Proposed Rule2022-26956
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
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 27, 2022
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule would revise the Medicare Advantage (Part C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations to implement changes related to Star Ratings, medication therapy management, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, passive enrollment, network adequacy, identification of overpayments, formulary changes, and other programmatic areas. This proposed rule would also codify regulations implementing section 118 of Division CC of the Consolidated Appropriations Act, 2021, section 11404 of the Inflation Reduction Act, and includes a large number of provisions that would codify existing sub-regulatory guidance in the Part C, Part D, and PACE programs. This proposed rule would also amend the existing regulations for Medicare Parts A, B, C, and D regarding the standard for an identified overpayment.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 247 (Tuesday, December 27, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Proposed Rules]
[Pages 79452-79749]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-26956]
[[Page 79451]]
Vol. 87
Tuesday,
No. 247
December 27, 2022
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Parts 401, 405, 417, et al.
-----------------------------------------------------------------------
Office of the Secretary
-----------------------------------------------------------------------
45 CFR Part 170
-----------------------------------------------------------------------
Medicare Program; Contract Year 2024 Policy and Technical Changes to
the Medicare Advantage Program, Medicare Prescription Drug Benefit
Program, Medicare Cost Plan Program, Medicare Parts A, B, C, and D
Overpayment Provisions of the Affordable Care Act and Programs of All-
Inclusive Care for the Elderly; Health Information Technology Standards
and Implementation Specifications; Proposed Rule
Federal Register / Vol. 87 , No. 247 / Tuesday, December 27, 2022 /
Proposed Rules
[[Page 79452]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 401, 405, 417, 422, 423, 455, and 460
Office of the Secretary
45 CFR Part 170
[CMS-4201-P]
RIN 0938-AU96
Medicare Program; Contract Year 2024 Policy and Technical Changes
to the Medicare Advantage Program, Medicare Prescription Drug Benefit
Program, Medicare Cost Plan Program, Medicare Parts A, B, C, and D
Overpayment Provisions of the Affordable Care Act and Programs of All-
Inclusive Care for the Elderly; Health Information Technology Standards
and Implementation Specifications
AGENCY: Centers for Medicare & Medicaid Services (CMS), Office of the
National Coordinator for Health Information Technology, Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would revise the Medicare Advantage (Part
C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan,
and Programs of All-Inclusive Care for the Elderly (PACE) regulations
to implement changes related to Star Ratings, medication therapy
management, marketing and communications, health equity, provider
directories, coverage criteria, prior authorization, passive
enrollment, network adequacy, identification of overpayments, formulary
changes, and other programmatic areas. This proposed rule would also
codify regulations implementing section 118 of Division CC of the
Consolidated Appropriations Act, 2021, section 11404 of the Inflation
Reduction Act, and includes a large number of provisions that would
codify existing sub-regulatory guidance in the Part C, Part D, and PACE
programs. This proposed rule would also amend the existing regulations
for Medicare Parts A, B, C, and D regarding the standard for an
identified overpayment.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on February 13,
2023.
ADDRESSES: In commenting, please refer to file code CMS-4201-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-4201-P, P.O. Box 8013,
Baltimore, MD 21244.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid
Services,Department of Health and Human Services, Attention: CMS-4201-
P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-
1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Catherine Gardiner, (410) 786-7638--General Questions.
Katie Parker, (410) 786-0537--Parts A and B Overpayment Provision.
Carly Medosch, (410) 786-8633--Part C and Cost Plan Issues.
Lucia Patrone, (410) 786-8621- Part D Issues.
Nathan Jessen, (608) 520-1837--Part D Issues.
Kristy Nishimoto, (206) 615-2367--Beneficiary Enrollment and
Appeals Issues.
Kelley Ordonio, (410) 786-3453--Parts C and D Payment Issues; Parts
C and D Overpayment Provisions.
Hunter Coohill, (720) 853-2804--Enforcement Issues.
Lauren Brandow, (410) 786-9765--PACE Issues.
Melissa Seeley, (212) 616-2329--D-SNP Issues.
Alexander Baker, (202) 260-2048--Health IT Standards.
<a href="/cdn-cgi/l/email-protection#f4a4958680b7959a90b0a7809586a695809d9a9387b4979987da9c9c87da939b82"><span class="__cf_email__" data-cfemail="712110030532101f153522051003231005181f160231121c025f1919025f161e07">[email protected]</span></a>--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: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Executive Summary
A. Purpose
The primary purpose of this proposed rule is to amend the
regulations for the Medicare Advantage (Part C), Medicare Cost Plan,
and Medicare Prescription Drug Benefit (Part D) programs, and Programs
of All-Inclusive Care for the Elderly (PACE). This proposed rule
includes a number of new policies that would improve these programs as
well as codify existing Part C and Part D sub-regulatory guidance. This
proposed rule would also amend the existing regulations for Medicare
Parts A, B, C, and D regarding the standard for an identified
overpayment.
Additionally, this rule implements certain sections of the
following Federal laws related to the Parts C and D programs:
<bullet> The Inflation Reduction Act (IRA) of 2022.
<bullet> The Consolidated Appropriations Act (CAA), 2021.
<bullet> The Bipartisan Budget Act (BBA) of 2018.
<bullet> The Substance Use-Disorder Prevention that Promotes Opioid
Recovery and Treatment (SUPPORT) for Patients and Communities Act of
2018.
B. Summary of the Major Provisions
1. Medicare Advantage/Part C and Part D Prescription Drug Plan Quality
Rating System (Sec. Sec. 422.162, 422.164, 422.166, 422.260, 423.182,
423.184, and 423.186)
In this rule, we are proposing a health equity index (HEI) reward
for the 2027 Star Ratings to further incentivize Parts C and D plans to
focus on improving care for enrollees with social risk factors (SRFs);
as part of this change, we are also proposing to remove the current
reward factor. This proposal supports CMS efforts to ensure attainment
of the highest level of health for all people. We are proposing to
reduce the weight of
[[Page 79453]]
patient experience/complaints and access measures to further align
efforts with other CMS quality programs and the current CMS Quality
Strategy, as well as to better balance the contribution of the
different types of measures in the Star Ratings program. We are also
proposing to remove the Part C Diabetes Care--Kidney Disease Monitoring
and the stand-alone Medication Reconciliation Post-discharge measures;
add the Part C Kidney Health Evaluation for Patients with Diabetes and
the updated Colorectal Cancer Screening and Care for Older Adults--
Functional Status Assessment measures; add the Part D Concurrent Use of
Opioids and Benzodiazepines, Polypharmacy Use of Multiple
Anticholinergic Medications in Older Adults, and Polypharmacy Use of
Multiple Central Nervous System Active Medications in Older Adults
measures; and update the Part D Medication Adherence for Diabetes
Medications, Medication Adherence for Hypertension (RAS Antagonists),
and Medication Adherence for Cholesterol (Statins) measures. We are
proposing to remove guardrails (that is, bi-directional caps that
restrict upward and downward movement of a measure's cut points for the
current year's measure-level Star Ratings compared to the prior year's
measure-threshold specific cut points) when determining measure-
specific-thresholds for non-Consumer Assessment of Healthcare Providers
and Systems (CAHPS) measures; modify the Improvement Measure hold
harmless policy; add a rule for the removal of Star Ratings measures;
and remove the 60 percent rule that is part of the adjustment for
extreme and uncontrollable circumstances (also called the disaster
adjustment). We are also proposing a series of technical clarifications
related to the disaster adjustment, Quality Bonus Payment (QBP) appeals
processes, treatment of ratings for contracts after consolidation,
weighting of measures with a substantive specification change, and
addressing the codification error related to use of Tukey outlier
deletion. These changes would apply (that is, data would be collected
and performance measured) for the 2024 measurement period and the 2026
Star Ratings, except for the removal of the Part C Diabetes Care--
Kidney Disease Monitoring measure, which would apply for the 2022
measurement period and the 2024 Star Ratings; the HEI reward, which
would include data from the 2024 and 2025 measurement periods and apply
for the 2027 Star Ratings; and the risk adjustment based on
sociodemographic status characteristics to the three adherence
measures, which would be implemented for the 2026 measurement period
and the 2028 Star Ratings.
2. Medication Therapy Management (MTM) Program (Sec. 423.153)
Section 1860D-4(c)(2) of the Act requires all Part D sponsors to
have an MTM program designed to assure, with respect to targeted
beneficiaries, that covered Part D drugs are appropriately used to
optimize therapeutic outcomes through improved medication use, and to
reduce the risk of adverse events, including adverse drug interactions.
Section 1860D-4(c)(2)(A)(ii) of the Act requires Part D sponsors to
target those Part D enrollees who have multiple chronic diseases, are
taking multiple Part D drugs, and are likely to meet a cost threshold
for covered Part D drugs established by the Secretary. CMS codified the
MTM targeting criteria at Sec. 423.153(d)(2).
Part D sponsors currently have significant flexibility in
establishing their MTM eligibility criteria within the established
framework. CMS has observed decreasing eligibility rates and near-
universal convergence among Part D sponsors to the most restrictive
criteria currently permitted. Due to the increasing cost threshold and
variations in the targeting criteria implemented by sponsors, Part D
enrollees with more complex drug regimens who would benefit most from
MTM services are often not eligible. In addition, enrollees with
equivalent patient profiles may or may not be eligible for MTM
depending on the criteria their plan requires.
After an extensive analysis to identify potential disparities in
MTM program eligibility and access, CMS is proposing changes to the MTM
targeting criteria at Sec. 423.153(d)(2) to promote consistent,
equitable, and expanded access to MTM services. The combination of
proposed changes includes: (1) requiring plan sponsors to target all
core chronic diseases identified by CMS, codifying the current 9 core
chronic diseases \1\ in regulation, and adding HIV/AIDS for a total of
10 core chronic diseases; (2) lowering the maximum number of covered
Part D drugs a sponsor may require from 8 to 5 drugs and requiring
sponsors to include all Part D maintenance drugs in their targeting
criteria; and (3) revising the methodology for calculating the cost
threshold ($4,935 in 2023) to be commensurate with the average annual
cost of 5 generic drugs ($1,004 in 2020). The proposed changes would
reduce eligibility gaps so that more Part D enrollees with complex drug
regimens at increased risk of medication therapy problems would be
eligible for MTM services. They would also better align MTM eligibility
criteria with statutory goals to reduce medication errors and optimize
therapeutic outcomes for beneficiaries with multiple chronic conditions
and taking multiple Part D drugs, while maintaining a reasonable cost
criterion.
---------------------------------------------------------------------------
\1\ The current core chronic diseases are: diabetes*,
hypertension*, dyslipidemia*, chronic congestive heart failure*,
Alzheimer's disease, end stage renal disease (ESRD), respiratory
disease (including asthma*, chronic obstructive pulmonary disease
(COPD), and other chronic lung disorders), bone disease-arthritis
(osteoporosis, osteoarthritis, and rheumatoid arthritis), and mental
health (including depression, schizophrenia, bipolar disorder, and
other chronic/disabling mental health conditions). Enumerated in
statute (*).
---------------------------------------------------------------------------
In this rule, we are also proposing to codify longstanding CMS
guidance that a beneficiary is unable to accept an offer to participate
in the comprehensive medication review (CMR) only when the beneficiary
is cognitively impaired and cannot make decisions regarding their
medical needs. We are also proposing other technical changes to clarify
that the CMR must include an interactive consultation that is conducted
in real-time, regardless of whether it is done in person or via
telehealth.
3. Strengthening Translation and Accessible Format Requirements for
Medicare Advantage, Part D, and D-SNP Enrollee Marketing and
Communication Materials (Sec. Sec. 422.2267 and 423.2267)
Sections Sec. Sec. 422.2267(a)(2) and 423.2267(a)(2) require MA
organizations, cost plans, and Part D sponsors to translate required
materials into any non-English language that is the primary language of
at least 5 percent of individuals in a plan benefit package service
area. In addition, 45 CFR 92.102(b) requires plans to provide
appropriate auxiliary aids and services, including interpreters and
information in alternate formats, to individuals with impaired sensory,
manual, or speaking skills, where necessary to afford such persons an
equal opportunity to benefit from the service in question. However, CMS
has learned from oversight activities, enrollee complaints, and
stakeholder feedback that enrollees often must make a separate request
each time they would like a material in an alternate language or need
auxiliary aids or services.
In addition, an increasing number of dually eligible individuals
are enrolled in managed care plans where the same plan covers both
Medicare and Medicaid services. In some cases, Medicaid standards for
Medicaid managed care plans require translation of plan materials into
a language not
[[Page 79454]]
captured by the Medicare Advantage requirements.
We are proposing to specify in Medicare regulations that MA
organizations, cost plans, and Part D sponsors must provide materials
to enrollees on a standing basis in any non-English language that is
the primary language of at least 5 percent of the individuals in a plan
benefit package service area or accessible format using auxiliary aids
and services upon receiving a request for the materials or otherwise
learning of the enrollee's preferred language and/or need for an
accessible format using auxiliary aids and services. We are also
proposing at Sec. Sec. 422.2267(a)(3) and 423.2267(a)(3) to extend
this requirement to individualized plans of care for special needs
plans. We are also proposing to require that fully integrated dual
eligible special needs plans (FIDE SNPs), highly integrated dual
eligible special needs plans (HIDE SNPs), and applicable integrated
plans (AIPs) as defined at Sec. 422.561, translate required materials
into any languages required by the Medicare translation standard at
Sec. 422.2267(a) plus any additional languages required by the
Medicaid translation standard as specified through their Medicaid
capitated contracts.
4. Health Equity in Medicare Advantage (MA) (Sec. Sec. 422.111 and
422.112)
CMS is working to achieve policy goals that advance health equity
across its programs and pursue a comprehensive approach to advancing
health equity for all, including those who have been historically
underserved, marginalized, and adversely affected by persistent poverty
and inequality.\2\ To that end, we are proposing the following
regulatory updates.
---------------------------------------------------------------------------
\2\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
---------------------------------------------------------------------------
First, current regulations require MA organizations to ensure that
services are provided in a culturally competent manner. The regulation
provides examples of populations that may require consideration
specific to their needs. In this proposed rule, we propose to further
clarify the broad application of our policy. Specifically, we propose
to amend the list of populations to include people: (1) with limited
English proficiency or reading skills; (2) of ethnic, cultural, racial,
or religious minorities; (3) with disabilities; (4) who identify as
lesbian, gay, bisexual, or other diverse sexual orientations; (5) who
identify as transgender, nonbinary, and other diverse gender
identities, or people who were born intersex; (6) who live in rural
areas and other areas with high levels of deprivation; and (7)
otherwise adversely affected by persistent poverty or inequality.
Next, CMS currently provides best practices for organizations to
use in developing their provider directories, including incorporating
non-English languages spoken by each provider and provider/location
accessibility for people with physical disabilities. In this rule, we
propose to codify these best practices by requiring organizations to
include providers' cultural and linguistic capabilities (including
American Sign Language, ASL) in their provider directories. If
finalized, this change would improve the quality and usability of
provider directories, particularly for non-English speakers, limited
English proficient individuals, and enrollees who use ASL. We are also
proposing to require organizations to identify certain providers waived
to treat patients with medications for opioid use disorder (MOUD) in
their provider directories.
In addition, as the use of telehealth becomes more prevalent, there
is evidence of disparities in telehealth access due in part to low
digital health literacy, especially among populations who already
experience health disparities. Low digital health literacy is one of
the most significant obstacles in achieving telehealth equity, and many
older adults with low digital health literacy experience gaps in access
to the health care they need. This is concerning for the MA program
because its enrollee population includes older adults who are age 65 or
older, which is why we are proposing to address the issue by requiring
MA organizations to develop and maintain procedures to identify and
offer digital health education to enrollees with low digital health
literacy to assist with accessing any medically necessary covered
telehealth benefits.
Finally, MA organizations' existing quality improvement (QI)
programs are an optimal vehicle to develop and implement strategies and
policies designed to reduce disparities in health and health care, and
advance equity in the health and health care of MA enrollee
populations, especially those that are underserved. To support these
efforts, we propose to require MA organizations to incorporate one or
more activities into their overall QI program that reduce disparities
in health and health care among their enrollees. MA organizations may
implement activities such as improving communication, developing and
using linguistically and culturally appropriate materials (to
distribute to enrollees or use in communicating with enrollees), hiring
bilingual staff, community outreach, or similar activities. We believe
adopting this proposed requirement for MA organizations as part of
their required QI programs will align with health equity efforts across
CMS policies and programs.
5. Utilization Management Requirements: Clarifications of Coverage
Criteria for Basic Benefits and Use of Prior Authorization, Additional
Continuity of Care Requirements, and Annual Review of Utilization
Management Tools (Sec. Sec. 422.101, 422.112, 422.137, 422.138, and
422.202)
In recent years, CMS has received numerous inquiries regarding MA
organizations' use of prior authorization and its effect on beneficiary
access to care. We are proposing several regulatory changes to address
these concerns regarding prior authorization. First, we propose that
prior authorization policies for coordinated care plans may only be
used to confirm the presence of diagnoses or other medical criteria
and/or ensure that an item or service is medically necessary based on
standards specified in this rule. Second, we propose that an approval
granted through prior authorization processes be valid for the duration
of the approved course of treatment and that plans provide a minimum
90-day transition period when an enrollee who is currently undergoing
treatment switches to a new MA plan. Third, we propose that MA plans
must comply with national coverage determinations (NCD), local coverage
determinations (LCD), and general coverage and benefit conditions
included in Traditional Medicare statutes and regulations as
interpreted by CMS. Further, we propose that MA plans cannot deny
coverage of a Medicare covered item or service based on internal,
proprietary, or external clinical criteria not found in Traditional
Medicare coverage policies. We propose that when there is no applicable
coverage criteria in Medicare statute, regulation, NCD, or LCD, MA
organizations may create internal coverage criteria that are based on
current evidence in widely used treatment guidelines or clinical
literature that is made publicly available to CMS, enrollees, and
providers.
Finally, to ensure prior authorization is being used appropriately,
we propose to require that all MA plans establish a Utilization
Management Committee to review all utilization management, including
prior authorization, policies
[[Page 79455]]
annually and ensure they are consistent with current, traditional
Medicare's national and local coverage decisions and guidelines. These
proposed changes will help ensure enrollees have consistent access to
medically necessary care, without unreasonable barriers or
interruptions.
6. Medicare Advantage (MA) and Part D Marketing (Subpart V of Parts 422
and 423)
In accordance with our statutory authority to review marketing
materials and application forms and to develop marketing standards
under sections 1851(h), 1851(j), 1860D-1(b)(1)(vi), and 1860D-4(l) of
the Act, as well as the statutory requirements in sections 1852(c) and
1860D-4(a) of the Act requiring MA organizations and Part D sponsors
disclose specific types of information to enrollees, we are proposing
several changes to 42 CFR parts 422 and 423, subpart V, to strengthen
beneficiary protections and improve MA and Part D marketing. These
changes include: notifying enrollees annually, in writing, of the
ability to opt out of phone calls regarding MA and Part D plan
business; requiring agents to explain the effect of an enrollee's
enrollment choice on their current coverage whenever the enrollee makes
an enrollment decision; requiring agents to share key pre-enrollment
information with potential enrollees when processing telephonic
enrollments; simplifying plan comparisons by requiring medical benefits
be in a specific order and listed at the top of a plan's Summary of
Benefits; limiting the time that a sales agent can call a potential
enrollee to no more than six months following the date that the
enrollee first asked for information; limiting the requirement to
record calls between third-party marketing organizations (TPMOs) and
beneficiaries to marketing (sales) and enrollment calls; clarifying
that the prohibition on door-to-door contact without a prior
appointment still applies after collection of a business reply card
(BRC) or scope of appointment (SOA); prohibiting marketing of benefits
in a service area where those benefits are not available, prohibiting
the marketing of information about savings available to potential
enrollees that are based on a comparison of typical expenses borne by
uninsured individuals, unpaid costs of dually eligible beneficiaries,
or other unrealized costs of a Medicare beneficiary; requiring TPMOs to
list or mention all of the MA organization or Part D sponsors that they
sell; requiring MA organizations and Part D sponsors to have an
oversight plan that monitors agent/broker activities and reports agent/
broker non-compliance to CMS; modifying the TPMO disclaimer to add
SHIPs as an option for beneficiaries to obtain additional help; placing
discrete limits around the use of the Medicare name, logo, and Medicare
card; prohibit the use of superlatives (for example, words like
``best'' or ``most'') in marketing unless the material provides
documentation to support the statement, and the documentation is for
the current or prior year; and, clarifying the requirement to record
calls between TPMOs and beneficiaries, such that it is clear that the
requirement includes virtual connections such as video conferencing and
other virtual telepresence methods.
