Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program icipants with final scores in the example ASM cohort had a total of $1 billion in Medicare Part B covered professional service payments during the ASM performance year. • Steps 2 and 3. We multiply the $1 billion calculated in Step 1 by the 9 percent ASM risk level and the 85 percent ASM redistribution percentage to determine an ASM incentive pool of $76.5 million for this example. • Step 4. An ASM participant, in this example, received a final score of 80 points and the median score for the example ASM cohort was 50 points. When transformed under the exchange function, this final score would result in a transformed final score of 0.95. • Step 5. We calculate a scaling factor of 1.5 applicable for all ASM participants in this example ASM cohort to ensure that the amount in the ASM incentive pool would be distributed in the form of scaled payment adjustments. The numerator of the scaling factor would be the $76.5 million in the ASM incentive pool (calculated in Steps 2 and 3) and the denominator would be calculated as $51 million based on the sum of all ASM participant’s transformed final scores multiplied by their respective total Medicare Part B covered professional services payme nominator would be calculated as $51 million based on the sum of all ASM participant’s transformed final scores multiplied by their respective total Medicare Part B covered professional services payments and the 9 percent ASM risk level: ($76.5 million/$51 million = 1.5). • Step 6A. The ASM payment adjustment factor, in this example, would be calculated as: [ASM risk level (9 percent) × transformed final score (0.95) × scaling factor (1.5)]¥ASM risk level (9 percent) = 0.0385 • Step 7. The resulting ASM payment multiplier, in this example, would be calculated as: 1 + ASM payment adjustment factor (0.0385) = 1.0385. The value of this ASM payment multiplier would mean that the example ASM participant would receive a positive adjustment of 3.85 percent on all Medicare Part B covered professional service payments during the corresponding ASM payment year. We note that the parameters of the previous calculation are fictitious and may look entirely different when calculating the ASM payment adjustment factors and ASM payment multipliers for the model, depending on the distribution of final scores, the magnitude of Medicare Part B covered professional service payments associated with ASM adjustment factors and ASM payment multipliers for the model, depending on the distribution of final scores, the magnitude of Medicare Part B covered professional service payments associated with ASM participants, the size of ASM incentive pool, among other factors. As discussed earlier in this section of this proposed rule, we are not proposing to use a performance threshold to determine a cutoff between positive and negative ASM payment adjustment factors and resulting ASM payment multipliers. We would, therefore, calculate ASM payment adjustment factors and resulting ASM payment multipliers based on the size of the ASM incentive pool and the distribution of final scores for a given ASM performance year using the proposed payment methodology described throughout this section of this proposed rule. Our proposed process to calculate ASM payment adjustment factors and adjust an ASM participant’s Medicare Part B payments using an ASM payment multiplier during an applicable ASM payment year as proposed at § 512.750 currently aligns with the processes and timelines by which the Quality Payment Program applies MIPS payment adjustments for each Medicare Part B claim made for covered prof ar as proposed at § 512.750 currently aligns with the processes and timelines by which the Quality Payment Program applies MIPS payment adjustments for each Medicare Part B claim made for covered professional services furnished by a MIPS eligible clinician as defined at § 414.1405(e). We believe that aligning the timeline and processes with the Quality Payment Program’s application of MIPS payment adjustments would ensure operational consistency and minimize confusion. As discussed in section III.C.2.e.(6). of this proposed rule, we propose to provide an ASM participant with their ASM payment adjustment factor and ASM payment multiplier in the ASM VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00258 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32609 performance report provided to each ASM participant for the applicable ASM performance year. We seek comment on our proposed process as described at § 512.750(c) to calculate the ASM payment adjustment factors and ASM payment multipliers, and how we would apply ASM paym ASM performance year. We seek comment on our proposed process as described at § 512.750(c) to calculate the ASM payment adjustment factors and ASM payment multipliers, and how we would apply ASM payment multipliers to an ASM participant’s Medicare Part B payment during an ASM payment year. The following sections discuss our proposals and alternatives on how we propose to calculate an ASM incentive pool, including the proposed ASM risk level, ASM redistribution percentage, and our proposal for the exchange function. (b) ASM Incentive Pool As discussed earlier in this section of this proposed rule, we propose to calculate the ASM incentive pool for each ASM cohort based on two factors: (1) the ASM risk level as described at § 512.705(c)(1) (that is, the magnitude of the maximum positive or negative net payment adjustment percentage to which an ASM participant would be subject during an ASM payment year) and (2) the ASM redistribution percentage as described at § 512.750(c)(1)(iii) (that is, the percentage of Medicare Part B covered professional services payments to ASM participants during an ASM performance year that would be distributed in the form of payment adjustments to ASM par is, the percentage of Medicare Part B covered professional services payments to ASM participants during an ASM performance year that would be distributed in the form of payment adjustments to ASM participants during an ASM payment year). We discuss our proposals for the magnitude of ASM risk level and ASM redistribution percentage later in this section of this proposed rule. The total amount in an ASM incentive pool would directly determine the magnitude of ASM payment adjustment factors and resulting ASM payment multipliers that each ASM participant would receive during an ASM payment year. We describe the step-by-step process of calculating the ASM incentive pool earlier in this section of this proposed rule. In summary, we propose at § 512.750(c)(1)(iii) to calculate an ASM incentive pool for each ASM cohort for applicable for each ASM payment year using the following formula: ASM Incentive Pool = ASM risk level × ASM redistribution percentage × S ASM participant Medicare Part B payments The proposed approach to calculating an ASM incentive pool aligns with the current approach that other CMS VBP programs use when calculating the total amount that can be distributed to program yments The proposed approach to calculating an ASM incentive pool aligns with the current approach that other CMS VBP programs use when calculating the total amount that can be distributed to program participants through payment adjustments. Both the SNF VBP Program (82 FR 36619 through 36621) and the Hospital VBP Program (88 FR 59063 through 59108) employ a similar calculation to determine the total amount that can be redistributed through payment adjustments for their respective program participants. We believe the proposed approach would determine an ASM incentive pool amount that would be appropriate to distribute through scaled payment adjustments, and that the proposed approach would align with the desired level of two-sided risk that we believe would incentivize behavioral change and increased accountability. We seek comments on our proposed approach to calculate the ASM incentive pool for each ASM cohort. (i) ASM Risk Level As discussed earlier in this section of this proposed rule, we propose to use the annual ASM risk level to calculate the ASM incentive pool for each ASM cohort. We propose at § 512.750(c)(1)(i) to establish the ASM risk level that is the magnitude of the rule, we propose to use the annual ASM risk level to calculate the ASM incentive pool for each ASM cohort. We propose at § 512.750(c)(1)(i) to establish the ASM risk level that is the magnitude of the maximum downside or upside risk to which an ASM participant would be subject to during an ASM payment year. We propose at § 512.750(c)(1)(i)(A) through (E) the risk levels for each ASM payment year as summarized in Table 44. Our proposed ASM risk level of 9 percent for the 2029 ASM payment year (based on 2027 ASM performance year performance) and the 2030 ASM payment year (based on 2028 ASM performance year performance) aligns with the CY2024 applicable percent of 9 percent under MIPS, which is the maximum and minimum range of potential MIPS payment adjustment factor for a given MIPS payment year defined at § 414.1405(c) (88 FR 79378). Depending on the range of MIPS eligible clinicians’ scores within a given MIPS performance period, a scaling factor (ranging from zero to 3) is applied to positive adjustments to retain budget neutrality as defined at § 414.1405(b)(3) (88 FR 79378), meaning that the maximum positive payment adjustment factor may be below or above the applicable percent. positive adjustments to retain budget neutrality as defined at § 414.1405(b)(3) (88 FR 79378), meaning that the maximum positive payment adjustment factor may be below or above the applicable percent. A MIPS eligible clinician with a score of zero receives a payment adjustment factor equal to the negative of the applicable percent as defined at defined at § 414.1405, meaning that all MIPS eligible clinicians are potentially subject to a maximum downside risk equivalent to the applicable percent. Based on our proposed ASM performance category and scoring approach that leverages the MVP measurement framework, we believe that starting and keeping the ASM risk level at 9 percent for the first two ASM payment years would be appropriate given its continued use within MIPS. We believe that gradually increasing the ASM risk level over time would provide an incentive for increased accountability that would be central to increasing accountability for longitudinal care management and improving the quality of care for beneficiaries with heart failure and low back pain. We considered annual ASM risk levels higher and lower than what we propose for each ASM performance year. Higher ASM risk leve e quality of care for beneficiaries with heart failure and low back pain. We considered annual ASM risk levels higher and lower than what we propose for each ASM performance year. Higher ASM risk levels would mean that ASM participants with lower final scores would be subject to potentially higher negative payment adjustments, whereas lower ASM risk levels would mean that ASM participants with lower final scores would be subject to potentially lower negative payment adjustments. Calibrating the right level of risk is critical to ensure that ASM participants VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00259 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00260 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32611 performance score. The choice of an exchange function ultimately contributes to creating an optimal set of incentives by setting the distribution and size of payment adjustment / Proposed Rules 32611 performance score. The choice of an exchange function ultimately contributes to creating an optimal set of incentives by setting the distribution and size of payment adjustments. We propose at § 512.750(c)(1)(ii) to use a logistic exchange function to translate final scores into ASM payment adjustment factors that would distribute each ASM incentive pool to their respective ASM participants through ASM payment adjustment factors that result in net negative, neutral, or positive payment adjustments. In our view, important factors when adopting an exchange function include: (1) the percentage of ASM participants that would receive positive payment adjustments compared to those that would receive negative payment adjustments and (2) the magnitude of the maximum positive and negative net payment adjustment. We believe that ASM would be most effective at encouraging ASM participants to improve the quality of care that they provide to Medicare beneficiaries if ASM participants can earn positive adjustments through high performance across ASM’s performance categories but also face some level of downside risk through possible negative payment adjustments. We also be ticipants can earn positive adjustments through high performance across ASM’s performance categories but also face some level of downside risk through possible negative payment adjustments. We also believe that the magnitude of negative and positive adjustments must create a strong incentive for improving care related to ASM’s targeted chronic conditions. The choice of an exchange function, and the specific parameters of the chosen exchange function, can create different distributions of ASM payment adjustment factors, ASM payment multipliers, and net payment adjustments based on the final scores of ASM participants in each ASM cohort. In the Quality Payment Program, CMS uses a linear exchange function to translate MIPS eligible clinicians’ final scores into MIPS payment adjustment factors relative to an annually determined performance threshold so that the program is budget neutral (89 FR 62199). Under the Hospital VBP Program, CMS uses a linear exchange function to translate a hospital’s Total Performance Score into the percentage multiplier to be applied to each Medicare discharge claim submitted by the hospital during the applicable FY (76 FR 26531 through 26534). We refer read al’s Total Performance Score into the percentage multiplier to be applied to each Medicare discharge claim submitted by the hospital during the applicable FY (76 FR 26531 through 26534). We refer readers to the Hospital VBP Program Final Rule (76 FR 26531 through 26534) for detailed discussion of the Hospital VBP Program’s exchange function, as well as responses to public comments on this issue. Under the SNF VBP Program, CMS uses a logistic function to translate a SNF’s performance score into an incentive payment multiplier (82 FR 36616 through 36619). The SNF VBP Program also considered a cube exchange function during its notice-and- comment rulemaking related to the SNF VBP Program exchange function (82 FR 36616 through 36619). We refer readers to the SNF VBP Program final rule (82 FR 36616 through 36619) for detailed discussion on the SNF VBP Program’s exchange function and responses to public comments on this issue. Using the exchange functions that other Medicare VBP programs use or considered using while determining their payment methodology, we considered three exchange functions for use in ASM’s payment methodology: (1) linear, (2) logistic, and (3) cube. The equations and or considered using while determining their payment methodology, we considered three exchange functions for use in ASM’s payment methodology: (1) linear, (2) logistic, and (3) cube. The equations and graphs of the proposed exchange functions displayed in the remainder of this section of this proposed rule are illustrative. We note that the actual exchange functions’ forms and slopes would vary depending on the distributions of final scores and wish to emphasize that we present these representations solely for the reader’s clarity as we discuss our exchange function policy. The linear function is a simple, steadily increasing function ranging from zero to one hundred (Figure 2). A linear exchange function would provide ASM participants the same marginal incentive to continually improve performance of their final score. The linear exchange function we considered had the following formula, where xi is an ASM participant’s final score: 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00261 Fmt 4701 Sfmt 4725 E:\FR\FM\16JYP3.SGM 16JYP3 / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00262 F D n o d n o m m a h k VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00261 Fmt 4701 Sfmt 4725 E:\FR\FM\16JYP3.SGM 16JYP3 / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00262 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00263 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00264 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32615 be few instances where a single NPI would be identified as multiple ASM participants, we believe this policy would appropriately track accountability to the NPI under a new TIN while reducing complexity by only applying on ASM payment adjustment multiplier. BILLING CODE 4120–01–P BILLING CODE 4120–01–C Our proposals would closely link the ASM participants’ performance during an ASM performance year to the ASM payment multiplier. It would also ensure that ASM participants that qualify for net 0–01–C Our proposals would closely link the ASM participants’ performance during an ASM performance year to the ASM payment multiplier. It would also ensure that ASM participants that qualify for net positive payment adjustments keep them, even if they change TINs by the start of the ASM performance year. For those who have a net negative payment adjustment, this proposal would also ensure ASM participants would remain accountable for their performance. As discussed earlier in this section of this proposed rule, our proposals would also prevent interference with the application of MIPS payment adjustment factors if the NPI identifying the ASM participant was a MIPS eligible clinician under a different TIN/NPI combination during the same ASM performance year/MIPS performance period. We based our proposed approach on sub-regulatory guidance issued by the Quality Payment Program on how MIPS payment adjustment factors follow MIPS eligible clinicians if they change their TIN affiliation after a MIPS performance period (81 FR 77330, 85 FR 84917 through 84919, and 86 FR 65536).241 Like MIPS, our proposal for ASM tracks accountability to the ASM participant regardless of their specific TIN er a MIPS performance period (81 FR 77330, 85 FR 84917 through 84919, and 86 FR 65536).241 Like MIPS, our proposal for ASM tracks accountability to the ASM participant regardless of their specific TIN affiliation at the time we would apply ASM payment multipliers to an ASM participant’s Medicare Part B covered professional services payments during an ASM payment year. We seek comments on our proposed approach to notify and apply ASM payment multipliers to Medicare Part B covered professional services payments 241 https://qpp.cms.gov/resources/document/ 21ee9d76-a002-4f5d-b228-3a99b32aa7dc. during an ASM payment year. We also seek comment on how ASM payment multipliers would be applied to Medicare Part B covered professional services payments for ASM participants whose TIN affiliations change after an ASM performance year and before the end of a corresponding ASM payment year. g. Proposed Timely Error Notice Process We believe that it is necessary to have a process by which ASM participants may appeal the ASM performance report. However, the standard CMS claims appeals process submitted through a MAC would not lead to timely resolution of disputes for the purposes of ASM because MAC ants may appeal the ASM performance report. However, the standard CMS claims appeals process submitted through a MAC would not lead to timely resolution of disputes for the purposes of ASM because MACs and other CMS officials would not have timely access to beneficiary attribution data. Therefore, we propose to waive the requirements of section 1869 of the Act specific to VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00265 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00266 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32617 measures in those programs are less relevant to specialty care. ASM takes the founding tenets for MVPs and goes further, allowing for like-to-like comparisons for all ASM participants by ensuring they are reporting on the same, clinically relevant measures. For these reasons, we propose to seek a MIPS waiver at § 512.775(a) for all ASM participants regardless of l ASM participants by ensuring they are reporting on the same, clinically relevant measures. For these reasons, we propose to seek a MIPS waiver at § 512.775(a) for all ASM participants regardless of whether they have achieved QP status through another Medicare model or program. We seek comment on the proposed MIPS waiver for all ASM participants at § 512.775(a). (3) Telehealth (a) Background We expect that the proposed ASM design features would lead to greater interest on the part of ASM participants caring for ASM beneficiaries in furnishing services to beneficiaries in their home or place of residence. ASM would create new incentives for comprehensive care management for beneficiaries, including early identification and intervention regarding changes in health status. Under section 1834(m) of the Act, Medicare pays for telehealth services furnished by a physician or practitioner under certain conditions even though the physician or practitioner is not in the same location as the beneficiary. Under the longstanding statutory payment requirements, telehealth services must be furnished to a beneficiary located in one of the originating sites specified in section 1834(m)(4)(C)(ii) o eficiary. Under the longstanding statutory payment requirements, telehealth services must be furnished to a beneficiary located in one of the originating sites specified in section 1834(m)(4)(C)(ii) of the Act and the site must satisfy at least one of the geographic requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act. Generally, for Medicare payment to be made for telehealth services under the Medicare Physician Fee Schedule several conditions must be met, as set forth under § 410.78(b). Specifically, the service must be on the Medicare list of telehealth services and meet all the following other requirements for payment: (1) the service must be furnished via an interactive telecommunications system, (2) the service must be furnished to an eligible telehealth individual, and (3) the individual receiving the services must be in an eligible originating site. For most telehealth services, this requires the beneficiary to be located at an originating site that is in certain, mostly rural, areas, and in a setting that is a health care facility. During the COVID–19 PHE, CMS used emergency authority under section 1135(b)(8) of the Act to waive these requirements to allow n, mostly rural, areas, and in a setting that is a health care facility. During the COVID–19 PHE, CMS used emergency authority under section 1135(b)(8) of the Act to waive these requirements to allow beneficiaries to be located in an originating site in any geographic area and in any setting, including the home of the beneficiary. Congress has enacted several laws that temporarily extend these flexibilities beyond the PHE. Most recently, the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119– 4) amended section 1834(m)(4)(C)(iii) of the Act to extend these originating site flexibilities through September 30, 2025. Absent Congressional action, beginning October 1, 2025, the statutory limitations that were in place for Medicare telehealth services prior to the COVID–19 PHE will retake effect for most telehealth services. These include geographic and location restrictions on where the services are provided. When all these conditions are met, Medicare pays a facility fee to the originating site and provides separate payment to the distant site practitioner for the service. Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include profess fee to the originating site and provides separate payment to the distant site practitioner for the service. Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include professional consultations, office visits, office psychiatry services, and any additional service specified by the Secretary, when furnished via a telecommunications system. For the list of approved Medicare telehealth services, see the CMS website at https://www.cms.gov/ medicare/coverage/telehealth/list- services. Under section 1834(m)(4)(F)(ii) of the Act, we have an annual process to consider additions to and deletions from the list of telehealth services. Some literature suggests certain beneficial telehealth technologies, which enable health care providers to deliver care to patients in locations remote from providers, are being increasingly used to complement face- to-face patient-provider encounters to increase access to care, especially in rural or underserved areas.242 In these cases, the use of remote access technologies may improve the accessibility and timeliness of needed care, increase communication between providers and patients, enhance care coordination, and improve the effi he use of remote access technologies may improve the accessibility and timeliness of needed care, increase communication between providers and patients, enhance care coordination, and improve the efficiency of care. We note that certain covered professional services that are commonly furnished remotely using telecommunications technology are paid under the same conditions as in-person physicians’ services and thus do not require a waiver to be considered as telehealth services. Such services that do not require the patient to be present in person with the practitioner when 242 Azizi Z, Broadwin C, Islam S, et al. Digital Health Interventions for Heart Failure Management in Underserved Rural Areas of the United States: A Systematic Review of Randomized Trials. J Am Heart Assoc. 2024;13(2):e030956. doi:10.1161/ JAHA.123.030956. they are furnished are covered and paid in the same way as services delivered without the use of telecommunications technology when the practitioner is in person at the medical facility furnishing care to the patient. In other CMS episode-based payment models, such as TEAM and the Comprehensive Care for Joint Replacement Model (CJR) model, participants were pe at the medical facility furnishing care to the patient. In other CMS episode-based payment models, such as TEAM and the Comprehensive Care for Joint Replacement Model (CJR) model, participants were permitted to use telehealth waivers that applied to two provisions: • CMS waived the geographic site requirements under 1834(m)(4)(C)(i)(I) through (III) of the Act which allowed telehealth services to be furnished to eligible telehealth individuals when they are located at an originating site at the time the service is furnished via a telecommunications system but without regard to the site meeting one of the geographic site requirements. • CMS waived the originating site requirements under section 1834(m)(4)(C)(ii)(I) through (VIII) of the Act which allowed the eligible telehealth individual to not be in an originating site when the otherwise eligible individual is receiving telehealth services in their home or place of residence. These telehealth waivers allowed providers and suppliers furnishing services to ASM beneficiaries to utilize telemedicine for beneficiaries that are not classified as rural and allowed the greatest degree of efficiency and communication between providers and rnishing services to ASM beneficiaries to utilize telemedicine for beneficiaries that are not classified as rural and allowed the greatest degree of efficiency and communication between providers and suppliers and beneficiaries by allowing beneficiaries to receive telehealth services at their home or place of residence. We believe similar telehealth waivers would be essential to maximize the opportunity to improve the quality of care and efficiency for ASM. (b) Telehealth Waivers Specifically, like the telehealth waivers in TEAM and the CJR model, we propose at § 512.775(b) to waive the geographic site requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act that limit telehealth payment to services furnished within specific types of geographic areas or in an entity participating in a federal telemedicine demonstration project approved as of December 31, 2000. Waiving of this requirement would allow beneficiaries located in any region to receive services related to the episode to be furnished via telehealth, as long as all other Medicare requirements for telehealth services are met. Any service on the list of Medicare approved telehealth services and reported on a claim ode to be furnished via telehealth, as long as all other Medicare requirements for telehealth services are met. Any service on the list of Medicare approved telehealth services and reported on a claim that is not excluded from the proposed episode (see section III.C.2.c.(3).(b). of this VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00267 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32618 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules proposed rule) could be furnished to an ASM beneficiary, regardless of the beneficiary’s geographic location. Under ASM, this waiver would support care coordination and increasing timely access to high quality care for all ASM beneficiaries, regardless of geography. Additionally, we propose waiving the originating site requirements of sections 1834(m)(4)(C)(ii)(I) through (VIII) of the Act that specify the particular sites at which the eligible telehealth individual must be located at the time the service is furnished via a telecommunications system. Specifically, we propose at § 512.775(b)(2) to waive the requirement only when te e eligible telehealth individual must be located at the time the service is furnished via a telecommunications system. Specifically, we propose at § 512.775(b)(2) to waive the requirement only when telehealth services are being furnished in the ASM beneficiary’s home or place of residence during the episode. Any service on the list of Medicare approved telehealth services that is not excluded from the proposed episode definition (see section III.C.2.c.(3).(b). of this proposed rule) could be furnished to a ASM beneficiary in their home or place of residence, unless the service’s HCPCS code descriptor precludes delivering the service in the home or place of residence. The existing set of codes used to report evaluation and management (E/ M) visits are extensively categorized and defined by the setting of the service, and the codes describe the services furnished when both the patient and the practitioner are in that setting. Section 1834(m) of the Act provides for the conditions under which Medicare can make payment for office visits when a patient is located in a health care setting (the originating sites authorized by statute) and the eligible practitioner is located elsewhere. Ho hich Medicare can make payment for office visits when a patient is located in a health care setting (the originating sites authorized by statute) and the eligible practitioner is located elsewhere. However, we do not believe that the kinds of E/M services furnished to patients outside of health care settings via real-time, interactive communication technology are accurately described by any existing E/ M codes. This would include circumstances when the patient is located in his or her home and the location of the practitioner is unspecified. To create a mechanism to report E/M services accurately, TEAM and the CJR model used specific sets of HCPCS G-codes to describe the E/M services furnished to the model beneficiaries in their homes via telehealth. We considered whether establishing ASM-specific G-codes would serve a distinct purpose to the model. Upon review of existing G-codes for services provided via telehealth, we identified concerns with administrative burden and duplicative codes. Thus, we propose to allow ASM participants to bill established G-codes.243 Under the proposed waiver of the geographic site requirement and originating site requirement, all telehealth services w des. Thus, we propose to allow ASM participants to bill established G-codes.243 Under the proposed waiver of the geographic site requirement and originating site requirement, all telehealth services would be required to be furnished in accordance with all Medicare coverage and payment criteria, and no additional payment would be made to cover set-up costs, technology purchases, training and education, or other related costs. The facility fee paid by Medicare to an originating site for a telehealth service would be waived if there is no facility as an originating site (that is, the service was originated in the beneficiary’s home). Finally, ASM participants furnishing a telehealth service to an ASM beneficiary in his or her home or place of residence would not be permitted to bill for telehealth services that were not fully furnished when an inability to provide the intended telehealth service is due to technical issues with telecommunications equipment required for that service. Beneficiaries would be able to receive services furnished under the telehealth waivers only during the episode. We plan to monitor patterns of utilization of telehealth services under ASM to monitor for ove ciaries would be able to receive services furnished under the telehealth waivers only during the episode. We plan to monitor patterns of utilization of telehealth services under ASM to monitor for overutilization or reductions in medically necessary care, and significant reductions in face-to- face visits with ASM participants. We seek comments on the proposed waivers with respect to telehealth services at § 512.775(b). i. Proposed Extreme and Uncontrollable Circumstances (EUC) Policy Events may occur outside the purview and control of the ASM participant that may affect their performance in the model. We propose at § 512.780 to apply a variation of the EUC policy for MIPS eligible clinicians (83 FR 60081), but with notable differences around scoring. Currently, MIPS has three mechanisms to adjust scoring MIPS performance categories due to external circumstances that may impact a MIPS eligible clinician’s ability to report during a given performance year: (1) the MIPS automatic EUC policy; 244 (2) the MIPS EUC Exception; and (3) the MIPS Promoting Interoperability Performance Category Hardship Exception.245 The latter two require affected MIPS eligible clinicians to submit an appli icy; 244 (2) the MIPS EUC Exception; and (3) the MIPS Promoting Interoperability Performance Category Hardship Exception.245 The latter two require affected MIPS eligible clinicians to submit an application to MIPS for consideration before being granted the exception. The MIPS 243https://www.cms.gov/medicare/coverage/ telehealth/list-services. 244https://qpp.cms.gov/resources/document/ 3579730b-0891-4491-b880-eb21da631b15. 245https://qpp.cms.gov/mips/exception- applications. Automatic EUC Policy, however, grants the exception to any MIPS eligible clinician located in a CMS-designated region affected by EUC, such as a Federal Emergency Management Agency (FEMA)-designated major disaster or an HHS-determined public health emergency. The exception eliminates the need for an application to request reweighting one or more MIPS performance categories. We propose to adopt at § 512.780 a modified version of the MIPS Automatic EUC Policy. We would use the same triggering events from the MIPS Automatic EUC Policy, such as federal disaster and/or public health emergency declarations, as the basis for determining whether an ASM participant may be automatically exempted from submitting ASM perfo omatic EUC Policy, such as federal disaster and/or public health emergency declarations, as the basis for determining whether an ASM participant may be automatically exempted from submitting ASM performance category data for an ASM performance year during which they were impacted by the EUC. If the ASM participant’s CBSA or metropolitan division that we use to determine ASM participant eligibility (as described at § 512.710(e)(5)) is within an area identified by CMS, under § 414.1380(c)(2)(i)(A)(8), as having been affected by extreme and uncontrollable circumstances,, then the ASM participant would be exempted from the requirement to submit ASM performance category data, as described at proposed § 512.720. We propose at § 512.780(c)(1) that ASM participants who qualify for the exemption and do not submit ASM performance category data that meet the requirements at § 512.720 would not receive a final score and would receive an ASM payment adjustment factor that results in a neutral payment adjustment for the applicable ASM payment year. We propose at § 512.780(c)(2) that ASM participants who qualify for the exemption but still submit ASM performance category data that meet the requir nt adjustment for the applicable ASM payment year. We propose at § 512.780(c)(2) that ASM participants who qualify for the exemption but still submit ASM performance category data that meet the requirements at § 512.720 would be scored according to the methodology described at proposed § 512.745. We also considered using claims data to determine whether an ASM participant furnishes services in a Federal disaster area or in an area in which HHS has declared a public health emergency. However, we believe that using the same methodology to determine whether a clinician furnishes services in a mandatory geographic area as part of the ASM participant eligibility criteria would ensure consistency across geographic determinations used for EUC-related exemptions. Furthermore, we recognize the external impact of circumstances outside of the ASM participants’ control, such as large-scale cyberattacks VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00268 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32619 and other emergencies JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32619 and other emergencies outside of those identified in the previous paragraphs. We propose at § 512.780(b)(1) and (2) to allow CMS to determine, based on information known to the agency prior to the beginning of the relevant ASM payment year, that data for an ASM participant are inaccurate, unusable, or otherwise compromised due to circumstances outside of the control of the clinician and its agents, including third-party intermediaries. We propose to notify ASM participants of CMS’ decision on the existence of circumstances as proposed at § 512.780(b)(1) and the impact of these circumstances upon scoring methodology for affected ASM participants. We also propose to grant CMS discretion in the form and manner of the notice to ASM participants. We considered adopting an application-based process for EUC exceptions like the MIPS provisions described at § 414.1380(c)(6). However, we believe that any hardships outside of those contemplated at proposed § 512.780(a) and (b) that renders an ASM participant unable to like the MIPS provisions described at § 414.1380(c)(6). However, we believe that any hardships outside of those contemplated at proposed § 512.780(a) and (b) that renders an ASM participant unable to report on ASM performance categories for quality, improvement activities, or Promoting Interoperability, would likely result in the ASM participant being unable to bill claims for that ASM performance year as well. Accordingly, we believe that ASM participants in these circumstances would likely not meet the case minimums for quality and cost measures in their respective ASM performance categories (as proposed at §§ 512.725(g) and 512.730(d)) and would, therefore, be subject to a neutral payment adjustment for the applicable ASM payment year. For example, if the ASM participant does not have 20 EBCM episodes identified in claims data for the impacted ASM performance year, then the ASM participant would not receive a final score and would be subject to an automatic neutral payment adjustment. However, in this scenario, since CMS is unable to determine whether the ASM participant meets the 20 EBCM episodes for the given ASM performance year until all claims for that ASM performance year nt. However, in this scenario, since CMS is unable to determine whether the ASM participant meets the 20 EBCM episodes for the given ASM performance year until all claims for that ASM performance year have been completed, the ASM participant is encouraged to submit as much data as they are able to for all other ASM performance measures. We considered whether an ASM participant affected by the circumstances at proposed § 512.780(a) or (b) who chooses to report ASM performance category data would be subject to a lower risk level as described at § 512.745(a)(3). Applying a differential risk level for some ASM participants could skew the calculation of ASM payment adjustment factors for all ASM participants depending on how many ASM participants are impacted by the identified circumstances. Instead of adjusting the ASM participant’s risk level, we believe it would be preferable for ASM participants not to receive a final score, which would result in an automatic neutral payment adjustment. We seek comments on the proposed provisions at § 512.780, as well as the alternatives that we considered. j. Proposed Data Sharing Under this proposed model, we aim to incentivize ASM participants to We seek comments on the proposed provisions at § 512.780, as well as the alternatives that we considered. j. Proposed Data Sharing Under this proposed model, we aim to incentivize ASM participants to engage in care redesign efforts to improve quality of care and reduce Medicare FFS spending for ASM beneficiaries. We expect ASM participants to work toward independently tracking their own data through electronic health records, health information exchanges, or other means that they believe are necessary to best evaluate the health needs of their patients, improve health outcomes, and produce efficiencies in the provision and use of health care items and services. However, we are proposing certain data sharing requirements in § 512.760 to assist ASM participants in this process and in meeting the model objectives. We propose at § 512.760(d) to provide certain aggregate data that has been de- identified in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model’s performance metrics. Any aggregate data provided in adva PAA) Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model’s performance metrics. Any aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant’s final score or ASM payment adjustment factor. Additionally, as with other mandatory Innovation Center models such as TEAM and IOTA, we propose to provide certain beneficiary-identifiable data to ASM participants regarding the ASM beneficiaries under their care, upon request and execution of a data sharing agreement. We anticipate that ASM participants would use this data to assess their treatment patterns and overall care plans and to identify room for improvement under the model or conducting other ‘‘health care operations’’ under the HIPAA Privacy Rule, 45 CFR 165.501. Specifically, subject to the limitations discussed in this proposed rule, and in accordance with applicable law, including the HIPAA Privacy Rule (45 CFR part 160 and subparts A and E of part 164), we propose at § 512.760(b) that CMS may offer an ASM participant an opportunity to request certain Medicare benef , including the HIPAA Privacy Rule (45 CFR part 160 and subparts A and E of part 164), we propose at § 512.760(b) that CMS may offer an ASM participant an opportunity to request certain Medicare beneficiary- identifiable data. We propose that CMS would share this beneficiary identifiable data with ASM participants on the condition that the ASM participants and other individuals or entities performing functions or services related to the ASM participant’s activities observe all relevant statutory and regulatory provisions regarding: (1) the appropriate use of data; and (2) the confidentiality and privacy of individually identifiable health information, and comply with the terms of the data sharing agreement proposed at § 512.760(e). Moreover, we recognize that an individual clinician generally may not be a covered entity. However, the participant clinicians are likely part of a covered entity and therefore are subject to the HIPAA Rules. We propose at § 512.760(f) that ASM participants must allow Medicare beneficiaries to request restrictions on sharing data, consistent with 45 CFR 164.522(a). We also propose at § 512.760(b)(4) that, for the beneficiary- identifiable claims data, we must allow Medicare beneficiaries to request restrictions on sharing data, consistent with 45 CFR 164.522(a). We also propose at § 512.760(b)(4) that, for the beneficiary- identifiable claims data, we would exclude information that is subject to the regulations governing the confidentiality of substance use disorder patient records (42 CFR part 2) from the data shared with an ASM participant. We request comment and feedback on our proposed policies at § 512.760(a) to make certain beneficiary-identifiable data available to ASM participants upon execution of an ASM data sharing agreement. (1) Data Provided to ASM Participants (a) Legal Authority To Share Beneficiary-Identifiable Data and Applicability to Proposed ASM Data Sharing Processes We believe that an ASM participant may need access to certain Medicare beneficiary-identifiable data for the purposes of evaluating its performance, conducting quality assessment and improvement activities, conducting population-based activities relating to improving health or reducing health care costs, or conducting other health care operations listed in the first or second paragraph of the definition of ‘‘health care operations’’ under the HIPAA ng to improving health or reducing health care costs, or conducting other health care operations listed in the first or second paragraph of the definition of ‘‘health care operations’’ under the HIPAA Privacy Rule, 45 CFR 164.501. We recognize there are sensitivities surrounding the disclosure of