during various specified enrollment periods (70 FR 4193).
The effective date requirements for the initial enrollment period (IEP)
for Part D, AEP, and SEPs are codified in regulation at Sec. 423.40.
Existing regulations at Sec. Sec. 422.68 and 423.40 do not address
what the MA organization or Part D plan sponsor should do when a
beneficiary is eligible for more than one election period, thus
resulting in more than one possible effective date for their election
choice. For example, the beneficiary is eligible to make a change in
their election choice during the MA-OEP, but they are also eligible for
an SEP due to changes in the individual's circumstances. Current sub-
regulatory guidance provides that the MA organization or Part D plan
sponsor determine the proper effective date based on the election
period for which the beneficiary is eligible before the enrollment or
disenrollment may be transmitted to CMS.\126\ Because the election
period determines the effective date of the election in most instances,
with the exception of some SEPs or when election periods overlap,
beneficiaries may not request their election effective date. The MA
organization or Part D plan sponsor determines the effective date once
the election period is identified. If a beneficiary is eligible for
more than one election period, which results in more than one possible
effective date, CMS's sub-regulatory guidance \127\ directs the MA
organization or Part D plan sponsor to allow the beneficiary to choose
the election period that results in the desired effective date. To
determine the beneficiary's choice of election period, MA organizations
and Part D plan sponsors are instructed to attempt to contact the
beneficiary, and to document their attempt(s). However, sub-regulatory
guidance \128\ states that this does not apply to beneficiary requests
for enrollment into an employer or union group health plan (EGHP) using
the group enrollment
[[Page 78549]]
mechanism. Beneficiaries who make an election via the employer or union
election process will be assigned an effective date according to the
SEP EGHP, unless the beneficiary requests a different effective date
that is allowed by one of the other election periods for which they are
eligible.
---------------------------------------------------------------------------
\126\ This guidance can be found in chapter 2, section 30.6 and
30.7 of the Medicare Managed Care Manual and chapter 3, section 30.4
and 30.5 of the Prescription Drug Benefit Manual.
\127\ This guidance can be found in chapter 2, section 30.6 of
the Medicare Managed Care Manual and chapter 3, section 30.4 of the
Prescription Drug Benefit Manual.
\128\ This guidance can be found in chapter 2, section 30.6 of
the Medicare Managed Care Manual and chapter 3, section 30.4 of the
Prescription Drug Benefit Manual.
---------------------------------------------------------------------------
Because a beneficiary must be entitled to Medicare Part A and
enrolled in Medicare Part B in order to be eligible to receive coverage
under a MA or MA-PD plan, CMS's sub-regulatory guidance \129\ explains
that if one of the election periods for which the beneficiary is
eligible is the ICEP, the beneficiary may not choose an effective date
any earlier than the month of entitlement to Part A and enrollment in
Part B. Likewise, because a beneficiary must be entitled to Part A or
enrolled in Part B in order to be eligible for coverage under a Part D
plan, sub-regulatory guidance explains that if one of the election
periods for which the beneficiary is eligible is the Part D IEP, the
beneficiary may not choose an effective date any earlier than the month
of entitlement to Part A and/or enrollment in Part B.\130\
---------------------------------------------------------------------------
\129\ This guidance on effective dates of elections is currently
outlined in section 30.6 of chapter 2 of the Medicare Managed Care
Manual.
\130\ This guidance on effective dates of elections is currently
outlined in section 30.4 of chapter 3 of the Medicare Prescription
Drug Benefit Manual.
---------------------------------------------------------------------------
Furthermore, sub-regulatory guidance \131\ provides that if a
beneficiary is eligible for more than one election period and does not
choose which election period to use, and the MA organization or Part D
plan sponsor is unable to contact the beneficiary, the MA organization
or Part D plan sponsor assigns an election period for the beneficiary
using the following ranking of election periods (1 = Highest, 5 =
Lowest): (1) ICEP/Part D IEP, (2) MA-OEP, (3) SEP, (4) AEP, and (5)
OEPI. The election period with the highest rank generally determines
the effective date of enrollment. In addition, if an MA organization or
Part D sponsor receives a disenrollment request when more than one
election period applies, the plan is instructed to allow the
beneficiary to choose which election period to use. If the beneficiary
does not make a choice, then the plan is directed to assign the
election period that results in the earliest disenrollment.
---------------------------------------------------------------------------
\131\ This guidance can be found in sections 30.6 and 30.7 of
chapter 2 of the Medicare Managed Care Manual and sections 30.4 and
30.5 of chapter 3 of the Medicare Prescription Drug Benefit Manual.
---------------------------------------------------------------------------
To provide transparency and stability about the MA and Part D
program for plans, beneficiaries, and other interested parties, we are
proposing at new Sec. Sec. 422.68(g) and 423.40(f) that if the MA
organization or Part D plan sponsor receives an enrollment or
disenrollment request, determines the beneficiary is eligible for more
than one election period and the election periods allow for more than
one effective date, the MA organization or Part D plan sponsor must
allow the beneficiary to choose the election period that results in the
desired effective date. We also propose at Sec. Sec. 422.68(g)(1) and
423.40(f)(1) that the MA organization or Part D plan sponsor must
attempt to contact the beneficiary, and must document its attempt(s),
to determine the beneficiary's choice. The plan may contact the
beneficiary by phone, in writing, or any other communication mechanism.
Plans would annotate the outcome of the contact(s) and retain the
record as part of the individual's enrollment or disenrollment request.
In addition, we propose at Sec. Sec. 422.68(g)(2) and 423.40(f)(2) to
require that the MA organization or Part D plan sponsor must use the
proposed ranking of election periods to assign an election period if
the beneficiary does not make a choice. With the exception of the SEP
EGHP noted earlier, if a beneficiary is simultaneously eligible for
more than one SEP and they do not make a choice, and the MA
organization or PDP sponsor is unable to obtain the beneficiary's
desired enrollment effective date, the MA organization or PDP sponsor
should assign the SEP that results in an effective date of the first of
the month after the enrollment request is received by the plan.
Finally, we propose at Sec. Sec. 422.68(g)(3) and 423.40(f)(3) to
require that if the MA organization or Part D plan sponsor is unable to
obtain the beneficiary's desired disenrollment effective date, they
must assign an election period that results in the earliest
disenrollment.
This proposal represents the codification of longstanding MA and
Part D sub-regulatory guidance. Based on infrequent complaints and
questions from plans and beneficiaries related to current guidance, we
conclude that the guidance has been previously implemented and is
currently being followed by plans. There is no additional paperwork
burden associated with codifying this longstanding sub-regulatory
policy, and there is also no impact to the Medicare Trust Fund. All
information impacts related to the current process for determining a
beneficiary's eligibility for an election period and processing
election requests have already been accounted for under OMB control
number 0938-0753 (CMS-R-267) for Part C and 0938-0964 (CMS-10141) for
Part D.
VI. Medicare Advantage/Part C and Part D Prescription Drug Plan
Marketing and Communications
A. Marketing and Communications Requirements for Special Supplemental
Benefits for the Chronically Ill (SSBCI) (Sec. 422.2267)
Section 1851(h) and (j) of the Act provide a structural framework
for how MA organizations may market to beneficiaries and direct CMS to
set standards related to the review of marketing materials and
establish limitations on marketing activities, as part of the standards
for carrying out the MA program under section 1856(b) of the Act. In
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
(hereinafter referred to as the January 2021 final rule), CMS used this
statutory authority to codify guidance from the Medicare Communications
& Marketing Guidelines (MCMG) into subpart V of part 422. Several
commenters in that prior rulemaking urged CMS to add specific
provisions in the marketing and communications regulations regarding
how MA organizations may market SSBCI described in Sec. 422.102(f). In
response, CMS established a new requirement for a disclaimer to be used
when SSBCI are mentioned. The SSBCI disclaimer was originally codified
at Sec. 422.2267(e)(32), and it currently appears at paragraph
(e)(34). Currently, that regulation requires MA organizations to: (i)
convey that the benefits mentioned are a part of special supplemental
benefits, (ii) convey that not all members will qualify for these
benefits; and (iii) include the model content in the material copy
which mentions SSBCI benefits. Section 422.2267(e)(34) does not
explicitly state that it applies to both marketing and communications
materials, but our sub-regulatory guidance is clear that it applies
whenever SSBCI are mentioned; the disclaimer is required regardless of
whether the material that mentions the benefits is a marketing or
communications material. The purpose of the SSBCI disclaimer is to
ensure that beneficiaries are aware that SSBCI are not available to all
plan enrollees and that the eligibility for these benefits is limited
by section 1852(a)(3)(D) of the Act and Sec. 422.102(f). Ensuring a
clear statement of these limitations in a
[[Page 78550]]
disclaimer guards against beneficiary confusion or misunderstanding of
the scope of SSBCI, and thus lessens the chance that a beneficiary will
enroll in a certain plan believing they can access that plan's SSBCI
for which they may not ultimately be eligible.
Per the January 2021 final rule, MA organizations were required to
comply with the new SSBCI disclaimer requirement beginning January 1,
2022. Since MA organizations have had over a year to implement their
use of the SSBCI disclaimer, we are taking an opportunity to reevaluate
the requirement at Sec. 422.2267(e)(34), considering our observation
of its actual implementation.
MA organizations market SSBCI by advertising various benefits,
including coverage of groceries, pest control, prepared meals,
household items, gasoline, utility bills, auto repair, pet supplies or
grooming, and more. Although some of these benefits may be available
under a given plan, the enrollee must meet the criteria established to
receive a particular SSBCI. In many instances, MA organizations have
been found to use marketing to potentially misrepresent the benefit
offered, oftentimes not presenting a clear picture of the benefit and
limits on eligibility. In a May 2022 letter sent to Congress, the
National Association of Insurance Commissioners (NAIC) detailed its
findings from surveys with State departments of insurance, showing ``an
increase in complaints from seniors about confusing, misleading and
potentially deceptive advertising and marketing of these plans.'' \132\
Additionally, as discussed in prior rulemaking, CMS has seen an
increase in complaints related to marketing, with more than twice as
many complaints related to marketing in 2021 compared to 2020.\133\ As
evidenced by complaints CMS has received, some of the current marketing
of SSBCI has the potential to give beneficiaries the wrong impression
by leading them to believe they can automatically receive all SSBCI
available by enrolling in the plan.
---------------------------------------------------------------------------
\132\ https://content.naic.org/sites/default/files/State%20MA%20Marketing%20Authority%20Senate%20Letter%20.pdf.
\133\ See 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 final rule (87 FR 27704, May 9, 2022).
---------------------------------------------------------------------------
CMS has seen multiple examples of such misleading SSBCI
advertisements among MA organizations. We have seen ads (for example,
online, billboards, television) in which the MA organization presents
an extensive list of benefits that are available, with this list being
displayed prominently in large font and the SSBCI disclaimer appearing
in very small font at the end of the ad. Often the disclaimer is brief,
merely stating that the enrollee must have one of the identified
chronic conditions in order to receive the benefit and that eligibility
will be determined after enrollment, with no other information
provided. A beneficiary reading such an ad could easily miss the small-
size disclaimer at the end because their attention is immediately drawn
to the long, attractive list of appealing benefits prominently
displayed in large, bold font. This type of SSBCI marketing is
potentially misleading because, at face value, it might appear to a
beneficiary that if they enroll in the advertised plan, they can
receive all the highlighted benefits, without any question as to the
beneficiary's eligibility, what an eligibility determination entails,
or when eligibility is assessed.
Based on our findings, we propose to expand the current required
SSBCI disclaimer to include more specific requirements, with the
intention of increasing transparency for beneficiaries and decreasing
misleading advertising by MA organizations. Our proposed expansion of
the SSBCI disclaimer would clarify what must occur for an enrollee to
be eligible for the SSBCI. That is, per Sec. 422.102(f), the enrollee
must first have the required chronic condition(s), then they must meet
the definition of a ``chronically ill enrollee'' at Sec.
422.102(f)(1)(i)(A), and finally the MA organization must determine
that the enrollee is eligible to receive a particular SSBCI under the
plan's coverage criteria. An MA organization designs and limits its
SSBCI to target specific chronic conditions. An enrollee might meet the
definition of ``chronically ill enrollee'' but nonetheless be
ineligible for the MA organization's advertised SSBCI because they do
not have the specific chronic condition(s) required for the particular
SSBCI being advertised. Taking these important SSBCI eligibility
requirements into account, our proposal amends the required SSBCI
disclaimer content to clearly communicate the eligibility parameters to
beneficiaries without misleading them. Specifically, at Sec.
422.2267(e)(34), we are proposing three key changes to the regulation
and two clarifications.
First, we are proposing to redesignate current paragraph
(e)(34)(ii) as paragraph (e)(34)(iii) and add a new paragraph
(e)(34)(ii), in which we propose to require MA organizations offering
SSBCI to list, in their SSBCI disclaimer, the chronic condition or
conditions the enrollee must have to be eligible for the SSBCI offered
by the MA organization. Per Sec. 422.102(f)(1)(i)(A), a ``chronically
ill enrollee'' must have one or more comorbid and medically complex
chronic conditions to be eligible for SSBCI. (See section IV.B. of this
proposed rule for a more detailed discussion of the definition of
``chronically ill enrollee'' and eligibility for SSBCI as part of our
proposal to strengthen the requirements for how determinations are made
that a particular item or service may be offered as SSBCI and
eligibility determinations for SSBCI.) We are proposing that if the
number of condition(s) is five or fewer, then the SSBCI disclaimer must
list all condition(s), and if the number of conditions is more than
five, then the SSBCI disclaimer must list the top five conditions, as
determined by the MA organization. For this top five list, we are
proposing it is the MA organization's discretion as to which five
conditions to include. In making this determination, an MA organization
might consider factors such as which conditions are more common or less
obscure among the enrollee population the MA organization intends to
serve. We believe that five is a reasonable number of conditions for
the MA organization to list, so that a beneficiary may have an idea of
the types of conditions that may be considered for eligibility for the
SSBCI, without listing so many conditions that a beneficiary ignores
the information.
Second, we propose to revise newly redesignated paragraph
(e)(34)(iii). Section 422.2267(e)(34)(ii) currently requires that MA
organizations that offer SSBCI convey that not all members will
qualify. We are proposing to expand this provision to require that the
MA organization must convey in its SSBCI disclaimer that even if the
enrollee has a listed chronic condition, the enrollee may not receive
the benefit because coverage of the item or service depends on the
enrollee being a ``chronically ill enrollee'' as defined in Sec.
422.102(f)(1)(i)(A) and on the MA organization's coverage criteria for
a specific SSBCI item or service required by Sec. 422.102(f)(4).
Section 1852(a)(3)(D) of the Act and Sec. 422.102(f) provide that
SSBCI are a permissible category of MA supplemental benefits only for a
``chronically ill enrollee,'' as that term is specifically defined, and
the item or service must have a reasonable expectation of improving or
maintaining
[[Page 78551]]
the health or overall function of the chronically ill enrollee. In
other words, just because an enrollee has one of the conditions listed
in the SSBCI disclaimer, it does not automatically mean that they are
eligible to receive the relevant SSBCI, as other criteria will also
need to be met. In addition, a particular item or service must meet the
requirements in Sec. 422.102(f)(1)(ii) to be offered as an SSBCI.
Likewise, if the requirements we are proposing to add to Sec.
422.102(f) for the item or service to be covered as an SSBCI are
finalized, an MA organization would also need to meet those
requirements to offer SSBCI (see section IV.B. of this proposed rule).
Determinations on whether an MA organization may offer coverage of a
particular item or service as an SSBCI will generally be made before an
MA organization begins marketing or communicating the benefits,
therefore, we are not including those requirements from the proposal in
section IV.B. of this proposed rule in the proposed expansion of the
SSBCI disclaimer. Our proposed newly redesignated Sec.
422.2267(e)(34)(iii) refers to the eligibility requirements and MA
organization responsibilities in Sec. 422.102(f) because we expect the
MA organization to use this information in developing their SSBCI
disclaimer to clearly convey that not all enrollees with the required
condition(s) will be eligible to receive the SSBCI. Per Sec.
422.102(f) currently and with the revisions proposed in section IV.B.
of this proposed rule, MA organizations offering SSBCI must have
written policies based on objective criteria for determining a
chronically ill enrollee's eligibility to receive a particular SSBCI.
The SSBCI disclaimer is model content, so each MA organization may
tailor their disclaimer's language to convey that, in addition to
having an eligible chronic condition, the enrollee must also meet other
eligibility requirements (that is, the definition of a ``chronically
ill enrollee'' and the coverage criteria of the MA organization for a
specific SSBCI item or service) in order to receive the SSBCI. MA
organizations would not need to specifically detail the additional
eligibility requirements (such as the coverage criteria) in the
disclaimer, but rather convey that coverage is dependent on additional
factors, not only on the fact that the enrollee has an eligible chronic
condition. For example, an MA organization might use the following
language in its SSBCI disclaimer: ``Eligibility for this benefit cannot
be guaranteed based solely on your condition. All applicable
eligibility requirements must be met before the benefit is provided.
For details, please contact us.'' We are providing this language as an
example, as the SSBCI disclaimer is model content. Therefore, in
developing their SSBCI disclaimer, MA organizations may deviate from
the model so long as they accurately convey the required information
and follow CMS's specified order of content, if specified (Sec.
422.2267(c)). Currently, Sec. 422.2267(e)(34) does not specify the
order of content for the SSBCI disclaimer, and we are not proposing to
add such a requirement; however, MA organizations must accurately
convey the required information listed in the proposed regulatory text
at Sec. 422.2267(e)(34)(i) through (iii) in their SSBCI disclaimer. In
addition, the disclaimer as drafted by the MA organization must be
clear, accurate, and comply with all applicable rules on marketing,
communications, and the standards for required materials and content at
Sec. 422.2267(a).
Third, at new proposed paragraph (e)(34)(iv), we are proposing
specific formatting requirements for MA organizations' SSBCI
disclaimers in ads, related to font and reading pace. These proposed
formatting requirements would apply to SSBCI disclaimers in any type of
ad, whether marketing or communications. For print ads, we reiterate
our existing requirement under paragraph (a)(1) that MA organizations
must display the disclaimer in 12-point font, Times New Roman or
equivalent. For television, online, social media, radio, or other-
voice-based ads, we propose that MA organizations must either: (1) read
the disclaimer at the same pace as the organization does for the phone
number or other contact information mentioned in the ad, or (2) display
the disclaimer in the same font size as the phone number or other
contact information mentioned in the ad. For outdoor advertising
(ODA)--which is defined in Sec. 422.2260 and includes billboards--we
propose that MA organizations must display the disclaimer in the same
font size as the phone number or other contact information appearing on
the billboard or other ODA. The specific font and reading pace
requirements for the SSBCI disclaimer in ads would appear at new
proposed paragraphs (e)(34)(iv)(A) and (B).
Finally, in revisiting the requirement at Sec. 422.2267(e)(34), we
believe additional clarification of current requirements is
appropriate. In the introductory language at paragraph (e)(34), we
propose a minor addition to clarify that the SSBCI disclaimer must be
used by MA organizations who offer CMS-approved SSBCI (as specified in
Sec. 422.102(f)). Also, current paragraph (e)(34)(iii) (requiring the
MA organization to include the SSBCI disclaimer in the material copy
which mentions SSBCI benefits) would be revised and moved to new
proposed paragraph (e)(34)(v). In this newly redesignated paragraph
(e)(34)(v), we propose to clarify that MA organizations must include
the SSBCI disclaimer in all marketing and communications materials that
mention SSBCI. We also propose a slight adjustment in this paragraph to
delete the redundant word ``benefits'' after ``SSBCI.''
In summary, this proposal would expand upon the current SSBCI
disclaimer requirements at Sec. 422.2267(e)(34) in several important
ways. Requiring a more robust disclaimer with specific conditions
listed would provide beneficiaries with more information to determine
whether a particular plan with SSBCI is appropriate for their needs. We
believe the revised disclaimer would diminish the ambiguity of when
SSBCI are covered, thus reducing the potential for misleading
information or misleading advertising. Our goal is to ensure that
beneficiaries enrolling in MA choose a plan that best meets their
health care needs. Transparency and precision in marketing and
communications to current and potential enrollees is of utmost
importance in this proposal.
We are not scoring this provision in the COI section since we
believe all burden impacts of this provision have already been
accounted for under OMB control number 0938-1051 (CMS-10260). In
addition, this provision is not expected to have any economic impact on
the Medicare Trust Fund. We welcome comment on our proposed amendments
to Sec. 422.2267(e)(34), and we thank commenters in advance for their
feedback.
B. Agent Broker Compensation
Pursuant to section 1851(j)(2)(D) of the Act, the Secretary has a
statutory obligation to establish guidelines to ensure that the use of
agent and broker compensation creates incentives for agents and brokers
to enroll individuals in the Medicare Advantage (MA) plan that is
intended to best meet beneficiaries' health care needs. In September
2008, CMS published the ``Medicare Program; Revisions to the Medicare
Advantage and Prescription Drug Benefit Programs'' interim final rule
(73 FR 54226, 54237), our first regulation to establish requirements
for agent and broker compensation, which included certain limitations
on agent and broker compensation and other
[[Page 78552]]
safeguards. In that rulemaking, we noted that these reforms addressed
concerns that the previously permitted compensation structure resulted
in financial incentives for agents to only market and enroll
beneficiaries in some plan products and not others due to larger
commissions. These incentives potentially resulted in beneficiaries
being directed towards plans that were not best suited to their needs.
In that interim final rule, we noted that depending on the
circumstances, agent and broker relationships can be problematic under
the Federal anti-kickback statute if they involve, by way of example
only, compensation in excess of fair market value, compensation
structures tied to the health status of the beneficiary (for example,
cherry-picking), or compensation that varies based on the attainment of
certain enrollment targets. These and other fraud and abuse risks exist
among the current agent and broker relationships. We note that the HHS
Office of the Inspector General (OIG) advisory opinion process is
available to parties seeking OIG's opinion as to the legality of a
particular arrangement. Information about this process remains
available on the OIG's website at http://oig.hhs.gov/compliance/advisory-opinions/process/.
In subsequent years, agents and brokers have become an integral
part of the industry, helping millions of Medicare beneficiaries to
learn about and enroll in Medicare, MA plans, and PDPs by providing
expert guidance on plan options in their local area, while assisting
with everything from comparing costs and coverage to applying for
financial assistance. CMS has also adopted updates to the agent and
broker compensation requirements. It has become apparent that shifts in
the MA industry and resulting changes in contract terms offered to
agents and brokers for enrollment-related services and expenses,
warrant further action to ensure CMS is complying with its statutory
requirement to ensure compensation paid to agents and brokers
incentivizes them to enroll individuals in the MA plan that is intended
to best meet their health care needs.
CMS has observed that the MA marketplace, nationwide, has become
increasingly consolidated among a few large national parent
organizations, which presumably have greater capital to expend on
sales, marketing, and other incentives and bonus payments to agents and
brokers than smaller market MA plans. This provides a greater
opportunity for these larger organizations, either directly or through
third parties, to use financial incentives outside and potentially in
violation of the compensation cap set by CMS to encourage agents and
brokers to enroll individuals in their plan over a competitor's plans.
For example, CMS has seen web-based advertisements for agents and
brokers to work with or sell particular plans where the agents and
brokers are offered bonuses and perks (such as golf parties, trips, and
extra cash) in exchange for enrollments. These payments, while being
presented to the agents and brokers as innocuous bonuses or incentives,
are implemented in such a way that allows the plan sponsor, in most
cases, to credibly account for these anti-competitive payments as
``administrative'' rather than ``compensation,'' and these payments are
therefore not limited by the regulatory limits on compensation.
CMS has also received complaints from a host of different
organizations, including State partners, beneficiary advocacy
organizations, and MA plans. A common thread to the complaints is that
agents and brokers are being paid, typically through various purported
administrative and other add-on payments, amounts that cumulatively
exceed the maximum compensation allowed under the current regulations.
Moreover, CMS has observed that such payments have created an
environment, not dissimilar to what prompted CMS to engage in the
original agent and broker compensation requirements in 2008, where the
amounts being paid for activities that do not fall under the umbrella
of ``compensation,'' are rapidly increasing. The result is that agents
and brokers are presented with a new suite of questionable financial
incentives that are likely to influence which MA plan an agent
encourages a beneficiary to select during enrollment.
We believe these financial incentives are contributing to behaviors
that are driving an increase in MA marketing complaints received by CMS
in recent years. As was discussed in our most recent Medicare Program
Contract Year 2023 Rule, based on the most recent data available at
that time, in 2021, CMS received more than twice the number of
beneficiary complaints related to marketing of MA plans compared to
2020, and for some states those numbers were much higher (87 FR 27704,
27704-27902). These complaints are typically filed by enrollees or
their caregivers with CMS through 1-800-Medicare or CMS regional
offices, and generally allege that a beneficiary was encouraged or
pressured to join an MA plan, and that once enrolled, the plan was not
what the enrollee expected or what was explained to them when they
spoke to an agent or broker.
In the 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 (88 FR 22234-22256), which appeared in the Federal
Register on April 12, 2023, we discussed at length the rapidly
increasing use of various marketing activities that typically result in
beneficiaries being connected with agents and brokers to be enrolled in
MA plans. Based on a number of complaints CMS reviewed, as well as
audio recordings of sale calls, it appears that the increased marketing
of 1-800 numbers to facilitate enrollment in Medicare Advantage plans
through national television advertisements combined with the subsequent
actions of agents and brokers when beneficiaries responded to those ads
resulted in beneficiary confusion. In some instances, through listening
to the call recording, CMS observed that when beneficiaries reached an
agent or broker in response to these television ads, the beneficiary
was often pressured by the agent or broker to continue with a plan
enrollment even though the beneficiary was clearly confused.
At the same time, these types of complaints have escalated at a
pace that mirrors the growth of administrative or add-on payments,
which we contend are being misused as a means to compensate over and
above the CMS-set compensation limits on payment to agents and brokers.
We also note that such payments appear to have no regional correlation,
that is, they are generated across the country.\134\ CMS is concerned
that when the value of administrative payments offered to agents and
brokers reaches the levels that CMS has observed in recent years, these
payments may distort the process that agents and brokers are expected
to engage in when they assist beneficiaries in weighing the merits of
different available plans. This distortion disadvantages beneficiaries
who enroll in a plan based on the recommendation or encouragement of an
agent or broker who may be influenced by how much or what kind of
administrative payment the agent or broker expects to receive, rather
than enrolling the beneficiary in a plan that is intended to best meet
the beneficiary's health care needs.
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\134\ https://www.cms.gov/medicare/enrollment-renewal/managed-care-eligibility-enrollment/agent-broker-compensation.
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Consequently, the rise in MA marketing complaints noted above
[[Page 78553]]
suggests that agents and brokers are being influenced to engage in high
pressure tactics, which may in turn cause beneficiary confusion about
their enrollment choices, to meet enrollment targets or earn
``administrative payments'' in excess of their compensation payment.
Although CMS's existing regulations already prohibit plans, and by
extension their agents and brokers, from engaging in misleading or
confusing communications with current or potential enrollees,
additional limitations on payments to agents and brokers may be
necessary to adequately address the rise in MA marketing complaints
described here.
Additionally, while the proposals described in this proposed rule
are focused on payments and compensation made to agents and brokers,
CMS is also concerned about how payments from MA plans to third party
marketing organizations (TPMOs) may further influence or obscure the
activities of agent and brokers. In particular, CMS is interested in
the effect of payments made to Field Marketing Organizations (FMOs),
which is a type of TPMO that employs agents and brokers to complete MA
enrollment activities and may also conduct additional marketing
activities on behalf of MA plans, such as lead generating and
advertising. In fact, at the time of our first agent and broker
compensation regulation, CMS expressed concern about amounts paid to
FMOs for services that do not necessarily relate directly to
enrollments completed by the agent or broker who deals directly with
the beneficiary (73 FR 54239). Some examples of such services are
training, material development, customer service, direct mail, and
agent recruitment.
As we noted in the preamble to the two interim final rules
published in 2008 (73 FR 67406 and 73 FR 54226), all parties should be
mindful that their compensation arrangements, including arrangements
with FMOs and other similar type entities, must comply with the fraud
and abuse laws, including the Federal anti-kickback statute. Beginning
as early as 2010, an OIG report indicated that ``plan sponsors may have
created financial incentives that could lead FMOs to encourage sales
agents to enroll Medicare beneficiaries in plans that do not meet their
health care needs. Because FMOs, like sales agents, may influence
Medicare beneficiaries' enrollment in MA plans, CMS should issue
additional regulations more clearly defining how and how much FMOs
should be paid for their services.'' \135\ In the time since CMS first
began to regulate agent and broker compensation, we have seen the FMO
landscape change from mostly small regionally-based companies to a
largely consolidated group of large national private equity-backed or
publicly-traded companies.
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\135\ Levinson, Daniel R, BENEFICIARIES REMAIN VULNERABLE TO
SALES AGENTS' MARKETING OF MEDICARE ADVANTAGE PLANS (March 2010);
https://oig.hhs.gov/oei/reports/oei-05-09-00070.pdf.
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We have also observed that, similar to the additional payments made
to agents and brokers, there has been a steep increase in
administrative payments made to FMOs by MA organizations. Likewise, CMS
is concerned that these quick increases in fees have resulted in a
``bidding war'' among plans to secure anti-competitive contract terms
with FMOs and their affiliated agents and brokers. If left unaddressed,
such bidding wars will continue to escalate with anti-competitive
results, as smaller, local or regional plans that are unable to pay
exorbitant fees to FMOs risk losing enrollees to larger, national plans
who can. In addition to comments on our proposals here to help us
develop additional regulatory action, we specifically request comments
regarding how CMS can further ensure that payments made by MA plans to
FMOs do not undercut the intended outcome of the agent and broker
compensation proposals included in this proposed rule.
Finally, in addition to the undue influence that perks, add-on
payments, volume bonuses and other financial incentives paid by MA
organizations to FMOs may have on agents and brokers, they also create
a situation where there is an unlevel playing field among plans.
Larger, national plans are more able to shoulder the added costs being
paid as compared to smaller, more locally based MA plans. Furthermore,
we have received reports that some larger FMOs are more likely to
contract with national plans, negatively impacting competition. On July
9, 2021, President Biden issued Executive Order (E.O.) 14036:
``Promoting Competition in the American Economy'' (hereinafter referred
to as E.O. 14036). E.O. 14036 describes the Administration's policy
goals to promote a fair, open, competitive marketplace, and directs the
U.S. Department of Health and Human Services to consider policies that
ensure Americans can choose health insurance plans that meet their
needs and compare plan offerings, furthering competition and consumer
choice. The proposed regulatory changes included here also aim to deter
anti-competitive practices engaged in by MA organizations, agents,
brokers, and TPMOs that prevent beneficiaries from exercising fully
informed choice and limit competition in the Medicare plan marketplace
among Traditional Medicare, MA plans, and Medigap plans.
In this proposed rule we are focusing on current payment structures
among MA organizations, agents, brokers, and TMPOs, specifically FMOs,
that may incentivize agents or brokers to emphasize or prioritize one
plan over another, irrespective of the beneficiary's needs, leading to
enrollment in a plan that does not best fit the beneficiary's needs and
a distortion of the competitive process.
As noted above, section 1851(j)(2)(D) and 1851(h)(4)(D) of the
Social Security Act directs the Secretary to set limits on compensation
rates to ``ensure that the use of compensation creates incentives for
agents and brokers to enroll individuals in the Medicare Advantage plan
that is intended to best meet their health care needs,'' and that the
Secretary ``shall only permit a Medicare Advantage organization (and
the agents, brokers, and other third parties representing such
organization) to conduct the activities described in subsection (j)(2)
in accordance with the limitations established under such subsection.''
Our regulations at Sec. 422.2274 set out limitations regarding
various types of payments and compensation that may be paid to agents,
brokers, and third parties who represent MA organizations. Each of
these limitations is intended to better align the professional
incentives of the agents and brokers with the interests of the Medicare
beneficiaries they serve. Our regulations specify maximum compensation
amounts that may be paid to agents and brokers for initial enrollment
and renewals. The regulations also allow for payment to agents and
brokers for administrative costs such as training and operational
overhead, as long as the payments are at or below the value of those
services in the marketplace. The maximum compensation for initial and
renewal enrollments and the requirement that administrative payments
reflect fair market value for actual administrative services are
intended to ensure incentives for agents and brokers to help enroll
beneficiaries into MA plans that best meet their health care needs.
However, while CMS has affirmatively stated the types of allowable
payment arrangements and the parameters for those payments in
regulations at Sec. 422.2274, some recent studies suggest that MA
plans offer
[[Page 78554]]
additional or alternative incentives to agents and brokers, often
through third parties such as FMOs, to prioritize enrollment into some
plans over others These incentives are both explicit (in the form of
higher payments purportedly for administrative services) and implicit
(such as in the case of passing on leads, as discussed below).\136\
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\136\ The Commonwealth Fund, The Challenges of Choosing Medicare
Coverage: Views from Insurance Brokers and Agents (Feb. 28, 2023);
https://www.commonwealthfund.org/publications/2023/feb/challenges-choosing-medicare-coverage-views-insurance-brokers-agents.
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As previously mentioned, we believe payments categorized by MA
organizations as ``administrative expenses,'' paid by MA organizations
to agents and brokers, have significantly outpaced the market rates for
similar services provided in non-MA markets, such as Traditional
Medicare with Medigap. This is based on information shared by insurance
associations and focus groups and published in research articles by
groups such as the Commonwealth Fund, which found that ``most brokers
and agents in the focus groups recalled receiving higher commissions
[total payments, including commission and administrative payments]--
sometimes much higher--for enrolling people in Medicare Advantage plans
compared to Medigap.'' \137\
---------------------------------------------------------------------------
\137\ The Commonwealth Fund, The Challenges of Choosing Medicare
Coverage: Views from Insurance Brokers and Agents (Feb. 28, 2023);
https://www.commonwealthfund.org/publications/2023/feb/challenges-choosing-medicare-coverage-views-insurance-brokers-agents.
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Similarly, some MA organizations are paying for things such as
travel or operational overhead on a ``per enrollment'' basis, resulting
in instances where an agent or broker may be paid multiple times for
the same, one-time expense, if the agent incurring the expense happened
to enroll more than one beneficiary into the plan making the payment.
For example, an agent could be reimbursed for the cost of traveling to
an event where that agent enrolls a beneficiary into an MA plan; if the
cost of travel is paid on a ``per enrollment'' basis, the agent would
be reimbursed the price of the trip multiplied by the number of
enrollments the agent facilitated while at that event. In this
scenario, whichever MA organization reimburses for travel at the
highest rates would effectively be offering a higher commission per
enrollee. This would inherently create a conflict of interest for the
agent. As the Secretary must ``ensure that the use of compensation
creates incentives for agents and brokers to enroll individuals in the
Medicare Advantage plan that is intended to best meet their health care
needs,'' we believe this type of conflict must be addressed.
We are also concerned that other activities undertaken by a TPMO,
as a part of their business relationships with MA organizations, may
influence the plan choices offered or how plan choices are presented by
the agent or broker to a prospective enrollee. For example, we have
learned of arrangements where an entity, such as an FMO, provides an MA
organization with both marketing and brokering services. As part of the
arrangement, the MA organization pays the FMO for leads generated by
the FMO and then the leads are given directly to the FMO's agents
instead of to the MA organization itself (or the MA organization's
other contracted agents and brokers). When the FMO's agents then
contact the individual and enroll the individual into an MA plan, the
MA organization pays the agent or the FMO the enrollment compensation
described in Sec. 422.2267(d), separate and apart from any referral
fee paid to the FMO.
While MA organizations that are engaged in these types of
arrangements (such as paying FMOs for lead generating activities and
marketing, then giving the leads to the FMO's agents and then paying
compensation for that same enrollment) might argue that they are not
intended to influence an agent or broker in determining which plan
``best meets the health care needs of a beneficiary,'' we believe it is
likely that these arrangements are having this effect. We believe that
current contracts in place between FMOs and MA plans can trickle down
to influence agents and brokers in enrolling more beneficiaries into
those plans that also provide the agents and brokers with leads,
regardless of the appropriateness of the plan is for the individual
enrollees. In fact, FMOs could leverage these leads as a form of
additional compensation by ``rewarding'' agents who enroll
beneficiaries into a specific plan with additional leads. Therefore,
CMS is required under section 1851(j)(2)(D) of the Social Security Act
to establish guidelines that will bring the incentives for agents and
brokers to enroll individuals in an MA plan that is intended to best
meet their health care needs, in accordance with the statute.
In this rule we are proposing to: (1) generally prohibit contract
terms between MA organizations and agents, brokers, or other TMPOs that
may interfere with the agent's or broker's ability to objectively
assess and recommend the plan which best fits a beneficiary's health
care needs; (2) set a single agent and broker compensation rate for all
plans, while revising the scope of what is considered ``compensation;''
and (3) eliminate the regulatory framework which currently allows for
separate payment to agents and brokers for administrative services. We
are also proposing to make conforming edits to the agent broker
compensation rules at Sec. 423.2274.
1. Limitation on Contract Terms
We propose to add at Sec. 422.2274(c)(13) that, beginning in
contract year 2025, MA organizations must ensure that no provision of a
contract with an agent, broker, or TPMO has the direct or indirect
effect of creating an incentive that would reasonably be expected to
inhibit an agent's or broker's ability to objectively assess and
recommend which plan best meets the health care needs of a beneficiary.
Examples of the anti-competitive contract terms we intend to
prohibit would include, for instance, those that specify renewal or
other terms of a plan's contract with an agent broker or FMO contingent
upon preferentially higher rates of enrollment; that make an MA
organizations contract with an FMO or reimbursement rates for marketing
activities contingent upon agents and brokers employed by the FMO
meeting specified enrollment quotas; terms that provide for bonuses or
additional payments from an MA organizations to an FMO with the
explicit or implicit understanding that the money be passed on to
agents or brokers based on enrollment volume in plans sponsored by that
MA organizations; for an FMO to provide an agent or broker leads or
other incentives based on previously enrolling beneficiaries into
specific plans for a reason other than what best meets their health
care needs.
We believe this proposal gives plans further direction as to the
types of incentives and outcomes that must be avoided without being
overly prescriptive as to how the plans should structure these
arrangements.
We seek comment on this proposal.
2. Compensation Rates
Under current regulations, compensation for agents and brokers
(described at Sec. 422.2274(d)(2) and excluding administrative
payments as described in Sec. 422.2274(e)) may be paid at a rate
determined by the MA organization but may not exceed caps that CMS
calculates each year, based on Fair Market Value (FMV) as specified at
Sec. 422.2274(a). For example, the CY2023 national agent/broker FMV
compensation caps are $601 for each
[[Page 78555]]
MA initial enrollment, $301 for a MA renewal enrollment, $92 for each
Part D initial enrollment, and $46 for a Part D renewal enrollment.
We have learned that overall payments to agents and brokers can
vary significantly depending on which plan an individual enrolls in. We
are concerned that the lack of a uniform compensation standard across
plans can encourage the types of arrangements that provide strong
financial incentives for agents and brokers to favor some plans over
others and that these incentives could result in beneficiaries
enrolling in plans that do not best fit their needs. To eliminate this
potential for bias and ensure that CMS's regulations governing agent
and broker compensation ensure that agents and brokers are incented to
enroll individuals in the MA plan that is intended to best meet their
health care needs, we are proposing to amend our regulations to require
that all payments to agents or brokers that are tied to enrollment,
related to an enrollment in an MA plan or product, or are for services
conducted as part of the relationship associated with the enrollment
into an MA plan or product must be included under compensation, as
defined at Sec. 422.2274(a), including payments for activities
previously excluded under paragraph (ii) of the definition of
compensation at Sec. 422.2274(a), and are regulated by the
compensation requirements of Sec. 422.2274(d)(1) through (3). We are
also proposing to make conforming amendments to the regulations at
Sec. 422.2274(e)(2) to clarify that all administrative payments are
included in the calculation of enrollment-based compensation; this
proposal is further discussed at section VI.B.3. of this proposed rule.
Further, we are proposing to change the caps on compensation
payments that are currently provided in Sec. 422.2274 to set rates
that would be paid by all plans across the board. Under this proposal,
agents and brokers would be paid the same amount either from the MA
plan directly or by an FMO. We note that the proposal does not extend
to payments for referrals as described at Sec. 422.2274(f); we believe
the cap set on referral payments is sufficient to avoid the harms
described above, and that a referral payment is often made in lieu of a
compensation payment, and so it does not provide the same incentives as
compensation payments.
We believe that this approach would level the playing field for all
plans represented by an agent or broker and promote competition. In
addition, by explicitly saying that compensation extends to additional
activities as a part of the relationship between the agent and the
beneficiary, we reinforce CMS's longstanding understanding that the
initial and renewal compensation amounts are based on the fact that
additional work may be done by an agent or broker throughout the plan
year, including fielding follow-up questions from the beneficiary or
collecting additional information from them would enhance a
beneficiary's ability to get the most out of their plan.
MA organizations are currently required, under Sec.
422.2274(c)(5), to report to CMS on an annual basis the specific rates
and range of rates they will be paying independent agents and brokers.
We propose to remove the reporting requirement at Sec. 422.2274(c)(5),
as all agents and brokers would be paid the same compensation rate in a
given year under our proposal.
We seek comment on this proposal.
3. Administrative Payments
As discussed above, CMS is proposing that all payments to an agent
or broker relating to the initial enrollment, renewal, or services
related to a plan product would be included in the definition of
compensation. For consistency with that proposed policy, we are also
proposing to remove the separate regulatory authority regarding
``administrative payments'' currently at Sec. 422.2274(e)(1), and to
amend Sec. 422.2274(e)(2) to clarify that the portion of an agent's
compensation for an enrollment may be calculated and updated
independently We believe this step is necessary to ensure that MA
organizations cannot utilize the existing regulatory framework allowing
for separate payment for administrative services to effectively
circumvent the FMV caps on agent and broker compensation.
For instance, we understand that many plans are paying agents and
brokers for conducting health risk assessments (HRAs) and categorize
these HRAs as an ``administrative service.'' We understand the fair
market value of these services, when provided by non-medical staff, to
be approximately $12.50 per hour and the time required to complete an
HRA is intended to be no more than twenty minutes.\138\ However, we
have been made aware of instances of an agent or broker enrolling a
beneficiary into a plan, asking the enrollee to complete one of these
short assessments, and then being compensated at rates of up to $125
per HRA.\139\ Compensation at these levels is not consistent with
market value. Moreover, a study funded by the CDC to provide guidance
for best practices ``recommend that HRAs be tied closely with clinician
practice and be collected electronically and incorporated into
electronic/patient health records [. . .] agents/brokers lack the
necessary health care knowledge, information technology capabilities,
and provider relationships to link HRAs in the recommended way.'' \140\
For this reason, we believe that the HRAs completed by agents and
brokers do not have the same value as those performed and interpreted
by health care providers or in a health care setting.
---------------------------------------------------------------------------
\138\ CDC, Interim Guidance for Health Risk Assessments and
their Modes of Provision for Medicare Beneficiaries; https://www.cms.gov/files/document/healthriskassessmentscdcfinalpdf.
\139\ https://4239296.fs1.hubspotusercontent-na1.net/hubfs/4239296/2023%20Plan%20Year%20Docs/2023%20HRA%20Instructions/Cigna%202023%20HRA%20Details.pdf.
\140\ The Commonwealth Fund, The Challenges of Choosing Medicare
Coverage: Views from Insurance Brokers and Agents (Feb. 28, 2023);
https://www.commonwealthfund.org/publications/2023/feb/challenges-choosing-medicare-coverage-views-insurance-brokers-agents;cf.
Guidance on Development of Health Risk Assessment as Part of the
Annual Wellness Visit for Medicare Beneficiaries--(section 4103 of
the Patient Protection and Affordable Care Act) https://www.cdc.gov/policy/paeo/hra/hraawvguidancereportfinal.pdf.
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Similarly, according to recent market surveys and information
gleaned from oversight activities, payments purportedly for training
and testing and other administrative tasks for agents and brokers
selling some MA plans seem to significantly outpace payments for
similar activities made by other MA plans, as well as payments for
similar activities undertaken by insurance agents and brokers in other
industries. The higher overall cost as compared to other industries,
combined with the otherwise inexplicable difference in payments for
administrative activities for some MA organizations compared to others,
further points to the payment for these administrative activities being
used as a mechanism to effectively pay agents and brokers enrollment
compensation amounts in excess of the limits specified at Sec.
422.2274(a) and (d).
By eliminating separate payment for administrative services, CMS
expects that this proposal would eliminate a significant method which
some plans may have used to circumvent the regulatory limits on
enrollment compensation. Furthermore, we believe ensuring a fixed
payment rate for agents will result in compensation greater than what
is currently provided through typical contractual arrangements with
FMOs, as there would no longer be a
[[Page 78556]]
range of compensation rates at which the MA organizations could pay for
agents and brokers' services. While our proposal would prohibit
separate administrative payments, as described below, we propose to
adjust the FMV for compensation to take into account costs for certain
appropriate administrative activities.
We recognize that this approach could have some drawbacks,
particularly as this policy would, in effect, leave agents and brokers
unable to directly recoup administrative costs such as overhead or lead
purchasing from its compensation from Medicare health and drug plans,
unless the agent has a certain volume of business. For instance, the
cost of a customer relationship management (CRM) system (the software
used to connect and log calls to potential enrollees) is about $50 per
month. This expense would require at least one enrollment commission
per year to cover these costs, whereas it is currently permissible for
an MA organization to pay for these costs directly, leaving the entire
commission as income for the agent or broker. However, given the high
volume of enrollees that use an agent or broker for enrollment
services, we do not believe there to be a large risk of agents or
brokers failing to cross that initial threshold to recoup their
administrative costs.
We considered an alternate policy proposal wherein we would
maintain our current definitions of compensation and administrative
payments but would remove the option for a plan to make administrative
payments based on enrollment, as currently codified at Sec.
422.2274(e)(2). We considered instead requiring that administrative
payments be made a maximum of one time per administrative cost, per
agent or broker. We considered the argument that these expenses, such
as payments for training and testing, or nonmonetary compensation such
as leads, should be paid at their FMV and not as a factor of overall
enrollment because the value of such administrative tasks is usually a
fixed rate, regardless of how many enrollments are ultimately generated
by the agent or broker engaged in these administrative tasks.
We also considered whether, under this alternative policy approach,
it would be best to require that each administrative expense be
reimbursed at the same rate by each contracting MA organization as a
means of encouraging agents and brokers to represent multiple plans at
any given time. However, this alternative policy would, of necessity,
be comparatively prescriptive and could present challenges for all
parties as it relates to the tracking these expenses. We believe our
proposal to include all payments to an agent or broker under the
definition of compensation is likely to reduce the ability of plans
and/or TPMOs to circumvent the maximum compensation rates defined by
CMS via the annual FMV determination.
We seek comment on this proposal.
We are also proposing to increase the compensation rate described
at Sec. 422.2274(a) to add certain appropriate administrative costs.
In particular, we believe that the administrative cost of the licensing
and training and testing requirements at Sec. 422.2274(b), and the
recording requirements at Sec. 422.2274(g)(2)(ii), may warrant an
increase in the rate of compensation given the significant and
predictable cost of these mandatory activities.\141\ Based on our fair
market value analysis, we believe these activities would warrant
increasing the base compensation rate by $31,\142\ and be updated
annually as part of the scheduled compensation rate update described at
Sec. 422.2274(a). Therefore, we propose to add, beginning in 2025,
that FMV will be increased by $31 to account for administrative
payments included under the compensation rate, and to be updated
annually in compliance with the requirements for FMV updates.
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\141\ https://www.cms.gov/medicare/enrollment-renewal/managed-care-eligibility-enrollment/agent-broker-compenstation.
\142\ Our calculations arriving at this number are further
discussed in the COI in section X.B.10 titled ICRs Regarding Agent
Broker Compensation (Sec. 422.2274).
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We believe it is necessary to increase the rate for compensation by
$31, based on the estimated costs for training, testing, and call
recording that would need to be covered by this single enrollment-based
payment. We are proposing to begin with a one-time $31 increase,
including various locality-specific adjustments, with annual FMV
updates to this amount as described by the regulation, including
``adding the current year FMV and the product of the current year FMV
and MA Growth Percentage for aged and disabled beneficiaries.'' We note
that we are not proposing a proportionate increase to compensation for
renewals and we considered this in determining the amount by which we
are proposing to increase the rate for compensation for enrollments.
We seek comment on our proposal to increase the rate for
compensation to account for necessary administrative costs that would
be incorporated into this rate under our previous proposal.
Specifically, CMS is requesting comment on the administrative costs
that should be considered, and how else we might determine their value,
as we consider the future of the compensation structure.
4. Agent Broker Compensation for Part D Plans
Finally, we also are proposing to apply each of the proposals
described above to the sale of PDP plans by agents and brokers, as
codified at Sec. 423.2274.
Pursuant to sections 1851(j)(2)(D) and 1860D-4(l) of the Act, the
Secretary has a statutory obligation to establish guidelines to ensure
that the use of agent and broker compensation creates incentives for
agents and brokers to enroll individuals in the Medicare Advantage (MA)
and Part D prescription drug plans that are intended to best meet
beneficiaries' health care needs.
Because the same agents and brokers are often licensed to sell both
MA plans and PDPs, we believe it is necessary under our statutory
authority to apply the same compensation rules to the sale of both MA
plans and PDPs in order to ensure that both plan types are being held
to the same standards and are on a `level playing field' when it comes
to incentives faced by agents and brokers. This includes increasing the
FMV rate compensation rate by $31.
We also believe it is necessary to extend these regulations to the
sale of PDPs to avoid shifting the incentives discussed at length
above, such as the incentive for agents to favor one plan over another
based upon bonuses or other payments that are not currently accounted
for under the definition of ``compensation.'' If conforming changes are
not made to the sale of PDP plans, the PDP plans may have an unfair
advantage in that they have the opportunity to offer additional
payments and perks to FMOs and agents, while MA plan sponsors are
limited by the policies proposed above. Therefore, for the same reasons
discussed above regarding proposed changes to Sec. 422.2274, we
propose to make conforming amendments to Sec. 423.2274.
We seek comment on this proposal, and specifically whether and to
what extend modifications to these proposals should be made to account
for differences between MA and Part D plan types.
VII. Medicare Advantage/Part C and Part D Prescription Drug Plan
Quality Rating System
A. Introduction
CMS develops and publicly posts a 5-star rating system for Medicare
Advantage (MA)/Part C and Part D plans
[[Page 78557]]
as part of its responsibility to disseminate comparative information,
including information about quality, to beneficiaries under sections
1851(d) and 1860D-1(c) of the Act and based on 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 MA beneficiary rebates under section 1854(b) of
the Act. Cost plans under section 1876 of the Act are also included in
the MA 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 parts 422
and 423 Medicare Advantage and Part D Prescription Drug Program Quality
Rating System. (83 FR 16526-27) As a result, the proposals here would
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 plans and cost plans.