7. Behavioral Health in Medicare Advantage (MA) (Sec. Sec. 422.112 and
422.116)
As part of the Medicare Program; Contract Year 2023 Policy and
Technical Changes to the Medicare Advantage and Medicare Prescription
Drug Benefit Programs Proposed Rule, which appeared in the January 12,
2022 Federal Register (87 FR 1842) (hereinafter referred to as the
January 2022 proposed rule), we solicited comments from stakeholders
regarding challenges in building MA behavioral health networks and
opportunities for improving access to services. Stakeholders commented
on the importance of ensuring adequate access to behavioral health
services for enrollees and suggested expanding network adequacy
requirements to include additional behavioral health specialty types.
To strengthen our network adequacy requirements and reaffirm MA
organizations' responsibilities to provide behavioral health services,
we propose to: (1) add Clinical Psychology Licensed Clinical Social
Worker, and Prescribers of Medication for Opioid Use Disorder as
specialty types that will be evaluated as part of the network adequacy
reviews under Sec. 422.116, and make these new specialty types
eligible for the 10-percentage point telehealth credit as allowed under
Sec. 422.116(d)(5); (2) amend our general access to services standards
in Sec. 422.112 to include explicitly behavioral health services; (3)
codify, from existing guidance on reasonable wait times for primary
care visits, standards for wait times that apply to both primary care
and behavioral health services; (4) clarify that some behavioral health
services may qualify as emergency services and, therefore, must not be
subject to prior authorization; and (5) extend current requirements for
MA organizations to establish programs to coordinate covered services
with community and social services to behavioral health services
programs to close equity gaps in treatment between physical health and
behavioral health.
8. Enrollee Notification Requirements for Medicare Advantage (MA)
Provider Contract Terminations (Sec. Sec. 422.111 and 422.2267)
CMS requires notification to MA enrollees when a provider network
participation contract terminates. CMS is proposing to revise Sec.
422.111(e) by establishing specific enrollee notification requirements
for no-cause and for-cause provider contract terminations and adding
specific and more stringent enrollee notification requirements when
primary care and behavioral health provider contract terminations
occur. CMS is also proposing to revise Sec. 422.2267(e)(12) to specify
the requirements for the content of the notification to enrollees about
a provider contract termination.
9. Transitional Coverage and Retroactive Medicare Part D Coverage for
Certain Low-Income Beneficiaries Through the Limited Income Newly
Eligible Transition (LI NET) Program (Sec. Sec. 423.2500-423.2536)
CMS has operated the LI NET demonstration since 2010. The LI NET
demonstration provides transitional, point-of-sale coverage for low-
income beneficiaries who demonstrate an immediate need for
prescriptions, but who have not yet enrolled in a Part D plan, or whose
enrollment is not yet effective. LI NET also provides retroactive and/
or temporary prospective coverage for beneficiaries determined to be
eligible for the Part D low-income subsidy (LIS) by the Social Security
Administration (SSA) or a State. In this proposed rule, we propose
regulations to make the LI NET program a permanent part of Medicare
Part D, as required by the Consolidated Appropriations Act, 2021 (CAA).
10. Medicare Parts A, B, C, and D Overpayment Provisions of the
Affordable Care Act (Sec. Sec. 401.305(a)(2), 422.326(c), and
423.360(c))
The proposed regulatory provisions would amend the existing
regulations for Medicare Parts A, B, C, and D regarding the standard
for an ``identified overpayment'' and will align the regulations with
the statutory language in section 1128J(d)(4)(A) of the Act, which
provides that the terms ``knowing'' and ``knowingly'' have the meaning
given those terms in the False
[[Page 79456]]
Claims Act at 31 U.S.C. 3729(b)(1)(A). Specifically, in this regulation
we propose to remove the existing ``reasonable diligence'' standard and
adopt by reference the False Claims Act definition of ``knowing'' and
``knowingly'' as set forth at 31 U.S.C. 3729(b)(1)(A). Under the
proposed rule, an MA organization, Part D sponsor, provider or supplier
has identified an overpayment if it has actual knowledge of the
existence of the overpayment, or acts in reckless disregard or
deliberate ignorance of the overpayment.
11. Changes to an Approved Part D Formulary--Immediate Substitutions
(Sec. Sec. 423.4, 423.100, 423.104, 423.120, and 423.128)
Current regulations permit Part D sponsors to immediately remove
from the formulary a brand name drug and substitute its newly released
generic equivalent. Part D sponsors meeting the requirements can
provide notice of specific changes, including direct notice to affected
beneficiaries, after they take place; do not need to provide a
transition supply of the substituted drug; and can make these changes
at any time including in advance of the plan year. Consistent with
these requirements, we propose to permit Part D sponsors to immediately
substitute: (i) a new interchangeable biological product for its
corresponding reference product; (ii) a new unbranded biological
product for its corresponding brand name biological product; and (iii)
a new authorized generic for its corresponding brand name equivalent.
12. Expanding Eligibility for Low-Income Subsidies (LIS) Under Part D
of the Medicare Program (Sec. Sec. 423.773 and 423.780)
Section 11404 of the IRA amended section 1860D-14 of the Act to
expand eligibility for the full LIS to individuals with incomes up to
150 percent of the Federal poverty level (FPL) beginning on or after
January 1, 2024. In addition, the IRA allows for individuals to qualify
for the full subsidy based on the higher resource requirements
currently applicable to the partial LIS group. This change will provide
the full LIS subsidy for those who currently qualify for the partial
subsidy, and we are proposing to implement this change in this
regulation.
C. Summary of Costs and Benefits
BILLING CODE 4120-01-P
[[Page 79457]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.000
[[Page 79458]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.001
[[Page 79459]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.002
[[Page 79460]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.003
[[Page 79461]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.004
[[Page 79462]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.005
[[Page 79463]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.006
[[Page 79464]]
[GRAPHIC] [TIFF OMITTED] TP27DE22.007
[[Page 79465]]
BILLING CODE 4120-01-C
II. Implementation of Certain Provisions of the Bipartisan Budget Act
of 2018, the Consolidated Appropriations Act, 2021, and the Inflation
Reduction Act of 2022
A. Applying D-SNP Look-Alike Requirements to Plan Benefit Package
Segments (Sec. Sec. 422.503(e), 422.504, 422.510 and 422.514)
In the final rule titled ``Medicare Program; Contract Year 2021
Policy and Technical Changes to the Medicare Advantage Program,
Medicare Prescription Drug Benefit Program, and Medicare Cost Plan
Program'' which appeared in the Federal Register on June 2, 2020 (85 FR
33796) (hereinafter referred to as the June 2020 final rule), CMS
finalized the contracting limitations for D-SNP look-alikes at Sec.
422.514(d) and the associated authority and procedures for
transitioning enrollees from a D-SNP look-alike at Sec. 422.514(e).
For plan year 2022 and subsequent years, as provided in Sec.
422.514(d)(1), CMS will not enter into a contract for a new non-SNP MA
plan that projects, in its bid submitted under Sec. 422.254, that 80
percent or more of the plan's total enrollment are enrollees entitled
to medical assistance under a State plan under Title XIX. For plan year
2023 and subsequent years, as provided in Sec. 422.514(d)(2), CMS will
not renew a contract with a non-SNP MA plan that has actual enrollment,
as determined by CMS using the January enrollment of the current year,
consisting of 80 percent or more of enrollees who are entitled to
medical assistance under a State plan under Title XIX, unless the MA
plan has been active for less than 1 year and has enrollment of 200 or
fewer individuals at the time of such determination.
We established these contract limitations to address the
proliferation and growth of D-SNP look-alikes, which raised concerns
related to effective implementation of requirements for D-SNPs
established by section 1859 of the Act (including amendments made by
the Medicare Improvements for Patients and Providers Act of 2008 (Pub.
L. 110-275) and the Bipartisan Budget Act of 2018 (Pub. L. 115-123)).
We adopted the regulation to ensure full implementation of requirements
for D-SNPs, such as contracts with State Medicaid agencies; a minimum
integration of Medicare and Medicaid benefits; care coordination
through health risk assessments (HRAs); evidence-based models of care.
In addition, we noted how limiting these D-SNP look-alikes would
address beneficiary confusion stemming from misleading marketing
practices by brokers and agents that misrepresent to dually eligible
individuals the characteristics of D-SNP look-alikes. For a more
detailed discussion of D-SNP look-alikes and their impact on the
implementation of D-SNP Medicare and Medicaid integration, we direct
readers to the June 2020 final rule (85 FR 33805 through 33820) and the
Medicare and Medicaid Programs; Contract Year 2021 and 2022 Policy and
Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly (85 FR 9018
through 9021) (also known as the February 2020 proposed rule). We are
proposing amendments to close unforeseen loopholes in the scope of the
regulation adopted to prohibit D-SNP look-alikes.
1. Applying Contracting Limitations for D-SNP Look-Alikes to MA Plan
Segments
As written at Sec. 422.514(d) and (e), the contracting limitations
for D-SNP look-alikes are based on analysis at the MA plan level.
Section 1854(h) of the Act authorizes MA organizations to segment an MA
plan and apply the uniformity requirements for MA plans at the segment
level, provided that the segments are comprised of one or more MA
payment areas. As implemented in Sec. Sec. 422.2 (defining ``MA
plan''), 422.100(d), 422.254, and 422.262, MA plans may include
multiple segments in an MA plan in which different benefit designs,
cost-sharing, and premiums are available; bids are submitted at the
segment level if an MA plan is segmented and evaluation of compliance
with MA requirements is done at the segment level where appropriate.
See Sec. 422.100(f)(6) providing for evaluation of cost-sharing at the
segment level for segmented plans. In effect, each segment of an MA
plan is like a plan itself. We discussed in the Medicare Program;
Medicare+Choice Program (65 FR 40170, 40204 through 40205) final rule,
which appeared in the Federal Register on June 29, 2000 (also known as
the June 2000 final rule) how the authority in section 1854(h) of the
Act for an MA organization to segment an MA plan has practical
implications that are similar to offering multiple plans. One or more
segments can be part of the same MA plan even though the Medicare Part
C benefits, cost-sharing, premiums, and marketing materials can differ.
For example, MA plan benefit package H1234-567 could offer multiple
segments distinguished by three additional digits, such as H1234-567-
001, H1234-567-002, and H1234-567-003. Since adopting Sec. 422.514(d),
we have seen MA plans where a specific segment looks like a D-SNP look-
alike and would be subject to the contracting prohibitions in Sec.
422.514(d) if the segment were treated as an MA plan. As finalized,
Sec. 422.514(d) does not clearly apply to a segment within an MA plan.
However, we believe that by applying the D-SNP look-alike contracting
limitations only at the MA plan level without applying it to segments
of plans, our existing regulation has an unintended and unforeseen
loophole through which D-SNP look-alikes could persist, contrary to the
stated objectives in our prior rulemaking.
Based on January 2022 Monthly Membership Report (MMR) data, we
identified 47 non-SNP MA plans that meet the criteria outlined at Sec.
422.514(d)(2) when we performed our analysis at the plan level. If we
were to apply the Sec. 422.514(d)(2) criteria at the MA plan segment
level, segments of three additional non-SNP MA plans would be
identified as D-SNP look-alikes. The segments in those three plans
collectively have approximately 3,000 enrollees. While the number of
non-SNP MA plans at the segment level is currently small, this number
could grow in the future and provide an opportunity for MA
organizations to circumvent the D-SNP look-alike contracting
limitations at Sec. 422.514(d). For example, in our analysis of
proposed D-SNP look-alike transitions for contract year 2023, two D-SNP
look-alikes in contract year 2022 are proposing to transition a
combined total of approximately 7,800 D-SNP look-alike enrollees into
two new non-SNP MA plan segments, which could create two new D-SNP
look-alike segments for contract year 2023.
We propose adding a new paragraph at 42 CFR 422.514(g) to provide
that Sec. 422.514(d) through (f) apply to segments of the MA plan in
the same way that those provisions apply to MA plans. As a result, CMS
will not contract with or renew a contract with a plan segment where
the MA plan or segment is not a D-SNP and the enrollment thresholds in
paragraph (d)(1) or (d)(2) are met. This proposal, to treat a segment
of an MA plan as an MA plan, would be consistent with CMS' annual
review of MA plan bids and Medicare cost-sharing, in which each MA plan
segment submits a separate bid pricing tool and plan benefit package
like an unsegmented MA plan and CMS separately evaluates these
submissions for compliance with MA requirements.
[[Page 79466]]
As discussed in the June 2020 final rule, CMS implements the
contracting prohibition in Sec. 422.514 at the plan level. Where an MA
plan is one of several offered under a single MA contract and the MA
organization does not voluntarily non-renew the D-SNP look-alike, CMS
will sever the D-SNP look-alike from the overall contract using its
authority under Sec. 422.503(e) to sever a specific MA plan from a
contract and terminate the deemed contract for the look-alike plan (85
FR 33812). However, CMS does not currently have clear regulatory
authority to sever a segment from an MA plan to terminate a contract
that has only a segment of an MA plan. CMS adopted the severability
regulation at Sec. 422.503(e) in the Medicare Program; Establishment
of the Medicare+Choice Program interim final rule (63 FR 35103,
hereafter known as the June 1998 interim final rule) as part of
implementing the statutory authority for MA contracts to cover more
than one MA plan. Without amending Sec. 422.503(e), CMS would need to
sever the entire MA plan that has the D-SNP look-alike segment such
that other segments in that MA plan would be subject to the contracting
prohibition and not renewed under Sec. 422.514(d) as proposed to be
amended here if the MA organization failed to comply with Sec.
422.514(d). Instead, we propose to amend Sec. 422.503(e) to allow for
CMS to sever a segment from an MA plan and allow the remaining segments
of that MA plan to continue along with any other MA plans offered under
the same contract. We propose to rely on our authority to adopt MA
standards under section 1856(b)(1) of the Act and our authority to
adopt additional contract terms when necessary and appropriate, and not
inconsistent with the MA statute, under section 1857(e)(1) of the Act.
Our primary impetus for this proposal relates to D-SNP look-alikes, but
our proposal at Sec. 422.503(e) is not specific to D-SNP look-alikes;
because each segment of an MA plan is like a plan itself, we believe
severability should apply similarly at the plan and segment level. We
also propose to amend Sec. 422.504(a)(19) to adopt a new contract term
that MA organizations agree not to segment an MA plan in a way that
results in a D-SNP look-alike. In conjunction with the proposed
amendments to Sec. 422.514(g) to apply the prohibitions on contracting
with D-SNP look-alikes to segments of an MA plan, the amendments to
Sec. 422.503(e) would allow CMS to eliminate existing D-SNP look-alike
segments and the amendments to Sec. 422.504(a)(19) would allow CMS to
prevent new D-SNP look-alikes.
2. Applying Contracting Limitations for D-SNP Look-Alikes to Existing
MA Plans
We identified a second loophole during our analysis of contract
year 2023 MA plan bids to identify any new MA plans that meet the
contract limitation at Sec. 422.514(d)(1). An existing (that is,
renewing) MA plan that did not meet the criteria in Sec. 422.514(d)(2)
(using January 2022 MMR data as provided in paragraph (e)(3)) projected
in its contract year 2023 bid that the MA plan would have 80 percent or
higher enrollment of dually eligible individuals in 2023. Because this
MA plan is not a new MA plan for contract year 2023, the contract
prohibition in Sec. 422.514(d)(1) did not apply. To prohibit similar
situations in the future, we propose to amend Sec. 422.514(d)(1) to
apply it to both new and existing (that is, renewing) MA plans that are
not D-SNPs and submit bids with projected enrollment of 80 percent or
more enrollees of the plan's total enrollment that are dually eligible
for Medicare and Medicaid. We propose to revise paragraph (d)(1) to
provide that CMS does not enter into or renew an MA contract for plan
year 2024 and subsequent years when the criteria in paragraphs
(d)(1)(i) and (ii) are met. We are proposing to begin this prohibition
with 2024 because we expect that 2024 will be the first plan year after
the final rule adopting this proposal. Pending finalization of this
proposal, Sec. 422.514(d)(1) will continue to prohibit contracts with
new MA plans that meet the criteria. As contracts for 2022 and 2023
have been awarded as of the time this proposed rule is issued, the
earliest our proposed revision to expand the scope of Sec.
422.514(d)(1) can apply is 2024.
3. Contract Limitations for D-SNP Look-Alikes as a Basis for MA
Contract Termination (Sec. 422.510(a)(4))
Finally, we propose an amendment to Sec. 422.510(a)(4), which
outlines the bases for termination of an MA contract. Specifically, we
propose to add language at Sec. 422.510(a)(4) to add a new paragraph
(a)(4)(xvi) that permits CMS to terminate an MA contract when the MA
organization meets the criteria in Sec. 422.514(d)(1) or (d)(2). This
proposed amendment is consistent with how Sec. 422.514(d) provides
that CMS will not enter into or renew an MA contract in certain
circumstances. In our view, Sec. 422.514(d) is sufficient authority
for the non-renewal, that is termination, of MA contracts when Sec.
422.514(d) applies. However, we believe that adopting a specific
provision in Sec. 422.510(a)(4) will avoid any inadvertent ambiguity
on this topic and make it clear that the procedures outlined in Sec.
422.510, including notices, timeframes, and appeal rights, apply when
CMS does not renew an MA contract based on application of Sec.
422.514(d).
B. Part D Special Enrollment Period Change Based on CAA Medicare
Enrollment Changes (Sec. 423.38)
Section 101 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L 108-173) established a Part D--
Voluntary Prescription Drug Benefit program for Medicare-eligible
individuals. The MMA added section 1860D-1(b)(3)(C) of the Act, which
authorized the Secretary to establish Part D special enrollment periods
(SEP) for Medicare-eligible individuals to enroll in a Part D plan
based on exceptional circumstances--that is, an individual may elect a
plan or change his or her current plan election when the individual
meets an exceptional condition as determined by the Secretary.
The SEPs for exceptional conditions were historically included in
our manual instructions rather than through regulation. In 2020, we
codified a number of SEPs that we had adopted and implemented through
subregulatory guidance as exceptional circumstance SEPs, including the
SEP for Individuals Who Enroll in Part B During the Part B General
Enrollment Period (GEP) (85 FR 33909). This SEP, as codified at Sec.
423.38(c)(16), allowed individuals who are not entitled to premium-free
Part A and who enroll in Part B during the GEP for Part B (January-
March) to enroll in a Part D plan. This SEP begins April 1st and ends
June 30th, with a Part D plan enrollment effective date of July 1st.
This SEP effective date aligns with the entitlement date for Part B for
individuals who enroll in Part B during the GEP.
Currently, when an individual enrolls in Part B during the GEP,
their Part B enrollment entitlement date is July 1st, regardless of
when during the GEP they enrolled. Division CC, title I, subtitle B,
section 120 of the Consolidated Appropriations Act, 2021 (CAA) Pub. L
116-260 modified section 1838(a)(2) of the Act, to address the
beginning of the entitlement for individuals enrolling during their GEP
pursuant to section 1837(e) of the Act. As added by the CAA, section
1838(a)(2)(D)(ii) of the Act requires that, for an individual who
enrolls in Part B during the GEP on or
[[Page 79467]]
after January 1, 2023, entitlement begins the first day of the month
following the month in which the individual enrolled. For example, if
an individual enrolls in Part B in February 2023 (during the GEP),
their Part B coverage will begin on March 1st.
Based on Medicare enrollment statutory changes made by the CAA
described previously, we are proposing to revise the start and end date
for the SEP for Individuals Who Enroll in Part B During the Part B GEP
to align with the Part B entitlement dates for someone who enrolls in
Part B using the GEP that starts January 1, 2023. Accordingly, we are
also proposing to revise the effective date of the individual's Part D
plan enrollment, which is always July 1st under the current parameters
of this Part D SEP. That is, we are proposing to modify Sec.