beneficiaries’ individually identifiable health information, and that several laws place constraints on the sharing of individually identifiable health information. For example, section 1106 of the Act generally bars the disclosure VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00269 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32620 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules of information collected under the Act without consent unless a law (statute or regulation) permits the disclosure. Here, the HIPAA Privacy Rule would allow for the proposed disclosure of individually identifiable health information by CMS to ASM participants so they can carry out ‘‘health care operations’’ that fall within the first and second paragraphs of the definition of the term as defin ally identifiable health information by CMS to ASM participants so they can carry out ‘‘health care operations’’ that fall within the first and second paragraphs of the definition of the term as defined at 45 CFR 164.501. In this proposed rule, we propose to make ASM participants accountable for quality and cost outcomes during an applicable ASM performance year. We believe it is necessary for the purposes of this model to offer ASM participants the ability to request certain raw beneficiary- identifiable Medicare claims data that CMS used to determine ASM participant eligibility for an applicable ASM performance year, as well as for the beneficiaries who trigger an EBCM episode with the ASM participant during the applicable ASM performance year. ASM participants would only receive data for the ASM beneficiaries who are their patients. We believe these data would constitute the minimum information necessary to enable ASM participants to understand care spending patterns, appropriately coordinate care, and target care strategies toward ASM beneficiaries. Under the HIPAA Privacy Rule, covered entities (defined in 45 CFR 160.103 as health plans, health care providers that conduct cert coordinate care, and target care strategies toward ASM beneficiaries. Under the HIPAA Privacy Rule, covered entities (defined in 45 CFR 160.103 as health plans, health care providers that conduct certain transactions electronically, and health care clearinghouses) may only use or disclose protected health information (PHI), a subset of individually identifiable health information I, as permitted or required by the HIPAA Privacy Rule, without the individual’s authorization. The Medicare FFS program, a ‘‘health plan’’ function of the Department, is subject to the HIPAA Privacy Rule limitations on the use or disclosure of PHI without an individual’s authorization. ASM participants are also covered entities, provided they are health care providers as defined by 45 CFR 160.103 and they electronically transmit any health information in connection with one or more HIPAA standard transactions, such as for claims, eligibility or enrollment transactions. ASM participants are clinicians who are either covered entities themselves, or they are part of a covered entity. We believe that the proposed disclosure of beneficiary-identifiable data under the ASM model would be permitted by the HIPAA Pr ither covered entities themselves, or they are part of a covered entity. We believe that the proposed disclosure of beneficiary-identifiable data under the ASM model would be permitted by the HIPAA Privacy Rule under the provisions that permit disclosures of PHI for ‘‘health care operations’’ purposes. Under those provisions, a covered entity is permitted to disclose PHI to another covered entity for the recipient’s health care operation’s purposes if both covered entities have or had a relationship with the subject of the PHI being requested, the PHI pertains to such relationship, and the PHI disclosure is for a ‘‘health care operations’’ purpose listed within the first two paragraphs of the definition of ‘‘health care operations’’ in the HIPAA Privacy Rule (45 CFR 164.506(c)(4)). The first paragraph of the definition of health care operations includes ‘‘conducting quality assessment and improvement activities, including outcomes evaluation and development of clinical guidelines,’’ and ‘‘population-based activities relating to improving health or reducing health costs, protocol development, case management and care coordination.’’ The second paragraph of the definition of health c d ‘‘population-based activities relating to improving health or reducing health costs, protocol development, case management and care coordination.’’ The second paragraph of the definition of health care operations includes ‘‘evaluating practitioner and provider performance’’ (45 CFR 164.501). We propose at § 512.760 that, subject to having an ASM data sharing agreement in place, an ASM participant may request from CMS certain beneficiary-identifiable claims for ASM beneficiaries under their care. Under the ASM data sharing agreement, we propose at § 512.760(b)(5)(i) and (ii) to allow CMS to share data with an ASM participant which includes unrefined (raw) Medicare Parts A, B, and D beneficiary-identifiable claims data used to determine ASM participant eligibility for an applicable ASM performance year, as well as unrefined (raw) Medicare Parts A, B, and D beneficiary- identifiable claims data for ASM beneficiaries who trigger an episode with the ASM participant during the applicable ASM performance year. ASM participants would use the data on their patients to evaluate the performance of the ASM participant and other providers and suppliers, such as clinicians with whom the ASM pa SM performance year. ASM participants would use the data on their patients to evaluate the performance of the ASM participant and other providers and suppliers, such as clinicians with whom the ASM participant may have entered into a collaborative care arrangement, that furnished services to the patient, conducts quality assessment and improvement activities, and conducts population-based activities relating to improved health for their patients. When done by or on behalf of an ASM participant that is a covered entity, these data uses would qualify as ‘‘health care operations’’ under the first and second paragraphs of the definition of health care operations at 45 CFR 164.501. This encompasses the anticipated uses of the beneficiary- identifiable data by an ASM participant so that such uses would be permissible under the HIPAA Privacy Rule. Moreover, done by or on behalf of a covered entity, these are covered functions and activities that would qualify as ‘‘health care operations’’ under the first and second paragraphs of the definition of health care operations at 45 CFR 164.501, thus encompassing the anticipated uses of the beneficiary- identifiable data by an ASM participant and er the first and second paragraphs of the definition of health care operations at 45 CFR 164.501, thus encompassing the anticipated uses of the beneficiary- identifiable data by an ASM participant and that such uses would be permissible under the HIPAA Privacy Rule. Moreover, our proposed disclosures would be made only to HIPAA covered entities that have (or had) a relationship with the subject of the information, the information we would disclose would pertain to such relationship, and those disclosures would be for purposes listed in the first two paragraphs of the definition of ‘‘health care operations.’’ When using or disclosing PHI, or when requesting this information from another covered entity, covered entities or business associates must make ‘‘reasonable efforts to limit’’ the PHI that is used, disclosed, or requested to the ‘‘minimum necessary’’ to accomplish the intended purpose of the use, disclosure, or request (45 CFR 164.502(b)). Thus, ASM participants must limit their beneficiary-identifiable data requests to the minimum necessary, as selected from the proposed data elements identified at § 512.760(c), to accomplish the intended purpose of the use, disclosure, or re eneficiary-identifiable data requests to the minimum necessary, as selected from the proposed data elements identified at § 512.760(c), to accomplish the intended purpose of the use, disclosure, or request. The proposed minimum necessary data elements include, but are not limited to: • Medicare beneficiary identifier (ID). • Procedure code. • Sex. • Diagnosis code. • Claim ID. • The from and through dates of service. • The provider or supplier ID. • The claim payment type. • Date of birth and death, if applicable. • Tax identification number. • National provider identifier. The Privacy Act of 1974 also places limits on agency data disclosures. The Privacy Act applies when Federal agencies maintain systems of records by which information about an individual is retrieved by use of one of the individual’s personal identifiers (names, Social Security numbers, or any other codes or identifiers that are assigned to the individual). The Privacy Act generally prohibits disclosure of information from a system of records to any third party without the prior written consent of the individual to whom the records apply (5 U.S.C. 552a(b)). VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 n from a system of records to any third party without the prior written consent of the individual to whom the records apply (5 U.S.C. 552a(b)). VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00270 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32621 ‘‘Routine uses’’ are an exception to this general principle. A routine use is a disclosure outside of the agency that is compatible with the purpose for which the data was collected. Routine uses are established by means of a publication in the Federal Register about the applicable system of records describing to whom the disclosure will be made and the purpose for the disclosure. For the proposed ASM model, we believe that the proposed data disclosures are compatible with the purposes for which the data discussed in this rule was collected, and, thus, would not run afoul of the Privacy Act, provided we ensure that an appropriate Privacy Act system of records ‘‘routine use’’ is in place prior to making any disclosures. The systems of records from which CMS would share dat the Privacy Act, provided we ensure that an appropriate Privacy Act system of records ‘‘routine use’’ is in place prior to making any disclosures. The systems of records from which CMS would share data are the Medicare Integrated Data Repository (IDR), the Common Working File, Medicare Provider Enrollment, Chain, and Ownership System (PECOS), the Enrollment Database (EDB), and the Part D Event (PDE) File. We believe that the proposed data disclosures are compatible with the purposes for which the data discussed in the proposed rule were collected and may be disclosed in accordance with the routine uses applicable to those records. We propose at § 512.760 that we would share the ASM beneficiary- identifiable lists and data with ASM participants who have submitted a formal request for the data. Under our proposal, the request must be submitted on at least an annual basis in a manner and form specified by CMS. The request also would need to identify the data being requested and include an attestation that (1) the ASM participant is requesting this beneficiary- identifiable data as a HIPAA covered entity, or as part of a HIPAA covered entity, and (2) the ASM participant’s request refle attestation that (1) the ASM participant is requesting this beneficiary- identifiable data as a HIPAA covered entity, or as part of a HIPAA covered entity, and (2) the ASM participant’s request reflects the minimum data necessary for the ASM participant to conduct activities that are described in the first or second paragraph of the definition of health care operations at 45 CFR 164.501. In addition, ASM participants who request this data must have a valid and signed ASM data sharing agreement in place, as described in more detail later in this section of this proposed rule. We propose at § 512.760(b) that we would make available beneficiary-identifiable data for ASM participants to request for purposes of conducting activities described in the first or second paragraph of the definition of health care operations at 45 CFR 164.501 on behalf of their attributed patients who are Medicare beneficiaries. We believe that access to beneficiary-identifiable claims data would improve care coordination between ASM participants and other health care providers. We also propose at § 512.760(b)(2)(ii) that ASM participants limit the request for beneficiary-identifiable claims data to Medicare rdination between ASM participants and other health care providers. We also propose at § 512.760(b)(2)(ii) that ASM participants limit the request for beneficiary-identifiable claims data to Medicare beneficiaries who have been seen by ASM participants for an ASM targeted chronic condition, and who did not request to restrict sharing their claims data with the ASM participant, as proposed at § 512.760(f)(1). Finally, we propose that CMS would share beneficiary identifiable data with an ASM participant on the condition that the ASM participant and other individuals or entities performing functions or services related to the ASM participant’s activities, comply with all applicable laws governing the use of data and the privacy and security of individually identifiable health information and the terms of the ASM data sharing agreement proposed at § 512.760(e)(1). (b) Medicare Beneficiary Opportunity To Request Restrictions on Data Sharing We propose at § 512.760(f)(1) that ASM beneficiaries would be notified about the opportunity to request restrictions on sharing claims data with an ASM participant, in accordance with 45 CFR 164.522. Recognizing the administrative burden associated w es would be notified about the opportunity to request restrictions on sharing claims data with an ASM participant, in accordance with 45 CFR 164.522. Recognizing the administrative burden associated with such restrictions, however, we note that under 45 CFR 164.522(a)(1)(iii), covered entities are not required to agree to such a restriction unless the request fulfills the conditions set forth at 45 CFR 164.522(a)(1)(vi). Furthermore, we propose that Medicare beneficiaries may not decline to have the aggregate, de- identified data proposed in § 512.760(d) shared with ASM participants. We also note that, in accordance with 42 U.S.C. 290dd–2 and its implementing regulations at 42 CFR part 2, we do not share beneficiary identifiable claims data relating to the diagnosis and treatment of substance use disorders under this model. We recognize this policy is distinct from the data sharing policy in IOTA and other voluntary Innovation Center models. We considered aligning the data sharing provisions with IOTA but decided to align with HIPAA requested data restriction provisions because they are less administratively burdensome on providers. We request comment and feedback on our proposed p isions with IOTA but decided to align with HIPAA requested data restriction provisions because they are less administratively burdensome on providers. We request comment and feedback on our proposed policies at § 512.760(f) to enable ASM beneficiaries to request restrictions on data sharing with their treating ASM participant. We also request comment and feedback on whether ASM should align its data sharing policies with existing Innovation Center models or retain its existing proposed structure, which is based on HIPAA requirements at 45 CFR 164.522. (c) Aggregated Data Sharing We propose at § 512.760(d) to deliver certain aggregate data that has been de- identified in accordance with the HIPAA Privacy Rule, 45 CFR 164.514(b), for the purposes of helping ASM participants understand their progress towards improving upon the model’s performance metrics. Such aggregated, de-identified data could include, when available, claims-based cost, utilization, and quality data. Cost and utilization data could include fields such as average Medicare FFS (Part A and Part B) expenditure per beneficiary, the top diagnosis codes for beneficiaries the ASM participant is seeing, or hospital admissio on data could include fields such as average Medicare FFS (Part A and Part B) expenditure per beneficiary, the top diagnosis codes for beneficiaries the ASM participant is seeing, or hospital admission and readmission rates. Quality data could include preliminary measure rates for the claims-based measures in each ASM measure set. The data would support ASM participants in analyzing care provided to their Medicare patients and their efforts to monitor, understand, and manage utilization and expenditure patterns as well as to develop, target, and implement quality improvement programs and initiatives. We are considering providing these two forms of performance feedback at regular intervals, allowing insights into trends that could result in improved model performance and beneficiary care. We seek comments on the elements, cadence, and format of this claims-based performance aggregated data and how it could be most beneficial to ASM participants in improving quality and reducing costs. Any aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant’s final score or ASM payment adjustment factor. Since thi ny aggregate data provided in advance of an ASM performance report for an ASM performance year would not be a guarantee of the ASM participant’s final score or ASM payment adjustment factor. Since this data would be de- identified according to the HIPAA Privacy Rule requirements and would not contain any protected health information (PHI) or personally identifiable information (PII), this aggregate data would be provided to ASM participants regardless of whether they have executed an ASM data sharing agreement with CMS. (2) ASM Data Sharing Agreement (a) General Requirement for Beneficiary- Identifiable Data We propose at § 512.760(e)(1) that if an ASM participant wishes to retrieve ASM beneficiary-identifiable data, the ASM participant would be required to VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00271 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32622 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules complete, sign, and submit—and thereby agree to the terms of—an ASM data sharing agreement with CMS on at least an annual basis. We propose to define the ‘‘AS Wednesday, July 16, 2025 / Proposed Rules complete, sign, and submit—and thereby agree to the terms of—an ASM data sharing agreement with CMS on at least an annual basis. We propose to define the ‘‘ASM data sharing agreement’’ as an agreement between the ASM participant and CMS that includes the terms and conditions for any beneficiary-identifiable data being shared with the ASM participant under proposed § 512.760(e). We propose that under the ASM data sharing agreement, the ASM participant would be required to comply with the limitations on the use and disclosure of PHI imposed by the HIPAA Privacy Rule, the applicable ASM data sharing agreement, and the statutory and regulatory requirements of ASM. We also propose that the ASM data sharing agreement would include certain protections and limitations on the ASM participant’s use and further disclosure of the beneficiary-identifiable data and would be provided in a form and manner specified by CMS. We propose at § 512.760(g) that a designated data custodian would be the individual(s) that an ASM participant would identify as responsible for ensuring compliance with all privacy and security requirements, including all applicable law ignated data custodian would be the individual(s) that an ASM participant would identify as responsible for ensuring compliance with all privacy and security requirements, including all applicable laws and terms of the ASM data sharing agreement, and for notifying CMS of any incidents relating to unauthorized disclosures of beneficiary-identifiable data. We believe it is important for the ASM participant to first complete and submit a signed ASM data sharing agreement before it retrieves any beneficiary-identifiable data to help protect the privacy and security of any beneficiary-identifiable data shared by CMS with the ASM participant. As noted previously in this section of the proposed rule, there are important sensitivities surrounding the sharing of this type of individually identifiable health information, and CMS must ensure to the best of its ability that any beneficiary-identifiable data that it shares with ASM participants would be further protected in an appropriate fashion. We seek public comment on our proposal at § 512.760(e) to require that the ASM participant agree to comply with all applicable laws and terms of the ASM data sharing agreement as a condition of retrie We seek public comment on our proposal at § 512.760(e) to require that the ASM participant agree to comply with all applicable laws and terms of the ASM data sharing agreement as a condition of retrieving beneficiary- identifiable data, and on our proposal that the ASM participant would need to submit the signed ASM data sharing agreement at least annually if the ASM participant wishes to retrieve the beneficiary-identifiable data. (b) Content of the ASM Data Sharing Agreement We recognize that ASM participants may already be required to comply with the HIPAA Privacy Security, and Breach Notification Rules ‘‘(HIPAA Rules’’) as covered entities themselves, or as employees or owners of HIPAA covered entities. However, since ASM participation is at the TIN–NPI level, we recognize that the TINs to which the ASM participants belong may be the covered entities, rather than the ASM participants themselves. Thus, we included language allowing ASM data sharing agreements to be executed between CMS and ASM participants or the covered entities that conduct HIPAA standard transactions on behalf of the ASM participants. We also propose at §§ 512.760(e)(1)(i) through (v) to impose CMS-specific r CMS and ASM participants or the covered entities that conduct HIPAA standard transactions on behalf of the ASM participants. We also propose at §§ 512.760(e)(1)(i) through (v) to impose CMS-specific requirements within the ASM data sharing agreement to reinforce the Innovation Center’s specific expectations and consequences for misuse, which is intended to protect the privacy and security CMS’ beneficiary-identifiable data in the hands of ASM participants and any downstream recipients. We propose that under the ASM data sharing agreement, ASM participants would agree to certain terms, including: • Complying with the requirements for use and disclosure of this ASM beneficiary-identifiable data that are imposed on covered entities, as defined by 45 CFR 160.103, by the regulations at 45 CFR part 160 and part 164, subparts A and E, including but not limited to ensuring the data will not be used for purposes outside of conducting health care operations as defined at 45 CFR 164.501 and as permitted by 45 CFR 164.506(c)(4) on behalf of their ASM beneficiaries • Complying with privacy, security, breach notification, and data retention requirements