We have continued to identify enhancements to the Star Ratings
program to ensure it is aligned with the CMS Quality Strategy as that
Strategy evolves over time. To support the CMS National Quality
Strategy, CMS is moving towards a building-block approach to streamline
quality measures across CMS quality and value-based care programs.
Across our programs, where applicable, we are considering including the
Universal Foundation \143\ of quality measures, which is a set of
measures that are aligned across CMS programs. CMS is committed to
aligning a set of measures across all our quality and value-based care
programs and ensuring we measure quality across the entire care
continuum in a way that promotes the best, safest, and most equitable
care for all individuals. Improving alignment of measures across
Federal programs and with private payers will reduce provider burden
while also improving the effectiveness and comparability of measures.
The Universal Foundation of quality measures will focus provider
attention, reduce burden, identify disparities in care, prioritize
development of interoperable, digital quality measures, allow for
cross-comparisons across programs, and help identify measurement gaps.
The Universal Foundation is a building block to which programs will add
additional aligned or program-specific measures. The set of measures
will evolve over time to meet the needs of individuals served across
CMS programs. We have submitted the Initiation and Engagement of
Substance Use Disorder Treatment (IET) measure (Part C) (a Universal
Foundation measure) to the 2023 Measures under Consideration process
for review by the Measures Application Partnership prior to proposing
use of that measure in the Star Ratings system through future
rulemaking to align with the Universal Foundation. We also note that,
beginning with measurement year 2023, Part C contracts are beginning to
report to CMS additional measures that are part of the Universal
Foundation, such as Adult Immunization Status, Depression Screening and
Follow-Up for Adolescents and Adults, and Social Need Screening and
Intervention, for the display page. We have previously solicited
feedback regarding potentially proposing these measures as Star Ratings
in the future through both 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 and 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.
We intend to submit these measures to the Measures Under Consideration
process for review by the Measures Application Partnership in the
future and propose them through future rulemaking as additional Star
Ratings measures. The remaining measures that are part of the Universal
Foundation are already part of the current Part C and D Star Ratings
program.
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\143\ https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
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In this proposed rule, we are also proposing to update the
Medication Therapy Management (MTM) Program Completion Rate for
Comprehensive Medication Review (CMR) measure (Part D).
We are also proposing the following methodological enhancements,
clarifications, and operational updates:
Revise the process for identifying data completeness
issues and calculating scaled reductions for the Part C appeals
measures.
Update how the CAI and HEI reward are calculated in the
case of contract consolidations.
Revise an aspect of the QBP appeals process.
Add that a sponsor may request CMS review of its
contract's administrative claims data used for the Part D Patient
Safety measures no later than the annual deadline set by CMS for the
applicable Star Ratings year.
Unless otherwise stated, proposed changes would apply (that is,
data would be collected and performance measured) for the 2025
measurement period and the 2027 Star Ratings.
B. 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 procedures for adding, updating, and removing measures for
the Star Ratings program. 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 (83 FR 16532) (hereinafter referred
to as the April 2018 final rule), we stated 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. 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. In this rule, CMS is proposing a measure change to the Star
Ratings program and an updated methodology for calculating scaled
reductions of the Part C appeals measures for performance periods
beginning on or after January 1, 2025, unless noted otherwise.
[[Page 78558]]
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. For example, we regularly review
measures developed by NCQA and PQA.
1. Proposed Measure Update
a. Medication Therapy Management (MTM) Program Completion Rate for
Comprehensive Medication Review (CMR) (Part D)
Section 1860D-4(c)(2) of the Act requires all Part D sponsors to
have an MTM program designed to assure, with respect to targeted
beneficiaries, that covered Part D drugs are appropriately used to
optimize therapeutic outcomes through improved medication use, and to
reduce the risk of adverse events, including adverse drug interactions.
Section 1860D-4(c)(2)(A)(ii) of the Act requires Part D sponsors to
target those Part D enrollees who have multiple chronic diseases, are
taking multiple Part D drugs, and are likely to meet a cost threshold
for covered Part D drugs established by the Secretary. CMS codified the
MTM targeting criteria at Sec. 423.153(d)(2).
CMS also uses the MTM Program Completion Rate for CMR Star Rating
measure, which is defined as the percent of MTM program enrollees who
received a CMR during the reporting period. The Part D MTM Program
Completion Rate for CMR measure shows how many members in a plan's MTM
program had an assessment from their plan by a pharmacist or other
health professional to help them manage their medications. As part of
the completion of a CMR, a Part D enrollee receives a written summary
of the discussion in CMS's Standardized Format, including an action
plan that recommends what the member can do to better understand and
use their medications.\144\
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\144\ The Medicare Part C & D Star Ratings Technical Notes
provide details on existing measures and are available at: https://www.cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovgenin/performancedata.
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In the December 27, 2022 proposed rule, ``Medicare Program;
Contract Year 2024 Policy and Technical Changes to the Medicare
Advantage Program, Medicare Prescription Drug Benefit Program, Medicare
Cost Plan Program, Medicare Parts A, B, C, and D Overpayment Provisions
of the Affordable Care Act and Programs of All-Inclusive Care for the
Elderly; Health Information Technology Standards and Implementation
Specifications'' (87 FR 79452), hereafter referred to as the December
2022 proposed rule, CMS proposed changes to the MTM program targeting
criteria, including: (1) requiring plan sponsors to target all core
chronic diseases identified by CMS, codifying the current 9 core
chronic diseases \145\ in regulation, and adding HIV/AIDS for a total
of 10 core chronic diseases; (2) lowering the maximum number of covered
Part D drugs a sponsor may require from 8 to 5 drugs and requiring
sponsors to include all Part D maintenance drugs in their targeting
criteria; and (3) revising the methodology for calculating the cost
threshold ($4,935 in 2023) to be commensurate with the average annual
cost of 5 generic drugs ($1,004 in 2020). We estimated that the
proposed changes would increase the number and percentage of Part D
enrollees eligible for MTM from 4.5 million (9 percent) to 11.4 million
(23 percent).
---------------------------------------------------------------------------
\145\ The current core chronic diseases are diabetes*,
hypertension*, dyslipidemia*, chronic congestive heart failure*,
Alzheimer's disease, end stage renal disease (ESRD), respiratory
disease (including asthma*, chronic obstructive pulmonary disease
(COPD), and other chronic lung disorders), bone disease-arthritis
(osteoporosis, osteoarthritis, and rheumatoid arthritis), and mental
health (including depression, schizophrenia, bipolar disorder, and
other chronic/disabling mental health conditions). Enumerated in
statute (*).
---------------------------------------------------------------------------
As noted in the April 12, 2023 final rule, ``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''
(88 FR 22120), hereafter referred to as the April 2023 final rule, we
did not address comments received on the provisions of the proposed
rule that were not finalized in that rule, such as the proposed MTM
program targeting criteria changes, and stated that they would be
addressed at a later time, in a subsequent rulemaking document, as
appropriate. If those proposed changes were to be finalized, the number
of Part D enrollees eligible for MTM programs would increase, and the
denominator of the MTM Program Completion Rate for CMR Measure would
expand accordingly; therefore such changes in the targeting criteria
would be substantive updates to the Star Rating measure per Sec.
423.184(d)(2). Specifically, these proposed changes to the targeting
criteria would not update the actual measure specifications but would
meaningfully impact the number of Part D enrollees eligible for MTM
services from 9 percent to an estimated 23 percent and, thus,
substantially increase the number of enrollees included in the
denominator of the MTM Program Completion Rate for CMR Measure, if
finalized.
Accordingly, if the changes to eligibility for the MTM program in
the December 2022 proposed rule (described above) are finalized in a
future rule, in this proposed rule CMS proposes to move the MTM Program
Completion Rate for CMR Star Rating measure to a display measure for at
least 2 years due to substantive measure updates. For example, if such
MTM program eligibility changes are finalized for CY 2025, our proposal
in this rule would move the measure to the display page for at least 2
years prior to using the updated measure to calculate and assign Star
Ratings. There would be no legacy measure to calculate while the
updated measure using the same measure specifications is on the display
page because the MTM-eligible denominator population would have
meaningfully increased due to changes in the program requirements.
Therefore, the measure would be removed from the Star Ratings entirely
for the 2025 and 2026 measurement years and would return to the Star
Ratings program no earlier than the 2027 measurement year for the 2029
Star Ratings. CMS does not anticipate any additional burden associated
with the measure update, as burden tied to the changes in the MTM
eligibility criteria is already considered in estimates for the
December 2022 proposed rule.
If the changes to eligibility for MTM programs described above and
in the December 2022 proposed rule are not finalized, CMS would not
make any substantive changes to the MTM Program Completion Rate for CMR
measure--that is, we would also not finalize the proposal in this rule
to update the Star Rating measure.
Table GB1 summarizes the updated MTM Program Completion Rate for
CMR measure addressed in this proposed rule. The measure description
listed in this table is a high-level description. The annual Star
Ratings measure specifications supporting document, Medicare Part C & D
Star Ratings Technical Notes, provides detailed specifications for each
measure. Detailed specifications include, where appropriate, 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, the 2027 Stars Ratings are produced in the
[[Page 78559]]
fall of 2026. If a measurement period is listed as ``the calendar year
2 years prior to the Star Ratings year'' and the Star Ratings year is
2027, the measurement period is referencing the January 1, 2025, to
December 31, 2025, period.
[GRAPHIC] [TIFF OMITTED] TP15NO23.019
C. Data Integrity (Sec. Sec. 422.164(g) and 423.184(g))
We currently have rules specified at Sec. Sec. 422.164(g) and
423.184(g) to reduce a measure rating when CMS determines that a
contract's measure data are incomplete, inaccurate, or biased. For the
Part C appeals measures, we have statistical criteria to reduce a
contract's appeals measures for missing Independent Review Entity (IRE)
data. Specifically, these criteria allow us to use scaled reductions
for the appeals measures to account for the degree to which the data
are missing. See 83 FR 16562-16564. The data underlying a measure score
and Star Rating must be complete, accurate, and unbiased for them to be
useful for the purposes we have codified at Sec. Sec. 422.160(b) and
423.180(b). In the April 2018 final rule (83 FR 16562), CMS codified at
Sec. Sec. 422.164(g)(1)(iii) and 423.184(g)(1)(ii) a policy to make
scaled reductions to the Part C and D appeals measures' Star Ratings
when the relevant IRE data are not complete based on the Timeliness
Monitoring Project (TMP) or audit information. As provided under Sec.
423.184(e)(1)(ii), we removed the two Part D appeals measures (Appeals
Auto-Forward and Appeals Upheld) beginning with the 2020 measurement
year and 2022 Star Ratings in the 2020 Rate Announcement \146\ due to
low statistical reliability; thus, the scaled reductions are no longer
applicable to the Part D appeals measures. However, we made no changes
to the scaled reductions used with the Part C appeals measures, Plan
Makes Timely Decisions about Appeals and Reviewing Appeals Decisions,
because there were no similar statistical reliability issues with those
measures. Therefore, these two Part C measures continue to be subject
to the scaled reductions authorized at Sec. 422.164(g)(1)(iii) based
on TMP or audit information.
---------------------------------------------------------------------------
\146\ Announcement of Calendar Year (CY) 2020 Medicare Advantage
Capitation Rates and Medicare Advantage and Part D Payment Policies
and Final Call Letter (cms.gov).
---------------------------------------------------------------------------
Because the Part D appeals measures are no longer part of the Star
Ratings, we are proposing to remove and reserve the paragraphs at
Sec. Sec. 422.164(g)(1)(iii)(B), (F), and (I) and 423.184(g)(1)(ii).
Paragraphs (g)(1)(iii)(B), (F), and (I) of Sec. 422.164 all address
how the error rate on the TMP for the Part D appeals measures had been
used in calculating scaled reductions for MA-PDs that are measured on
both Part C and Part D appeals. Currently, Sec. 423.184(g)(1)(ii)
addresses the scaled reductions for Part D appeals measures based on
the TMP. Given the removal of the Part D appeals measures from the Star
Ratings, these provisions are moot. We propose to reserve the relevant
paragraphs to avoid the risk that redesignating the remaining
paragraphs would cause unintended consequences with any existing
references to these provisions.
The completeness of the IRE data is critical to support fair and
accurate measurement of the two Part C appeals measures. Since the 2019
Star Ratings we have used data from the TMP, which uses the Part C
audit protocols for collecting Organization Determinations, Appeals and
Grievances (ODAG) universes, to determine whether the IRE data used to
calculate the Part C appeals measures are complete. As described at
Sec. 422.164(g)(1)(iii), we use scaled reductions to account for the
degree to which the IRE data are missing. The current regulations
describe how scaled reductions are based on the TMP. However, due to a
change in the Part C audit protocols for collecting universes of ODAG
data, we are proposing to modify, and in one case reserve, paragraphs
(g)(1)(iii) introductory text, (g)(1)(iii)(A)(1) and (2),
(g)(1)(iii)(H) and (J), (g)(1)(iii)(K)(2), and (g)(1)(iii)(O) to change
how we address reductions in the Star Ratings for Part C appeals
measures using different data. We are proposing to revise the
introductory language in Sec. 422.164(g)(1)(iii) to remove references
to the timeliness monitoring study and audits and replace them with
references to data from MA organizations, the IRE or CMS administrative
sources. In addition, our proposed revisions to this paragraph include
minor grammatical changes to the verb tense. We are also proposing to
modify Sec. 422.164(g)(1)(iii)(A) to use data from MA organizations,
the IRE, or CMS administrative sources to determine the completeness of
the data at the IRE for the Part C appeals measures starting with the
2025 measurement year and the 2027 Star Ratings. Currently, data
collected through Sec. 422.516(a) could be used to confirm the
completeness of the IRE data; however, data collected from MA
organizations through other mechanisms in addition to data from the IRE
or CMS administrative sources could be used in the future. The proposed
amendment to Sec. 422.164(g)(1)(iii)(A) is not intended to limit the
data CMS uses to conduct analyses of the completeness of the IRE data
in order to adapt to changing information submissions that could be
reliably used for the same purpose in the future. The revisions
proposed for the other paragraphs provide for a new calculation to
implement scaled reductions for the Part C appeals
[[Page 78560]]
measures for specific data integrity issues.
Part C contracts are required to send partially favorable
(partially adverse) and unfavorable (adverse) decisions to the IRE
within applicable timeframes as specified at Sec. 422.590(a) through
(e). In order for the existing Part C appeals measures (Plan Makes
Timely Decisions about Appeals and Reviewing Appeals Decisions) to
accurately reflect plan performances in those areas, the appeals must
be sent to the IRE because the data source for these measures is based
on the data that have been submitted to the IRE. Currently, through the
Part C Reporting Requirements as set forth at Sec. 422.516(a), CMS
collects information at the contract level from MA organizations about
the number of partially favorable reconsiderations (that is, the number
of partially favorable claims and the number of partially favorable
service requests by enrollees/representatives and non-contract
providers) and unfavorable reconsiderations (that is, the number of
partially favorable claims and the number of partially favorable
service requests by enrollees/representatives and non-contract
providers) over a calendar year.\147\ These data are subject to data
validation requirements, in accordance with specifications developed by
CMS, under Sec. 422.516(g), to confirm that they are reliable, valid,
complete, and comparable. CMS would use this information to determine
the total number of cases that should have been sent to the IRE over
the measurement year (that is, number of partially favorable
reconsiderations + number of unfavorable reconsiderations) to compare
to information from the IRE about submissions received from each MA
organization. In the future, CMS may use detailed beneficiary-level
data collected on the number of partially favorable reconsiderations
and the number of unfavorable reconsiderations if such more detailed
information is collected under CMS's statutory and regulatory authority
to require reporting and data submission from MA organizations (such as
the reporting requirements in Sec. Sec. 422.504(f)(2) and/or
422.516(a)).
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\147\ Elements E through L in Subsection #4 on page 15 at
https://www.cms.gov/files/document/cy2023-part_technical-
specifications-222023.pdf are currently used to identify favorable
and partially favorable reconsiderations.
---------------------------------------------------------------------------
To determine if a contract may be subject to a potential reduction
for the Part C appeals measures' Star Ratings, CMS is proposing to
compare the total number of appeals received by the IRE, including all
appeals regardless of their disposition (for example, including appeals
that are dismissed for reasons other than the plan's agreement to cover
the disputed services and withdrawn appeals), to the total number of
appeals that were supposed to go to the IRE. The total number of
appeals that were supposed to be sent to the IRE would be based on the
sum of the number of partially favorable reconsiderations and the
number of unfavorable reconsiderations from the Part C Reporting
Requirements during the measurement year (January 1 to December 31st).
We propose to modify the calculation of the error rate at Sec.
422.164(g)(1)(iii)(H) by taking 1 minus the quotient of the total
number of cases received by the IRE and the total number of cases that
were supposed to be sent to the IRE (Equation 1). The total number of
appeals that were supposed to be sent to the IRE in Equation 2 would be
calculated from the data described in the proposed revisions to Sec.
422.164(g)(1)(iii)(A):
[GRAPHIC] [TIFF OMITTED] TP15NO23.000
[GRAPHIC] [TIFF OMITTED] TP15NO23.001
We propose to remove and reserve Sec. 422.164(g)(1)(iii)(J)
because we intend to calculate the Part C error rate based on 12 months
rather than a projected number of cases not forwarded to the IRE in a
3-month period as has historically been done with the TMP data.
Currently, a contract is subject to a possible reduction due to lack of
IRE data completeness if the calculated error rate is 20 percent or
more and the projected number of cases not forwarded to the IRE is at
least 10 in a 3-month period as described at Sec.
422.164(g)(1)(iii)(K). We are proposing to modify Sec.
422.164(g)(1)(iii)(K)(2) so that the number of cases not forwarded to
the IRE is at least 10 for the measurement year (that is, total number
of cases that should have been forwarded to the IRE minus the total
number of cases received by the IRE is at least 10 for the measurement
year). The requirement for a minimum number of cases is needed to
address statistical concerns with precision and small numbers. If a
contract meets only one of the conditions specified in paragraph (K),
the contract would not be subject to reductions for IRE data
completeness issues.
We are proposing at Sec. 422.164(g)(1)(iii)(O) that the two Part C
appeals measure Star Ratings be reduced to 1 star if CMS does not have
accurate, complete, and unbiased data to validate the completeness of
the Part C appeals measures. For example, the data collected in the
Part C Reporting Requirements go through a data validation process
(Sec. 422.516(a)). CMS has developed and implemented data validation
standards to ensure that data reported by sponsoring organizations
pursuant to Sec. 422.516 satisfy the regulatory obligation. If these
data are used to validate the completeness of the IRE data used to
calculate the Part C appeals measures, we would reduce the two Part C
appeals measure Star Ratings to 1 star if a contract fails data
validation of the applicable Part C Reporting Requirements sections for
reconsiderations by not scoring at least 95 percent or is not compliant
with data validation standards (which includes sub-standards as
applicable), since we cannot confirm the data used for the Part C
appeals measures.
We also propose to update Sec. 422.164(g)(1)(iii)(A)(2) to change
the data source in the case of contract consolidations so that the data
[[Page 78561]]
described in paragraph (g)(1)(iii)(A)(1) are combined for consumed and
surviving contracts for the first year after consolidation. In
addition, we propose to delete the phrase ``For contract consolidations
approved on or after January 1, 2022'' as unnecessary.
We are not proposing to update the steps currently described at
Sec. 422.164(g)(1)(iii)(C) through (E) and (G), (g)(1)(iii)(K)(1), and
(g)(1)(iii)(L) through (N) to determine whether a scaled reduction
should be applied to the two Part C appeals measures. We welcome
feedback on this updated approach for making scaled reductions proposed
at Sec. 422.164(g)(1)(iii) introductory text, (g)(1)(iii)(A)(1) and
(2), (g)(1)(iii)(H), (g)(1)(iii)(K)(2), and (g)(1)(iii)(O), the removal
of the Part D related provisions at Sec. Sec. 422.164(g)(1)(iii)(B),
(F), and (I) and 423.184(g)(1)(ii), and removal of the provision at
Sec. 422.164(g)(1)(iii)(J).
D. Review of Sponsor's Data (Sec. Sec. 422.164(h) and 423.184(h))
Currently, Sec. Sec. 422.164(h) and 423.184(h) provide that an MA
organization (and a cost plan organization as the regulations are
applied under Sec. 417.472(k)) and a Part D plan sponsor may request a
review of certain administrative data (that is, the contracts' appeals
data and Complaints Tracking Module data) before Star Ratings are
calculated. The regulations provide that CMS will establish an annual
deadline by which such requests must be submitted. At Sec. Sec.
422.164(h)(3) and 423.184(h)(3), CMS proposes to expand the policy for
requests that CMS review certain data used for Star Ratings to include
administrative data used for their contract's Part D Star Rating
Patient Safety measures. These requests would also have to be received
by the annual deadline set by CMS. We intend that the requests could
include CMS's review of Prescription Drug Event (PDE), diagnosis code,
and enrollment data but the requests are not necessarily limited to
these specific data.
CMS reports and updates the rates for the current Part D Star
Ratings Patient Safety measures (that is, Medication Adherence for
Cholesterol (Statins) (ADH-Statins), Medication Adherence for
Hypertension (RAS Antagonists) (ADH-RAS), Medication Adherence for
Diabetes Medications (ADH-Diabetes), and Statin Use in Persons with
Diabetes (SUPD) measures) via the Patient Safety Analysis Web Portal
for sponsors to review and download. Part D sponsors can use the
Patient Safety reports to compare their performance to overall averages
and monitor their progress in improving their measure rates. In the
April 17, 2023, HPMS memorandum titled ``Information to Review Data
Used for Medicare Part C and D Star Ratings and Display Measures,'' CMS
reminded sponsors of the various datasets and reports available for
sponsors to review their underlying measure data that are the basis for
the Part C and D Star Ratings and display measures, including the
monthly Part D Patient Safety measure reports. We expect sponsors to
review their monthly Patient Safety reports that include measure rates
along with available underlying administrative data and alert CMS of
potential errors or anomalies in the rate calculations per the measure
specifications in advance of CMS's plan preview periods to allow
sufficient time to investigate and resolve them before the release of
the Star Ratings.
Reviewing administrative data for the Patient Safety measures is a
time-consuming process. In addition, once CMS implements
sociodemographic status (SDS) risk adjustment for the three Medication
Adherence measures, as finalized in the April 2023 final rule (88 FR
22265-22270), the final measure rates, which are calculated in July
after the end of the measurement period, will require increased
processing time to calculate. To allow enough time for CMS to review a
sponsor's administrative data and ensure the accuracy of the final
calculated Patient Safety measure rates, we are proposing that
sponsors' requests for CMS review of administrative data must be
received no later than the annual deadline set by CMS.
Beginning with the 2025 measurement year (2027 Star Ratings), we
propose at Sec. Sec. 422.164(h)(3) and 423.184(h)(3) that any requests
by an MA organization or Part D sponsor to review its administrative
data for Patient Safety measures be made by the annual deadline set by
CMS for the applicable Star Ratings year. Similar to the implementation
of Sec. Sec. 422.164(h)(1) and (2) and 423.184(h)(1) and (2), to
provide flexibility to set the deadline contingent on the timing of the
availability of data for plans to review, we intend to announce the
deadline in advance either through the process described for changes in
and adoption of payment and risk adjustment policies section 1853(b) of
the Act (that is, the annual Advance Notice and Rate Announcement) or
an HPMS memorandum.
Given the timing of the publication of the Advance Notice of
Methodological Changes for Calendar Year (CY) 2025 for Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment Policies
and of this proposal, we intend to announce the deadline for
measurement year 2025 in the final rule, should this proposal be
finalized. In subsequent years, we will announce annual deadlines in
advance via annual Advance Notice and Rate Announcement, or by a HPMS
memorandum. For the 2025 measurement year (2027 Star Ratings), we
expect this deadline to be May 18, 2026. In establishing this deadline,
we factored in data completeness along with operational deadlines to
produce the final Star Ratings. These requests may be time-consuming to
review, and it is beneficial to receive the requests before the final
rates are calculated and before the first plan preview. Historically,
we find that PDE data for performance measurement are complete by April
of the following year (that is, PDE data for Year of Service (YOS) 2025
is generally complete by April of 2026) even though the PDE submission
deadline is established at the end of June following the payment year.
E. Categorical Adjustment Index (Sec. Sec. 422.166(f)(2) and
423.186(f)(2))
We propose to calculate the percentage LIS/DE enrollees and
percentage disabled enrollees used to determine the Categorical
Adjustment Index (CAI) adjustment factor in the case of contract
consolidations based on the combined contract enrollment from all
contracts in the consolidation beginning with the 2027 Star Ratings.
The methodology for the CAI is codified at Sec. Sec. 422.166(f)(2) and
423.186(f)(2). The CAI adjusts for the average within-contract
disparity in performance associated with the percentages of enrollees
who receive a low-income subsidy or are dual eligible (LIS/DE) or have
disability status within that contract. Currently, the percentage LIS/
DE enrollees and percentage disabled enrollees for the surviving
contract of a consolidation that are used to determine the CAI
adjustment factor are calculated using enrollment data for the month of
December for the measurement period of the Star Ratings year for the
surviving contract as described at Sec. Sec. 422.166(f)(2)(i)(B) and
423.186(f)(2)(i)(B). To more accurately reflect the membership of the
surviving contract after the consolidation, we propose to determine the
percentage LIS/DE enrollees and percentage disabled enrollees for the
surviving contract by combining the enrollment data across all
contracts in the consolidation.
We propose to modify Sec. Sec. 422.166(f)(2)(i)(B) and
423.186(f)(2)(i)(B) to calculate the percentage LIS/DE enrollees and
the
[[Page 78562]]
percentage disabled enrollees for the surviving contract for the first
two years following a consolidation by combining the enrollment data
for the month of December for the measurement period of the Star
Ratings year across all contracts in the consolidation. Once the
enrollment data are combined across the contracts in the consolidation,
all other steps described at Sec. Sec. 422.166(f)(2)(i)(B) and
423.186(f)(2)(i)(B) for determining the percentage LIS/DE enrollees and
percentage disabled enrollees would remain the same, but we are
proposing to restructure that regulation text into new paragraphs
(f)(2)(i)(B)(2) through (4). We are proposing this change since
Sec. Sec. 422.166(b)(3) and 423.186(b)(3) do not address the
calculation of enrollment for the CAI in the event of a contract
consolidation; rather, they focus on the calculation of measure scores
in the case of consolidations.
F. Health Equity Index Reward (Sec. Sec. 422.166(f)(3) and
423.186(f)(3))
We are proposing how to calculate the health equity index (HEI)
reward in the case of contract consolidations beginning with the 2027
Star Ratings. (The 2027 Star Ratings will be the first Star Ratings to
include the HEI.) The methodology for the HEI reward is codified at
Sec. Sec. 422.166(f)(3) and 423.186(f)(3). The HEI rewards contracts
for obtaining high measure-level scores for the subset of enrollees
with the specified social risk factors (SRFs). The goal of the HEI
reward is to improve health equity by incentivizing MA, cost, and PDP
contracts to perform well among enrollees with specified SRFs. In
calculating the HEI reward for the surviving contract of a
consolidation, we want to avoid masking the scores of contracts with
low performance among enrollees with the specified SRFs under higher
performing contracts. We also want to avoid masking contracts that
serve relatively few enrollees with the specified SRFs under contracts
that serve relatively many more of these enrollees.
For the first year following a consolidation, we propose to add new
paragraphs Sec. Sec. 422.166(f)(3)(viii)(A) and 423.186(f)(3)(viii)(A)
to assign the surviving contract of a consolidation the enrollment-
weighted mean of the HEI reward of the consumed and surviving contracts
using enrollment from July of the most recent measurement year used in
calculating the HEI reward; the existing rules laid out at Sec. Sec.
422.162(b)(3)(iv) and 423.182(b)(3)(iv) address how CMS will handle
combining measures scores for consolidations, but do not address how
CMS will handle the calculation of the HEI when contracts consolidate
since the HEI is not a measure. We propose that contracts that do not
meet the minimum percentage of enrollees with the specified SRF
thresholds or the minimum performance threshold described at Sec. Sec.
422.166(f)(3)(vii) and 423.186(f)(3)(vii) would have a reward value of
zero used in calculating the enrollment-weighted mean reward. For the
second year following a consolidation, we propose at new paragraphs
Sec. Sec. 422.166(f)(3)(viii)(B) and 423.186(f)(3)(viii)(B) that, when
calculating the HEI score for the surviving contract, the patient-level
data used in calculating the HEI score would be combined across the
contracts in the consolidation prior to calculating the HEI score. The
HEI score for the surviving contract would then be used to calculate
the HEI reward for the surviving contract following the methodology
described in Sec. Sec. 422.166(f)(3)(viii) and 423.186(f)(3)(viii).
G. Quality Bonus Payment Rules (Sec. 422.260)
Sections 1853(n) and 1853(o) of the Act require CMS to make QBPs to
MA organizations that achieve at least 4 stars in a 5-star quality
rating system. In addition, section 1854(b)(1)(C) of the Act ties the
share of savings that MA organizations must provide to enrollees as the
beneficiary rebate to the level of an MA organization's QBP rating. The
administrative review process for an MA contract to appeal its QBP
status is laid out at Sec. 422.260(c). As described in the final rule
titled ``Medicare Program; Changes to the Medicare Advantage and the
Medicare Prescription Drug Benefit Programs for Contract Year 2012 and
Other Changes,'' which was published in the Federal Register on April
15, 2011 (76 FR 21490-91), Sec. 422.260(c)(1) and (2) create a two-
step administrative review process that includes a request for
reconsideration and a request for an informal hearing on the record,
and Sec. 422.260(c)(3) imposes limits on the scope of requests for an
administrative review. We propose to revise the language at Sec.
422.260(c)(2)(vii) to provide the CMS Administrator the opportunity to
review and modify the hearing officer's decision within 10 business
days of its issuance. We propose that if the Administrator does not
review and issue a decision within 10 business days, the hearing
officer's decision is final and binding. Under this proposal, if the
Administrator does review and modify the hearing officer's decision, a
new decision will be issued as directed by the Administrator. If
finalized, this proposed amendment would be implemented for all QBP
appeals after the effective date of the final rule.
VIII. Improvements for Special Needs Plans
A. Verification of Eligibility for C-SNPs (Sec. 422.52(f))
Section 1859(b)(6) of the Act defines specialized MA plans for
special needs individuals, as well as the term ``special needs
individual.'' Section 1859(f)(1) of the Act provides that
notwithstanding any other provision of Part C of the Medicare statute
and in accordance with regulations of the Secretary, an MA special
needs plan (SNP) may restrict the enrollment of individuals under the
plan to individuals who are within one or more classes of special needs
individuals. The regulation governing eligibility for MA SNPs is at
Sec. 422.52. In addition to meeting the definition of a special needs
individual in Sec. 422.2 and the general eligibility requirements for
MA enrollment in Sec. 422.50, an individual must meet the eligibility
requirements for the specific MA SNP in which the individual seeks to
enroll. Currently, Sec. 422.52(f) provides that each MA SNP must
employ a process approved by CMS to verify the eligibility of each
individual enrolling in the SNP. CMS adopted this provision in
paragraph (f) in the final rule with comment period ``Medicare Program;
Medicare Advantage and Prescription Drug Benefit Programs: Negotiated
Pricing and Remaining Revisions,'' which appeared in the Federal
Register on January 12, 2009 (74 FR 1494). Historically, we have
provided operational guidance related to eligibility criteria for
enrollment in an MA SNP that exclusively enrolls individuals who meet
the definition of special needs individual under Sec. 422.2 in our
sub-regulatory manuals.\148\
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\148\ This guidance can be found at https://www.cms.gov/files/document/cy2021-ma-enrollment-and-disenrollment-guidance.pdf and
https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/mc86c16b.pdf.
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We propose to revise paragraph Sec. 422.52(f) to codify, with
minor modifications and clarifications, our longstanding guidance on
procedural steps MA plans must take to verify an individual's
eligibility for enrollment in a chronic condition SNP (C-SNP). C-SNPs
are SNPs that restrict enrollment to special needs individuals with
specific severe or disabling chronic conditions, defined at Sec.
422.2. By codifying the verification requirements, we intend to provide
transparency and stability for MA organizations offering C-SNPs and
other interested parties
[[Page 78563]]
about this aspect of the MA program. It will also clarify the SNP's
roles and responsibilities and further assist MA organizations in
meeting the requirements pertaining to verification of eligibility for
C-SNPs.
Specifically, we propose in new Sec. 422.52(f)(1) to codify
existing guidance stating that for enrollments into a C-SNP, the MA
organization must contact the individual applicant's current physician
to confirm that the enrollee has the specific severe or disabling
chronic condition(s). Although the current sub-regulatory guidance in
chapter 16-B, section 40.2.1 of the Medicare Managed Care Manual refers
only to the applicant's existing provider, we believe that a
physician--either the applicant's primary care physician or a
specialist treating the qualifying condition(s)--should provide the
required verification of the applicant's condition to ensure the
accuracy and integrity of the verification process. Therefore, we are
proposing to use the term ``physician'' throughout proposed new Sec.
422.52(f).
To further clarify the verification process, we also propose in new
Sec. 422.52(f)(1)(i) that the physician must be the enrollee's primary
care physician or specialist treating the chronic condition, or
conditions in the case of an individual seeking enrollment in a multi-
condition C-SNP. The MA organization may either (1) as proposed at new
Sec. 422.52(f)(1)(i), contact the applicant's physician or physician's
office and obtain verification of the condition prior to enrollment, or
(2) as proposed at new Sec. 422.52(f)(1)(ii), use a Pre-enrollment
Qualification Assessment Tool (PQAT) prior to enrollment and
subsequently (which can be after enrollment) obtain verification of the
condition(s) from the enrollee's physician no later than the end of the
individual's first month of enrollment in the C-SNP.\149\ Both proposed
options are discussed in the current guidance. We continue to believe
that these procedures will allow the MA organization to efficiently
serve special needs populations while maintaining the integrity of SNP
offerings under the MA program.
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\149\ CMS provides an outline of the Pre-enrollment
Qualification Assessment Tool in section 40.2.1 of chapter 16-B of
the Medicare Managed Care Manual (MMCM). In 2017, CMS released a
memo entitled, ``Discontinuation of CMS Approval Process for C-SNP
Pre-Enrollment Qualification Assessment Tool,'' stating that we
would no longer require chronic condition special needs plans (C-
SNPs) to seek CMS approval prior to using a Pre-Enrollment
Qualification Assessment Tool. CMS approval is granted for tools
that meet the standards articulated in section 40.2.1 of the MMCM
and individual review and approval of plan-specific tools is not
required. Therefore, MA organizations are no longer required to
submit these tools individually to CMS for approval so long as the
standards outlined in the guidance are met.
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As part of this process, we propose at new Sec. 422.52(f)(1)(i)
that verification of the chronic condition(s) from the applicant's
primary care physician or treating specialist must be in a form and
manner authorized by CMS. Existing guidance states that this
verification can be in the form of a note from a provider or the
provider's office or documented telephone contact with the physician or
physician's office confirming that the enrollee has the specific severe
or disabling chronic condition. These would remain acceptable under
this proposal. Performing this pre-enrollment verification with the
applicant's primary care physician or specialist treating the
qualifying condition will mean that the C-SNP may process the
enrollment promptly.
Use of the PQAT requires both pre-enrollment and post-enrollment
actions by the C-SNP to conduct an assessment and subsequently confirm
the information. The PQAT, per existing guidance,\150\ would collect
information about the chronic condition(s) targeted by the C-SNP
directly from the enrollee and must include a signature line for a
physician to confirm the individual's eligibility for C-SNP enrollment.
In order for the PQAT to be complete, a physician must be the person
who goes through the PQAT with the enrollee. The physician that goes
through the PQAT with the enrollee can be either the enrollee's
physician or a physician employed or contracted by the plan. A
physician must later review the document to confirm that the
information supports a determination that the enrollee is eligible for
the C-SNP, even without their presence at the time of the determination
by the physician. The physician providing the review and signature must
be the enrollee's physician. Ultimately, a physician's review of and
signature on the completed PQAT provide verification of the applicant's
special needs status with regards to the applicable chronic
condition(s). Currently, C-SNPs are not required to submit the PQAT to
CMS for review and approval before the PQAT is used by the C-SNP and
CMS proposes to codify that policy. The PQAT must meet the standards
articulated in proposed Sec. 422.52(f)(1)(ii)(A), and therefore review
and approval of plan-specific tools by CMS are not required.
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\150\ This guidance can be found in chapter 16-B, Special Needs
Plans, section 40.2 of the Medicare Managed Care Manual.
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As proposed at Sec. 422.52(f)(1)(ii)(A)(1), the PQAT must
include a set of clinically appropriate questions relevant to the
chronic condition(s) on which the C-SNP focuses. For example, an MA
organization sponsoring a Diabetes Mellitus C-SNP would perhaps include
questions related to diagnoses of diabetes, such as blood glucose level
or whether the enrollee is currently taking a medication for diabetes
mellitus.
As proposed at Sec. 422.52(f)(1)(ii)(A)(2), the PQAT must
gather information on the applicant's past medical history, current
signs and/or symptoms, and current medications sufficient to provide
reliable evidence that the applicant has the applicable condition(s).
As proposed at Sec. 422.52(f)(1)(ii)(A)(3), the PQAT must
include the date and time of the assessment if completed during a face-
to-face interview with the applicant, or the receipt date if the C-SNP
receives the completed PQAT by mail or by electronic means (if
available).
As proposed at Sec. 422.52(f)(1)(ii)(A)(4), the PQAT must
include a signature line for and be signed by a physician to confirm
the individual's eligibility for C-SNP enrollment. (We are also
proposing that this signature be from the applicant/enrollee's primary
care physician or treating specialist.)
As proposed at Sec. 422.52(f)(1)(ii)(B), the C-SNP must
conduct a post-enrollment confirmation of each enrollee's information
and eligibility using medical information (medical history, current
signs and/or symptoms, diagnostic testing, and current medications)
provided by the enrollee's primary care physician or the specialist
treating the enrollee's chronic condition.
As proposed at Sec. 422.52(f)(1)(ii)(C), the C-SNP must
include the information gathered in the PQAT and used in this
verification process in the records related to or about the enrollee
that are subject to the confidentiality requirements in Sec. 422.118.
As proposed at Sec. 422.52(f)(1)(ii)(D), the C-SNP must
track the total number of enrollees and the number and percent by
condition whose post-enrollment verification matches the pre-enrollment
assessment and the data and supporting documentation must be made
available upon request by CMS.
In addition, we propose to codify at Sec. 422.52(f)(1)(ii)(E) our
longstanding
[[Page 78564]]
guidance \151\ to MA organizations offering C-SNPs that choose see to
use a PQAT that the MA organization has until the end of the first
month of enrollment to confirm that the individual has the qualifying
condition(s) necessary for enrollment into the C-SNP. If the C-SNP
cannot confirm that the enrollee has the qualifying condition(s) within
that time, the C-SNP has the first seven calendar days of the following
month (i.e., the second month of enrollment) in which to send the
enrollee notice of disenrollment for not having the qualifying
condition(s). Disenrollment is effective at the end of the second month
of enrollment; however, as also outlined in current guidance, the C-SNP
must continue the individual's enrollment in the C-SNP if confirmation
of the qualifying condition(s) is obtained at any point prior to the
end of the second month of enrollment. We propose to codify at Sec.
422.52(f)(1)(ii)(F), consistent with existing guidance, that the C-SNP
must continue the enrollment of the individual in the C-SNP if the C-
SNP confirms the qualifying condition(s) prior to the disenrollment
effective date.
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\151\ This guidance can be found in chapter 2, section 20.10,
and chapter 16-B, Special Needs Plans, section 40.2 of the Medicare
Managed Care Manual.
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Lastly, we propose to codify at Sec. 422.52(f)(1)(iii) that the C-
SNP is required to have the individual's current physician (primary
care physician or specialist treating the qualifying condition)
administer the PQAT directly with the enrollee or provide confirmation
(with or without the presence of the enrollee) that the information in
the document supports a determination that the individual is eligible
for the C-SNP. Once the physician has confirmed that the PQAT contains
information that supports the applicant's chronic condition and signs
it, the PQAT is complete. Without a physician's signature, the process
is incomplete, and thus, the applicant must be denied enrollment if the
enrollment has not yet happened or disenrolled by the end of the second
month if the applicant had been enrolled. If the individual is
disenrolled because the person's eligibility cannot be verified, SNPs
must recoup any agent/broker compensation consistent with Sec.
422.2274(d)(5)(ii).
These proposals represent the codification of existing guidance
outlining the procedural steps MA organizations currently take to
verify an individual's eligibility for enrollment in a C-SNP, with
minor modifications and clarifications. Therefore, we believe that this
proposal would not result in a new or additional paperwork burden, as
the policy to verify eligibility for C-SNPs has been in existence for
some time. All burden impacts related to the SNP eligibility
verification procedures have already been accounted for under OMB
control number 0938-0753 (CMS-R-267). These requirements have been
previously implemented and are currently being followed by MA
organizations. Similarly, we do not believe the proposed changes would
have any impact to the Medicare Trust Fund.
B. I-SNP Network Adequacy
In accordance with Sec. 422.116, CMS conducts evaluations of the
adequacy of provider networks of all MA coordinated care plans to
ensure access to covered benefits for enrollees. For MA coordinated
care plans, which generally base coverage or cost sharing on whether
the provider that furnishes services to an MA enrollee is in-network or
out-of-network, these evaluations are particularly important. All MA
special needs plans (SNP) are coordinated care plans and subject to the
current requirements for network adequacy. Within the MA program, SNPs
are classified into three distinct types: Chronic Care special needs
plan (C-SNP), Dual Eligible special needs plan (D-SNP), and
Institutional special needs plan (I-SNP). An I-SNP is a SNP that
restricts enrollment to MA-eligible individuals who meet the definition
of institutionalized and institutionalized-equivalent. One specific
subtype of I-SNP is the facility-based I-SNP. Here, we use the term
(``facility-based I-SNP'') to refer to an I-SNP that restricts
enrollment to MA-eligible individuals who meet the definition of
institutionalized; owns or contracts with at least one institution,
specified in the definition of institutionalized in Sec. 422.2, for
each county within the plan's county-based service area; and owns or
has a contractual arrangement with each institutional facility serving
enrollees in the plan. Historically, the I-SNP industry has stated that
CMS's current network adequacy criteria under Sec. 422.116 create
challenges for facility-based I-SNPs because facility-based I-SNP
enrollees access services and seek care in a different way than
enrollees of other plan types.
In the ``Medicare Program; Contract Year 2024 Policy and Technical
Changes to the Medicare Advantage Program, Medicare Prescription Drug
Benefit Program, Medicare Cost Plan Program, Medicare Parts A, B, C,
and D Overpayment Provisions of the Affordable Care Act and Programs of
All-Inclusive Care for the Elderly; Health Information Technology
Standards and Implementation Specifications'' proposed rule, which
appeared in the Federal Register on December 27, 2022 (87 FR 79452)
(``the December 2022 proposed rule''), we explained in detail how I-
SNPs restrict enrollment to MA-eligible individuals who are
institutionalized or institutionalized-equivalent, as those terms are
defined in Sec. 422.2 and proposed new definitions for the different
types of I-SNPs. As a result, the enrollees in I-SNPs are individuals
who continuously reside in or are expected to continuously reside for
90 days or longer in one of the specified facilities listed in the
definition of ``institutionalized'' at Sec. 422.2 or individuals
(``institutionalized-equivalent'') who are living in the community but
require an institutional level of care. We refer readers to the
December 2022 proposed rule for a more detailed discussion of the
eligibility requirements for I-SNPs. (87 FR 79566 through 79568) See
also chapter 16-B, section 20.3 of the Medicare Managed Care
Manual.\152\ Our use of the term ``facility-based I-SNP'' in this
proposed rule aligns with the proposed definition of ``Facility-based
Institutional special needs plan (FI-SNP)'' in the December 2022
proposed rule.
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\152\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/mc86c16b.pdf.
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Per section 1859(f)(2) of the Act, I-SNPs restrict enrollment to
MA-eligible individuals who, for 90 days or longer, have had or are
expected to need the level of services provided in a long-term care
(LTC) facility, which includes: a skilled nursing facility (SNF), a
nursing facility (NF), an intermediate care facility for individuals
with intellectual disabilities (ICF/IDD), an inpatient psychiatric
hospital, a rehabilitation hospital, an LTC hospital, or a swing-bed
hospital. See Sec. 422.2 for the definition of ``institutionalized''
for the details of the types of facilities. Facility-based I-SNPs serve
a vulnerable cohort of Medicare beneficiaries with well over 95 percent
of facility-based I-SNP enrollees being eligible for both Medicare and
Medicaid. Generally, facility-based I-SNP enrollees reside either
temporarily or permanently in an institution, therefore, these
enrollees typically receive most of their health care services through
or at the facility in which they reside, most often a SNF. As a result
of the way that these enrollees receive covered services, CMS's
established network adequacy time and distance standards under Sec.
422.116 may
[[Page 78565]]
not be a meaningful way to measure provider network adequacy for and
ensure access to covered benefits for enrollees of this plan type. Time
and distance standards are created using several factors, including
pattern of care. In order to comply with the network evaluation
requirements in Sec. 422.116, a facility-based I-SNP must contract
with sufficient providers of the various specialties within the time
and distance requirements specified in that regulation. The I-SNP
industry has indicated through public comments and in prior
correspondence to CMS that many facility-based I-SNPs have difficulty
contracting with providers outside their facilities, due to their model
of care. This is because these providers know that enrollees of the I-
SNP will not routinely seek care with these providers since they
generally do not travel away from the facility for care.
The MA organizations offering and those that are interested in
offering facility-based I-SNPs have raised questions about whether our
network standards are appropriate considering the nature of the
facility-based I-SNP coverage model. The residential nature of this
model creates inherent differences in patterns of care for facility-
based I-SNP enrollees as compared to the prevailing patterns of
community health care delivery in other MA plan types. For example,
most residents of a facility receive their care from a provider at the
facility rather than traveling to a provider outside the facility
whereas individuals who live at home in the community would need to
travel to a provider to receive health care services.
To address these concerns, CMS is proposing to adopt a new
exception for facility-based I-SNP plans from the network evaluation
requirements. This provision would apply only to facility-based I-SNPs.
CMS adopted minimum access requirements for MA coordinated care
plans (which include all SNPs) in Sec. 422.112 and network evaluation
criteria in Sec. 422.116 as means to implement and ensure compliance
with section 1852(d)(1)(A) of the Act, which permits MA plans to limit
coverage to items and services furnished by or through a network of
providers subject to specific exceptions (such as emergency medical
services) and so long as the MA organization makes benefits available
and accessible to their enrollees. Currently, Sec. 422.116(f) allows
an MA plan to request an exception to network adequacy criteria when
both of the following occur: (1) certain providers or facilities are
not available for the MA plan to meet the network adequacy criteria as
shown in the Provider Supply file (that is, a cross-sectional database
that includes information on provider and facility name, address,
national provider identifier, and specialty type and is posted by State
and specialty type); and (2) 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. In
evaluating exception requests, CMS considers whether: (i) the current
access to providers and facilities is different from the Health Service
Delivery (HSD) reference file (as defined at 42 CFR 422.116(a)(4)(i))
and Provider Supply files for the year; (ii) there are other factors
present, in accordance with Sec. 422.112(a)(10)(v), that demonstrate
that network access is consistent with or better than the Traditional
Medicare pattern of care; and (iii) the approval of the exception is in
the best interests of beneficiaries.
CMS has provided examples of situations that meet the first
requirement for an exception to be requested in sub-regulatory
guidance, specifically the Medicare Advantage and section 1876 Cost
Plan Network Adequacy Guidance.\153\ The following examples of
situations where providers or facilities are not available to contract
with the MA plan do not account for the issues that are unique to
facility-based I-SNPs:
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\153\ https://www.cms.gov/files/document/medicare-advantage-and-section-1876-cost-plan-network-adequacy-guidance08302022.pdf.
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Provider is no longer practicing (for example, deceased,
retired),
Provider does not contract with any organizations or
contracts exclusively with another organization,
Provider does not provide services at the office/facility
address listed in the supply file,
Provider does not provide services in the specialty type
listed in the supply file,
Provider has opted out of Medicare, or
Provider is sanctioned and on the List of Excluded
Individuals and Entities.
In addition, the use of Traditional Medicare telehealth providers or
mobile providers and the specific patterns of care in a community that
would be the basis for an approval exception do not account for the
provider network issues unique to facility-based I-SNPs that we propose
to address in this rule. Therefore, we are proposing to amend our
network adequacy regulations at Sec. 422.116(f) to establish an
additional exception to the current CMS network adequacy requirements
outlined in Sec. 422.116 and we are proposing that this exception be
specific to facility-based I-SNPs. Under this proposal, facility-based
I-SNPs would not be required to meet the current two prerequisites to
request an exception from the network adequacy requirements in Sec.
422.116 but would have alternate bases on which to request an
exception.
First, CMS is proposing to broaden the acceptable rationales for an
exception from the requirements in Sec. 422.116(b) through (e) for
facility-based I-SNPs. We are proposing that a facility-based I-SNP may
request an exception from the network adequacy requirements in Sec.
422.116 when one of two situations occurs. To add these proposed new
rationales to Sec. 422.116(f)(1), we are reorganizing the current
regulation text; the two current requirements for an exception request
will be moved to new paragraphs (f)(1)(i)(A) and (B) and the proposed
new rationales for an exception request will be in new paragraphs
(f)(1)(ii)(A) and (B). Second, we are proposing new considerations CMS
will use when determining whether to grant an exception under Sec.
422.116(f) that are specific to the proposed new acceptable rationales
for an exception request. We are proposing to add a new paragraph
(f)(2)(iv) to specify the proposed new considerations that will apply
to the new exceptions for facility-based I-SNPs, which will be added to
the existing considerations in Sec. 422.116(f)(2).
Our proposal includes new bases on which only facility-based I-SNPs
may request an exception from the network adequacy requirements,
additional considerations for CMS when deciding whether to approve an
exception request from a facility-based I-SNP, and a new contract term
for facility-based I-SNPs that receive the exception from the Sec.
422.116 network adequacy evaluation. Because we evaluate network
adequacy and grant an exception at the contract level, the proposed new
exception is limited to contracts that include only facility-based I-
SNPs.