423.38(c)(16) to provide that on or after January 1, 2023, an
individual who is not entitled to premium-free Part A and who enrolls
in Part B during the GEP is eligible to use the SEP for Individuals Who
Enroll in Part B During the Part B GEP to request enrollment in a Part
D plan, and that this SEP will begin when the individual submits the
application for Part B, and will continue for the first 2 months of
enrollment in Part B. Further, we propose to modify Sec. 438.38(c)(16)
to provide that where an individual uses this Part D SEP to request
enrollment in a Part D plan, the Part D plan enrollment would be
effective the first of the month following the month the Part D plan
sponsor receives the enrollment request. For example, an individual who
enrolls in Part B on February 10th for a Part B entitlement date of
March 1st can use the Part D SEP to request enrollment in a Part D plan
during the period from February 10th to April 30th. If the individual
submitted an enrollment request for a Part D plan on February 10th and
the enrollment is accepted, the effective date of their Part D coverage
would be March 1st. Note that an individual's Part D enrollment
effective date cannot be prior to the Part A and/or Part B entitlement
date, and the individual must also meet other Part D plan eligibility
criteria as described in Sec. 423.30(a). Per current practice, the
Part D plan would need to confirm that the individual had enrolled in
Part B (or Part B and premium Part A) prior to the individual's Part D
enrollment effective date. The Social Security Administration (SSA)
will have to first process the individual's Part B application and
submit that information into SSA systems, which, in turn, would be
populated in the CMS enrollment systems, for a Part D plan to have
access to that entitlement information.
We expect this proposed change in enrollment and effective dates
using this Part D SEP would simplify the enrollment process and reduce
the potential for gaps in prescription drug coverage. Also, we believe
it will be easier for beneficiaries to understand the effective date of
their Medicare coverage using this Part D SEP, as we are proposing that
the Part D effective date will be the first of the month following the
month the beneficiary submits an enrollment request, which aligns with
most Part D enrollment and SEP timeframes. Although the current SEP for
Individuals Who Enroll in Part B During the Part B GEP lasts for 3
calendar months, and the proposed timeframe for use of this SEP would
be shorter, the proposed timeframe aligns with most of our other Part D
SEPs. In addition, this proposed timeframe would provide the individual
the opportunity for a Part D plan enrollment effective date that is
within 63 days of the Part B entitlement. For individuals who have
maintained creditable drug coverage prior to enrolling in Part B, this
proposed SEP timeframe will help to ensure that an individual would not
incur a Part D late enrollment penalty (LEP). For example, if an
individual enrolls in Part B in February and is entitled to Part B
effective March 1st, they could enroll in a Part D plan for an
effective date of March 1st, April 1st or May 1st, depending on whether
the Part D plan sponsor received the enrollment request in February,
March or April, respectively. Any of these Part D plan effective dates
would provide Part D coverage to an individual who maintained
creditable coverage prior to enrolling in Part B in February within the
63-day timeframe to avoid the penalty. Proposing this exceptional
condition SEP also supports President Biden's April 5, 2022 Executive
Order on Continuing to Strengthen Americans' Access to Affordable,
Quality Health Coverage, which, among other things, requires agencies
to examine policies or practices that make it easier for all consumers
to enroll in and retain coverage, understand their coverage options,
and select appropriate coverage, and also examine policies or practices
that strengthen benefits and improve access to healthcare providers.
This proposal would revise the timeframes for use of the Part D SEP
described in Sec. 423.38(c)(16) based on the change in effective date
for GEP enrollments made by section 120 of the CAA. These proposed
revisions are needed to align the timeframe for use of this Part D SEP
based on new Part B GEP enrollment effective date parameters.
Because an individual may elect a Part D plan only during an
election period, Medicare Part D sponsors already have procedures in
place to determine the election period(s) for which an applicant is
eligible. Our proposal would not add to existing enrollment processes,
so we believe any burden associated with this aspect of enrollment
processing would remain unchanged from the current practice, and would
not impose any new requirements or burden.
All information impacts of this provision have already been
accounted for under OMB control number 0938-1378 (CMS-10718). We do not
believe the proposed changes will adversely impact individuals
requesting enrollment in Medicare plans, the plans themselves, or their
current enrollees. Similarly, we do not believe the proposed changes
would have any impact to the Medicare Trust Funds.
C. Alignment of Part C and Part D Special Enrollment Periods With
Medicare Exceptional Condition Enrollment (Sec. Sec. 422.62 and
423.38)
Section 1851(e)(4)(D) of the Act authorizes the Secretary to create
special enrollment periods (SEPs) for an individual to disenroll from
an MA plan or elect another MA plan if the individual meets an
exceptional condition provided by the Secretary. This authority was
originally codified at Sec. 422.62(b)(4) in the June 1998 interim
final rule as a general SEP for CMS to apply on an ad hoc basis. (63 FR
35073)
As noted previously, section 1860D-1(b)(3)(C) of the Act authorizes
the Secretary to establish Part D SEPs for Medicare-eligible
individuals to enroll in a Part D plan if they meet certain exceptional
circumstances. This authority was originally codified at Sec.
423.38(c)(8)(ii) (70 FR 4529). The MMA also added section 1860D-
1(b)(1)(B) of the Act which provides that in adopting the Part D
enrollment process, the Secretary ``shall use rules similar to (and
coordinated with) the rules for enrollment, disenrollment, termination,
and change of enrollment with an MA-PD plan under the following
provisions of section 1851.''
Historically, we had included in our regulations those MA and Part
D SEPs that have been specifically named in the statute, and
established SEPs for exceptional conditions in our subregulatory
guidance. In the June 2020 final rule, we codified, at Sec. Sec.
422.62(b) and 423.38(c), respectively, the MA and Part D SEPs that we
had adopted and implemented through
[[Page 79468]]
subregulatory guidance as exceptional condition SEPs (85 FR 33796).
Codifying these SEPs provided transparency and stability to the MA and
Part D programs by ensuring that these SEPs are known to plans and
beneficiaries.
As required by section 1851(a)(3) of the Act (for the MA program)
and section 1860D-1(a)(3)(A) of the Act (for the Part D program) and
described in Sec. Sec. 422.50(a)(1) and 423.30(a)(1)(i), eligibility
for MA or Part D plan enrollment requires that an individual first have
Medicare Parts A and B for MA eligibility and either Part A or B for
Part D eligibility. Individuals who are entitled to premium-free Part A
are generally auto-enrolled when they are first eligible, if they are
already receiving retirement or disability benefits from the SSA or
Railroad Retirement Board, or they may submit an application to enroll
in premium-free Part A at any time after meeting the requirements for
entitlement. Under normal conditions, individuals who want to enroll in
premium Part A, Part B, or both, must submit a timely enrollment
request during their Initial Enrollment Period (IEP), the GEP, or an
existing SEP for which they are eligible. Those who fail to enroll
during their IEP may face a lengthy penalty for late enrollment (life-
long for Part B) and a potential gap in coverage. Prior to the
enactment of the Consolidated Appropriations Act, 2021 (CAA) (Pub. L
116-260), CMS did not have broad authority to create SEPs based on
exceptional conditions for enrollment into Medicare Parts A and B.
However, Division CC, title I, subtitle B, Section 120 of the CAA
established section 1837(m) of the Act to authorize the Secretary to
establish Part B SEPs for individuals who are eligible to enroll in
Medicare and meet such exceptional conditions as the Secretary
provides. Per section 1818(c) of the Act, the provisions of section
1837 of the Act, excluding subsection (f) thereof, applies to the
premium Part A program. This authority to adopt exceptional conditions
SEPs for premium Part A and Part B is effective January 1, 2023. The
ability to grant SEPs for exceptional conditions is an important tool
that will allow CMS to provide relief to individuals who missed an
opportunity to enroll in Medicare due to circumstances that were
outside of their control, ensure continuous health coverage, and avoid
late enrollment penalties on the premium Part A or Part B premiums. CMS
finalized new exceptional condition SEPs under section 1837(m) of the
Act in 42 CFR 406.27 and 407.23 for Medicare parts A and B,
respectively, in a final rule that was published in the Federal
Register on November 3, 2022, titled ``Medicare Program; Implementing
Certain Provisions of the Consolidated Appropriations Act, 2021 and
Other Revisions to Medicare Enrollment and Eligibility Rules'' (87 FR
66454). These SEPs would be available to individuals who have missed an
enrollment period due to an exceptional condition that is specified in
the final rule. Specifically, individuals who miss an IEP, GEP, or
another SEP, such as the Group Health Plan SEP, due to a specified
exceptional condition, would be eligible to enroll in Medicare premium
Part A or Part B using the new SEPs.
Based on Medicare enrollment changes made by the CAA described
previously, we are proposing to add corresponding exceptional condition
SEPs for MA and Part D enrollment, as authorized under sections
1851(e)(4)(D) and 1860D-1(b)(3)(C) of the Act, to align with the new
Medicare premium Part A and B exceptional condition SEPs that CMS has
finalized in 42 CFR 406.27 and 407.23. These new Medicare Part C and D
SEPs would be based on an individual's use of a Medicare premium Part A
or Part B exceptional conditions SEP. That is, individuals who use an
exceptional condition SEP to enroll in premium Part A and/or Part B
will be provided an opportunity to enroll in a MA or Part D plan,
provided that the individual meets applicable eligibility requirements
for the plan.
We are proposing at Sec. 422.62(b) to redesignate current
paragraphs (26) as (27) and add a new paragraph (26) to provide an SEP
for individuals to enroll in a MA plan or MA plan that includes Part D
benefits (MA-PD plan), when they use a Medicare exceptional condition
SEP to enroll in premium Part A and/or Part B. We are also proposing at
Sec. 423.38(c) to redesignate current paragraph (34) as (35) and add
new paragraph (34) to provide an SEP for individuals to enroll in a
stand-alone Part D prescription drug plan (PDP) when they use a
Medicare exceptional condition SEP to enroll in premium Part A or Part
B.
The proposed new MA SEP would begin when the individual submits the
application for premium Part A and Part B, or only Part B, and would
continue for the first 2 months of enrollment in Part A (premium or
premium-free) and Part B. Similarly, the proposed new Part D SEP would
begin when the individual submits their premium Part A or Part B
application and would continue for the first 2 months of enrollment in
premium Part A or Part B. The MA or Part D plan enrollment would be
effective the first of the month following the month the MA or Part D
plan receives the enrollment request. For example, an individual who
enrolls in premium Part A or Part B using an exceptional conditions
SEP, as codified in 42 CFR 406.27 and 407.23, on July 10th for an
entitlement ate of August 1st, can use the MA or Part D exceptional
circumstance SEP to request enrollment in a MA or Part D plan during
the period from July 10th to September 30th. If the individual
submitted an enrollment request for an MA or Part D plan on July 10th
and the enrollment is accepted, the effective date of their MA or Part
D coverage would be August 1st.
An individual's MA or Part D plan enrollment effective date cannot
be prior to the Part A and/or Part B enrollment date, and the
individual must also meet other MA or Part D plan eligibility criteria
as described in Sec. Sec. 422.50(a) or 423.30(a), respectively, in
order to use the new MA or Part D SEP we are proposing. Per current
practice, the MA or Part D plan would need to confirm that the
individual had enrolled in premium Part A and/or Part B, as applicable,
using one of the new SEPs for exceptional conditions prior to the
individual's MA or Part D enrollment effective date. The SSA will have
to first process the individual's premium Part A and/or Part B
application and submit that information into SSA systems, which, in
turn, would be populated in the CMS enrollment systems, for an MA or
Part D plan to have access to that enrollment information.
Providing an opportunity for Part D enrollment at the time of
Medicare premium Part A or Part B enrollment using an exceptional
condition SEP will help ensure that an individual will have timely
access to Part D drugs, within the timeframe of 63 days \3\ established
in regulation at Sec. 423.46(a), to prevent a Part D late enrollment
penalty from being assessed. For example, if an individual enrolls in
premium Part A or Part B using an exceptional condition SEP in July and
is entitled to premium Part A and/or Part B effective August 1st, they
could enroll in a Part D plan
[[Page 79469]]
for an effective date of August 1st, September 1st, or October 1st,
depending on whether the Part D plan sponsor received the enrollment
request in July, August, or September respectively. Any of these Part D
plan effective dates would provide an individual with Part D coverage
within the 63-day timeframe of Medicare eligibility to avoid the
penalty. This is an important beneficiary protection, especially for
those individuals who have to bear the cost of paying a premium for
Part A.
---------------------------------------------------------------------------
\3\ 42 CFR 423.46(a) states that, a Part D eligible individual
must pay the late penalty described under Sec. 423.286(d)(3),
except as described at Sec. 423.780(e), if there is a continuous
period of 63 days or longer at any time after the end of the
individual's initial enrollment period during which the individual
meets all of the following conditions:
(1) The individual was eligible to enroll in a Part D plan.
(2) The individual was not covered under any creditable
prescription drug coverage.
(3) The individual was not enrolled in a Part D plan.
---------------------------------------------------------------------------
This proposed MA exceptional condition SEP will allow beneficiaries
who are enrolled in premium Part A and in Part B to exercise their
option to receive their healthcare from an MA plan, instead of Original
Medicare, as soon as the individual is enrolled in both Parts A and B,
without waiting for the annual coordinated election period. Proposing
exceptional condition SEPs for MA and Part D also supports President
Biden's April 5, 2022 E.O. on Continuing to Strengthen Americans'
Access to Affordable, Quality Health Coverage, which, among other
things, requires agencies to examine policies or practices that make it
easier for all consumers to enroll in and retain coverage, understand
their coverage options, and select appropriate coverage, and also
examine policies or practices that strengthen benefits and improve
access to healthcare providers.
Because an individual may elect an MA or Part D plan only during an
election period, MA organizations and Part D sponsors already have
procedures in place to determine the election period(s) for which an
applicant is eligible. Our proposal would not add to existing
enrollment processes, so we believe any burden associated with this
aspect of enrollment processing would remain unchanged from the current
practice, and would not impose any new requirements or burden.
Consequently, this provision will not have added impact. All burden
impacts of these provisions have already been accounted for under OMB
control number 0938-1378 (CMS-10718). We do not believe the proposed
changes will adversely impact individuals requesting enrollment in
Medicare plans, the plans themselves, or their current enrollees.
Similarly, we do not believe the proposed changes would have any impact
to the Medicare Trust Funds.
D. Transitional Coverage and Retroactive Medicare Part D Coverage for
Certain Low-Income Beneficiaries Through the Limited Income Newly
Eligible Transition (LI NET) Program (Sec. Sec. 423.2500 through
423.2536)
1. Background on the LI NET Demonstration and Introduction to the
Proposals
a. Background on the LI NET Demonstration
The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) established the Medicare Part D prescription drug
benefit, which became effective on January 1, 2006. Prior to 2006,
beneficiaries who were eligible for both Medicaid and Medicare (dual
eligible) received prescription drug benefits through Medicaid. When
the MMA went into effect, dual eligible beneficiaries began receiving
their prescription drug benefits through Medicare Part D.
From the beginning of Part D, CMS recognized the need to provide
both immediate and retroactive coverage for full benefit dual eligible
(FBDE) beneficiaries who were newly identified by either CMS or a
State. Prior to 2010, CMS automatically enrolled newly identified
beneficiaries eligible for the Part D low-income subsidy (LIS) into a
Part D plan with a premium at or below the low-income benchmark
(``benchmark'' plans), which have no or reduced premiums for LIS-
eligible beneficiaries. Each benchmark plan receiving these
beneficiaries was required to grant retroactive coverage to the
beginning of a beneficiary's LIS-eligible status or their last
uncovered month, whichever date was later. At the time, there were
around 300 Part D benchmark plans, and each needed to develop the
capacity to provide transitional and retroactive coverage for these
beneficiaries. Conducting retroactive claims adjudication and providing
point-of-sale coverage was not efficient for Part D sponsors and
accordingly, in 2010, CMS established the Medicare Part D Demonstration
for Retroactive and Point of Sale Coverage for Certain Low-Income
Beneficiaries, also known as Medicare's Limited Income Newly Eligible
Transition (LI NET demonstration). The LI NET demonstration
consolidates administration of transitional and retroactive Part D
coverage for eligible beneficiaries to a single Part D sponsor.
Part D coverage under the LI NET demonstration differs from
coverage under traditional Part D plans in that the LI NET
demonstration provides point-of-sale coverage for beneficiaries who
demonstrate an immediate need for prescriptions, and also provides
retroactive and/or temporary coverage for beneficiaries determined to
be eligible, or likely to be eligible, for the Part D LIS by the Social
Security Administration (SSA) or a State. The LI NET demonstration
provides temporary, transitional Part D prescription drug coverage for
LIS-eligible beneficiaries, including beneficiaries who are eligible
for the Part D LIS but who are not yet enrolled in a Part D drug plan,
or are enrolled in a plan but for whom coverage has not yet taken
effect.
The purposes of the demonstration are to provide the following:
<bullet> More efficient prescription drug coverage and claims
reimbursement for newly eligible low-income beneficiaries, including
periods of retroactive eligibility;
<bullet> More efficient prescription drug coverage and claims
reimbursement for individuals who are not enrolled in a PDP and whose
LIS status is not yet established in CMS' systems, but who arrive at a
pharmacy with an immediate need for their prescription. This may occur,
for instance, when a State has determined that a beneficiary is
eligible for Medicaid but that information does not yet appear in CMS'
systems;
<bullet> A seamless transition for LIS-eligible beneficiaries from
LI NET into a qualifying PDP with basic prescription drug coverage
absent a beneficiary's choice otherwise; and
<bullet> More efficient prescription drug coverage and claims
reimbursement for LIS-eligible beneficiaries who are losing existing
coverage in a PDP. For example, a beneficiary could be terminated for
moving out of the service area of their current PDP. The beneficiary
would be automatically enrolled into LI NET for that month and the
following month, with enrollment into a qualifying PDP with basic
prescription drug coverage that would become effective at the end of
the LI NET enrollment absent the beneficiary's choice otherwise.
b. Introduction to the Proposals To Implement LI NET as a Permanent
Program
Division CC, title I, subtitle B, section 118 of the Consolidated
Appropriations Act 2021 (CAA) (Pub. L. 116-260) modified section 1860D-
14 of the Act by redesignating subsection (e) of section 1860D-14 as
subsection (f) and by establishing a new subsection (e) Limited Income
Newly Eligible Transition Program. New subsection (e)(1) requires the
Secretary to ``carry out a program to provide transitional coverage for
covered Part D drugs for LI NET eligible individuals. . .'' no later
[[Page 79470]]
than January 1, 2024. This directive in section 118 of the CAA makes LI
NET a permanent program within Part D, beginning in 2024.
The proposed rulemaking to establish the LI NET program is
consistent with President Biden's Executive Order 13985 on Advancing
Racial Equity and Support for Underserved Communities Through the
Federal Government (January 20, 2021) and Executive Order 14085 on
Transforming Federal Customer Experience and Service Delivery to
Rebuild Trust in Government (December 13, 2021). LI NET ensures that
low-income beneficiaries transitioning from Medicaid to Medicare do not
experience a gap in coverage for their prescription medications.
Executive Order 14085 calls for the Federal Government to design and
deliver services with ``a focus on the actual experience of the people
whom it is meant to serve'' and ``deliver services more equitably and
effectively, especially for those who have been historically
underserved.'' We have designed the proposed LI NET program with
beneficiary needs foremost in mind, ensuring continuous drug coverage
and access for eligible low-income individuals.
LI NET policies, infrastructure, and operations have evolved over
the past 12 years to balance providing needed coverage with responsible
stewardship of taxpayer dollars and efficiency in administering the
program. The LI NET demonstration has proven successful in providing
low-income individuals transitional Part D coverage. Approximately 8
million low-income individuals received the benefits of the LI NET
program under the demonstration, with over 100,000 beneficiaries
enrolled in LI NET in any given month. It has become a program that
beneficiary advocacy groups rely on when supporting low-income
individuals and connecting them with services. LI NET works directly
with over a dozen advocacy groups and 51 State Health Insurance
Assistance Programs (SHIPs), which collectively work with LIS
beneficiaries to remove access barriers and provide health insurance
counseling.