specified by CMS in the ASM data sharing a rmitted by 45 CFR 164.506(c)(4) on behalf of their ASM beneficiaries • Complying with privacy, security, breach notification, and data retention requirements specified by CMS in the ASM data sharing agreement if CMS deems such requirements necessary to safeguard beneficiary data, in addition to applicable law, such as the HIPAA Privacy, Security, and Breach Notification Rules • Contractually binding any and each downstream recipient of the ASM beneficiary-identifiable data, such as persons or entities performing functions or services related to the ASM participant’s data sharing activities including those that meet the definition of a business associate as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at § 512.771, to the same terms and conditions to which the ASM participant is itself bound in its ASM data sharing agreement with CMS as a condition of the business associate’s receipt of the ASM beneficiary-identifiable data obtained by the ASM participant • Acknowledging that if the ASM participant or any downstream recipient misuses or discloses the ASM beneficiary-identifiable data in a manner that violates any applicable s ned by the ASM participant • Acknowledging that if the ASM participant or any downstream recipient misuses or discloses the ASM beneficiary-identifiable data in a manner that violates any applicable statutory or regulatory requirements or that is otherwise non-compliant with the provisions of the ASM data sharing agreement, CMS may do any or all of the following: deem the ASM participant ineligible to obtain ASM beneficiary- identifiable data for any amount of time, or subject the ASM participant to additional sanctions and penalties available under applicable law. • An ASM participant must comply with all applicable laws and the terms of the ASM data sharing agreement to obtain ASM beneficiary-identifiable data. We propose at § 512.760(e)(2) that CMS would share beneficiary- identifiable data with an ASM participant on the condition that the ASM participant and other individuals or entities performing functions or services related to the ASM participant’s data sharing activities, including business associates of the ASM participant as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at § 512.771, comply with all relevant laws g uding business associates of the ASM participant as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at § 512.771, comply with all relevant laws governing the use of data and the privacy and security of individually identifiable health information and the proposed terms of the ASM data sharing agreement. We believe that these proposed terms for sharing beneficiary-identifiable data with ASM participants are appropriate and important, as CMS must ensure to the best of its ability that any beneficiary-identifiable data that it shares with ASM participants would be further protected by the ASM participant, and any business associates of the ASM participant as defined at 45 CFR 160.103 and non-ASM participant parties to collaborative care arrangements described at § 512.771, in an appropriate fashion. We have these types of agreements in place as part of the governing documents of other models tested under section 1115A of the Act and in the Medicare Shared Savings Program. In these agreements, CMS typically requires the identification of data custodian(s) and imposes certain requirements related to administrative, physical, and tec n the Medicare Shared Savings Program. In these agreements, CMS typically requires the identification of data custodian(s) and imposes certain requirements related to administrative, physical, and technical safeguards for data storage and transmission; limitations on further use and disclosure of the data; procedures VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00272 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32623 for responding to data incidents and breaches; and data destruction and retention. These provisions would be in addition to any restrictions imposed by applicable law, such as the HIPAA Rules. These ASM data sharing agreement provisions would not prohibit the ASM participant from making any disclosures of the data otherwise required by law. We solicit public comments on this proposal at § 512.760(e) to impose certain requirements in the ASM data sharing agreement related to privacy, security, data retention, breach notification, and data destruction. k. Proposed ASM Beneficiary Incentives, Collaborat mpose certain requirements in the ASM data sharing agreement related to privacy, security, data retention, breach notification, and data destruction. k. Proposed ASM Beneficiary Incentives, Collaborative Care Arrangements, and Applicability of CMS-Sponsored Model Safe Harbor at § 1001.952(ii) (1) ASM Beneficiary Incentives As part of CMS’ commitment to empower patients to actively participate and be accountable for quality and whole health outcomes, we invite ASM participants to think outside the box with regards to physical and lifestyle factors that contribute to the ASM’s targeted chronic conditions. We propose at § 512.770(a)(1) through (8) to allow ASM participants the option of providing in-kind patient engagement incentives, so long as the following criteria are met: • The incentive must be provided directly by the ASM participant or by an agent of the ASM participant under the ASM participant’s direction and control to an ASM beneficiary who is an established patient of the ASM participant. • The ASM participant must be solely responsible for any costs associated with the provision of the incentive, including but not limited to, the retail value of the item or services offe participant. • The ASM participant must be solely responsible for any costs associated with the provision of the incentive, including but not limited to, the retail value of the item or services offered as the ASM beneficiary incentive. • The item or service provided must be reasonably connected to medical care provided by the ASM participant to an ASM beneficiary for an ASM targeted chronic condition. • The item or service must be a preventive care item or service or an item or service that advances a clinical goal for an ASM beneficiary by engaging the ASM beneficiary in better managing an ASM targeted chronic condition. ASM’s clinical goals are centered around promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and primary care providers to increase independent physician participation in value-based payment programs. • The item or service must not be tied to the receipt of items or services outside the services furnished by the ASM participant to the ASM beneficiary. participation in value-based payment programs. • The item or service must not be tied to the receipt of items or services outside the services furnished by the ASM participant to the ASM beneficiary. • The item or service must not be tied to the receipt of items or services from a particular provider or supplier. • The availability of the items or services must not be advertised or promoted, except that an ASM beneficiary may be made aware of the availability of the items or services at the time the ASM beneficiary could reasonably benefit from them. • The cost of the items or services must not be shifted to any Federal health care program, as defined at section 1128B(f) of the Act. • The totality of items or services, including technology as described at paragraph (b) of this section, provided to an ASM beneficiary may not exceed $1,000 in retail value for any one ASM beneficiary. We envision this could take the form of remote patient monitoring devices such as blood pressure monitors or scales with or without the capability to send data to their providers, vouchers for healthier food options or meal planning, and promotions for regular physical activity such as gym memberships o s or scales with or without the capability to send data to their providers, vouchers for healthier food options or meal planning, and promotions for regular physical activity such as gym memberships or classes. These are, however, just examples and are not inclusive of all options available to ASM participants who offer beneficiary incentives. To safeguard against potential fraud, waste, and abuse, however, we propose to require limits on the retail value of offered items or services, when offered items must be retrieved from the ASM beneficiary, and when an ASM beneficiary becomes eligible for ASM beneficiary incentives. Specifically, due to multi-use nature of technological items and devices, we propose at § 512.770(b)(1) and (2) the following stipulations for technology that is provided to ASM beneficiaries: • Items or services involving technology provided to a ASM beneficiary must be the minimum necessary to advance a clinical goal of the model as proposed at § 512.770(b), which are: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and re: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and primary care providers to increase independent physician participation in value-based payment programs. • Items of technology exceeding $75 in retail value must remain the property of the ASM participant. However, upon the end of their care relationship with the ASM participant, that technology must be retrieved from the ASM beneficiary with documentation of the ultimate date of retrieval. The ASM participant must document all retrieval attempts. In cases when the item of technology is not able to be retrieved, the ASM participant must determine why the item was not retrievable. If it was determined that the item was misappropriated, then the ASM participant must take steps to prevent future beneficiary incentives for that ASM beneficiary. Following this process, documented, diligent, good faith attempts to retrieve items of technology would be deemed to meet the retrieval requirement. If the provided technology or that ASM beneficiary. Following this process, documented, diligent, good faith attempts to retrieve items of technology would be deemed to meet the retrieval requirement. If the provided technology breaks or is otherwise rendered unusable for its intended purposes, the technology must be retrieved from the ASM beneficiary with documentation of the ultimate date of retrieval. The ASM participant may replace the unusable unit with the same or similar technology, to the extent practicable, that meets the original requirements for the technology. • In addition to the requirements on audits and record retention at § 512.135, we propose at § 512.770(c)(1) through (4) that ASM participants who wish to offer ASM beneficiary incentives must also ensure documentation of the incentives distributed according to the following requirements: • ASM participants must maintain documentation of items and services furnished as beneficiary incentives that exceed $75 in retail value. • The documentation must be established contemporaneously with the provision of the items and services with a record established and maintained to include at least the date the incentive is provided and the identity of t must be established contemporaneously with the provision of the items and services with a record established and maintained to include at least the date the incentive is provided and the identity of the ASM beneficiary to whom the item or service was provided. • The documentation regarding items of technology exceeding $75 in retail value must also include contemporaneous documentation of any attempt to retrieve technology at the end of an episode, or why the items were not retrievable. • The ASM participant must retain and provide access to the required documentation. We seek comment on the proposed parameters at § 512.770 for allowed ASM beneficiary incentives, especially regarding the practicality and feasibility VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00273 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32624 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules of the requirements around items of technology. (2) Collaborative Care Arrangements To support the goals of ASM, we propose to encourage ASM participants to enter into collaborative care arrangements of the requirements around items of technology. (2) Collaborative Care Arrangements To support the goals of ASM, we propose to encourage ASM participants to enter into collaborative care arrangements with primary care practices to further the ASM participant’s performance in the improvement activities ASM performance category or advance the clinical goals of ASM. To allow ASM participants greater flexibility when negotiating collaborative care arrangements, we propose at § 512.771(a) to make the CMS-sponsored model arrangements safe harbor at 42 CFR 1001.952(ii)(1) available to ASM participants when establishing collaborative care arrangements so long as they comply with the requirements of that safe harbor and proposed § 512.771. We propose at § 512.771(a) to require all collaborative care arrangements to: • Be in writing, signed by both parties, and containing the effective date of the collaborative care arrangement. • Be exclusively between the ASM participant and the primary care practice with whom the ASM participant shares at least one established patient who is an ASM beneficiary, • The arrangement must be entered into for the purpose of furthering the ASM participant’s impr ractice with whom the ASM participant shares at least one established patient who is an ASM beneficiary, • The arrangement must be entered into for the purpose of furthering the ASM participant’s improvement activities or advancing at least one of ASM’s three clinical goals proposed at § 512.771(b), which are: promoting preventive care through improved management of ASM targeted chronic conditions; empowering patients to actively participate and be accountable for quality and whole health outcomes; and facilitating meaningful and efficient coordination between specialists and primary care providers to increase independent physician participation in value-based payment programs. • Participation in a collaborative care arrangement must be voluntary and without penalty for nonparticipation. • Both parties to the collaborative care arrangement must comply with all applicable statutes, regulations, and guidance, including without limitation: federal criminal laws; the False Claims Act (31 U.S.C. 3729 et seq.); the anti- kickback statute (42 U.S.C 1320a–7b(b)); the civil monetary penalties law (42 U.S.C. 1320a–7a); and the physician self-referral law (42 U.S.C. 1395nn). • The opportunity .S.C. 3729 et seq.); the anti- kickback statute (42 U.S.C 1320a–7b(b)); the civil monetary penalties law (42 U.S.C. 1320a–7a); and the physician self-referral law (42 U.S.C. 1395nn). • The opportunity to enter into a collaborative care arrangement, and the amount of any payment or other remuneration under a collaborative care arrangement, must not be conditioned directly or indirectly on the volume or value of past or anticipated referrals or business generated by, between, or among the parties to the collaborative care arrangement or any other person. • Any payment or other remuneration between the parties set forth in a collaborative care arrangement must not exceed fair market value and must be determined in accordance with a methodology that is solely based on the purposes identified at paragraphs (b)(2)(i) and (b)(2)(ii) of this section. • Any payment or other remuneration set forth in the collaborative care arrangement must be solely between the parties to the arrangements. Any payment between the parties must be made by check, electronic funds transfer, or another traceable cash transaction. • Both parties to the collaborative care arrangement must retain the ability to make ayment between the parties must be made by check, electronic funds transfer, or another traceable cash transaction. • Both parties to the collaborative care arrangement must retain the ability to make decisions in the best interests of the ASM beneficiary, including the selection of clinicians, devices, supplies, and treatments. • The collaborative care arrangement must not induce any party to reduce or limit medically necessary services to any Medicare beneficiary, or reward the provision of items and services that are medically unnecessary. • ASM participants must maintain contemporaneous documentation, in accordance with § 512.135, regarding all collaborative care arrangements to which they are a party. • The collaborative care arrangement must stipulate that any non-ASM participant party is considered a downstream recipient for CMS data sharing purposes, and must require the non-ASM participant party to comply with applicable data sharing requirements at proposed § 512.760. • Any non-ASM participant party to a collaborative care arrangement shall be a downstream participant subject to the standard provisions for Innovation Center models specified in subpart A of this part 512. on-ASM participant party to a collaborative care arrangement shall be a downstream participant subject to the standard provisions for Innovation Center models specified in subpart A of this part 512. As currently defined, a collaborative care arrangement is exclusively between an ASM participant and a primary care practice. We considered expanding this definition to allow multiple ASM participants in the same TIN to enter into a collaborative care arrangement with a primary care practice. We are concerned about the burden that may be introduced by having each ASM participant enter these arrangements individually, however, elevating the arrangement to the TIN level opens risks related to other elements of collaborative care arrangement, such as remuneration. We welcome comments on our collaborative care arrangement definition and how to address the burden it may impose on ASM participants and partnered primary care practices. We also welcome comments on the types of services and remuneration that ASM participants may contemplate in their collaborative care arrangements to meet improvement activity specifications or advancing at least one of ASM’s three clinical goals as proposed at ation that ASM participants may contemplate in their collaborative care arrangements to meet improvement activity specifications or advancing at least one of ASM’s three clinical goals as proposed at § 512.771(b). We welcome comments on these proposals at §§ 512.771(a) and (b). (3) Application of the CMS-Sponsored Model Arrangements and Patient Incentives Safe Harbor to ASM Beneficiary Incentives and Collaborative Care Arrangements Consistent with the authority under section 1115A(d)(1) of the Act, the Secretary may consider issuing waivers of certain fraud and abuse provisions in sections 1128A, 1128B, and 1877 of the Act. No fraud or abuse waivers are being issued in this document; fraud and abuse waivers, if any, would be set forth in separately issued documentation. Any such waiver would apply solely to ASM and could differ in scope or design from waivers granted for other programs or models. Thus, notwithstanding any provision of this proposed rule, ASM participants must comply with all applicable laws and regulations, except as explicitly provided in any such separately documented waiver issued under section 1115A(d)(1) of the Act specifically for ASM. In addition to or in li th all applicable laws and regulations, except as explicitly provided in any such separately documented waiver issued under section 1115A(d)(1) of the Act specifically for ASM. In addition to or in lieu of a waiver of certain fraud and abuse provisions in sections 1128A and 1128B of the Act, CMS expects to make a determination that the anti-kickback statute safe harbor for CMS-sponsored model arrangements and CMS-sponsored model patient incentives (§ 1001.952(ii)(1) and (2)) is available to protect remuneration exchanged under certain collaborative care arrangements and patient incentives that may be permitted under the final rule, if issued. Specifically, we propose at §§ 512.765(a) and (b) that the CMS-sponsored models safe harbor would be available to protect collaborative care arrangements and ASM beneficiary incentives so long as they meet specified requirements at proposed §§ 512.770 and 512.771 under the model and the requirements of the safe harbor at § 1001.952(ii). We considered not allowing use of the respective safe harbor provisions for ASM participants who enter into collaborative care arrangements or who wish to provide beneficiary incentives. However, we determined red not allowing use of the respective safe harbor provisions for ASM participants who enter into collaborative care arrangements or who wish to provide beneficiary incentives. However, we determined that use of the safe harbor would encourage the goals of the model. We believe that a VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00274 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32625 successful model requires integration and coordination among ASM participants and other health care providers and suppliers. We believe the use of the respective safe harbor provisions available for collaborative care arrangements and beneficiary incentives would encourage and improve beneficiary experience of care and coordination of care among providers and suppliers. We also believe these safe harbor provisions offer flexibility for innovation and customization of the patient care experience. Use of the respective safe harbor provisions for collaborative care arrangements and beneficiary incentives allow for emerging arrangements innovation and customization of the patient care experience. Use of the respective safe harbor provisions for collaborative care arrangements and beneficiary incentives allow for emerging arrangements that reflect up-to-date understandings in medicine, science, and technology. Thus, we propose at § 512.765 making the CMS-sponsored model arrangements at §§ 1001.952(ii)(1) and 1001.952(ii)(2) available for ASM participants to foster stronger connections with primary care providers in their communities and to promote a more holistic approach to ASM beneficiary care outcomes, so long as they comply with the proposed requirements at §§ 512.770 and 512.771. We seek public comments on this proposal. l. Proposed Evaluation Approach (1) Background As proposed, ASM is designed to incentivize specialist providers to engage in accountable care and aims to improve quality of care while lowering spending. An evaluation of ASM would be required in accordance with section 1115A(b)(4) of the Act, which requires the Secretary to evaluate each model tested by the Innovation Center (84 FR 34533). All Innovation Center models are rigorously evaluated on their ability to improve quality of care and redu requires the Secretary to evaluate each model tested by the Innovation Center (84 FR 34533). All Innovation Center models are rigorously evaluated on their ability to improve quality of care and reduce costs. Additionally, we routinely monitor Innovation Center models for potential unintended consequences of the model that run counter to the stated objective of lowering costs without adversely affecting quality of care. Outlined later in this section are the proposed design and evaluation methods, the data collection methods, key evaluation research questions, and the evaluation period and anticipated reports for the proposed ASM. (2) Design and Evaluation Methods We propose an evaluation methodology for ASM that would be consistent with the standard Innovation Center evaluation approaches that we have taken in other models, such as TEAM and CJR. Specifically, the evaluation design and methodology for ASM would be designed to allow for a comparison of historic patterns of care among ASM participants to any changes made in these patterns in response to ASM. The overall design would include a comparison of ASM participants with comparable specialist providers not participating in AS SM participants to any changes made in these patterns in response to ASM. The overall design would include a comparison of ASM participants with comparable specialist providers not participating in ASM to help us discern simultaneous and competing providers and market level forces that could influence our findings. Our proposed evaluation methodology for this model builds upon our proposal to use CBSAs and metropolitan divisions as the geographic unit of selection for participation in the model based on a stratified random assignment as described in section III.C.2.c.