The first proposed new basis for an exception request is that a
facility-based I-SNP is unable to contract with certain specialty types
required under Sec. 422.116(b) because of the way enrollees in
facility-based I-SNPs receive care. For purposes of this first proposed
new basis for an exception, the inability to contract means the MA
organization offering the facility-based
[[Page 78566]]
I-SNP could not successfully negotiate and establish a contract with a
provider, including individual providers and facilities. This is
broader than the existing condition for an exception that certain
providers are unavailable for the MA plan. The non-interference
provision at section 1854(a)(6) of the Act prohibits CMS from requiring
any MA organization to contract with a particular hospital, physician,
or other entity or individual to furnish items and services or require
a particular price structure for payment under such a contract. As
such, CMS cannot assume the role of arbitrating or judging the bona
fides of contract negotiations between an MA organization and available
providers or facilities. Currently, CMS does not regard an MA
organization's inability to contract with a provider as a valid
rationale for an exception from the network adequacy evaluation but
interested parties have indicated through public comments and in prior
correspondence to CMS that, historically, facility-based I-SNP plans
have encountered significant struggles contracting with the necessary
number of providers to meet CMS network adequacy standards due to their
unique care model. We propose to add this new basis for an exception
request to Sec. 422.116(f)(1)(ii)(A). CMS is also proposing that its
decision whether to approve an exception for a facility-based I-SNP on
this specific basis (that the I-SNP is unable to contract with certain
specialty types required under Sec. 422.116(b) because of the way
enrollees in facility-based I-SNPs receive care) will be based on
whether the facility-based I-SNP submits evidence of the inability to
contract with certain specialty types required under Sec. 422.116 due
to the way enrollees in facility-based I-SNPs receive care. For
example, an organization could submit letters or emails to and from the
providers' offices demonstrating that the providers were declining to
contract with any facility-based I-SNP. CMS proposes to add this
requirement in a new paragraph (f)(2)(iv)(A). Under this proposal, CMS
will also consider the existing factors in addition to the new factors
proposed here that are unique to the specific new exception proposed
for facility-based I-SNPs. We solicit comment on this proposed new
rationale for an exception from the network adequacy requirements in
Sec. 422.116(b) through (e) and on the type of evidence we should
consider in determining whether to grant an exception.
We are also proposing a second basis on which a facility-based I-
SNP may request an exception from the network adequacy requirements in
Sec. 422.116(b) through (e) if:
(1) A facility-based I-SNP provides sufficient and adequate access
to basic benefits through additional telehealth benefits (in compliance
with Sec. 422.135) when using telehealth providers of the specialties
listed in paragraph (d)(5) in place of in-person providers to fulfill
network adequacy standards in paragraphs (b) through (e).
(2) Substantial and credible evidence that sufficient and adequate
access to basic benefits is provided to enrollees using additional
telehealth benefits (in compliance with Sec. 422.135) furnished by
providers of the specialties listed in paragraph (d)(5) of this section
and the facility-based I-SNP covers out-of-network services furnished
by a provider in person when requested by the enrollee as provided in
Sec. 422.135(c)(1) and (2), with in-network cost sharing for the
enrollee.
We believe it is appropriate to permit exceptions in these
situations because enrollees in facility-based I-SNP plans do not
generally travel to receive care, so the time and distance standards
that apply to other plan types are not appropriate for I-SNP plans. As
part of this proposal, we are proposing to add to the factors that CMS
will consider whether to approve the exception request a new factor
specifically related to this type of exception.
Finally, we are proposing regulation text to ensure that the
exception for facility-based I-SNPs is used by and available only to
facility-based I-SNPs. We are proposing a new paragraph (f)(3) at Sec.
422.116 to require any MA organization that receives the exception
provided for facility-based I-SNPs to agree to offer only facility-
based I-SNPs on the contract that receives the exception. To support
the provision outlined at Sec. 422.116(f)(3), CMS also proposes to
add, at Sec. 422.504(a)(21), a new contract provision that MA
organizations must not establish additional plans (or plan benefit
packages, called PBPs) that are not facility-based I-SNPs to a contract
that is within the scope of proposed Sec. 422.116(f)(3). This will
ensure MA organizations that have received the exception do not submit
additional PBPs that are not facility-based I-SNPs to their facility-
based I-SNP-only contracts. CMS reviews networks at the contract level
which means if an MA organization were to add an MA plan (that is, a
PBP) that is not a facility-based I-SNP to a contract, the exception we
propose here would not be appropriate. We welcome comment on this
aspect of our proposal and whether additional guardrails are necessary
to ensure that the proposed new exception from network adequacy
evaluations is limited to facility-based I-SNPs consistent with our
rationale for it.
Under our proposal, facility-based I-SNPs would still be required
to adhere to Sec. 422.112 regarding access to covered benefits. For
example, Sec. 422.112(a)(1)(iii) requires an MA coordinated care plan
to 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. Because all SNPs, including facility-
based I-SNPs, are coordinated care plans, this beneficiary protection
applies to them. Similarly, the timeliness of access to care
requirements newly adopted at Sec. 422.112(a)(6)(i) would apply. We
believe that our proposal appropriately balances the need to ensure
access to covered benefits for enrollees in facility-based I-SNPs while
recognizing the unique way this type of MA plan furnishes benefits and
how enrollees generally receive services at the institution where the
enrollee resides. Expanding this proposed new exception from the Sec.
422.116 network adequacy requirements to other I-SNPs that enroll
special needs individuals that reside in the community or other SNPs or
MA plans that are not designed to furnish services to institutionalized
special needs individuals would not be appropriate or serve the best
interests of the Medicare program or Medicare beneficiaries.
We request comment on this proposal.
C. Increasing the Percentage of Dually Eligible Managed Care Enrollees
Who Receive Medicare and Medicaid Services From the Same Organization
(Sec. Sec. 422.503, 422.504, 422.514, 422.530, and 423.38)
Dually eligible individuals face a complex range of enrollment
options based on MA plan types (that is, HMOs, PPOs, private fee-for-
service plans, MA special needs plans, etc.), enrollment eligibility,
and plan performance, but which do not consider the enrollee's Medicaid
choice. Further, many of the coverage options available to dually
eligible individuals--even including many dual eligible special needs
plans (D-SNP)--do not meaningfully integrate Medicare and Medicaid,
chiefly because the parent organization of the D-SNP does not also
provide the enrollee's Medicaid services. The current managed care
enrollment and eligibility policies have resulted in a proliferation of
such D-SNPs and leave dually eligible
[[Page 78567]]
individuals susceptible to aggressive marketing tactics from agents and
brokers throughout the year.
Over the last decade, we have taken numerous steps to improve the
experiences and outcomes for dually eligible individuals through
various forms of Medicare-Medicaid integrated care. Despite progress,
there remain a significant number of enrollees who receive Medicare
services through one managed care entity and Medicaid services through
a different entity (misaligned enrollment), rather than from one
organization delivering both Medicare and Medicaid services (aligned
enrollment \154\). In the final rule titled Medicare and Medicaid
Programs; Policy and Technical Changes to the Medicare Advantage,
Medicare Prescription Drug Benefit, Programs of All-Inclusive Care for
the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care
Programs for Years 2020 and 2021 (CMS-4185-F) (hereinafter referred to
as the April 2019 final rule), we expressed our belief that aligned
enrollment, and especially exclusively aligned enrollment, is a
critical part of improving experiences and outcomes for dually eligible
individuals. Exclusively aligned enrollment (EAE) occurs when
enrollment in a parent organization's D-SNP is limited to individuals
who are also enrolled in that organization's Medicaid managed care
organization. Congress' advisory commissions have emphasized similar
themes: the Medicare Payment Advisory Commission (MedPAC) has ``long
believed that D-SNPs should have a high level of integration so they
have the proper incentives to coordinate care across Medicare and
Medicaid.'' \155\ The Medicaid and CHIP Payment and Access Commission's
(MACPAC's) ``long-term vision is for all dually eligible beneficiaries
to be enrolled in an integrated model'' \156\ and has noted that a key
feature of integrated care is ``financial alignment where a single
entity receives a single payment to cover all Medicare and Medicaid
services.'' \157\
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\154\ 42 CFR 422.2 (definition of ``aligned enrollment'').
\155\ MedPAC response to Congressional request for information
on dual-eligible beneficiaries, page 2, January 13, 2023.
\156\ MACPAC response to proposed rule on policy and technical
changes to Medicare Advantage and Medicare Part D for contract year
2024 (CMS-4201-P), page 1, February 13, 2023.
\157\ MACPAC response to request for information on data and
recommendations to improve care for dually eligible beneficiaries,
page 3, January 13, 2023.
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Longer term, for dually eligible individuals who are in Medicare
and Medicaid managed care, we believe that we should continue to drive
toward increasing aligned enrollment until it is the normative, if not
only, managed care enrollment scenario. Our proposals here represent an
incremental step in that direction, balancing our long-term policy
vision with our interest in limiting disruption in the short term. For
dually eligible individuals that elect MA plans, we are focused on
increasing enrollment in integrated D-SNPs: fully integrated dual
eligible special needs plans (FIDE SNPs),\158\ highly integrated dual
eligible special needs plans (HIDE SNPs),\159\ and applicable
integrated plans (AIPs).\160\ These D-SNP types more meaningfully
integrate Medicare and Medicaid services than coordination-only D-SNPs
\161\ that are not also AIPs.
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\158\ Effective 2025, FIDE SNPs as defined in Sec. 422.2 are
required to have EAE and would therefore be AIPs by definition. To
receive the FIDE designation, a D-SNP would be required to provide
nearly all Medicaid services, including long-term services and
supports, Medicaid behavioral health services, home health and DME.
\159\ HIDE SNPs as defined in Sec. 422.2 are required to cover
long-term services and supports or behavioral health services but
may have more Medicaid services carved out relative to plans with
the FIDE designation. HIDE SNPs that also operate with EAE would
meet the definition of an AIP, but there is no requirement for EAE
for the HIDE designation.
\160\ AIPs as defined in Sec. 422.561 are D-SNPs with EAE,
where the companion Medicaid MCO covers Medicaid benefits including
primary care and acute care, Medicare cost-sharing, and at a minimum
one of the following: home health services, medical supplies,
equipment and appliances (DME), or nursing facility services.
\161\ Dual eligible special needs plans (D-SNPs) are defined at
Sec. 422.2. ``Coordination-only'' D-SNPs are D-SNPs that neither
meet the FIDE SNP nor HIDE SNP definition at Sec. 422.2 and for
which there are no Federal requirements to cover any Medicaid
benefits either directly or through an affiliated Medicaid managed
care plan.
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In this section we describe interconnected proposals that would (1)
replace the current quarterly special enrollment period (SEP) with a
one-time-per month SEP for dually eligible individuals and other LIS
eligible individuals to elect a standalone PDP, (2) create a new
integrated care SEP to allow dually eligible individuals to elect an
integrated D-SNP on a monthly basis, (3) limit enrollment in certain D-
SNPs to those individuals who are also enrolled in an affiliated
Medicaid managed care organization (MCO), and (4) limit the number of
D-SNPs an MA organization, its parent organization, or an entity that
shares a parent organization with the MA organization, can offer in the
same service area as an affiliated Medicaid MCO in order to reduce
``choice overload'' of D-SNP options in certain markets. Affiliated
Medicaid MCOs are Medicaid MCOs offered by the MA organization, the
same parent organization, or another subsidiary of the parent
organization. In combination, our proposals would create more
opportunities for dually eligible individuals to elect integrated D-
SNPs, more opportunities to switch to Traditional Medicare, and fewer
opportunities to enroll in MA-PD plans that do not integrate Medicare
and Medicaid services. Table HC1 summarizes the combined effects of
these proposals, then we describe each proposal in greater detail.
[[Page 78568]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.020
1. Changes to the Special Enrollment Periods for Dually Eligible
Individuals and Other LIS Eligible Individuals
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\162\ We propose that during AEP and other available enrollment
periods, MA organizations would not be permitted to enroll dually
eligible individuals into a D-SNP where such enrollment would not
result in aligned enrollment with an affiliated Medicaid MCO offered
in the same service area (that is, a Medicaid MCO offered by the MA
organization, its parent organization, or another subsidiary of the
parent organization).
---------------------------------------------------------------------------
Section 1860D-1(b)(3)(D) of the Act directs the Secretary to
establish a SEP for full-benefit dually eligible individuals under Part
D. The SEP, subsequently referred to as the continuous dual SEP,
codified at Sec. 423.38(c)(4), was later extended to all other
subsidy-eligible beneficiaries by regulation.\163\ The continuous dual
SEP allowed eligible beneficiaries to make Part D enrollment changes
(that is, enroll in, disenroll from, or change Part D plans, including
Medicare Advantage Prescription Drug (MA-PD) plans) throughout the
year, unlike other Part D enrollees who generally may switch plans only
during the AEP or via other applicable SEPs each year.
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\163\ Medicare Program; Policy and Technical Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit
Programs (CMS-4085-F) (75 FR 19720 (April 15, 2010)).
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In the April 2018 final rule, we cited concerns with usage of the
continuous dual SEP related to enrollees changing plans frequently,
hindering care coordination efforts by D-SNPs; plans having less
incentive to innovate and invest in serving high-cost enrollees who may
disenroll at any time; and agents and brokers targeting dually eligible
individuals due to their ability to make enrollment elections
throughout the year (83 FR 16514). We had considered limiting use of
the SEP to once per calendar year, limiting use of the SEP to two or
three uses per calendar year, or prohibiting use of the SEP for
enrollment into non-integrated MA-PD plans, but allowing continuous use
of the SEP to allow eligible beneficiaries to enroll into (a)
integrated D-SNPs for dually eligible individuals or (b) standalone
PDPs (83 FR 16515). We received a mix of concern and support from
commenters on our proposals.
[[Page 78569]]
Ultimately, the April 2018 final rule amended the continuous dual
SEP to allow usage once per calendar quarter during the first nine
months of the year (that is, one election during each of the following
time periods: January-March, April-June, July-September). We noted that
our changes struck a balance between allowing dually eligible
individuals opportunities to change plans while also maintaining
stability with care coordination and case management (83 FR 16515).
The quarterly dual SEP reduced individuals moving from one Part D
plan (including an MA-PD) to another Part D plan (including an MA-PD)
as frequently. However, we have concerns with the quarterly dual SEP:
Marketing. We finalized numerous policies to reduce
aggressive marketing tactics in the April 2023 final rule,\164\ but we
remain concerned about marketing opportunities, especially when they
focus on dually eligible individuals who, as a group, have lower levels
of education, health literacy, and access to resources that could help
overcome sub-optimal coverage decisions. Because the quarterly dual SEP
still allows the vast majority of dually eligible individuals to enroll
in almost any MA-PD plan, they remain a target for marketing activities
from all types of plans throughout the year.
---------------------------------------------------------------------------
\164\ 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 (CMS-4201-F) (88 FR 22122 (April
12, 2023)).
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Ability to enroll in integrated D-SNPs. The quarterly dual
SEP does not allow dually eligible individuals to enroll in integrated
D-SNPs after those individuals have exhausted the opportunities allowed
by the quarterly dual SEP.
Complexity for States. State Medicaid agencies have shown
interest in opportunities to bring Medicare and Medicaid managed care
enrollment policies into greater alignment and reduce complexity. The
quarterly dual SEP has created some challenges related to aligning
Medicare and Medicaid enrollment dates for dually eligible individuals
seeking to enroll in integrated products. For example, California
needed expenditure authority to waive Sec. 438.56(e)(1) under a
section 1115(a) demonstration to allow for a Medicaid MCO disenrollment
to be delayed during the last calendar quarter to maintain exclusively
aligned enrollment with a corresponding D-SNP. This expenditure
authority would not have been necessary if the dual SEP was available
to make elections throughout the year. In the capitated financial
alignment models of the Financial Alignment Initiative (FAI), we waived
the quarterly dual SEP rules at State request to allow for monthly
opportunities for individuals to enroll or disenroll. This alleviated
the complexity of different Medicare and Medicaid enrollment periods
and allows dually eligible individuals more opportunities to enroll in
integrated products.
Complexity for enrollment counselors and individuals.
Enrollment counselors such as State Health Insurance Assistance
Programs (SHIPs) and State ombudsman programs have also noted that the
once-per-quarter rule is complicated. Without any accessible central
data source on who has already used the quarterly dual SEP, it is not
clear to options counselors (or sometimes to beneficiaries themselves)
what enrollment options are truly available to dually eligible
individuals at any given time.
To further protect Medicare beneficiaries, reduce complexity for
States and enrollment counselors, and increasingly promote integrated
care, we are proposing two SEP changes. Section 1860D-1(b)(3)(D) of the
Act requires the Secretary to establish special enrollment periods for
full-benefit dually eligible individuals, although it does not specify
the frequency or mechanics of those SEPs. Further, section 1860D-
1(b)(3)(C) of the Act grants the Secretary the authority to create SEPs
for individuals who meet other exceptional circumstances.\165\ Section
1859(f)(1) of the Act permits the Secretary to set forth regulations
related to how MA organizations restrict the enrollment of individuals
who are within one or more classes of special needs individuals.
Section 1859(f)(6) establishes the authority to adopt a transition
process to move dually eligible individuals out of SNPs when they are
not eligible for the SNP. Section 1859(f)(8) of the Act also reflects
an interest in and goal of furthering the integration of D-SNPs; the
requirement for us to establish procedures for unified grievance and
appeals processes and requirement, in section 1859(f)(8)(D), for a
mandatory minimum level of integration illustrate how efforts to
increase integration in implementing and adopting standards for the MA
program further the goals of the program. Based on these authorities,
we propose to amend Sec. 423.38(c)(4)(i) to replace the quarterly dual
SEP with a simpler new dual/LIS SEP. The proposed dual/LIS SEP would
allow dually eligible and other LIS-enrolled individuals to enroll once
per month into any standalone prescription drug plan.
---------------------------------------------------------------------------
\165\ Medicare Program; Policy and Technical Changes to the
Medicare Advantage and the Medicare Prescription Drug Benefit
Programs (CMS-4085-F) (75 FR 19720 (April 15, 2010)).
---------------------------------------------------------------------------
Functionally, the revised dual/LIS SEP would mean that such
individuals could, in any month, switch PDPs or leave their MA-PD for
Traditional Medicare plus a standalone PDP (plans that only offer
prescription drug coverage). However, the dual/LIS SEP would no longer
permit enrollment into MA-PD plans or changes between MA-PD plans,
although such options would still be available where another election
period permits.
In conjunction, based on the statutory authorities described above,
we also propose to create a new integrated care SEP at Sec.
423.38(c)(35) for dually eligible individuals. This new integrated care
SEP would allow enrollment in any month into FIDE SNPs, HIDE SNPs, and
AIPs for those dually eligible individuals who meet the qualifications
for such plans.
In combination, our SEP proposals draw heavily from MedPAC's 2008
recommendation to Congress, which proposed eliminating dually eligible
individuals' ability to enroll in MA-PD plans, except special needs
plans with State contracts, outside of open enrollment. MedPAC also
recommended dually eligible individuals be able to disenroll from an
MA-PD plan and return to Traditional Medicare at any time of the
year.\166\
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\166\ Medicare Payment Advisory Commission, ``Report to
Congress: Medicare Payment Policy,'' March 2008.
---------------------------------------------------------------------------
For dually eligible individuals, our two SEP proposals would allow
a monthly election to:
Leave an MA-PD plan for Traditional Medicare by enrolling
in a standalone PDP,
Switch between standalone PDPs, or
Enroll in an integrated D-SNP such as a FIDE, HIDE, or
AIP.
If an eligible individual attempts to use, or uses, both the
monthly dual/LIS SEP and the integrated care SEP within the same month,
the application date of whichever SEP is elected last in time is the
SEP effectuated the first of the following month.
As a result of these proposals, dually eligible and other LIS-
eligible individuals, like other Medicare beneficiaries, would be able
to enroll into non-AIP coordination-only D-SNPs \167\ or other MA plans
only during
[[Page 78570]]
the ICEP, AEP, or where another SEP permits. While the proposed changes
constrain some enrollment options at certain times of the year, dually
eligible individuals and other LIS-eligible individuals would never
have fewer choices than people who are not dually or LIS eligible.
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\167\ Dual eligible special needs plans (D-SNPs) are defined at
Sec. 422.2. ``Coordination-only'' D-SNPs are D-SNPs that neither
meet the FIDE SNP nor HIDE SNP definition at Sec. 422.2 and are not
required to cover any Medicaid benefits.
---------------------------------------------------------------------------
We believe the proposed SEP changes would:
Create more opportunity for dually eligible or LIS
individuals to leave MA-PD plans if MA is not working well for them, by
providing an opportunity to enroll in a standalone PDP, which results
in disenrollment from the MA-PD plan and enrollment in Traditional
Medicare.\168\
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\168\ We note that enrollment in a standalone PDP would not
result in automatic disenrollment from a Medicare MA-only Private
Fee-for-Service plan unless that plan also offers Part D.
---------------------------------------------------------------------------
Reduce the incentive for most plans to deploy aggressive
sales tactics targeted at dually eligible or LIS-enrolled individuals
outside of the AEP. Based on our review of 2023 plans, approximately 5
percent of the plans that can currently enroll dually eligible
individuals using the quarterly dual SEP would be available as options
for dually eligible individuals using the proposed new monthly
integrated care SEP.
Increase transparency for Medicare beneficiaries and
enrollment counselors-such as SHIPs-on opportunities to change plans,
by eliminating the need to determine whether the current once-per-
quarter SEP opportunity had already been used.
Create more opportunities for enrollment into integrated
D-SNPs through which an individual could receive Medicare and Medicaid
services and care coordination from the same organization.
Reduce the burden on States working to align Medicaid MCO
enrollment to D-SNP enrollment, particularly for States transitioning
their FAI demonstrations to integrated D-SNPs (all FAI demonstration
States waived the implementation of the quarterly dual SEP as it proved
too operationally challenging to implement for Medicare-Medicaid
Plans).
Strengthen incentives for MA sponsors to also compete for
Medicaid managed care contracts.
While there are advantages to the new proposed SEP changes, we
recognize there are potential challenges:
In States with few or no integrated D-SNPs, dually
eligible individuals would not be able to change MA-PD plans outside of
the AEP, MA-OEP, or other available SEPs, limiting their ability to
change plans as their needs change. Choices outside of AEP, MA-OEP, or
other available SEPs would similarly be limited in States where
integrated D-SNPs only serve limited geographic regions.
MA plans may have marginally less incentive to innovate
and invest in meeting the needs of high-cost dually eligible enrollees
in a situation where these enrollees may disenroll at any time. This
could exacerbate the phenomenon of higher-cost dually eligible
individuals disenrolling from MA.169 170 171
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\169\ GAO Report to Congressional Requesters, Medicare Advantage
Disenrollment, pages 19-20, June 2021.
\170\ https://www.gao.gov/assets/gao-17-393.pdf.
\171\ https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.0272.
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Some dually eligible individuals would be able to change
between integrated care plans monthly, which could hinder care
coordination and case management efforts by those plans.
Finally, since LIS individuals without Medicaid are
ineligible for integrated D-SNPs, our proposal would limit how the
dual/LIS SEP can be used for these individuals compared to the current
scope of the SEP. LIS eligible individuals without full Medicaid and
partial-benefit dually eligible individuals would have the opportunity
to disenroll from an MA-PD plan (to Traditional Medicare) in any month
throughout the year, and could switch between standalone PDPs on a
monthly basis, but--with few exceptions--could not use the new
integrated care SEP to enroll in an MA-PD.\172\ These individuals could
elect an MA-PD or non-AIP coordination-only D-SNP for which they are
eligible only during the ICEP, the AEP, the MA-OEP (as applicable), or
by using a different SEP. We estimate approximately one million
partial-benefit dually eligible individuals and other LIS eligible
individuals, or 7.5 percent of all individuals with LIS, would no
longer be able to make quarterly MA-PD elections.\173\ Dually eligible
and other LIS-eligible individuals would also continue to be eligible,
if applicable, for other SEPs outlined in Sec. Sec. 422.62(b) and
423.38(c), which include circumstances like enrolling into a 5-star
plan, change in residence, or enrollment in PACE.\174\
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\172\ There is no Federal prohibition on partial-benefit dually
eligible individuals enrolling in HIDE SNPs. However, most States
limit enrollment in HIDE SNPs to full-benefit dually eligible
individuals.
\173\ Section 11404 of the Inflation Reduction Act (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. See 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 (CMS-4201-F) (88 FR 22123 (April 12, 2023)).
\174\ 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 (CMS-4182-F) (83 FR 16516 (April 16, 2018)).
---------------------------------------------------------------------------
Section 423.40(c) currently provides that the effective date of an
enrollment change in Part D during a special enrollment period
specified in Sec. 423.38(c), including the existing SEP for dually
eligible and other LIS-eligible individuals, will be the first day of
the calendar month following the month in which the election is made,
unless otherwise noted. We are considering using flexibilities at
section 1851(f)(4) of the Act (as cross-referenced at section 1860D-
1(b)(1)(B)(iv) of the Act) and at Sec. 423.40(c) to establish a
Medicare enrollment effective date for the proposed integrated care SEP
at Sec. 423.38(c)(35) that differs from the effective date in the
current quarterly dual/LIS SEP at Sec. 423.38(c)(4). Establishing a
different enrollment effective date could allow better alignment with
Medicaid enrollment effective dates, for example, in situations where
States are unable to enroll individuals on the first of the month
following an enrollment request after a certain cut-off date and delay
the effective date until the first of the following month. However,
aligning with Medicaid enrollment effective dates may delay enrollment
in integrated care plans and prevent dually eligible individuals from
selecting an integrated D-SNP on a monthly basis.
We welcome comments on utilizing these flexibilities to establish a
different enrollment effective date for the proposed integrated care
SEP. See section VIII.E. for further discussion of alignment of
enrollment effective dates and a request for comments on this topic.
We also welcome comments on the proposed changes to the dual SEP,
the proposed integrated care SEP, and their combined impacts.
2. Enrollment Limitations for Non-Integrated Medicare Advantage Plans
Aligned enrollment is a key feature of the FAI, PACE, and other
long-standing integrated care programs such as the Massachusetts'
Senior Care Options and Minnesota's Senior Health Options that started
as demonstration programs that were precursors to D-SNPs. Individual
States may also use their State Medicaid agency contracts (SMAC) to
limit
[[Page 78571]]
enrollment in a D-SNP to the enrollees in an affiliated Medicaid MCO.
Further, we have adopted, as part of the definition in Sec. 422.2,
enrollment limits for FIDE SNPs that require, beginning January 1,
2025, FIDE SNPs to have exclusively aligned enrollment.
Separate from contracting with D-SNPs via SMACs, States have
discretion in how they arrange their Medicaid managed care programs and
may use Medicaid MCOs to cover a comprehensive scope of Medicaid
benefits or use prepaid health plans to cover a smaller scope of
Medicaid benefits.\175\ Many States with Medicaid managed care programs
select a limited number of Medicaid MCOs through a competitive
procurement process. State approaches vary regarding eligibility for
Medicaid MCOs that are part of the State's managed care program (for
example, whether plans cover just dually eligible enrollees or
additional Medicaid populations), service areas, and carved-in benefits
for dually eligible enrollees. While there may be some overlap in plan
parent organizations operating both Medicaid MCOs and D-SNPs within a
State, it is not always the case.\176\ Service areas are commonly
misaligned between Medicaid MCOs and D-SNPs. States have the option to
pursue EAE when it meets their own Medicaid managed care policy goals
and objectives; however, placing responsibility solely on States to
implement and facilitate EAE has often led to a complex market of D-
SNPs, many of which only meet minimum integration requirements, as well
as a complex set of Federal and State enrollment policies for States,
plans, advocates, and beneficiaries to navigate.
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\175\ See 42 CFR 438.2 for definitions of the terms managed care
organization (MCO), prepaid ambulatory health plan, and prepaid
inpatient health plan.
\176\ MedPAC Report to Congress, Promoting integration in dual-
eligible special needs, table 12-6, page 436, June 2019.
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In many service areas, dually eligible individuals face complicated
enrollment policies, overwhelming marketing, and an increasingly
complex array of plans purportedly designed especially for them but
that do not offer meaningful Medicare and Medicaid integration due to
service area and enrollment misalignment. Enrollment in D-SNPs has
increased rapidly and now exceeds five million. We estimate that
approximately 1.26 million were in aligned enrollment as of July 2022,
and this number has also grown over time.\177\ However, the majority of
D-SNP enrollment remains in unaligned plans where the individual is
either in a non-AIP coordination-only D-SNP or in one parent
organization's D-SNP and another parent organization's Medicaid MCO,
and the increases in enrollment in such plans has exceeded the
increases in enrollment for integrated D-SNPs.\178\ Analysis by MedPAC
in 2019 found that ``14 percent of [D-SNP] enrollees qualify for full
Medicaid benefits and are in D-SNPs that have a companion managed long
term services and supports (MLTSS) plan run by the same parent company,
but they are not enrolled in that MLTSS plan.'' As MedPAC noted, ``some
enrollees may not be required to enroll in an MLTSS plan, but for those
who are, these cases of misaligned enrollment are unlikely to lead to
any meaningful integration given the inherent challenges of
coordinating the efforts of two separate managed care companies.''
\179\
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\177\ The FY22 CMS Medicare-Medicaid Coordination Office Report
to Congress indicates that as of July 2022, 1.75 million full-
benefit dually eligible individuals were enrolled in managed care
arrangements where the same organization covers both Medicare and
Medicaid services. CMS utilized the underlying data to estimate that
of the 1.75 million, 1.26 million were enrolled in a D-SNP and
affiliated Medicaid MCO offered by the same organization. The
remaining half million were enrolled in Medicare-Medicaid plans,
PACE, and managed fee-for-service arrangements. The FY22 Medicare-
Medicaid Coordination Office Report to Congress can be accessed
here: https://www.cms.gov/files/document/mmco-report-congress.pdf-0.
\178\ Velasquez, David E., E. John Orav, and Jos[eacute] F.
Figueroa. Enrollment and characteristics of dual-eligible Medicare
and Medicaid beneficiaries in integrated care programs, Health
Affairs 42, No. 5 (2023), 685.
\179\ MedPAC Report to Congress, Promoting integration in dual-
eligible special needs plans, Chapter 12, page 422, June 2019.
Retrieved from https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf.
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While some States have utilized SMACs and selective contracting to
limit the availability of D-SNPs in the State to those MA organizations
that also have contracts with the State to cover Medicaid services,
other D-SNP markets have grown without any limitations on non-
integrated plans. In some markets, parent organizations of MA
organizations have acquired multiple D-SNPs by purchasing smaller plans
and have not consolidated the various plans, resulting in one parent
organization operating multiple D-SNPs within a single State, often
with overlapping service areas. For States that do not require parent
organizations to consolidate their plans, multiple D-SNPs of this type
may continue to operate indefinitely. This creates a market with a
large number D-SNP options that often do not offer significantly
different benefits or networks, which creates confusion for plan
selection and could lead to individuals choosing unaligned Medicare and
Medicaid plans.
One State provides a useful (but not necessarily unique) example.
In this State, for 2023, there are 47 D-SNP plan benefit packages
(PBPs) offered through 24 different plan contracts. A few parent
organizations' D-SNPs account for a large share of the plans in this
State: UnitedHealth Group operates 15 D-SNP PBPs across six different
MA contracts, Humana offers eight D-SNP PBPs across two MA contracts,
and Centene offers five D-SNP PBPs across three MA contracts. A search
of available options in Medicare Plan Finder (MPF) for a dually
eligible individual in a zip code in this State yields 69 MA-PD
options, including 19 D-SNPs. Of the 19 D-SNPs, five are offered by
Centene, three are offered by Elevance, three are offered by
UnitedHealth Group, and two are offered by Humana. The large number of
D-SNPs operated by a relatively small group of parent organizations in
this State illustrates the ``choice overload'' faced by dually eligible
individuals, their families, advocates, and enrollment counselors.
Although Medicaid managed care in this State is mandatory for
dually eligible individuals, and many of the same D-SNP parent
organizations operate Medicaid MCOs in the State, there is currently no
EAE required. Additionally, D-SNP and Medicaid MCO service areas are
misaligned throughout the State, hindering meaningful integration and
robust care coordination for enrollees despite a relatively small group
of parent organizations. Further, the abundance of non-AIP
coordination-only D-SNP options reduces the likelihood that a dually
eligible individual would select a more integrated option.
Additionally, numerous plan options in one service area increases the
potential for marketing issues including agents and brokers targeting
dually eligible individuals to switch into another plan.
We recognize that States have policy interests and goals that shape
their Medicaid managed care programs, and our intent is to help further
support States interested in implementing EAE. We have historically
deferred to States to use SMACs to align Medicare and Medicaid plan
offerings consistent with State policy priorities. However, as the
number of dually eligible individuals with misaligned enrollment and
sheer number of D-SNPs have grown, we now believe that Federal
rulemaking is warranted to promote greater alignment of D-SNPs and
Medicaid MCOs and to begin to simplify the array of choices.
[[Page 78572]]
We have authority, per section 1857(e)(1) of the Act, to add MA
contract terms and conditions not inconsistent with the MA statute
(that is Part C of Title XVIII of the Act) as the Secretary may find
necessary and appropriate. Given how section 1859(f)(8) of the Act
reflects a goal of furthering the integration of D-SNPs and how our
proposal is designed to reduce choice overload situations for dually
eligible individuals while furthering opportunities for enrollment in
integrated D-SNPs (that is, FIDE SNPs, HIDE SNPs, and AIPs), we believe
that the standard in section 1857(e)(1) is met. Further, section
1854(a)(5) of the Act is clear that we are not obligated to accept any
and every MA plan bid.
Based on these authorities, we are proposing new regulations (at
Sec. Sec. 422.503(b)(8), 422.504(a)(20), 422.514(h), and
422.530(c)(4)(iii)) related to how MA organizations offer and enroll
eligible individuals into D-SNPs. Proposed Sec. 422.503(b)(8) would
establish a new qualification for an MA organization (or new applicant
to be an MA organization) to offer D-SNP(s) while proposed Sec.
422.504(a)(20) would establish a new contract term for certain MA
organizations; both are tied to the substantive limits we are proposing
in Sec. 422.514(h). Proposed Sec. 422.514(h) would establish
conditions for how certain MA organizations and D-SNPs may enroll
dually eligible individuals and limit the number of D-SNPs that may be
offered by certain MA organizations. Finally, proposed Sec.
422.530(c)(4)(iii) would establish a new crosswalk to authorize MA
organizations that are subject to these new enrollment limitations to
crosswalk their enrollees to a single D-SNP to accomplish aligned
enrollment.
Together, our proposals at Sec. Sec. 422.503(b)(8),
422.504(a)(20), and 422.514(h)(1) and (2) would require the following:
Beginning in plan year 2027, when an MA organization, its
parent organization, or an entity that shares a parent organization
with the MA organization, also contracts with a State as a Medicaid MCO
that enrolls dually eligible individuals in the same service area, D-
SNPs offered by the MA organization, its parent organization, or an
entity that shares a parent organization with the MA organization, must
limit new enrollment to individuals enrolled in (or in the process of
enrolling in) the D-SNP's affiliated Medicaid MCO. This would apply
when any part of the D-SNP service area(s) overlaps with any part of
the Medicaid MCO service area, even if the two service areas do not
perfectly align. Additionally, only one D-SNP may be offered by an MA
organization, its parent organization, or another MA organization with
the same parent organization in the same service area as the aligned
Medicaid MCO. We would only enter into a contract with one D-SNP for
full-benefit dually eligible individuals in the same service area as
that MA organization's affiliated Medicaid MCO (with limited exceptions
as described below).
Beginning in 2030, such D-SNPs must only enroll (or
continue to enroll) individuals enrolled in (or in the process of
enrolling in) the affiliated Medicaid MCO. Therefore, by 2030,
integrated D-SNPs would be required to disenroll individuals who are
not enrolled in both the D-SNP and Medicaid MCO offered under the same
parent organization (that is, offered by the parent organization or any
subsidiary), except that D-SNPs would still be able to use a period of
deemed continued eligibility to retain enrollees who temporarily lost
Medicaid coverage as described in Sec. 422.52(d). This also means that
where an enrollee is temporarily disenrolled from the affiliated
Medicaid MCO but is expected to be re-enrolled in the affiliated
Medicaid MCO within the period of deemed continued eligibility, the D-
SNP would not be required to disenroll that enrollee during that
period.
Consistent with how CMS believes MA organizations under the same
parent organization share operational and administrative functions, we
are proposing to apply the proposed regulations at the parent
organization level.
We are proposing a corresponding new provision at Sec.
422.530(c)(4)(iii) that would provide a new crosswalk exception to
allow one or more MA organizations that share a parent organization and
offer D-SNPs subject to these proposed new limits to crosswalk
enrollees (within the same parent organization and among consistent
plan types) when the MA organization chooses to non-renew or
consolidate its current D-SNPs to comply with the new rules in proposed
Sec. Sec. 422.504(a)(20) and 422.514(h). Currently, Sec.
422.530(a)(2) does not allow enrollee crosswalks across different
contracts or plan types. The proposed new crosswalk exception would
explicitly permit moving enrollments across contracts held by MA
organizations with the same parent organization; because we are not
including any explicit exception from the rule in Sec. 422.530(a)(2)
prohibiting crosswalks to different plan types, the receiving D-SNP
must be the same plan type as the D-SNP out of which the enrollees are
crosswalked. We expect MA organizations who offer D-SNPs to leverage
Sec. 422.530(c)(4)(iii)--as well as standard MA processes to add or
remove service areas--to come into compliance with Sec. 422.514(h).
We believe that allowing this crosswalk would limit enrollee
disruption if MA organizations non-renew D-SNPs to comply with our
proposal. In addition, we believe this new crosswalk is consistent with
preserving the evergreen nature of enrollee elections given the
differences in the benefits being offered by the D-SNPs that are owned
or controlled by the same parent organization are generally not
meaningful beyond the scope of annual changes explained in the Annual
Notice of Change. For example, in contract year 2023, there is one
parent organization with three MA organizations that offer a total of
13 HMO D-SNP benefit packages in one State. Only five of those D-SNPs
enroll full-benefit dually eligible individuals, and the benefits
offered in each of the D-SNPs are substantively similar.
We are proposing the following exceptions to our proposals at
Sec. Sec. 422.504(a)(20) and 422.514(h)(1) and (2):
In certain circumstances, State D-SNP policy may require
the need for more than one D-SNP for full-benefit dually eligible
individuals to operate in the same service area. Under Sec.
422.514(h)(3)(i), we propose to permit an MA organization, its parent
organization, or an entity that shares a parent organization with the
MA organization, offering more than one D-SNP for full-benefit dually
eligible individuals in the same service area as that MA organization's
affiliated Medicaid MCO only when a SMAC requires it. For example,
where a SMAC limits enrollment for certain groups into certain D-SNPs
(such as by age group), the MA organization may offer additional D-SNPs
for different groups of full-benefit dually eligible individuals in the
same service area accordingly. This exception allows for States that
currently have different integrated D-SNP programs based on age or
benefit design to continue to operate these programs and allows States
the flexibility to design future integrated D-SNP programs with
eligibility nuances should they so choose. This proposed exception
would only be available where the SMAC requires different eligibility
groups for the different D-SNPs that are offered by the same MA
organization, its parent organization, or another MA
[[Page 78573]]
organization that shares the parent organization.
Numerous parent organizations operate both HMO and PPO D-
SNPs in States where they also contract with a State as a Medicaid MCO,
and the proposed regulation at Sec. Sec. 422.504(a)(20) and
422.514(h)(1) and (2) would apply to both HMO and PPO D-SNPs. However,
as noted above, Sec. 422.530(a)(2) does not allow enrollee crosswalks
across different plan types, and we are not including any exception
from that existing rule in the new crosswalk exception proposed at
Sec. 422.530(c)(4)(iii). To minimize enrollee disruption, our proposal
would not prohibit an MA organization, its parent organization, or
another MA organization that shares a parent organization with the MA
organization, from continuing to operate both an HMO D-SNP and a PPO D-
SNP in a State where the proposed new policy applies. However, to
achieve the goals of the new regulation, including simplification of
the D-SNP market and promotion of integrated care through aligned
Medicare and Medicaid products, we propose at Sec. 422.514(h)(3)(ii)
that the MA organization, its parent organization, or another MA
organization that shares a parent organization with the MA organization
may offer (or continue to offer) both the HMO and PPO D-SNPs only if
they no longer accept new full-benefit dually eligible enrollees in the
same service area as the D-SNP affected by the new regulations at
Sec. Sec. 422.504(a)(20) and 422.514(h). Under this proposal, the MA
organization, its parent organization, and another MA organization that
shares a parent organization with the MA organization may only accept
new enrollment in one D-SNP for full-benefit dually eligible
individuals in the same service area as an affiliated Medicaid MCO, and
such new enrollment is limited to the full-benefit dually eligible
individuals who are enrolled (or are enrolling) in the affiliated
Medicaid MCO.
We also propose at Sec. 422.503(b)(8) that in service areas in
which a D-SNP limits enrollment to individuals enrolled in (or in the
process of enrolling in) an affiliated Medicaid MCO, the MA
organization, its parent organization, or entities that share a parent
organization with the MA organization may not newly offer another D-SNP
for full-benefit dually eligible individuals, if it would result in
noncompliance with Sec. 422.514(h). Additionally, we propose at Sec.
422.504(a)(20) to establish a new contract term for MA organizations
that offer D-SNPs to require compliance with the enrollment limits we
are proposing to add to Sec. 422.514(h). These proposals would apply
regardless of any EAE requirements in State SMACs, unless the exception
to accommodate State policy choices, described in proposed Sec.
422.514(h)(3)(i), applies.
Table HC2 summarizes enrollment scenarios to illustrate the
combined effects of our proposed SEP changes and enrollment
limitations. The term ``D-SNP's parent organization'' as used in the
table includes the MA organization that offers the D-SNP, the MA
organization's parent organization, and any other entity (MA
organization or otherwise) that shares the parent organization with the
MA organization that offers the D-SNP.
[GRAPHIC] [TIFF OMITTED] TP15NO23.021
We look to a hypothetical example of how the proposed regulations
would likely play out in the market. For this example, Parent
Organization Alpha operates three MA organizations in Montgomery
County. For the sake of this example, the service areas for all D-SNPs
encompass Montgomery County, and each of the D-SNPs enrolls both full-
benefit and partial-benefit dually eligible individuals of all ages.
[[Page 78574]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.022
We anticipate that under proposed Sec. 422.514(h), for periods
beginning on or after January 1, 2027, Parent Organization Alpha would
have to choose one of the three D-SNPs offered by its MA organization
subsidiaries to align with the Plan Omega Medicaid MCO. For this
example, MA Organization Omega chooses HIDE D-SNP Omega 001 to serve as
the D-SNP aligned with Medicaid MCO Omega and permitted to continue
under proposed Sec. 422.514(h). Under the proposed crosswalk authority
at Sec. 422.530(c)(4)(iii), MA Organization Omega and MA Organization
Gamma would be able to move enrollees from Gamma 001 into Omega 001 on
January 1, 2027. MA Organization Gamma could then convert HIDE D-SNP
Gamma 001 to coordination-only D-SNP Gamma 001 and keep that plan open
for partial-benefit dually eligible individuals, or elect to non-renew
Gamma 001 and keep only Omega 001 as the plan aligned with the Omega
Medicaid MCO into which full-benefit dually eligible individuals may
enroll so long as they are also enrolled in the Omega Medicaid MCO.
Further, under proposed Sec. 422.514(h)(3)(ii), MA Organization Omega
could retain the HIDE PPO D-SNP, but it would be closed to new
enrollment for full-benefit dually eligible individuals in Montgomery
County.
[GRAPHIC] [TIFF OMITTED] TP15NO23.023
Our proposals on enrollment limitations for non-integrated D-SNPs
would apply based on an MA organization having an affiliated Medicaid
MCO. However, we are considering whether our proposals should apply
where an MA organization has other affiliated Medicaid managed care
plan options as well, including prepaid inpatient health plans (PIHPs)
and prepaid ambulatory health plans (PAHPs). PIHPs and PAHPs are
limited in what they cover and do not have comprehensive risk
contracts. Some States use PIHPs or PAHPs to deliver specific
categories of services, like behavioral health, or a single benefit,
such as non-emergency medical transportation, using a single
contractor. The revenue for a PIHP or PAHP is usually less than the
revenue for an MCO. As such, to the extent our proposal incentivizes an
organization to end its Medicaid managed care contracts to avoid our
new contracting limitations, that incentive would be stronger for a
PIHP or PAHP than an MCO. Therefore, we are concerned that applying our
proposals to PIHPs and PAHPs could create incentives that are
disruptive yet do not significantly further the goals of our proposals.
We welcome comments on this issue.
If we finalize our proposals, we would consider updates to the
systems and supports designed to aid individuals in
[[Page 78575]]
making Medicare choices. This would include MPF, HPMS, and other
resources that help to outline available plan choices to individuals,
SHIP counselors, and others. This may be especially important where
dually eligible individuals have choices that would vary based on the
type of plan and time of year. We would consider the best ways to show
only those plans available to individuals and highlight options that
align with Medicaid enrollment. We welcome recommendations on how the
choice architecture could best support the proposals or objectives
described in this section.
Overall, we believe our proposals at Sec. Sec. 422.503(b)(8),
422.504(a)(20), 422.514(h), and 422.530(c)(4)(iii) would:
Increase the percentage of D-SNP enrollees who are in
aligned enrollment, and--over time--exclusively aligned enrollment
(EAE), which would increase access to the comprehensive coordination of
care, unified appeal processes across Medicare and Medicaid,
continuation of Medicare services during an appeal, and integrated
materials that come with enrollment in one or more of the various types
of integrated D-SNPs. The impact would be concentrated in those States
that have Medicaid managed care but do not have EAE requirements
already. In such States, to comply with the proposals, MA organizations
that have multiple D-SNP PBPs available to full-benefit dually eligible
individuals and that also offer (or have parent organizations that
offer) Medicaid MCOs in the same service area would likely choose to
consolidate their PBPs down to a single PBP for full-benefit dually
eligible individuals that is aligned with their Medicaid MCO that fully
or partially overlaps the D-SNPs service area. Such MA organizations
could operate non-AIP coordination-only D-SNPs both for service areas
where they do not serve beneficiaries on the Medicaid side and for
partial-benefit dually eligible individuals. (We believe that
consolidation is more likely due to the potential administrative burden
of offering multiple D-SNPs for which enrollment is restricted.)
Reduce the number of D-SNP options overall, and thus
reduce choice overload and market complexity where parent organizations
offer multiple D-SNP options in the same or overlapping service areas.
Remove some incentives for agents and brokers to target
dually eligible individuals (especially among employed or captive
agents affiliated with plans that do not offer integrated D-SNPs), thus
lessening the assistance needed from advocates and SHIP counselors to
correct enrollment issues.
Simplify provider billing and lower the risk of
inappropriate billing, as more enrollees would be in D-SNPs with
aligned enrollment.
Promote integrated care and create more opportunities to
provide truly integrated experience for beneficiaries by requiring
plans to align enrollment (for example, D-SNPs can better coordinate
care across Medicare and Medicaid when plans are aligned).
In 2030, increase the number of D-SNPs with EAE, and
therefore increase the number of D-SNPs that would be AIPs that are
required to use unified appeals and grievance procedures and
continuation of Medicare benefits pending appeal.
Potentially lead to more States requiring D-SNP-only
contracts (see Sec. 422.107(e)) after 2030, as aligned enrollment and
service areas for D-SNPs with affiliated Medicaid MCOs would be
Federally required, allowing States to receive the benefits of D-SNP-
only contracts (like HPMS access for oversight and information sharing,
greater transparency on Star Ratings specific to D-SNP enrollees in
their State, increased transparency on health care spending, among
other benefits).\180\
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\180\ MMCO memo on 42 CFR 422.107(e) available here: https://www.cms.gov/files/document/stateoppsintegratedcareprogs.pdf.
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While there are many benefits to our proposals, we acknowledge
there are certain challenges:
Our proposals would reduce the number of D-SNP options for
Medicaid MCO enrollees in some States. In general, we share MedPAC's
assessment that cases of misaligned enrollment are unlikely to lead to
any meaningful integration. However, it is plausible that some dually
eligible individuals could benefit from the unique combinations of
provider networks and supplemental benefits that could be possible only
by enrolling in misaligned Medicare and Medicaid plans.
Making plan choices clear under our proposals to dually
eligible individuals, SHIP counselors and others would require changes
to MPF, HPMS, and other CMS public materials explaining Medicare
coverage options. Systems changes often present unknown challenges and
a learning curve for users while they become accustomed to new updates.
It also may seem that our proposal on limiting enrollment
in D-SNPs offered by MA organizations with affiliated Medicaid MCOs, in
isolation, would disadvantage parent organizations that choose to offer
Medicaid MCOs as well as D-SNPs because such organizations would be
limited in the number of D-SNP offerings and would be required to align
their enrollment between D-SNP and MCO for full-benefit dually eligible
individuals. However, our SEP proposals would have the opposite effect
by permitting enrollment into integrated D-SNP options that cover both
Medicare and Medicaid benefits using the new one-time-per month SEP.
Therefore, we believe our proposals, in combination, would maintain a
high level of competition and choice, even while imposing some new
constraints.
MA organizations that operate both D-SNPs and Medicaid
MCOs might elect to participate in fewer competitive Medicaid
procurements (or exit Medicaid managed care in ``any willing provider''
States) to be exempted from the proposed restrictions on plan
enrollment and number of plan offerings. This could adversely affect
competition and the minimum choice requirements in Sec. 438.52 for
Medicaid managed care programs. However, our SEP proposals would have
the opposite effect, since only integrated D-SNPs could benefit from
the new integrated care SEP, and overall, we believe our proposals, in
combination, maintain strong incentives for organizations to compete
for Medicaid managed care contracts.
The enrollment and eligibility restrictions--without the
offsetting proposed SEP changes--could incentivize sponsors to create
D-SNP look-alikes or other types of MA plans to build enrollment of
dually eligible individuals without being subject to the enrollment
limits and integration requirements associated with D-SNPs (although we
plan to mitigate this risk with proposed revisions to Sec. 422.514(d)
and (e) in section VIII.G of this proposed rule). Finally, beginning in
2030, our proposal would no longer allow some enrollees to stay in
their current D-SNPs, causing some enrollee disruption where the D-SNPs
were unable to completely align their D-SNP and Medicaid MCO
populations.
We welcome comments on our overall policy direction, specific
proposals, and analysis of their likely effects.
D. Comment Solicitation: Medicare Plan Finder and Information on
Certain Integrated D-SNPs
Medicare Plan Finder (MPF) is an online searchable tool located on
the Medicare.gov website that allows individuals to compare options for
enrolling in MA or Part D plans. Medicare beneficiaries can also enroll
in a plan using MPF. Each year, we work
[[Page 78576]]
to improve its functionality by implementing enhancements to MPF.
MPF users can find information on D-SNPs that also provide Medicaid
benefits for dually eligible individuals. However, the extent to which
MPF highlights those plans is currently limited. We are soliciting
comment to inform our intent to improve MPF functionality in the future
to make it easier for dually eligible MPF users to assess MA plans that
cover their full array of Medicare and Medicaid benefits.