We believe the LI NET demonstration has become a reliable, stable
program that has been successful in providing transitional and
retroactive Part D coverage to millions of beneficiaries. In developing
our proposals for implementing the permanent LI NET program, we have
taken into consideration our experience under the LI NET demonstration.
Where appropriate, we discuss the policies and practices under the LI
NET demonstration that inform our proposals for how to implement
aspects of the LI NET program that are not directly specified by the
statute.
We rely on the premise that Part D regulations apply to the LI NET
program and to the LI NET sponsor as part of the Part D program and as
a type of Part D sponsor, except for when the statute requires us to
deviate or when existing regulations would not apply. For example, as
discussed further in this proposed rule, because the LI NET sponsor is
required to have an open formulary, existing Part D requirements on
formulary development would not be applicable.
Our proposals to make LI NET a permanent program start with Sec.
423.2500. In Sec. 423.2500(a), we propose the basis of the LI NET
program would be based on section 1860D-14 of the Act. We propose in
Sec. 423.2500(b) the scope of the LI NET program, which would begin no
later than January 1, 2024. Under this program, eligible individuals
would be provided transitional coverage for part D drugs. Section Sec.
423.2504 sets forth the LI NET eligibility and enrollment proposals and
Sec. 423.2508 proposes LI NET benefits and beneficiary protections.
Next, we propose in Sec. 423.2512 the requirements to be an LI NET
sponsor and Sec. 423.2516 proposes how the Part D sponsor
administering LI NET in partnership with CMS will be selected and the
requirements set forth in the LI NET contract to provide services and
coverage. Section 423.2518 provides a proposal for intermediate
sanctions in the event of contract violations. Section 423.2520
proposes how an LI NET contract would be non-renewed or terminated.
Section 423.2524 lays out our proposals for bidding and determining the
LI NET payment rate. Finally, Sec. 423.2536 enumerates the Part D
requirements we propose waiving for LI NET.
We propose to align sunsetting the demonstration seamlessly with
the start of the LI NET program under this section. Specifically, the
LI NET demonstration would continue to operate until December 31, 2023,
and the LI NET program would start to operate on January 1, 2024
according to the regulations that we finalize.
2. Eligibility and Enrollment
a. Eligibility
Section 1860D-14(e)(2) of the Act provides that an individual is
eligible for LI NET coverage if they: (A) meet the requirements of
section 1860D-14(a)(3)(A)(ii) and (iii) of the Act; and (B) have not
yet enrolled in a prescription drug plan or an MA-PD plan, or, who have
so enrolled, but with respect to whom coverage under such plan has not
yet taken effect. This means that to be eligible, the individual would
need to be a full-benefit dual-eligible individual or low-income
subsidy (LIS) eligible individual as defined at Sec. 423.773 and--
<bullet> Not yet be enrolled in a prescription drug plan or an MA-
PD plan; or
<bullet> Be enrolled but their coverage has not yet taken effect.
Under these requirements, LI NET would be available to all
categories of individuals who are LIS-eligible, including:
<bullet> Full Subsidy-Full Benefit Dual Eligible (FBDE)
individuals, including institutionalized beneficiaries and
beneficiaries receiving home and community-based services;
<bullet> Full Subsidy-Non-FBDE Individuals, including those who
have applied or are eligible for QMB/SLMB/QI or SSI, with income and
resource thresholds at or below the amounts set by CMS each year; and
<bullet> Partial Subsidy Individuals, including those who have
applied and have income and resource amounts below the thresholds set
by CMS each year.
We propose to codify at Subpart Y the LI NET eligibility
requirements set forth in section 1860D-14(e)(2) of the Act. We propose
to establish in paragraph (a) of new Sec. 423.2504 two categories of
individuals eligible to enroll in LI NET that encompass the previously
noted categories of low-income individuals recognized by Part D. The
first category, which we term ``LIS-eligible'' in proposed paragraph
(a)(1), would be composed of individuals whose low-income status has
been confirmed either through CMS's data in our system of record or
because the individual can demonstrate their current or future low-
income status. The second category, which we term ``immediate need'' in
proposed paragraph (a)(2), would consist of individuals whose low-
income status has not been confirmed, because CMS's data do not yet
reflect the individual's low-income status, but the individual has
indicated that they are eligible for the LIS.
We refer to the individuals in the category established in proposed
paragraph (a)(2) as ``immediate need'' because they present at a
pharmacy or to the LI NET sponsor in immediate need of a prescription
and have no Part D coverage. Ideally, these beneficiaries would be able
to show documentation of their pending LIS status, such as a letter
received from the State showing the beneficiary's LIS status. However,
[[Page 79471]]
we do not believe an absence of documentation in hand at the point-of-
sale should be a barrier to entry to LI NET for immediate need
individuals. This is because our experience in the demonstration is
that 80 percent of immediate need individuals do have their eligibility
confirmed,\4\ and we would not want to turn away these individuals who
imminently require access to their prescription drugs. Under the LI NET
demonstration, individuals can indicate the likelihood of their low-
income status by providing the evidence they have, which can include
verbal explanations of why they consider themselves eligible.
---------------------------------------------------------------------------
\4\ Of the 80 percent of immediate need LI NET beneficiaries
whose LIS status is ultimately confirmed, for 89 percent
confirmation was within 10 days, and for 97 percent confirmation was
within 21 days. In the demonstration, beneficiaries whose LIS status
is not able to be confirmed within 21 days continue to be enrolled
in LI NET for two months, but they can no longer fill prescriptions
after 21 days.
---------------------------------------------------------------------------
We propose in Sec. 423.2504(a)(2) to grant immediate access to
covered Part D drugs at the point-of-sale for individuals whose
eligibility as defined at Sec. 423.773 cannot be confirmed at the
point-of-sale. Under proposed paragraph (a)(2)(i), immediate need
individuals may provide documentation to the LI NET sponsor to confirm
LIS eligibility. Documentation could include, but would not be limited
to--
<bullet> A copy of the beneficiary's Medicaid card that includes
their name and eligibility date;
<bullet> A copy of a letter from the State or SSA showing LIS
status;
<bullet> The date that a verification call was made to the State
Medicaid Agency, the name and telephone number of the State staff
person who verified the Medicaid period, and the Medicaid eligibility
dates confirmed on the call;
<bullet> A copy of a State document that confirms active Medicaid
status;
<bullet> A screen-print from the State's Medicaid systems showing
Medicaid status; or
<bullet> Evidence at point-of-sale of recent Medicaid billing and
payment in the pharmacy's patient profile.
Under proposed paragraph (a)(2)(ii), if an immediate need
individual's LIS status cannot be confirmed within a period of 2
months, that individual would not be automatically enrolled into a Part
D plan. This is the same as current practice under the LI NET
demonstration. We solicit comment on the proposal to align the 2 months
of enrollment with the ability to fill prescriptions for these
immediate need beneficiaries.
We propose in Sec. 423.2504(a)(2)(i) that immediate need
beneficiaries whose eligibility cannot be confirmed can continue to
fill prescriptions throughout their 2-month enrollment in LI NET. We
believe this ensures access to LI NET benefits and is an
administratively simple approach as compared with alternative ideas,
such as the approach under the demonstration of keeping immediate need
beneficiaries with uncertain eligibility enrolled in LI NET but unable
to fill prescriptions. We propose in Sec. 423.2504(a)(2)(ii) that if,
by the end of an immediate need individual's enrollment in LI NET,
neither CMS's systems nor the beneficiary's provision of documentation
confirms low-income status, then that individual would not be auto-
enrolled into a qualifying standalone Part D plan following their LI
NET coverage.
b. Enrollment
Section 1860D-14(e) of the Act does not specify a process for
enrollment into the LI NET program. Therefore, in forming our proposed
enrollment process, we look to the process used in the demonstration.
Under the LI NET demonstration, there are four ways for eligible
individuals to be enrolled into the demonstration. They are as follows:
Automatic enrollment. Individuals who are LIS-eligible but do not
yet have Part D coverage, and those individuals who have selected a
Part D plan but whose enrollment has not taken effect, are enrolled by
CMS into the LI NET demonstration unless the beneficiary has
affirmatively declined enrollment in Part D.
Point of sale enrollment. Immediate need individuals whose claims
are submitted by the pharmacy at the point-of-sale and billed to LI NET
are enrolled into the LI NET demonstration by the LI NET sponsor.
Direct reimbursement request. Individuals who are LIS-eligible and
who submit receipts for reimbursement for claims paid out of pocket are
retroactively enrolled into the LI NET demonstration by the LI NET
sponsor, with 36-month retroactive coverage for full dual eligible
individuals and those who receive supplemental security income (SSI)
benefits.
LI NET application form. Beneficiaries who are not enrolled into LI
NET through auto-enrollment, point-of-sale enrollment or via an
approved direct reimbursement request may submit an application form to
the LI NET sponsor with supporting documentation demonstrating their
LIS status. The LI NET sponsor will periodically check for eligibility
and enroll applicants once eligibility is confirmed.
The majority of LI NET beneficiaries are enrolled into the LI NET
demonstration automatically by CMS; about 90 to 95 percent of LI NET
beneficiaries are those we identify in our systems and enroll into the
demonstration. To do this, CMS ``sweeps'' our data monthly to identify
all beneficiaries who are--
<bullet> Eligible for LIS;
<bullet> Eligible for Part D;
<bullet> Not enrolled in a Part D plan or receiving the Retiree
Drug Subsidy (RDS) or coverage through Veterans Affairs;
<bullet> Have not opted-out of Part D enrollment for any reason
(for example, because they declined it);
<bullet> Not incarcerated, are lawfully present in the US, and do
not live in another country; and
<bullet> Are not enrolled in a Part C plan that disallows
concurrent enrollment in a Part D plan.
Beneficiaries identified in the monthly sweep are automatically
enrolled into the LI NET demonstration for that month and the following
month. CMS then prospectively enrolls the beneficiary into a
traditional Part D plan, with coverage under that plan taking effect
immediately after the LI NET coverage ends. This population of
beneficiaries includes those who may be gaining Part D eligibility or
LIS status but have not made an election into a Part D plan.
A smaller number of beneficiaries, about five to ten percent of LI
NET beneficiaries, enroll in the LI NET demonstration outside of the
sweeps process. Some enroll at the point-of-sale, as described
previously. An even smaller number of beneficiaries contact the LI NET
sponsor directly to enroll in the LI NET demonstration. Individuals can
submit a request for reimbursement to the LI NET sponsor. If the person
is LIS-eligible, the LI NET sponsor enrolls them into the LI NET
demonstration and reimburses them for out-of-pocket costs during the
duration of their retroactive enrollment. As with an individual who is
enrolled at the point-of-sale, the start date of LI NET enrollment
would be the first of the month the request is received. There may be
individuals who do not have an immediate need for medication and
believe they are eligible for LI NET. These individuals can fill out an
application form, which allows the LI NET sponsor to periodically check
their eligibility and enroll them into LI NET if they become eligible.
Consistent with the enrollment processes under the demonstration,
we propose in Sec. 423.2504(b) to codify the ways in which individuals
can be enrolled into LI NET: auto-enrollment,
[[Page 79472]]
point-of-sale for immediate need individuals, direct reimbursement, and
LI NET enrollment form.
In Sec. 423.2504(b)(1), we propose that individuals who are LIS-
eligible and whose auto-enrollment into a Part D plan (as outlined in
Sec. 423.34(d)(1)) has not taken effect will be automatically enrolled
by CMS into the LI NET program unless they have affirmatively declined
enrollment in Part D per Sec. 423.34(e). LIS-eligible beneficiaries
who have made the decision to opt out of enrollment in Part D must take
a proactive step to contact CMS for us to record that decision in our
systems by placing a flag on the beneficiary's record. Beneficiaries
may opt out of Part D enrollment if they have other insurance or do not
want to participate as a matter of principle. We assume that a
beneficiary who opts out of Part D enrollment would also want to opt
out of transitional coverage under the LI NET program. Therefore,
proposed Sec. 423.2504(b)(1) would provide that when a beneficiary
affirmatively declines enrollment in Part D per Sec. 423.34(e), that
would also entail opting out of LI NET enrollment.
In defining ``transitional coverage'' for LI NET, the statute sets
forth requirements for the duration of LI NET coverage under section
1860D-14(e)(3). Section 1860D-14(e)(3)(A) of the Act establishes that
``immediate access to covered part D drugs at the point of sale during
the period that begins on the first day of the month such individual is
determined to meet the requirements of clauses (ii) and (iii) of
subsection (a)(3)(A) and ends on the date that coverage under a
prescription drug plan or MA-PD plan takes effect with respect to such
individual.'' The starting point of enrollment into LI NET for these
types of LIS-eligible beneficiaries, whether they are automatically
enrolled or immediate need individuals, is required by statute but the
duration of time they prospectively remain enrolled in LI NET is not
specified. Under the demonstration, we have typically capped non-
retroactive coverage in LI NET to 2 months. Consistent with the statute
and with our operations under the demonstration, in Sec. 423.2504(c),
we propose that LI NET enrollment begins on the first day of the month
an individual is identified as eligible under Sec. 423.2504 and ends
after 2 months.
Section 1860D-14(e)(3)(B) of the Act sets a limit on how far back
retroactive LI NET coverage can extend. Full-benefit dual eligible
individuals (as defined in section 1935(c)(6)) and recipients of
supplemental security income (SSI) benefits under title XVI) are
eligible for up to 36 months of retroactive coverage. In proposed Sec.
423.2504(c)(2), retroactive LI NET coverage would begin on the date an
individual is identified as full-benefit dual or an SSI benefit
recipient, or 36 months prior to the date such individual enrolls in
(or opts out of) Part D coverage, whichever is later. This duration of
time is similar to retroactive coverage under the demonstration, which
provides for a maximum retroactive period of 36 months for Full Subsidy
LIS eligible individuals.\5\ As with LI NET beneficiaries without
retroactive coverage, we propose that LI NET coverage would end with
enrollment into a Part D plan or opting out of Part D coverage.
---------------------------------------------------------------------------
\5\ The LI NET demonstration provides an exception to the 36-
month maximum period of retroactive enrollment if there is a
Medicaid determination within the last 90 days that confers Medicaid
eligibility going back further than 36 months. In these situations,
LI NET enrollment under the demonstration goes back to the start of
Medicaid eligibility. We are not proposing an exception to the 36-
month limit on retroactive coverage in this rulemaking as the
statute does not provide for such an exception.
---------------------------------------------------------------------------
We propose in Sec. 423.2504(d) that enrollment in LI NET would end
on the date that coverage under Part D takes effect, consistent with
section 1860D-14(e)(3) of the Act. In the case of immediate need
beneficiaries for whom LIS-eligibility is not confirmed and who are not
enrolled into a PDP, enrollment would end 2 months after the immediate
need enrollment begins. No matter the method of enrollment, we propose
that the minimum duration of LI NET enrollment is 2 months unless the
beneficiary elects to disenroll from LI NET or to enroll in a Part D
plan. For example, an individual whom we auto-assign into LI NET
starting April 1, 2024 would remain in LI NET for April and May 2024
before being enrolled into an appropriate Part D plan starting June 1,
2024.
We provide two beneficiary examples to further explain how LI NET
enrollment and disenrollment would work under our proposals:
Example 1: Beneficiary Kristy is a full-benefit dual eligible and
arrives at a pharmacy on May 5, 2024, with documentation showing that
her LIS application is pending. She would have immediate coverage in LI
NET for May and June 2024. If, in the course of adjudicating her LIS
application, it is discovered that she was actually LIS-eligible dating
back to January 2016, Kristy would be retroactively enrolled in LI NET
as of July 1, 2021, which is the later of 36 months prior to the date
she is enrolled in a Part D plan or the date she was first LIS eligible
(since January 2016 is more than 36 months prior to her Part D plan
enrollment, her retroactive coverage under LI NET is capped at 36
months prior to such enrollment). Kristy's LI NET coverage would end
June 30, 2024, upon her enrollment into a benchmark PDP starting July
1, 2024, unless she makes the choice to opt-out.
Example 2: The Social Security Administration notifies CMS in
February 2024 that Beneficiary Ravi was eligible for both Medicare and
SSI starting in November 2022. CMS provides Ravi retroactive Medicare
drug coverage from November 2022, which is the later of 36 months prior
to enrollment in a Part D plan or the date Ravi was first LIS eligible,
through March 2024. After March 2024, if Ravi does not actively enroll
in a plan of their choosing, CMS would randomly enroll them into a
benchmark PDP with an April 1, 2024 effective date.
As noted previously, our goal in the proposals is to match current
eligibility and enrollment policy in effect in the demonstration and
the Part D program, to the extent the statute permits. We seek comment
on whether revised or additional regulations are required to achieve
accurate, streamlined, and beneficiary friendly eligibility
determinations and enrollment in the LI NET program.
3. Benefits and Beneficiary Protections
Section 1860D-14(e)(4)(B)(i) of the Act requires the LI NET program
to provide eligible beneficiaries with access to all Part D drugs under
an open formulary. The statute, at clauses (ii) and (iii) of section
1860D-14(e)(4)(B) of the Act, also requires the LI NET program to
permit all pharmacies that are determined by the Secretary to be in
good standing to process claims under the program, and to be consistent
with such requirements as the Secretary considers necessary to improve
patient safety and ensure appropriate dispensing of medication. These
requirements are consistent with how the LI NET demonstration has
operated, and we propose to codify the requirement that the LI NET
program provide access to all Part D drugs under an open formulary in
Sec. 423.2508(a). We propose in Sec. 423.2508(b) to require the LI
NET sponsor to permit all pharmacies that CMS determines to be in good
standing to process claims under the program, whether or not the
pharmacy is a network or out-of-network (OON) pharmacy for the LI NET
sponsor. Under the demonstration, we consider a pharmacy, including
retail, mail-order, and institutional pharmacies, to be ``in good
standing'' when it is licensed and does not have a fraud, waste, or
abuse
[[Page 79473]]
determination against it. For the permanent LI NET program, we propose
that a pharmacy would be in good standing if it is licensed, has not
been revoked from Medicare under Sec. 424.535, does not appear on the
Office of Inspector General's list of entities excluded from Federally
funded health care programs pursuant to section 1128 of the Act and
from Medicare under section 1156 of the Act (unless the OIG waives the
exclusion, which the OIG has authority to do in certain specified
circumstances), and does not appear on the preclusion list as defined
in Sec. 423.100. A pharmacy will appear on the preclusion list if it:
<bullet> Is currently revoked from Medicare, is under an active
reenrollment bar, and CMS has determined that the underlying conduct
that led to the revocation is detrimental to the best interests of the
Medicare program, including LI NET;
<bullet> Has engaged in behavior for which CMS could have revoked
the entity to the extent applicable if they had been enrolled in
Medicare, and CMS determines that the underlying conduct that would
have led to the revocation is detrimental to the best interests of the
Medicare program, including LI NET; or
<bullet> Has been convicted of a felony under Federal or State law
within the previous 10 years that CMS deems detrimental to the best
interests of the Medicare program, including LI NET.
In Sec. 423.2508(c), we propose requirements we consider necessary
to improve patient safety and ensure appropriate dispensing of
medication consistent with subpart D of the Part D regulations.
Existing Part D requirements related to appropriate dispensing, patient
safety, electronic dispensing, quality improvement organization (QIO)
activities, compliance, and accreditation would improve patient safety
and appropriate dispensing. Specifically, we propose to apply the
following provisions to the LI NET program and LI NET sponsor, as
appropriate:
<bullet> Sec. 423.153(b) and (c) for dispensing and point-of-sale
safety edits.
<bullet> Sec. 423.154 for appropriate dispensing of prescription
drugs in long-term care facilities.
<bullet> Sec. 423.159, requiring an electronic prescription drug
program.
<bullet> Sec. 423.160, excepting the requirements pertaining to
formulary standards in Sec. 423.160(b)(5), setting forth standards for
electronic prescribing.
<bullet> Sec. 423.162, for quality improvement organization (QIO)
activities.
<bullet> Sec. 423.165, regarding compliance deemed on the basis of
accreditation.
We solicit comment on whether any of these provisions would not be
compatible with the LI NET program proposed in this rulemaking.