(4) of this proposed rule. Under this approach, researchers evaluate the effects of the model on outcomes of interest by directly comparing CBSAs and metropolitan divisions that are randomly selected to participate in the model to a comparison group of CBSAs and metropolitan divisions that were not randomly selected for the model but could have been. Randomized evaluation designs of this kind are widely considered the ‘‘gold standard’’ for social science and medical research because they ensure that the systematic differences are reduced between units that do and do not experience an intervention, which ensures that (o ld standard’’ for social science and medical research because they ensure that the systematic differences are reduced between units that do and do not experience an intervention, which ensures that (on average) differences in outcomes between participating and non- participating units reflect the effect of the intervention. We plan to use a range of analytic methods, including regression and other multivariate methods appropriate to the analysis of stratified randomized experiments to examine each of our measures of interest. Measures of interest could include, for example, quality of and access to care, utilization patterns, expenditures, and beneficiary experience. With these methods, we would be able to examine the experience of the ASM participants over time relative to those in the comparison group controlling for as many of the relevant confounding factors as is possible. The evaluation would also include rigorous qualitative analyses to understand the contextual factors influencing the implementation and impact of ASM and the evolving nature of care delivery transformation. In our proposed evaluation methodology, we plan to account for the impact of ASM at the geographic uni ing the implementation and impact of ASM and the evolving nature of care delivery transformation. In our proposed evaluation methodology, we plan to account for the impact of ASM at the geographic unit level, the TIN/NPI level, and the beneficiary level. We would also consider various statistical methods to address factors that could confound or bias our results. We would also account for clustering of beneficiaries within TINs and markets. Accounting for clustering ensures that we do not overstate our effective sample size by failing to account for the fact that the performance of participants in a market may not be fully independent of one another. Accounting for clustering may also improve statistical precision and allow us to better examine how patterns of performance vary across TINs and markets. Thus, in our analysis, if a large TIN consistently has poor performance, clustering would allow us to detect improved performance in the other, smaller TINs in a market rather than place too much weight on the results of one TIN and potentially lead to biased estimates and mistaken inferences. Finally, we plan to use various statistical techniques to examine the effects of the ASM whi too much weight on the results of one TIN and potentially lead to biased estimates and mistaken inferences. Finally, we plan to use various statistical techniques to examine the effects of the ASM while also accounting for the effects of other ongoing interventions such as the Medicare Shared Savings Program. For example, we are considering additional regression techniques to help identify and evaluate the incremental effects of adding ASM in areas where patients and market areas are already subject to these other interventions as well as potential interactions among these efforts. (3) Data Collection Methods As part of our proposed evaluation methodology, we propose to consider multiple sources of data to evaluate the effects of ASM. We expect to base much of our quantitative analyses on secondary data sources including Medicare FFS claims. The beneficiary claims data would provide information such as utilization and expenditures in total and by type of provider and service. In conjunction with the secondary data sources mentioned previously, we would consider a CMS- administered survey, guided interviews, and focus groups of beneficiaries who experienced a heart failure or low ba ction with the secondary data sources mentioned previously, we would consider a CMS- administered survey, guided interviews, and focus groups of beneficiaries who experienced a heart failure or low back pain episode during the ASM test period. This survey would be administered to ASM beneficiaries who were in an episode or similar patients selected as part of a control group. The primary focus of this survey would be to obtain information on the ASM beneficiary’s experience in episodes relative to usual care. We are also considering a survey administered by CMS to ASM participants. These surveys would provide insight into providers’ experience under the model and further information on the care redesign strategies undertaken by health care providers. In addition, we would consider site visits and focus groups with selected active ASM participants. We believe that these qualitative methods would VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00275 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32626 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules provide contextual M\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32626 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules provide contextual information that would help us better understand the dynamics and interactions occurring between ASM participants and other providers. For example, these data would help us better understand ASM participants’ plans for engagement with PCPs in accountable care arrangements, as well as how those plans were implemented and what they achieved. Additionally, in contrast to relying on quantitative methods alone, qualitative approaches would enable us to capture variations in implementation as well as identify factors that are associated with successful interventions and distinguish the effects of multiple interventions that may be occurring within participating providers, such as simultaneous ACO and bundled payment participation. We are considering primary data collection efforts with providers and beneficiaries within the comparison group. The systematic data collection from comparison group providers would allow for parsing out changes in standard of care from the ASM impact. Additionall s and beneficiaries within the comparison group. The systematic data collection from comparison group providers would allow for parsing out changes in standard of care from the ASM impact. Additionally, primary data collection with beneficiaries who received care at comparison group providers would provide critical information about the impact of the model on self-reported health status, experience of care and overall satisfaction. (4) Key Evaluation Research Questions Our evaluation would assess the impact of ASM on the dual aims of improved care quality and reduced costs. The evaluation would include assessments of Medicare expenditures, utilization, quality outcomes, and patient experience of care. Our key evaluation questions would include, but are not limited to, the following: • Payment. Is there a reduction in Medicare expenditures in absolute terms? By subcategories including major cost drivers for heart failure and low back pain episodes? Does ASM reduce variations in expenditures that are not attributable to differences in health status? Did ASM result in net savings to the Medicare program, after accounting for any payment adjustments made under the model? • Utilization. ures that are not attributable to differences in health status? Did ASM result in net savings to the Medicare program, after accounting for any payment adjustments made under the model? • Utilization. Are there changes in Medicare utilization patterns overall and for specific types of services including services identified as ‘‘low value’’? How do these patterns compare to historic patterns, regional variations, and national patterns of care? How are these patterns of changing utilization associated with Medicare payments, patient outcomes, and general clinical judgment of appropriate care? • Quality of care. What impact did the model have on quality of care for beneficiaries? Did the incidence of relevant clinical outcomes such as hospital admissions remain constant or decrease? Were there changes in beneficiary outcomes under the model compared to appropriate comparison groups? • Beneficiary experience. What impact did the model have on beneficiary experience overall and for beneficiary subgroups? Did the model have an impact on beneficiaries’ engagement in their health care decisions? • Care delivery transformation. How has provider behavior in the mandatory geographic areas cha ary subgroups? Did the model have an impact on beneficiaries’ engagement in their health care decisions? • Care delivery transformation. How has provider behavior in the mandatory geographic areas changed under the model? Is there evidence of broader market-level changes? Are provider relationships changing over the course of the model? Is the model facilitating continuity of care between specialty and PCPs? Is there evidence that the participants’ changes in care delivery that were made in the response to the model will be sustained? • Unintended outcomes. Did ASM result in any unintended consequences, including adverse selection of patients, access problems, cost shifting, evidence of stinting on appropriate care, anti- competitive effects on local health care markets, evidence of inappropriate referrals practices? If so, how, to what extent, and for which beneficiaries or providers? (5) Evaluation Period and Anticipated Reports As discussed in section III.C.2.b. of this proposed rule, we propose that the ASM test period would be 7 years that includes both ASM performance years and ASM payment years. The evaluation period would encompass the ASM test period. We would plan to eval e, we propose that the ASM test period would be 7 years that includes both ASM performance years and ASM payment years. The evaluation period would encompass the ASM test period. We would plan to evaluate ASM on an annual basis. However, we recognize that interim results are subject to issues such as sample size and random fluctuations in practice patterns. Hence, while we intend to conduct periodic summaries to offer useful insight during the model test, a final analysis after the end of the 7-year ASM test period would be important for ultimately synthesizing and validating results. We seek public comments on our proposed design, evaluation, data collection methods, and research questions. m. Proposed Overlap With Other Models Tested Under Section 1115A and CMS Programs We propose to permit ASM to overlap with other CMS Innovation Center models and CMS programs, with the exception of MIPS, from which ASM participants would be excluded from reporting and participation, as proposed in section III.C.2.h.(2) of this proposed rule. We intentionally designed ASM to apply to Medicare FFS beneficiaries that are assigned, aligned, or attributed to other CMS Innovation Center models, such section III.C.2.h.(2) of this proposed rule. We intentionally designed ASM to apply to Medicare FFS beneficiaries that are assigned, aligned, or attributed to other CMS Innovation Center models, such as existing or forthcoming population-based total cost of care models, or CMS programs, such as the Medicare Shared Savings Program, while ensuring compatibility and alignment towards improving care and reducing spending. The ASM payment methodology allows for overlaps between ASM and other Innovation Center models or CMS programs by avoiding shared savings payments to participants in more than one shared savings model, as barred by statute in 42 USC 1395jjj(b)(4)(A). Overlapping incentives are key to aligning incentives across the care team because clinicians are more likely to change their behavior or engage in care transformation when the incentives directly affect them.246 Because specialists drive the majority of spending within Original Medicare, increasing specialist awareness of their participation in ACOs and better engaging them in care transformation is key.247 248 Given this objective, ASM would apply to all clinicians meeting the ASM participant eligibility criteria, regar eir participation in ACOs and better engaging them in care transformation is key.247 248 Given this objective, ASM would apply to all clinicians meeting the ASM participant eligibility criteria, regardless of whether the clinician is excused from reporting to MIPS due to Advanced APM participation or if the clinician is exempt from reporting MIPS due to eligibility requirements. One reason that we propose to include this broad selection of clinicians as part of ASM is to encourage more specialist engagement with ACOs. The benefits of driving further specialist engagement in value-based care outweigh the additional burdens, especially given the specialists’ patient panels make up a smaller portion of ACO-assigned beneficiaries relative to primary care.249 246 Leao DLL, Cremers HP, van Veghel D, Pavlova M, Groot W. The Impact of Value-Based Payment Models for Networks of Care and Transmural Care: A Systematic Literature Review. Appl Health Econ Health Policy. 2023 May;21(3):441–466. doi: 10.1007/s40258–023–00790–z. 247 Markovitz AA, Ryan AM, Peterson TA, Rozier MD, Ayanian JZ, Hollingsworth JM. ACO Awareness and Perceptions Among Specialists Versus Primary Care Physicians: a Survey o 10.1007/s40258–023–00790–z. 247 Markovitz AA, Ryan AM, Peterson TA, Rozier MD, Ayanian JZ, Hollingsworth JM. ACO Awareness and Perceptions Among Specialists Versus Primary Care Physicians: a Survey of a Large Medicare Shared Savings Program. J Gen Intern Med. 2022 Feb;37(2):492–494. 248 Lewis, Valerie A.; Schoenherr, Karen; Fraze, Taressa; Cunningham, Aleen. Clinical coordination in accountable care organizations: A qualitative study. Health Care Management Review 44(2):p 127–136, 4⁄6 2019. 249 Barnett ML, McWilliams JM. Changes in specialty care use and leakage in Medicare accountable care organizations. Am J Manag Care. 2018 May 1;24(5):e141–e149. VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00276 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32627 Furthermore, for any clinician who achieves Qualifying APM Participant (QP) status in an Advanced Alternative Payment Model, the QP is waived from reporting and participating in MIPS (81 FR 77062). In addition, participation in MIPS is optional for those Advanced APM ant (QP) status in an Advanced Alternative Payment Model, the QP is waived from reporting and participating in MIPS (81 FR 77062). In addition, participation in MIPS is optional for those Advanced APM participants who are partial QP (81 FR 77014). ASM, however, was designed to purposely overlap with Advanced APMs and ACOs to increase engagement of specialists, regardless of organizational structure. And for specialists participating in an ACO, ASM intends to capture Medicare FFS beneficiaries across the entire specialist practice rather than only the subset of beneficiaries assigned to the ACO. This expands the impact of incentives beyond those beneficiaries assigned to the ACO to the specialist’s full panel of beneficiaries who are treated for each relevant condition. This ensures that ACOs are enabled by a landscape of specialists, whether participating in an ACO model or not, who are more likely to cooperate in care transformation to achieve their shared goals. For these reasons, we propose to allow overlaps between ASM and other Innovation Center models and CMS programs. We propose that this model would apply to all clinicians meeting the eligibility criteria, regardless of whe propose to allow overlaps between ASM and other Innovation Center models and CMS programs. We propose that this model would apply to all clinicians meeting the eligibility criteria, regardless of whether the clinician is exempt from MIPS reporting during ASM’s performance year due to QP status or Partial QP status as a result of meeting the thresholds for payments or patients tied to participation in an Advanced APM. We seek comment on the proposal to permit overlap between ASM and other Innovation Center and CMS programs. n. Application of Standard Provisions for Mandatory Innovation Center Models ASM meets the criteria for application of the Standard Provisions for Mandatory Innovation Center Models (42 CFR part 512, subpart A). Unless otherwise specified, all ASM participants and ASM beneficiaries would be subject to the provisions at §§ 512.100 through 512.190, which address the following areas: • Beneficiary Protections. • Cooperation in Model Evaluation and Monitoring. • Audits and Record Retention. • Rights in Data and Intellectual Property. • Monitoring and Compliance. • Remedial Action. • Innovation Center Model Termination by CMS. • Limitations on Review. • Miscellaneous and Record Retention. • Rights in Data and Intellectual Property. • Monitoring and Compliance. • Remedial Action. • Innovation Center Model Termination by CMS. • Limitations on Review. • Miscellaneous Provisions on Bankruptcy and Other Notifications. • Reconsideration Review Process. We recognize the standard provisions were not intended to encompass all the terms and conditions that would apply to each Innovation Center model, because each model embodies unique design features and implementation plans that may require additional, more tailored provisions, including with respect to payment methodology, care delivery and quality measurement, that would continue to be included in each model’s governing documentation. Thus, we seek public comment on whether ASM should set forth model- specific provisions related to any of the provisions identified above. E. Medicare Diabetes Prevention Program (MDPP) The Centers for Medicare & Medicaid Services’ (CMS) Medicare Diabetes Prevention Program Expanded Model (hereafter, ‘‘MDPP’’ or ‘‘MDPP expanded model’’) is an evidence-based behavioral intervention that aims to prevent or delay the onset of type 2 diabetes for eligible Medicare beneficiar Expanded Model (hereafter, ‘‘MDPP’’ or ‘‘MDPP expanded model’’) is an evidence-based behavioral intervention that aims to prevent or delay the onset of type 2 diabetes for eligible Medicare beneficiaries diagnosed with prediabetes. MDPP is an expansion in duration and scope of the Diabetes Prevention Program (DPP) model test, which was initially tested by CMS through a Round One Health Care Innovation Award (2012–2016).250 The DPP model test successfully met statutory criteria for model expansion,251 demonstrating 5 percent weight loss from their starting weight by participants (a key metric of the program’s success) along with statistically significant reductions in Medicare spending, emergency department (ED) visits, and inpatient stays.252 The MDPP expanded model was implemented through the 250 The Health Care Innovation Awards funds awards to organizations that implemented the most compelling new ideas to deliver better health, improved care, and lower costs to people enrolled in Medicare, Medicaid and Children’s Health Insurance Program (CHIP), particularly those with the highest health care needs. The CMS Innovation Center announced the first batch of awardees for the Health edicare, Medicaid and Children’s Health Insurance Program (CHIP), particularly those with the highest health care needs. The CMS Innovation Center announced the first batch of awardees for the Health Care Innovation Awards on May 8, 2012, and the second (final) batch on June 15, 2012. For more, see https://www.cms.gov/priorities/ innovation/innovation-models/health-care- innovation-awards. 251 Paul Spitalnic. Certification of Medicare Diabetes Prevention Program. Mar. 14, 2016.https:// www.cms.gov/Research-Statistics-Data-and- Systems/Research/ActuarialStudies/Downloads/ Diabetes-Prevention-Certification-2016-03-14.pdf. 252 Rojas Smith. L., Amico, P., Hoerger, T.J., Jacobs, S., Payne. J., & Renaud, J.: Evaluation of the Health Care Innovation Awards: Community Resource Planning, Prevention, and Monitoring Third Annual Report Addendum—August 2017 https://downloads.cms.gov/files/cmmi/hcia-crppm- thirdannrptaddendum.pdf (pp. 858–914). rulemaking process in two phases, in the CY 2017 PFS (81 FR 80459 through 80483) and CY 2018 PFS final rules (82 FR 53234 through 53339). MDPP was established in 2017 as an ‘‘additional preventive service,’’ 253 covered by Medicare and not subject to ben 81 FR 80459 through 80483) and CY 2018 PFS final rules (82 FR 53234 through 53339). MDPP was established in 2017 as an ‘‘additional preventive service,’’ 253 covered by Medicare and not subject to beneficiary cost-sharing, in addition to being available once per lifetime to eligible beneficiaries. To facilitate delivery of MDPP in a non-clinical community setting (to align with the certified DPP model tested by The CMS Innovation Center), CMS created a new MDPP supplier type through rulemaking in the CY 2017 PFS final rule (81 FR 80471), in addition to requiring organizations that wish to participate in MDPP to enroll in Medicare separately, even if they are already enrolled in Medicare for other purposes. MDPP is a non-pharmacological behavioral intervention consisting of up to 22 intensive sessions furnished over 12 months, which consists of 16 core sessions delivered weekly over 6 months followed by core maintenance sessions delivered monthly in the following 6 months. MDPP sessions are delivered by a trained Coach who provides training on topics that include long-term dietary change, increased physical activity, and behavior change strategies for weight control and diabetes ris are delivered by a trained Coach who provides training on topics that include long-term dietary change, increased physical activity, and behavior change strategies for weight control and diabetes risk reduction. All sessions must adhere to a Centers for Disease Control and Prevention (CDC) approved National Diabetes Prevention Program (National DPP) curriculum 254 and must be 1 hour in length. The primary goal of the MDPP expanded model is to help Medicare beneficiaries reduce their risk for developing type 2 diabetes by achieving at least 5 percent weight loss from the first core session (81 FR 80465). Eligible organizations seeking to furnish MDPP began enrolling in Medicare as MDPP suppliers on January 1, 2018, and began furnishing MDPP on April 1, 2018 (82 FR 53237). As of March 2025, there were 331 approved MDPP suppliers.255 The most recent MDPP evaluation report reflected that between April 2018 and September 2024, approximately 9,015 beneficiaries have participated in MDPP. Of these, 4,396 were Medicare FFS beneficiaries and 4,650 were MA beneficiaries.256 253 42 CFR 410.64—Additional preventive services. 