One important consideration is how MPF displays benefits offered by
MA and Part D plans. Currently, MPF only displays benefits that are
included in the MA plan benefit package (PBP) (that is, Medicare Parts
A and B benefits, Part D coverage, approved Medicare supplemental
benefits, and Value Based Insurance Design (VBID)/Uniform Flexibility
(UF)/Supplemental Benefits for Chronically Ill (SSBCI)). For most MPF
users, this represents the totality of their coverage.
However, for applicable integrated plans (AIPs), as defined at
Sec. 422.561, D-SNP enrollment is limited to those individuals who
also receive Medicaid benefits through the D-SNP or affiliated Medicaid
managed care organization (MCO) under the same parent organization. For
these D-SNPs, the benefits listed in MPF accurately reflect those
covered by Medicare but do not reflect all the benefits available to
all enrollees in the D-SNP.
For example, in most States, all dually eligible individuals who
qualify to enroll in an AIP would have access to Medicaid-covered non-
emergency medical transportation (NEMT). However, MPF currently only
displays NEMT as a covered benefit for any MA plan if it is also
covered as an MA supplemental benefit. As such, all other things equal,
an MA plan that offers NEMT as an MA supplemental benefit appears in
MPF to have more generous coverage than an AIP that does not cover NEMT
as an MA supplemental benefit but does cover it under the affiliated
Medicaid MCO contract.
Information about only Medicare benefits covered by MA plans
available to the individual, although accurate, may not provide as much
information to dually eligible MPF users as would be beneficial, since
the combination of available Medicare and Medicaid benefits available
through some integrated D-SNPs may be greater than the Medicare
benefits reflected in MPF. It may also create a perverse incentive for
D-SNPs to offer certain types of supplemental benefits for Medicare
marketing purposes even when the same services are already available to
all enrollees in the plan through Medicaid.
We believe there is an opportunity to better inform dually eligible
MPF users. For AIPs, we are considering adding a limited number of
specific Medicaid-covered benefits (for example, dental, NEMT, certain
types of home and community-based services, or others) to MPF when
those services are available to enrollees through the D-SNP or the
affiliated Medicaid MCO. We would limit this functionality to AIPs,
because in such plans all enrollees--by definition--receive Medicaid
benefits through the AIP.
We would not include in the MPF display any Medicaid benefits that
are available but only through a separate carve-out. Consider, for
example, a State in which NEMT is available to dually eligible
individuals but through a Statewide vendor separate from the AIP. In
this instance, displaying NEMT in MPF would accurately represent that
all D-SNP enrollees have coverage for NEMT in Medicaid, but it would
not accurately characterize the D-SNP's role (or the role of the
affiliated Medicaid MCO offered by D-SNP parent organization) in
delivering the service.
We continue to consider whether to indicate which services are
Medicare supplemental benefits and which are Medicaid, weighing whether
the additional information would be worth the added complexity.
Displaying Medicaid benefits in MPF, even with the limitations
described above, would present new operational challenges for CMS. We
do not currently capture the necessary information for AIPs or other D-
SNPs in a systematic manner to populate MPF with information about
Medicaid benefits covered by D-SNPs. (Medicaid benefit information is
included in State Medicaid agency contracts (SMACs) that D-SNPs submit
annually to CMS, but the information is not standardized and can be
inconsistent and difficult to retrieve. Also, the current timing of
SMAC submissions by the first Monday in July may not allow CMS enough
time to review the SMACs and make the Medicaid benefits information
available to MPF for an early October release.) Another way to
potentially capture the necessary information would be for us to
provide a mechanism by which D-SNPs can report it to us annually. We
solicit comment on the practicality and means for accomplishing this.
Our experiences with integrated PBPs in the Medicare-Medicaid Financial
Alignment Initiative would inform our implementation, but enhancements
to MPF would require effort and some opportunity cost. Nonetheless, we
believe we can better inform dually eligible MPF users about the
benefits to which they are entitled and, in doing so, better integrate
their experience across Medicare and Medicaid. With support from the
Administration for Community Living and the National Council on Aging,
the My Care My Choice website is currently available to showcase
integrated care plan options (and more) for three States (California,
Michigan, and Ohio).\181\ We are also interested in stakeholders
submitting comments about any features from the My Care My Choice
website that are particularly helpful for individuals in understanding
and making plan choices.
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\181\ The My Care My Choice website is available at: https://www.mycaremychoice.org/en.
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Such enhancements to MPF would not require rulemaking. We are
soliciting comments on the concepts described above to inform our
decision about whether and how to implement changes to MPF along these
lines.
E. Comment Solicitation: State Enrollment Vendors and Enrollment in
Integrated D-SNPs
We, along with our State partners, have worked to create integrated
care options for dually eligible individuals. When individuals choose
to enroll, we want the enrollment process to be easy to navigate.
Unfortunately, there remain technical challenges that can impede the
ease of enrollment in integrated D-SNPs, including misalignment of
Medicare and Medicaid enrollment processes, start dates, and related
operational challenges for States and plans, as well as potentially
confusing non-integrated enrollee communication materials.
In the FAI, CMS delegated eligibility and enrollment functions for
Medicare-Medicaid Plans (MMPs) to States by waiving regulations at 42
CFR part 422, subpart B, insofar as they were inconsistent with the
passive enrollment process used for each demonstration and with
limiting enrollment in MMPs to certain dually eligible individuals.
Operationally, many States have leveraged their State Medicaid
enrollment vendors to operationalize enrollment, eligibility, or both.
Which functions FAI States have chosen to delegate to their enrollment
vendors or keep in-house (for example, enrollment vendor call center,
enrollment noticing, eligibility determinations and enrollment
processing) vary depending on the State.
Within the context of the FAI demonstrations, the use of a State
enrollment vendor serves multiple purposes:
[[Page 78577]]
Effectuating Medicare and Medicaid enrollment
simultaneously to avoid misalignment between enrollment start and end
dates,
Serving as an unbiased source of information about
integrated managed care plans and coverage options, and
Reducing the risk of real or perceived conflicts of
interest when plans initiate enrollment directly.
Outside of the FAI, dually eligible individuals elect MA plans,
including D-SNPs, by enrolling directly with the plan, or Third-Party
Marketing Organizations, or via 1-800-Medicare and the Medicare Online
Enrollment Center. This creates special challenges for D-SNPs that have
exclusively aligned enrollment (EAE) with affiliated Medicaid MCOs
because these D-SNPs then need to separately coordinate enrollment of
the dually eligible individual into the D-SNP's affiliated Medicaid
MCO. Some States have expressed interest in leveraging State enrollment
vendors, including enrollment brokers as described in section
1903(b)(4) of the Act, to effectuate EAE for integrated D-SNPs and
their affiliated Medicaid MCOs.
Based on this experience, we are assessing ways to:
Promote enrollment in integrated D-SNPs and reduce the
likelihood of misaligned Medicare and Medicaid managed care enrollment
for beneficiaries,
Work toward an integrated D-SNP enrollment process that is
operationally practical for both CMS and States,
Create alignment--to the extent feasible--between Medicare
and Medicaid managed care enrollment start and end dates,
Protect beneficiaries from abusive enrollment practices
without creating barriers to enrollment into a plan of choice, and
Streamline beneficiary messaging and communication related
to enrollment.
1. Current Opportunity for Use of State Enrollment Vendors for
Enrollment in Integrated D-SNPs
States can utilize Medicaid enrollment vendors for enrollment in
integrated D-SNPs through requirements in the SMAC required by Sec.
422.107. States may thus require D-SNPs to contract directly with the
State's enrollment vendor to verify D-SNP eligibility and effectuate D-
SNP enrollment transactions. While these contracts could govern the
respective obligations of the broker and the D-SNP, they would have to
be uniform for all D-SNPs in the State, and in order to avoid a
violation of section 1903(b)(4) of the Act and Sec. Sec. 438.71(c)(2)
and 438.810 regarding a broker having a financial interest in a
provider or managed care plan in the State, the State would have to
compensate its enrollment broker for performing these functions. D-SNPs
would be in the position to provide the necessary information and
oversight of the enrollment mechanisms and activities. D-SNPs would
still be subject to existing regulations at Sec. 422.504(i),
maintaining ultimate responsibility for adhering to and complying with
all terms and conditions of their contract with CMS.
States can implement, and require of D-SNPs, specific messaging
directing dually eligible individuals to take enrollment actions via
the State's enrollment vendor only, similar to the noticing and
messaging that applies in the FAI demonstrations. States could choose
which functions to direct the D-SNPs to contract with the enrollment
vendor for via the SMAC. States could also choose to direct the D-SNPs
via the SMAC to not elect use of the Medicare Online Enrollment Center.
States could require D-SNPs to transfer prospective enrollees to
the State's enrollment vendor for eligibility confirmation, as MMPs are
required to do under the FAI demonstrations (for example, via warm
transfer, in which the D-SNP staff transfers the prospective enrollee
to the State's enrollment vendor but passes on the relevant information
about the prospective enrollee). The enrollment vendor or the D-SNP--
depending upon the contractual arrangement--would then effectuate the
enrollment or disenrollment for Medicare and Medicaid. States could
also require plans to direct enrollees to their vendor for
disenrollments. Currently, under FAI, MMPs cannot accept enrollment
requests directly from an individual or process the request, but
instead they must forward the request to the State or State's
enrollment vendor within two business days.
Under an arrangement in which a State requires D-SNPs to contract
with the State's enrollment vendor, D-SNPs would retain the
responsibility to oversee any functions delegated to the State's
enrollment vendor under Sec. 422.504 provisions that require MA plans
to oversee first tier, downstream, and related entities. However, as
noted earlier, financial arrangements would need to be structured to
avoid violating the independence and conflict of interest limitations
that apply to enrollment brokers under section 1903(b)(4) of the Act
and Sec. Sec. 438.71(c) and 438.810.
Requiring D-SNPs to contract with a State's enrollment vendor for
enrollment and eligibility functions could create a simpler,
streamlined enrollment experience for dually eligible individuals and
may reduce the risk of misaligned Medicare and Medicaid enrollment. As
in the FAI demonstrations, the State's enrollment vendor would need to
implement Medicare managed care eligibility and enrollment policies,
such as Medicare special enrollment periods and Comprehensive Addition
and Recovery Act provisions.
Finally, like the FAI demonstrations, States can prohibit D-SNPs,
via SMACs, from using agents and brokers to perform the activities
described in Sec. Sec. 422.2274 and 423.2274.
2. Medicaid Managed Care Enrollment Cut-Off Dates
One challenge of applying FAI enrollment processes outside the
demonstration context is alignment of Medicaid and Medicare managed
care enrollment start and end dates. Sections 1851(f)(2) and 1860D-
1(b)(1)(B)(iv) of the Social Security Act, and regulations codified at
Sec. Sec. 422.68 and 423.40(c) respectively, generally require that
Medicare enrollments become effective on the first day of the first
calendar month following the date on which the election or change is
made, although section 1851(f)(4) of the Act and Sec. Sec. 422.68(d)
and 423.40(c) allow CMS flexibility to determine the effective dates
for enrollments that occur in the context of special enrollment
periods. Medicaid managed care regulations at Sec. 438.54 do not
specify the timelines or deadlines by which any enrollment must be
effective.
Some States have cut-off dates after which enrollment in a Medicaid
managed care plan is not effectuated until the first calendar day of
the next month after the following month. (For example, an application
received on March 28 would be effective May 1 in some States.) If a
dually eligible individual is trying to enroll in an integrated D-SNP
at the end of a month in a State with a Medicaid managed care
enrollment cut-off date, there could be a monthlong lag between their
Medicare managed care effective date and Medicaid managed care
effective date. The lag in start dates between Medicare and Medicaid
services for an integrated D-SNP can be confusing to enrollees,
operationally challenging for integrated plans, and difficult to
describe in plan materials, particularly in instances where the D-SNP
and Medicaid MCO are described as a single integrated organization.
[[Page 78578]]
We are interested in learning more about reasons for implementing
Medicaid managed care enrollment cut-off dates and the barriers, as
well as potential solutions, to aligning Medicare and Medicaid managed
care enrollment start and end dates. We invite comment from interested
parties, including States, D-SNPs, and Medicaid managed care plans,
about their specific operational challenges related to potential
changes to Medicaid cut-off dates to align them with the Medicare start
date.
3. Comment Solicitation
We are seeking feedback on the feasibility of the approach to
enrollment outlined above (requiring integrated D-SNPs to contract with
State enrollment brokers), as well as any specific concerns about
States implementing it.
We are soliciting comments on, but not limited to, the following
topics:
What challenges do individuals face when trying to enroll
in integrated D-SNPs?
What are States' reasons for having a specific Medicaid
managed care enrollment cut off date in place?
What type of operational or systems barriers do States and
Medicaid managed care plans face to making changes to their Medicaid
enrollment cut-off date to align with the Medicare managed care
enrollment start date?
What potential concerns would stakeholders have about CMS
using flexibilities at section 1860D-1(b)(1)(B)(iv) of the Act and
Sec. 423.40(c) to determine effective dates for Medicare enrollments
that occur in the context of our proposed special enrollment period for
integrated care? (For example, Medicare enrollment effective dates that
align with Medicaid enrollment effective dates, even if they are not
the first day of the first calendar month following the date on which
the election or change is made.)
Are there operational or systems barriers for States and
Medicaid managed care plans to align disenrollment dates with Medicare?
What concerns, if any, should we consider with States
requiring D-SNPs to route enrollment through the State enrollment
vendor via the SMAC? Are there any Federal regulations, other than or
in addition to the limitations on enrollment brokers under section
1903(b)(4) and Sec. Sec. 438.71(c) and 438.810, that interested
parties view as an impediment to this option?
What type of technical assistance related to effectuating
MA plan and D-SNP enrollment and eligibility processes would be helpful
to States?
What concerns should we consider about potential abusive
enrollment practices?
What are States' current requirements and policies related
to agents and brokers?
Are there other aspects of the integrated enrollment and
disenrollment processes in FAI that should apply to D-SNPs?
F. Clarification of Restrictions on New Enrollment Into D-SNPs via
State Medicaid Agency Contracts (SMACs) (Sec. Sec. 422.52 and 422.60)
To elect a specialized MA plan for special needs individuals as
defined at Sec. 422.2 (special needs plans or SNPs), an individual
must meet the eligibility requirements for the specific type of SNP in
which the individual wishes to enroll. At Sec. 422.52(b), we define
the eligibility requirements for individuals to enroll in a SNP. These
eligibility requirements indicate that an individual must meet the
regulatory definition of a special needs individual at Sec. 422.2,
meet the eligibility requirements for the specific SNP they elect to
enroll in, and be eligible to elect an MA plan under Sec. 422.50. For
D-SNPs, we also require at Sec. 422.107(c)(2) that the categories and
criteria for eligibility for dually eligible individuals to enroll in
the SNP be included in the SMAC between the State and the D-SNP. D-SNPs
must restrict enrollment eligibility categories or criteria consistent
with the SMAC.
Currently, numerous States add eligibility categories and criteria
to their SMACs that restrict new D-SNP enrollment to prioritize and
promote integrated care. For example, some States only allow D-SNPs to
enroll full-benefit dually eligible individuals. Other States only
allow D-SNPs to enroll individuals who are also in an affiliated
Medicaid managed care plan, creating exclusively aligned enrollment.
State restrictions serve an important purpose in maximizing the number
of dually eligible individuals who receive coordinated services through
the same organization for both Medicare and Medicaid; minimizing
disruption for enrollees currently served by existing D-SNPs; and
allowing for the creation of D-SNP benefit packages that are tailored
to certain subsets of dually eligible individuals.
State limitation of D-SNP enrollment to certain populations has
been a feature throughout the history of D-SNPs. Nonetheless, we
believe we can further clarify our regulations.
We propose to revise Sec. 422.52(b)(2) to be explicit that to be
eligible to elect a D-SNP, an individual must also meet any additional
eligibility requirements established in the SMAC. We also propose to
revise Sec. 422.60(a)(1) and add Sec. 422.60(a)(3) to be more
explicit that MA organizations may restrict enrollment in alignment
with Sec. 422.52(b)(2). Neither proposal is intended to change our
longstanding policy. We do not expect any new burden associated with
these proposed changes because States are already including eligibility
categories and criteria in their SMACs and we are reviewing those
accordingly.
G. Contracting Standards for Dual Eligible Special Needs Plan Look-
Alikes (Sec. 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 \182\ and subsequent years, as provided in Sec.
422.514(d)(1), CMS does 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.
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\182\ CMS amended Sec. 422.514(d)(1) in the April 2023 final
rule, so the regulation text now refers to plan year 2024 and
subsequent years; however, the regulation was in effect, with the
reference to 2022 and subsequent years, as described here.
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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
[[Page 78579]]
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
potentially misleading marketing practices by brokers and agents that
market D-SNP look-alikes to dually eligible individuals. For a more
detailed discussion of D-SNP look-alikes and their impact on the
implementation of D-SNP Medicare and Medicaid integration, we direct
readers to the June 2020 final rule (85 FR 33805 through 33820) and the
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 (85 FR 9018 through 9021) (also known as the February 2020
proposed rule).
In the April 2023 final rule, we finalized amendments to close
unforeseen loopholes in the scope of the regulation adopted to prohibit
D-SNP look-alikes. Specifically, we finalized language at Sec.
422.514(g) to apply the prohibitions on contracting with D-SNP look-
alikes to individual segments of an MA plan. We also finalized language
at Sec. 422.514(d)(1) to apply the D-SNP look-alike contracting
limitation to both new and existing (that is, renewing) MA plans that
are not 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.
1. Reducing Threshold for Contract Limitation on D-SNP Look-Alikes
Our contracting limitations at Sec. 422.514(d) mean that we do not
contract with non-SNP MA plans that have enrollment consisting of 80
percent or more of enrollees who are entitled to Medicaid. We set the
threshold at 80 percent or higher based on a 2019 MedPAC analysis that
showed the proportion of dually eligible individuals in most geographic
areas did not exceed the 80-percent threshold; \183\ at that time, no
MA plan service area had more than 50 percent dually eligible
beneficiaries, and therefore dually eligible enrollment of 80 percent
or greater would not be the result of any plan that had not intended to
achieve high enrollment of dually eligible individuals (85 FR 33812).
The 80-percent threshold also captured almost three-quarters of the
non-SNP MA plans with more than 50 percent dually eligible enrollees
(85 FR 33812). As described in the June 2020 final rule, we also
considered two other approaches: (1) setting the threshold at the
higher of 50 percent dually eligible enrollment or the proportion of
dually eligible MA-eligible individuals in the plan service area plus
15 percentage points; and (2) setting a lower threshold for dually
eligible enrollment at a point between 50 and 80 percent (85 FR 33807).
In addition to 80 percent or higher being an indicator that the plan is
designed to attract disproportionate dually eligible enrollment, we
believed this threshold would be easier for MA organizations to
determine prospectively and operationally easier for CMS to implement
than a threshold that varied across each service area.
---------------------------------------------------------------------------
\183\ See June 2019 MedPAC Report to Congress, Chapter 12 at
http://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf.
---------------------------------------------------------------------------
A number of commenters on the February 2020 proposed rule
recommended that we set a threshold lower than 80 percent. These
commenters expressed concern that a threshold of 80 percent could be
``gamed'' by MA organizations to keep enrollment of dually eligible
individuals just under the ceiling. Some commenters recommended that
CMS set the ceiling for dually eligible enrollment at 50 percent with a
commenter citing MACPAC analysis showing faster growth in projected
enrollment among MA plans with dual eligible enrollment greater than 50
percent than among those greater than 80 percent. Another commenter
recommended a threshold of 60 percent.
In the June 2020 final rule, we responded that we believed the 80-
percent threshold was reasonable because, based on the 2019 MedPAC
analysis on 2017 data, it far exceeded the share of dually eligible
individuals in any given MA plan service area--no MA plan service area
had more than 50 percent dually eligible beneficiaries--and, therefore,
would not be the result for any plan that had not intended to achieve
high dually eligible enrollment. We also stated that we would monitor
for potential gaming after implementation of the final rule by
reviewing plan enrollment data and consider future rulemaking as needed
(85 FR 33812).
In response to our proposals to close unforeseen D-SNP look-alike
loopholes in the April 2023 final rule, some commenters again
recommended we lower the threshold to less than 80 percent (88 FR
22131). A few commenters recommended we lower the threshold below 80
percent without recommending a specific percentage, and other
commenters recommended we lower the threshold to 50 percent. The
commenters suggested that lowering the threshold further would promote
integrated care and minimize beneficiary confusion. As one of these
commenters, MACPAC noted that it ``remains concerned that while CMS's
focus on plans where 80 percent or more of all enrollees are dually
eligible addresses the most egregious instances, there could still be a
real risk of growth in non-SNP MA plans falling below the 80-percent
threshold and thus continuing to detract from Federal and State efforts
to integrate care.'' We analyzed the percentage of non-SNP MA plans'
dually eligible enrollment as a percentage of total enrollment from
plan years 2017 through 2023. Our analysis shows that the number of
non-SNP MA plans with high levels of dually eligible individuals has
grown substantially.
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The rate of growth from 2017 to 2023 in the number of non-SNP MA
plans with 50 to 60 percent (544 percent increase), 60 to 70 percent
(900 percent), and 70 to 80 percent dually eligible individuals as a
percent of total enrollment (1,400 percent) \184\ exceeded the rate of
enrollment growth for all MA-PD plans (109 percent) over the same
period of time.\185\ The increased growth in non-SNP MA plans with
dually eligible individuals between 50 and 80 percent of total
enrollment suggests to us that MA organizations are
[[Page 78581]]
offering plans for dually eligible individuals but circumventing rules
for D-SNPs, including requirements from the Bipartisan Budget Act of
2018, and detracting from Federal and State efforts to better integrate
Medicare and Medicaid benefits. This growth in enrollment in these non-
SNP plans is likely also drawing enrollment from integrated care D-SNPs
and similar integrated programs. Recent analysis found that almost one-
third of dually eligible individuals newly enrolled in D-SNP look-
alikes were previously enrolled in fully integrated dual eligible SNPs
(FIDE SNPs), other D-SNPs, PACE plans, or MMPs.\186\
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\184\ CMS analysis of Integrated Data Repository (IDR) data for
January of each respective year. Analysis conducted in April 2023,
as shown in Table 1.
\185\ CMS data from the Contract Year 2021 and 2023 Landscape
Plan shows the total number of MA-PD plans in 2017 was 2,332 and the
total number of MA-PD plans in 2023 is 4,875.
\186\ Ma, Y., Austin F., Roberts, E., Johnston, K., Phelan, J.,
and Figueroa, J. ``Rapid Enrollment Growth In `Look-Alike' Dual-
Eligible Special Needs Plans: A Threat To Integrated Care'', Health
Affairs (July 2023) 919-927. Retrieved from https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2023.00103.
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We also conducted analysis with 2023 data mimicking MedPAC's 2019
analysis showing the share of dually eligible individuals enrolled in
non-SNP MA plans against the share of beneficiaries in a plan service
area who are dually eligible individuals.\187\ MedPAC's analysis showed
that in most MA markets, the share of beneficiaries in a plan service
area who are dually eligible was clustered in the 10 to 25 percent
range and in no county exceeded 50 percent. Their analysis showed that
dually eligible individuals generally represented 30 percent or less of
non-SNP MA plans' total enrollment. MedPAC's analysis informed our
decision to set the threshold for dually eligible enrollment at 80
percent of a non-SNP MA plan's enrollment because it far exceeded the
share of dually eligible individuals in any given market (by 30
percentage points or more) at that point in time and, therefore, would
not be the result for any plan that had not intended to achieve high
dually eligible enrollment. Similar to the earlier MedPAC analysis, our
analysis of 2023 data shows the share of beneficiaries in a plan
service area who are dually eligible is clustered in the 10 to 30
percent range and does not exceed 49 percent except in one county (at
56 percent).\188\ Also like MedPAC, we found that for most non-SNP MA
plans, dually eligible individuals generally represent 30 percent or
less of the plan's total enrollment. However, whereas MedPAC found 13
non-SNP MA plans with dually eligible enrollment between 50 percent and
80 percent for 2017,\189\ we found 128 non-SNP MA plans with enrollment
in that range for 2023.\190\
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\187\ See June 2019 MedPAC Report to Congress, Chapter 12 at
https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf.
\188\ CMS analysis of 2023 non-SNP MA plan data in the IDR.
Analysis conducted in April 2023, as shown in Table 1.
\189\ June 2019 MedPAC Report to Congress, Chapter 12,
calculated from Table 12-9 at https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun19_ch12_medpac_reporttocongress_sec.pdf.
\190\ CMS analysis of 2023 non-SNP MA plan data in the IDR.
Analysis conducted in April 2023, as shown in Table 1.
---------------------------------------------------------------------------
To address the substantial growth in non-SNP MA plans with
disproportionately high enrollment of dually eligible individuals, we
propose lowering the D-SNP look-alike threshold from 80 percent to 60
percent incrementally over a two-year period. We propose to lower the
threshold for dually eligible enrollment to 60 percent of a non-SNP MA
plan's enrollment because it exceeds the share of dually eligible
individuals in any given MA plan service area currently and, therefore,
would not be the result for any plan that simply reflected the
concentration of dually eligible enrollees in its service area.
We propose a limitation on non-SNP MA plans with 70 or greater
percent dually eligible individuals for contract year 2025. For
contract year 2026, we propose to reduce the threshold from 70 percent
to 60 percent or greater dually eligible enrollment as a share of total
enrollment. This incremental approach would minimize disruptions to
dually eligible individuals and allow MA organizations and CMS to
operationalize these transitions over a two-year period. As discussed
in more detail below, we would maintain processes to minimize
disruption for the enrollees in plans affected by this proposed change.
Based on 2023 data, we expect the lower threshold would impact 30
non-SNP MA plans with dually eligible individuals representing 70 to 80
percent of total enrollment and 40 non-SNP MA plans with dually
eligible individuals representing 60 to 70 percent of total enrollment.
Some of the plans that could be affected by our proposal are offered in
States (that is, California, Massachusetts, Minnesota) that limit
contracting to integrated D-SNPs, such as FIDE SNPs and AIPs. Based on
2023 plan data, 12 non-SNP MA plans in California, Massachusetts, and
Minnesota have shares of dually eligible enrollment between 60 and 80
percent. These States have chosen to limit their markets to certain D-
SNPs to integrate Medicare and Medicaid for dually eligible
individuals. Lowering the D-SNP look-alike contracting limitation to 60
percent will help to simplify choices for dually eligible individuals
in these States and promote Medicare and Medicaid integration
objectives.
We propose revisions to the rule on dually eligible enrollment at
Sec. 422.514(d)(1) to apply the lower thresholds to new and existing
non-SNP MA plan bids. Specifically, we propose amending paragraph
(d)(1)(ii) such that CMS would not enter into or renew a contract for a
new or existing non-SNP MA plan that projects enrollment in its bid of
80 percent or more dually eligible individuals for plan year 2024 (as
is already the case under current regulations); 70 percent or more
dually eligible individuals for plan year 2025; and 60 percent or more
dually eligible individuals for plan year 2026 and subsequent years.
Consistent with our current practice, we would apply the proposed
changes at Sec. 422.514(d)(1)(ii) to all bids for the next plan year,
including any bids for non-SNP MA plans projected to exceed the
threshold even if the actual enrollment for the current plan year is
under the threshold at Sec. 422.514(d)(1).
Similarly, we propose revisions to paragraph (d)(2) to apply the
lower thresholds to non-SNP MA plan enrollment. Specifically, we
propose to amend paragraph (d)(2)(ii) to state that we will not renew a
contract with a non-SNP MA plan that has actual enrollment, using
January enrollment of the current year, in which dually eligible
individuals constitute 80 percent or more dually eligible individuals
for plan year 2024 (as is already the case under current regulations);
70 percent or more dually eligible individuals for plan year 2025; or
60 percent or more dually eligible individuals for plan year 2026 or
subsequent years. In operationalizing these proposed changes, for
example, we would use January 2024 enrollment data to identify non-SNP
MA plans that exceed the proposed 70-percent threshold, for purposes of
determining whether to renew contracts with these plans for plan year
2025. We would use January 2025 enrollment data to identify non-SNP MA
plans that exceed the proposed 60-percent threshold for purposes of
determining whether to renew contracts with these plans for plan year
2026. Consistent with existing rules, we would not apply the
contracting limitation in Sec. 422.514(d)(2) to any non-SNP MA plan
that has been active for less than one year and has enrollment of 200
or fewer individuals.
We considered lowering the threshold to 50 percent, given the
growth in the number of non-SNP MA plans between 50 and 60 percent
dually eligible
[[Page 78582]]
individuals as a share of total enrollment. MedPAC's analysis of 2017
data and our analysis of 2023 data showed that there are some service
areas where the entire Medicare population is around 50 percent dually
eligible individuals and 50 percent non-dually eligible individuals. As
such, lowering the threshold to 50 percent could prohibit plans that
reflect the distribution of eligibility in that community. Also, it is
less clear that a plan is designed to target dually eligible
individuals and circumvent the statutory D-SNP requirements when a plan
appeals equally to dually eligible individuals and non-dually eligible
individuals. Although we propose to lower the threshold to 60 percent,
we solicit comments on whether the alternative to reduce the threshold
to 50 percent is more appropriate to protect against plans
circumventing the requirements for D-SNPs while enrolling a
disproportionate number of dually eligible individuals.
2. Amending Transition Processes and Procedures for D-SNP Look-Alikes
Section 422.514(e) establishes parameters for transitioning
individuals who are enrolled in a D-SNP look-alike to another MA-PD
plan (or plans) offered by the MA organization to minimize disruption
as a result of the prohibition on contract renewal for existing D-SNP
look-alikes. Under the existing processes and procedures, an MA
organization with a non-SNP MA plan determined to meet the enrollment
threshold in proposed paragraph (d)(2) could transition enrollees into
another MA-PD plan (or plans) offered by the same MA organization, as
long as any such MA-PD plan meets certain proposed criteria. This
transition process allows MA enrollees to be transitioned at the end of
the year from one MA plan offered by an MA organization to another MA-
PD plan (or plans) without having to complete an election form or
otherwise indicate their enrollment choice as typically required, but
it also permits the enrollee to make an affirmative choice for another
MA plan or standalone Part D plan of his or her choosing during the
annual election period (AEP) preceding the year for which the
transition is effective. Consistent with our description of the
transition process in the June 2020 final rule (85 FR 33816), if a
transitioned enrollee elects to enroll in a different plan during the
AEP, enrollment in the plan the enrollee selected would take precedence
over the plan into which the MA organization transitioned the enrollee.
Transitioned enrollees would also have additional opportunities to
select another plan through the Medicare Advantage Open Enrollment
Period described in Sec. 422.62(a)(3) from January 1 through March 31.
Affected individuals may also qualify for a SEP, depending on the
circumstances.
Existing provisions at paragraphs (e)(1)(i) through (iv) outline
specific criteria for any MA plan to receive enrollment through this
transition process to ensure that enrollees receive coverage under
their new MA plan that is similarly affordable as the plan that would
not be permitted for the next year. At existing paragraph (e)(1)(i), we
allow a non-renewing D-SNP look-alike to transition that plan's
enrollment to another non-SNP plan (or plans) only if the resulting
total enrollment in each of the MA plans receiving enrollment consists
of less than the threshold established in paragraph (d)(2)(ii) (now, 80
percent but with the proposed amendment, this would refer to the
scheduled change in the threshold). SNPs receiving transitioned
enrollment are not subject to this proposed limit on dually eligible
individual enrollment. Under existing paragraph (e)(1)(ii), we require
that any plan receiving transitioned enrollment be an MA-PD plan as
defined in Sec. 422.2. Under existing paragraph (e)(1)(iii), any MA
plan receiving transitioned enrollment from a D-SNP look-alike is
required to have a combined Part C and D beneficiary premium of $0
after application of the premium subsidy for full subsidy eligible
individuals described at Sec. 423.780(a). Finally, paragraph
(e)(1)(iv) requires that the receiving plan be of the same plan type
(for example, HMO or PPO) of the D-SNP look-alike out of which
enrollees are transitioned.
At existing paragraph (e)(2)(ii), the current transition process
requires MA organizations to describe changes to MA-PD benefits and
provide information about the MA-PD plan into which the individual is
enrolled in the Annual Notice of Change (ANOC) that the MA organization
must send, consistent with Sec. Sec. 422.111(a), (d), and (e) and
422.2267(e)(3). Consistent with Sec. 422.111(d)(2), enrollees receive
this ANOC describing the change in plan enrollment and any differences
in plan enrollment at least 15 days prior to the first day of the AEP.
At existing paragraph (e)(4), the regulation addresses situations
where the prohibition on contracting or renewing a D-SNP look alike is
applied and the D-SNP look alike is terminated. In such situations
where an MA organization does not transition some or all current
enrollees from a D-SNP look-alike to one or more of the MA
organization's other plans as provided in proposed paragraph (e)(1),
the MA organization is required to send affected enrollees a written
notice consistent with the non-renewal notice requirements at Sec.
422.506(a)(2).
This transition process is conceptually similar to ``crosswalk
exception'' procedures at Sec. 422.530(c). However, in contrast to the
crosswalk exceptions, our transition process at Sec. 422.514(e)
permits transition across contracts and across MA organizations under
the same parent organization, as well as from non-SNP plans to SNPs.
We propose to apply the existing transition processes and
procedures at Sec. 422.514(e) to non-SNP MA plans that meet the
proposed D-SNP look-alike contracting limitation of 70 percent or more
dually eligible individuals effective plan year 2025 and 60 percent or
more dually eligible individuals effective plan year 2026. Consistent
with the initial years of implementation of the D-SNP look-alike
contract limitations with the 80-percent threshold, maintaining these
transition processes and procedures will help to minimize disruption as
a result of the prohibition on contract renewal for existing D-SNP
look-alikes. However, for plan year 2027 and subsequent years, we
propose to limit the Sec. 422.514(e) transition processes and
procedures to D-SNP look-alikes transitioning dually eligible enrollees
into D-SNPs. Based on our experience with D-SNP look-alike transitions
effective plan year 2023, the vast majority of enrollees are
transitioned to other MA-PDs under the same parent organization as the
D-SNP look-alike. Based on our review of D-SNP look-alike transition
plans thus far, we expect the experience for transitions effective plan
year 2024 to follow a similar pattern. We propose this new limitation
on the transition process at new paragraph (e)(1)(v).
MA organizations can utilize other CMS processes to transition D-
SNP look-alike enrollees to non-D-SNPs. For example, an MA organization
can utilize the CMS crosswalk process if it is transitioning the full
D-SNP look-alike enrollment to one non-SNP plan benefit package (PBP)
of the same type offered by the same MA organization under the same
contract provided all requirements at Sec. 422.530 for a crosswalk are
met. An MA organization moving the entire enrollment of the D-SNP look-
alike PBP to another PBP of the same type under the same contract may
structure this action as a consolidation of PBPs and use the crosswalk
for consolidated renewal process, under Sec. 422.530(b)(1)(ii). An MA
organization
[[Page 78583]]
may utilize the crosswalk exception process at Sec. 422.530(c)(2) to
request to transition the entire enrollment of the MA contract
(including the D-SNP look-alike) to another MA contract offered by
another MA organization with the same parent organization as part of a
contract consolidation of separate MA contracts. As part of reviewing a
request for a crosswalk exception under Sec. 422.530(c)(2), CMS
reviews the contract consolidation to ensure compliance with the change
of ownership regulations (Sec. Sec. 422.550 through 422.553).
While multiple options exist for MA organizations to transition D-
SNP look-alike enrollees to other non-SNP MA plans, these pathways are
not available for moving enrollees from D-SNP look-alikes to D-SNPs. We
believe it is appropriate to limit the transition process in Sec.
422.514(e) since although other options remain available to transition
enrollees from the D-SNP look-alike, MA organizations do not have other
options to transition D-SNP look-alike enrollees into D-SNPs, and
movement into D-SNPs encourages enrollment in integrated plans.
Furthermore, we are concerned that if D-SNP look-alikes continue to be
allowed to transition enrollees into non-D-SNPs indefinitely, there is
little incentive for MA organizations to avoid non-compliance with the
D-SNP look-alike thresholds. Thus, for plan year 2027 and subsequent
years, we propose to add new paragraph Sec. 422.514(e)(1)(v) to limit
the existing D-SNP look-alike transition pathway to MA organizations
with D-SNP look-alikes transitioning enrollees into D-SNPs.
We are also considering an alternative to our proposal that would
eliminate the 70-percent threshold applying for plan year 2025 but
would involve additional conditions and changes related to the
transition authority Specifically, this alternative would:
Apply the 60-percent threshold beginning in plan year
2026;
Permit use of the transition authority into non-SNP MA
plans (as currently permitted under Sec. 422.514(e)) for plan year
2025; and
Limit use of transition authority under Sec. 422.514(e)
to transition D-SNP look-alike enrollees into D-SNPs for plan year 2026
and beyond.
Relative to our proposal, this alternative would give plans with
dually eligible individual enrollment between 70 and 80 percent of
total enrollment (based on January 2024 enrollment data) one additional
year to apply for a new D-SNP or service area expansion to an existing
D-SNP, such that these plans could transition enrollees into a D-SNP
for plan year 2026. The alternative would balance the additional year
using the existing 80-percent enrollment threshold to identify
prohibited D-SNP look-alikes with an earlier limitation on the Sec.
422.514(e) transition authority to enrollees transitioning into non-
SNPs. We solicit comment on whether this alternative is a better
balance of the goals of our policy to prohibit circumvention of the
requirements for D-SNPs and to encourage and incentivize enrollment in
integrated care plans. Among the factors we would consider in adopting
the alternative instead of our proposal is the extent to which plans
with between 70 and 80 percent dually eligible enrollment in plan year
2024 expect to be able to establish a D-SNP in the same service area as
the D-SNP look-alike if given an additional year (that is, 2026) to
transition enrollees. Based on 2023 plan year data, approximately two-
thirds of the MA organizations with non-SNP MA plans with between 70
and 80 percent dually eligible individuals already have a D-SNP under
the same MA organization with the vast majority of those D-SNPs having
a service area that covers the same service area as the non-SNP MA
plan. The other approximately one-third of the MA organizations with
non-SNP MA plans with between 70 and 80 percent dually eligible
individuals do not have a D-SNP in the same service area in plan year
2023. If given an additional year, these MA organizations would have
more time in which to establish D-SNPs in the same service areas as
non-SNP MA plans and transition the enrollees into a D-SNP.
We also propose a technical edit at Sec. 422.514(e)(1)(i) to make
the term ``specialized MA plan for special needs individuals''
lowercase, consistent with the definition of D-SNPs at Sec. 422.2.
H. For D-SNP PPOs, Limit Out-of-Network Cost Sharing (Sec. 422.100)
MA organizations offer a range of health plan options including
Medicare savings account (MSA) plans, private fee-for-service (PFFS)
plans, preferred provider organizations (PPOs), health maintenance
organizations (HMOs) and health maintenance organizations with point of
services benefits (HMO/POS). (See Sec. 422.4.) The most common health
plan options are HMOs and PPOs. HMOs generally require enrollees to use
network providers. PPOs have a network of providers but also pay for
services delivered by providers not contracted with the MA organization
as a network provider. PPOs can be attractive to Medicare beneficiaries
who want a broader choice of providers than would be available through
an HMO or who have a specific preferred provider, like a psychiatrist,
who is not in network. MA organizations offer PPOs that are open to all
Medicare beneficiaries as well as D-SNP PPOs that enroll only
individuals dually eligible for Medicare and Medicaid.\191\
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\191\ There are currently no D-SNP PFFS plans. MSA plans are
prohibited from enrolling dually eligible individuals. HMO/POS plans
have 1,423,000 enrollees as of July 2023.
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Enrollment in D-SNP PPOs has increased in recent years, rising to
approximately 925,000 enrollees as of May 2023, accounting for about 17
percent of total D-SNP enrollment. D-SNP PPO enrollment has increased
by 38 percent from May 2022 to May 2023.\192\ Four national MA sponsors
account for over 98 percent of D-SNP PPO enrollment.\193\
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\192\ D-SNP PPO enrollment was at approximately 668,000 as if
May 2023.
\193\ The four sponsors are UnitedHealth Group (69 percent of
national D-SNP PPO enrollment), Humana (23 percent), Centene (4
percent), and Elevance (2 percent).
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Like PPOs offered primarily to Medicare beneficiaries not entitled
to Medicaid benefits, D-SNP PPOs generally have higher cost sharing for
out-of-network services than for the same services obtained from
network providers. For non-D-SNP PPOs, the higher out-of-network cost
sharing is meant to incentivize use of in-network providers. In D-SNP
PPOs, however, the large majority of enrollees are protected from being
billed for covered Medicare services by Medicare providers, including
out-of-network providers. Instead, when these enrollees access
services, either State Medicaid agencies pay the cost sharing or, if
State payment of cost sharing is limited by a Medicaid rate for the
service that is lower than the amount the D-SNP paid the provider, the
provider must forego receipt of the cost sharing amounts.
Those cost sharing amounts for out-of-network services in D-SNP
PPOs are often significantly higher than the cost sharing for the same
services under original Medicare.
Our review of D-SNP PPO out-of-network cost sharing shows that for
some important services, the cost sharing applicable to out-of-network
services far exceeds the Medicare FFS cost sharing for these Part A and
B benefits. For example, as of 2023:
Primary care providers: 59 percent of D-SNP PPOs charge
out-of-network coinsurance above 20 percent, with most ranging from 30
to 40 percent.
Part B prescription drugs: 53 percent of D-SNP PPOs charge
an out-of-network coinsurance above 20 percent, with most ranging from
30 to 40 percent.
[[Page 78584]]
DME: 50 percent of D-SNP PPOs charge an out-of-network
coinsurance above 20 percent, with most ranging from 30 to 50 percent.
Home health: 41 percent of D-SNP PPOs charge an out-of-
network coinsurance for home health services (original Medicare has no
coinsurance). Out-of-network coinsurance ranged from 20 percent to 40
percent.
Dialysis: Three percent of D-SNP PPOs charge an out-of-
network coinsurance above 20 percent for dialysis.
Skilled Nursing Facility (SNF): 46 percent of D-SNP PPOs
charge between 20 and 50 percent coinsurance for out-of-network SNF
stays, considerably more than Traditional Medicare, which charges
nothing for the first 20 days of a stay and a per diem charge for days
21-100.
Inpatient Hospital (Acute): 47 percent of D-SNP PPOs
charged between 20 and 50 percent for an inpatient stay at an out-of-
network acute care hospital, which can be substantially more than the
Part A deductible in Traditional Medicare.
Inpatient Hospital (Psychiatric): 46 percent of D-SNP PPOs
charge between 20 and 50 percent coinsurance for out-of-network
inpatient psychiatric services, substantially greater than the
inpatient deductible charged under Traditional Medicare.
By contrast, cost sharing for in-network services in these D-SNP
PPOs largely tracks the cost sharing structure in Traditional Medicare.
Seventy-nine percent charge a Part B deductible. Eighty-five percent
charge 20 percent for professional services, like visits with primary
care and specialist physicians, and 100 percent charge 20 percent
coinsurance for Part B drugs and DME, consistent with Traditional
Medicare. While this in-network benefit design is consistent with
statutory and regulatory requirements for overall and service-specific
limits under Sec. 422.100(f)(6) (which sets specific cost sharing
limits for certain in-network services tied to the maximum out-of-
pocket (MOOP) limit used by the plan) and (j) (which identifies
services for which in-network cost sharing must not exceed cost sharing
in Traditional Medicare) for in-network benefits, it differs from non-
D-SNP PPOs which generally provide greater reductions in in-network
cost sharing (compared to Traditional Medicare cost sharing) as
supplemental benefits.
This higher cost sharing for out-of-network services in D-SNP PPOs
raises several concerns.
First, when State Medicaid agencies pay the cost sharing for out-
of-network services, these levels of cost sharing raise costs for State
Medicaid programs. This is especially true for those few States that,
by policy, pay the full Medicare cost sharing amounts for all Medicare
services, rather than for specific services in the Medicaid benefit.
Second, certain dually eligible enrollees, specifically full-
benefit dually eligible enrollees who are not Qualified Medicare
Beneficiaries (QMBs), are liable for cost sharing if they go out of
network to providers not enrolled in Medicaid, as services from these
providers are not covered by Medicaid unless the provider is enrolled
in Medicaid. (QMBs, in contrast, have applicable Medicare cost-sharing
amounts covered by Medicaid based on coverage of cost-sharing for
Medicare covered services.) Non-QMB full-benefit dually eligible
individuals are protected from cost sharing under Sec.
422.504(g)(1)(iii) if they use in-network providers, including
providers not enrolled in Medicaid. The regulation imposes obligations
on MA organizations to ensure that their contracted--that is, in-
network--providers do not collect cost sharing from enrollees when the
State is responsible for paying such amounts. However, this protection
does not extend to out-of-network providers not enrolled in Medicaid.
Third, the higher out-of-network cost sharing disadvantages out-of-
network safety net providers serving D-SNP PPO enrollees in States
where limits established by Medicaid rates for the service result in no
State payment of cost sharing.\194\ In such a scenario, the provider
may receive 70 or 60 percent of the Traditional Medicare rate for the
services rather than the 80 percent that the provider would receive
under Traditional Medicare (or as an in-network provider). We are
concerned that this effective payment cut disincentivizes providers
from serving dually eligible enrollees, which may compromise access to
services for these enrollees. In addition, we are concerned that such
disincentives undermine the promise of out-of-network access that is a
key component of how D-SNP PPOs are marketed to potential enrollees.
---------------------------------------------------------------------------
\194\ For example, if the Medicare (or MA) rate for a service is
$100, of which $20 is beneficiary coinsurance, and the Medicaid rate
for the service is $90, the State would only pay $10. If the
Medicaid rate is $80 or lower, the State would make no payment. This
is often referred to as the ``lesser of'' policy. Under the ``lesser
of'' policy, a State caps its payment of Medicare cost-sharing at
the Medicaid rate for a particular service.
---------------------------------------------------------------------------
In addition to the potential impact on States, safety net providers
and dually eligible individuals of this cost sharing structure, we
believe such higher cost sharing for out-of-network services may result
in situations that are inconsistent with the policy goals underlying
section 1852(a)(2) of the Act. Section 1852(a)(2)(A) of the Act
describes how MA organizations can satisfy the requirement to cover
Traditional Medicare services (that is, Part A and B benefits, with
limited exceptions) under section 1852(a)(1)(A) when covered services
are furnished by non-contracted (that is, out-of-network) providers.
This statute provides that the MA organization has satisfied its
coverage obligation for out-of-network services if the plan provides
payment in an amount ``so that the sum of such payment and any cost
sharing provided for under the plan is equal to at least the total
dollar amount for payment for such items and services as would
otherwise be authorized under parts A and B (including any balance
billing permitted under such parts).''
For a non-D-SNP PPO, in which the majority of plan enrollees must
pay plan cost sharing, the total dollar amount for a service paid at
the Medicare rate will equal the total dollar amount under parts A and
B, even if the cost sharing exceeds the cost sharing under original
Medicare.
For a D-SNP PPO, however, the vast majority of plan enrollees are
not liable for cost sharing for out-of-network services, just as they
are not liable for such cost sharing under Traditional Medicare.\195\
Therefore, whenever State Medicaid limits on payment of Medicare cost
sharing result in no payment of cost sharing or payment of only a
portion of cost sharing, the total dollar amount of payment received by
the out-of-network provider for these covered services is less than the
provider would collect under Traditional Medicare whenever the plan
out-of-network cost sharing exceeds the cost sharing for those services
under Traditional Medicare.
---------------------------------------------------------------------------
\195\ For more information on cost sharing protections
applicable to dually eligible individuals, see: https://www.cms.gov/medicare-medicaid-coordination/medicare-and-medicaid-coordination/medicare-medicaid-coordination-office/qmb.
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For example, a provider in a State that capped its cost sharing
payments at a Medicaid primary care rate that is 70 percent of the
Medicare rate would receive just 70 percent of that Medicare rate when
the provider is not in the PPO's network and the PPO's out-of-network
cost sharing is 30 percent or higher. That provider would receive 80
percent of the Medicare rate under
[[Page 78585]]
Traditional Medicare for the covered service.
This lesser net out-of-network provider payment in a D-SNP PPO
undermines the balance of obligations and benefits among MA
organizations and Medicare providers that the statute creates to
regulate out-of-network payments and beneficiary access for the MA
program. While section 1852(a)(2)(A) of the Act requires the total
dollar amount to be at least as much as would be authorized under
Traditional Medicare, Medicare providers are required by sections
1852(k)(1) and 1866(a)(1)(O) of the Act to accept such amounts as
payment in full. When a D-SNP PPO imposes cost sharing greater than
Traditional Medicare and that cost sharing is unpaid by the State and
uncollectable from the beneficiary, the MA organization has, in effect,
failed to fulfill the spirit of its side of this statutory scheme and
the providers are in effect forced to accept less than they would
receive under original Medicare if they agree to treat the D-SNP PPO
enrollee.
In a D-SNP PPO, therefore, we are concerned that the combination of
these issues results in a situation frustrating the underlying intent
of section 1852(a)(2)(A) of the Act because, for services furnished to
many (if not all) enrollees in the D-SNP PPO, the out-of-network
provider potentially receives a total payment that is less than the
total payment available under Traditional Medicare. To address these
concerns, we are proposing new limits on out-of-network cost sharing
under D-SNP PPOs. We have authority under section 1856(b)(1) of the Act
to establish standards for MA organizations and MA plans to carry out
the MA statute (that is, Part C of Title XVIII of the Act) in addition
to authority, under section 1857(e)(1) of the Act, to adopt additional
terms and conditions for MA contracts that are not inconsistent with
the Part C statute and that are necessary and appropriate for the MA
program. Further, CMS is not obligated to accept any and every bid from
an MA organization and is authorized to negotiate MA bids under section
1854(a)(5)(C) and (a)(6)(B) of the Act. This proposal would establish
minimum standards for D-SNP PPO plans that are consistent with and
necessary and appropriate for the MA program to address our concerns.
We propose at Sec. 422.100(o)(1) that an MA organization offering
a local PPO plan or regional PPO plan that is a dual eligible special
needs plan (that is, a D-SNP) cap out-of-network cost sharing for
professional services at the cost sharing limits for such services
established at Sec. 422.100(f)(6) when such services are delivered in
network starting in 2026. The term ``professional services'' as used
here means the same thing as it does in existing Sec.
422.100(f)(6)(iii) and includes primary care services, physician
specialist services, partial hospitalization, and rehabilitation
services. Under this proposal, a D-SNP PPO with a catastrophic limit
set at the mandatory MOOP limit in 2026 and subsequent years must have
cost sharing for a visit with an out-of-network psychiatrist or other
specialist (that is, cost sharing subject to paragraph (f)(6)(iii))
that is capped at 30 percent coinsurance. If the catastrophic limit is
set at the intermediate MOOP limit in 2026 and subsequent years, the
coinsurance cap would be set at 40 percent. If the catastrophic limit
is set at the lower MOOP limit in 2026 and subsequent years, the
coinsurance cap would be 50 percent. Under our proposal, the rules in
Sec. 422.100(f)(6) and (j)(1) about how we assess that copayments that
are actuarially equivalent to coinsurance would apply here as well.