Section 1860D-14(e)(4)(B)(iv) of the Act provides the Secretary the
authority to establish requirements for the LI NET coverage provided to
LI NET eligible individuals. We draw upon our experience under the
demonstration to propose cost sharing and appeals policy for LI NET in
sections Sec. 423.2508(d) and (e), respectively.
We propose in Sec. 423.2508(d)(1) that LI NET beneficiaries under
Sec. 423.2504(a)(1) (that is, beneficiaries whose LIS-eligibility is
established and who have not yet enrolled in a prescription drug plan
or MA-PD plan, or who have enrolled in a prescription drug or MA-PD
plan but coverage under such plan has not yet taken effect) would pay
the applicable cost sharing for their low-income category as
established in the yearly Announcement of Calendar Year Medicare
Advantage (MA) Capitation Rates and Part C and Part D Payment Policies
(the Rate Announcement publication specified in Sec. 422.312). Under
the demonstration, LI NET beneficiaries pay the reduced cost-sharing
aligned with the LIS categories defined in the Part D program. Because
there is already the existing statutory requirement for CMS to update
the parameters for the LIS benefit each year using statutory indexing
methods, and because CMS and pharmacy systems are already set up to
reflect the appropriate cost-sharing based on the LIS category of the
individual, we believe it is reasonable to calculate and charge cost-
sharing in alignment with the Part D LIS categories. For immediate need
beneficiaries, we propose in Sec. 423.2508(d)(2) these individuals
would by default pay the cost-sharing associated with the category of
non-institutionalized FBDE individuals with incomes above 100 percent
of the Federal poverty level and full-subsidy-non-FBDE individuals
(that is, Category Code 1). Of the four LIS eligibility categories,
this category has the highest level of cost-sharing. Proposed Sec.
423.2508(d)(2) would further provide that if the beneficiary is later
confirmed to belong to a different LIS category, the beneficiary would
be refunded by the LI NET sponsor for the difference between the cost
sharing they paid versus what they would have paid in their confirmed
LIS category. This approach allows for the least government liability
for individuals whose LIS eligibility is unable to be confirmed while
still allowing prescription drug access for immediate need individuals.
We propose in Sec. 423.2508(e) that LI NET enrollees have rights
with respect to Part D grievances, coverage determinations, and appeals
processes set out in subpart M of the Part D regulations. The
established processes would adequately adjudicate LI NET beneficiary
concerns. This approach of using existing processes avoids needing to
devote resources to establishing separate grievance, coverage
determinations. Furthermore, consistency with other Part D contracts as
it relates to grievances, coverage determinations, and appeals would be
simplest for LI NET sponsors.
4. LI NET Sponsor Requirements
Section 1860D-14(e)(4)(A) of the Act specifies that, as determined
appropriate by the Secretary, the LI NET program is to be administered
through a contract with a single administrator. Since the beginning of
the demonstration, CMS has had one Part D sponsor serve as the sole
contractor for administering the program. We have found that this
approach supports our goal of administrative simplicity by making it
unnecessary for each individual plan sponsor to check eligibility and
conduct a retroactive enrollment/reimbursement process. In our
experience, the benefits of having a single Part D sponsor administer
LI NET include the following:
<bullet> Providing a single point of contact for beneficiaries and
pharmacies attempting to have their claims paid.
<bullet> Providing a single point of contact for State Medicaid
agencies submitting Medicaid eligibility and attempting to reconcile
and coordinate claims.
<bullet> Simplifying the filing of retroactive beneficiary claims.
There may be circumstances in which CMS may want to consider
contracting with more than one Part D sponsor to administer LI NET.
Though we have had stability in LI NET in terms of only having the
single LI NET sponsor for the duration of the demonstration, we
recognize the need for some protections should it become necessary for
another entity to take over as LI NET sponsor and assume responsibility
for providing LI NET coverage. The downside of consolidating LI NET
functions into a single sponsor is the potential for beneficiary impact
should there be a reason that the single LI NET sponsor no longer
continues its functions. We believe that this potential of beneficiary
impact is mitigated by our proposals to non-renew or terminate the LI
NET contract, which are discussed in greater detail in section II.D.5.
of this proposed rule, titled ``Contractor Selection and Contracting
Guidelines.'' Accordingly,
[[Page 79474]]
while we propose at new Sec. 423.2512 that the program will be
operated by ``one or more'' Part D sponsors, we intend to initially
continue with the current practice of operating the program through a
single sponsor because we determined the benefits outweigh potential
beneficiary impacts, which have not come to bear since the start of the
demonstration in 2010.
We propose to establish at Sec. 423.2512 the requirements the LI
NET sponsor must meet when administering the LI NET program.
<bullet> Because LI NET may enroll beneficiaries from across the
nation, we propose to specify at Sec. 423.2512(a)(1) that the LI NET
sponsor(s) would be selected from among the Part D sponsors with a
national presence, with an established contracted pharmacy network in
all geographic areas of the United States in which LIS is available,
which as of the date of this proposed rule is the 50 States and the
District of Columbia. Because LIS is not available in the territories,
CMS would not require the LI NET sponsor to have network pharmacies in
territories. LI NET beneficiaries could still access LI NET benefits
while in the territories if needed, however, through out-of-network
pharmacies.
<bullet> We find that some experience as a Part D sponsor should be
a pre-requisite for being an LI NET sponsor, and propose at Sec.
423.2512(b) that any candidates to be an LI NET sponsor have a minimum
of 2 consecutive years contracting with CMS as a Part D sponsor.
<bullet> We propose at Sec. 423.2512(c) some technical and
operational requirements of the LI NET sponsor. In Sec. 423.2512(c)(1)
and (c)(2) we propose that the LI NET sponsor have the technical
capability and the infrastructure to provide immediate, current, and
retroactive coverage for LI NET enrollees and the technical capability
to develop the infrastructure necessary for verifying Medicaid dual
eligibility status for presumed eligible LI NET enrollees. In Sec.
423.2512(c)(3), we propose requiring the LI NET sponsor to identify,
develop, and implement outreach plans in consultation with CMS
targeting key stakeholders to inform them about the LI NET program.
Under the demonstration, CMS enrolls over 90 percent of LI NET
beneficiaries into the LI NET plan and we expect CMS would continue to
be responsible for most enrollees in a permanent LI NET program. For
the beneficiaries who are not auto-enrolled, outreach is important so
that stakeholders like the states, SHIPs, and pharmacies to have
awareness and knowledge about the LI NET program. Under the
demonstration, the LI NET sponsor routinely conducts outreach in
consultation with CMS to inform stakeholders about the program. We
propose to adopt this approach for the permanent LI NET program.
As discussed further in this section of this rule, we propose to
waive requirements under Sec. Sec. 423.128(d)(2)(ii),
423.128(d)(2)(iii), and 423.128(d)(4). We also propose in Sec.
423.2512(c)(4) that the LI NET sponsor be required to establish and
manage a toll-free customer service telephone line and fax line that
can be accessed by pharmacy providers and beneficiaries, or others
acting on their behalf, for purposes that include but are not limited
to: handling inquiries about services under the LI NET program,
providing the status of eligibility or claims, and having the ability
to accept documentation for evidence of eligibility.
Reimbursement to beneficiaries with retroactive coverage is
provided for in section 1860D-14(e)(3)(B) of the Act, as the ``amounts
that would have been paid under this Part had such individual been
enrolled in a prescription drug plan or MA-PD plan.'' This entails
establishing a process for beneficiaries to request and receive such
reimbursement. In the demonstration we provide a means for
beneficiaries who receive retroactive coverage to submit a direct
member out-of-pocket reimbursement request for Part D covered drugs for
any past month(s) in which they were entitled to retroactive coverage
under LI NET. The LI NET sponsor provides reimbursement to eligible
beneficiaries based on the submitted cost minus any applicable
copayments. Once the LI NET sponsor receives a written reimbursement
request, they follow timeframes that are consistent with those Part D
sponsors are already accustomed to in Sec. 423.636(a)(2) when they
authorize payment for a benefit due to a reversal in their coverage
determination. That is, under the demonstration, the LI NET sponsor has
14 calendar days to reply with whether the claim is eligible for
reimbursement, including the reason for denying the request if
applicable. If the request for reimbursement is granted, the LI NET
sponsor issues the reimbursement no later than 30 days after it
determines the claim is eligible for reimbursement. As these timelines
have proved workable under the demonstration, we propose in Sec.
423.2512(c)(5) that the LI NET sponsor meet these deadlines related to
direct reimbursement in the permanent LI NET program.
In Sec. 423.2512(c)(6), we propose requiring the LI NET sponsor to
adjudicate claims from out-of-network pharmacies according to the LI
NET sponsor's standard reimbursement for their network pharmacies. As
the LI NET sponsor must provide access to all Part D drugs under an
open formulary, we believe there is the need for some protection
against unreasonably high drug costs for OON claims in LI NET. Other
Part D sponsors have the option to deny such claims, or to pay OON
claims according to their standard reimbursement for their network
pharmacies (with beneficiaries paying any difference between the cost
of the OON claim the negotiated price). Because this restraint on
unreasonable drug costs borne by the Medicare Trust Funds would not
otherwise be present for LI NET, we believe a limit on how much the LI
NET sponsor can be reimbursed for OON claims is needed.
5. Selection of LI NET Sponsor and Contracting Provisions
Section 1860D-14(e)(6) of the Act authorizes us to implement LI NET
without regard to laws relating to the making, performance, amendment,
or modification of contracts of the United States as we may determine
to be inconsistent with the furtherance of the purpose of Title XVIII.
Thus, CMS is not required to follow the Federal Acquisition Regulation
(FAR) or the contracting authority used under the Part D program.
Neither is CMS required to contract with every qualified plan sponsor
to provide LI NET Part D coverage, as we are required to do for
qualified plan sponsors providing non-LI NET Part D coverage. If we
followed the same approach for LI NET, we could have many points of
contact for beneficiaries and pharmacies attempting to have their
retroactive claims paid and multiple points of contact for State
Medicaid agencies submitting Medicaid eligibility and attempting to
reconcile and coordinate claims. This approach would not serve the
purpose of providing smooth, transitional coverage for Part D drugs for
LI NET eligible individuals through the LI NET program, which is a Part
D program under Medicare in Title XVIII.
Using the authority in section 1860D-14(e)(6) of the Act, we
propose to follow the contracting approach set forth in proposed Sec.
423.2516 to select the LI NET sponsor for the 2024 plan year and
onwards.
In Sec. 423.2516(a), we propose that CMS would appoint a Part D
sponsor that meets the requirements at Sec. 423.2512 to serve as the
LI NET sponsor. To determine this appointment, we propose that CMS may
choose to conduct discussions with potentially eligible
[[Page 79475]]
entities to establish mutual interest and ability to administer the
program. This circumstance could arise if, for example, CMS needs
additional information in any particular year to learn more about a
Part D sponsor's ability to administer the LI NET program. Under the
demonstration, there is a multi-year contract approved by the Office of
Management and Budget, and each year CMS and the LI NET sponsor have
executed an addendum to the contract that included such information as
the payment rates and risk corridors as determined in the final bid. As
we consider options for establishing regulations to implement the
permanent LI NET program, we find it is appropriate that we bring the
LI NET contractor into closer alignment with other contracts in the
Part D program by executing an LI NET contract with a Part D plan
sponsor each plan year that contains, among other information, payment
information for that year. Our expectation is that unless circumstances
shift to prompt a change, the existing LI NET sponsor would continue in
that role in the succeeding year. Therefore, in Sec. 423.2516(b), we
propose selection criteria CMS may use in appointing an LI NET sponsor
based on some features of the LI NET program that are related to a Part
D sponsor's ability to successfully administer the program. These are--
<bullet> Experience covering low-income beneficiaries, including
but not limited to enrolling and providing coverage to low-income
subsidy individuals as defined in Sec. 423.34;
<bullet> Pharmacy access as outlined in Sec. 423.120;
<bullet> Past performance consistent with Sec. 423.503(b),
including Star Ratings (as detailed in Sec. 423.186), and previous
intermediate sanctions (as detailed in Sec. 423.750); and
<bullet> Ability to meet the requirements listed in Sec. 423.505
that are not waived under Sec. 423.2536.
As we are proposing that Part D requirements apply to the LI NET
program unless waived, we intend for Sec. 423.505 to apply to LI NET,
with the exception of Sec. 423.505(k)(6), which we propose to waive in
proposed Sec. 423.2536(g). For example, the contract between the LI
NET sponsor and CMS would be required to contain provisions in which
the LI NET sponsor agrees to accept new enrollments, make enrollments
effective, process voluntary disenrollments, and limit involuntary
disenrollments (see Sec. 423.505(a) and (b)(2)). As another example,
consistent with Sec. 423.505(b)(22), the LI NET contract would be
required to include a provision in which the LI NET sponsor agrees to
use the CMS complaint tracking system to address and resolve complaints
received by CMS against the sponsor. Per Sec. 423.505(k), the LI NET
contract would also require the LI NET sponsor to submit certifications
of data that determine payment as applicable, such as for enrollment
and payment information, claims data, bid submission information, DIR
data, and overpayments. The only certification the LI NET sponsor would
not submit is the one pertaining to data for price comparison under
Sec. 423.505(k)(6); we believe this certification is unnecessary given
that the LI NET plan is not one for which beneficiaries shop and thus
would not be comparing against other plan options based on price
considerations. We intend to exclude LI NET from Medicare Plan Finder,
consistent with past practice under the demonstration. Therefore, it
would not make sense to require certification to data for price
comparison purposes, and we propose to waive this requirement in Sec.
423.2536(g).
In Sec. 423.2516(c), we propose that the term of the appointment
will be ongoing provided mutual agreement between CMS and the selected
party, subject to an annual contracting and bid process (per proposed
Sec. 423.2524(c)) to determine payment rates for the upcoming year.
This approach has worked well during the demonstration and we see no
reason to propose a different approach for the permanent program.
If the LI NET sponsor violates its contract, we propose in Sec.
423.2518 that CMS would have the authority to impose intermediate
sanctions as outlined in subpart O of the Part D regulations, just as
we would for any other Part D sponsor.
In Sec. 423.2520(a) we propose that if the LI NET sponsor decides
for any reason to non-renew its existing contract, it must notify CMS
by January 1 of the year before the next contract year. Except as
provided in paragraph (c) of this section, if CMS decides for any
reason to non-renew the existing contract with the incumbent LI NET
sponsor, CMS would notify the LI NET sponsor by January 1 of the year
before the next contract year. We propose that CMS could non-renew for
any reason, without cause, and the LI NET sponsor would not have a
right to appeal the non-renewal. To provide CMS the authority to non-
renew the LI NET contract with that particular sponsor for any reason
with no appeal, we propose in Sec. 423.2536(e) waiving the appeals
requirements in Subpart N except for those relevant to a contract
termination. As there has only been a single LI NET sponsor for the
duration of the demonstration, and we are anticipating a single LI NET
sponsor for the permanent LI NET program, we do not want to assume the
risk of the appeals process not providing finality by the time an LI
NET sponsor would need to begin preparing the LI NET bid. Even if we
required the appeals process to be complete by the April timeframe and
while the appeal was pending moved forward with selection process, we
would be cutting into or needing to forgo entirely the transition time
of 3 months we propose in Sec. 423.2520(b) to ensure seamless
transition of the LI NET program. Proposing to assume these risks would
not further the purpose of the LI NET program being ready and available
to provide immediate, current, and retroactive coverage for LI NET
enrollees. We note that non-renewal, whether at the election of CMS or
the LI NET sponsor, would not have an impact on the sponsor's
eligibility to be selected as the LI NET sponsor in future years. As
discussed in section II.D.4. of this proposed rule, we intend to
initially contract with a single Part D sponsor to administer the LI
NET program. Unlike beneficiaries in traditional Part D plans,
beneficiaries enrolled in LI NET would not have the option of simply
choosing to enroll in LI NET under a different sponsor. For these
reasons, ample notice is needed if the LI NET sponsor does not intend
to continue as the LI NET sponsor in the following year. We anticipate
that CMS would be able to provide the same amount of notice to the LI
NET sponsor if we were contemplating changing the LI NET sponsor for
the following year. A decision to non-renew the LI NET contract with a
particular Part D sponsor would not bar or prohibit that sponsor from
being considered to be the LI NET sponsor in a future year. Any CMS
decisions regarding LI NET sponsor selection would have no bearing on a
Part D sponsor proceeding with the application process for other, non-
LI NET, Medicare prescription drug plans.
In Sec. 423.2520(b), we propose that after a notice of non-
renewal, CMS would select a successor LI NET sponsor from among the
other eligible entities (as detailed in proposed Sec. 423.2516).
Similar to how our multi-year contracts with our contractors require an
outgoing contractor to coordinate with any successor contractor during
a transition period, proposed Sec. 423.2520(b) would require the
outgoing LI NET sponsor to coordinate with the successor LI NET sponsor
appointed by CMS for a period of no less than 3 months to ensure
seamless transition for LI NET enrollees,
[[Page 79476]]
including timely transfer of any data or files. All data, files,
written materials, and LI NET work products would be considered CMS's
property. During the transition period, the outgoing and incoming LI
NET sponsors would work together to develop a transition plan,
including setting up a training schedule and a schedule of events for a
smooth changeover.
There may be exigent circumstances of risk to beneficiaries in
which a more immediate termination is warranted. Referencing portions
of CMS's immediate termination authority in Sec. 423.509, we propose
to establish in Sec. 423.2520(c) that CMS may terminate the LI NET
contract immediately if:
<bullet> CMS determinates that a delay in termination, resulting
from non-compliance with the procedures provided in this Part prior to
termination, would pose an imminent and serious risk to the health of
the individuals enrolled with the LI NET sponsor, per Sec.
423.509(b)(2)(i)(A);
<bullet> The LI NET sponsor has experienced financial difficulties
so severe that its ability to make necessary health services available
is impaired to the point of posing an imminent and serious risk to
beneficiary health, or otherwise fails to make services available to
the extent that such a risk to health exists per Sec.
423.509(b)(2)(i)(B); or
<bullet> The LI NET sponsor has had one or more of the issues
enumerated in paragraphs (a)(4)(i) and (xii) of Sec. 423.509.
Proposed Sec. 423.2520(d) would provide that if CMS intends to
terminate the contract under proposed Sec. 423.2520(c), CMS provides
written notice to the LI NET sponsor informing it of its termination
appeal rights in accordance with subpart N of this Part.
We expect to identify the LI NET contract as X0001, and advance the
plan benefit package number by one each year so that we can update the
payment rates in our systems for the new payment year. If the LI NET
contract with a particular LI NET sponsor is terminated, we would not
discontinue use of the contract number X0001. Instead, we would
terminate the relationship with that specific LI NET sponsor to provide
LI NET coverage, and continue to allow enrollment under contract X0001.
6. Bidding and Payments to the LI NET Sponsor
Section 1860D-14(e) of the Act does not specify how CMS is to
determine the amounts that it pays to the LI NET sponsor under the
contract or how payments are to be made. We propose to establish the
methodology and formulas that we would use to determine the amounts we
pay to the LI NET sponsor under the contract. We use our payment
policies under the demonstration, including the bidding requirements,
as the basis for the proposed LI NET payment policies in this rule. We
do so because LI NET payment activities bear many similarities to those
of typical Part D plans, because the infrastructure to pay in this
manner is already established, and because we are proposing that the LI
NET sponsor must be a Part D sponsor who would be familiar with these
payment activities already, in this proposed rule.
We propose in Sec. 423.2524(a) that CMS payments for the LI NET
program would be made from the Medicare Prescription Drug Account, as
payments are made to other Part D sponsors.
In Sec. 423.2524(b) we propose requirements related to the LI NET
bid. Because most of the provisions in Subpart F would not be
applicable to LI NET, we propose to waive Subpart F except for those
provisions we propose to apply to LI NET.
Section 423.2524(b)(1) proposes that the submission of LI NET bids
and related information will follow the requirements and limitations in
Part 423, Subpart F, Sec. Sec. 423.265(b), (c), (d)(1), (d)(2)(i),
(d)(2)(ii), (d)(2)(iv), (d)(2)(v), (d)(4), (d)(6), and (e). This
proposal would require the LI NET sponsor to submit a bid and
supplemental information in a format specified by CMS, with the same
deadline as other Part D bids of no later than the first Monday of June
each year. It also gives CMS the ability to request additional
information from the LI NET sponsor to support bid amounts, and the
ability to require revisions to the submitted LI NET bid before it is
accepted. As with other Part D bids, a qualified actuary, whether
internal or external to the plan sponsor, would certify the LI NET
sponsor's actuarial valuation (which may be prepared by others under
the qualified actuary's direction or review). The qualified actuary
would need to be a member of the American Academy of Actuaries.