254 https://www.cdc.gov/diabetes/prevention/ resources/curriculum.ht these, 4,396 were Medicare FFS beneficiaries and 4,650 were MA beneficiaries.256 253 42 CFR 410.64—Additional preventive services. 254 https://www.cdc.gov/diabetes/prevention/ resources/curriculum.html. 255 Medicare Provider Enrollment, Chain, and Ownership System (PECOS). Unpublished data. 256 RTI International. Evaluation of the Medicare Diabetes Prevention Program. March 2025. https:// www.cms.gov/priorities/innovation/data-and- reports/2025/mdpp-finalevalrpt. VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00277 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32628 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules Through the Diabetes Prevention Recognition Program (DPRP), CDC administers a national quality assurance program recognizing eligible organizations that furnish the National DPP through its evidence based DPRP Standards,257 which are updated every 3 years. The CDC established the DPRP in 2012 and possesses significant experience assessing the quality of program delivery by organizations throughout the United States, applying a comprehensive set of natio The CDC established the DPRP in 2012 and possesses significant experience assessing the quality of program delivery by organizations throughout the United States, applying a comprehensive set of national quality standards. For further information on the DPP model test,258 the CDC’s National DPP,259 and DPRP Standards,260 please refer to the CY 2017 (81 FR 80471) and CY 2018 PFS (82 FR 52976) final rules and related websites. The Public Health Emergency (PHE) for COVID–19 prompted changes to allow live, virtual delivery via distance learning for MDPP, among other changes (85 FR 84830 through 84841). Changes to MDPP in the CY 2024 PFS final rule (88 FR 78818) included a simplified payment structure to allow for FFS payments for beneficiary attendance while retaining the performance-based payments for diabetes risk reduction (that is, weight loss). Beginning January 1, 2024, payments are made to an MDPP supplier if an MDPP beneficiary attends any core session in the first 6 months or core maintenance session in the second 6 months, allowing payment for up to 22 sessions in a 12-month timeframe. The CY 2024 PFS final rule also extended certain PHE flexibilities, including the option to maintenance session in the second 6 months, allowing payment for up to 22 sessions in a 12-month timeframe. The CY 2024 PFS final rule also extended certain PHE flexibilities, including the option to deliver some or all MDPP sessions via distance learning and for beneficiaries to virtually self- report weight for MDPP distance learning sessions, until December 31, 2027 (88 FR 79241). CDC released the 2024 DPRP Standards 261 to replace the 2021 DPRP Standards in June 2024. The CY 2025 PFS final rule (89 FR 97710) made conforming changes to align with the 257 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. 258 Health Care Innovation Awards. https:// www.cms.gov/priorities/innovation/innovation- models/health-care-innovation-awards. 259 https://www.cdc.gov/diabetes/prevention/ index.html. 260 https://www.cdc.gov/diabetes/prevention/pdf/ dprp-standards.pdf. 261 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirem 60 https://www.cdc.gov/diabetes/prevention/pdf/ dprp-standards.pdf. 261 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. 2024 CDC DPRP Standards and further clarify regulatory language pertaining to program delivery and claim submission by adding new MDPP terms for ‘‘in- person with a distance learning component’’ and ‘‘combination with an online component.’’ The CY 2025 PFS final rule also updated self-reporting weight requirements for an MDPP distance learning session by providing beneficiaries with a new option to self- report their weight using two photos for distance learning sessions. In addition, the CY 2025 PFS final rule added a HCPCS modifier for reporting a make-up session on the same day as a regularly scheduled MDPP session, and bridge payments were removed from MDPP’s FFS payment structure. While the CY 2024 and CY 2025 PFS final rules included changes to MDPP, which included enhancements that simplified payment structure and extended the ability for MDPP suppliers to del ment structure. While the CY 2024 and CY 2025 PFS final rules included changes to MDPP, which included enhancements that simplified payment structure and extended the ability for MDPP suppliers to deliver some or all MDPP sessions via distance learning, additional changes to MDPP through the CY 2026 PFS proposed rule are necessary to increase uptake of MDPP. Participation in MDPP has been low, with less than 1 percent of eligible beneficiaries participating in the program. While an estimated 9.3 million Medicare FFS beneficiaries are potentially eligible for the program (that is, have a prediabetes diagnosis but not a diabetes diagnosis in claims), fewer than 5,000 Medicare FFS beneficiaries have participated in MDPP during the first 6 years of the program. Increasing the uptake of MDPP among both suppliers and beneficiaries is necessary to increase the impact and success of the program. In this proposed rule, we are proposing several changes which are aimed towards increasing the uptake of this important prevention-focused program while empowering beneficiaries and promoting further alignment between MDPP and the CDC DPRP Standards. Specifically, we are proposing changes to 42 CFR ke of this important prevention-focused program while empowering beneficiaries and promoting further alignment between MDPP and the CDC DPRP Standards. Specifically, we are proposing changes to 42 CFR 410.79(b) to add definitions for the following terms: Live Coach interaction, Online delivery period, and Online session while modifying the definition of ‘‘Online.’’ We also propose changes to the expanded model by amending § 410.79(c)(1)(ii) and (e)(3)(iii)(C) to address operational questions and barriers related to weight collection requirements. We also propose to extend flexibilities allowed during the PHE for COVID–19 through December 31, 2029 by modifying the definition of extended flexibilities period in § 410.79(b). Finally, we are proposing to test the inclusion of an asynchronous delivery modality by modifying § 410.79 by revising paragraph (b) adding paragraph (f) and amending § 424.205(c)(10), (f)(2)(i), and (f)(5), which will allow MDPP suppliers to deliver the Set of MDPP services Online through December 31, 2029, clarify that MDPP suppliers are not required to maintain in-person delivery capability through December 31, 2029, and introduce a new G-code and payment for O ervices Online through December 31, 2029, clarify that MDPP suppliers are not required to maintain in-person delivery capability through December 31, 2029, and introduce a new G-code and payment for Online sessions. These changes are expected to expand beneficiary access to MDPP, reduce barriers to participation, improve MDPP session attendance and retention, and promote safety. 1. Changes to § 410.79(b) The 2024 CDC DPRP Standards include the following delivery modes with definitions: ‘‘In-person,’’ ‘‘Distance learning (live),’’ ‘‘In-person with a distance learning component,’’ ‘‘Online (non-live),’’ and ‘‘Combination with an online component.’’ 262 These delivery modes also serve as organization codes for CDC DPRP recognition. As indicated in § 410.79(b), distance learning refers to an MDPP session that is delivered by trained Coaches via remote classroom and is furnished in a manner consistent with the DPRP Standards for distance learning sessions. The Coach provides live (synchronous) delivery of session content in one location and participants call-in or video-conference from another location. The CY 2024 PFS final rule introduced and defined ‘‘distance learning’’ for MDPP and us) delivery of session content in one location and participants call-in or video-conference from another location. The CY 2024 PFS final rule introduced and defined ‘‘distance learning’’ for MDPP and provided a definition for ‘‘online delivery’’ (88 FR 79243). The CY 2025 PFS final rule modified the definition for ‘‘online delivery’’ at § 410.79(b), to align with the 2024 CDC DPRP Standards 263 by revising the term from ‘‘online delivery’’ to ‘‘online’’ to align with both the MDPP ‘‘distance learning’’ term and CDC DPRP ‘‘online (non-live)’’ term (89 FR 98045). We also finalized the definition for the MDPP ‘‘Online’’ delivery mode to provide that sessions that are delivered one hundred percent (100 percent) through the internet via smartphone, tablet, or laptop in an asynchronous (non-live) classroom where participants are experiencing the content on their own time without a live (including non- artificial intelligence (AI)) Coach 262 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. 2 s Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. 263 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00278 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32629 teaching the content. These sessions must be furnished in a manner consistent with the DPRP Standards for Online sessions. Live Coach interaction must be offered to each participant during weeks when the participant has engaged with content. E-mails and text messages can count toward the requirement for live Coach interaction if there is bi-directional communication between the Coach and participant, whereby both parties engage in the interaction. Chat bots and AI forum unt toward the requirement for live Coach interaction if there is bi-directional communication between the Coach and participant, whereby both parties engage in the interaction. Chat bots and AI forums do not count as live Coach interaction. This modified definition added the term ‘‘non-live’’ and further clarified that Chat bots and AI forums do not constitute live interaction. We propose to amend § 410.79(b) by adding definitions for Live Coach Interaction and Online session while modifying the definition for Online as defined at § 410.79(b) to clarify the Online delivery modality and remove requirements in the Online definition that will be outlined at § 410.79(f). We also propose adding the definition of Online delivery period, which refers to the 4-year period (January 1, 2026 to December 31, 2029) to test the inclusion of the Online delivery modality, described at § 410.79(f), to apply. During this time, MDPP suppliers may deliver the Set of MDPP services Online. We propose to amend § 410.79(b) by adding definitions for ‘‘Live Coach Interaction’’ and ‘‘Online Session’’ while modifying the definition for Online as defined at § 410.79(b) to clarify the ‘‘Online’’ delivery modal end § 410.79(b) by adding definitions for ‘‘Live Coach Interaction’’ and ‘‘Online Session’’ while modifying the definition for Online as defined at § 410.79(b) to clarify the ‘‘Online’’ delivery modality and remove requirements in the Online definition that will be outlined at § 410.79(f). We also propose adding the definition of Online Delivery Period, which refers to the 4-year period (January 1, 2026 to December 31, 2029) to test the inclusion of the Online delivery modality, described at § 410.79(f), to apply. During this time, MDPP suppliers may deliver the Set of MDPP services Online. The CY 2024 PFS final rule extended certain PHE flexibilities finalized in the CY 2021 PFS final rule, including the option to deliver some or all MDPP sessions via distance learning and for beneficiaries to virtually self-report weight for MDPP distance learning sessions, until December 31, 2027 (88 FR 79241). In the CY 2024 PFS, we finalized that during the Extended flexibilities period, MDPP suppliers may provide virtual services as long as they are provided in a manner consistent with the CDC DPRP standards for distance learning. The extension of these flexibilities allowed beneficiaries to liers may provide virtual services as long as they are provided in a manner consistent with the CDC DPRP standards for distance learning. The extension of these flexibilities allowed beneficiaries to obtain the Set of MDPP services either in-person, through distance learning, or through a combination of in-person and distance learning for a proposed period of 4 years. The Extended flexibilities definition refers to § 410.79(e)(3)(iii) and (iv), and the extended flexibilities period described at § 410.79(b) refers to the 4-year period (January 1, 2024 to December 31, 2027) for the Extended flexibilities to apply. Prior to the PHE for COVID–19, MDPP suppliers delivered the program predominantly in-person. Delivery modes have shifted over time, with an increasing number of beneficiaries participating through the virtual delivery option. The most recent evaluation report indicates that from April 2018 through March 2024, 59 percent of MDPP beneficiaries predominantly attended the program in person, 7.5 percent of MDPP beneficiaries attended the program through a mix of in-person and virtual sessions, and 33.5 percent predominantly attended the program virtually.264 Among beneficiaries n person, 7.5 percent of MDPP beneficiaries attended the program through a mix of in-person and virtual sessions, and 33.5 percent predominantly attended the program virtually.264 Among beneficiaries who participate in MDPP via distance learning or in-person with a distance learning component (hybrid), most expressed their satisfaction by citing the flexibility the choices provided when faced with challenges such as inclement weather or travel restrictions that made in-person participation difficult.265 We are also proposing to extend flexibilities allowed during the PHE for COVID–19 through December 31, 2029 by revising the dates included in the definition for ‘‘extended flexibilities period’’ a § 410.79(b). We propose extending this flexibility to promote continued access to MDPP for beneficiaries. In particular, beneficiaries in geographic areas with a limited number of in-person MDPP suppliers or other areas (for example, rural) where travel to an in-person session may be challenging and may be further exacerbated under certain circumstances; for example, during inclement weather. This proposed change will ensure that all delivery modalities for MDPP are available during the sa ng and may be further exacerbated under certain circumstances; for example, during inclement weather. This proposed change will ensure that all delivery modalities for MDPP are available during the same period of time (that is, through December 31, 2029) creating greater alignment, reducing potential confusion amongst beneficiaries and suppliers, and streamlining the program. Additionally, the proposed change provides MDPP 264 RTI International. Evaluation of the Medicare Diabetes Prevention Program. March 2025. https:// www.cms.gov/priorities/innovation/data-and- reports/2025/mdpp-finalevalrpt. 265 RTI International. Evaluation of the Medicare Diabetes Prevention Program. March 2025. https:// www.cms.gov/priorities/innovation/data-and- reports/2025/mdpp-finalevalrpt. suppliers with a variety of modes in which to deliver the program and facilitates consistency across delivery modalities adhering to this same timeframe. We are proposing to amend § 410.79(b) and seek comments on these proposals. 2. Proposed Changes to § 410.79 (c)(1)(ii) and (e)(3)(iii)(C) Our policies for obtaining weight measurements for baseline weight and performance-based weight loss achievement goals are descri oposals. 2. Proposed Changes to § 410.79 (c)(1)(ii) and (e)(3)(iii)(C) Our policies for obtaining weight measurements for baseline weight and performance-based weight loss achievement goals are described at § 410.79(c)(1)(ii), and for the MDPP expanded model emergency policy, summarized at § 410.79(e)(3)(iii). Currently, these policies permit weight measurements used to determine the achievement or maintenance of the required minimum weight loss to be taken in person by an MDPP supplier during an MDPP session, or via digital technology during the Extended flexibilities period. Specifically, these policies permit an MDPP supplier to obtain weight measurements for MDPP beneficiaries for the baseline weight and any weight loss-based performance achievement goals in the following manner: (1) in-person, when the weight measurement can be obtained safely and in compliance with all applicable laws and regulations; (2) via digital technology, such as scales that transmit weights securely via wireless or cellular transmission; or (3) via self-reported weight measurements from the at-home digital scale of the MDPP beneficiary (89 FR 98046). The CY 2025 PFS policies regarding beneficiary weig ireless or cellular transmission; or (3) via self-reported weight measurements from the at-home digital scale of the MDPP beneficiary (89 FR 98046). The CY 2025 PFS policies regarding beneficiary weight self-reported measurements and virtual weight collection (89 FR 98045) provided additional flexibilities for beneficiaries to self-report their weights by providing one or 2 (two) date-stamped photo(s) or a video recording of the beneficiary’s weight, with the beneficiary visible on the scale, submitted by the MDPP beneficiary to the MDPP supplier. The photo(s) or video must clearly document the weight of the MDPP beneficiary as it appears on their digital scale on the date associated with the billable MDPP session. If choosing to submit one photo, this photo must show the beneficiary’s weight on the scale with the beneficiary visible in their home. If choosing to submit two (2) photos, one photo must show the beneficiary’s weight on the digital scale, and a second photo must show the beneficiary visible in their home. Overall, commenters on the proposed MDPP Extended flexibilities in the CY 2024 PFS and CY 2025 PFS rules were very supportive of CMS continuing to VerDate Sep 2014 23 eneficiary visible in their home. Overall, commenters on the proposed MDPP Extended flexibilities in the CY 2024 PFS and CY 2025 PFS rules were very supportive of CMS continuing to VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00279 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32630 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules allow virtual weight collection (88 FR 79240 through 79256, 89 FR 98046). However, we received several comments regarding barriers to virtual weight collection experienced by MDPP suppliers and beneficiaries. This problem has become even more relevant as suppliers continue to expand distance learning to help reach beneficiaries in rural and underserved areas, sometimes across state lines. For example, several commenters reported that many of their beneficiaries are unable to take a picture while standing on their home scales due to risk of injury and physical health limitations. The current weight collection requirements discourage individuals with mobility concerns from participating in MDPP due to risk of injury while self-reporting injury and physical health limitations. The current weight collection requirements discourage individuals with mobility concerns from participating in MDPP due to risk of injury while self-reporting weight from home. Beneficiaries with mobility concerns may need to obtain weight at a medical office using a special scale (for example, wheelchair scale). Currently, beneficiaries do not have the option to submit medical record data as proof of weight, contributing to participant burden. Additionally, we have received feedback from suppliers stating that the requirement that beneficiaries must self-report weight by providing date-stamped photo(s) or video which must show the beneficiary’s weight on the digital scale and the visible in their home is restrictive. We acknowledge in our responses to these comments that some MDPP beneficiaries may lack the technology or capacity to provide a date-stamped photograph to document their body weight measurements. We previously stated that in situations in which beneficiaries may be unable to self- report their weight according to the MDPP conditions of coverage, suppliers may want to consider collecting weight measurements from the MDPP benefic ions in which beneficiaries may be unable to self- report their weight according to the MDPP conditions of coverage, suppliers may want to consider collecting weight measurements from the MDPP beneficiary in person (88 FR 79249). However, this may not be a practical option for beneficiaries who have chosen distance learning based on not living within driving distance from an MDPP supplier location, lack access to transportation, or are participating from a location outside of their home or an in-person delivery site. Therefore, we propose revising § 410.79(c)(1)(ii) to allow for weight measurements used to determine the achievement or maintenance of the required minimum weight loss to be based on weight documented in the beneficiary’s medical record within 2 days of the completion of the MDPP session. Currently, beneficiaries must weigh in during their in-person MDPP session or self-report weight measurements on the date associated with the billable MDPP session. We anticipate that suppliers and beneficiaries will appreciate the expanded flexibilities surrounding weight collection for MDPP as current requirements limit the ability of a beneficiary to report their weight from locati pliers and beneficiaries will appreciate the expanded flexibilities surrounding weight collection for MDPP as current requirements limit the ability of a beneficiary to report their weight from locations outside of an in-person delivery site or their home and prevent beneficiaries from submitting weight measurements documented in a medical record. We expect these additional flexibilities to empower beneficiaries, improve MDPP beneficiary engagement, session attendance, retention, and program completion. We considered alternative timeframes ranging from 3 to 5 days for this proposed change. We believe a 2-day documentation window prevents significant overlap between session documentation periods, considering core sessions occur weekly. We believe a shorter timeframe would be overly restrictive for suppliers and beneficiaries. We solicit public comments on this proposed timeframe and welcome feedback on whether the two (2) day documentation window is appropriate, or if alternative timeframes would better serve MDPP suppliers and MDPP beneficiaries while maintaining program integrity. Additionally, we propose revising § 410.79(e)(3)(iii)(C) to allow beneficiaries to self-report weight ames would better serve MDPP suppliers and MDPP beneficiaries while maintaining program integrity. Additionally, we propose revising § 410.79(e)(3)(iii)(C) to allow beneficiaries to self-report weight from a reasonable location outside of an in- person delivery site. Examples of a reasonable location outside of an in- person delivery site include, but are not limited to fitness centers, medical facilities, and temporary abodes (for example, travel accommodations or a family member’s home). Currently, beneficiaries must submit photo(s) or video documenting their weight on a digital scale from their home, which limits their ability to submit required weight measurements when on vacation or away from their home. We are continuing to require the date-stamp on photo(s) to ensure program integrity in the virtual setting. We propose amending § 410.79(c)(1)(ii) and (e)(3)(iii)(C). We are soliciting comments on these proposals. 