We propose to apply cost sharing limits on out-of-network
professional services because this category of services includes the
physician and psychiatry services most utilized out-of-network in D-SNP
PPOs. In addition, physician services are among the services for which
Medicaid rates will most commonly either result in no payment of cost
sharing due to limits on Medicaid rates or will increase State
liability for cost sharing but still not result in total payment of at
least 80 percent of the Medicare rate.\196\
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\196\ Only 14 States have Medicaid primary care rates that are
greater than 80 percent of the Medicare rate. See: https://www.kff.org/medicaid/state-indicator/medicaid-to-medicare-fee-index/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
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Our proposal at Sec. 422.100(o)(1) also would require that cost
sharing for out-of-network acute and psychiatric inpatient services be
limited by the cost sharing caps under Sec. 422.100(f)(6) that now
apply only to in-network benefits. Using the same methodology to
calculate comparable FFS cost sharing in Sec. 422.100(f)(6)(iv), the
cost sharing limit for a D-SNP PPO with a catastrophic limit set at the
mandatory MOOP limit could not exceed 100 percent of estimated Medicare
FFS cost sharing, including the projected Part A deductible and related
Part B costs, for each length-of-stay scenario in an out-of-network
inpatient or psychiatric hospital. For catastrophic limits equivalent
to the intermediate and lower MOOP amounts, higher cost sharing for
out-of-network cost sharing for inpatient and psychiatric stays could
be charged as described at Sec. 422.100(f)(6)(iv)(D)(2) and (3),
respectively.
We also propose at Sec. 422.100(o)(2), by cross-referencing Sec.
422.100(j)(1), that cost sharing for out-of-network services under D-
SNP PPOs be limited to the existing cost sharing limits now applicable
to specific in-network services for all MA plans:
Cost sharing for chemotherapy administration services,
including chemotherapy/radiation drugs and radiation therapy integral
to the treatment regimen, other Part B drugs, and renal dialysis
services as defined at section 1881(b)(14)(B) of the Act, would be
capped at the cost sharing applicable for those service under
Traditional Medicare.
For skilled nursing care, defined as services provided
during a covered stay in a skilled nursing facility (SNF) during the
period for which cost sharing would apply under Traditional Medicare,
cost sharing would be limited to the cost sharing amounts under
Traditional Medicare when the MA plan establishes the mandatory MOOP
catastrophic limit under Sec. 422.101(d)(3). When the MA plan
establishes the lower MOOP catastrophic limit, the cost sharing could
not be greater than $20 per day for the first 20 days of a SNF stay.
When the MA plan establishes the intermediate MOOP catastrophic limit,
the cost sharing could not be greater than $10 per day for the first 20
days of a SNF stay.
Regardless of the MOOP amount established by the MA plan,
the per-day cost sharing for days 21 through 100 could not be greater
than one eighth of the projected (or actual) Part A deductible amount.
[[Page 78586]]
For home health services (as defined in section 1861(m) of
the Act), when the MA plan establishes a mandatory or intermediate MOOP
type, cost sharing could not be greater than Traditional Medicare. When
the MA plan establishes the lower MOOP catastrophic limit, the cost
sharing could not be greater than 20 percent coinsurance or an
actuarially equivalent copayment.
Cost sharing could not be greater than the applicable cost
sharing under Traditional Medicare, when the MA plan establishes the
mandatory MOOP catastrophic limit for the following specific service
categories of durable medical equipment (DME): equipment, prosthetics,
medical supplies, diabetes monitoring supplies, diabetic shoes or
inserts.
For regional PPO D-SNPs, we propose to exclude paragraph
(j)(1)(C)(2) and the last sentence of paragraph (j)(1)(E) regarding
overall actuarial equivalence requirements to avoid conflict with
section 1852(a)(1)(B)(ii) of the Act.
We propose applying out-of-network cost sharing limits to those
services enumerated at Sec. 422.100(f)(6) and (j)(1) because MA
organizations and CMS have experience limiting cost sharing to
Traditional Medicare for these categories of services when they are
furnished in-network. In addition, this would establish alignment and
consistency between the in-network and out-of-network cost sharing used
by D-SNP PPOs for these services. We also note that section
1852(a)(1)(B)(iv) of the Act limits cost sharing for some of these
services, including chemotherapy administration and dialysis, to cost
sharing levels in Traditional Medicare, which CMS has implemented in
Sec. 422.100(j) to apply to in-network benefits. As noted above, these
services are among those services for which D-SNP PPOs most often
impose cost sharing greater than Traditional Medicare.
We are considering a requirement to limit all D-SNP PPO out-of-
network cost sharing to no greater than Traditional Medicare, or using
a limit specifically for physician services, including psychiatric and
other mental health services, rather than using the cost sharing limits
in Sec. 422.100(f)(6). These are among the most commonly accessed
services out-of-network in D-SNP PPOs, and these safety net providers
are most likely to see reduced payment compared to their Traditional
Medicare patients, which weighs in favor of requiring cost sharing to
align with Traditional Medicare. Although we continue to consider these
alternatives and request comment on them, we decided to propose
application of the cost sharing limits that are applicable for in-
network coverage for specific benefit categories, some of which are
capped at Traditional Medicare cost sharing and some of which are
higher. We propose to take this measured approach on the one hand to
impose cost sharing limits on those services where the limits would
have the most impact--those services most used out-of-network in D-SNP
PPOs and where the greater cost sharing has the most impact on provider
payment and, for those dually eligible beneficiaries liable for cost
sharing, ability to pay. We also believe this approach, at least
initially, would mitigate any negative impact on MA organizations and
D-SNP PPO enrollees as MA organizations redirect funds from other
supplemental benefits to reduce cost sharing for these out-of-network
services. However, we seek comment on whether there are additional out-
of-network services for which cost sharing should be limited to the
levels applicable in Traditional Medicare.
We considered proposing out-of-network cost sharing limits for D-
SNP PPOs only for services for which the Medicaid payment of cost
sharing did not result in a total payment that was at least equivalent
to the payment under Traditional Medicare. That approach would address
our concern about how high out-of-network costs sharing by D-SNP PPOs
appears to circumvent the goal of section 1852(a)(2)(A) of the Act that
the out-of-network providers that furnish covered services to enrollees
in MA plans receive the amount that the provider would have received
under Traditional Medicare. However, such an approach would create an
overly complex and likely unworkable system of cost sharing limits that
differed both by State (depending on whether State policy limited cost
sharing for specific services), by service, and--in some cases--by
individual provider. For example, a State may pay the full Medicare
cost sharing for Part B drugs administered by an oncologist but set the
rate for administration of those drugs at 50 percent of the Medicare
rate, resulting in no payment of cost sharing. That would result in two
parts of a single services--payment for chemotherapy drugs and
administration of such drugs--being subject to different cost sharing
limits. The services subject to cost sharing limits could also change
over time as States changed the rates at which they reimbursed for such
services.
We also considered proposing out-of-network cost sharing limits
only for services furnished out of network to QMBs because they are
always protected from being billed cost sharing (see sections
1848(g)(3), 1866(a)(1)(A), 1902(n), and 1905(p)(3) of the Act).
However, this would not allow for the MA organization to apply its
benefit uniformly to all its members, as required by 42 CFR
422.100(d)(2)(i), unless the SMAC limits enrollment in the D-SNP PPO to
QMBs. In addition, managing cost sharing benefits in a non-uniform way
could be administratively burdensome for both MA organizations and
providers or difficult to clearly and accurately explain to enrollees
in the member materials.
Finally, we believe our proposed uniform application of out-of-
network cost sharing limits for all PPO D-SNPs is the appropriate way
to address our concerns about section 1852(a)(2)(A), the shifting of
costs to States, the reduction in net payments to safety net providers,
and the potential for excessive cost sharing for those dually eligible
individuals, who, while low income, do not benefit from cost sharing
protections out of network.
To provide the industry time to adjust to and for CMS to
operationalize these new requirements, we propose to implement these
new limits starting for the 2026 plan year.
Currently, D-SNP PPOs already submit out-of-network benefits for a
limited review to ensure that cost sharing does not exceed 50 percent
of the costs (as required by Sec. 422.100(f)(6)(i)) and in-network
benefits for a review to ensure compliance with the cost sharing limits
we propose to apply to out-of-network cost sharing. Therefore, we do
not believe this proposed rule creates substantial information
collection requirements.
We do not expect any new burden to be associated with these
proposed changes, as MA organizations are currently required to include
information on MA cost sharing in their bids. Further, we do not expect
any additional burden on CMS, as modifications to account for this
proposed provision would be completed as part of normal business
operations.
IX. Updates to Program of All-Inclusive Care for the Elderly (PACE)
Policy
A. Corrective Action (Sec. 460.194)
Sections 1894(e)(4) and 1934(e)(4) of the Act require CMS, in
cooperation with the State administering agency (SAA), to conduct
comprehensive reviews of PACE organizations' compliance with all
significant program requirements. Additionally, sections
18941(e)(6)(A)(i) and 1934(e)(6)(A)(i) of
[[Page 78587]]
the Act condition the continuation of the PACE program agreement upon
timely execution of a corrective action plan if the PACE provider fails
to substantially comply with the program requirements as set forth in
the Act and regulation. In the 1999 PACE interim final rule, we
specified at Sec. 460.194(a) and (c) that PACE organizations must take
action to correct deficiencies identified by CMS or the SAA, or PACE
organizations may be subject to sanction or termination (84 FR 66296).
The 2019 PACE final rule amended Sec. 460.194(a) to expand the ways
CMS or the SAA may identify deficiencies that the PACE organization
must correct (84 FR 25677). These include ongoing monitoring, reviews,
audits, or participant or caregiver complaints, and for any other
instance in which CMS or SAA identifies programmatic deficiencies
requiring correction (84 FR 25677).
The 1999 PACE interim final rule also specified at Sec. 460.194(b)
that CMS or the SAA monitors the effectiveness of PACE organizations'
corrective actions. The burden on CMS and SAAs to always monitor the
effectiveness of every corrective action taken by the organization
after an audit is high, and the number of audits, and thus the number
of instances in which monitoring is required, increases each year
because the PACE program continues to rapidly grow, and CMS is required
to conduct audits in each year of the three-year trial period for new
PACE contracts. However, our experience overseeing this program has
shown that it is not always necessary or worthwhile for CMS to monitor
the effectiveness of every corrective action taken by an audited
organization. For example, a PACE organization may implement a
corrective action that impacts its unscheduled reassessments due to a
change in participant status, but historically, these types of
assessments are not conducted frequently, therefore, it may not be
worthwhile for CMS or the states to spend resources monitoring the
effectiveness of that correction due to limited data available for CMS
or the SAA to monitor. Therefore, we propose to revise Sec. 460.194(b)
to specify that, at their discretion, CMS or the SAA may monitor the
effectiveness of corrective actions. This proposal would give CMS and
the SAA the flexibility to determine how to use their oversight
resources most effectively, which will be increasingly important as
PACE continues to grow.
This proposal would not change our expectation that PACE
organizations expeditiously and fully correct any identified
deficiencies, and CMS and the SAAs would continue to engage in
monitoring efforts that prioritize participant health and safety and
program integrity. In addition, as a part of a PACE organization's
oversight compliance program, we require at Sec. 460.63 that PACE
organizations adopt and implement effective oversight requirements,
which include measures that prevent, detect and correct non-compliance
with CMS's program requirements. A PACE organization's oversight
compliance program must, at a minimum, include establishment and
implementation of procedures and a system for promptly responding to
compliance issues as they are raised. In addition, compliance oversight
programs must ensure ongoing compliance with CMS requirements.
Since the effect of the proposed change would be to provide CMS and
the SAA more flexibility when monitoring the effectiveness of
corrective actions without placing new requirements on CMS, the SAAs,
or PACE organizations, we believe this change would create no
additional burden for PACE organizations. Additionally, we do not
expect this change to have economic impact on the Medicare Trust Fund.
We solicit comment on this proposal.
B. Service Determination Requests Pending Initial Plan of Care (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.
The PACE regulations define a service determination request as a
request to initiate a service; modify an existing service, including to
increase, reduce, eliminate, or otherwise change a service; or to
continue coverage of a service that the PACE organization is
recommending be discontinued or reduced (see Sec. 460.121(b)(1)(i)
through (iii)). In the January 2021 final rule (86 FR 6024), we
finalized an exception to the definition of service determination
request at Sec. 460.121(b)(2), which, as amended, provides that
requests to initiate, modify, or continue a service do not constitute a
service determination request if the request is made prior to
completing the development of the initial plan of care. When we
proposed this exception in the February 2020 proposed rule, we noted
that the exception would apply any time before the initial plan was
finalized and discussions among the interdisciplinary team (IDT) ceased
(85 FR 9125). We explained that we believed this change would benefit
both participants and PACE organizations because it would allow the IDT
and the participant and/or caregiver ``to continue to discuss the
comprehensive plan of care taking into account all aspects of the
participant's condition as well as the participant's wishes'' (Id.). We
also stated that ``if a service was not incorporated into the plan of
care in a way that satisfies the participant, the participant would
always have the right to make a service determination request at that
time'' (85 FR 9126).
Our intention for this provision was that the IDT would discuss
specific requests made by a participant and/or caregiver as part of the
care planning process and determine whether these requests needed to be
addressed in the plan of care. We stated in the February 2020 proposed
rule that if a participant asked for a specific number of home care
hours, that the request would not need to be processed as a service
determination request because the IDT was actively considering how many
home care hours the participant should receive as part of the
development of the initial plan of care (85 FR 9125). This rationale is
also consistent with our statement in the proposed rule titled
``Medicare and Medicaid Programs; Programs of All-Inclusive Care for
the Elderly (PACE),'' which appeared in the August 16, 2016 Federal
Register, that ``CMS expects the plan of care to reflect that the
participant was assessed for all services even where a determination is
made that certain services were unnecessary at that time'' (81 FR
54684).
[[Page 78588]]
However, as part of our oversight and monitoring of PACE
organizations, we have found that often requests made by participants
and/or caregivers prior to the finalizing of the care plan are not
discussed during the care planning process and are therefore not
considered by the IDT. These requests are some of the first
communications from participants related to the care they will be
receiving from the PACE organization and would otherwise be considered
service determination requests at any other stage of their enrollment.
While we continue to believe that it is not prudent for the PACE
organization to process these requests as service determination
requests, it is important that the IDT consider these requests and
determine whether they are necessary for the participant.
Therefore, we propose to modify the regulation text at Sec.
460.121(b)(2) to specify that service requests made prior to developing
the participant's initial plan of care must either be approved and
incorporated into the participant's initial plan of care, or the
rationale for why it was not approved and incorporated must be
documented. Specifically, we propose to add the add the following
language at Sec. 460.121(b)(2). For all requests identified in this
section, the interdisciplinary team must--
Document the request; and
Discuss the request during the care plan meeting and
either--
++ Approve the requested service and incorporate it into the
participant's initial plan of care; or
++ Document their rationale for not approving the service in the
initial plan of care.
We believe this change is consistent with existing plan of care
requirements at Sec. 460.104(b) and aligns with our plan of care
proposals in the December 2022 proposed rule (87 FR 79452).
As the development of the plan of care is a typical responsibility
for the IDT, any burden associated with this would be incurred by
persons in their normal course of business. Therefore, the burden
associated with documenting the determination of any assessment of a
participant and/or caregiver service request during the initial care
planning process is exempt from the PRA in accordance with 5 CFR
1320.3(b)(2).
X. 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. 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.
We are soliciting public comment (see section VII.D. of this
preamble for further information) on each of these issues for the
following sections of this document that contain information collection
requirements. Comments, if received, will be responded to within the
subsequent final rule.
A. Wage Data
1. Private Sector
To derive mean 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 (https://www.bls.gov/oes/2022/may/oes_nat.htm), which, at the time of publication of this
proposed rule, provides May 2022 wages. In this regard, Table J1
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.
[GRAPHIC] [TIFF OMITTED] TP15NO23.026
As indicated, except for Insurance Sales Agents, 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. In
this regard, we believe that doubling the hourly wage to estimate costs
is a reasonably accurate estimation method.
However, the mean wage for Insurance Sales Agent is being applied
[[Page 78589]]
to Agent-Brokers who work on behalf of Medicare Advantage plans. We are
not adjusting their mean hourly wage for fringe benefits and other
indirect costs because this proposed rule includes a proposal which
accounts for payments for certain administrative activities while
explicitly precluding others. These proposed payments would have their
own annual update.
2. 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.
For valuing time spent outside of work, there is logic to this
approach but also to using a fully loaded wage. In the past we have
used occupational code 00-0000, the average of all occupational codes,
which currently is $29.76/hr. Thus we propose a range for enrollees of
$20.71/hr-$29.76/hr. Nevertheless, the upper limit is based on an
average over all occupations while the lower limit reflects a detailed
analysis by ASPE targeted at enrollees many of whom are over 65 and
unemployed; consequently, in our primary estimates we will use the
lower limit as we consider it more accurate. The effect of this range
will be footnoted in Table J5 and the summary table. Since the impact
to beneficiaries is approximately $54,000, increasing the wage by 50
percent would result in a roughly $24,000 increase.
B. Proposed Information Collection Requirements (ICRs)
The following ICRs are listed in the order of appearance within the
preamble of this proposed rule.
1. ICRs Regarding Network Adequacy in Behavioral Health (Sec.
422.116(b)(2) and (d)(2) and (5))
The following proposed changes will be submitted to OMB for review
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, we are proposing to add one new facility-specialty
type that will be subject to network adequacy evaluation under Sec.
422.116. As discussed in the ``Expanding Network Adequacy Requirements
for Behavioral Health'' section of the preamble, we are proposing to
amend the network adequacy requirements to add one combined facility-
specialty category called ``Outpatient Behavioral Health'' under Sec.
422.116(b)(2) and to add ``Outpatient Behavioral Health'' to the time
and distance requirements in Sec. 422.116(d)(2). This new category can
include, for network adequacy evaluation purposes, provider types
including Marriage and Family Therapists (MFTs), Mental Health
Counselors (MHCs), Opioid Treatment Program (OTP) providers Community
Mental Health Centers or other behavioral health and addiction medicine
specialists and facilities. Based on the current regulation at Sec.
422.116(e)(2) for all facility-specialty types other than acute
inpatient hospitals, the minimum provider number requirement for this
proposed new provider type is one. Finally, we also propose to add the
new ``Outpatient Behavioral Health'' facility-specialty type to the
list at Sec. 422.116(d)(5) of the specialty types that will receive a
10-percentage point credit towards the percentage of beneficiaries that
reside within published time and distance standards for certain
providers 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. To determine the
potential burden regarding this proposal, we considered cost estimates
for MA organizations to update policies and procedures. However, the
burden for updating the HPMS system is a burden to CMS and its
contractors and hence not subject to COI review.
Although there is a no cost for MA organizations to report new
specialty types to CMS for their network adequacy reviews as this
proposal requires, we have determined that there is a minimal one-time
cost for MA organizations to update their policies and procedures
associated with this proposal.
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 3 years for the triennial review. This proposal
would only require that the proposed specialty type be added to the
Health Services Delivery (HSD) tables during any network adequacy
evaluation requested by CMS. 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 type is included. We
estimate that it would take 5 minutes (0.0833 hr) at $79.50/hr for a
business operations specialist to update of policies and procedures
related to this task. In aggregate we estimate a one-time burden of 62
hours (742 MA contracts * 0.0833 hr) at a cost $4,929 (62 hr * $79.50/
hr).
2. ICRs Regarding Standards for Electronic Prescribing ((Sec. 423.160
and 45 CFR 170.205 and 170.299)
In section III.B. of this proposed rule, we propose updates to the
standards to be used for electronic transmission of prescriptions and
prescription-related information for Part D covered drugs for Part D
eligible individuals. This includes: (1) after a transition period,
requiring the National Council for Prescription Drug Plans (NDPDP)
SCRIPT standard version 202301, proposed for adoption at 45 CFR
170.205(b)(2), and retiring use of NCPDP SCRIPT standard version
2017071 for communication of a prescription or prescription-related
information supported by Part D sponsors; (2) requiring use of NCPDP
RTPB standard version 13 for prescriber RTBTs implemented by Part D
sponsors beginning January 1, 2027; and (3) requiring use of NCPDP
Formulary and Benefit (F&B) standard version 60, proposed for adoption
at 45 CFR 170.205(u), and retiring use of NCPDP F&B version 3.0 for
transmitting formulary and benefit information between prescribers and
Part D sponsors. These proposals update existing standards that have
historically been exempt from the PRA, as explained in this section.
The initial electronic prescribing standards for the Medicare Part
D program were adopted in the final rule ``Medicare Program; Standards
for E-
[[Page 78590]]
Prescribing Under Medicare Part D and Identification of Backward
Compatible Version of Adopted Standard for E-Prescribing and the
Medicare Prescription Drug Program (Version 8.1)'' (Initial Standards
final rule), which appeared in the April 4, 2008, Federal Register (73
FR 18917). The Initial Standards final rule implemented the first
update to the electronic prescribing foundation standards in the Part D
program that had been adopted in the final rule ``Medicare Program; E-
Prescribing and the Prescription Drug Program'' (Foundation Standards
final rule), which appeared in the November 7, 2005, Federal Register
(70 FR 67567). The Initial Standards final rule adopted the updated the
National Council for Prescription Drug Programs (NCPDP) SCRIPT standard
version 8.1 and retired the previous NCPDP SCRIPT standard version 5.0.
With respect to ICRs in the Initial Standards final rule, CMS stated
that as a third-party disclosure requirement subject to the PRA,
Medicare Part D sponsors must support and comply with the adopted e-
prescribing standards relating to covered Medicare Part D drugs,
prescribed for Medicare Part D eligible individuals. However, the
requirement that Medicare Part D sponsors support electronic
prescription drug programs in accordance with standards set forth in
this section, as established by the Secretary, does not require that
prescriptions be written or transmitted electronically by prescribers
or dispensers. These entities are required to comply with the adopted
standards when they electronically transmit prescription or
prescription-related information for covered transactions. Testimony
presented to the [National Committee on Vital and Health Statistics]
indicates that most health plans/[pharmacy benefit managers] currently
have [electronic] prescribing capability either directly or through
contract with another entity. Therefore, we do not believe that
utilizing the adopted standards will impose an additional burden on
Medicare Part D sponsors. Since the standards that have been adopted
are already familiar to industry, we believe the requirement to utilize
them in covered [electronic] prescribing transactions constitutes a
usual and customary business practice. As such, the burden associated
with the requirements is exempt from the PRA as stipulated under 5 CFR
1320.3(b)(2).
Subsequent rules which have updated electronic prescribing
standards in the Medicare Part D program have not included any burden
estimates. Specifically--
The ``Medicare Program; Revisions to Payment Policies
Under the Physician Fee Schedule, DME Face-to-Face Encounters,
Elimination of the Requirement for Termination of Non-Random Prepayment
Complex Medical Review and Other Revisions to Part B for CY 2013''
final rule, which appeared in the November 16, 2012, Federal Register
(77 FR 68891). This final rule updated the electronic prescribing
standards in Medicare Part D from NCPDP SCRIPT standard version 8.1 to
version 10.6;
The ``Medicare Program; Revisions to Payment Policies
Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule &
Other Revisions to Part B for CY 2014'' final rule, which appeared in
the Federal Register December 10, 2013 (78 FR 74229). This final rule
updated the electronic prescribing standards in Medicare Part D from
NCPDP Formulary and Benefit (F&B) standard version 1.0 to 3.0; and
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 April 16, 2018 (83 FR 16640). This final rule updated
the electronic prescribing standards in Medicare Part D from NCPDP
SCRIPT standard version 10.6 to 2017071.
Rationale that further supports CMS's longstanding approach to not
estimate burden associated with updating electronic prescribing
standards is described in the proposed rule ``Medicare Program;
Contract Year 2019 Policy and Technical Changes to the Medicare
Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare
Prescription Drug Benefit Programs, and the PACE Program'' (November
2017 proposed rule), which appeared in the November 28, 2017, Federal
Register (82 FR 56336). When describing the proposed update of the
NCPDP SCRIPT standard from version 10.6 to 2017071 in the November 2017
proposed rule, CMS stated that we believe that transitioning to the new
2017071 versions of the transactions already covered by the current
Part D [electronic] prescribing standard (version 10.6 of the NCPDP
SCRIPT) will impose de minimis cost on the industry as the burden in
using the updated standards is anticipated to be the same as using the
old standards for the transactions currently covered by the program. We
believe that prescribers and dispensers that are now prescribing
[electronically] largely invested in the hardware, software, and
connectivity necessary to prescribe [electronically]. We do not
anticipate that the retirement of NCPDP SCRIPT 10.6 in favor of NCPDP
SCRIPT 2017071 will result in significant costs.
Similarly, Part D sponsors have been required support real-time
benefit tools (RTBTs) since January 1, 2021, as finalized in the
``Modernizing Part D and Medicare Advantage to Lower Drug Prices and
Reduce Out-of-Pocket Expenses'' final rule, which appeared in the
Federal Register May 23, 2019 (84 FR 23832). Because Part D sponsors
have invested in the hardware, software, and connectivity necessary to
utilize RTBTs, we believe that adopting the NCPDP Real-Time
Prescription Benefit (RTPB) standard version 13 will impose de minimis
cost on the industry and that costs will be largely offset by the
advantages and efficiencies associated with interoperability that a
standard brings.
The operations associated with updates to standards that we propose
in this proposed rule are analogous to the operations associated with
updates to standards in the prior rules described. Therefore, the
proposals in section III.B. of this proposed rule are exempt from the
PRA.
3. ICRs Regarding to Improvements to Drug Management Programs
(Sec. Sec. 423.100 and 423.153)
The following proposed changes will be submitted to OMB for review
under control number 0938-TBD (CMS-10874). At this time, the OMB
control number has not been determined, but it will be assigned by OMB
upon their clearance of our proposed collection of information request.
We intend to identify the new control number in the subsequent final
rule. The control number's expiration date will be issued by OMB upon
their approval of our final rule's collection of information request.
When ready, the expiration date can be found on reginfo.gov.
Ordinarily, the proposed changes would be submitted to OMB for
review under control number 0938-0964 (CMS-10141), where the current
OMB-approved Part D drug management program (DMP) information
collection and burden is located. However, based on internal review, we
are removing the DMP information collection and related burden from
CMS-10141 and submitting it under a new collection of information
request (OMB 0938-TBD, CMS-10874). This change will streamline
clearance processes and minimize duplicative administrative burden for
CMS and other stakeholders. Although we are proposing to remove
[[Page 78591]]
DMP burden from CMS-10141, that collection will continue to include
burden associated with many other aspects of the Part D program.
As described in section III.E. of this proposed rule, we propose to
amend regulations regarding Part D DMPs for beneficiaries at risk of
abuse or misuse of frequently abused drugs (FADs). Specifically, we
propose to amend the definition of ``exempted beneficiary'' at Sec.
423.100 by replacing the reference to ``active cancer-related pain''
with ``cancer-related pain.'' This proposed change would reduce the
overall burden associated with sponsors providing DMP case management
and notices to potentially at-risk beneficiaries (PARBs) and at-risk
beneficiaries (ARBs) because some beneficiaries identified as PARBs
under the current definition would be excluded under the amended
definition.
Under Sec. 423.153(a), all Part D plan sponsors must have a DMP to
address overutilization of FADs for enrollees in their prescription
drug benefit plans. Based on 2023 data, there are 319 Part D parent
organizations. The provisions codified at Sec. 423.153(f)(2) require
that Part D sponsors conduct case management of beneficiaries
identified by the minimum overutilization monitoring system (OMS)
criteria through contact with their prescribers to determine if a
beneficiary is at-risk for abuse or misuse of opioids and/or
benzodiazepines. Case management must include informing the
beneficiary's prescriber(s) of the beneficiary's potential risk for
misuse or abuse of FADs and requesting information from the prescribers
relevant to evaluating the beneficiary's risk, including whether they
meet the regulatory definition of exempted beneficiary. Under current
CMS regulations at Sec. 423.100, if a beneficiary meets the definition
of an exempted beneficiary, the beneficiary does not meet the
definition of a PARB. For this reason, exempted beneficiaries cannot be
placed in a Part D sponsor's DMP.
In 2022, the OMS identified 43,915 PARBs meeting the minimum
criteria prior to applying exclusions and 30,411 after excluding
exempted beneficiaries. Thus, 13,504 beneficiaries (43,915 - 30,411)
met the definition of exempted beneficiary. Amending the definition of
``exempted beneficiary'' at Sec. 423.100 by replacing the reference to
``active cancer-related pain'' with ``cancer-related pain'' would
result in 46 additional enrollees meeting the definition of exempted
beneficiary, or 13,550 exempted beneficiaries total (13,504 + 46). This
yields 30,365 (43,915 - 13,550) instead of 30,411 beneficiaries
requiring case management under the amended definition.
We estimate it takes an average of 5 hours for a sponsor to conduct
case management for a PARB. We assume certain components of case
management can be completed by staff of differing specialization and
credentialing. Of the 5 hours, we assume that 2 hours at $124.44/hr
would be conducted by a pharmacist (such as initial review of
medication profiles, utilization, etc.), 2 hours at $38.70/hr would be
conducted by a pharmacy technician, and 1 hour at $229.52/hr would be
conducted by a physician to work directly with prescribers on
discussing available options and determining the best course of action.
The case management team would require 5 hours at a cost of $555.80 per
PARB case managed ([2 hr x $124.44/hr] + [2 hr * $38.70/hr] + [1 hr *
$229.52/hr]). Therefore, the case management team's average hourly wage
is $111.16/hr ($555.80/5 hr). In aggregate, we estimate annual burden
with the proposed changes for case management is 151,825 hours (30,365
enrollees subject to case management * 5 hr/response) at a cost of
$16,876,867 (30,365 enrollees * (5 hr * $111.16/hr); see case
management row in Table J3. CMS 10141 included an estimate for the
current case management burden of 178,855 hours and, with the hourly
wage updated, a cost of $19,881,522; see case management row in Table
J2. Thus, we calculate a savings of 27,033 hours (178,855 - 151,825)
and $3,004,655 ($19,955,671 - $16,876,867) with this current proposed
burden; see case management row in Table J4 and note that in Table J4
we list savings as a negative number.
As a result of case management, a portion of PARBs may receive
notice from a plan sponsor, informing the beneficiary of the sponsor's
intention to limit their access to coverage of opioids and/or
benzodiazepines. Approximately 5 percent of PARBs identified by OMS
criteria receive an initial and either a second notice or an alternate
second notice. Amending the definition of ``exempted beneficiary''
would reduce the number of notices sent. Therefore, it follows that 2
fewer PARBs would receive notices (46 additional individuals * 0.05)
and there would be 4 fewer notices total (2 enrollees * 2 notices/
enrollee). Approximately 1,518 (30,365 * 0.05) PARBs overall would
receive an initial and second notice (or alternate second notice)
annually. We estimate it takes a pharmacy technician at $38.70/hr
approximately 5 minutes (0.0833 hr) to send each notice and a total of
10 minutes (0.1667 hr) per enrollee to send both notices. In aggregate,
we estimate an annual burden with the proposed changes for sending
notices of 253 hours (1,518 enrollees * 0.1667 hr) at a cost of $9,791
(253 hr * $38.70/hr) to send both notices; see the row for notification
for enrollees in Table J3. CMS 10141, presenting the current burden,
includes an estimated notice burden of 1,319 hours and, with the hourly
wage updated, a cost of $51,045; see the row for notification for
enrollees in Table J2. Thus, we calculate a savings of 1,066 hours
(1,319 - 253) and $41,254 ($51,045 - $9,791) with this current proposed
burden; see the row for notification for enrollees in Table J4 and note
that in Table J4 we list savings as a negative number.
Amending the definition of ``exempted beneficiary'' would also
reduce the burden of disclosure of DMP data to CMS based on the outcome
of case management of PARBs. Using 30,365 beneficiaries requiring DMP
data disclosure, we estimate that it would take (on average) 1 minute
(0.0167 hr) at $38.70/hr for a sponsor's pharmacy technician to
document the outcome of case management and any applicable coverage
limitations in OMS and/or MARx. In aggregate, we estimate an annual
burden with the proposed changes for notification to CMS of 507 hours
(30,365 PARBs * 0.0167 hr) at a cost of $19,621 (507 hr * $38.70/hr);
see the row for notification to CMS in Table J3. CMS-10141, presenting
the current burden, includes an estimated data disclosure burden of 597
hours and, with updated hourly wages, a cost of $23,104; see the row
for notification to CMS of Table J2. Thus, we calculate a savings of 90
hours (597 - 507) and $3,483 ($23,104 - $19,621) with this current
proposed burden; see the row for notification to CMS in Table J4 and
note that in Table J4 we list savings as a negative number.
Table J2, presents information from the current package, CMS-10141,
with wages adjusted to 2022 wages.
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[[Page 78592]]
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Table J3 presents the estimated burden proposed in this rule which
will be submitted with the new package, CMS-10874, which uses the
currently approved burden from CMS-10141 as a baseline.
[GRAPHIC] [TIFF OMITTED] TP15NO23.028
In aggregate, these proposed changes will result in an annual
reduction of cost of $3,049,392 and reduction of 28,186 hours. The
aggregate burden change (reduction) is presented in table J4, and will
be submitted with the new package, CMS-10874.
[[Page 78593]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.029
BILLING CODE 4120-01-C
4. ICRs Regarding Additional Changes to an Approved Formulary--
Biosimilar Biological Product Maintenance Changes and Timing of
Substitutions (Sec. Sec. 423.4, 423.100, and 423.120(e)(2))
In section III.F. of this proposal, we are proposing a limited
number of changes to update regulatory text we originally proposed in
section III.Q. Changes to an Approved Formulary of the December 2022
proposed rule. In the December 2022 proposed rule, we proposed to
reorganize current regulatory text to incorporate and as necessary
conform with longstanding sub-regulatory guidance and operations with
respect to changes to an approved formulary and associated notice
provisions. We also proposed to permit the immediate substitution of
interchangeable biological products. The proposals discussed in section
III.Q. of the December 2022 proposed rule have not been finalized and
remain under consideration.
Specifically, in section III.F. of this proposed rule, we are now
proposing to update the regulatory text proposed in December 2022 to
the extent necessary to permit Part D sponsors to treat substitutions
of biosimilar biological products other than interchangeable biological
products as ``maintenance changes'' under Sec. 423.100 as proposed in
the December 2022 rule. We also are proposing to revise paragraphs (1)
and (2) of the Sec. 423.100 definition of ``maintenance changes'' to
clarify that certain substitutions need not take place ``at the same
time'' but that Part D sponsors can remove or make negative changes to
a brand name drug or reference product within a certain time period
after adding a corresponding drug or a biosimilar biological product
other than an interchangeable biological product to the formulary.
Lastly, we are proposing a few technical changes, including in support
of the above specified proposals.
In section VII.B.10. of the December 2022 proposed rule (87 FR
79680), we outlined ICRs regarding the proposed provision ``Changes to
an Approved Formulary.'' We described the methodology used to quantify
burden, labor, and non-labor costs incurred by Part D plan sponsors
related to making changes to their approved Part D formularies. The
information collection responses included: (1) submitting a negative
change request to CMS; (2) updating the formulary in CMS's Health Plan
Management System (HPMS); (3) updating the formulary and providing
online notice of changes on the plan website; and (4) providing direct
written notice to affected enrollees. The burden estimates in the
December 2022 proposed rule were based on actual formulary changes
submitted to CMS since the ``Changes to an Approved Formulary''
proposals set out to codify existing guidance that Part D sponsors had
already been following.
We are not revising the December 2022 proposed rule's burden
estimates for the purposes of this CMS-4205-P proposal which permits
formulary substitutions of a biosimilar biological product other than
an interchangeable biological product for the reference product as a
maintenance change. New drugs and biological products are approved or
licensed by the FDA and become available on the market at irregular
intervals. Therefore, with respect to this provision, we cannot predict
when new biosimilar biological products will enter the market or to
what extent Part D sponsors will make formulary substitutions as a
result. Several biosimilar biological products entered the market in
2023,\197\ but CMS has not seen a corresponding influx of non-
maintenance negative change requests from Part D sponsors. It is
unclear whether Part D sponsors are not requesting midyear formulary
changes due to concerns about patient and provider hesitancy towards
biosimilar biological products, or if the current policy that treats
such formulary changes as non-maintenance changes disincentivizes Part
D sponsors from making midyear formulary changes that will not apply to
all enrollees currently taking the reference product.
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\197\ Billingsly A. Is There a Biosimilar for Humira? Yes, Here
Are 9 Humira Biosimilars Launching in 2023. GoodRxHealth. July 12,
2023. Available from: https://www.goodrx.com/humira/biosimilars.
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We will continue to base our burden estimates on CMS's internal
data on formulary changes from a recent contract year, as described in
section VII.B.10. of the December 2022 proposed rule and will consider
comments received. We will revise our estimates, as appropriate, based
on current data when finalizing the proposals from the December 2022
proposed rule. The changes will also be posted for public review under
control number 0938-0964 (CMS-10141) using the standard non-rule PRA
process which includes the publication of 60- and 30-day Federal
Register notices. The 60-day notice will publish soon
[[Page 78594]]
after the publication of the CMS-4205-F final rule.
5. ICRs Regarding Expanding Permissible Data Use and Data Disclosure
for MA Encounter Data (Sec. 422.310)
In section III.H. of this proposed rule, we discuss two proposals
to improve access to MA encounter data for certain purposes. We noted
that our current regulatory language limits CMS's ability to use and
disclose MA encounter data to States for activities in support of
administration or evaluation of the Medicaid program, including care
coordination. Further, the regulation delays when CMS may share MA
encounter data to State Medicaid agencies for care coordination and
quality review and improvement activities for the Medicaid program,
particularly with regard to dually eligible individuals. Our proposals
to improve access to MA encounter data include all the following:
Adding ``and Medicaid programs'' to the current MA risk
adjustment data use purposes codified at Sec. 422.310(f)(1)(vi) and
(vii).
Adding Sec. 422.310(f)(3)(v) to allow for risk adjustment
data to be released prior to reconciliation if the data will be
released to States for the purpose of coordinating care for dually
eligible individuals.
Together, these proposals aim to clarify and broaden the allowable
data uses for CMS and external entities (for data disclosed in
accordance with Sec. 422.310(f)(2) and (3)). We discuss the regulatory
impact on CMS review and fulfillment of new MA encounter data requests
in section XI., explaining that we do not anticipate any significant
impact to CMS.
As discussed in sections III.H. and XI., these proposed provisions
would allow States to voluntarily request MA encounter data from CMS
for certain allowable purposes to support the Medicaid program.
Currently, States can request MA encounter data to support the
administration of the Medicare program or Medicare-Medicaid
demonstrations, and to conduct evaluations and other analysis to
support the Medicare program (including demonstrations). In addition,
we interpret the regulation as permitting use and disclosure of the MA
encounter data for quality review and improvement activities for
Medicaid as well as Medicare.
When determining the potential burden of these proposals on States,
we considered our existing data sharing program for States to request
Medicare data for initiatives related to their dually eligible
population. We expect the process to request MA encounter data would be
similar to the process that States currently undertake to request new
Medicare FFS claims and events data files or to update allowable data
uses. All States, including the District of Columbia, maintain
agreements with CMS that cover operational data exchanges related to
the Medicare and Medicaid program administration as well as optional
data requests for Medicare claims and events data. Therefore, States
interested in requesting MA encounter data would not need to complete
and submit a new data agreement for MA encounter data; instead, they
would submit a use justification for the new data request and update
their existing data agreement form. We note that requesting Medicare
data is voluntary and that not all States currently request Medicare
FFS claims or prescription drug events data for coordinating care of
dually eligible beneficiaries, and of those States that request
Medicare data, not all States request the same Medicare data files. As
with Medicare FFS claims and events data, States would maintain the
ability to choose if and when they want to request MA encounter data
for existing or newly expanded uses. We further note that the process
for States to submit a request for data and for CMS to review these
requests are part of standard operations for CMS and many States.
Additionally, we have technical assistance support to help States
navigate the data request process and help States maintain their data
agreements.
In the August 2014 final rule, when we established several of the
current provisions around CMS disclosure of MA encounter data, we
explained that we had determined that ``the proposed regulatory
amendments would not impose a burden on the entity requesting data
files.'' (79 FR 50445). Similarly, for the proposed refinements to the
approved data uses and the data disclosure in this proposed rule, we do
not anticipate a significant change in burden for States as a result of
these proposals, which clarify and expand MA encounter data uses and
timing of data release. We solicit comment on our analysis.
6. ICRs Regarding Standards for Determining Whether a Special
Supplemental Benefit for the Chronically Ill Has a Reasonable
Expectation of Improving the Health or Overall Function of an Enrollee
(Sec. 422.102(f)(3)(iii) and (iv) and (f)(4))
The following proposed changes will be submitted to OMB for review
under control number 0938-0753 (CMS-R-267).
As explained in section IV.B. of this rule, due to increased
offering of SSCBI, we are proposing to: (1) require the MA organization
to establish, by the date on which it submits its bid, a bibliography
of ``relevant acceptable evidence'' related to the item or service the
MA organization would offer as an SSBCI during the applicable coverage
year; (2) require that an MA plan follow its written policies (that
must be based on objective criteria) for determining eligibility for an
SSBCI when making such determinations; (3) require the MA plan to
document denials of SSBCI eligibility rather than approvals; and (4)
codify CMS's authority to decline to accept a bid due to the SSBCI the
MA organization includes in its bid and to review SSBCI offerings
annually for compliance, taking into account the evidence available at
the time. We now estimate burden.
Item (4) is a burden specific to CMS and is therefore not subject
to collection of information requirements. We choose to combine the
burdens of: (1) and (2) as the evidence gathered under (1) will likely
directly inform the criteria established under (2).
In estimating the impact, we note the following: (i) Not all
contracts offer SSBCI (only about 40 percent); (ii) not all plan
benefit packages (PBP) offer them (only about 20 percent); (iii) the
distribution of the number of SSBCI per PBP is highly skewed (for
example, for 2023 the average is about 8 while the median is 2); and
(iv) both the median and 3rd quartile of the number of SSBCI per PBP
reflect only a handful of SSBCI offered.
Based on internal CMS data we are using 10,000 SSBCI per year for
the three-year estimates required by the Collection of Information
requirements. To comply with the requirements of the provision that
would require bibliography, a staff member knowledgeable in health
should be deployed. We are using a registered nurse. Establishing a
bibliography requires research, including reading papers and assessing
their quality. Because the bibliography would contain only citations
and copies of the necessary information, and not any narrative, we
assume these activities would take a day of work (8 hours), which can
refer to the aggregate activity of 1 nurse working 8 hours or 2 nurses
working 4 hours each. A plan would need to review and update its
bibliography annually. We assume that updating an existing bibliography
would take less time than establishing an initial bibliography. We
estimate that
[[Page 78595]]
it would take 8 hours each year to update existing bibliographies.
To create a single line-item, we estimate that it would take 8
hours at $85.60/hr for a registered nurse to create the bibliography
for one plan. Thus, the median burden per plan is 16 hours (8/hr per
SSBCI * a median of 2 SSBCI) at a cost of $1,397 ($85.60/hr *16 hr).
The aggregate cost across all plans would be 80,000 hours (8 hours per
SSBCI * 10,000 aggregate SSBCI) at a cost of $6,848,000 (80,000 *
$85.60/hr).
Regarding the requirement for plans to document denials of SSCBI,
it is reasonable that plans already have this information stored in
their systems. Thus, we assume that plans will need to compile data
already collected into a report or other transmittable format. We
estimate that it would take 2 hours at $98.84/hr for a programmer to
complete the initial software update. In aggregate, we estimate a one-
time burden of 1,548 hours (774 plans x 2 hr) at a cost of $153,004
(1,548 hr x $98.84/hr).
7. ICRs Regarding Mid-Year Notice of Unused Supplemental Benefits
(Sec. Sec. 422.111 and 422.2267)
The following proposed changes will be submitted to OMB for review
under control number 0938-0753 (CMS-R-267).
As explained in section IV.C of this proposed rule, per CMS
regulations at Sec. 422.101, MA organizations are permitted to offer
mandatory supplemental benefits, optional supplemental benefits, and
special supplemental benefits for the chronically ill (SSBCI). The
number of supplemental benefit offerings has risen significantly in
recent years, as observed through trends identified in CMS's annual PBP
reviews. At the same time, CMS has received reports that MA
organizations have observed low utilization for many of these benefits
by their enrollees and it is unclear whether plans are actively
encouraging utilization of these benefits by their enrollees.
Currently, there is no requirement for MA organizations to conduct
outreach to enrollees to encourage utilization of supplemental
benefits.
We have several concerns about this low utilization of some
supplemental benefits. First, we are concerned that beneficiaries may
be making enrollment decisions based on the allure of supplemental
benefits that are extensively marketed by a given MA plan during the
annual election period (AEP), but once enrolled in the plan the
beneficiaries do not fully utilize, or utilize at all, those
supplemental benefits during the plan year. Such under-utilization of
supplemental benefits may hinder or nullify any potential health
benefit value offered by these extra benefits. Additionally, section
1854(b)(1)(C) of the Act requires MA plans to provide the value of the
MA rebates to enrollees; per CMS regulations at Sec. 422.266, MA
rebates must be provided to enrollees in the form of payment for
supplemental benefits (including reductions in cost sharing for Part A
and B benefits compared to Original Medicare), or payment of Part B or
D premiums. Therefore, CMS has an interest in ensuring that the MA
rebate is provided to enrollees in a way that they can benefit from the
value of these rebate dollars.
Hence, we are proposing to require plans engage in targeted
outreach to inform enrollees of their unused supplemental benefits they
have not yet accessed. This targeted outreach aims to increase
utilization of these benefits, as it would increase enrollees'
awareness of the supplemental benefits available to them.
This proposed requirement would still ensure that a minimum
outreach effort is conducted by MA organizations to inform enrollees of
supplemental benefits available under their plans they have not yet
accessed. We propose that, beginning January 1, 2026, MA organizations
must mail a mid-year notice annually, but not sooner than June 30 and
not later than July 31 of the plan year, to each enrollee with
information pertaining to each supplemental benefit available through
the plan year that the enrollee has not accessed, by June 30 of the
plan year. For each covered mandatory supplemental benefit and optional
supplemental benefit (if elected) the enrollee is eligible for but has
not accessed, the MA organization must list in the notice the
information about each such benefit that appears in the Evidence of
Coverage (EOC). For SSBCI, the notice must also include the proposed
new SSBCI disclaimer. Finally, we are proposing that all notices must
include the scope of the supplemental benefit(s), applicable cost-
sharing, instructions on how to access the benefit(s), applicable
information on use of any network providers application information for
each available benefit consistent with the format of the EOC, and a
toll free customer service number and, as required, corresponding TTY
number to call if additional help is needed.
In estimating the burden of this provision, we first note that
plans already keep track of utilization patterns of benefits by
enrollees. The primary burden is therefore dissemination of notices. In
this regard there are three burdens: (1) a one-time update to software
systems to produce reports; (2) a one-time update of policies and
procedures; and (3) the printing and sending of notices to
beneficiaries.
We estimate that a software developer working at $127.82/
hr would take about 4 hours to update systems. In aggregate we estimate
a one-time burden of 3,096 hours (774 prepaid contracts * 4 hr/
contract) at a cost of $395,731 (3,096 hr * $127.82/hr).
We estimate that a business operations specialist working
at $79.50/hr would take 1 hour to update of policies and procedures. In
aggregate we estimate a one-time burden of 774 hours (774 prepaid
contracts * 1 hour/contract) at a cost of $61,533 (774 hr * $79.50/hr).
The major cost would be printing and dissemination. There
have been several recent CMS rules in which such printing and
dissemination has been estimated.
A recent estimate was presented in proposed rule, ``Medicare
Program; Contract Year 2024 Policy and Technical Changes to the
Medicare Advantage Program, Medicare Prescription Drug Benefit Program,
Medicare Cost Plan Program, Medicare Parts A, B, C, and D Overpayment
Provisions of the Affordable Care Act and Programs of All-Inclusive
Care for the Elderly; Health Information Technology Standards and
Implementation Specifications,'' CMS-4201-P, (87 FR 79452) published on
December 27, 2022. We have checked the prices listed there for paper
and toner and found them consistent with current pricing.
Cost of paper: We assume $3.50 for a ream of 500 sheets.
The cost for one page is $0.007 ($3.50/500 sheets).
Cost of toner: We assume a cost of $70 for 10,000 pages.
The toner cost per page is $0.007 ($70/10,000 pages).
Cost of postage: We estimate a bulk rate mailing of $0.12
for 1,000 notices, or $0.00012. We particularly solicit stakeholder
feedback on their experience in bulk rates. We note that the particular
provision for which this estimate was provided in CMS-4201, DMP, had
HIPPA requirements necessitating first class postage. However,
notifications about the lack of use of supplemental benefits would be
similar to EOBs which need not be sent by first class postage.
We believe it reasonable that every MA enrollee has at least one
supplemental benefit that they have not used. Since PDPs do not provide
supplemental benefits, we would
[[Page 78596]]
require 32 million mailings for the 32 million enrollees in prepaid
contracts. Thus, the expected price per page of mailing is $0.01412
($0.007 for paper plus $0.007 for toner plus 0.00012 for postage). The
aggregate non-labor cost for 32 million mailings of one page would be
$451,840 (32,000,000 * $0.01412). We do not have a definite basis for
estimating the average number of pages needed per enrollee. Some
enrollees may only require 1 page listing 1 to 3 benefits with all
information required by CMS. Some enrollees may require more. We are
estimating 3 pages on average per enrollee but solicit stakeholder
feedback. Thus, the total non-labor cost would be $1,355,520 (3 pages *
$451,840/page).
8. ICRs Regarding New Requirements for the Utilization Management
Committee (Sec. 422.137)
As discussed in section IV.D. of this proposed rule, we are adding
new requirements related to the Utilization Management (UM) Committee
established at Sec. 422.137.
The following proposed changes will be submitted to OMB for review
under control number 0938-0964 (CMS-10141).
We are proposing at Sec. 422.137(c)(5) to require a member of the
UM committee have expertise in health equity. Reviewing UM policies and
procedures is an important beneficiary protection, and adding a
committee member with expertise in health equity will ensure that
policies and procedures are reviewed from a health equity perspective.
We estimate that a compliance officer working at $74.02/hr would take
30 minutes for a one-time update of the policies and procedures. In
aggregate, we estimate a one-time burden of 483 hours (966 plans * 0.5
hr) at a cost of $35,752 (483 hr * $74.02/hr).
The following proposed changes will be submitted to OMB for review
under control number 0938-0964 (CMS-10141).