We propose in Sec. 423.2524(b)(2) that the following provisions
would apply in the review, negotiation, and approval of the LI NET bid:
Sec. 423.272(a), (b)(1), and (b)(4). This would allow CMS to review
the LI NET bid, conduct negotiations regarding the terms and conditions
of the proposed bid, and approve it only if the bidding LI NET sponsor
and the LI NET plan comply with all applicable CMS Part D requirements.
As in typical Part D bid reviews, CMS would be able to decline the LI
NET bid if it proposes significant increases in cost sharing (Sec.
423.272(b)(4)). This approach follows the bid process under the
demonstration, in which the LI NET sponsor submits a bid that estimates
their costs and includes assumptions for enrollment and utilization
based on prior experience. Starting with PY2021, the LI NET sponsor
began using an LI NET Bid Pricing Tool (BPT) and accompanying
instructions that were adapted from the traditional Part D BPT and
instructions. Once the LI NET bid is accepted, we update this
information in our systems for the new payment year for the LI NET
demonstration. Each year, we advance by one the number designating the
current plan benefit package. For example, the contract-PBP was X0001-
011 for plan year 2021 and X0001-012 for plan year 2022.
Proposed Sec. 423.2524(b)(3) specifies the basic rule and major
components of the LI NET bid, which are the LI NET sponsor's estimate
of its revenue needs for Payment Rates A and B, which are discussed in
greater detail in proposing Sec. 423.2524(d).
In Sec. 423.2524(c) we propose that CMS would provide advance
monthly LI NET payments, on a per-member, per-month (PMPM) basis, equal
to the sum of Payment Rates A and B as established in the LI NET
sponsor's approved bid submitted annually under paragraph (b) of this
proposed section. Paying on a PMPM basis would align with other Part D
payments and with our operations under the LI NET demonstration in
which we provide a capitated PMPM amount established by the bid for
each beneficiary enrolled in the demonstration. Unlike typical Part D
monthly payments, the monthly LI NET payment under the demonstration is
a PMPM amount that represents the sum of Payment Rates A and B, as
determined by the LI NET bid. The bid represents the LI NET sponsor's
total expected cost, minus any beneficiary co-pays, and with a
reasonable margin that represents the LI NET sponsor's profit. Also,
unlike other Part D payments, payments under the LI NET demonstration
would not be risk adjusted. Because payments under the LI NET
demonstration are cost reconciled (with the exception of risk
corridors) and there is no concern about the LI NET sponsor cherry-
picking beneficiaries, we use a simpler payment methodology that does
not include risk adjustment.
We propose in Sec. 423.2524(c)(1) that Payment Rate A would be a
monthly payment for projected administrative costs, constrained by an
annual percentage cap set as part of the bid
[[Page 79477]]
review and negotiation under Sec. 423.272(a). Payment Rate A would
include two elements, as it does under the demonstration. The first
would be the LI NET sponsor's estimated administrative costs, which
would represent the administrative costs to run the LI NET program
inclusive of an amount for the margin, which represents the LI NET
sponsor's profit. The second element in Payment Rate A would be the LI
NET sponsor's estimated costs to pay pharmacy claims for prescriptions
filled by immediate need individuals, for which the LI NET sponsor may
not be able to submit a prescription drug event (PDE) record to CMS due
to the individual's unconfirmed LIS status. We expect that these are
generally the ``immediate need'' beneficiaries discussed in section
II.D.2.a. of this proposed rule (under the heading ``Eligibility and
Enrollment'') who are not confirmed to be LIS-eligible. We propose in
Sec. 423.2524(c)(1)(i) that for the 2024 plan year, the LI NET sponsor
includes in its bid the assumption that Payment Rate A cannot exceed a
2 percent increase from the prior year's Payment A, which is a figure
CMS will provide to the LI NET sponsor. For the 2025 plan going
forward, we propose in Sec. 423.2524(c)(1)(ii) the LI NET sponsor will
specify their assumption for any increase needed to the prior year's
Payment Rate A, submitting justification to CMS in its bid if the cap
exceeds 2 percent. Any proposed increase in Payment Rate A from year-
to-year would not be able to exceed the percentage cap. Similar to how
CMS determines reasonableness in evaluating a plan's anticipated profit
in the bid, we would use the same reasonableness standard in setting
and negotiating the cap on Payment Rate A in the bid.
In Sec. 423.2524(c)(2), we propose that Payment Rate B would
reflect the projected net costs of the Part D drugs dispensed to
individuals who receive the LI NET benefit. Payment Rate B would be the
estimated actual drug costs minus direct and indirect remuneration
(DIR). In the demonstration, we apply risk corridors to Payment Rate B
so that excess gains and losses are shared between CMS and the LI NET
sponsor. These risk corridors are symmetrical in sharing upside and
downside risk, but are narrower than the risk corridors provided for
under section 1860D-15(e) of the Act and applicable to other Part D
plans. Because the risk corridors in the demonstration are so narrow,
the LI NET sponsor has not assumed as much risk for LI NET as
traditional Part D plans assume. CMS has not shared risk on Payment
Rate A, in keeping with typical Part D plans for which CMS does not
share risk on margin or administrative costs. In 2012, CMS revised the
risk corridors under the LI NET demonstration to limit payment
adjustments on Payment Rate B. For the portion of a plan's cost for
drugs that is between the target amount and the threshold upper limit
(101 percent of the target amount), the LI NET sponsor pays 100 percent
of this amount. For the portion of the plan's cost for drugs that
exceeds the threshold upper limit, the government pays 99.9 percent and
the plan pays 0.1 percent. Similarly, if a plan's cost for drugs is
between the target amount and the threshold lower limit (99 percent of
the target amount), the LI NET sponsor keeps 100 percent of the
difference between the drug cost and the target amount. If a plan's
cost for drugs is lower than the threshold lower limit, the government
keeps 99.9 percent and the plan keeps 0.1 percent of the difference
between the plan's drug cost and the threshold lower limit.
Both under the demonstration and for other Part D plans, after a
payment year is over and the deadline for submitting payment data for
that payment year has passed, we reconcile the payments for the year.
This allows us to narrow the gap between what predicted and actual
costs were in a given year, as well as share risk with plan sponsor in
gains and losses. To provide for payment reconciliation and risk
sharing in the LI NET program, we propose in Sec. 423.2524(d) to
establish the payment policies for reconciliation and risk corridors,
including adopting targeted provisions of existing risk sharing
requirements. Proposed Sec. 423.2524(d)(1) provides that CMS would
conduct LI NET payment reconciliation each year for Payment Rates A and
B after the annual PDE data submission deadline has passed and make the
resulting payment adjustment consistent with Sec. 423.343(a).
In Sec. 423.2524(d)(2), we propose to establish the same risk
corridors for Payment Rate B that apply under the demonstration: no
risk sharing within 1 percent of the target amount and symmetrical 0.1
percent risk sharing beyond the 1 percent corridor. To carry out risk
sharing as part of reconciliation, we propose to have Sec. 423.336(c)
apply to LI NET, which requires a plan sponsor to provide necessary
cost data information to CMS and authorizes CMS to make either lump-sum
payments or adjustments based on the risk corridor calculations.
Proposed Sec. 423.2524(e) would establish that the LI NET contract
is subject to the existing provision at Sec. 423.346 pertaining to
payment reopenings. Per Sec. 423.346, CMS may reopen and revise an
initial or reconsidered final payment determination for up to 5 payment
years. Under the demonstration, each LI NET reconciliation has been in
alignment with Sec. 423.346 and included the prior 5 years of PDEs.
The most recently completed payment year gets reconciled for the first
time along with reopening the prior 4 years. For example, in 2019, PBP
008 for payment year 2018 was reconciled for the first time while PBPs
004-007 (for payment years 2014 through 2017) were reopened.
Sequestration is not used or accounted for in reconciliation,
consistent with how we apply sequestration for other Part D plans.
Under the demonstration, we maintain consistency between LI NET's PDE
and DIR reporting deadlines and the reporting deadlines that apply to
Part D plans (for example, the yearly deadline for data used for
payment year reconciliation is June 30th). Enrollment, risk adjustment,
and PDE certifications (attestations) are collected under the LI NET
demonstration just like other contracts, and we propose to adopt the
requirements in Sec. 423.505(k)(1) through (5), except for certifying
to reinsurance data because LI NET does not receive a reinsurance
subsidy. This proposal would require the LI NET sponsor to certify to
the accuracy, completeness, and truthfulness of all data related to
payment.
As noted earlier in this section of this proposed rule, as a
general matter, all payment rights and responsibilities under Part D
that otherwise apply and are not explicitly waived in proposed Sec.
423.2536 would apply to the LI NET program, as appropriate. Proposed
Sec. 423.2524(f) would provide that the LI NET sponsor could appeal
the payment calculation under Sec. 423.350. Proposed Sec. 423.2524(g)
would establish that the LI NET contractor is subject to the ``report
and return'' overpayment requirements under Sec. 423.360.
7. Part D Program Waivers
Because the LI NET sponsor is a Part D sponsor and the LI NET
contract is a PDP contract, many existing provisions in Part 423 apply
to LI NET. The exceptions are those provisions waived by the statute,
those provisions that are inapplicable to LI NET, and the requirements
we propose to waive through this rulemaking.
The LI NET statute at section 1860D-14(e)(5)(A) of the Act provides
that paragraphs (1) and (3)(B) of section 1860D-4(a) of the Act,
subparagraphs
[[Page 79478]]
(A) and (B) of section 1860D-4(b)(3) of the Act, and paragraphs (1)(C)
and (2) of section 1860D-4(c) of the Act do not apply to the LI NET
program; thus, requirements relating to dissemination of general
information and the provision of formulary information, formulary
requirements, and medication therapy management (MTM) program
requirements do not apply to LI NET. For this reason, we propose to
waive formulary requirements in Sec. Sec. 423.120(b), 423.128(e)(5),
and 423.128(e)(6) and MTM program requirements in Sec. 423.153.
Section 1860D-14(e)(5)(B) of the Act contains broad waiver
authority to ``waive such other requirements of title XI and this title
as may be necessary to carry out the purposes of the program
established under this subsection''. We also propose to waive for LI
NET some of the cost control and quality improvement requirements in
Part 423 Subpart D, except for the provisions we explicitly propose to
adopt in Sec. 423.2508(d)(1) through (d)(5) that relate to appropriate
dispensing, patient safety, electronic dispensing, QIO activities,
compliance, and accreditation. This proposal would waive requirements
that would not make sense in the context of temporary coverage with
access to an open formulary. The requirements we propose to waive
pertain to drug utilization management programs, medication therapy
management programs, and consumer satisfaction surveys.
We solicit comment on whether we should waive any additional
regulatory provisions related to paragraphs (1) and (3)(B) of section
1860D-4(a) of the Act and subparagraphs (A) and (B) of section 1860D-
4(b)(3) of the Act.
As discussed in section II.D.4. of this proposed rule, we are
proposing that the LI NET sponsor submit most of the certifications
listed in Sec. 423.505(k), with the exception that we are waiving the
certification of accuracy of data for price comparison in paragraph
(k)(6), given that the LI NET plan is not one for which beneficiaries
shop.
Part D beneficiaries receiving a low-income subsidy are not
eligible for the coverage gap discount program, and under the
demonstration LI NET was not subject to coverage gap discount
requirements under subpart W of Part 423. Thus, we propose in Sec.
423.2536(i) to waive subpart W in full for LI NET.
We propose in Sec. 423.2536(j) to waive the MLR requirements in
subpart X of Part 423.
Section 1857 as incorporated into 1860D-14(e) of the Act does not
speak to MLR requirements for LI NET. Under the LI NET demonstration,
CMS does not require the LI NET sponsor to meet the minimum medical
loss ratio (MLR) requirement or to report the MLR for the LI NET
contract as it does for other Part D contracts. This is due to the
unique payment structure for the contract. Under Part D, a sponsor
submits a single bid including estimated administrative costs, returns
on investment, and drug costs, which are risk-adjusted. After a payment
year concludes, Part D sponsors are required under subpart X of Part
423 to report the MLR for each contract, and if the MLR for a contract
is below 85 percent, the sponsor is required to remit payment to CMS.
Enrollment sanctions are applied to contracts that fail to meet the
minimum MLR requirement for three3 consecutive years, and contracts
that fail to meet the requirement for 5 consecutive years are subject
to termination. The minimum MLR requirement is intended to create
incentives for Part D sponsors to reduce administrative costs such as
marketing costs, profits, and other such uses of plan revenues, and to
help ensure that taxpayers and enrolled beneficiaries receive value
from Medicare health plans. Because of the limits we are proposing to
place on how much administrative costs in LI NET under Payment Rate A
can increase year over year and because of the differing payment
structure, we do not believe MLR reporting should be applicable to LI
NET.
The Affordable Care Act amended section 1893(h) of the Act to
expand the use of Recovery Audit Contractors (RACs) to include the MA
and Part D programs. Section 1893(h)(9) of the Act specifies that,
under contracts with the Secretary, Part D RACs are required to ensure
that each PDP has an anti-fraud plan in effect and to review the
effectiveness of each such anti-fraud plan, to examine claims for
reinsurance payments to determine whether PDPs submitting such claims
incurred costs in excess of the costs allowed, and to review estimates
submitted by PDPs with respect to the enrollment of high-cost
beneficiaries and compare such estimates with the numbers of such
beneficiaries actually enrolled by such plans. Because the LI NET
sponsor must enroll every eligible LI NET beneficiary, and because LI
NET does not receive reinsurance, a Part D RAC's review or examination
of LI NET claims would likely be extremely limited in scope. As other
audit, oversight, and compliance requirements would continue to apply
to the LI NET program, the other program integrity safeguards we have
proposed for the LI NET program would be adequate, and we therefore
propose to waive application of the RAC requirements in subpart Z of
Part 423.
In surveying the items under Part 423 for the Voluntary Medicare
Prescription Drug Benefit, we attempted to categorize existing
requirements as applicable, inapplicable, or a candidate for waiver. We
solicit comment on whether there are additional provisions in part 423
that we have not mentioned in this proposed rule and that we should
address for LI NET.
8. Technical Corrections
In the course of this rulemaking, we noticed the need for a
technical correction in Sec. 423.505(b)(22), which requires Part D
sponsors to address and resolve complaints received by CMS against the
Part D sponsor. The regulation text currently refers to MA organization
when it should refer to Part D sponsor, and thus we propose to make the
correction.
We also propose to make a technical correction in the header of
subpart Z of Part 423. The header in regulation text currently is
``Recovery Audit Contractor Part C Appeals Process'' when it should be
referring to Part D. Thus, we propose to make the technical correction
so the header correctly reads, ``Recovery Audit Contractor Part D
Appeals Process.''
E. Expanding Eligibility for Low-Income Subsidies Under Part D of the
Medicare Program (Sec. Sec. 423.773 and 423.780)
The Part D low income subsidy (LIS) helps people with Medicare who
meet certain statutory income and resource criteria pay for
prescription drugs and lowers the costs of prescription drug coverage.
Individuals who qualify for the full LIS receive assistance to pay
their full premiums and deductibles (in certain Part D plans) and have
reduced cost sharing. Individuals who qualify for the partial LIS pay
reduced premiums (on a sliding scale based on their income) and also
have reduced deductibles and cost sharing.
Currently, in order to qualify for the full subsidy, an individual
must live in 1 of the 50 States or the District of Columbia and meet
the income and resource standards established in at section 1860D-
14(a)(3)(D) of the Act and codified at Sec. 423.773. To be eligible
for the full subsidy, individuals must have countable income below 135
percent of the Federal poverty level (FPL) for the individual's family
size. In addition, an individual must have resources that do not exceed
three times the resource limit under section 1613 for applicants for
Supplemental Security Income (SSI) under title XVI. The resource limit
increases annually by
[[Page 79479]]
the percentage increase in the Consumer Price Index (CPI, all items,
U.S. city average) as of September for the year before and is rounded
to the nearest multiple of $10. The resource limits in 2006 (at the
start of the Part D benefit) were $6,000 for a beneficiary who was
single or $9,000 if the beneficiary was married, and in 2022 the
amounts are $8,400, if single, or $12,600, if married.
Individuals who are not eligible for the full LIS subsidy may be
eligible for the partial LIS subsidy if they live in 1 of the 50 States
or the District of Columbia and have incomes below 150 percent of the
FPL for their family size and have resources that do not exceed the
amounts specified in section 1860D-14(a)(3)(E)(I) of the Act. Similar
to the resource limits for the full subsidy group, these amounts are
increased annually by the percentage increase in the CPI as of
September for the year before and rounded to the nearest multiple of
$10. The resource limits for the partial subsidy in 2006 were $10,000
for a beneficiary who was single or $20,000 if the beneficiary was
married, and the limits in 2022 are $14,010, if single, or $27,950, if
married.
Section 11404 of the Inflation Reduction Act (IRA) (Pub. L. 117-
169), enacted on August 16, 2022, amended section 1860D-14 of the Act
to expand eligibility for the full LIS subsidy group to individuals
with incomes below 150 percent of the FPL and who meet either the
resource standard in paragraph (3)(D) or paragraph (3)(E) of section
1860D-14(a) of the Act, beginning on or after January 1, 2024. This
change will provide the full LIS subsidy for those who currently
qualify for the partial subsidy.
To implement the changes to the LIS income requirements, we propose
to amend Sec. 423.773(b)(1) to add that to be eligible for the full
subsidy for plan years beginning on or after January 1, 2024, an
individual must have an income below 150 percent of the FPL. To
coordinate with this change, we are also proposing to amend Sec.
423.773(d) to specify that the requirement that an individual have an
income below 150 percent of the FPL to be eligible for the partial
subsidy applies only to plan years beginning before January 1, 2024.
This latter change will effectively sunset the partial subsidy income
requirements after 2023.
To implement the changes to the resource limits, we propose to
amend Sec. 423.773 to state that the current resource limits
applicable for the full subsidy at paragraph (b)(2)(ii) apply to years
2007 through 2023. We also propose to add a new Sec.
423.773(b)(2)(iii) to state that for years beginning on or after
January 1, 2024, the resource limits at paragraph (d)(2) of Sec.
423.773--the resource standards currently applicable for the partial
subsidy--would apply to full subsidy eligible individuals.
Lastly, we propose to amend Sec. 423.780(d) to specify that the
sliding scale premium amounts currently applicable for individuals with
the partial subsidy apply with respect to plan years beginning before
January 1, 2024. These individuals who have incomes between 135 and 150
percent of the FPL and who meet the resource requirements will now
qualify for the full subsidy beginning in 2024, and will be entitled to
a premium subsidy of 100 percent of the premium subsidy amount, as
outlined in Sec. 423.780(a).
III. Enhancements to the Medicare Advantage and Medicare Prescription
Drug Benefit Programs
A. Health Equity in Medicare Advantage (MA) (Sec. Sec. 422.111,
422.112, and 422.152)
1. Introduction
On January 20, 2021, President Biden issued Executive Order (E.O.)
13985: ``Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government,'' (hereinafter referred to
as E.O. 13985).\6\ E.O. 13985 describes the Administration's policy
goals to advance equity across Federal programs and directs Federal
agencies to pursue a comprehensive approach to advancing equity for
all, including those who have been historically underserved,
marginalized, and adversely affected by persistent poverty and
inequality. In response, CMS announced its 2022 CMS Strategic Plan, and
``Advance Equity'' is the first pillar of that Strategic Plan.\7\ This
pillar emphasizes the importance of advancing health equity by
addressing the health disparities that impact our health system. CMS
defines health equity as ``the attainment of the highest level of
health for all people, where everyone has a fair and just opportunity
to attain their optimal health regardless of race, ethnicity,
disability, sexual orientation, gender identity, socioeconomic status,
geography, preferred language, or other factors that affect access to
care and health outcomes.'' \8\ This is the definition of health equity
that we use for all health equity provisions in this proposed rule.