3. Proposed Changes to § 410.79 by Adding Paragraph (f) and Amending § 424.205(c)(10), (f)(2)(i), and (f)(5) In the CY 2018 PFS final rule, we stated our intention to align MDPP with CDC DPRP Standards whenever possible (82 FR 53245). The CDC DPRP Standards have incl g § 424.205(c)(10), (f)(2)(i), and (f)(5) In the CY 2018 PFS final rule, we stated our intention to align MDPP with CDC DPRP Standards whenever possible (82 FR 53245). The CDC DPRP Standards have included virtual, online modalities and approaches since 2015.266 MDPP has included in-person delivery of the Set of MDPP Services since it began serving beneficiaries in 2018. The MDPP expanded model emergency policy (85 FR 84831) broadened the delivery of the Set of MDPP services through synchronous distance learning to provide greater flexibility during the PHE for COVID– 19, and later extended distance learning, and other related flexibilities through December 31, 2027, as part of the CY 2024 PFS final rule (82 FR 53249). In the CY 2021 PFS final rule, we established that virtual sessions performed under flexibilities finalized in that rule could only be performed by MDPP suppliers who offered in-person services (85 FR 84830) and maintained CDC DPRP ‘‘in-person’’ recognition (85 FR 84830 and 84831). In the CY 2024 PFS final rule, we extended flexibilities allowed during the PHE for COVID–19 for 4 years, or through December 31, 2027 (88 FR 79241). We also confirmed that suppliers who ex nd 84831). In the CY 2024 PFS final rule, we extended flexibilities allowed during the PHE for COVID–19 for 4 years, or through December 31, 2027 (88 FR 79241). We also confirmed that suppliers who exclusively delivered MDPP services virtually via distance learning without maintaining in-person delivery capability were not permitted to furnish the Set of MDPP services because MDPP beneficiaries may elect to return to in-person services, and MDPP suppliers need to be able to accommodate their request (88 FR 79248). The CY 2025 PFS final rule confirmed that only MDPP ‘‘in-person,’’ ‘‘distance learning,’’ and ‘‘in-person with a distance learning component’’ delivery modes are acceptable delivery modalities for MDPP during the Extended flexibilities period, as finalized in the CY 2024 PFS final rule (88 FR 79241). The CY 2025 PFS final rule did not include ‘‘online’’ nor ‘‘combination with an online component’’ as accepted delivery modalities for MDPP. For the MDPP Extended flexibilities period, we finalized in the CY 2024 PFS final rule to limit virtual delivery to the CDC DPRP definition of ‘‘distance learning’’ (88 FR 79243). We stated that the MDPP Extended flexibilities do not inc eriod, we finalized in the CY 2024 PFS final rule to limit virtual delivery to the CDC DPRP definition of ‘‘distance learning’’ (88 FR 79243). We stated that the MDPP Extended flexibilities do not include online delivery (or asynchronous virtual), as defined in the CDC DPRP Standards through the ‘‘Online’’ modality, including virtual make-up sessions (88 FR 79244). The 2024 CDC DPRP Standards allow for National DPP make-up sessions to be furnished using any delivery mode, including online.267 266 2015 CDC DPRP Standards: https:// stacks.cdc.gov/view/cdc/44247. 267 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00280 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32631 The MDPP expanded model was certified as a primarily in-person program. Virtual-only providers include those that deliver the National DPP services solely by distance learning or on oposed Rules 32631 The MDPP expanded model was certified as a primarily in-person program. Virtual-only providers include those that deliver the National DPP services solely by distance learning or online delivery. Although ‘‘telehealth’’ is included in CDC’s definition of distance learning, CMS stated in the CY 2017 PFS final rule (82 FR 53235) that the Set of MDPP services delivered via a telecommunications system, or other remote technologies do not qualify as telehealth services. Additionally, we have stated that through utilizing distance learning, participants may still interact with their Coach and other participants in their cohort in real-time, allowing for relationship building and peer support, unlike the Online modality which is delivered asynchronously (88 FR 79244). We have responded to previous public comments requesting that CMS allow asynchronous delivery of MDPP and virtual-only providers to offer MDPP in previous rules (85 FR 84831, 89 FR 98045). Commenters have expressed that the exclusion of an asynchronous delivery modality is misaligned with the CDC DPRP Standards, which permit ‘‘online’’ asynchronous participation. Suppliers have commented that the exclusion essed that the exclusion of an asynchronous delivery modality is misaligned with the CDC DPRP Standards, which permit ‘‘online’’ asynchronous participation. Suppliers have commented that the exclusion of asynchronous modality significantly limits program participation. Advocacy group members pursued legislation that would require CMS to open the MDPP to suppliers of asynchronous ‘‘online’’ MDPP programs through the PREVENT DIABETES Act [H.R. 7856] 268 in April 2024. Although this bill was not enacted into law, suppliers continue to encourage CMS to meet the demand for asynchronous delivery of MDPP. After the PHE went into effect in March 2020, more than 90 percent of all MDPP sessions were delivered virtually via Distance learning. To date, average weight loss for MDPP beneficiaries is 4.9 percent of starting body weight. Among beneficiaries that attend their sessions primarily in person, the average weight loss was 4.6 percent, compared with an average weight loss of 5.3 percent among those that attend sessions virtually via Distance learning.269 We propose adding paragraph (f) to 45 CFR 170.79 to test the addition of coverage of an Online delivery modality nationaldppcsc.cdc.gov/ those that attend sessions virtually via Distance learning.269 We propose adding paragraph (f) to 45 CFR 170.79 to test the addition of coverage of an Online delivery modality nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. 268 H.R. 7856 (118th): PREVENT DIABETES Act, https://www.govtrack.us/congress/bills/118/hr7856/ text. 269 RTI International. Evaluation of the Medicare Diabetes Prevention Program. March 2025. https:// www.cms.gov/priorities/innovation/data-and- reports/2025/mdpp-finalevalrpt. during the Online delivery period (until December 31, 2029). Consistent with the 2024 CDC DPRP Standards, organizations are required to submit a separate application for each delivery mode used to the CDC. This will result in a separate organization code (orgcode) for each delivery mode. Therefore, organizations are required to obtain an online organization code from CDC prior to delivering Online sessions for MDPP. As referenced above, The MDPP expanded model was certified as a primarily in-person program, and CMS previously opposed inclusion of an asynchronous delivery modality for MDPP for various reasons. We consider the proposed change to include the Online ertified as a primarily in-person program, and CMS previously opposed inclusion of an asynchronous delivery modality for MDPP for various reasons. We consider the proposed change to include the Online, asynchronous delivery modality as an MDPP delivery modality as a test during the Online delivery period permitted under the PHE. To evaluate the efficacy of Online delivery during the Online delivery period, beneficiary outcomes from asynchronous (that is, Online) will be evaluated to determine if this delivery modality reduces costs and improves quality. We continuously monitor MDPP trends and believe that the inclusion of Online delivery during the Online delivery period will build upon previous changes to introduce distance learning during the PHE for COVID–19 (85 FR 84830 through 84841) and respond to innovations in health care delivery and the increased provision of services outside of in-office settings. In addition, we anticipate that the inclusion of the Online delivery modality will promote beneficiary access to services, remove the barrier of beneficiaries having to wait for a cohort to start due to the on-demand nature of this proposed modality, build on the inclusion of t will promote beneficiary access to services, remove the barrier of beneficiaries having to wait for a cohort to start due to the on-demand nature of this proposed modality, build on the inclusion of the distance learning delivery modality, and align with the CMS Innovation Center Strategy to Make America Healthy Again by promoting evidence-based prevention, empowering people to achieve their health goals, and driving choice and competition for people.270 In the CY 2024 PFS, CMS reminded MDPP suppliers that they are required to maintain capacity to deliver the MDPP set of services in-person 271 however, we 270 CMS Innovation Center Strategy to Make America Healthy Again https://www.cms.gov/ priorities/innovation/about/cms-innovation-center- strategy-make-america-healthy-again, 271 Medicare and Medicaid Programs; CY 2024 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Advantage; Medicare and Medicaid Provider and Supplier Enrollment Policies; and Basic Health Program (88 FR 79249), Thursday November 16, 2023. https:// www.federalregister.gov/documents/2023/11/16/ are pr tage; Medicare and Medicaid Provider and Supplier Enrollment Policies; and Basic Health Program (88 FR 79249), Thursday November 16, 2023. https:// www.federalregister.gov/documents/2023/11/16/ are proposing under paragraph (f)(2) of 42 CFR 410.79 to explicitly not require MDPP suppliers to maintain in-person delivery capability during the Online delivery period. This will allow for distance learning and online-only organizations to enroll in Medicare as an MDPP supplier and streamline the process to allow for Online delivery of the Set of MDPP services. In hopes of further increasing program participation among suppliers and beneficiaries and promoting alignment between MDPP and the 2024 CDC DPRP Standards, we propose adding coverage of the delivery of the Set of MDPP services using the Online modality during the Online delivery period to test if outcomes, for MDPP beneficiaries, including weight loss, are similar to the in-person and distance learning delivery modalities. Additionally, under § 410.79 (f)(2)(i), we propose that Online sessions must be furnished in a manner consistent with the DPRP Standards regarding program format, coach interaction, and program intensity and dur y, under § 410.79 (f)(2)(i), we propose that Online sessions must be furnished in a manner consistent with the DPRP Standards regarding program format, coach interaction, and program intensity and duration to qualify for payment. Online sessions must be delivered one hundred percent (100 percent) through the internet via smartphone, tablet, or laptop in an asynchronous (non-live) classroom where participants are experiencing the content on their own time without a live (including non-artificial intelligence ([AI]) Coach teaching the content. We propose at § 410.79 (f)(2)(i)(A) that Live Coach interaction must occur between MDPP beneficiaries and Coaches during the weeks when the beneficiary has engaged with content to qualify for payment. MDPP suppliers may not use AI or Machine Learning (ML) to replace Live Coach interaction. Additionally, we propose that weight collection procedures referenced in the MDPP expanded model emergency policy at § 410.79(e)(3)(iii)(C) as well as the proposed (c)(1)(ii) apply during the online delivery period for MDPP services, as defined at § 410.79 (b). Beneficiaries must submit weight measurements on the date on which the online session is completed. ed (c)(1)(ii) apply during the online delivery period for MDPP services, as defined at § 410.79 (b). Beneficiaries must submit weight measurements on the date on which the online session is completed. We also propose at § 410.79 (f)(2)(i)(B) that MDPP suppliers must ensure safeguards are in place to ensure the accuracy of beneficiary weight measurements. These safeguards may include but are not limited to quality controls, diagnostic testing of hardware and/or software, and monitoring of trends (for example, rapid beneficiary weight loss within a short timeframe), are in place to ensure the accuracy of beneficiary weight 2023–24184/medicare-and-medicaid-programs-cy- 2024-payment-policies-under-the-physician-fee- schedule-and-other#page-79249 VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00281 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32632 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules measurements. For example, if organizations choose to use a website or mobile application to deliver the Set of MDPP services Online, integrations with hardware such as smart 16, 2025 / Proposed Rules measurements. For example, if organizations choose to use a website or mobile application to deliver the Set of MDPP services Online, integrations with hardware such as smart/BluetoothTM scales may be used to collect beneficiary weight measurements. Scales may be set up to automatically transmit weight measurements directly to the MDPP supplier and MDPP suppliers may opt to perform data validation checks and flag suspicious entries or ensure necessary firmware updates are deployed to ensure the accuracy and/or security of such scales. As described in at § 410.79 (f)(2)(i)(B), MDPP suppliers delivering the Set of MDPP services must ensure necessary technological safeguards to ensure the accuracy of weight collected through BluetoothTM scales, transmitted through an application, or utilizing any other means that do not involve direct Coach interaction or coach review of photos/ video. For instance, CMS expects organizations to ensure safeguards to avoid fraud, waste, and abuse (including but not limited to hardware or software errors and data manipulation) and organizations may be subject to audits to ensure compliance. While CDC DPRP Standards define ‘‘comb aste, and abuse (including but not limited to hardware or software errors and data manipulation) and organizations may be subject to audits to ensure compliance. While CDC DPRP Standards define ‘‘combination with an online component’’ as a yearlong National Diabetes Prevention Program Lifestyle Change Program (National DPP LCP) delivered as a combination of online (non-live) with in-person and/or distance learning, we are proposing that MDPP suppliers deliver MDPP via in- person, distance learning, in-person with a distance learning component, or Online modalities. While MDPP suppliers may offer synchronous and asynchronous modalities, they may not intermingle asynchronous (for example, Online) and synchronous (that is, In- Person, In-person with a distance learning component, and Distance learning) delivery modalities for individual beneficiaries. The Set of MDPP services, inclusive of make-up sessions, must be delivered to individual beneficiaries fully synchronously (that is, In-person, Distance learning, or In-person with a distance learning component) or fully asynchronously (that is, Online). To evaluate the efficacy of the Online delivery modality during the Online Delivery son, Distance learning, or In-person with a distance learning component) or fully asynchronously (that is, Online). To evaluate the efficacy of the Online delivery modality during the Online Delivery Period, beneficiary outcomes from synchronous (that is, In-person, distance learning, or In-person with a distance learning component) delivery of the Set of MDPP services must be compared to beneficiary outcomes from asynchronous (that is, Online), therefore, these modalities must be delivered separately for individual beneficiaries in order to evaluate whether Online results, including weight loss, are similar to in-person and distance learning delivery modalities. If organizations choose to provide the Set of MDPP services Online, we propose that organizations must adhere to requirements consistent with CDC DPRP Standards regarding program format, coach interaction, and program intensity and duration to qualify for payment, as described at § 410.79 (f)(2)(i).272 Specifically, we propose during the Online delivery period at § 410.79(f)(2)(i)(D) that organizations must ensure that participants enrolled in self-paced programs engage with the content through use of one or more of the fo during the Online delivery period at § 410.79(f)(2)(i)(D) that organizations must ensure that participants enrolled in self-paced programs engage with the content through use of one or more of the following: documented completion of videos/presentations and other learning modules in the application; knowledge checks (multiple choice or short answer); participant contributions to group discussions on a community board; and participant responses to the Coach via email, text message, or in-app messaging. Though the 2024 CDC DPRP Standards indicate live lifestyle coach interaction is required for Online delivery and should be offered to each participant during weeks when the participants have engaged with program content, we propose that live coach interaction must occur between the Coach and MDPP beneficiary as part of each session for the MDPP supplier to receive payment for that session at § 410.79(f)(2)(i)(A). Consistent with the CDC DPRP Standards, E-mails and text messages can count toward the requirement for live coach interaction as long as there is bi-directional communication (that is, organizations may not simply send out an announcement via text or e-mail and count that as toward the requirement for live coach interaction as long as there is bi-directional communication (that is, organizations may not simply send out an announcement via text or e-mail and count that as live coach interaction; the participant must have the ability to respond to and get support from the live coach) and both parties engage in some sort of communication. In alignment with CDC DPRP Standards, we are proposing that Coaches be required to track beneficiary engagement and completion of Online modules. Additionally, proactive outreach by the Coach may be used to encourage session completion and reporting of weight. To promote consistency with the 2024 CDC DPRP Standards and to ensure that beneficiaries receive Live Coach interaction across delivery modalities, we are proposing that MDPP Suppliers may not require that beneficiaries initiate Coach interactions and MDPP Suppliers may not use AI or Machine Learning (ML) to replace live coaching, as described at § 410.79(f)(2)(i)(A). We also propose to amend § 424.205(c)(10) to allow the minimum number of required MDPP core sessions and core maintenance sessions to be delivered Online during the Online delivery period. At § 424.2 We also propose to amend § 424.205(c)(10) to allow the minimum number of required MDPP core sessions and core maintenance sessions to be delivered Online during the Online delivery period. At § 424.205(c)(10)(i), we propose to require 16 in-person, distance learning, or online core sessions no more frequently than weekly for the first 6 months of the MDPP services period, which begins on the date of attendance at the first such core session. Next, at § 424.205(c)(10)(ii), we propose to require one in-person, distance learning, or online core maintenance session each month during months 7 through 12 (6 months total) of the MDPP services period. We also propose to amend § 424.205(f)(2)(i) to include the online modality among acceptable session types for session documentation. We are proposing in § 424.205(f)(5)(i) through (iv) to incorporate changes necessary for other proposed changes, including the addition of references directly to § 410.79(c)(1)(ii), and removal of references to ‘‘in person’’ in regard to how weight loss must be measured. These proposed changes provide greater clarity regarding the MDPP supplier’s records in regard to claim submission for weight loss and are ali n person’’ in regard to how weight loss must be measured. These proposed changes provide greater clarity regarding the MDPP supplier’s records in regard to claim submission for weight loss and are aligned with the proposed changes allowing for weight documented in a medical record. We anticipate that beneficiaries will appreciate the option to participate in MDPP via the Online modality, which will expand beneficiary access to MDPP, reduce barriers to participation, and improve health outcomes. MDPP suppliers and advocacy groups will also appreciate inclusion of the Online modality, as these entities have commented that the exclusion of the online modality significantly limits program participation, particularly for beneficiaries living in areas without a nearby in-person MDPP delivery site (for example, rural areas) or access to transportation. We propose to amend § 410.79(f) and § 424.205(c)(10), (f)(2)(i), and (f)(5). We are soliciting comments on these proposals. 