We are proposing at Sec. 422.137(d)(6) to require the UM committee
to conduct an annual health equity analysis of the use of prior
authorization and publicly post the results of the analysis to the
plan's website. The analysis would examine the impact of prior
authorization, at the plan level, on enrollees with one or more of the
following social risk factors: (i) receipt of the low-income subsidy
for Medicare Part D, or being dually eligible for Medicare and
Medicaid, or (ii) having a disability, as reflected in CMS's records
regarding the basis for Medicare Part A entitlement. To gain a deeper
understanding of the impact of prior authorization practices on
enrollees with the specified SRFs, the proposed analysis must compare
metrics related to the use of prior authorization for enrollees with
the specified SRFs to enrollees without the specified SRFs. The metrics
that must be stratified and aggregated for all items and services for
this analysis are as follows:
The percentage of standard prior authorization requests
that were approved.
The percentage of standard prior authorization requests
that were denied.
The percentage of standard prior authorization requests
that were approved after appeal.
The percentage of prior authorization requests for which
the timeframe for review was extended, and the request was approved.
The percentage of expedited prior authorization requests
that were approved.
The percentage of expedited prior authorization requests
that were denied.
The average and median time that elapsed between the
submission of a request and a determination by the MA plan, for
standard prior authorizations.
The average and median time that elapsed between the
submission of a request and a decision by the MA plan for expedited
prior authorizations.
We estimate that a software and web developer working at an hourly
wage of $120.14/hr would take 8 hours at a cost of $961 (8 hr *
$120.14/hr) for developing the software necessary to collect and
aggregate the data required to produce the report. In aggregate, we
estimate a one-time burden of 7,728 hr (966 plans * 8 hr/plan) at a
cost of $928,442 (7,728 hr * $120.14/hr).
The following proposed changes will be submitted to OMB for review
under control number 0938-0753 (CMS-R-267).
Annually, the report must be produced and posted to the plan's
website. The health equity analysis and public reporting must be easily
accessible, without barriers, including but not limited to ensuring the
information is available: free of charge; without having to establish a
user account or password; without having to submit personal identifying
information (PII); to automated searches and direct file downloads
through a link posted in the footer on the plan's publicly available
website, and includes a txt file in the root directory that includes a
direct link to the machine-readable file of public reporting and health
equity analysis to establish and maintain automated access. We believe
that making this information more easily accessible to automated
searches and data pulls and capturing this information in a meaningful
way across MA organizations will help third parties develop tools and
researchers conduct studies that further aid the public in
understanding the information. We assume the plans' programmers will
make this an automated process accessing data already in the plans'
systems; hence, we estimate minimal time to produce and inspect the
report prior to posting. We estimate a Business Operations Specialist
working at $79.50/hr would take 0.1667 hr (10 minutes) to produce,
inspect, and post the report at a cost of $13 ($79.50/hr * 0.1667 hr).
In the aggregate, we estimate an annual burden of 161 hours (966 plans
* 0.1667 hr/plan) at a cost of $12,800 (161 hr * $79.50/hr).
9. ICRs Regarding Agent Broker Compensation (Sec. 422.2274)
The following proposed changes will be submitted to OMB for review
under control number 0938-0753 (CMS-R-273).
Currently, agents and brokers are compensated by MA plans at a base
rate with a maximum of $601 per enrollee, plus administrative payments.
In section VI.B. of this proposed rule, we are proposing to raise the
maximum compensation rate to a fixed amount that covers two basic
activities that agents and brokers perform: (1) training and testing;
and (2) other necessary administrative activities such as recording and
transcription. The training and testing focus on the information that
agents and brokers may or may not disclose about the Medicare program
and the plans they represent. The training and testing involve the
transmission of information to agents and brokers about Medicare rules.
Prior to stating our estimates, we emphasize that there are
numerous data challenges in formulating an exact amount of
compensation. Therefore, we especially invite stakeholder comments on
all our assumptions and conclusions. More specifically, the estimates
that follow address three areas where we have uncertainty: (1) the
number of agent and brokers actively working in selling Medicare
products; (2) the number of new enrollees in non-employer MA plans and
PDPs; and (3) the percent of new enrollments effected by agent and
brokers. Our assumptions and supportive data are presented in Table J5.
[[Page 78597]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.030
We now present estimates for the two activities listed previously:
(1) training and testing per enrollee, and (2) other necessary
administrative activities such as recording and transcription.
a. Cost of Training
CMS requires that agents be certified, as evidenced by attending
training and passing certain tests, in order to sell Medicare products.
Many agents and brokers and many plans prefer the use of a recognized
certification organization such as AHIP (https://www.ritterim.com/blog/what-is-ahip-certification-and-how-do-i-get-it/#pdp-ebook) for training
and testing. The AHIP training and certification costs $175. However,
some plans provide a discount of $50; and some plans will pay for the
training. The training allows three attempts at passing. If the agent
or broker fails three times, some plans will not recognize their
certification even if they eventually pass. For those plans that do
recognize continued attempts, the agent must pay an additional $175.
Therefore, we believe it reasonable to set the average cost of training
at $125 and assume that most agents and brokers pass within their first
three attempts (we lack data on this and invite stakeholder comment).
We are treating the $125 as a non-labor business expense (and invite
comments on this assumption). Finally, we note that this $125 fee,
corresponds to $12.50 per enrollee, since we estimate there are 2
million new enrollees, half of which (1 million enrollees) are affected
by the 100,000 agent and brokers, implying that on average each agent
and broker recruits 10 enrollees. Therefore, the $125 cost when divided
by the number of enrollees gives a $12.50/enrollee cost ($125/10).
b. Burden Associated With Transcription and Recording
We are estimating 30 minutes (0.5 hr) to account for the time and
expense of recording and storing calls (and solicit stakeholder comment
on this assumption). As already noted, based on the occupational title
``Insurance Sales agents'' we assume a mean hourly wage of $37.00/hr.
Thus, the fair market value (FMV) per enrollee for transcription and
recording would be $18.50 ($37.00/hr * 0.5 hr).
c. Total Cost
Thus, the aggregate cost per enrollee is $31 ($18.50 for
transcription and recording + $12.50 for training and testing). The
aggregate cost over all new enrollees would be $31 million ($31/
enrollee x 1,000,000 new enrollees affected annually).
We have focused on new enrollments, since the cost of the
administrative activities discussed is predominantly overhead not
closely connected with actual enrollments, and we are more accurately
able to track new enrollments, so they serve as a better basis for
attaching these payments.
10. ICRs Regarding Adding Proposed New Rationale for an Exception From
the Network Adequacy Requirements in Sec. 422.116(b) Through (e)
The following proposed changes will be submitted to OMB for review
under control number 0938-1346 (CMS-10636).
Historically, the industry has stated that CMS's current network
adequacy criteria under Sec. 422.116 create challenges for facility-
based Institutional Special Needs Plans (I-SNP) because facility-based
I-SNP enrollees access services and seek care in a different way than
enrollees of other plan types. Thus, we are proposing to broaden our
acceptable rationales for facility-based I-SNPs when submitting a
network exception under Sec. 422.116(f). The first proposed new basis
for an exception request is that a facility-based I-SNP is unable to
contract with certain specialty types required under Sec. 422.116(b)
because of the way enrollees in facility-based I-SNPs receive care.
Facility-based I-SNP may also request an exception from the network
adequacy requirements in Sec. 422.116(b) through (e) if: The I-SNP
covers Additional Telehealth Benefits (ATBs) consistent with Sec.
422.135 and uses ATB telehealth providers of the specialties listed in
paragraph (d)(5) to furnish services to enrollees; When substituting
ATB telehealth providers of the specialties listed in paragraph (d)(5)
for in-person providers, the facility-
[[Page 78598]]
based I-SNP would fulfill the network adequacy requirements in Sec.
422.116(b) through (e); The I-SNP complies with Sec. 422.135(c)(1) and
(2) by covering in-person services from an out-of-network provider at
in-network cost sharing for the enrollee who requests in-person
services instead of ATBs; and the I-SNP provides substantial and
credible evidence that the enrollees of the facility-based I-SNP
receive sufficient and adequate access to all covered benefits.
To determine the potential burden regarding this proposal, we
considered the one-time burden for MA organizations to update policies.
The other burdens associated with this provision involve updates to the
HPMS system, which is done by CMS and its contractors and not subject
to COI review.
MA organizations that offer Facility-based I-SNPs are already
required to conduct work related to network adequacy reviews that
happen during the initial or service area expansion application
process, or every 3 years for the triennial review. Further, MA
organizations that offer facility-based I-SNPs should already have
measures in place to submit data to meet CMS network adequacy review
requirements to CMS, so there is no additional burden.
We understand that MA organizations will need to update their
policies and procedures related to broadening our acceptable rationales
for facility-based I-SNPs when submitting a network exception. We
estimate that a business operations specialist working at $79.50/hr
would take 5 minutes (0.0833 hr) to update policies and procedures
related to this task. In aggregate, we estimate a one-time burden of
0.8 hour (10 facility-based I-SNP contracts * 0.0833 hr) at a cost $64
(0.8 hr * $79.50/hr).
11. ICRs Regarding Increasing the Percentage of Dually Eligible Managed
Care Enrollees Who Receive Medicare and Medicaid Services From the Same
Organization (Sec. Sec. 422.503, 422.504, 422.514, 422.530, and
423.38)
At Sec. 423.38(c)(4) we are proposing to replace the current
quarterly special enrollment period (SEP) with a one-time-per month SEP
for dually eligible individuals and others enrolled in the Part D low-
income subsidy program to elect a standalone PDP. At Sec.
423.38(c)(35), we propose a new integrated care SEP to allow dually
eligible individuals to elect an integrated D-SNP on a monthly basis.
The burden associated with the current quarterly dual/LIS SEP at Sec.
423.38(c)(4) is currently approved by OMB under control number 0938-
0964 (CMS-10141).
The proposed changes related to a new integrated care SEP at Sec.
423.38(c)(35) will be submitted to OMB for review under control number
0938-0964 (CMS-10141).
In section VIII.C. of this proposed rule, we propose amending
Sec. Sec. 422.514(h), 422.503(b), 422.504(a), and 422.530(c). Proposed
Sec. 422.514(h) would require an MA organization's parent
organization, where that MA organization offers a D-SNP (and that
parent organization also contracts with the State as a Medicaid managed
care organization (MCO) in the same service area), to only offer one D-
SNP for full-benefit dually eligible individuals. The proposed
regulation at Sec. 422.514(h) would also require the affected D-SNP to
limit new enrollment to individuals enrolling in, or in the process of
enrolling in, the affiliated Medicaid MCO effective 2027, and further
require the D-SNP to limit all enrollment to individuals enrolled in,
or in the process of enrolling in the affiliated MCO effective 2030. A
new contract provision at Sec. 422.503(b)(8) would prohibit parent
organizations from offering a new D-SNP when that D-SNP would result in
noncompliance with the proposed regulation at Sec. 422.514(h).
Additionally, the proposed regulation at Sec. 422.504(a)(20) would
require compliance with Sec. 422.514(h). To support parent
organizations seeking to consolidate D-SNPs, we also propose Sec.
422.530(c)(4)(iii) that would provide a new crosswalk exception to
allow D-SNP parent organizations to crosswalk enrollees (within the
same parent organization and among consistent plan types) where they
are impacted by the requirements at Sec. 422.514(h). The proposed
changes related to MA organizations that offer multiple D-SNPs in a
service area (Sec. Sec. 422.514(h), 422.503(b), 422.504(a), and
422.530(c)) with a Medicaid MCO will be submitted to OMB for review
under control number 0938-0753 (CMS-R-267).
a. MA Plan Requirements and Burden
We are proposing to redesignate Sec. 423.38(c)(35) as Sec.
423.38(c)(36) and proposing a new integrated care special enrollment
period (SEP) at Sec. 423.38(c)(35) that would allow enrollment in any
month into FIDE SNPs, HIDE SNPs, and AIPs for those dually eligible
individuals who meet the qualifications for such plans. The proposed
integrated care SEP at Sec. 423.38(c)(35) would require plans to
update guidance and train staff. That new burden would be limited to
FIDE SNPs, HIDE SNPs, and AIPs. We expect that plans would need one
software engineer working 4 hours to update software and one business
operations specialist working 4 hours to update plan policies and
procedures and train staff in the first year with no additional burden
in future years. In aggregate, we estimate a one-time burden (for plan
year 2025) of 904 hours (113 plans * 8 hr/plan) at a cost of $93,709
(113 plans x [(4 hr * $127.82/hr) + (4 hr * $79.50/hr)]). We do not
anticipate any new burden to plans after the initial year. This will be
submitted to OMB for review under control number 0938-0964 (CMS-10141).
The proposed provisions at Sec. Sec. 422.514(h) and
422.530(c)(4)(iii) would create burden for MA organizations where they
offer multiple D-SNPs in a service area with a Medicaid MCO. Impacted
MA organizations would need to non-renew or (more likely) combine plans
and update systems as well as notify enrollees of plan changes. We
expect that MA organizations would need two software engineers working
4 hours to update software in the first year with no additional burden
in future years and one business operations specialist working 4 hours
to update plan policies and procedures in the first year with no
additional burden in future years. In aggregate, we estimate a one-time
burden (for plan year 2027) of 600 hours (50 plans * 12 hr/plan) at a
cost of $67,028 (50 plans x [(8 hr * $127.82/hr) + (4 hr * $79.50/
hr)]). This will be submitted to OMB for review under control number
0938-0753 (CMS-R-267).
b. Medicare Enrollee Requirements and Burden
Proposed amendments to Sec. 423.38(c)(4) and (35) would affect the
circumstances in which individuals can change plans. Individuals can
complete an enrollment form to effectuate such changes, and we have
previously estimated that the forms take 0.3333 hours (20 min) to
complete as cited under OMB control number 0938-0964 (CMS-10141).
However, Medicare beneficiaries make enrollment choices currently, and
we do not expect the overall volume of enrollment selections to
materially change if our proposals are finalized. Therefore, we do not
believe the proposals at Sec. 423.38(c)(4) and (35) would impact the
burden estimates that are currently approved under 0938-0964 (CMS-
10141). Similarly, we are not proposing any changes to that
collection's currently approved forms.
In the section XI. of this proposed rule, we describe the impacts
related to the expected enrollment shift from non-
[[Page 78599]]
integrated MA-PDs into FIDE SNPs, HIDE SNPs, and AIPs over time as more
D-SNPs align with Medicaid MCOs.
12. ICRs Regarding Contracting Standards for Dual Eligible Special
Needs Plan (D-SNP) Look-Alikes (Sec. 422.514)
The following proposed changes will be submitted to OMB for review
under control number 0938-0753 (CMS-R-267) consistent with burden on MA
plans identified as D-SNP look-alikes under Sec. 422.514(d) through
(e) (see section VIII.G. of this proposed rule).
As described in section VIII.G. of this proposed rule, we propose
lowering the D-SNP look-alike threshold from 80 percent to 60 percent
over a two-year period. We propose a limitation on non-SNP MA plans
with 70 or greater percent dually eligible individuals for CY 2025. For
CY 2026, we are proposing to reduce the threshold from 70 percent to 60
percent or greater dually eligible enrollment as a share of total
enrollment. This incremental approach would minimize disruptions to
dually eligible individuals and allow plans and CMS to operationalize
these transitions over a two-year period.
We would maintain processes to minimize disruption for the
enrollees in plans affected by this proposed change. We propose to
apply the existing transition processes and procedures at Sec.
422.514(e) to non-SNP MA plans that meet the proposed D-SNP look-alike
contracting limitation of 70 percent or greater dually eligible
individuals effective plan year 2025 and 60 percent or greater dually
eligible individuals effective plan year 2026. Consistent with the
initial years of implementation of the D-SNP look-alike contract
limitations with the 80-percent threshold, maintaining these transition
processes and procedures would help to minimize disruption for current
enrollees as a result of the prohibition on contract renewal for
existing D-SNP look-alikes. For plan year 2027 and subsequent years, we
propose to limit the Sec. 422.514(e) transition processes and
procedures to D-SNP look-alikes transitioning dually eligible enrollees
into D-SNPs. Based on our experience with D-SNP look-alike transitions
through plan year 2023, the vast majority of enrollees transitioned to
other MA-PDs under the same parent organization as the D-SNP look-
alike. Based on our review of D-SNP look-alike transition plans thus
far, we expect the experience for transitions effective plan year 2024
to follow a similar pattern.
MA organizations can utilize other CMS processes to transition D-
SNP look-alike enrollees to other MA plans. For example, an MA
organization can utilize the CMS crosswalk process if it is
transitioning the full D-SNP look-alike enrollment to one non-SNP plan
benefit package (PBP) of the same type offered by the same MA
organization under the same contract and the requirements at Sec.
422.530 for a crosswalk are met. An MA organization moving the entire
enrollment of the D-SNP look-alike PBP to another PBP of the same type
under the same contract may structure this action as a consolidation of
PBPs and use the crosswalk for consolidated renewal process, under
Sec. 422.530(b)(1)(ii). An MA organization may utilize the crosswalk
exception process, subject to CMS approval, at Sec. 422.530(c)(2) to
transition the entire enrollment of the MA contract (including the D-
SNP look-alike) to another MA contract (of the same type) offered by
another MA organization with the same parent organization as part of a
contract consolidation of separate MA contracts. While multiple options
exist for MA organizations to transition D-SNP look-alike enrollees to
other non-SNP MA plans, these pathways are not available for moving
enrollees to D-SNPs.
Using data from the 2023 contract year, we estimate that there are
30 non-SNP MA plans \198\ that have enrollment of dually eligible
individuals of 70 percent through 79.9 percent of total enrollment and
40 non-SNP MA plans \199\ that have enrollment of dually eligible
individuals of 60 percent through 69.9 percent of total enrollment. As
of January 2023, the 30 non-SNP MA plans have total enrollment of
53,334 enrollees and the 40 non-SNP MA plans have 92,100 enrollees
collectively. Of the 30 non-SNP MA plans with 70-79.9 percent dually
eligible enrollment, 28 are in States where for contract year 2023
there are D-SNPs or comparable managed care plans and would be subject
to Sec. 422.514(d).\200\ Of the 40 non-SNP MA plans with 60-69.9
percent dually eligible enrollment, all are in States where for
contract year 2023 there are D-SNPs or comparable managed care plans
and would be subject to Sec. 422.514(d). As of January 2023, these 68
plans have total enrollment of 145,434 for contract year 2023. If these
plans all have the same enrollment pattern in 2024, MA organizations
would need to non-renew for plan year 2025 those 28 plans that exceed
our proposed criteria to lower the threshold to 70 percent for plan
year 2025.\201\ Similarly, MA organizations with plans that exceed our
proposed criteria to lower the threshold to 60 percent for plan year
2026 would need to non-renew 40 plans for plan year 2026.\202\ Each MA
organization would have the opportunity to make an informed decision to
transition enrollees into another MA-PD plan (offered by it or by its
parent organization) by: (1) identifying, or applying, or contracting
for, a qualified MA-PD plan, including a D-SNP, in the same service
area; or (2) creating a new D-SNP through the annual bid submission
process. Consistent with our experience with D-SNP look-alikes non-
renewing for plan years 2021 through 2023, we expect the vast majority
of D-SNP look-alike enrollees to be transitioned into a plan offered by
the same parent organization as the D-SNP look-alike, and we expect in
rare instances that the non-renewing plan may choose to not transition
enrollees. Plan year 2023 was the only plan year when D-SNP look-alikes
transitioned enrollees to Traditional Medicare rather than an MA plan
under the same parent organization. In plan year 2023, 9 of the 47 D-
SNP look-alikes transitioned approximately 3,300 enrollees to
Traditional Medicare, which accounted for less than 2 percent of total
enrollees transitioned from D-SNP look-alikes. The changes required of
MA organizations based on this proposed rule would impact D-SNP look-
alikes and their enrollees (see section VIII.G. of this proposed rule).
While we cannot predict the actions of each affected MA organization
with 100 percent certainty, we base our burden estimates on the current
landscape of D-SNP look-alikes and our experience with transitions of
D-SNP look-alikes through plan year 2023.
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\198\ These 30 non-SNP MA plans are located in Arizona,
California, Connecticut, Idaho, Illinois, Louisiana, Nevada, New
Hampshire, New Mexico, Oklahoma, Oregon, Pennsylvania, Tennessee,
Vermont, and Virginia.
\199\ These 40 non-SNP MA plans are located in Arkansas,
California, Connecticut, Georgia, Illinois, Indiana, Iowa, Kansas,
Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Nevada, New Mexico, New York, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, and Tennessee.
\200\ The 2 non-SNP MA plans are located in New Hampshire and
Vermont, neither of which have a D-SNP as of contract year 2023.
\201\ These 28 plans have total enrollment of 53,334 individuals
as of January 2023.
\202\ These 40 plans have total enrollment of 92,100 individuals
as of January 2023.
---------------------------------------------------------------------------
a. MA Plan Requirements and Burden
As indicated, the following proposed changes will be submitted to
OMB for review under control number 0938-0753 (CMS-R-267).
[[Page 78600]]
At Sec. 422.514(e), we established a process for an MA
organization with a D-SNP look-alike to transition individuals who are
enrolled in its D-SNP look-alike to another MA-PD plan offered by the
MA organization, or by the same parent organization as the MA
organization, to minimize disruption as a result of the prohibition on
contract renewal for existing D-SNP look-alikes. This process allows,
but does not require, the MA organization to transition dually eligible
enrollees from D-SNP look-alikes into D-SNPs and other qualifying MA-PD
plans for which the enrollees are eligible without the transitioned
enrollees having to complete an election form. This transition process
is conceptually similar to the proposed ``crosswalk exception''
procedures at Sec. 422.530(a) and (b); however, Sec. 422.514(e)
allows the transition process to apply across contracts or legal
entities and from non-SNP to SNPs provided that the receiving plan is
otherwise of the same plan type (for example, HMO or PPO) as the D-SNP
look-alike.
Based on the experience of D-SNP look-alike transitions through
plan year 2023, we believe 95 percent of D-SNP look-alikes for plan
years 2025 and 2026 would be able to move enrollees into another MA-PD
plan using the transition process established at Sec. 422.514(e) or
existing crosswalk functionality at Sec. 422.530 and would choose to
transition enrollment for plan years 2025 and 2026. All are in States
where for contract year 2023 there are D-SNPs or comparable managed
care plans that would be subject to Sec. 422.514(d). Therefore, we are
assuming the burden of 27 of the 28 non-SNP MA plans with 70-79.9
percent dually eligible enrollment and offered in a State with a D-SNP
would transition enrollees for plan year 2025 (for a January 2025
effective date) and 38 of the 40 non-SNP MA plans with 60-69.9 percent
dually eligible enrollment would transition enrollees for plan year
2026 (for a January 2026 effective date). Consistent with our estimates
from the June 2020 final rule, we estimate each plan will take a one-
time amount of 2 hours at $79.50/hr for a business operations
specialist to submit all enrollment changes to CMS necessary to
complete the transition process. D-SNP look-alikes that transition
enrollees into another non-SNP plan will take less time than D-SNP
look-alikes that transition eligible beneficiaries into a D-SNP because
they would not need to verify enrollees' Medicaid eligibility. The 2-
hour time estimate would account for any additional work to confirm
enrollees' Medicaid eligibility for D-SNP look-alikes transitioning
eligible enrollees to a D-SNP. Based on the previous discussion, the
estimates for the burden for MA organizations to transition enrollees
to other MA-PD plans during the 2025 to 2027 plan years is summarized
in Table J6.
[GRAPHIC] [TIFF OMITTED] TP15NO23.031
Based on our experience through plan year 2023, we expect the vast
majority of MA organizations with non-SNP MA plans with dually eligible
enrollment between 60 and 80 percent of total enrollment also have an
MA-PD plan with a premium of $0 or a D-SNP in the same service area as
the D-SNP look-alike. Based on 2023 plan year data, of the 30 non-SNP
MA plans with 70 to 79.9 percent dually eligible enrollment, 19 of
these plans (63 percent) have a D-SNP within the same service area or
nearly the same service area. Also based on 2023 plan year data, of the
40 non-SNP MA plans with 60 to 69.9 percent dually eligible enrollment,
24 of these plans (60 percent) have a D-SNP within the same service
area or nearly the same service area. An MA organization with one of
these non-SNP MA plans could expand its service area for an existing
MA-PD plan or D-SNP. The MA organizations with the non-SNP MA plans
between 60 and 79.9 percent dually eligible enrollment already have the
opportunity to establish a D-SNP and expand their service areas. Any
burden associated with these MA organizations establishing new D-SNPs
and/or expanding their service areas would already be captured under
currently approved burden under control number 0938-0935 (CMS-10237)
for creating a new MA-PD plan to receive non-SNP MA plan enrollees.
Per Sec. 422.514(e)(2)(ii), in the Annual Notice of Change (ANOC)
that the MA organization must send consistent with Sec. 422.111(a),
(d), and (e), the MA organization would be required to describe changes
to the MA-PD plan benefits and provide information about the MA-PD plan
into which the individual is enrolled.
Consistent with Sec. 422.111(d)(2), enrollees will receive this
ANOC describing the change in plan enrollment and any differences in
plan enrollment at least 15 days prior to the first date of the annual
election period (AEP). As each MA plan must send out the ANOC to all
enrollees annually, we do not estimate that MA organizations will incur
additional burden for transitioned enrollees. The current burden for
the ANOC is approved by OMB under control number 0938-1051 (CMS-10260).
We expect 1 plan for plan year 2025 and 2 plans for plan year 2026
would be required to send affected enrollees a written notice
consistent with the non-renewal notice requirements at Sec.
422.506(a)(2) and described at
[[Page 78601]]
Sec. 422.514(e)(4), as we anticipate--based on our experience with
transitions through plan year 2023--not all D-SNP look-alikes would be
able to transition their enrollees into another MA-PD plan (or plans).
b. Enrollee Requirements and Burden
In 2027 and subsequent years, we estimate that 12 plans per year
would be identified as D-SNP look-alikes under Sec. 422.514(d). We
base our estimate on the fact that there are 12 D-SNP look-alikes for
plan year 2024, which is the first year following the phase in of the
80-percent threshold. We expect our proposal to lower the threshold for
identifying D-SNP look-alikes from 80 percent to 60 percent would
increase the number of plans identified as D-SNP look-alikes. However,
we expect this increase to be offset by a reduction in D-SNP look-
alikes due to our proposed changes to the Sec. 422.514(e) transition
process, which would limit use of the Sec. 422.514(e) transition
process to D-SNP look-alikes transitioning dually eligible enrollees
into D-SNPs. Under our proposal, D-SNP look-alikes transitioning
effective for plan year 2025 and plan year 2026--including the newly
identified D-SNP look-alikes based on the proposed threshold lowered to
70 percent and then 60 percent--could continue to use the existing
transition process under Sec. 422.514(e). Once the newly identified D-
SNP look-alikes at the lower thresholds complete their transitions for
plan year 2025 and plan year 2026, the Sec. 422.514(e) transition
process could only be used for D-SNP look-alike transitioning enrollees
into D-SNPs. We believe this proposed limit would give MA organizations
a stronger incentive to avoid creating D-SNP look-alikes, due to the
more limited opportunity for these plans to transition enrollees to
non-D-SNPs. The proposed limit on the Sec. 422.514(e) transitions
would be effective for plan year 2027 and subsequent years. We believe
that these 12 D-SNP look-alikes would non-renew and transition their
enrollment into a D-SNP or other MA-PD plan. The annual burden is
summarized in Table J6. We welcome comment on these assumptions.
As indicated, the following proposed changes will be submitted to
OMB for review under control number 0938-0753 (CMS-R-267).
An individual transitioned from a D-SNP look-alike to another MA-PD
plan may stay in the MA-PD plan receiving the enrollment or, using the
AEP or another enrollment period (such as the MA OEP), make a different
election. The enrollees may choose new forms of coverage for the
following plan year, including a new MA-PD plan or receiving services
through Traditional Medicare and enrollment in a stand-alone PDP.
Because the enrollment transition process is effective on January 1 and
notices would be provided during the AEP, affected individuals have
opportunities to make different plan selections through the AEP (prior
to January 1) or the MA open enrollment period (OEP) (after January 1).
Affected individuals may also qualify for a special enrollment period
(SEP), such as the SEP for plan non-renewals at Sec. 422.62(b)(1) or
the SEP for dually eligible/LIS beneficiaries at Sec. 423.38(c)(4),
which this rule proposes to revise as discussed in section VIII.C. of
this proposed rule. Based on our experience with D-SNP look-alike
transitions through plan year 2023, we estimate that 99 percent of the
53,334 D-SNP look-alike enrollees (52,801 enrollees = 53,334 enrollees
x 0.99) in the 30 non-SNP MA plans with dually eligible enrollment of
70 to 79.9 percent and 99 percent of the 92,100 D-SNP look-alike
enrollees (91,179 enrollees = 92,100 enrollees x 0.99) in the 40 non-
SNP MA plans with dually eligible enrollment of 60 to 69.9 percent
would transition into another plan under the same parent organization
as the D-SNP look-alike. Of these 143,980 transitioning enrollees
(52,801 enrollees + 91,179 enrollees), our experience with D-SNP look-
alike transitions through plan year 2023 suggests that 14 percent would
select a new plan or the Traditional Medicare and PDP option rather
than accepting the transition into a different MA-PD plan or D-SNP
under the same MA organization as the D-SNP in which they are currently
enrolled. For plan year 2025, we estimate that 7,392 enrollees (52,801
transitioning D-SNP look-alike enrollees * 0.14), would opt out of the
new plan into which the D-SNP look-alike transitioned them. For plan
year 2026, we estimate that 12,765 enrollees (91,179 transitioning D-
SNP look-alike enrollees * 0.14), would opt out of the new plan into
which the D-SNP look-alike transitioned them. Consistent with the per
response time estimate that is currently approved by OMB under control
number 0938-0753 (CMS-R-267), we continue to estimate that the
enrollment process requires 20 minutes (0.3333 hr).
Based on the aforementioned discussion, Table J7, summarizes the
hour and dollar burden for added enrollments for years 2025 to 2027.
[GRAPHIC] [TIFF OMITTED] TP15NO23.032
As stated previously, we believe that in 2027 and subsequent years,
12 plans would be identified as D-SNP look-alikes and therefore this
proposed rule would have a much smaller impact on MA enrollees after
the initial period of implementation. Since the current 70 non-SNP MA
plans with dually eligible enrollment of 60.0 to 79.9 percent have
[[Page 78602]]
145,434 enrollees in 70 plans, we estimate 24,932 enrollees (145,434
enrollees * 12/70 plans) in 12 plans. The burden is summarized in Table
J6. The average annual enrollee burden over 3 years is also presented
in Table J6.
13. ICRs Regarding Update to the Multi-Language Insert Regulation
(Sec. Sec. 422.2267 and 423.2267)
The following proposed changes will be submitted to OMB for review
under control number 0938-1421 (CMS-10802).
The multi-language insert (MLI) required at Sec. Sec.
422.2267(e)(31) and 423.2267(e)(33) is a standardized communications
material that informs enrollees and prospective enrollees that
interpreter services are available in Spanish, Chinese, Tagalog,
French, Vietnamese, German, Korean, Russian, Arabic, Italian,
Portuguese, French Creole, Polish, Hindi, and Japanese. These are the
15 most common non-English languages in the United States.
Additionally, Sec. Sec. 422.2267(e)(31)(i) and 423.2267(e)(33)(i)
require plans to provide the MLI in any non-English language that is
the primary language of at least 5 percent of the individuals in a PBP
service area but is not already included on the MLI. These regulations
also provide that a plan may opt to include the MLI in any additional
languages that do not meet the 5 percent threshold, where it determines
that including the language would be appropriate.
As discussed in section III.G. of this proposed rule, we are
proposing to update Sec. Sec. 422.2267(e)(31) and 423.2267(e)(33) to
require that notice of availability of language assistance services and
auxiliary aids and services be provided in English and the 15 languages
most commonly spoken by individuals with limited English proficiency in
a State and must be provided in alternate formats for individuals with
disabilities who require auxiliary aids and services to ensure
effective communication. Thus, under our proposal, MA organizations and
Part D sponsors would send the Notice of Availability in English and
the 15 most common non-English languages in a State instead of the
current MLI in the 15 most common non-English languages nationally.
This proposed policy is consistent with a proposed rule that OCR
published in August 2022 (87 FR 47824). We also expect that this
proposed policy would better align with the Medicaid translation
requirements at Sec. 438.10(d)(2).\203\ We propose to modify the
language to note that this is a model communication material rather
than a standardized communication material because we are no longer
specifying the exact text that must be used. Even though the MA
organizations and Part D sponsors could change the Notice of
Availability, we are not accounting for such changes because we do not
expect any MA organizations or Part D sponsors to make such changes.
---------------------------------------------------------------------------
\203\ We expect the 15 most common languages for a given State
to include any language required by the Medicaid program at Sec.
438.10(d)(2). Therefore, our proposed rule would not impose
additional burden on fully integrated dual eligible special needs
plans and highly integrated dual eligible special needs plans, as
defined at Sec. 422.2, and applicable integrated plans, as defined
at Sec. 422.561, to comply with regulations at Sec. Sec.
422.2267(a)(4) and 423.2267(a)(4).
---------------------------------------------------------------------------
We do not expect this proposed policy to create any new collection
of information burden for MA organizations or Part D sponsors since the
August 2022 proposed rule indicates that OCR would provide the
translated language for the Notice of Availability in the 15 most
common non-English languages in a State or States. Also, the MA
organizations and Part D sponsors are already distributing the MLI and,
under this proposal, would instead distribute the Notice of
Availability, so we do not anticipate any new burden associated with
printing or mailing. In addition, the Notice of Availability would be a
one-page document that would never be sent alone and therefore does not
create additional postage costs.
We expect some new burden for MA organizations and Part D sponsors
operating plans across multiple States. Rather than sending the same
MLI with the same 15 non-English language translations to plans in any
State, under the proposed rule the plans under these MA organizations
or Part D sponsors would need to send the Notice of Availability with
translations in the 15 most common non-English languages in each State
in which the plan operates. Based on plan year 2023 data, we estimate
there are approximately 20 MA parent organizations offering MA plans in
multiple States with approximately 3,900 PBPs and approximately 20 Part
D sponsors offering Part D plans in multiple States with approximately
1,400 Part D plans. Since many of these parent organizations have MA
organizations at the State level, we estimate that these 20 parent
organizations have approximately 220 MA organizations covering PBPs by
State. Similarly, we estimate that the 20 Part D sponsors have
approximately 50 parent organizations covering PBPs by State. We
believe the parent organizations would update systems software and plan
policies and procedures as well as train staff at the MA organization
and Part D sponsor level to cover all PBPs and Part D plans,
respectively, offered in a State. We expect that MA organizations and
Part D sponsors would need one software engineer working one hour to
update systems software in the first year with no additional burden in
future years and one business operations specialist working one hour to
update plan policies and procedures and train staff in the first year
with no additional burden in future years. For MA organizations, we
estimate the burden for plan year 2025 at 440 hours (220 MA
organizations * 2 hr/plan) at a cost of $56,241 (440 hr * $127.82/hr)
for a software engineer to update systems to ensure the Notice of
Availability with the correct State-specific languages is distributed
with other communications and marketing materials. We estimate the
burden for MA organizations for plan year 2025 to be 440 hours (220 MA
organizations * 2 hr/plan) at a cost of $34,980 (440 hr * $79.50/hr)
for a business operations specialist to update plan policies and
procedures and train staff. For Part D sponsors, we estimate the burden
for plan year 2025 at 100 hours (50 Part D sponsors * 2 hr/plan) at a
cost of $12,782 (100 hr * $127.82/hr) for a software engineer to update
systems to ensure the Notice of Availability with the correct State-
specific languages is distributed with other communications and
marketing materials. We estimate the burden for Part D sponsors for
plan year 2025 to be 100 hours (50 Part D sponsors * 2 hr/plan) at a
cost of $7,950 (100 hr * $79.50/hr) for a business operations
specialist to update plan policies and procedures and train staff. We
do not anticipate any new burden to plans after the initial year. We
will submit this burden to OMB for review under control number 0938-
1421 (CMS-10802).
We also note that, as part of the current MLI required at
Sec. Sec. 422.2267(e)(31) and 423.2267(e)(33), MA organizations and
Part D sponsors must already include additional languages that meet the
5 percent service area threshold as required under Sec. Sec.
422.2267(a)(2) and 423.2267(a)(3). Thus, MA organizations and Part D
sponsors must currently review the most frequently used languages in a
service area beyond the top 15 national languages. As a result, we do
not believe the burden will be greater than our estimate note
previously. We welcome comment on our assumptions.
[[Page 78603]]
C. Summary of Proposed Information Collection Requirements and
Associated Burden
BILLING CODE 4120-01-P
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[[Page 78604]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.003
BILLING CODE 4120-01-C
[[Page 78605]]
D. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection requirements. The
requirements are not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections discussed previously, please visit the CMS
website at https://www.cms.gov/regulations-and-guidance/legislation/paperworkreductionactof1995/pra-listing, or call the Reports Clearance
Office at 410-786-1326.
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the DATES and ADDRESSES sections of this
proposed rule and identify the rule (CMS-4205-P), the ICR's CFR
citation, and the OMB control number.
XI. Regulatory Impact Analysis
A. Statement of Need
The primary purpose of this proposed rule is to amend the
regulations for the Medicare Advantage (Part C) program, Medicare
Prescription Drug Benefit (Part D) program, Medicare cost plan program,
and Programs of All-Inclusive Care for the Elderly (PACE). This
proposed rule includes several new policies that would improve these
programs beginning with contract year 2025 as well as codify existing
Part C and Part D sub-regulatory guidance. This proposed rule also
includes revisions to existing regulations in the Risk Adjustment Data
Validation (RADV) audit appeals process and the appeal process for
quality bonus payment determination that would take effect 60 days
after publication of a final rule. Revisions to existing regulations
for the use and release of risk adjustment data would also take effect
60 days after publication of a final rule. Additionally, this proposed
rule would implement certain sections of the following Federal laws
related to the Parts C and D programs:
The Bipartisan Budget Act (BBA) of 2018.
Consolidated Appropriations Act (CAA) of 2023.
B. Overall Impact
We have examined the impacts of this proposed 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), Executive Order 14094 entitled ``Modernizing
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the
Social Security Act, section 202 of the Unfunded Mandates Reform Act of
1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999) and 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). The
Executive Order 14094, entitled ``Modernizing Regulatory Review''
(hereinafter, the Modernizing E.O.), amends section 3(f)(1) of
Executive Order 12866 (Regulatory Planning and Review). The amended
section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule:
(1) having an annual effect on the economy of $200 million or more in
any 1 year, or adversely affecting in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, territorial, 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 legal or policy issues for which
centralized review would meaningfully further the President's
priorities or the principles set forth in this Executive order.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action/s and/or with significant effects as
per section 3(f)(1) ($200 million or more in any 1 year). The total
economic impact for this proposed rule exceeds $200 million in several
years. Therefore, 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 the $200 million or more in any one
year and 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.
Cost of reviewing the rule. Using the wage information from the BLS
for medical and health service managers (Code 11-9111), we estimate
that:
The hourly cost per reviewer for reviewing this proposed
rule is $123.06 per hour, including overhead and fringe benefits
https://www.bls.gov/oes/current/oes_nat.htm. Had a general business
operations specialist been used (say for an entity without medical and
health service managers) the cost per hour would be less than that for
a medical and health services manager. Therefore, we are at most over-
estimating the cost per hour and will use $123.06/hr.
We estimate that there will be less than 2,000 reviewers
of this proposed rule: There are currently less than 1,000 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, PBMs).
We expect that each organization will designate one person to review
the rule. Therefore, a reasonable maximal number is 2,000 total
reviewers. We note that other assumptions are possible.
The rule is about 150,000 words. Average reading speeds
vary from 180 to 240 words per minute. Since the rule is technical and
presumably notes are being taken, we use the lower estimate.
Furthermore, since in addition to notetaking, summaries would be
submitted to leadership we are lowering the 180 words/minutes to 150.
Accordingly, we assume it would take staff 17 hours to review this
proposed rule (150,000 words/150 words per minute/60 minutes hour).
This may be an overestimate since each entity will likely only read the
provisions affecting them and not the entire rule.
Therefore, the estimated cost per reviewing entity for
reading this entire rule is $2,100 (17 hr x $123.06/hr), and the total
cost over all entities for reviewing this entire proposed rule is $4.2
million ($2,100 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.
Thus, it is very likely that on average only half or a quarter of the
rule will be read resulting in a range of $2 million to $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
[[Page 78606]]
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 proposed rule.
In accordance with the provisions of Executive Order 12866, this
proposed 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.
A wide range of policies are being proposed in this 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; (2) providers, including institutional providers,
outpatient providers, clinical laboratories, and pharmacies; and (3)
enrollees. Some descriptive data on these stakeholders are provided in
Table K-1.
[GRAPHIC] [TIFF OMITTED] TP15NO23.033
We are certifying that this proposed rule 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 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 proposed rule).
MA plans can also offer extra benefits, that is, benefits not
covered under Traditional Medicare Parts A and B, called supplemental
benefits. These benefits are paid for through enrollee premiums, rebate
dollars or a combination. Under the statutory payment formula, if the
bid submitted by a Medicare Advantage plan for furnishing Parts 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 Traditional Medicare, including
lower cost sharing) 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 Traditional Medicare, those additional
payments put upward pressure on the Part B premium, which is paid by
all Medicare beneficiaries, including those in Traditional 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 Medicare funds and beneficiary
premiums. In addition, for enrolled low-income beneficiaries, Part D
plans receive special government payments to cover most of the premium
and cost sharing amounts those beneficiaries would otherwise pay.
Thus, the cost of providing services by MA and Part D plans is
funded by a variety of government funding sources and in some cases by
enrollee premiums. As a result, MA and Part D 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 and Part D regulations,
such as those in this proposed 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 Direct Health and Medical Insurance Carriers, NAICS 524114,
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
Traditional Medicare data; or (2) the benchmark, if the bid amount is
greater than the benchmark.
If an MA plan bids above the benchmark, section 1854 of the Act
requires the MA plan to charge enrollees
[[Page 78607]]
a premium for that amount. Historically, at most 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.
The preceding analysis only shows that MA plans, whether small or
large, are not affected by this proposed rule since a significant
number of them (all but at most 2 percent) will have their costs
subsidized by the Government.
Therefore, 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:
Pharmacies and Drug Stores, NAICS 446110;
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;
Hospitals, NAICS 622, including General Medical and
Surgical Hospitals, Psychiatric and Substance Abuse Hospitals, and
Specialty Hospitals; and
SNFs, NAICS 623110.
Whether these providers are contracted or, in the case of PPOs and
PFFS MA plans, not contracted with the MA plan, their aggregate payment
for services is the sum of the enrollee cost sharing and plan payments.
For non-contracted providers, Sec. 422.214 and sections
1852(k)(1) and 1866(a)(1)(O) of the Act require that a non-contracted
provider that furnishes covered services to an MA enrollee accept
payment that is at least what the provider would have been paid had the
services been furnished to a Medicare FFS beneficiary.
For contracted providers, Sec. 422.520 requires that the
payment is governed by a mutually agreed upon contract between the
provider and the plan. CMS is prohibited from requiring MA plans to
contract with a particular health care provider or to use a particular
price structure for payment by section 1854(a)(6)(B)(iii) of the Act.
Consequently, for providers, there is no additional cost burden
above the already existing burden in Traditional Medicare. In other
words, the provisions of this proposed rule do not create a significant
burden for providers.
Based on the previous discussion, the Secretary certifies that this
proposed rule will not have a significant impact on a substantial
number of small entities.
There are certain indirect consequences of these provisions which
also create impact. We have already explained that at least 98 percent
of the 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 an MA ``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 be paid by enrollee
premiums to the extent that the MA rebate is not sufficient to cover
those costs.) However, as noted previously, the number of MA plans
bidding above the benchmark to whom this burden applies does not meet
the RFA criteria of a significant number of plans.
It is possible that if the provisions of this proposed rule would
otherwise cause MA plan 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 may lose its enrollees to competing plans that offer these
supplemental benefits. Thus, it may, in certain cases, be advantageous
for a plan to reduce profit margins, rather than reduce supplemental
benefits. Most likely an increase in bids would result in a combination
of reduction in supplemental benefits and reduction in profit margins
(not 100 percent one or the other). Part of the challenge in
pinpointing the effects of an increase in bids is that there are many
other factors combining with the effects of proposed and final rules,
making it effectively impossible to determine whether a particular
policy had a long-term effect on supplemental benefits.
We also note that we do not have definitive data on this. Plans do
not report to CMS the strategies behind their bids. More specifically,
when plans do reduce supplemental benefits, we have no way of knowing
the cause for this reduction, whether it be new provisions, market
forces, or other causes.
D. Anticipated Effects
Many provisions of this proposed rule have negligible impact either
because they are technical provisions, clarifications, or are
provisions that codify existing guidance. Other provisions have an
impact that cannot be quantified. Throughout the preamble, we have
noted when we estimated that provisions have no impact either because
they are codifying already existing practices, or, for example, because
contractors for CMS have asserted that changes work within their
current contract without the need for additional compensation.
Additionally, this Regulatory Impact Statement discusses several
provisions with either zero impact or impact that cannot be quantified.
The remaining provisions' effects are estimated in section XXX of this
proposed rule and in this RIA. Where appropriate, when a group of
provisions have both paperwork and non-paperwork impact, this
Regulatory Impact Statement cross-references impacts from section XXX
of this proposed rule in order to arrive at total impact.
1. Effects of Expanding Permissible Data Use and Data Disclosure for MA
Encounter Data (Sec. 422.310)
In section III.H. of this proposed rule, we discussed two proposals
to improve access to MA encounter data for certain purposes. We noted
that our current regulatory language limits CMS's ability to use and
disclose MA encounter data for activities in support of administration
or evaluation of the Medicaid program, including care coordination.
Further, the regulation delays when CMS may share MA encounter data to
State Medicaid agencies for care coordination and quality review and
improvement activities for the Medicaid program, particularly with
regard to dually eligible individuals. Our proposals to improve access
to MA data include the following:
Adding ``and Medicaid programs'' to the current MA risk
adjustment data use purposes codified at Sec. 422.310(f)(1)(vi) and
(vii).
Adding a new Sec. 422.310(f)(3)(v) to allow for risk
adjustment data to be released prior to reconciliation if the data will
be released to State Medicaid agencies for the purpose of coordinating
care for dually eligible individuals.
Together, these proposals aim to clarify and broaden the allowable
data uses for CMS and external entities (for data disclosed in
accordance with Sec. 422.310(f)(2) and (3)). These proposals do not
change the external entities
[[Page 78608]]
allowed to request MA encounter data from CMS.
As discussed in sections X and III.H., these proposed provisions
would allow external entities to voluntarily request MA encounter data
for allowable data uses to support the Medicare program, Medicaid
program, and Medicare and Medicaid combined purposes. There is one area
where this provision could impact the burden to CMS: CMS reviewing and
fulfilling new MA encounter data requests. However, in the FY 2015 2015
Hospital Inpatient Prospective Payment System (IPPS)/Long-term Care
Hospital Prospective Payment System (LTCH PPS) final rule, when we
initially established CMS disclosure of MA encounter data, we explained
that we had determined that ``there are not any economically
significant effects of the proposed provisions'' (79 FR 50445). The
same applies for the proposed refinements to the approved data uses and
the data disclosure in this proposed rule.
2. Increasing the Percentage of Dually Eligible Managed Care Enrollees
Who Receive Medicare and Medicaid Services From the Same Organization
(Sec. Sec. 422.503, 422.504, 422.514, 422.530, and 423.38)
We discussed collection of information burden associated with this
provision in section X.B.11 of this proposed rule. In this section, we
describe the impacts of our proposed change to the dual/LIS SEP, new
integrated care SEP, and contract limitations for non-integrated MA-PD
plans.
These proposals would impact dually eligible and other LIS eligible
individuals that currently use the quarterly dual/LIS SEP to change
their enrollment in MA-PD plans. We are proposing to change the
quarterly dual/LIS SEP to a one-time-per month SEP for dually eligible
individuals and other LIS eligible individuals to elect a standalone
PDP. The proposal would allow individuals to switch PDPs or leave their
MA-PD plans for Traditional Medicare (with a standalone PDP) in any
month. The proposed dual/LIS SEP would no longer permit enrollment into
MA-PD plans or changes between MA-PD plans (although such options would
remain available through other enrollment periods and SEPs). In
addition, we propose a new integrated care SEP that would allow
enrollment in any month into a FIDE SNP, HIDE SNP, or AIP for dually
eligible individuals who meet the qualifications of such plans.
Proposed Sec. Sec. 422.504(a)(20) and 422.514(h) would establish a
new requirement for an MA organization, that, beginning in plan year
2027, when an MA organization, its parent organization, or an entity
that shares a corporate parent organization with the MA organization,
also contracts with a State as a Medicaid MCO that enrolls dually
eligible individuals in the same service area, that the MA
organization's D-SNPs must limit new enrollment to individuals enrolled
in (or in the process of enrolling in) the D-SNP's aligned Medicaid
MCO. Additionally, an MA organization (or its parent organization or
another MA organization with the same parent organization) in this
situation would only be able to offer one D-SNP for full-benefit dually
eligible individuals in the same service area as that MA organization's
affiliated Medicaid MCO (with limited exceptions as described in
section VIII.C. of this proposed rule). Further, beginning in plan year
2030, such D-SNPs must only enroll (or continue to enroll) individuals
enrolled in (or in the process of enrolling in) the affiliated Medicaid
MCO.
Full-benefit dually eligible individuals enrolled in a D-SNP that
consolidate due to our proposals at Sec. Sec. 422.504(a)(20) and
422.514(h) would be moved into a new plan. The impacted enrollees would
receive materials about the plan consolidation and materials associated
with the new plan. We believe the plan benefit packages of the plans
required to consolidate to be similar if not the same and do not expect
impact to enrollees.
We expect there to be an enrollment shift from MA-PDs into FIDE
SNPs, HIDE SNPs, or AIPs over time as more D-SNPs align with Medicaid
MCOs. Starting in plan year 2027, we expect new D-SNP enrollment to be
limited and then we expect integrated D-SNP enrollment to accelerate in
2030 when D-SNPs under a parent organization with an affiliated
Medicaid MCO would need to disenroll individuals who are not enrolled
in both the D-SNP and affiliated MCO.
We examined contract year 2023 bid data for D-SNPs that enroll
beneficiaries in States that also use Medicaid managed care to cover
some or all benefits for dually eligible individuals. In general, the
data shows that the more integrated D-SNPs have higher per capita MA
rebates than those in less integrated plans. MA rebates are used to
reduce beneficiary cost sharing, lower beneficiary premiums, and
provide additional supplemental benefits. MA rebates are calculated by
multiplying the difference in the risk-adjusted benchmarks and the
risk-adjusted bids by a percentage called the rebate percentage. The
Federal Government retains the complement of the rebate percentage (or
1-rebate percentage) multiplied by the difference in the risk-adjusted
benchmarks and bids. The (risk-adjusted) bid-to-benchmark ratios, in
general, are smaller for the more integrated plans versus the less
integrated plans. This suggests that the more integrated D-SNPs can
provide Traditional Medicare benefits (represented by the risk adjusted
bid) at a lower or more efficient level than the less integrated D-
SNPs. We have assumed that this provision's requirement for greater
alignment between the D-SNP and the affiliated Medicaid MCO will lead
to greater health benefit efficiencies and incur Federal Government
savings since the Federal Government retains the complement of the
difference between the submitted risk adjusted bids and benchmarks.