---------------------------------------------------------------------------
\6\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
\7\ <a href="https://www.cms.gov/cms-strategic-plan">https://www.cms.gov/cms-strategic-plan</a>.
\8\ <a href="https://www.cms.gov/pillar/health-equity">https://www.cms.gov/pillar/health-equity</a>.
---------------------------------------------------------------------------
CMS continues to work diligently to identify regulatory actions
that can help support CMS's goal to advance health equity or that
already address health equity topics but should be expanded in order to
meet the increasingly diverse needs of enrollees served by MA
organizations. In order to support the Administration's goal of
advancing equity for all, it is imperative that we ensure our
regulations address topics that enable disadvantaged populations to
fully access the care that the regulations already allow them to
receive. Consequently, we are proposing several regulatory updates in
the MA program related to health equity. These proposals include
requirements intended to ensure equitable access to MA services, ensure
MA provider directories reflect providers' cultural and linguistic
capabilities and notate MOUD-waivered providers, ensure MA enrollees
with low digital health literacy are identified and offered digital
health education to assist them in accessing any medically necessary
covered telehealth benefits, and ensure MA organizations incorporate
one or more activities into their overall quality improvement program
that reduce disparities in health and health care among their
enrollees. CMS believes that the proposed changes included in this
proposed rule would address health disparities in the MA program and
could be essential to more broadly supporting other equity-focused
efforts across CMS policies and programs.
2. Ensuring Equitable Access to Medicare Advantage (MA) Services (Sec.
422.112)
As discussed extensively in section III.A.1. of this proposed rule,
E.O. 13985 describes the Administration's policy goals to advance
equity across the Federal Government. Currently, Sec. 422.112(a)(8)
requires MA organizations that offer coordinated care plans to ensure
that services are provided in a culturally competent manner to all
enrollees, including those with limited English proficiency or reading
skills, and diverse cultural and ethnic backgrounds.
As discussed in the interim final rule with comment period titled,
``Medicare Program; Establishment of the Medicare+Choice Program,''
which appeared in the Federal Register on June 26, 1998 (63 FR 34968,
34989) (the June 1998 IFC), the goal of this regulatory requirement was
to ensure that enrollees with limited English proficiency, limited
education, or other socioeconomic disadvantages receive the health care
to which they are entitled. This requirement was part of
[[Page 79480]]
several provisions implementing and setting standards for ensuring
access to covered services. CMS later finalized the provision in the
final rule titled Medicare Program; Medicare+Choice Program, which
appeared in the Federal Register on June 29, 2000 (65 FR 40170) (the
June 2000 final rule) with a somewhat detailed discussion of the
objectives served by this provision (65 FR 40217 through 40218). The
principle objective underlying the current requirement to provide
services in a culturally competent manner is to address unique racial
and ethnically-related health care concerns. However, the regulation
explicitly applies to all enrollees and does not include an exception
for any enrollees; therefore, this consideration must be part of an MA
organization's work in ensuring that all covered benefits are available
and accessible to all enrollees. The regulation applies to ``all
enrollees'' even though specific populations are mentioned as examples
of enrollees to whom services must be provided in a culturally
competent manner.
In the June 2000 final rule (65 FR 40217), CMS discussed that
appropriate care delivery should accommodate the unique health-related
beliefs, attitudes, practices, and communication patterns of
beneficiaries and their caregivers to improve services, strengthen
programs, increase community participation and eliminate disparities in
health status among diverse population groups; CMS also emphasized the
importance for health care providers and administrative staff to
possess a set of attitudes, skills, behaviors, and policies that
enables the organization to effectively provide services to diverse
population groups. While Sec. 422.112(a)(8) already applies to all
enrollees, CMS believes that amendments to the current regulatory text
would better reflect the broad scope of underserved populations that MA
organizations must ensure have access to services provided in a
culturally competent manner. As the populations that CMS serves become
increasingly diverse, it is imperative to keep regulations updated to
ensure broad protections are available that minimize the potential for
discriminatory barriers, including any electronic tools that use
discriminatory algorithms, to surface. Thus, CMS is proposing the
following changes and additions to the regulatory language at Sec.
422.112(a)(8) with an intention to clarify the scope of the existing
requirements, consistent with the direction and goals of E.O. 13985.
CMS notes that the requirements at Sec. 422.112(a)(8) were originally
codified using our authority in section 1852(d) of the Act (concerning
access to services) as well as our authority in section 1856(b)(1) of
the Act to establish standards under Part C; the intent of this
proposal is to update the regulatory language at Sec. 422.112(a)(8)
for clarification purposes rather than to make actual changes in
requirements. We continue to rely on sections 1852(d) and 1856(b)(1) of
the Act as the basis for Sec. 422.112, including these changes,
consistent with the June 1998 IFC and finalization in a February 1999
final rule (64 FR 7981) of these existing requirements.
The current paragraph heading at Sec. 422.112(a)(8), which
precedes the existing equitable access provisions, is titled ``Cultural
considerations.'' CMS acknowledges that the term ``cultural
considerations'' could create the misconception that the protections of
the provisions apply only to some populations and not others. CMS is
proposing to revise this heading to ``Ensuring Equitable Access to
Medicare Advantage (MA) Services.'' The term ``equitable access'' is a
broader and more suitable description for the paragraph, as it does not
suggest an emphasis on protecting access to care for one population
over another. We believe these changes will more clearly reflect the
inclusive nature of the protections MA organizations must guarantee for
all enrollees under these provisions.
Additionally, the current regulatory language describes some
underserved groups as examples of populations that may require
accommodations that are specific to their needs--those with limited
English proficiency or reading skills, and diverse cultural and ethnic
backgrounds. Amending the text to identify additional types of
underserved groups will provide clarity with regard to the populations
MA organizations must accommodate in order to meet requirements for
access to services. At Sec. 422.112(a)(8), CMS proposes to replace the
phrase ``those with limited English proficiency or reading skills, and
diverse cultural and ethnic backgrounds'' after the word ``including''
and to add in its place additional paragraphs listing more examples of
underserved populations to whom an MA organization must ensure that
services are provided in a culturally competent manner and promote
equitable access to services in order to satisfy the existing
requirement. The proposed new list would be as follows: (i) people with
limited English proficiency or reading skills; (ii) people of ethnic,
cultural, racial, or religious minorities; (iii) people with
disabilities; (iv) people who identify as lesbian, gay, bisexual, or
other diverse sexual orientations; (v) people who identify as
transgender, nonbinary, and other diverse gender identities, or people
who were born intersex; (vi) people who live in rural areas and other
areas with high levels of deprivation; and (vii) people otherwise
adversely affected by persistent poverty or inequality. CMS notes that
MA organizations must provide all enrollees, without exception,
accommodations to equitably access services according to applicable
statutory, regulatory, and other guidance. These provisions should not
be construed to mean that accommodations are required only for
enrollees who belong to the groups listed herein.
CMS believes these clarifications are necessary and are consistent
with the Administration's goal of ensuring equity across Federal
programs, consistent with E.O. 13985. CMS welcomes public comment in
response to this proposal.
3. Medicare Advantage (MA) Provider Directories (Sec. 422.111)
Section 1852(c)(1) of the Act requires an MA organization to
disclose, among other things, the number, mix, and distribution of plan
providers in a clear, accurate, and standardized form to each enrollee
in an MA plan offered by the MA organization at the time of enrollment
and at least annually thereafter. We implemented this requirement in a
regulation at Sec. 422.111(a) and (b)(3)(i), requiring that an MA
organization must disclose the number, mix, and distribution
(addresses) of providers from whom enrollees may reasonably be expected
to obtain services, in the manner specified by CMS, to each enrollee
electing an MA plan it offers; in a clear, accurate, and standardized
form; and at the time of enrollment and at least annually thereafter,
by the first day of the annual coordinated election period. In
addition, under Sec. 417.427, the MA disclosure requirements at Sec.
422.111 also apply to section 1876 cost plans.
CMS has historically interpreted the disclosure requirement at
Sec. 422.111(b)(3)(i)--``the number, mix, and distribution (addresses)
of providers from whom enrollees may reasonably be expected to obtain
services''--as referring to the provider directory. CMS developed the
MA and Section 1876 Cost Plan Provider Directory Model,\9\ a model
material created as an example of how to convey the required
information
[[Page 79481]]
to enrollees. In accordance with Sec. 422.2267(c), when drafting their
provider directories based on CMS's model, organizations must
accurately convey the required information and follow the order of
content specified by CMS.
---------------------------------------------------------------------------
\9\ The current MA and Section 1876 Cost Plan Provider Directory
Model is located at: <a href="https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial">https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/MarketngModelsStandardDocumentsandEducationalMaterial</a>.
---------------------------------------------------------------------------
The current provider directory model contains an array of specific
required information based on Sec. 422.111(b)(3)(i); we refer to this
information collectively as required provider directory data elements.
For example, organizations must list only the office or practice
location(s) where the provider regularly practices, must clearly
identify the capacity in which the provider is serving (that is,
specialty type), and must clearly identify whether or not a provider is
accepting new patients or provide a notice directing beneficiaries to
contact a provider to determine if he or she is accepting new patients.
Other examples of required provider directory data elements include up-
to-date provider practice names and notations next to providers'
listings indicating any restrictions on access. Several of these data
elements are tied to how Sec. 422.111(b)(3)(i) requires the
organization to disclose information about providers from whom
enrollees may reasonably be expected to obtain services; issues of
access, including whether the provider is accepting new patients, are
integral to whether an enrollee may reasonably be expected to obtain
covered services from that provider. In addition, some of these
provider directory data elements (for example, restrictions on access
notations, accepting new patients indicator) contain important
information that organizations should be taking into account to verify
that their networks are truly adequate. This enables the organization
to ensure that all covered services are available and accessible under
the plan, as required by section 1852 of the Act and Sec. 422.112(a).
In addition to the required provider directory data elements, CMS
guidance addresses best practices for provider directories, including
encouraging organizations to identify non-English languages spoken by
each provider and provider/location accessibility for people with
physical disabilities. CMS proposes to codify these two best practices
(the latter in terms of deaf or hard of hearing individuals) as a
regulatory requirement at Sec. 422.111(b)(3)(i). Specifically, we
propose to mirror the Medicaid provider directory requirements at Sec.
438.10(h)(1)(vii) by adding the phrase ``each provider's cultural and
linguistic capabilities, including languages (including American Sign
Language) offered by the provider or a skilled medical interpreter at
the provider's office'' to paragraph (b)(3)(i). This would change these
two best practices to required data elements that all organizations
must include in their provider directories. Currently, the Medicaid
managed care regulation at Sec. 438.10(h)(1)(vii) requires that
provider directories for Medicaid managed care plans include
information on the provider's cultural and linguistic capabilities,
including languages (including American Sign Language (ASL)) offered by
the provider or a skilled medical interpreter at the provider's office
as well as other information identifying the provider's location,
contact information, specialty, and other information important for
beneficiaries in selecting a healthcare provider. The proposal here
makes use of the precedent established by the Medicaid program and
helps move the agency closer to its goal of aligning the various CMS
program requirements.
We note that the phrase ``cultural and linguistic capabilities'' as
proposed here for Sec. 422.111(b)(3)(i) refers to the capabilities of
a provider (or skilled medical interpreter at the provider's office) to
deliver culturally and linguistically appropriate services (CLAS),
which are defined by the HHS Office of Minority Health as ``services
that are respectful of and responsive to individual cultural health
beliefs and practices, preferred languages, health literacy levels, and
communication needs.'' \10\ As indicated by several research studies,
language concordance between providers and limited English proficient
individuals is associated with better health outcomes, and so better
matching patients with providers who speak the same language is
expected to improve quality of care and reduce disparities.\11\ CMS
believes this important proposed regulatory change would enhance the
quality and usability of provider directories, particularly for non-
English speaking enrollees searching for providers who speak their
preferred language, for limited English proficient individuals, and for
those enrollees seeking providers who use ASL themselves or have an ASL
interpreter available in their office.
---------------------------------------------------------------------------
\10\ <a href="https://www.minorityhealth.hhs.gov/Assets/PDF/TCH%20Resource%20Library_CLAS%20CLC%20CH.pdf">https://www.minorityhealth.hhs.gov/Assets/PDF/TCH%20Resource%20Library_CLAS%20CLC%20CH.pdf</a>.
\11\ <a href="https://pubmed.ncbi.nlm.nih.gov/20878497/">https://pubmed.ncbi.nlm.nih.gov/20878497/</a>; <a href="https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2599011">https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2599011</a>;
<a href="https://link.springer.com/article/10.1007/s11606-019-04847-5">https://link.springer.com/article/10.1007/s11606-019-04847-5</a>.
---------------------------------------------------------------------------
This proposal does not implement, take the place of, or supersede
an organization's or provider's obligations to take reasonable steps to
ensure meaningful access to such programs or activities by limited
English proficient individuals and appropriate steps to ensure that
communications with individuals with disabilities are as effective as
communications with others in such programs or activities, including
the provision of oral language assistance services and/or auxiliary
aids and services when required by applicable law (section 1557 of the
Patient Protection and Affordable Care Act (PPACA) and 45 CFR part 92).
We are proposing this new requirement for MA provider directories as a
standard for implementing and ensuring compliance with section
1852(c)(1)(C) of the Act and as a necessary and appropriate standard to
ensure that MA enrollees have the information they need in order to
access covered services from an MA plan.
This proposal is also consistent with the health equity objectives
of CMS's first strategic pillar ``Advance Equity'' under the 2022 CMS
Strategic Plan.\12\ It supports current CMS efforts to advance health
equity by giving enrollees a fair and just opportunity to access health
care services regardless of preferred language. Please refer to
sections III.A.1. and III.A.2. of this proposed rule for more extensive
discussion of health equity issues in the MA program.
---------------------------------------------------------------------------
\12\ <a href="https://www.cms.gov/cms-strategic-plan">https://www.cms.gov/cms-strategic-plan</a>.
---------------------------------------------------------------------------
To further enhance our requirements for MA provider directories in
the area of behavioral health, we also propose to add a new required
provider directory data element for certain providers who offer
medications for opioid use disorder (MOUD). Access to MOUD can be life-
saving, but too often, patients do not know how to access this type of
care. MA enrollees may have little insight as to which providers can
provide MOUD. This problem is especially urgent, as overdose deaths
from opioids have skyrocketed during the COVID-19 pandemic.\13\
Therefore, we propose to require organizations to identify certain
providers in their provider directories who have obtained a waiver
under section 303(g)(2) of the Controlled Substances Act (CSA) (21
U.S.C. 823(g)(2)(B)(i)-(ii)) from the Substance Abuse and Mental Health
Services Administration (SAMHSA) and the Drug Enforcement
Administration (DEA) to treat patients with MOUD (for example,
methadone, buprenorphine, naltrexone, naloxone, or Suboxone) and who
are listed on SAMHSA's
[[Page 79482]]
Buprenorphine Practitioner Locator (BPL).\14\
---------------------------------------------------------------------------
\13\ <a href="https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm">https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm</a>.
\14\ <a href="https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator">https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator</a>.
---------------------------------------------------------------------------
Specifically, we propose to include this new regulatory requirement
at Sec. 422.111(b)(3)(i) by adding the phrase ``notations for MOUD-
Waivered Providers as defined in Sec. 422.116(b)(1)(xxx) who are
listed on the Substance Abuse and Mental Health Services
Administration's Buprenorphine Practitioner Locator'' to paragraph (i).
We are using the term ``MOUD-Waivered Providers'' as section III.B.2.
of this proposed rule is proposing to define this term at proposed
Sec. 422.116(b)(1)(xxx) as ``providers who are waived by the Substance
Abuse and Mental Health Services Administration and the Drug
Enforcement Agency to administer, dispense, or prescribe narcotic drugs
in schedule III, IV, or V or combinations of such drugs to patients for
maintenance or detoxification treatment for opioid use disorder in
accordance with section 303(g)(2) of the Controlled Substances Act.''
Thus, to avoid duplication and ensure consistency in application of the
term, at proposed Sec. 422.111(b)(3)(i), we cross-reference the
definition at proposed Sec. 422.116(b)(1)(xxx). This proposed change
to the content requirements for provider directories would allow MA
enrollees to use their provider directories to search for the providers
that have special training to provide MOUD and are allowed to
administer, dispense, or prescribe the medications in an office
setting.
In order for the organization to flag the provider in its provider
directory, the provider must: (1) possess a waiver currently approved
by SAMHSA and the DEA; (2) have a valid and active ``X-number'' from
the DEA in order to administer, dispense, or prescribe MOUD; and (3) be
listed on SAMHSA's BPL (have allowed their practice location to be
disclosed publicly).\15\ For more information on how providers can
become MOUD-waivered providers, see the SAMHSA website.\16\ This
proposal would require organizations to identify such providers in
their provider directories by including notations next to the
providers' listings indicating that the providers are able to treat
patients with MOUD. No reference to the actual waiver in the provider
directory is necessary to provide the necessary notices to the
enrollee; however, the organization would need to determine which
providers in their network currently have the waiver, have the valid
and active ``X-number,'' and are listed in SAMHSA's BPL in order to
know which providers to flag in the provider directory as able to treat
patients with MOUD. The provider directory would need to include
language to indicate the meaning of the MOUD-waivered providers
notation, which is that these providers have completed the training so
that they may administer, dispense, or prescribe MOUD in an office
setting and have agreed to be publicly identified, but that such
notations are not inclusive of all providers who may do so.
---------------------------------------------------------------------------
\15\ <a href="https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator">https://www.samhsa.gov/medication-assisted-treatment/find-treatment/treatment-practitioner-locator</a>.
\16\ <a href="https://www.samhsa.gov/medication-assisted-treatment/become-buprenorphine-waivered-practitioner">https://www.samhsa.gov/medication-assisted-treatment/become-buprenorphine-waivered-practitioner</a>.
---------------------------------------------------------------------------
We believe that this new proposed MA provider directory data
element is important and necessary for ensuring access to behavioral
health services for MA enrollees. It supports both national and CMS
efforts related to behavioral health priorities and strategies, as
described in section III.B.1. of this proposed rule. This proposal will
help MA enrollees struggling with OUD find providers who can treat them
by prescribing MOUD, moving them further along the path towards long-
term recovery.
If finalized, CMS intends to monitor organization compliance with
the proposed new requirements described here through periodic online
provider directory reviews, as CMS deems necessary, and other
activities that are consistent with CMS's existing compliance
monitoring regarding provider directory requirements.
These proposals to amend Sec. 422.111(b)(3)(i) both codify as new
requirements certain existing guidance on best practices and introduce
a new provider directory data element. Organizations that do not
currently collect data on their contracted providers' cultural and
linguistic capabilities or their status as a MOUD-waivered provider may
do so by using the same means and methods by which they already collect
other information from contracted providers for inclusion in provider
directories. Also, organizations would use SAMHSA's BPL to identify
approved providers who have allowed their practice location to be
disclosed. We expect this proposed provision to impose an additional
minimal amount of information collection requirements (that is,
reporting, recordkeeping, or third-party disclosure requirements) on
organizations in terms of the updating of their existing processes
related to provider directories, such as a template, related software,
and the added data points for providers. However, we believe this
burden does not need to be submitted to the Office of Management and
Budget (OMB) based on the currently approved control number 0938-0753
(CMS-R-267), which states: ``The additional burden of translating this
network into a directory which is posted on the plan website as well as
the update and maintenance of this directory is part of the usual and
customary normal business activities and as such is exempt from PRA by
5 CFR 1320.3(b)(2).'' Consequently, there is no need for review by OMB
under the authority of the Paperwork Reduction Act (PRA) of 1995 (44
U.S.C. 3501 et seq.). In addition, this provision is not expected to
have any economic impact on the Medicare Trust Fund.
In summary, CMS is proposing to add two new requirements to Sec.
422.111(b)(3)(i) that organizations must include providers' cultural
and linguistic capabilities and identify certain providers waived to
treat patients with MOUD in their provider directories. We solicit
comment on these proposed improvements to the content of MA provider
directories. We also refer readers to section III.B.2. of this proposed
rule for our proposal to add prescribers of MOUD as a new specialty
type to be subject to MA network adequacy evaluation.