In calculating our estimates, we assumed savings would begin in
2027 when new D-SNPs enrollment would be limited. We expect integrated
D-SNP enrollment and related savings to accelerate in 2030 when D-SNPs
under a parent organization participating in Medicaid managed care
would need to disenroll individuals who are not enrolled in both the D-
SNP and affiliated Medicaid MCO under the same parent organization. We
estimated that the other elements of this proposal (including the
proposed changes to the SEP) would have a negligible impact.
To develop the savings projections, we calculated the bid-to-
benchmark ratios for the integrated D-SNPs based on the calendar year
2023 plan data and applied them to the coordination-only D-SNPs that we
assume would convert to aligned D-SNPs by 2030. We assumed that a large
percentage of the coordination-only D-SNP enrollment would convert to
integrated D-SNPs by 2030. For trending purposes, we used 2023 bid data
and 2023 enrollment data as the starting point and trended those data
points by values found in the 2023 Medicare Trustees Report. We
calculated gross costs (savings are represented by negative dollar
amounts) by multiplying the per member per month expenditure
differences by the enrollment that is projected to switch to aligned
plans. Then, we calculated the net cost by multiplying the gross costs
by the net of Part B premium amount which averages between 85.1 percent
and 84.6 percent from 2025-2034. This yields an overall annual estimate
of net Part C costs ranging from -$6 million in contract year 2027 to -
$207 million in contract year 2034.
[[Page 78609]]
[GRAPHIC] [TIFF OMITTED] TP15NO23.034
We performed a similar comparison of contract year 2023 bids for
Part D on the same MA plans and their associated population. The data
also suggests that the more integrated D-SNPs had lower combined bid
and reinsurance amounts for contract year 2023. As a result, we also
projected that there would be efficiencies when D-SNPs aligned more
with the Medicaid MCOs. The observed 2023 difference (efficiency) in
the combined bid and reinsurance amounts is projected with the
corresponding D-SNP trend assumed in the 2023 Medicare Trustees' Report
(not shown in that report). The Part D gross savings are the product of
the efficiency and the associated switchers from Table K-3. Since the
premiums for the Medicaid beneficiaries are subsidized, there would be
no premium offset. As a result, the net savings would be the same as
the gross savings. We estimated the net costs would range from -$7
million in contract year 2027 to -$286 million in contract year 2034.
We also have reviewed the impact to the Medicaid program and have
concluded that the Medicaid impacts would be negligible. The majority
of States have a ``lesser-of'' policy, under which the State caps its
payment of Medicare cost sharing so that the sum of Medicare payment
and cost-sharing does not exceed the Medicaid rate for a particular
service. Under this proposed policy, the Medicare payment and the cost
sharing are not expected to increase resulting in non-significant
impacts to Medicaid payments. For Part D, given that the Medicaid
liability is limited to the beneficiary cost sharing and that the vast
majority of dually eligible individuals qualify for low-income cost
sharing, we anticipate no significant impacts to Medicaid costs.
[GRAPHIC] [TIFF OMITTED] TP15NO23.035
In addition to the estimated savings from limiting enrollment into
certain D-SNPs starting in plan year 2027, these provisions require
updates to a variety of CMS manual systems.
The proposed change to Sec. 423.38(c)(4) and the proposed
provision at Sec. 423.38(c)(35) would create burden for CMS to update
MA-PD plan manual chapters, the plan communication user guide (PCUG),
and model enrollment notices. Additionally, the MARx system would
require coding changes for the proposed amended dual/LIS SEP at Sec.
423.38(c)(4) and proposed integrated care SEP at Sec. 423.38(c)(35).
The CMS call center 1-800-MEDICARE would need training on the proposed
SEPs to be able to identify beneficiaries eligible for the SEPs. The
updates and changes would require two GS-13 staff 20 hours to complete
the necessary updates. We estimate the burden for plan year 2025, would
be at 40 hours (2 GS-13 * 20 hrs) at a cost of $2,433 (40 hrs * $60.83)
for two GS-13 staff to update manual chapters, the PCUG, enrollment
notices, and complete coding for MARx. This is a one-time cost that
would not create new burden in subsequent years.
The new provision at Sec. 422.514(h)(3)(ii) would allow plans to
continue operating a PPO and HMO in the same service area but not allow
new enrollments of full-benefit dually eligible individuals into the
plan (or plans) that are not aligned with the affiliated MCO as
described Sec. 422.514(h)(1). This provision would not create new
burden for CMS since CMS would use its existing process to suppress
these plans from Medicare Plan Finder.
The new provision at Sec. 422.530(c)(4)(iii) allowing a crosswalk
exception for plans consolidating their D-SNPs would create burden for
CMS. The coding to create the crosswalk exception would require one GS-
13 10 hours to complete the necessary updates. The burden for plan year
2025, is estimated at 10 hours (1 GS-13 * 10 hrs) at a cost of $608.30
(10 hrs * $60.83) for a GS-13 to complete coding for crosswalk
exceptions. This is a one-time cost that would not create new burden in
subsequent years. The burden
[[Page 78610]]
associated with crosswalks and plan consolidation could create
additional burden such as breaking plans into different PBPs or having
fewer PBPs to manage in the future. We cannot estimate these actions
and associated burden but generally believe they would cancel each
other out.
3. Effects of Additional Changes to an Approved Formulary--Biosimilar
Biological Product Maintenance Changes and Timing of Substitutions
(Sec. Sec. 423.4, 423.100, and 423.120(e)(2))
We do not estimate any impact on the Medicare Trust Fund as a
result of the proposal to treat substitutions of biosimilar biological
products other than interchangeable biological products as a
maintenance change. New biosimilar biological products are approved or
licensed by the FDA and become available on the market at irregular
intervals. Therefore, with respect to this provision, we cannot predict
when new biosimilar biological products will enter the market or to
what extent Part D sponsors will make formulary substitutions as a
result. Several biosimilar biological products entered the market in
2023,\204\ but CMS has not seen a corresponding influx of non-
maintenance negative change requests from Part D sponsors. It is
unclear whether Part D sponsors are not requesting midyear formulary
changes due to concerns about patient and provider hesitancy towards
biosimilar biological products, or if the current policy that treats
such formulary changes as non-maintenance changes disincentivizes Part
D sponsors from making midyear formulary changes that will not apply to
all enrollees currently taking the reference product. The introduction
of biosimilar biological products to the market is relatively recent
compared to generic small molecule drugs. We believe there is a
potential for savings to the Medicare Trust Fund in the long term as
acceptance of biosimilar biological products grows and increased
competition drives down costs; however, a number cannot be estimated
right now.
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\204\ Billingsly A. Is There a Biosimilar for Humira? Yes, Here
Are 9 Humira Biosimilars Launching in 2023. GoodRxHealth. July 12,
2023. Available from: https://www.goodrx.com/humira/biosimilars.
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4. Mid-Year Notice of Unused Supplemental Benefits
This proposal would require plans to notify enrollees about any
supplemental benefit they have not used during the first half-year of
the contract year. We lack data to quantify the effects of this
provision. Therefore, we present a qualitative analysis below. The
provision has 3 impacts on plans and the MA program.
One impact is the burden to plans to notify enrollees. This burden
has been quantified in the Collection of Information in section X. of
this proposed rule. The burden consists of: (1) a system update to
identify supplemental benefits not utilized by enrollees; and (2) the
burden to notify enrollees.
The second impact relates to the intent of the provision, which is
to increase utilization of benefits when appropriate. This would
initially involve a cost to both enrollees for their share of cost
sharing, and to the plans for providing the benefit. In assessing the
impact, there are several dimensions of impact for which we lack data:
(1) how many plans offer these supplemental benefits; (2) which
supplemental benefits are not being utilized at all by some enrollees;
(3) for each plan offering supplemental benefits, how many enrollees do
and do not utilize these benefits; (4) how many more enrollees would
utilize these benefits as a result of the notification; and (5) what is
the range and distribution of the cost to provide these supplemental
benefits.
The third impact relates to savings expected from increased
utilization. Normally, such savings are considered consequences of a
provision and not typically analyzed in an RIA. We use dental and gym
benefits to show several complications and possibilities in this
analysis.
Enrollees who use their preventive supplemental dental benefits may
uncover problems early, thus preventing unnecessary complications. For
example, the filling of cavities may prevent a costlier root canal
later. Also note that the filling may happen in one plan while the
costlier root canal that was prevented refers to a possible event
several years later possibly in another plan (or out of pocket for the
enrollee).
An interesting subtlety of this example is that enrollees who have
preventive dental checkups may do so annually or semi-annually. The
effect of the notification might be to increase annual checkups to
semi-annual checkups. It is harder to quantify the savings from such a
change in frequency.
From discussions with plans, we know that enrollees may incur the
cost of a gym membership benefit without utilizing it. The intent of
the provision would be to increase gym utilization. In the case of gym
benefits the savings from increased prevention is challenging to
analyze since different frequencies of gym attendance have different
effects on health. An enrollee, for example, who decides to visit the
gym only once because of the notification might not have any
significant health benefits generating savings; even enrollees who
switch to monthly visits may not experience savings. The savings on
enrollees who decide to continue gym visit on a regular basis might
arise from varied consequences since increased exercise has the
potential to ``reduce risk of chronic conditions like obesity, type 2
diabetes, heart disease, many types of cancer, depression and anxiety,
and dementia.'' \205\
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\205\ https://www.cdc.gov/chronicdisease/resources/infographic/physical-activity.htm#.
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In summary, this is the type of provision that has a savings impact
that can be analyzed only after several years of experience with the
provision.
We solicit public comment on the economic cost and benefits of this
proposal.
5. Agent Broker Compensation (Sec. 422.2274)
In this rule we are proposing to: (1) generally prohibit contract
terms between MA organizations and agents, brokers, or other TMPOs that
may interfere with the agent's or broker's ability to objectively
assess and recommend the plan which best fits a beneficiary's health
care needs; (2) set a single agent and broker compensation rate for all
plans, while revising the scope of what is considered ``compensation;''
and (3) eliminate the regulatory framework which currently allows for
separate payment to agents and brokers for administrative services. We
are also proposing to make conforming edits to the agent broker
compensation rules at Sec. 423.2274.
The proposed changes to the MA and Part D agent broker compensation
regulations at 42 CFR 422.2274 and 423.2274 have potential economic
effects on agents/brokers, plans, and Medicare beneficiaries. Since we
lack the data to quantify these effects, we discuss them qualitatively.
Agents and brokers may lose certain excess payments that would be
prohibited under the proposed regulation; on the other hand, they would
receive an increased FMV calculation for compensation per enrollment. A
typical agent or broker might work on behalf of many insurance
companies and their associated plans, including commercial, Medicare,
Medicaid, Medigap etc. A reduction in net payment for Medicare
Advantage enrollments may cause
[[Page 78611]]
agents or brokers to reapportion their time and focus instead on other
areas of the industry, resulting in decreased MA plan enrollment;
however, we believe this impact would swiftly be offset by increased
marketing and other adjustments made by the MA plans, as discussed
below.
Another effect on agents and brokers from this provision is the
requirement of uniform payment to agents and brokers and the resulting
increased transparency. More specifically, agents and brokers who might
have been receiving excess payments for targeting certain plans will no
longer be financially incentivized to target these plans resulting in a
more equitable distribution of efforts.
Plans are already spending a standard amount of $601 per new
enrollee on agents and brokers. We do not believe the increased
compensations of $31 extra (about a 5 percent increase) per agent per
enrollee would have any significant financial impact on plans given the
proposal to prohibit excess payments in the form of administrative
payments.
On the other hand, if some agents and brokers withdraw or lower
efforts for Medicare Advantage and Part D plans, resulting in possibly
lower enrollment, plans may increase money allocated to outreach and
advertising. Overall, we do not expect a decrease in enrollment because
of the agent and broker compensation provisions since plans
meticulously monitor enrollment trends and possess a variety of
vehicles to counteract any significant changes. Indeed, in assessing
the impact of the agent broker compensation provision it is important
to emphasize that people join plans because of outreach from a wide
variety of sources and therefore no single source is critical.
We solicit public comment on the economic cost and benefits of this
proposal.
6. Enhancing Enrollees' Right To Appeal an MA Plan's Decision To
Terminate Coverage for Non-Hospital Provider Services (Sec. 422.626)
In Sec. 422.626, we are proposing to (1) require the QIO instead
of the MA plan, to review untimely fast-track appeals of an MA plan's
decision to terminate services in an HHA, CORF, or SNF; and (2) fully
eliminate the provision requiring the forfeiture of an enrollee's right
to appeal a termination of services decision when they leave the
facility or end home health, CORF, or home-based hospice services
before the proposed terminate date.
Currently, there is no data collected on the volume of fast-track
appeals conducted by MA plans for untimely requests. The QIO conducts
appeals for FFS fast-track appeals for untimely requests but does not
formally collect data on appeals based on untimely requests from MA
enrollees. Thus, the following estimates are speculative given the lack
of precise data on the number of the fast-track appeals for untimely
FFS requests.
Anecdotal data from the QIOs conducting these fast-track appeals
indicates that approximately 2.5 percent of all fee-for-service (FFS)
fast-track appeal requests are untimely. In CY 2021 (most recent year
available), there were 190,031 MA fast-track appeals to the QIO. Thus,
we estimate that approximately 4,751 fast track appeals will be shifted
from MA plans to the QIO (0.025 x 190,031).
The shift of these untimely appeals from the QIOs to the MA plans
will result in an increased burden. There is an estimated per case cost
for QIOs to conduct these appeals (per the Financial Information and
Vouchering System (FIVS) from 5/1/2019-7/31/2023), while MA plans are
not specifically reimbursed for this activity. The average QIO appeal
of this type takes 1.69 hours at $85.18/hr.
In aggregate we estimate an annual burden of 8,029 hours (4,751
responses * 1.69 hr/response) at a cost of $683,910 (8,029 hr x $85.18/
hr).
We are unable to estimate how many new QIO reviews will be
conducted under the proposed provision at Sec. 422.626(a)(3) to
eliminate the provision requiring the forfeiture of an enrollee's right
to appeal a termination of services decision when they leave the
skilled nursing facility or end home health, CORF, or home-based
hospice services before the proposed termination date. No entity tracks
how many appeals are not conducted because the enrollee stopped the
services at issue before the last day of coverage. Further, because
this provision has never existed for FFS, we have no basis from which
to derive an estimate.
E. Alternatives Considered
In this section, CMS includes discussions of alternatives
considered. Several provisions of this proposed 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, traditional
categories of alternative analysis such as different compliance dates,
different enforcement methods, different levels of stringency, as
outlined in section C of OMB's Circular A-4, are not fully relevant
since the provision is already being complied with adequately.
Consequently, alternative analysis is not provided for these
provisions.
1. Contracting Standards for Dual Eligible Special Needs Plan Look-
Alikes (Sec. 422.514)
We are proposing to lower the threshold for D-SNP look-alikes from
80 percent to 60 percent over a 2-year period. We considered an
alternative proposal to lower the D-SNP look-alike threshold to 60
percent in 1 year, allowing an earlier phase-out of these non-SNP MA
plans. But we are proposing the more incremental approach to minimize
disruptions to dually eligible individuals and allow plans and CMS more
time to operationalize these transitions.
We are considering and soliciting comment on an alternative to our
proposal that would eliminate the proposed 70 percent threshold for
plan year 2025 but would involve additional conditions and changes
related to the transition authority. Specifically, this alternative
would--
Apply the 60 percent threshold beginning in plan year
2026;
Permit use of the transition authority into non-SNP MA
plans (as currently permitted under Sec. 422.514(e)) for plan year
2025; and
Limit use of transition authority under Sec. 422.514(e)
to transition D-SNP look-alike enrollees into D-SNPs for plan year 2026
and subsequent plan years.
Relative to our proposal, this alternative would give plans with
dually eligible individual enrollment between 70 and 80 percent of
total enrollment based on January 2024 enrollment data one additional
year to apply for a new D-SNP or service area expansion to an existing
D-SNP, such that these plans could transition enrollees into a D-SNP
for plan year 2026. The alternative would balance the additional year
using the existing 80 percent enrollment threshold to identify
prohibited D-SNP look-alikes with an earlier limitation on the Sec.
422.514(e) transition authority to enrollees transitioning into non-
SNPs. We solicit comment on whether this alternative is a better
balance of the goals of our policy to prohibit circumvention of the
requirements for D-SNPs and to encourage and incentivize enrollment in
integrated care plans.
Among the factors we would consider in adopting the alternative
instead of
[[Page 78612]]
our proposal is the extent to which plans with 70 percent or more
dually eligible enrollment in plan year 2024 expect to be able to
establish a D-SNP in the same service area as the D-SNP look-alike if
given an additional year (that is, 2026) to transition enrollees. Based
on 2023 plan year data, approximately two-thirds of the MA
organizations with non-SNP MA plans with between 70 and 80 percent
dually eligible individuals already have a D-SNP under the same MA
organization with the vast majority of those D-SNPs having a service
area that covers the service area as the non-SNP MA plan. The other
approximately one-third of the MA organizations with non-SNP MA plans
with between 70 and 80 percent dually eligible individuals do not have
a D-SNP in the same service area in plan year 2023. If given an
additional year, these MA organizations would have more time in which
to establish D-SNPs in the same service areas as non-SNP MA plans and
transition the enrollees into a D-SNP.
F. Accounting Statement and Table
As required by OMB Circular A-4 (available at https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/) in Table K-4, we
have prepared an accounting statement showing the costs and transfers
associated with the provisions of this proposed rule for calendar years
2025 through 2034. Table K4 is based on Tables K-5a and Table K5-b
which list savings and costs by provision and year. Tables K4, K5a and
K5b with costs listed as positive numbers and savings listed as
positive numbers. As can be seen, the net annualized savings of this
proposed rule is between $150 and $200 million per year. The net
savings reflect a mixture of several provisions that save and cost.
Minor seeming discrepancies in totals in Tables K4, K5a, and K5b
reflect use of underlying spreadsheets, rather than intermediate
rounded amounts. A breakdown of these costs of this proposed rule by
provision may be found in Tables K5a and K5b.
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The following Tables K5a and K5b summarize costs, and savings by
provision and year, and forms a basis for the accounting Table K4. In
Tables K5a and K5b, costs and savings are expressed as positive numbers
(except in the row with header ``Aggregate savings'' where positive
numbers reflect savings and negative numbers reflect cost). The
provisions increasing enrollment for D-SNPS Part C and Part D--effect
the Medicare Trust Fund. In these rows, positive numbers reflect
reduced dollar spending to the Trust Fund, that is savings. The savings
(and costs) in these tables are true costs and savings reflecting
increases or decreases in consumption of services and goods. Tables K5a
and K5b combine related provisions. For example, all provisions related
to the utilization management committee in the COI summary table are
combined into one-line item in the RIA.
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[[Page 78614]]
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G. Conclusion
In aggregate this proposed rule saves significantly. Two provisions
reduce spending by the Medicare Trust Fund: (1) the effect on Part C
plans from the provisions designed to increase enrollment D-SNPs; and
(2) the effect on Part D plans from these D-SNP provisions. Over a 10-
year period they reduce spending of the Medicare Trust Fund of $28,
$961, and $1,341 million respectively. The provisions for the Drug
Management Program should reduce paperwork burden by $3 million
annually saving $30 million over 10 years. The agent broker provision
is expected to cost $31 million and $310 million over 10 years.
XII. Response to Comments
Because of the large number of public comments that we normally
receive on Federal Register documents, we are not able to acknowledge
or respond to them individually. We will consider all comments we
receive by the date and time specified in the DATES section of this
preamble, and, when we proceed with a subsequent document, we will
respond to the comments in the preamble to that document. 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 October 24, 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, 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.
45 CFR Part 170
Computer technology, Health, Health care, Health insurance, Health
records, Hospitals, Incorporation by reference, Laboratories, Medicaid,
Medicare, Privacy, Public health, Reporting and recordkeeping
requirements, Security measures.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV and the
Department of Health and Human Services proposes to amend 45 CFR part
170 as set forth below:
Title 42
PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL
PLANS, AND HEALTH CARE PREPAYMENT PLANS
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.
Subpart L--Medicare Contract Requirements
0
2. Section 417.472 is amended by adding paragraph (l) to read as
follows:
Sec. 417.472 Basic contract requirements.
* * * * *
(l) Resolution of complaints in the complaints tracking module. The
HMO or CMP must comply with requirements of Sec. Sec. 422.125 and
422.504(a)(15) of this chapter to, through the CMS complaints tracking
module as defined in Sec. 422.125(a), address and resolve complaints
received by CMS against the HMO or CMP within the required timeframes.
References to the MA organization or MA plan in those regulations shall
be read as references to the HMO or CMP.
* * * * *
PART 422--MEDICARE ADVANTAGE PROGRAM
0
3. The authority citation for part 422 is revised to read as follows:
Authority: 42 U.S.C. 1302, 1306, 1395w-21 through 1395w-28, and
1395hh.
0
4. Section 422.2 is amended by revising the definition of ``Basic
benefits'' to read as follows:
Sec. 422.2 Definitions.
* * * * *
Basic benefits means Part A and Part B benefits except--
(1) Hospice services; and
(2) Beginning in 2021, organ acquisitions for kidney transplants,
including costs covered under section 1881(d) of the Act.
* * * * *
0
5. Section 422.52 is amended by:
0
a. Revising paragraph (b)(2);
0
b. Redesignating paragraph (f) as paragraph (f) introductory text; and
0
c. Adding paragraph (f)(1) and reserved paragraph (f)(2).
The revision and additions read as follows:
Sec. 422.52 Eligibility to elect an MA plan for special needs
individuals.
* * * * *
(b) * * *
(2) Meet the eligibility requirements for that specific SNP,
including any additional eligibility requirements established in the
State Medicaid agency contract (as described at Sec. 422.107(a)) for
dual eligible special needs plans; and
* * * * *
(f) * * *
(1) For enrollments into a SNP that exclusively enrolls individuals
that have severe or disabling chronic conditions (C-SNP), the
organization must contact the applicant's current physician to confirm
that the applicant has the qualifying condition(s). The organization
must obtain this information in one of the following two ways described
in paragraph (f)(1)(i) or (ii) of this section:
(i) Contact the physician or physician's office and obtain
verification of the condition(s) prior to enrollment in a form and
manner authorized by CMS from the applicant's primary care provider or
specialist treating the qualifying condition(s).
(ii) Through an assessment with the enrollee using a pre-enrollment
qualification assessment tool (PQAT) where the assessment and the
information gathered are verified (as described in paragraph
(f)(1)(iii) of this section) before the end of the first month of
enrollment in the C-SNP. Use of a PQAT requires the following:
(A) The PQAT must do all of the following in paragraphs
(f)(1)(i)(A)(1) through (4) of this section:
(1) Include clinically appropriate questions relevant to the
chronic condition(s) on which the C-SNP focuses.
(2) Gather sufficient reliable evidence of having the applicable
condition using the applicant's past medical history, current signs or
symptoms, and current medications.
(3) Include the date and time of the assessment completion if done
face-to-
[[Page 78616]]
face with the applicant, or the receipt date if the C-SNP receives the
completed PQAT by mail or by electronic means (if available).
(4) Include a signature line for and be signed by a physician to
confirm the individual's eligibility for C-SNP enrollment.
(B) The C-SNP conducts a post-enrollment confirmation of each
enrollee's information and eligibility using medical information
(medical history, current signs or symptoms, diagnostic testing, and
current medications) provided by the enrollee's primary care physician
or the specialist treating the chronic condition.
(C) The C-SNP must include the information gathered in the PQAT and
used in this verification process in its records related to or about
the enrollee that are subject to the confidentiality requirements in
Sec. 422.118.
(D)(1) The C-SNP tracks the total number of enrollees and the
number and percent by condition whose post-enrollment verification
matches the pre-enrollment assessment.
(2) Data and supporting documentation are made available upon
request by CMS.
(E) If the organization does not obtain verification of the
enrollees' required chronic condition(s) by the end of the first month
of enrollment in the C-SNP, the organization must--
(1) Disenroll the enrollee as of the end of the second month of
enrollment; and
(2) Send the enrollee notice of the disenrollment within the first
7 calendar days of the second month of enrollment.
(F) The organization must maintain the enrollment of the individual
if verification of the required condition(s) is obtained at any point
before the end of the second month of enrollment.
(iii) To complete the PQAT, the C-SNP is required to have the
individual's current physician (primary care physician or specialist
treating the qualifying condition) or a physician employed or
contracted by the plan administer the PQAT directly with the enrollee
or provide confirmation (with or without the presence of the enrollee)
that the information in the document supports a determination that the
individual is eligible for the C-SNP. The enrollee's physician must
sign the completed PQAT.
(2) [Reserved]
0
6. Section 422.60 is amended by revising paragraph (a)(1) and adding
paragraphs (a)(3) and (h) to read as follows:
Sec. 422.60 Election process.
(a) * * *
(1) Except for the limitations on enrollment in an MA MSA plan
provided by Sec. 422.62(d)(1) and except as specified in paragraphs
(a)(2) and (3) of this section, each MA organization must accept
without restriction (except for an MA RFB plan as provided by Sec.
422.57) individuals who are eligible to elect an MA plan that the MA
organization offers and who elect an MA plan during initial coverage
election periods under Sec. 422.62(a)(1), annual election periods
under Sec. 422.62(a)(2), and under the circumstances described in
Sec. 422.62(b)(1) through (4).
* * * * *
(3) Dual eligible special needs plans must limit enrollments to
those individuals who meet the eligibility requirements established in
the State Medicaid agency contract, as specified at Sec. 422.52(b)(2).
* * * * *
(h) Authorized representatives. As used in this subpart, an
authorized representative is an individual who is the legal
representative or otherwise legally able to act on behalf of an
enrollee, as the law of the State in which the beneficiary resides may
allow, in order to execute an enrollment or disenrollment request.
(1) The authorized representative would constitute the
``beneficiary'' or the ``enrollee'' for the purpose of making an
election.
(2) Authorized representatives may include court-appointed legal
guardians, persons having durable power of attorney for health care
decisions, or individuals authorized to make health care decisions
under State surrogate consent laws, provided they have the authority to
act for the beneficiary in this capacity.
0
7. Section 422.62 is amended by revising paragraphs (a)(1)(i) and
(a)(4) to read as follows:
Sec. 422.62 Election of coverage under an MA plan.
(a) * * *
(1) * * *
(i) The last day of the second month after the month in which they
are first entitled to Part A and enrolled in Part B; or
* * * * *
(4) Open enrollment period for institutionalized individuals. After
2005, an individual who is eligible to elect an MA plan and who is
institutionalized, as defined in Sec. 422.2, is not limited (except as
provided for in paragraph (d) of this section for MA MSA plans) in the
number of elections or changes he or she may make.
(i) Subject to the MA plan being open to enrollees as provided
under Sec. 422.60(a)(2), an MA eligible institutionalized individual
may at any time elect an MA plan or change his or her election from an
MA plan to Original Medicare, to a different MA plan, or from Original
Medicare to an MA plan.
(ii) The open enrollment period for institutionalized individuals
ends on the last day of the second month after the month the individual
ceases to reside in one of the long-term care facility settings
described in the definition of ``institutionalized'' in Sec. 422.2.
* * * * *
0
8. Section 422.68 is amended by adding paragraph (g) to read as
follows:
Sec. 422.68 Effective dates of coverage and change of coverage.
* * * * *
(g) Beneficiary choice of effective date. If a beneficiary is
eligible for more than one election period, resulting in more than one
possible effective date, the MA organization must allow the beneficiary
to choose the election period that results in the individual's desired
effective date.
(1) To determine the beneficiary's choice of election period and
effective date, the MA organization must attempt to contact the
beneficiary and must document its attempts.
(2) If the MA organization is unable to obtain the beneficiary's
desired enrollment effective date, the MA organization must assign an
election period using the following ranking of election periods:
(i) ICEP/Part D IEP
(ii) MA-OEP
(iii) SEP
(iv) AEP
(v) OEPI
(3) If the MA organization is unable to obtain the beneficiary's
desired disenrollment effective date, the MA organization must assign
an election period that results in the earliest disenrollment.
0
9. Section 422.100 is amended by adding paragraph (o) to read as
follows:
Sec. 422.100 General requirements.
* * * * *
(o) Cost sharing standards for D-SNP PPOs. Beginning on or after
January 1, 2026, a MA organization offering a local PPO plan or
regional PPO plan that is a dual eligible special needs plan must
establish cost sharing for out-of-network services that--
(1) Complies with the limits described in paragraph (f)(6) of this
section with the exception that references to the MOOP amounts refer to
the total catastrophic limits under Sec. 422.101(d)(3) for local PPOs
and MA regional plans; and
[[Page 78617]]
(2) Complies with the limits described in paragraph (j)(1) of this
section with the exception that references to the MOOP amounts that
refer to the total catastrophic limits under Sec. 422.101(d)(3) for
local PPOs and MA regional plans and, for regional PPO dual eligible
special needs plans, excluding paragraph (j)(1)(i)(C)(2) and the last
sentence of paragraph (j)(1)(i)(E) of this section.
0
10. Section 422.102 is amended by:
0
a. Revising paragraph (f)(1)(i)(A)(2);
0
b. Redesignating paragraph (f)(3) as paragraph (f)(4);
0
c. Adding a new paragraph (f)(3);
0
d. Revising newly redesignated paragraph (f)(4) introductory text and
(f)(4)(iii) and (iv); and
0
e. Adding paragraph (f)(5).
The additions and revision read as follows:
Sec. 422.102 Supplemental benefits.
* * * * *
(f) * * *
(1) * * *
(i) * * *
(A) * * *
(2) Has a high risk of hospitalization or other adverse health
outcomes; and
* * * * *
(3) MA organization responsibilities. An MA organization that
includes an item or service as SSBCI in its bid must be able to
demonstrate through relevant acceptable evidence that the item or
service has a reasonable expectation of improving or maintaining the
health or overall function of a chronically ill enrollee. By the date
on which an MA organization submits its bid, the MA organization must
establish a written bibliography of relevant acceptable evidence
concerning the impact that the item or service has on the health or
overall function of its recipient. For each citation in the written
bibliography, the MA organization must include a working hyperlink to
or a document containing the entire source cited.
(i) Relevant acceptable evidence includes large, randomized
controlled trials or prospective cohort studies with clear results,
published in a peer-reviewed journal, and specifically designed to
investigate whether the item or service impacts the health or overall
function of a population, or large systematic reviews or meta-analyses
summarizing the literature of the same.
(ii) An MA organization must include in its bibliography all
relevant acceptable evidence published within the 10 years prior to the
June immediately preceding the coverage year during which the SSBCI
will be offered.
(iii) If no evidence of the type described in paragraphs (f)(3)(i)
and (ii) of this section exists for a given item or service, then MA
organization may cite case studies, Federal policies or reports,
internal analyses, or any other investigation of the impact that the
item or service has on the health or overall function of its recipient
as relevant acceptable evidence in the MA organization's bibliography.
(iv) The MA organization must make its bibliography of relevant
acceptable evidence available to CMS upon request.
(4) Plan responsibilities. An MA plan offering SSBCI must do all of
the following:
* * * * *
(iii)(A) Have and apply written policies based on objective
criteria for determining a chronically ill enrollee's eligibility to
receive a particular SSBCI; and
(B) Document the written policies specified in paragraph
(f)(4)(iii)(A) of this section and the objective criteria on which the
written policies are based.
(iv) Document each determination that an enrollee is not eligible
to receive an SSBCI and make this information available to CMS upon
request.
(5) CMS review of SSBCI offerings in bids. (i) CMS may decline to
approve an MA organization's bid if CMS determines that the MA
organization has not demonstrated, through relevant acceptable
evidence, that an SSBCI has a reasonable expectation of improving or
maintaining the health or overall function of the chronically ill
enrollees that the MA organization is targeting.
(ii) CMS may annually review the items or services that an MA
organization includes as SSBCI in its bid for compliance with all
applicable requirements, taking into account updates to the relevant
acceptable evidence applicable to each item or service.
(iii) This provision does not limit CMS's authority to review and
negotiate bids or to reject bids under section 1854(a) of the Act and
subpart F of this part nor does it limit CMS's authority to review plan
benefits and bids for compliance with all applicable requirements.
0
11. Section 422.111 is amended by adding paragraph (l) to read as
follows:
Sec. 422.111 Disclosure requirements.
* * * * *
(l) Mid-year notice of unused supplemental benefits. Beginning
January 1, 2026, MA organizations must send notification annually, no
sooner than June 30 and no later than July 31, to each enrollee with
unused supplemental benefits consistent with the requirements of Sec.
422.2267(e)(42).
0
12. Section 422.116 is amended by:
0
a. Adding paragraph (b)(2)(xiv);
0
b. In table 1 to paragraph (d)(2), adding an entry for ``Outpatient
Behavioral Health'' following the entry for ``Orthopedic Surgery'';
0
c. Adding paragraph (d)(5)(xv);
0
d. Revising paragraph (f)(1) introductory text; and
0
e. Adding paragraphs (f)(2)(iv) and (f)(3).
The additions and revisions read as follows:
Sec. 422.116 Network adequacy.
* * * * *
(b) * * *
(2) * * *
(xiv) Outpatient Behavioral Health, which can include Marriage and
Family Therapists (as defined in section 1861(lll) of the Act), Mental
Health Counselors (as defined in section 1861(lll) of the Act), Opioid
Treatment Programs (as defined in section 1861(jjj) of the Act),
Community Mental Health Centers (as defined in section 1861(ff)(3)(B)
of the Act), or those of the following who regularly furnish or will
regularly furnish behavioral health counseling or therapy services
including, but not limited to, psychotherapy or prescription of
medication for substance use disorders: physician assistants, nurse
practitioners and clinical nurse specialists (as defined in section
1861(aa)(5) of the Act); addiction medicine physicians; or outpatient
mental health and substance use treatment facilities.
* * * * *
(d) * * *
(2) * * *
[[Page 78618]]
Table 1 to Paragraph (d)(2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large metro Metro Micro Rural CEAC
-----------------------------------------------------------------------------------------------------------------------
Provider/Facility type Max Max Max Max Max
Max time distance Max time distance Max time distance Max time distance Max time distance
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
Outpatient Behavioral Health.... 20 10 40 25 55 40 60 50 110 100
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * *
(d) * * *
(5) * * *
(xv) Outpatient Behavioral Health, described in paragraph
(b)(2)(xiv) of this section.
* * * * *
(f) * * *
(1) An MA plan may request an exception to network adequacy
criteria in paragraphs (b) through (e) of this section when either
paragraph (f)(1)(i) or (ii) of this section is met:
(i)(A) Certain 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
(B) 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; or
(ii)(A) A facility-based Institutional-Special Needs Plan (I-SNP)
is unable to contract with certain specialty types required under
paragraph (b) of this section because of the way enrollees in facility-
based I-SNPs receive care; or
(B) A facility-based I-SNP provides sufficient and adequate access
to basic benefits through additional telehealth benefits (in compliance
with Sec. 422.135) when using telehealth providers of the specialties
listed in paragraph (d)(5) of this section in place of in-person
providers to fulfill network adequacy standards in paragraphs (b)
through (e) of this section.
(2) * * *
(iv) As applicable, the facility-based I-SNP submits:
(A) Evidence of the inability to contract with certain specialty
types required under this section due to the way enrollees in facility-
based I-SNPs receive care; or
(B) Substantial and credible evidence that sufficient and adequate
access to basic benefits is provided to enrollees using additional
telehealth benefits (in compliance with Sec. 422.135) furnished by
providers of the specialties listed in paragraph (d)(5) of this section
and the facility-based I-SNP covers out-of-network services furnished
by a provider in person when requested by the enrollee as provided in
Sec. 422.135(c)(1) and (2), with in-network cost sharing for the
enrollee.
(3) Any MA organization that receives the exception provided for
facility-based I-SNPs must agree to offer only facility-based I-SNPs
under the MA contract that receives the exception.
0
13. Section 422.125 is added to read as follows:
Sec. 422.125 Resolution of complaints in Complaints Tracking Module.
(a) Definitions. For the purposes of this section, the terms have
the following meanings:
Assignment date is the date CMS assigns a complaint to a particular
MA organization in the Complaints Tracking Module.
Complaints Tracking Module means an electronic system maintained by
CMS to record and track complaints submitted to CMS about Medicare
health and drug plans from beneficiaries and others.
Immediate need complaint means a complaint involving a situation
that prevents a beneficiary from accessing care or a service for which
they have an immediate need. This includes when the beneficiary
currently has enough of the drug or supply to which they are seeking
access to last for 2 or fewer days.
Urgent complaint means a complaint involving a situation that
prevents a beneficiary from accessing care or a service for which they
do not have an immediate need. This includes when the beneficiary
currently has enough of the drug or supply to which they are seeking
access to last for 3 to 14 days.
(b) Timelines for complaint resolution--(1) Immediate need
complaints. The MA organization must resolve immediate need complaints
within 2 calendar days of the assignment date.
(2) Urgent complaints. The MA organization must resolve urgent
complaints within 7 calendar days of the assignment date.
(3) All other complaints. The MA organization must resolve all
other complaints within 30 calendar days of the assignment date.
(c) Timeline for contacting individual filing a complaint.
Regardless of the type of complaint received, the MA organization must
contact the individual who filed a complaint within 3 calendar days of
the assignment date.
0
14. Section 422.137 is amended by adding paragraphs (c)(5) and (d)(6)
and (7) to read as follows:
Sec. 422.137 Medicare Advantage Utilization Management Committee.
* * * * *
(c) * * *
(5) Beginning January 1, 2025, include at least one member with
expertise in health equity. Expertise in health equity includes, but is
not limited to, educational degrees or credentials with an emphasis on
health equity; experience conducting studies identifying disparities
amongst different population groups; experience leading organization-
wide policies, programs, or services to achieve health equity; or
experience leading advocacy efforts to achieve health equity.
(d) * * *
(6) Beginning in 2025, annually conduct a health equity analysis of
the use of prior authorization.
(i) The final report of the analysis must be approved by the member
of the committee with expertise in health equity before it is publicly
posted.
(ii) The analysis must examine the impact of prior authorization on
enrollees with one or more of the following social risk factors:
(A) Receipt of the low-income subsidy or being dually eligible for
Medicare and Medicaid.
(B) Having a disability. Disability status is determined using the
variable original reason for entitlement code (OREC) for Medicare using
the information from the Social Security Administration and Railroad
Retirement Board record systems.
(iii) The analysis must use the following metrics, calculated for
enrollees with the specified social risk factors and enrollees without
the
[[Page 78619]]
specified social risk factors, to conduct the analysis at the plan
level using data from the prior contract year:
(A) The percentage of standard prior authorization requests that
were approved, aggregated for all items and services.
(B) The percentage of standard prior authorization requests that
were denied, aggregated for all items and services.
(C) The percentage of standard prior authorization requests that
were approved after appeal, aggregated for all items and services.
(D) The percentage of prior authorization requests for which the
timeframe for review was extended, and the request was approved,
aggregated for all items and services.
(E) The percentage of expedited prior authorization requests that
were approved, aggregated for all items and services.
(F) The percentage of expedited prior authorization requests that
were denied, aggregated for all items and services.
(G) The average and median time that elapsed between the submission
of a request and a determination by the MA plan, for standard prior
authorizations, aggregated for all items and services.
(H) The average and median time that elapsed between the submission
of a request and a decision by the MA plan for expedited prior
authorizations, aggregated for all items and services.
(7) By July 1, 2025, and annually thereafter, publicly post the
results of the health equity analysis of the utilization management
policies and procedures on the plan's website meeting the following
requirements:
(i) In a prominent manner and clearly identified in the footer of
the website.
(ii) Easily accessible to the general public, without barriers,
including but not limited to ensuring the information is accessible:
(A) Free of charge.
(B) Without having to establish a user account or password.
(C) Without having to submit personal identifying information.
(iii) In a machine-readable format with the data contained within
that file being digitally searchable and downloadable.
(iv) Include a .txt file in the root directory of the website
domain that includes a direct link to the machine-readable file to
establish and maintain automated access.
0
15. Section 422.164 is amended by:
0
a. Revising paragraphs (g)(1)(iii) introductory text and
(g)(1)(iii)(A);
0
b. Removing and reserving paragraphs (g)(1)(iii)(B) and (F);
0
c. Revising paragraph (g)(1)(iii)(H);
0
d. Removing and reserving paragraphs (g)(1)(iii)(I) and (J);
0
e. Revising paragraphs (g)(1)(iii)(K)(2) and (g)(1)(iii)(O); and
0
f. Adding paragraph (h)(3).
The revisions and addition read as follows:
Sec. 422.164 Adding, updating, and removing measures.
* * * * *
(g) * * *
(1) * * *
(iii) For the appeals measures, CMS uses statistical criteria to
estimate the percentage of missing data for each contract using data
from MA organizations, the independent review entity (IRE), or CMS
administrative sources to determine whether the data at the IRE are
complete. CMS uses scaled reductions for the Star Ratings for the
applicable appeals measures to account for the degree to which the IRE
data are missing.
(A)(1) The data reported by the MA organization on appeals,
including the number of reconsiderations requested, denied, upheld,
dismissed, or otherwise disposed of by the MA organization, and data
from the IRE or CMS administrative sources, that align with the Star
Ratings year measurement period are used to determine the scaled
reduction.
(2) If there is a contract consolidation as described at Sec.
422.162(b)(3), the data described in paragraph (g)(1)(iii)(A)(1) of
this section are combined for the consumed and surviving contracts
before the methodology provided in paragraphs (g)(1)(iii)(B) through
(H) and (K) through (O) of this section is applied.
* * * * *
(H) The Part C calculated error is determined using 1 minus the
quotient of the total number of cases received by the IRE and the total
number of cases that should have been forwarded to the IRE. The total
number of cases that should have been forwarded to the IRE is
determined by the sum of the partially favorable (adverse)
reconsiderations and unfavorable (adverse) reconsiderations for the
applicable measurement year.
* * * * *
(K) * * *
(2) The number of cases not forwarded to the IRE is at least 10 for
the measurement year.
* * * * *
(O) CMS reduces the measure rating to 1 star for the applicable
appeals measure(s) if CMS does not have accurate, complete, and
unbiased data to validate the completeness of the Part C appeals
measures.
* * * * *
(h) * * *
(3) Beginning with the 2025 measurement year (2027 Star Ratings),
an MA organization may request that CMS review its contract's
administrative data for Patient Safety measures provided that the
request is received by the annual deadline set by CMS for the
applicable Star Ratings year.
* * * * *
0
16. Section 422.166 is amended by revising paragraph (f)(2)(i)(B) and
adding paragraphs (f)(3)(viii)(A) and (B) to read as follows:
Sec. 422.166 Calculation of Star Ratings.
* * * * *
(f) * * *
(2) * * *
(i) * * *
(B) To determine a contract's final adjustment category, contract
enrollment is determined using enrollment data for the month of
December for the measurement period of the Star Ratings year.
(1) For the first 2 years following a consolidation, for the
surviving contract of a contract consolidation involving two or more
contracts for health or drug services of the same plan type under the
same parent organization, the enrollment data for the month of December
for the measurement period of the Star Ratings year are combined across
the surviving and consumed contracts in the consolidation.
(2) The count of beneficiaries for a contract is restricted to
beneficiaries that are alive for part or all of the month of December
of the applicable measurement year.
(3) A beneficiary is categorized as LIS/DE if the beneficiary was
designated as full or partially dually eligible or receiving a LIS at
any time during the applicable measurement period.
(4) Disability status is determined using the variable original
reason for entitlement (OREC) for Medicare using the information from
the Social Security Administration and Railroad Retirement Board record
systems.
* * * * *
(3) * * *
(viii) * * *
(A) In the case of contract consolidations involving two or more
contracts for health or drug services of the same plan type under the
same parent organization, CMS calculates the HEI reward for the
surviving contract accounting for both the surviving and consumed
contract(s). For the first year following a consolidation, the HEI
reward for the surviving contract is calculated as the enrollment-
weighted mean of the HEI reward of the consumed and surviving contracts
using
[[Page 78620]]
enrollment from July of the most recent measurement year used in
calculating the HEI reward. A reward value of zero is used in
calculating the enrollment-weighted mean for contracts that do not meet
the minimum percentage of enrollees with the SRF thresholds or the
minimum performance threshold specified at paragraph (f)(3)(vii) of
this section.
(B) For the second year following a consolidation when calculating
the HEI score for the surviving contract, the patient-level data used
in calculating the HEI score will be combined from the consumed and
surviving contracts and used in calculating the HEI score.
* * * * *
0
17. Section 422.260 is amended by revising paragraph (c)(2)(vii) to
read as follows:
Sec. 422.260 Appeals of quality bonus payment determinations.
* * * * *
(c) * * *
(2) * * *
(vii) After the hearing officer's decision is issued to the MA
organization and the CMS Administrator, the hearing officer's decision
is subject to review and modification by the CMS Administrator within
10 business days of issuance. If the Administrator does not review and
issue a decision within 10 business days, the hearing officer's
decision is final and binding.
* * * * *
0
18. Section 422.310 is amended by:
0
a. Revising paragraphs (f)(1)(vi) and (vii);
0
b. Adding reserved paragraph (f)(3)(iv); and
0
c. Adding paragraph (f)(3)(v).
The revisions and addition read as follows:
Sec. 422.310 Risk adjustment data.
* * * * *
(f) * * *
(1) * * *
(vi) To conduct evaluations and other analysis to support the
Medicare and Medicaid programs (including demonstrations) and to
support public health initiatives and other health care-related
research;
(vii) For activities to support the administration of the Medicare
and Medicaid programs;
* * * * *
(3) * * *
(iv) [Reserved]
(v) CMS determines that releasing data to State Medicaid agencies
before reconciliation for the purpose of coordinating care for dually
eligible individuals is necessary and appropriate to support activities
or authorized uses under paragraph (f)(1)(vii) of this section.
* * * * *
0
19. Section 422.311 is amended by:
0
a. Revising paragraphs (a) and (c)(5)(ii)(B);
0
b. Removing paragraph (c)(5)(ii)(C);
0
c. Revising paragraph (c)(5)(iii);
0
d. Adding paragraph (c)(5)(iv);
0
e. Revising paragraphs (c)(6)(i)(A) and (c)(6)(iv)(B);
0
f. Adding paragraph (c)(6)(v);
0
g. Revising paragraph (c)(7)(ix);
0
h. Revising paragraphs (c)(8)(iii), (c)(8)(iv) introductory text,
(c)(8)(iv)(A), and (c)(8)(vi); and
0
i. Adding paragraphs (c)(8)(vii) and (c)(9).
The revisions and additions read as follows:
Sec. 422.311 RADV audit dispute and appeal processes.
(a) Risk adjustment data validation (RADV) audits. In accordance
with Sec. Sec. 422.2 and 422.310(e), the Secretary conducts RADV
audits to ensure risk-adjusted payment integrity and accuracy.
(1) Recovery of improper payments from MA organizations is
conducted in accordance with the Secretary's payment error
extrapolation and recovery methodologies.
(2) CMS may apply extrapolation to audits for payment year 2018 and
subsequent payment years.
* * * * *
(c) * * *
(5) * * *
(ii) * * *
(B) Whether the MA organization requests a payment error
calculation appeal, the issues with which the MA organization
disagrees, and the reasons for the disagreements. MA organizations will
forgo their medical record review determination appeal if they choose
to file only a payment error calculation appeal because medical record
review determinations need to be final prior to adjudicating a payment
error calculation appeal.
(iii) For MA organizations that intend to appeal both the medical
record review determination and the RADV payment error calculation, an
MA organization's request for appeal of its RADV payment error
calculation may not be filed and will not be adjudicated until:
(A) The administrative appeal process for the RADV medical record
review determinations filed by the MA organization has been exhausted;
or
(B) The MA organization does not timely request a RADV medical
record review determination appeal at the hearing stage and/or the CMS
Administrator review stage, as applicable.
(iv) An MA organization whose medical record review determination
appeal has been completed as described in paragraph (c)(5)(iii) of this
section has 60 days from the date of issuance of a revised RADV audit
report, based on the final medical record review determination, to file
a written request with CMS for a RADV payment error calculation appeal.
This request for RADV payment error calculation appeal must clearly
specify where the Secretary's RADV payment error calculation was
erroneous, what the MA organization disagrees with, and the reasons for
the disagreements.
(6) * * *
(i) * * *
(A) Any and all HCC(s) that the Secretary identified as being in
error that the MA organization wishes to appeal.
* * * * *
(iv) * * *
(B) The reconsideration official's decision is final unless it is
reversed or modified by a final decision of the hearing officer as
defined at paragraph (c)(7)(x) of this section.
* * * * *
(v) Computations based on reconsideration official's decision. (A)
Once the reconsideration official's medical record review determination
decision is considered final in accordance with paragraph (c)(6)(iv)(B)
of this section, the Secretary recalculates the MA organization's RADV
payment error and issues a revised RADV audit report superseding all
prior RADV audit reports to the appellant MA organization.
(B) For MA organizations appealing the RADV payment error
calculation only, once the reconsideration official's payment error
calculation decision is considered final in accordance with paragraph
(c)(6)(iv)(B) of this section, the Secretary recalculates the MA
organization's RADV payment error and issues a revised RADV audit
report superseding all prior RADV audit reports to the appellant MA
organization.
* * * * *
(7) * * *
(ix) Computations based on Hearing Officer's decision. (A) Once the
hearing officer's medical record review determination decision is
considered final in accordance with paragraph (c)(7)(x) of this
section, the Secretary recalculates the MA organization's RADV payment
error and issues a revised RADV audit report superseding
[[Page 78621]]
all prior RADV audit reports to the appellant MA organization.
(B) For MA organizations appealing the RADV payment error
calculation only, once the hearing officer's payment error calculation
decision is considered final in accordance with paragraph (c)(7)(x) of
this section, the Secretary recalculates the MA organization's RADV
payment error and issues a revised RADV audit report superseding all
prior RADV audit reports to the appellant MA organization.
* * * * *
(8) * * *
(iii) After reviewing a request for review, the CMS Administrator
has the discretion to elect to review the hearing officer's decision or
to decline to review the hearing officer's decision. If the CMS
Administrator does not decline to review or does not elect to review
within 90 days of receipt of either the MA organization or CMS's timely
request for review (whichever is later), the hearing officer's decision
becomes final.
(iv) If the CMS Administrator elects to review the hearing
decision--
(A) The CMS Administrator acknowledges the decision to review the
hearing decision in writing and notifies CMS and the MA organization of
their right to submit comments within 15 days of the date of the
issuance of the notification that the Administrator has elected to
review the hearing decision; and
* * * * *
(v) The CMS Administrator renders his or her final decision in
writing within 60 days of the date of the issuance of the notice
acknowledging his or her decision to elect to review the hearing
officer's decision.
(vi) The decision of the hearing officer is final if the CMS
Administrator--
(A) Declines to review the hearing officer's decision; or
(B) Does not decline to review or elect to review within 90 days of
the date of the receipt of either the MA organization or CMS 's request
for review (whichever is later); or
(C) Does not make a decision within 60 days of the date of the
issuance of the notice acknowledging his or her decision to elect to
review the hearing officer's decision.
* * * * *
(vii) Computations based on CMS Administrator decision. (A) Once
the CMS Administrator's medical record review determination decision is
considered final in accordance with paragraph (c)(8)(vi) of this
section, the Secretary recalculates the MA organization's RADV payment
error and issues a revised RADV audit report superseding all prior RADV
audit reports to the appellant MA organization.
(B) For MA organizations appealing the RADV payment error
calculation only, once the CMS Administrator's payment error
calculation decision is considered final in accordance with paragraph
(c)(8)(vi) of this section, the Secretary recalculates the MA
organization's RADV payment error and issues a revised and final RADV
audit report superseding all prior RADV audit reports to the appellant
MA organization.
(9) Final agency action. In cases when an MA organization files a
payment error calculation appeal subsequent to a medical record review
determination appeal that has completed the administrative appeals
process, the medical record review determination appeal final decision
and the payment error calculation appeal final decision will not be
considered a final agency action until the payment error calculation
appeal has completed the administrative appeals process and a final
revised audit report superseding all prior RADV audit reports has been
issued to the appellant MA organization.
0
20. Section 422.502 is amended by:
0
a. Revising paragraphs (b)(1)(i)(A) through (C); and
0
b. Removing paragraphs (b)(1)(i)(E)(2)(A) and (B).
The revisions read as follows.
Sec. 422.502 Evaluation and determination procedures.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(A) Was under intermediate sanction under subpart O of this part or
a determination by CMS to prohibit the enrollment of new enrollees in
accordance with Sec. 422.2410(c), with the exception of a sanction
imposed under Sec. 422.752(d).
(B) Failed to maintain a fiscally sound operation consistent with
the requirements of Sec. 422.504(a)(14).
(C) Filed for or is currently in Federal or State bankruptcy
proceedings.
* * * * *
0
21. Section 422.503 is amended by adding paragraph (b)(8) to read as
follows:
Sec. 422.503 General provisions.
* * * * *
(b) * * *
(8) Not newly offer a dual eligible special needs plan that would
result in noncompliance with Sec. 422.514(h).
* * * * *
0
22. Section 422.504 is amended by revising paragraph (a)(15) and adding
paragraphs (a)(20) and (21) to read as follows.
Sec. 422.504 Contract provisions.
* * * * *
(a) * * *
(15) As described in Sec. 422.125, address and resolve complaints
received by CMS against the MA organization in the Complaints Tracking
Module.
* * * * *
(20) To comply with the requirements established in Sec.
422.514(h).
(21) Not to establish additional MA plans that are not facility-
based ISNPs to contracts described in Sec. 422.116(f)(3).
* * * * *
0
23. Section 422.510 is amended by adding paragraph (e) to read as
follows:
Sec. 422.510 Termination of contract by CMS.
* * * * *
(e) Intermediate sanctions imposed with CMS termination. If CMS
makes a determination to terminate a MA organization's contract under
paragraph (a) of this section, CMS also imposes the intermediate
sanctions at Sec. 422.750(a)(1) and (3) in accordance with the
following procedures:
(1) The sanction goes into effect 15 days after the termination
notice is sent.
(2) The MA organization has a right to appeal the intermediate
sanction in the same proceeding as the termination appeal specified in
paragraph (d) of this section.
(3) A request for a hearing does not delay the date specified by
CMS when the sanction becomes effective.
(4) The sanction remains in effect--
(i) Until the effective date of the termination; or
(ii) If the termination decision is overturned on appeal, when a
final decision is made by the hearing officer or Administrator.
0
24. Section 422.514 is amended by:
0
a. Revising paragraphs (d)(1) introductory text, (d)(1)(ii), (d)(2)
introductory text, and (d)(2)(ii);
0
b. In paragraph (e)(1)(i), removing the phrase ``Specialized MA Plan
for Special Needs Individuals'' and adding in its place the phrase
``specialized MA plan for special needs individuals'';
0
c. In paragraph (e)(1)(iii), removing the phrase ``chapter; and'' and
adding in its place ``chapter;'';
0
d. In paragraph (e)(1)(iv), removing the phrase ``of this section.''
and adding in its place ``of this section; and''; and
0
e. Adding paragraphs (e)(1)(v) and (h).
The revisions and additions read as follows:
Sec. 422.514 Enrollment requirements.
* * * * *
[[Page 78622]]
(d) * * *
(1) Enter into or renew a contract under this subpart for a MA plan
that--
* * * * *
(ii) Projects enrollment in its bid submitted under Sec. 422.254
in which enrollees entitled to medical assistance under a State plan
under title XIX constitute a percentage of the plan's total enrollment
that meets or exceeds one of the following:
(A) For plan year 2024, 80 percent.
(B) For plan year 2025, 70 percent.
(C) For plan year 2026 and subsequent years, 60 percent.
(2) Renew a contract under this subpart for an MA plan that--
* * * * *
(ii) 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, has actual enrollment, as determined by CMS using the
January enrollment of the current year in which enrollees who are
entitled to medical assistance under a State plan under title XIX,
constitute a percentage of the plan's total enrollment that meets or
exceeds one of the following:
(A) For renewals for plan year 2024, 80 percent.
(B) For renewals for plan year 2025, 70 percent.
(C) For renewals for plan year 2026 and subsequent years, 60
percent.
(e) * * *
(1) * * *
(v) For transitions for plan year 2027 and subsequent years, is a
dual eligible special needs plan as defined in Sec. 422.2.
* * * * *
(h) Rule on dual eligible special needs plans in relation to
Medicaid managed care. (1) Beginning in 2027, where an MA organization
offers a dual eligible special needs plan and the MA organization, its
parent organization, or any entity that shares a parent organization
with the MA organization also contracts with a State as a Medicaid
managed care organization (MCO) (as defined in Sec. 438.2 of this
chapter) that enrolls dually eligible individuals as defined in Sec.
423.772 of this chapter, during the effective dates and in the same
service area (even if there is only partial overlap of the service
areas) of that Medicaid MCO contract, the MA organization--
(i) May only offer, or have a parent organization or share a parent
organization with another MA organization that offers, one D-SNP for
full-benefit dually eligible individuals, except as permitted in
paragraph (h)(3) of this section; and
(ii) Must limit new enrollment in the D-SNP to individuals enrolled
in, or in the process of enrolling in, the Medicaid MCO.
(2) Beginning in 2030, such D-SNPs may only enroll (or continue to
enroll) individuals enrolled in (or in the process of enrolling in) the
Medicaid MCO, except that such D-SNPs may continue to implement deemed
continued eligibility requirements as described in Sec. 422.52(d).
(3)(i) If a State Medicaid agency's contract with the MA
organization limits enrollment for certain groups into D-SNPs (such as
by age group or other criteria), the MA organization, its parent
organization or an entity that shares a parent organization with the MA
organization may offer one or more additional D-SNPs for full-benefit
dually eligible individuals in the same service area in accordance with
the group (or groups) eligible for D-SNPs based on provisions of the
contract with the State Medicaid agency under Sec. 422.107 of this
chapter.
(ii) If the MA organization, its parent organization or an entity
that shares a parent organization with the MA organization offers more
than one D-SNP of any type (HMOs and/or PPOs), and one or more of the
plans is subject to paragraph (h)(1) of this section, the plan (or
plans) not subject to paragraph (h)(1) of this section may continue if
they no longer accept new enrollment of full-benefit dually eligible
individuals in the same service area as the plan (or plans) subject to
paragraph (h)(1) of this section.
0
25. Section 422.516 is amended by revising paragraphs (a) introductory
text and (a)(2) to read as follows:
Sec. 422.516 Validation of Part C reporting requirements.
(a) Required information. Each MA organization must have an
effective procedure to develop, compile, evaluate, and report to CMS,
to its enrollees, and to the general public, at the times and in the
manner that CMS requires, and while safeguarding the confidentiality of
the doctor-patient relationship, information with respect to the
following:
* * * * *
(2) The procedures related to and utilization of its services and
items.
* * * * *
0
26. Section 422.530 is amended by adding paragraph (c)(4)(iii) to read
as follows:
Sec. 422.530 Plan crosswalks.
* * * * *
(c) * * *
(4) * * *
(iii) For contract year 2027 and subsequent years, where one or
more MA organizations that share a parent organization seek to
consolidate D-SNPs in the same service area down to a single D-SNP
under one MA-PD contract to comply with requirements at Sec. Sec.
422.514(h) and 422.504(a)(20), CMS permits enrollees to be moved
between different contracts.
* * * * *
0
27. Section 422.582 is amended by revising paragraph (b) to read as
follows:
Sec. 422.582 Request for a standard reconsideration.
* * * * *
(b) Timeframe for filing a request. Except as provided in paragraph
(c) of this section, a request for reconsideration must be filed within
60 calendar days after receipt of the written organization
determination notice.
(1) The date of receipt of the organization determination is
presumed to be 5 calendar days after the date of the written
organization determination, unless there is evidence to the contrary.
(2) For purposes of meeting the 60-calendar day filing deadline,
the request is considered as filed on the date it is received by the
plan or delegated entity specified in the MA organization's written
organization determination.
* * * * *
0
27. Section 422.584 is amended by revising the paragraph (b) heading
and adding paragraphs (b) introductory text and (b)(3) and (4) to read
as follows:
Sec. 422.584 Expediting certain reconsiderations.
* * * * *
(b) Procedure and timeframe for filing a request. A request for
reconsideration must be filed within 60 calendar days after receipt of
the written organization determination notice.
* * * * *
(3) The date of receipt of the organization determination is
presumed to be 5 calendar days after the date of the written
organization determination, unless there is evidence to the contrary.
(4) For purposes of meeting the 60-calendar day filing deadline,
the request is considered as filed on the date it is received by the
plan or delegated entity specified in the MA organization's written
organization determination.
* * * * *
0
28. Section 422.626 is amended by:
0
a. Revising paragraph (a)(2); and
0
b. Removing paragraph (a)(3).
The revision reads as follows:
Sec. 422.626 Fast-track appeals of service terminations to
independent review entities (IREs).
(a) * * *
(2) If an enrollee makes an untimely request to an IRE, the IRE
accepts the
[[Page 78623]]
request and makes a determination as soon as possible, but the
timeframe under paragraph (d)(5) of this section and the financial
liability protection under paragraph (b) of this section do not apply.
* * * * *
0
29. Section 422.633 is amended by revising paragraph (d)(1) to read as
follows:
Sec. 422.633 Integrated reconsiderations.
* * * * *
(d) * * *
(1) Timeframe for filing. An enrollee has 60 calendar days after
receipt of the adverse organization determination notice to file a
request for an integrated reconsideration with the applicable
integrated plan.
(i) The date of receipt of the adverse organization determination
is presumed to be 5 calendar days after the date of the integrated
organization determination notice, unless there is evidence to the
contrary.
(ii) For purposes of meeting the 60-calendar day filing deadline,
the request is considered as filed on the date it is received by the
applicable integrated plan.
* * * * *
0
30. Section 422.2267 is amended by:
0
a. Revising paragraph (e)(31) and paragraph (e)(34) introductory text;
0
b. Redesignating paragraph (e)(34)(iii) as paragraph (e)(34)(v);
0
c. Redesignating paragraph (e)(34)(ii) as paragraph (e)(34)(iii);
0
d. Adding a new paragraph (e)(34)(ii);
0
e. Revising newly redesignated paragraph (e)(34)(iii);
0
f. Adding paragraph (e)(34)(iv);
0
g. Revising newly redesignated paragraph (e)(34)(v); and
0
h. Adding paragraph (e)(42).
The revisions and additions read as follows:
Sec. 422.2267 Required materials and content.
* * * * *
(e) * * *
(31) Notice of availability of language assistance services and
auxiliary aids and services (notice of availability). This is a model
communications material through which MA organizations must provide a
notice of availability of language assistance services and auxiliary
aids and services that, at a minimum, states that the MA organization
provides language assistance services and appropriate auxiliary aids
and services free of charge.
(i) This notice of availability of language assistance services and
auxiliary aids and services must be provided in English and at least
the 15 languages most commonly spoken by individuals with limited
English proficiency of the relevant State and must be provided in
alternate formats for individuals with disabilities who require
auxiliary aids and services to ensure effective communication.
(ii) If there are additional languages in a particular service area
that meet the 5-percent service area threshold, described in paragraph
(a)(2) of this section, beyond the languages described in paragraph
(e)(31)(i) of this section, the notice of availability of language
assistance services and auxiliary aids and services must also be
translated into those languages. MA organizations may also opt to
translate the notice in any additional languages that do not meet the
5-percent service area threshold, where the MA organization determines
that this inclusion would be appropriate.
(iii) The notice must be provided with all required materials under
this paragraph (e).
(iv) The notice may be included as a part of the required material
or as a standalone material in conjunction with the required material.
(v) When used as a standalone material, the notice may include
organization name and logo.
(vi) When mailing multiple required materials together, only one
notice is required.
(vii) The notice may be provided electronically when a required
material is provided electronically as permitted under paragraph (d)(2)
of this section.
* * * * *
(34) SSBCI disclaimer. This is model content and must be used by MA
organizations that offer CMS-approved SSBCI as specified in Sec.
422.102(f). In the SSBCI disclaimer, MA organizations must include the
information required in paragraphs (e)(34)(i) through (iii) of this
section. MA organizations must--
* * * * *
(ii) List the chronic condition(s) the enrollee must have to be
eligible for the SSBCI offered by the MA organization.
(A) If the number of condition(s) is five or fewer, then list all
condition(s).
(B) If the number of conditions is more than five, then list the
top five conditions, as determined by the MA organization.
(iii) Convey that even if the enrollee has a listed chronic
condition, the enrollee will not necessarily receive the benefit
because coverage of the item or service depends on the enrollee being a
``chronically ill enrollee'' as defined in Sec. 422.102(f)(1)(i)(A)
and on the MA organization's coverage criteria for a specific SSBCI
item or service required by Sec. 422.102(f)(4).
(iv) Meet the following requirements for the SSBCI disclaimer in
ads:
(A) For television, online, social media, radio, or other voice-
based ads, either read the disclaimer at the same pace as or display
the disclaimer in the same font size as the advertised phone number or
other contact information.
(B) For outdoor advertising (as defined in Sec. 422.2260), display
the disclaimer in the same font size as the advertised phone number or
other contact information.
(v) Include the SSBCI disclaimer in all marketing and
communications materials that mention SSBCI.
* * * * *
(42) Mid-year supplemental benefits notice. This is a model
communications material through which plans must inform each enrollee
of the availability of any supplemental benefit the enrollee has not
begun to use by June 30 of the plan year.
(i) The notice must be sent on an annual basis, no earlier than
June 30 of the plan year, and no later than July 31 of the plan year.
(ii) The notice must include the following content:
(A) Mandatory supplemental benefits. For each mandatory
supplemental benefit an enrollee has not used, the MA organization must
include the same information about the benefit that is provided in the
Evidence of Coverage.
(B) Optional supplemental benefits. For each optional supplemental
benefit an enrollee has not used, the MA organization must include the
same information about the benefit that is provided in the Evidence of
Coverage.
(C) SSBCI. For plans that include SSBCI--
(1) The MA organization must include an explanation of SSBCI
available under the plan (including eligibility criteria and
limitations and scope of the covered items and services) and must
include point-of-contact information for eligibility assessments,
including providing point-of-contact information (which can be the
customer service line or a separate dedicated line), with trained staff
that enrollees can contact to inquire about or begin the SSBCI
eligibility determination process and to address any other questions
the enrollee may have about the availability of SSBCI under their plan;
(2) When an enrollee has been determined eligible for SSBCI but has
not used SSBCI, the MA organization must include a description of the
unused SSBCI for which the enrollee is eligible, and must include a
description of any limitations on the benefit; and
[[Page 78624]]
(3) The disclaimer specified at paragraph (e)(34) of this section.
(D) Additional notice information. The information about all
supplemental benefits listed in the notice must include all of the
following:
(1) Scope of benefit.
(2) Applicable cost-sharing.
(3) Instructions on how to access the benefit.
(4) Any applicable network information.
(5) Supplemental benefits listed consistent with the format of the
EOC.
(6) A customer service number, and required TTY number, to call for
additional help.
0
31. Section 422.2274 is amended by:
0
a. In paragraph (a)--
0
i. Revising paragraph (i) of the definition of ``Compensation''; and
0
ii. Revising the definition of ``Fair market value (FMV)''; and
0
b. Revising paragraphs (c)(5), (d)(1)(ii), (d)(2) introductory text,
(d)(3) introductory text, and (e)(1) and (2).
The revisions read as follows:
Sec. 422.2274 Agent, broker, and other third-party requirements.
* * * * *
(a) * * *
Compensation. (i) Includes monetary or non-monetary remuneration of
any kind relating to the sale, renewal, or services related to a plan
or product offered by an MA organization including, but not limited to
the following:
(A) Commissions.
(B) Bonuses.
(C) Gifts.
(D) Prizes or Awards.
(E) Payment of fees to comply with State appointment laws,
training, certification, and testing costs.
(F) Reimbursement for mileage to, and from, appointments with
beneficiaries.
(G) Reimbursement for actual costs associated with beneficiary
sales appointments such as venue rent, snacks, and materials.
(H) Any other payments made to an agent or broker that are tied to
enrollment, related to an enrollment in an MA plan or product, or for
services conducted as a part of the relationship associated with the
enrollment into an MA plan or product.
* * * * *
Fair market value (FMV) means, for purposes of evaluating agent or
broker compensation under the requirements of this section only, the
amount that CMS determines could reasonably be expected to be paid for
an enrollment or continued enrollment into an MA plan.
(i) Beginning January 1, 2021, the national FMV is $539, the FMV
for Connecticut, Pennsylvania, and the District of Columbia is $607,
the FMV for California and New Jersey is $672, and the FMV for Puerto
Rico and the U.S. Virgin Islands is $370.
(ii) Beginning in 2025, the FMV will be increased to account for
administrative payments included under the compensation rate, beginning
at $31 and updated annually in compliance with this section.
(iii) For subsequent years, FMV is calculated by adding the current
year FMV and the produce of the current year FMV and MA growth
percentage for aged and disabled beneficiaries, which is published for
each year in the rate announcement issued in accordance with Sec.
422.312.
* * * * *
(c) * * *
(5) Ensure that no provision of a contract with an agent, broker,
or other TPMO has a direct or indirect effect of creating an incentive
that would reasonably be expected to inhibit an agent or broker's
ability to objectively assess and recommend which plan best fits the
health care needs of a beneficiary.
* * * * *
(d) * * *
(1) * * *
(ii) MA organizations are limited to the compensation amounts
outlined in this section.
(2) Initial enrollment year compensation. For each enrollment in an
initial enrollment year, MA organizations may pay compensation at FMV.
* * * * *
(3) Renewal compensation. For each enrollment in a renewal year, MA
plans may pay compensation at a rate of 50 percent of FMV.
* * * * *
(e) * * *
(1) For plan years through 2024, Payments for services other than
enrollment of beneficiaries (for example, training, customer service,
agent recruitment, operational overhead, or assistance with completion
of health risk assessments) must not exceed the value of those services
in the marketplace.
(2) Beginning in 2025, administrative payments are included in the
calculation of enrollment-based compensation.
* * * * *
PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT
0
32. 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
33. Section 423.4 is amended by adding definitions for ``Biosimilar
biological product'' and ``Interchangeable biological product'' in
alphabetical order to read as follows:
Sec. 423.4 Definitions.
* * * * *
Biosimilar biological product means a biological product licensed
under section 351(k) of the Public Health Service Act (42 U.S.C.
262(k)) that, in accordance with section 351(i)(2) of the Public Health
Service Act (42 U.S.C. 262(i)(2)), is highly similar to the reference
product, notwithstanding minor differences in clinically inactive
components, and has no clinically meaningful differences between the
biological product and the reference product, in terms of the safety,
purity, and potency of the product.
* * * * *
Interchangeable biological product means a product licensed under
section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)) that
FDA has determined meets the standards described in section 351(k)(4)
of the Public Health Service Act (42 U.S.C. 262(k)(4)).
* * * * *
0
34. Section 423.32 is amended by adding paragraph (h) to read as
follows:
Sec. 423.32 Enrollment process.
* * * * *
(h) Authorized representatives. As used in this subpart, an
authorized representative is an individual who is the legal
representative or otherwise legally able to act on behalf of an
enrollee, as the law of the State in which the beneficiary resides may
allow, in order to execute an enrollment or disenrollment request.
(1) The authorized representative would constitute the
``beneficiary'' or the ``enrollee'' for the purpose of making an
election.
(2) Authorized representatives may include court-appointed legal
guardians, persons having durable power of attorney for health care
decisions, or individuals authorized to make health care decisions
under State surrogate consent laws, provided they have the authority to
act for the beneficiary in this capacity.
0
34. Section 423.38 is amended by:
0
a. Revising paragraph (c)(4)(i);
0
b. Redesignating paragraph (c)(35) as paragraph (c)(36); and
0
c. Adding new paragraph (c)(35).
The revision and addition read as follows:
[[Page 78625]]
Sec. 423.38 Enrollment periods.
* * * * *
(c) * * *
(4) * * *
(i) Except as provided in paragraph (c)(4)(ii) of this section, the
individual is a full-subsidy eligible individual or other subsidy-
eligible individual as defined in Sec. 423.772, who is making a one-
time-per month election into a PDP.
* * * * *
(35) The individual is making a one-time-per month election into a
fully integrated dual eligible special needs plan as defined in Sec.
422.2 of this chapter, a highly integrated dual eligible special needs
plan as defined in Sec. 422.2, or an applicable integrated plan as
defined in Sec. 422.561 of this chapter.
* * * * *
0
35. Section 423.40 is amended by adding paragraph (f) to read as
follows:
Sec. 423.40 Effective dates.
* * * * *
(f) Beneficiary choice of effective date. If a beneficiary is
eligible for more than one election period, resulting in more than one
possible effective date, the Part D plan sponsor must allow the
beneficiary to choose the election period that results in the
individual's desired effective date.
(1) To determine the beneficiary's choice of election period and
effective date, the Part D plan sponsor must attempt to contact the
beneficiary and must document its attempts.
(2) If the Part D plan sponsor is unable to obtain the
beneficiary's desired enrollment effective date, the Part D plan
sponsor must assign an election period using the following ranking of
election periods:
(i) ICEP/Part D IEP.
(ii) MA-OEP.
(iii) SEP.
(iv) AEP.
(v) OEPI.
(3) If the Part D plan sponsor is unable to obtain the
beneficiary's desired disenrollment effective date, the Part D plan
sponsor must assign an election period that results in the earliest
disenrollment.
0
36. Section 423.100 is amended by:
0
a. Adding in alphabetical order a definition for ``Corresponding
drug'';
0
b. Revising paragraph (3) of the definition of ``Exempted
beneficiary''; and
0
c Adding in alphabetical order a definition for ``Maintenance change''.
The additions and revision read as follows:
Sec. 423.100 Definitions.
* * * * *
Corresponding drug means, respectively, a generic or authorized
generic of a brand name drug, an interchangeable biological product of
a reference product, or an unbranded biological product marketed under
the same biologics license application (BLA) as a brand name biological
product.
Exempted beneficiary * * *
(3) Is being treated for cancer-related pain; or
* * * * *
Maintenance change means one of the following negative formulary
changes with respect to a covered Part D drug:
(1) Making any negative formulary changes to a drug within 90 days
of adding a corresponding drug to the same or a lower cost-sharing tier
and with the same or less restrictive prior authorization (PA), step
therapy (ST), or quantity limit (QL) requirements (other than immediate
substitutions that meet the requirements of Sec. 423.120(e)(2)(i)).
(2) Making any negative formulary changes to a reference product
within 90 days of adding a biosimilar biological product other than an
interchangeable biological product of that reference product to the
same or a lower cost-sharing tier and with the same or less restrictive
PA, ST, or QL requirements.
(3) Removing a non-Part D drug.
(4) Adding or making more restrictive PA, ST, or QL requirements
based upon a new FDA-mandated boxed warning.
(5) Removing a drug deemed unsafe by FDA or withdrawn from sale by
the manufacturer if the Part D sponsor chooses not to treat it as an
immediate negative formulary change.
(6) Removing a drug based on long term shortage and market
availability.
(7) Making negative formulary changes based upon new clinical
guidelines or information or to promote safe utilization.
(8) Adding PA to help determine Part B versus Part D coverage.
* * * * *
0
37. Section 423.120 (as proposed to be amended at 87 FR 79727, December
27, 2022) is amended by revising paragraph (e)(2)(i) to read as
follows:
Sec. 423.120 Access to covered Part D drugs.
* * * * *
(e) * * *
(2) * * *
(i) Immediate substitutions. A Part D sponsor may make negative
formulary changes to a brand name drug, a reference product, or a brand
name biological product within 30 days of adding a corresponding drug
to its formulary on the same or lower cost sharing tier and with the
same or less restrictive formulary prior authorization (PA), step
therapy (ST), or quantity limit (QL) requirements, so long as the Part
D sponsor previously could not have included such corresponding drug on
its formulary when it submitted its initial formulary for CMS approval
consistent with paragraph (b)(2) of this section because such drug was
not yet available on the market, and the Part D sponsor has provided
advance general notice as specified in paragraph (f)(2) of this
section.
* * * * *
0
38. Section 423.129 is added to read as follows:
Sec. 423.129 Resolution of complaints in complaints tracking module.
(a) Definitions. For the purposes of this section, the following
terms have the following meanings:
Assignment date is the date CMS assigns a complaint to a particular
Part D sponsor in the Complaints Tracking Module.
Complaints Tracking Module is an electronic system maintained by
CMS to record and track complaints submitted to CMS about Medicare
health and drug plans from beneficiaries and others.
Immediate need complaint is a complaint involving a situation that
prevents a beneficiary from accessing care or a service for which they
have an immediate need. This includes when the beneficiary currently
has enough of the drug or supply to which they are seeking access to
last for 2 or fewer days.
Urgent complaint is a complaint involving a situation that prevents
a beneficiary from accessing care or a service for which they do not
have an immediate need. This includes when the beneficiary currently
has enough of the drug or supply to which they are seeking access to
last for 3 to 14 days.
(b) Timelines for complaint resolution--(1) Immediate need
complaints. The Part D sponsor must resolve immediate need complaints
within 2 calendar days of the assignment date.
(2) Urgent complaints. The Part D sponsor must resolve urgent
complaints within 7 calendar days of the assignment date.
(3) All other complaints. The Part D sponsor must resolve all other
complaints within 30 calendar days of the assignment date.
(c) Timeline for contacting individual filing a complaint.
Regardless of the type of complaint received, the Part D sponsor must
contact the individual who filed a complaint within 3 calendar days of
the assignment date.
0
39. Section 423.153 is amended by:
0
a. Removing the phrase ``paragraph (f)(8)(ii)'' and adding in its place
[[Page 78626]]
``paragraphs (f)(8)(ii) and (iii)'' in paragraph (f)(8)(i) introductory
text;
0
b. Revising paragraph (f)(8)(i)(A);
0
c. Redesignating paragraph (f)(8)(ii) as paragraph (f)(8)(iii); and
0
d. Adding a new paragraph (f)(8)(ii).
The revision and addition read as follows:
Sec. 423.153 Drug utilization management, quality assurance,
medication therapy management programs (MTMPs), drug management
programs, and access to Medicare Parts A and B claims data extracts.
* * * * *
(f) * * *
(8) * * *
(i) * * *
(A) Within 3 days of the date the sponsor makes the relevant
determination.
* * * * *
(ii) In the case of a beneficiary who is determined by a Part D
sponsor to be exempt, the sponsor must provide the alternate second
notice within 3 days of the date the sponsor makes the relevant
determination, even if such determination is made less than 30 days
from the date of the initial notice described in paragraph (f)(5) of
this section.
* * * * *
0
40. Section 423.160 is amended by:
0
a. Revising paragraphs (a)(2) and (3), (b), and (c); and
0
b. Removing the section-level authority citation.
The revisions read as follows:
Sec. 423.160 Standards for electronic prescribing.
(a) * * *
(2) Except as provided in paragraph (a)(3) of this section,
prescribers and dispensers that transmit, directly or through an
intermediary, prescriptions and prescription-related information using
electronic media (including entities transmitting prescriptions or
prescription-related information where the prescriber is required by
law to issue a prescription for a patient to a non-prescribing
provider, such as a nursing facility, that in turn forwards the
prescription to a dispenser), must comply with the applicable standards
in paragraph (b) of this section when e-prescribing for covered Part D
drugs for Part D eligible individuals.
(3)(i) Entities transmitting prescriptions or prescription-related
information must utilize the NCPDP SCRIPT standard, consistent with
paragraph (b)(1) of this section, in all instances other than
temporary/transient network transmission failures.
(ii) Electronic transmission of prescriptions or prescription-
related information by means of computer-generated facsimile is only
permitted in instances of temporary/transient transmission failure and
communication problems that would preclude the use of the NCPDP SCRIPT
Standard adopted by this section.
(iii) Entities may use either HL7 messages or the NCPDP SCRIPT
Standard to transmit prescriptions or prescription-related information
internally when the sender and the recipient are part of the same legal
entity. If an entity sends prescriptions outside the entity (for
example, from an HMO to a non-HMO pharmacy), it must use the adopted
NCPDP SCRIPT Standard or other applicable adopted standards. Any
pharmacy within an entity must be able to receive electronic
prescription transmittals for Medicare beneficiaries from outside the
entity using the adopted NCPDP SCRIPT Standard. This exemption does not
supersede any HIPAA requirement that may require the use of a HIPAA
transaction standard within an organization.
* * * * *
(b) Standards--(1) Prescriptions, electronic prior authorization,
and medication history. The communication of a prescription or
prescription-related information must comply with a standard in 45 CFR
170.205(b) (incorporated by reference, see paragraph (c) of this
section) for the following transactions, as applicable to the version
of the standard in use:
(i)(A) GetMessage.
(B) Status.
(C) Error.
(D) RxChangeRequest and RxChangeResponse.
(E) RxRenewalRequest and RxRenewalResponse.
(F) Resupply.
(G) Verify.
(H) CancelRx and CancelRxResponse.
(I) RxFill.
(J) DrugAdministration.
(K) NewRxRequest.
(L) NewRx.
(M) NewRxResponseDenied.
(N) RxTransferInitiationRequest.
(O) RxTransfer.
(P) RxTransferConfirm.
(Q) RxFillIndicatorChange.
(R) Recertification.
(S) REMSInitiationRequest and REMSInitiationResponse.
(T) REMSRequest and REMSResponse.
(U) RxHistoryRequest and RxHistoryResponse.
(V) PAInitiationRequest and PAInitiationResponse.
(W) PARequest and PAResponse.
(X) PAAppealRequest and PAAppealResponse.
(Y) PACancelRequest and PACancelResponse.
(Z) PANotification.
(ii) [Reserved]
(2) Eligibility. Eligibility inquiries and responses between the
Part D sponsor and prescribers and between the Part D sponsor and
dispensers must comply with 45 CFR 162.1202.
(3) Formulary and benefits. The National Council for Prescription
Drug Programs Formulary and Benefits Standard, Implementation Guide,
Version 3, Release 0 (Version 3.0), April 2012 (incorporated by
reference, see paragraph (c) of this section) or comply with a standard
in 45 CFR 170.205(u) (incorporated by reference, see paragraph (c) of
this section) for transmitting formulary and benefits information
between prescribers and Medicare Part D sponsors. Beginning January 1,
2027, transmission of formulary and benefit information between
prescribers and Medicare Part D sponsors must comply with a standard in
45 CFR 170.205(u) (incorporated by reference, see paragraph (c) of this
section).
(4) Provider identifier. The National Provider Identifier (NPI), as
defined at 45 CFR 162.406, to identify an individual health care
provider to Medicare Part D sponsors, prescribers and dispensers, in
electronically transmitted prescriptions or prescription-related
materials for Medicare Part D covered drugs for Medicare Part D
eligible individuals.
(5) Real-time benefit tools. Part D sponsors must implement one or
more electronic real-time benefit tools (RTBT) that are capable of
integrating with at least one prescriber's e-Prescribing (eRx) system
or electronic health record (EHR) to provide complete, accurate,
timely, clinically appropriate, patient-specific formulary and benefit
information to the prescriber in real time for assessing coverage under
the Part D plan. Such information must include enrollee cost-sharing
information, clinically appropriate formulary alternatives, when
available, and the formulary status of each drug presented including
any utilization management requirements applicable to each alternative
drug. Beginning January 1, 2027, Part D sponsors' RTBT must comply with
a standard in 45 CFR 170.205(c) (incorporated by reference, see
paragraph (c) of this section).
(c) Incorporation by reference. The material listed in this
paragraph (c) is incorporated by reference into this section with the
approval of the Director of the Federal Register under 5 U.S.C.
[[Page 78627]]
552(a) and 1 CFR part 51. All approved incorporation by reference (IBR)
material is available for inspection at the Centers for Medicare &
Medicaid Services (CMS) and at the National Archives and Records
Administration (NARA). Contact CMS at: CMS 7500 Security Boulevard,
Baltimore, Maryland 21244; phone: (410) 786-4132 or (877) 267-2323;
email: [email protected]. For information on the availability of
this material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations or email [email protected]. The material may be obtained
from National Council for Prescription Drug Programs, Incorporated,
9240 E. Raintree Drive, Scottsdale, AZ 85260-7518; phone: (480) 477-
1000; email: ncpdp.org">info@ncpdp.org; website: www.ncpdp.org.
(1) The National Council for Prescription Drug Programs Formulary
and Benefits Standard, Implementation Guide, Version 3, Release 0
(Version 3.0), published April 2012.
(2) National Council for Prescription Drug Programs SCRIPT
Standard, Implementation Guide Version 2017071, approved July 28, 2017.
(3) National Council for Prescription Drug Programs SCRIPT
Standard, Implementation Guide Version 2023011, published April 2023,
(Approval Date for American National Standards Institute [ANSI]:
January 17, 2023).
(4) National Council for Prescription Drug Programs Real-Time
Prescription Benefit Standard, Implementation Guide Version 13,
published July 2023 (Approval Date for ANSI: May 19, 2022).
(5) National Council for Prescription Drug Programs Formulary and
Benefit Standard, Implementation Guide Version 60, published April 2023
(Approval Date for ANSI: April 12, 2023).
0
40. Section 423.184 is amended by:
0
a. Removing and reserving paragraph (g)(1)(ii); and
0
b. Adding paragraph (h)(3).
The addition reads as follows:
Sec. 423.184 Adding, updating, and removing measures.
* * * * *
(h) * * *
(3) Beginning with the 2025 measurement year (2027 Star Ratings),
Part D sponsor may request that CMS review its contract's
administrative data for Patient Safety measures provided that the
request is received by the annual deadline set by CMS for the
applicable Star Ratings year.
* * * * *
0
41. Section 423.186 is amended by revising paragraph (f)(2)(i)(B) and
adding paragraphs (f)(3)(viii)(A) and (B) to read as follows:
Sec. 423.186 Calculation of Star Ratings.
* * * * *
(f) * * *
(2) * * *
(i) * * *
(B) To determine a contract's final adjustment category, contract
enrollment is determined using enrollment data for the month of
December for the measurement period of the Star Ratings year.
(1) For the first 2 years following a consolidation, for the
surviving contract of a contract consolidation involving two or more
contracts for health or drug services of the same plan type under the
same parent organization, the enrollment data for the month of December
for the measurement period of the Star Ratings year are combined across
the surviving and consumed contracts in the consolidation.
(2) The count of beneficiaries for a contract is restricted to
beneficiaries that are alive for part or all of the month of December
of the applicable measurement year.
(3) A beneficiary is categorized as LIS/DE if the beneficiary was
designated as full or partially dually eligible or receiving a LIS at
any time during the applicable measurement period.
(4) Disability status is determined using the variable original
reason for entitlement (OREC) for Medicare using the information from
the Social Security Administration and Railroad Retirement Board record
systems.
* * * * *
(3) * * *
(viii) * * *
(A) In the case of contract consolidations involving two or more
contracts for health or drug services of the same plan type under the
same parent organization, CMS calculates the HEI reward for the
surviving contract accounting for both the surviving and consumed
contract(s). For the first year following a consolidation, the HEI
reward for the surviving contract is calculated as the enrollment-
weighted mean of the HEI reward of the consumed and surviving contracts
using enrollment from July of the most recent measurement year used in
calculating the HEI reward. A reward value of zero is used in
calculating the enrollment-weighted mean for contracts that do not meet
the minimum percentage of enrollees with the SRF thresholds or the
minimum performance threshold specified at paragraph (f)(3)(vii) of
this section.
(B) For the second year following a consolidation when calculating
the HEI score for the surviving contract, the patient-level data used
in calculating the HEI score will be combined from the consumed and
surviving contracts and used in calculating the HEI score.
* * * * *
0
42. Section 423.503 is amended by revising paragraph (b)(1)(i)(A) and
(C) to read as follows:
Sec. 423.503 Evaluation and determination procedures.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(A) Was under an intermediate sanction under subpart O of this
part, or a determination by CMS to prohibit the enrollment of new
enrollees under Sec. 423.2410(c).
* * * * *
(C) Filed for or is currently in Federal or State bankruptcy
proceedings.
* * * * *
0
43. Section 423.505 is amended by revising paragraph (b)(22) to read as
follows:
Sec. 423.505 Contract provisions.
* * * * *
(b) * * *
(22) As described in Sec. 423.129, address and resolve complaints
received by CMS against the Part D sponsor in the Complaints Tracking
Module.
* * * * *
0
44. Section 423.509 is amended by adding paragraph (f) to read as
follows:
Sec. 423.509 Termination of contract by CMS.
* * * * *
(f) Intermediate sanctions imposed with CMS termination. If CMS
makes a determination to terminate a Part D sponsor's contract under
paragraph (a) of this section, CMS also imposes the intermediate
sanctions at Sec. 423.750(a)(1) and (3) in accordance with the
following procedures:
(1) The sanction will go into effect 15 days after the termination
notice is sent.
(2) The Part D sponsor will have a right to appeal the intermediate
sanction in the same proceeding as the termination appeal specified in
paragraph (d) of this section.
(3) A request for a hearing does not delay the date specified by
CMS when the sanction becomes effective.
(4) The sanction will remain in effect--
(i) Until the effective date of the termination; or
(ii) If the termination decision is overturned on appeal, when a
final decision is made by the hearing officer or Administrator.
[[Page 78628]]
0
45. Section 423.514 is amended by revising paragraph (a) introductory
text and paragraph (a)(2) to read as follows:
Sec. 423.514 Validation of Part D reporting requirements.
(a) Required information. Each Part D plan sponsor must have an
effective procedure to develop, compile, evaluate, and report to CMS,
to its enrollees, and to the general public, at the times and in the
manner that CMS requires, information indicating the following--
* * * * *
(2) The procedures related to and utilization of its services and
items.
* * * * *
46. Section 423.582 is amended by revising paragraph (b) to read as
follows:
Sec. 423.582 Request for a standard redetermination.
* * * * *
(b) Timeframe for filing a request. Except as provided in paragraph
(c) of this section, a request for a redetermination must be filed
within 60 calendar days after receipt of the written coverage
determination notice or the at-risk determination under a drug
management program in accordance with Sec. 423.153(f).
(1) The date of receipt of the coverage determination or at-risk
determination is presumed to be 5 calendar days after the date of the
written coverage determination or at-risk determination unless there is
evidence to the contrary.
(2) For purposes of meeting the 60-calendar day filing deadline,
the request is considered as filed on the date it is received by the
Part D plan sponsor or delegated entity specified in the Part D plan
sponsor's written coverage determination or at-risk determination.
* * * * *
47. Section 423.584 is amended by revising the paragraph (b)
heading and adding paragraphs (b) introductory text and (b)(3) and (4)
to read as follows:
Sec. 423.584 Expediting certain redeterminations.
* * * * *
(b) Procedure and timeframe for filing a request. A request for
redetermination must be filed within 60 calendar days after receipt of
the written coverage determination notice or at-risk determination
notice.
* * * * *
(3) The date of receipt of the coverage determination or at-risk
determination is presumed to be 5 calendar days after the date of the
written coverage determination or at-risk determination unless there is
evidence to the contrary.
(4) For purposes of meeting the 60-calendar day filing deadline,
the request is considered as filed on the date it is received by the
Part D plan sponsor or delegated entity specified the Part D plan
sponsor's written coverage determination or at-risk determination.
* * * * *
0
48. Section 423.600 is amended by revising paragraph (a) to read as
follows:
Sec. 423.600 Reconsideration by an independent review entity (IRE).
(a) An enrollee who is dissatisfied with the redetermination of a
Part D plan sponsor has a right to a reconsideration by an independent
review entity that contracts with CMS. The prescribing physician or
other prescriber (acting on behalf of an enrollee), upon providing
notice to the enrollee, may request an IRE reconsideration. The
enrollee, or the enrollee's prescribing physician or other prescriber
(acting on behalf of the enrollee) must file a written request for
reconsideration with the IRE within 60 calendar days after receipt of
the written redetermination by the Part D plan sponsor.
(1) The date of receipt of the redetermination is presumed to be 5
calendar days after the date of the Part D plan sponsor's written
redetermination, unless there is evidence to the contrary.
(2) For purposes of meeting the 60-calendar day filing deadline,
the request is considered as filed on the date it is received by the
IRE specified in the Part D plan sponsor's written redetermination.
* * * * *
0
49. Section 423.2267 is amended by revising paragraph (e)(33) to read
as follows:
Sec. 423.2267 Required materials and content.
* * * * *
(e) * * *
(33) Notice of availability of language assistance services and
auxiliary aids and services (notice of availability). This is a model
communications material through which Part D sponsors must provide a
notice of availability of language assistance services and auxiliary
aids and services that, at a minimum, states that the Part D sponsor
provides language assistance services and appropriate auxiliary aids
and services free of charge.
(i) This notice of availability of language assistance services and
auxiliary aids and services must be provided in English and at least
the 15 languages most commonly spoken by individuals with limited
English proficiency of the relevant state and must be provided in
alternate formats for individuals with disabilities who require
auxiliary aids and services to ensure effective communication.
(ii) If there are additional languages in a particular service area
that meet the 5-percent service area threshold, described in paragraph
(a)(2) of this section, beyond the languages described in paragraph
(e)(33)(i) of this section, the notice of availability of language
assistance services and auxiliary aids and services must also be
translated into those languages. Part D sponsors may also opt to
translate the notice in any additional languages that do not meet the
5-percent service area threshold, where the Part D sponsor determines
that this inclusion would be appropriate.
(iii) The notice must be provided with all required materials under
this paragraph (e).
(iv) The notice may be included as a part of the required material
or as a standalone material in conjunction with the required material.
(v) When used as a standalone material, the notice may include
organization name and logo.
(vi) When mailing multiple required materials together, only one
notice is required.
(vii) The notice may be provided electronically when a required
material is provided electronically as permitted under paragraph (d)(2)
of this section.
* * * * *
0
50. Section 423.2274 is amended by:
0
a. In paragraph (a):
0
i. Revising paragraph (i) of the definition of ``Compensation''; and
0
ii. Revising the definition of ``Fair market value (FMV)''; and
0
b. Revising paragraphs (c)(5), (d)(1)(ii), (d)(2) introductory text,
(d)(3) introductory text, and (e)(1) and (2).
The revisions read as follows:
Sec. 423.2274 Agent, broker, and other third-party requirements.
* * * * *
(a) * * *
Compensation. (i) Includes monetary or non-monetary remuneration of
any kind relating to the sale, renewal, or services related to a plan
or product offered by a Part D sponsor including, but not limited to
the following:
(A) Commissions.
(B) Bonuses.
(C) Gifts.
(D) Prizes or Awards.
(E) Payment of fees to comply with State appointment laws,
training, certification, and testing costs.
(F) Reimbursement for mileage to, and from, appointments with
beneficiaries.
[[Page 78629]]
(G) Reimbursement for actual costs associated with beneficiary
sales appointments such as venue rent, snacks, and materials.
(H) Any other payments made to an agent or broker that are tied to
enrollment, related to an enrollment in a Part D plan or product, or
for services conducted as a part of the relationship associated with
the enrollment into a Part D plan or product.
* * * * *
Fair market value (FMV) means, for purposes of evaluating agent or
broker compensation under the requirements of this section only, the
amount that CMS determines could reasonably be expected to be paid for
an enrollment or continued enrollment into a Part D plan.
(i) Beginning January 1, 2021, the national FMV is 81.
(ii) Beginning in 2025, the FMV will be increased to account for
administrative payments included under the compensation rate, beginning
at $31 and updated annually in compliance with this section.
(iii) For subsequent years, FMV is calculated by adding the current
year FMV and the produce of the current year FMV and Annual Percentage
Increase for Part D, which is published for each year in the rate
announcement issued under Sec. 422.312 of this chapter.
* * * * *
(c) * * *
(5) Ensure that no provision of a contract with an agent, broker,
or other TPMO has a direct or indirect effect of creating an incentive
that would reasonably be expected to inhibit an agent or broker's
ability to objectively assess and recommend which plan best fits the
health care needs of a beneficiary.
* * * * *
(d) * * *
(1) * * *
(ii) Part D sponsors are limited to the compensation amounts
outlined in this section.
(2) Initial enrollment year compensation. For each enrollment in an
initial enrollment year, Part D sponsors may pay compensation at FMV.
* * * * *
(3) Renewal compensation. For each enrollment in a renewal year,
Part D sponsors may pay compensation at a rate of 50 percent of FMV.
* * * * *
(e) * * *
(1) For plan years through 2024, Payments for services other than
enrollment of beneficiaries (for example, training, customer service,
agent recruitment, operational overhead, or assistance with completion
of health risk assessments) must not exceed the value of those services
in the marketplace.
(2) Beginning in 2025, administrative payments are included in the
calculation of enrollment-based compensation.
* * * * *
PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
0
51. 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
52. Section 460.119 is added to read as follows:
Sec. 460.119 Resolution of complaints in the complaints tracking
module.
The PACE organization must comply with requirements of Sec. Sec.
422.125 and 422.504(a)(15) of this chapter to, through the CMS
complaints tracking module as defined in Sec. 422.125(a) of this
chapter, address and resolve complaints received by CMS against the
PACE organization within the required timeframes. References to the MA
organization or MA plan in those regulations must be read as references
to the PACE organization. Nothing in this section should be construed
to affect the PACE organization's obligation to resolve grievances as
described in Sec. 460.120.
0
53. Section 460.121 is amended by revising paragraph (b)(2) to read as
follows:
Sec. 460.121 Service determination process.
* * * * *
(b) * * *
(2) Requests that do not constitute a service determination
request. Requests to initiate, modify, or continue a service do not
constitute a service determination request if the request is made prior
to completing the development of the initial plan of care. For all
requests identified in this section, the interdisciplinary team must--
(i) Document the request; and
(ii) Discuss the request during the care planning meeting, and
either:
(A) Approve the requested service and incorporate it into the
participant's initial plan of care; or
(B) Document their rationale for not approving the service in the
initial plan of care.
* * * * *
0
54. Section 460.194 is amended by revising paragraph (b) to read as
follows:
Sec. 460.194 Corrective action.
* * * * *
(b) At their discretion, CMS or the State administering agency may
monitor the effectiveness of corrective actions.
* * * * *
Title 45
PART 170--HEALTH INFORMATION TECHNOLOGY STANDARDS, IMPLEMENTATION
SPECIFICATIONS, AND CERTIFICATION CRITERIA AND CERTIFICATION
PROGRAMS FOR HEALTH INFORMATION TECHNOLOGY
0
55. The authority citation for part 170 continues to read as follows:
Authority: 42 U.S.C. 300jj-11; 42 U.S.C 300jj-14; 5 U.S.C. 552.
0
56. Section 170.205 is amended by:
0
a. Revising paragraph (b);
0
b. Adding paragraph (c);
0
c. Adding a reserved paragraph (t); and
0
d. Adding paragraph (u).
The revision and additions read as follows:
Sec. 170.205 Content exchange standards and implementation
specifications for exchanging electronic health information.
* * * * *
(b) Electronic prescribing--(1) Standard. National Council for
Prescription Drug Programs (NCPDP): SCRIPT Standard Implementation
Guide; Version 2017071 (incorporated by reference in Sec. 170.299).
The Secretary's adoption of this standard expires on January 1, 2027.
(2) Standard. NCPDP SCRIPT Standard, Implementation Guide, Version
2023011 (incorporated by reference in Sec. 170.299).
(c) Real-time prescription benefit--(1) Standard. NCPDP Real-Time
Prescription Benefit Standard, Implementation Guide, Version 13
(incorporated by reference in Sec. 170.299).
(2) [Reserved]
* * * * *
(t) [Reserved]
(u) Formulary and benefit--(1) Standard. NCPDP Formulary and
Benefit Standard, Implementation Guide, Version 60 (incorporated by
reference in Sec. 170.299).
(2) [Reserved]
0
57. Section 170.299 is amended by revising paragraph (k) to read as
follows:
Sec. 170.299 Incorporation by reference.
* * * * *
(k) National Council for Prescription Drug Programs (NCPDP),
Incorporated, 9240 E. Raintree Drive, Scottsdale, AZ 85260-7518; phone
(480) 477-1000;
[[Page 78630]]
email: ncpdp.org">info@ncpdp.org; website: www.ncpdp.org.
(1) NCPDP SCRIPT Standard, Implementation Guide, Version 2017071
(Approval Date for ANSI: July 28, 2017); IBR approved for Sec.
170.205(b).
(2) NCPDP SCRIPT Standard, Implementation Guide, Version 2023011,
April 2023, (Approval Date for ANSI: January 17, 2023); IBR approved
for Sec. 170.205(b).
(3) NCPDP Real-Time Prescription Benefit Standard, Implementation
Guide, Version 13, July 2023 (Approval Date for ANSI: May 19, 2022);
IBR approved for Sec. 170.205(c).
(4) NCPDP Formulary and Benefit Standard, Implementation Guide,
Version 60, April 2023 (Approval Date for ANSI: April 12, 2023); IBR
approved for Sec. 170.205(u).
* * * * *
Xavier Becerra
Secretary, Department of Health and Human Services.
[FR Doc. 2023-24118 Filed 11-6-23; 4:15 pm]
BILLING CODE 4120-01-P