4. Digital Health Education for Medicare Advantage (MA) Enrollees Using
Telehealth (Sec. 422.112)
Telehealth has become increasingly popular and essential to
providing access to health care, especially during the COVID-19 Public
Health Emergency (PHE). For the purposes of this section of this
proposed rule, we are using the term ``telehealth benefits'' very
broadly to encompass covered services that are furnished to the
enrollee (that is, the patient) in a different location than where the
provider is located; there are multiple categories of covered benefits
where this circumstance is present, with additional criteria or
requirements applying to different categories of covered benefits when
the enrollee and provider are not in the same place at the time the
service is furnished. Under the MA program, there are various
requirements and options for coverage of telehealth benefits. When
original Medicare covers telehealth benefits, such as services
described in section 1834(m) of the Act and Sec. 411.78, MA
organizations must cover those telehealth benefits as basic benefits,
as defined in Sec. 422.100(c). If an MA organization wishes to offer
telehealth benefits that go beyond the scope of the original Medicare
telehealth benefits
[[Page 79483]]
that must be covered by every MA plan, MA organizations have the option
to offer ``Additional Telehealth Benefits'' (ATBs) and/or supplemental
telehealth benefits. Section 1852(m) of the Act and Sec. 422.135
outline the requirements for ATBs, which are generally services for
which benefits are available under Medicare Part B but which are not
payable under section 1834(m) of the Act, and the services are
furnished when the patient and the physician or practitioner are not in
the same location. If an MA organization wishes to offer telehealth
benefits that are not covered by original Medicare and are not within
the scope of Sec. 422.135, then the MA organization may choose to
offer them as supplemental benefits. The requirements for MA
supplemental benefits are set forth at section 1852(a)(3) of the Act
and Sec. Sec. 422.100(c) and 422.102. An MA organization's bid must
accurately reflect the covered telehealth service, whether it is
covered as an ATB or a supplemental benefit. In addition, during the
COVID-19 PHE, MA organizations have been required to take into account
the various waivers, amendments to regulations, and other guidance
published by CMS, with regard to telehealth benefits. In using the term
``telehealth benefits'' here, we mean to include all of these various
categories of covered benefits. In the regulation text we are proposing
here, we use the phrase ``covered benefits that are furnished when the
enrollee and the provider are not in the same location using electronic
exchange, as defined in Sec. 422.135'' as a means to encompass all of
the potential covered benefits included in our broad use of the term
``telehealth benefits.'' As defined in Sec. 422.135, electronic
exchange means electronic information and telecommunications
technology, which we believe is broad enough to include
telecommunications and technologies permitted for covered Part B
services under section 1834(m) of the Act and implementing regulations
as well as MA ATBs and other supplemental benefits.
In recent years, CMS has seen a significant boost in the offering
of telehealth benefits in the MA program. Almost 99 percent of MA plans
offered some form of telehealth benefits in contract year 2022, either
in the form of ATBs or supplemental telehealth benefits. This is a 16
percent increase since contract year 2018 and a 9 percent increase
since contract year 2020, which was the first year MA organizations
were permitted to offer ATBs. ATB offerings alone have increased by
approximately 39 percent since their inception 2 years ago. The total
number of MA enrollees who have access to MA telehealth benefits of any
kind has risen from approximately 89 percent in contract year 2018 to
nearly 100 percent in contract year 2022.
While the supply and demand of telehealth has clearly grown in
recent years, there is evidence that barriers to accessing telehealth
leave room to improve health equity in telehealth. The regulatory
change we are proposing here is an attempt to improve health equity in
telehealth and is consistent with both E.O. 13985 and CMS's first
strategic pillar ``Advance Equity'' under the 2022 CMS Strategic
Plan.<SUP>17 18</SUP> For purposes of this provision, we are using
CMS's definition of health equity, which is included in section
III.A.1. of this proposed rule.\19\ In developing this proposal, we are
also guided by HHS's definition of ``health equity in telehealth'' as
meaning the ``opportunity for everyone to receive the health care they
need and deserve, regardless of social or economic status. Providing
health equity in telehealth means making changes in digital literacy,
technology, and analytics, which will help telehealth providers reach
the underserved communities that need it the most.'' \20\
---------------------------------------------------------------------------
\17\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
\18\ <a href="https://www.cms.gov/cms-strategic-plan">https://www.cms.gov/cms-strategic-plan</a>.
\19\ <a href="https://www.cms.gov/pillar/health-equity">https://www.cms.gov/pillar/health-equity</a>.
\20\ <a href="https://telehealth.hhs.gov/providers/health-equity-in-telehealth/">https://telehealth.hhs.gov/providers/health-equity-in-telehealth/</a>.
---------------------------------------------------------------------------
Health equity in telehealth is difficult to attain due to barriers
to telehealth access, which may include: lack of video sharing
technology (for example, a smartphone, tablet, or computer), spotty or
no internet access, lack of housing or private space to participate in
virtual visits, few local providers who offer telehealth practices,
language barriers (including oral, written, and signed language), the
inability to incorporate third party auxiliary aids and services such
as live captioners, telehealth software, apps, and websites that are
accessible and usable by people with disabilities, and lack of adaptive
equipment for people with disabilities along with incompatibility with
external assistive technologies used by people with disabilities.\21\
These barriers are especially burdensome on populations that may
already experience health disparities, such as those who are adversely
affected by persistent poverty and inequality, those who live in rural
areas, people from some racial and ethnic groups, immigrants, people
who identify as LGBTQI+, people with disabilities, older people,
limited English proficient individuals, people with limited digital
literacy, and people who are underinsured or uninsured. Such
underserved communities often lack equitable access to health care,
leading to consequences such as: higher mortality and disease rates,
more severe disease and illness, higher medical costs, lack of access
to treatment, and lack of access to health insurance.\22\
---------------------------------------------------------------------------
\21\ Valdez R.S., Rogers C.C., Claypool H., Trieshmann L., Frye
O., Wellbeloved-Stone C., Kushalnagar P. Ensuring full participation
of people with disabilities in an era of telehealth. J Am Med Inform
Assoc. 2021 Feb 15;28(2):389-392. doi: 10.1093/jamia/ocaa297. PMID:
33325524; PMCID: PMC7717308.
Annaswamy TM, Verduzco-Gutierrez M, Frieden L. Telemedicine
barriers and challenges for persons with disabilities: COVID-19 and
beyond. Disabil Health J. 2020;13(4):100973. doi:10.1016/
j.dhjo.2020.100973.
\22\ <a href="https://telehealth.hhs.gov/providers/health-equity-in-telehealth/">https://telehealth.hhs.gov/providers/health-equity-in-telehealth/</a>.
---------------------------------------------------------------------------
The existence of communities with low digital health literacy who
in turn cannot access telehealth represents a significant obstacle in
achieving health equity in telehealth. The World Health Organization
defines digital health literacy as ``the ability to seek, find,
understand, and appraise health information from electronic sources and
apply the knowledge gained to addressing or solving a health problem.
Examples of digital health literacy include accessing your electronic
health record, communicating electronically with your health care team,
ability to discern reliable online health information, and using health
and wellness apps.'' \23\ Low digital health literacy can impact an
individual's access to or quality of telehealth visits.\24\ Evidence
shows that those with low digital health literacy tend to be older,
lower income, less educated, and Black or Hispanic.\25\
---------------------------------------------------------------------------
\23\ <a href="https://nnlm.gov/guides/intro-health-literacy">https://nnlm.gov/guides/intro-health-literacy</a>.
\24\ <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8464820/">https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8464820/</a>.
\25\ <a href="https://nces.ed.gov/pubs2018/2018161.pdf">https://nces.ed.gov/pubs2018/2018161.pdf</a>.
---------------------------------------------------------------------------
Many older adults with low digital health literacy experience gaps
in access to the health care they need, and this is concerning for the
MA program, whose enrollee population includes individuals age 65 and
older (as well as individuals under age 65 with disabilities). For
example, the American Association of Retired Persons (AARP) annual
technology survey found that more than half of older adults (age 50 and
older) in 2021 indicated they need more digital education, while more
than one in three said they lacked confidence when using
technology.\26\ Of the 32
[[Page 79484]]
million Americans who cannot use a computer, approximately one-third
are seniors.\27\ Further, less than one-third of Medicare beneficiaries
over 65 have at-home digital access, and those over age 75 and with
less than high school-level education are less likely to use
telehealth.\28\ For people with disabilities, 15 percent reported not
using the internet as opposed to 5 percent in the general population in
a Pew Foundation Survey, while 62 percent of people with disabilities
as opposed to 81 percent of the general population own their own
desktop or laptop computer.\29\ Other studies have confirmed a
significant gap in digital literacy among people with disabilities.\30\
Another survey found that Black, Latino, and Filipino seniors and those
75 years and older are significantly less likely to own devices like
computers and smartphones compared to non-Hispanic whites, Chinese, and
younger seniors (ages 65-69); this was also true in terms of these
groups' respective use of the internet and email, as well as their
ability and willingness to use technology for telehealth purposes.\31\
---------------------------------------------------------------------------
\26\ Kakulla, Brittne. 2021 Tech Trends and the 50-Plus: Top 10
Biggest Trends. Washington, DC: AARP Research, April 2021. <a href="https://doi.org/10.26419/res.00420.001">https://doi.org/10.26419/res.00420.001</a>.
\27\ <a href="https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html">https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html</a>.
\28\ Shah M.K., Gibbs A.C., Ali M.K., Narayan K.M.V., Islam N.
Overcoming the Digital Divide in the Post-COVID-19 ``Reset'':
Enhancing Group Virtual Visits with Community Health Workers J Med
internet Res 2021;23(7):e27682 doi: 10.2196/27682.
\29\ Andrew Perrin and Sara Atske, Americans with disabilities
less likely than those without to own some digital devices, Pew
Research, September 10, 2021, online at <a href="https://www.pewresearch.org/fact-tank/2021/09/10/americans-with-disabilities-less-likely-than-those-without-to-own-some-digital-devices/">https://www.pewresearch.org/fact-tank/2021/09/10/americans-with-disabilities-less-likely-than-those-without-to-own-some-digital-devices/</a>.
\30\ Eun Ji Kim, MS, MD, Yiyang Yuan, MS, MPH, Jane Liebschutz,
MPH, MD, Howard Cabral, MPH, Ph.D.,\4\ and Lewis Kazis, ScD,
Understanding the Digital Gap Among US Adults With Disability:
Cross-Sectional Analysis of the Health Information National Trends
Survey 2013, JMIR Rehabil Assist Technol. 2018 Jan-Jun; 5(1): e3.
Online at <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/">https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/</a>.
\31\ <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/">https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4799429/</a>.
---------------------------------------------------------------------------
As outlined here, research indicates that older adults, people with
disabilities, people from some racial and ethnic groups, rural
communities, underserved populations, and those adversely affected by
persistent poverty and inequality are all disadvantaged by limited
access to modern information and communications technology (sometimes
referred to as a digital divide).\32\ Individuals with a higher degree
of digital health literacy receive more healthcare information, are
better equipped to evaluate the quality of information regarding their
healthcare, and report higher telehealth usage.\33\ Further,
individuals with chronic diseases also benefit from digital health
literacy; when such individuals possess digital health literacy, they
tend to monitor and manage their diseases more competently, are more
satisfied with the telemedicine services, and respond faster to changes
that might adversely affect their situation, thereby improving their
overall health.\34\ This is significant because individuals with two or
more chronic diseases are more likely to be individuals 65 and
over.\35\
---------------------------------------------------------------------------
\32\ <a href="https://academic.oup.com/jamia/article/27/12/1949/5899728">https://academic.oup.com/jamia/article/27/12/1949/5899728</a>.
\33\ <a href="https://jamanetwork.com/journals/jama/article-abstract/2426088">https://jamanetwork.com/journals/jama/article-abstract/2426088</a>.
\34\ <a href="https://www.sciencedirect.com/science/article/pii/S0738399114001876">https://www.sciencedirect.com/science/article/pii/S0738399114001876</a>.
\35\ <a href="https://www.cdc.gov/pcd/issues/2020/20_0130.htm">https://www.cdc.gov/pcd/issues/2020/20_0130.htm</a>.
---------------------------------------------------------------------------
CMS does not currently have requirements for MA organizations in
the area of digital health literacy. Given the need to increase digital
health literacy in many communities with MA enrollees and the goal to
achieve health equity in telehealth, we believe it is necessary to
implement regulations addressing digital health literacy in the MA
program. CMS expects that these digital health literacy proposals, if
finalized, would help underserved communities in need of assistance to
improve their digital health literacy and help advance the goal of
achieving health equity in telehealth.\36\
---------------------------------------------------------------------------
\36\ <a href="https://telehealth.hhs.gov/providers/health-equity-in-telehealth/">https://telehealth.hhs.gov/providers/health-equity-in-telehealth/</a>.
---------------------------------------------------------------------------
We propose to add requirements for MA organizations to develop and
maintain procedures to identify and offer digital health education to
enrollees with low digital health literacy to assist them with
accessing any medically necessary covered telehealth benefits.
Specifically, we propose to amend current continuity of care
requirements for MA organizations offering coordinated care plans to
``ensure continuity of care and integration of services through
arrangements with contracted providers'' at Sec. 422.112(b), by adding
a new paragraph (9). The new proposed paragraph would require MA
organizations to develop and maintain procedures to identify and offer
digital health education to enrollees with low digital health literacy
to assist with accessing any medically necessary covered benefits that
are furnished when the enrollee and the provider are not in the same
location using electronic exchange; we use the term ``electronic
exchange'' as it is broadly defined in Sec. 422.135. This proposed new
continuity of care requirement would apply to all MA organizations
offering coordinated care plans (that is, HMOs, PPOs, HMO-POSs, and
SNPs) and would be relevant for all types of covered telehealth
benefits, including basic telehealth benefits, ATBs, and supplemental
telehealth benefits offered by MA coordinated care plans. We solicit
comment on whether to amend Sec. 422.100 instead of Sec. 422.112(b)
in order to apply this new requirement to all MA plans and not just
coordinated care plans. This proposed additional standard is intended
to ensure that MA enrollees are able to access covered benefits and
that MA organizations meet their obligations under section 1852(d) of
the Act to make covered benefits available and accessible to enrollees
in the plan. Section 1856(b) of the Act authorizes the adoption of
standards that are consistent with and to carry out the Part C statute.
As telehealth benefits become more prevalent in the MA program, taking
steps to provide enrollees with digital health education will ensure
that these telehealth benefits are truly accessible and available to
enrollees.
This proposal would be a first step for MA organizations to assess
the landscape of health equity in telehealth in their plans and help
enrollees navigate telehealth. Under this proposal, CMS would provide a
degree of discretion for MA organizations in the procedures developed
and used to identify enrollees with low digital health literacy and the
digital health education services the MA organization provides for
those enrollees. In order to comply with the proposed new regulation,
MA organizations would necessarily have to introduce a digital health
literacy screening program or other similar procedure to identify
current enrollees with low digital health literacy, however, MA
organizations would have flexibility to design their own screening
program or procedure. Some experts recommend such an assessment should
examine patient-level barriers such as telehealth readiness, broadband
access, and inaccessible or unusable information and communication
technologies by individuals with disabilities that limit patient use of
telehealth.\37\ Others recommend considering certain digital foundation
skills based on a specific framework.\38\ CMS encourages MA
organizations to research current trends and successes in the field
when developing their own methods to identify enrollees with low
digital
[[Page 79485]]
health literacy. CMS anticipates that some MA organizations could ask
enrollees, for example, if they have internet access and reliable
connectivity, if they have a device that meets appropriate telehealth
system requirements, if they use email, if they can download a mobile
app, or if they can change applicable settings on a device (for
example, browser or camera settings), as a means to identify which
enrollees have low digital heath literacy.\39\
---------------------------------------------------------------------------
\37\ <a href="https://link.springer.com/content/pdf/10.1007/s00520-021-06629-4.pdf">https://link.springer.com/content/pdf/10.1007/s00520-021-06629-4.pdf</a>.
\38\ <a href="https://www.digitalinclusion.org/definitions/">https://www.digitalinclusion.org/definitions/</a>.
\39\ <a href="https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html">https://www.telehealthequitycoalition.org/improving-digital-literacy-to-improve-telehealth-equity.html</a>.
---------------------------------------------------------------------------
Once the MA organization determines which enrollees experience low
digital health literacy, the MA organization would then have to
implement a digital health education program to offer to these
enrollees. CMS is not proposing to identify explicit parameters for
this digital health education requirement, rather, we have chosen to
keep it flexible and allow for innovation in this area by MA
organizations. Depending on the specific enrollment in an MA plan, the
procedures to identify enrollees and the mechanisms and content of the
digital health education could vary. However, some examples of digital
health education designs include: distributing educational materials
about how to access certain telehealth technologies in multiple
languages, including sign language, and in alternative formats; holding
digital health literacy workshops; integrating digital health coaching;
offering enrollees in-person digital health navigators; and partnering
with local libraries and/or community centers that offer digital health
education services and supports.
As a best practice, CMS encourages MA organizations to ensure that
there are no system requirements (for example, online portal
enrollment) that could act as barriers to accessing covered telehealth
benefits, or the proposed digital health education for enrollees with
low digital health literacy, so as to promote ease of access in the
simplest way possible. In addition, if an MA organization offers
enrollees assistance with any necessary telehealth technology--for
instance, if they provide limited use smartphones/tablets or cellular
data plans as supplemental benefits in order to aid in the use of
telehealth services--then the MA organization must comply with
applicable laws about those benefits and make enrollees aware of these
available benefits per section 1852(c)(1)(F) of the Act and Sec.
422.111(b)(6). This disclosure is especially important for enrollees
identified as having low digital health literacy. Smartphones and
tablets (or other similar equipment) must only be used for primarily
health related purposes (and cellular data plans can only be provided
if use of these plans is locked and limited to health-related
activities), such as when the device is locked except for remote
monitoring or to enable engagement with health care providers, in order
for these items and services to be permissible supplemental benefits
under Sec. 422.100(c)(2)(ii). However, furnishing or covering a
cellular data plan without limitations might be permissible (under
section 1852(a)(3)(D) of the Act and Sec. 422.102(f)) as a non-
primarily health related special supplemental benefit for the
chronically ill (SSBCI) when the benefit is limited to a chronically
ill enrollee and has a reasonable expectation of improving or
maintaining the health or overall function of the chronically ill
enrollee. For more information on SSBCI, please see the June 2020 final
rule and the Medicare and Medicaid Programs; Contract Year 2022 Policy
and Technical Changes to the Medicare Advantage Program, Medicare
Prescription Drug Benefit Program, Medicaid Program, Medicare Cost Plan
Program, and Programs of All-Inclusive Care for the Elderly final rule
which appeared in the Federal Register on January 19, 2021 (86 FR 5864)
(hereinafter referred to as the January 2021 final rule). CMS
encourages MA organizations whose plans have a high number of enrollees
with low digital health literacy to consider offering the
aforementioned supplemental benefits and pairing an appropriate digital
health education program with the provision of such devices to
enrollees, where permitted by applicable law.
To further emphasize the importance of health equity and health
equity in telehealth specifically, CMS reminds MA organizations that
Sec. 422.112(a)(8) as it currently reads requires MA organizations
offering coordinated care plans to ensure that services are provided in
a culturally competent manner to all enrollees, including limited
English proficient individuals or those with limited reading skills,
and those with diverse cultural and ethnic backgrounds. CMS is
proposing, in section III.A.2. of this proposed rule, to amend Sec.
422.112(a)(8) to better reflect the broad scope of potentially
underserved populations and to emphasize how MA plans must ensure
equitable access to services. As adopted and with our proposed
revisions, Sec. 422.112(a)(8) requires MA organizations to ensure that
services are provided in an equitable manner to all enrollees. MA
organizations must take into account these additional obligations, as
applicable, when developing and maintaining the digital health
education programs they would be required to implement under this
proposal. Furthermore, the HHS Office for Civil Rights and the U.S.
Department of Justice (DOJ) Civil Rights Division recently published
new guidance providing clarity on how Federal nondiscrimination laws
require accessibility for people with disabilities and limited English
proficient individuals in health care provided via telehealth.\40\
These Federal civil rights laws--including the Americans with
Disabili
[…truncated; see source link]Indexed from Federal Register on December 27, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.