4. Changes to § 414.84 272 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cd 4.84 272 Centers for Disease Control and Prevention Diabetes Prevention Recognition Program. Standards and Operating Procedures. Requirements for CDC Recognition. June 2024. https:// nationaldppcsc.cdc.gov/s/article/DPRP-Standards- and-Operating-Procedures. MDPP, as defined at § 410.79(b), consists of up to 16 sessions offered during the core session period (Months 1 to 6) and 6 monthly maintenance sessions offered during the core VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00282 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32633 maintenance session interval period (Months 7 to 12), (collectively the ‘‘core services period’’). While MDPP has an attendance-based fee-for-service payment structure as finalized in the CY 2024 PFS final rule (88 FR 79251), MDPP suppliers are also rewarded for successful outcomes for beneficiaries (weight loss), motivating them to not only retain participants, but also deliver a high-quality program that achieves better outcomes through performance- based payments. The fee-for-service ficiaries (weight loss), motivating them to not only retain participants, but also deliver a high-quality program that achieves better outcomes through performance- based payments. The fee-for-service payment structure finalized in the CY 2024 PFS final rule (88 FR 79251) added a distance learning HCPCS G-code, taking into consideration the Extended flexibilities. We propose edits throughout § 414.84 by revising paragraphs (b)(1) introductory text and (b)(2) introductory text to update language to include all accepted MDPP delivery modes for performance goals in which beneficiaries achieve weight loss milestones. We also propose adding paragraph (c)(3) to indicate payment for Online delivery, including the inclusion of a new HCPCS G-code, G9871, for online delivery (Behavioral counseling for diabetes prevention, online, 60 minutes). Finally, we propose redesignating paragraphs (c)(3) and (c)(4) as paragraphs (c)(4) and (c)(5) respectively and revising the redesignated paragraph (c)(4)(ii) to include a payment rate for a core session or core maintenance session furnished Online during the Online delivery period ($18). We seek comments on these proposals. Table 46 displays the propos ii) to include a payment rate for a core session or core maintenance session furnished Online during the Online delivery period ($18). We seek comments on these proposals. Table 46 displays the proposed CY 2026 MDPP payment structure for the set of MDPP services delivered Online. As indicated in Table 46, performance payments for 5 percent weight loss achieved from baseline weight (G9880) and 9 percent weight loss achieved from baseline weight (G9881) will remain the same regardless of delivery modality for MDPP. For each beneficiary, MDPP suppliers must either bill claims with G9886, G9887, a combination of G9886 and G9887, or G9871. The proposed G9871 for behavioral counseling for diabetes prevention, online, 60 minutes is for the set of MDPP services delivered Online, asynchronously. The existing G9886, behavioral counseling for diabetes prevention, in-person, group, 60 minutes, and G9887, behavioral counseling for diabetes prevention, distance learning, 60 minutes are delivered synchronously. Therefore, we are proposing that for each beneficiary, suppliers may not bill for the Set of MDPP services that were delivered through a combination of synchronous and asynchronous deliver chronously. Therefore, we are proposing that for each beneficiary, suppliers may not bill for the Set of MDPP services that were delivered through a combination of synchronous and asynchronous delivery modalities. Specifically, for MDPP beneficiaries, MDPP suppliers may not bill for Online Sessions as well as In-Person or Virtual Sessions during the Online delivery period. The Set of MDPP services must be delivered to individual beneficiaries as exclusively Online sessions (fully asynchronous) or exclusively In-person, distance learning, or In-person with a distance learning component sessions (fully synchronous). To evaluate the efficacy of Online delivery during the Online Delivery Period, beneficiary outcomes from synchronous (that is, In- person, Distance learning, or In-person with a distance learning component) delivery of the Set of MDPP services must be compared to beneficiary outcomes from asynchronous (that is, Online), therefore, these modalities must remain mutually exclusive for individual beneficiaries. While the 2024 CDC DPRP Standards define ‘‘Combination with an online component’’ as sessions that are delivered as a combination of online (non-live) with in-person o ve for individual beneficiaries. While the 2024 CDC DPRP Standards define ‘‘Combination with an online component’’ as sessions that are delivered as a combination of online (non-live) with in-person or distance learning, this will not be an accepted delivery modality for MDPP while online delivery is being tested through December 31, 2029. In summary, we are proposing to amend § 414.84 by revising paragraphs (b)(1) introductory text and (b)(2) introductory text; adding paragraph (c)(3); redesignating paragraphs (c)(3) and (c)(4) as paragraphs (c)(4) and (c)(5) respectively; and revising the redesignated paragraph (c)(4)(ii). We are seeking comments on these proposals. I. Medicare Prescription Drug Inflation Rebate Program 1. Background a. Overview of the Medicare Prescription Drug Inflation Rebate Program Sections 11101 and 11102 of the Inflation Reduction Act of 2022 (IRA) (Pub. L. 117–169, enacted August 16, 2022) established requirements under which drug manufacturers must pay inflation rebates if they raise their prices for certain drugs payable under Part B and/or covered under Part D faster than the rate of inflation. Specifically, section 11101 of the IRA amended section 184 tion rebates if they raise their prices for certain drugs payable under Part B and/or covered under Part D faster than the rate of inflation. Specifically, section 11101 of the IRA amended section 1847A of the Social Security Act (the VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00283 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00284 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32635 regulatory text, we are proposing to remove the definition. In the CY 2025 final rule (89 FR 98579), we codified the definition of manufacturer in § 427.20 to have the meaning set forth in section 1847A(c)(6)(A) of the Act. As articulated in the CY 2025 final rule (89 FR 98266), we will identify the manufacturer that is responsible for paying a rebate amount using the same approach used for reporting ASP and Medicaid Drug Rebate Program (MDRP) data. In this proposed rule, as a matter of operations, w facturer that is responsible for paying a rebate amount using the same approach used for reporting ASP and Medicaid Drug Rebate Program (MDRP) data. In this proposed rule, as a matter of operations, we are clarifying that CMS identifies the manufacturer with financial responsibility for the inflation rebate for a Part B rebatable drug by reviewing ASP data submissions for the current reporting period and the agency will also take into account, as applicable, manufacturer-identifying information in other CMS systems including MDRP. b. Drugs Covered as Additional Preventive Services (DCAPS) Medicare Part B covers ‘‘additional preventive services,’’ as defined under section 1861(ddd)(1) of the Act, that identify medical conditions or risk factors and that the Secretary determines are: (A) reasonable and necessary for the prevention or early detection of an illness or disability; (B) recommended with a grade of A or B by the United States Preventive Services Task Force; and (C) appropriate for individuals entitled to benefits under Part A or enrolled under Part B. Section 1861(ddd)(2) of the Act states that, in making determinations under section 1861(ddd)(1) of the Act, the Secretary for individuals entitled to benefits under Part A or enrolled under Part B. Section 1861(ddd)(2) of the Act states that, in making determinations under section 1861(ddd)(1) of the Act, the Secretary shall use the process for making National Coverage Determinations (as defined in section 1869(f)(1)(B) of the Act) in the Medicare program. Section 1833(a)(1)(W)(ii) of the Act provides for the payment for additional preventive services, including drugs. On September 30, 2024, CMS established coverage of certain drugs as an additional preventive service under section 1861(ddd)(1) of the Act for the first time.273 Such drugs covered as additional preventive services are referred to DCAPS, and we will use the term ‘‘DCAPS drug(s),’’ for ease of the reader. As described at § 410.152(o)(3), CMS will determine the payment limit for the applicable billing and payment code for a DCAPS drug by applying the ASP methodology if ASP data is available (89 273 See: Preexposure Prophylaxis (PrEP) Using Antiretroviral Therapy to Prevent Human Immunodeficiency Virus (HIV) Infection, available at https://www.cms.gov/medicare-coverage- database/view/ncacal-decision- memo.aspx?proposed=N&ncaid=310. FR 982 ntiretroviral Therapy to Prevent Human Immunodeficiency Virus (HIV) Infection, available at https://www.cms.gov/medicare-coverage- database/view/ncacal-decision- memo.aspx?proposed=N&ncaid=310. FR 98225). If ASP data is not available, then the payment limit would be determined using National Average Drug Acquisition Cost (NADAC) prices for the drug. If ASP data and NADAC prices are not available, the payment limit would be calculated using the Federal Supply Schedule (FSS) prices for the drug. If ASP data, NADAC prices, and FSS prices are not available, the payment limit would be the invoice price determined by the Medicare Administrative Contractor. In this proposed rule we are addressing whether DCAPS drugs are Part B rebatable drugs, as discussed in the CY 2025 PFS final rule (89 FR 98250). The current set of drugs covered as DCAPS drugs meets the definition of a Part B rebatable drug under section 1847A(i)(2) of the Act. Therefore, CMS intends to identify DCAPS drugs as Part B rebatable drugs as defined in section 1847A(i)(2) of the Act. Under this proposal, we would calculate rebates for DCAPS drugs in alignment with the methodology described in §§ 427.300 through 427.402. Man table drugs as defined in section 1847A(i)(2) of the Act. Under this proposal, we would calculate rebates for DCAPS drugs in alignment with the methodology described in §§ 427.300 through 427.402. Manufacturers of DCAPS drugs would receive reports of rebate amounts subject to the process and timing described in §§ 427.500 through 427.505. c. Billing Units That Are Packaged Into the Payment Amount for an Item or Service and Are Typically Not Separately Payable Section 1847A(i)(3)(B)(ii)(II) of the Act requires that units ‘‘that are packaged into the payment amount for an item or service and are not separately payable’’ be excluded from the total number of units of a billing and payment code for a Part B rebatable drug. As stated in the CY 2025 final rule (89 FR 98247), we will remove billing units that are packaged into the payment amount for an item or service and are not separately payable. We codified this policy at § 427.303(b)(3). We have identified rare instances where claims for separate payment have been submitted for a Part B rebatable drug when such claims are reimbursable only as part of a bundled payment. CMS excludes units associated with such separately billed claims f separate payment have been submitted for a Part B rebatable drug when such claims are reimbursable only as part of a bundled payment. CMS excludes units associated with such separately billed claims from the rebate calculation consistent with § 427.303(b)(3). d. Identification of the Payment Amount Benchmark Quarter (§ 427.302(c)) We are proposing at § 427.302(c)(5) that if data needed to calculate the payment amount in the payment amount benchmark quarter as described in and determined under § 427.302(d)(1) are not available in the calendar quarter beginning July 1, 2021, or the third full calendar quarter after such drug’s first marketed date, whichever is later, CMS will use the third full calendar quarter after the Part B rebatable drug is assigned a billing and payment code as the payment amount benchmark quarter. Without a payment amount in the payment amount benchmark quarter, we would not be able to calculate Part B inflation rebates for such billing and payment codes. We believe this approach will allow CMS to calculate a payment amount in the payment amount benchmark quarter, incorporating the two-quarter lag used to set payments in alignment with section 1847A of the Act ve this approach will allow CMS to calculate a payment amount in the payment amount benchmark quarter, incorporating the two-quarter lag used to set payments in alignment with section 1847A of the Act. We are making this proposal to address identified instances as described in section III.E.2.e. of this proposed rule. This proposal would require CMS to make technical edits to and to renumber regulations at § 427.302(c). Therefore, we propose conforming changes to § 427.302(c) and to redesignate § 427.302(c)(5) as § 427.302(c)(6). e. Identification of the Payment Amount in the Payment Amount Benchmark Quarter (§ 427.302(d)(1)) Section 1847A(i)(3)(C) of the Act specifies use of the ‘‘payment amount for the billing and payment code for such drug in the payment amount benchmark quarter’’ (‘‘payment amount in the payment amount benchmark quarter’’) in the determination of the inflation-adjusted payment amount. As stated in the CY 2025 PFS final rule (89 FR 98244), to identify the payment amount in the payment amount benchmark quarter, we use the published payment limit for the billing and payment code for the applicable payment amount benchmark quarter. If the published payment limit is ount in the payment amount benchmark quarter, we use the published payment limit for the billing and payment code for the applicable payment amount benchmark quarter. If the published payment limit is not available for the applicable benchmark quarter, we stated we will use the lower of 106 percent of ASP or 106 percent of WAC. However, we have identified instances in which some or all NDCs in a billing and payment code have zero or negative ASP or WAC values. Using such data could result in a payment amount in the payment amount benchmark quarter that is zero, negative, or unreasonably low due to the inclusion of the zero or negative ASP or WAC values. In addition, when the published payment limit is not available, using 106 percent of ASP or 106 percent of WAC to calculate the payment amount in the payment amount benchmark quarter may not be appropriate in instances where the payment limit is based on a different amount, such as in the case of Part B rebatable drugs that are biosimilars for which the add-on amount reflects the VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00285 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S ars for which the add-on amount reflects the VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00285 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 32636 Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules payment amount for the reference biological product (as set forth in section 1847A(b)(8) of the Act). For the purposes of calculating a payment amount under the statute, CMS finalized in the CY 2025 PFS final rule (89 FR 97981) that negative or zero manufacturer’s ASP data are considered ‘‘not available.’’ We also note that the published payment limit for a drug with negative or zero ASP data reported after January 1, 2025, could be based on a positive amount that is carried forward from a previous quarter in accordance with § 414.904(i). In this proposed rule, we are proposing to remove from § 427.302(d)(1) ‘‘determined under section 1847A of the Act’’. This text was inadvertently included in the PFS CY 2025 final rule (89 FR 98583) and needs to be removed because the statutory provision governing the payment amount in the payment amount benchmark quarter, section 184 vertently included in the PFS CY 2025 final rule (89 FR 98583) and needs to be removed because the statutory provision governing the payment amount in the payment amount benchmark quarter, section 1847A(i)(3)(C)(i) of the Act, does not limit that amount to payment amounts determined under section 1847A of the Act and because the payment limits for some Part B rebatable drugs are not determined under section 1847A of the Act. Additionally, in this proposed rule, we are proposing to revise § 427.302(d)(1)(i) by removing ‘‘If a published payment limit is not available for the applicable payment amount benchmark quarter, CMS will use the lower of 106 percent of manufacturer- reported ASP or 106 percent of manufacturer-reported WAC.’’ We also are proposing to revise § 427.302(d)(1)(ii) by removing ‘‘If neither a published payment limit nor manufacturer-reported ASP or WAC data are available, CMS will use WAC data from other public sources to calculate 106 percent of WAC, which, solely for the purposes of this section, CMS will consider to be the payment amount for the payment amount benchmark quarter.’’ If a published payment limit is not available for the applicable payment amount benc he purposes of this section, CMS will consider to be the payment amount for the payment amount benchmark quarter.’’ If a published payment limit is not available for the applicable payment amount benchmark quarter, at § 427.302(d)(1)(i), we are proposing to calculate the payment amount in the payment amount benchmark quarter using positive ASP or positive WAC data reported by manufacturers to the ASP Data Collection System.274 Additionally, at § 427.302(d)(1)(ii), if neither positive ASP nor positive WAC data are available in the ASP Data Collection System for the given quarter, we are proposing to use WAC data from other public sources for the given quarter to 274 Available at https://portal.cms.gov/portal/. calculate the payment amount in the payment amount benchmark quarter. We believe these proposals would allow CMS to calculate a payment amount in the payment amount benchmark quarter that aligns with section 1847A of the Act, rather than strictly limiting this calculation to the lower of 106 percent of ASP or 106 percent of WAC as reported for a given drug, as previously stated in the CY 2025 PFS final rule, which may not align with CMS’ policy for calculating payment limits u ower of 106 percent of ASP or 106 percent of WAC as reported for a given drug, as previously stated in the CY 2025 PFS final rule, which may not align with CMS’ policy for calculating payment limits under § 414.904. Under this proposed approach, we would also avoid calculating inappropriately large inflation rebate amounts for drugs that had zero or negative sales in their payment amount benchmark quarter. f. Reports of Rebate Amounts, Reconciliation, Suggestion of Error, and Payments (§§ 427.500 Through 427.505) Section 1847A(i)(1)(A) of the Act requires the Secretary to provide a report to each manufacturer of a Part B rebatable drug with the following information not later than 6 months after the end of an applicable calendar quarter: (1) the total number of billing units for each Part B rebatable drug; (2) the amount, if any, of the excess average sales price increase (the amount by which the specified amount exceeds the inflation-adjusted payment amount as calculated at § 427.302(g)) for an applicable calendar quarter; and (3) the rebate amount for the Part B rebatable drug. In compliance with section 1847A(i)(1)(B) of the Act, manufacturers of a Part B rebatable drug must pro g)) for an applicable calendar quarter; and (3) the rebate amount for the Part B rebatable drug. In compliance with section 1847A(i)(1)(B) of the Act, manufacturers of a Part B rebatable drug must provide a rebate for each Part B rebatable drug no later than 30 calendar days after the receipt of the information provided by the Secretary in section 1847A(i)(1)(A) of the Act. In accordance with §§ 427.504 and 427.505, CMS has established a standard method and process to issue Rebate Reports to manufacturers of Part B rebatable drugs and to accept manufacturer rebate payments. CMS has established an online portal, the ‘‘Manufacturer Payment Portal’’ (MPP),275 administered by a CMS contractor, through which manufacturers will access their Rebate Reports, submit Suggestions of Error, as applicable, and pay rebate amounts due, as described in §§ 427.504 and 427.505. Manufacturers of Part B rebatable drugs should provide points of contact to view Preliminary Rebate Reports Rebate Reports, enter and modify banking 275 See: https://www.cms.gov/files/document/ medicare-prescription-drug-inflation-rebate- program-onboarding-memo.pdf. information, and initiate payment of rebate amounts through er and modify banking 275 See: https://www.cms.gov/files/document/ medicare-prescription-drug-inflation-rebate- program-onboarding-memo.pdf. information, and initiate payment of rebate amounts through the MPP. i. Rebate Reports and Reconciliation (§ 427.501) As stated in the CY 2025 PFS final rule (89 FR 98264), we codified a multi-step process to provide a manufacturer, as defined in § 427.20, with the rebate information specified in section 1847A(i)(1)(A) of the Act. Specifically, in the CY 2025 PFS final rule (89 FR 98264), CMS established the information that will be included in a Rebate Report at § 427.501, including the NDC(s) and billing and payment codes identified for the Part B rebatable drug, the total number of billing units, the applicable calendar quarter, and the rebate amount due, among other items specified in § 427.501. Consistent with the approach specified in section 80.3 of the Medicare Part B Drug Inflation Rebate Guidance, published December 14, 2023, we propose to add paragraph (c)(3) in § 427.501 to clarify that CMS would report the manufacturer’s rebate amount due as a dollar amount that is rounded to the nearest cent. CMS did not specify an approach to re to add paragraph (c)(3) in § 427.501 to clarify that CMS would report the manufacturer’s rebate amount due as a dollar amount that is rounded to the nearest cent. CMS did not specify an approach to reporting of the rebate amount in the CY 2025 PFS final rule and we believe it is necessary to provide this information to manufacturers to provide notice of CMS’ approach to rounding of the rebate amount. The calculation steps specified in subpart D of part 427 will not include rounded values. In the CY 2025 PFS final rule (89 FR 98578), to determine which data elements would be included when CMS reports the rebate amount to the manufacturer, we stated that we considered the statutory requirements outlined in section 1847A(i)(1)(A)(i) through (iii) of the Act to determine what information is necessary for manufacturers to review the accuracy of the rebate amount while also protecting proprietary information. As stated on page 98578 of the CY 2025 PFS final rule, CMS structured a two-step reporting process to first include a Preliminary Rebate Report to provide an initial notice to manufacturers regarding whether they may owe a rebate amount, followed by the Rebate Report. Further, we pr porting process to first include a Preliminary Rebate Report to provide an initial notice to manufacturers regarding whether they may owe a rebate amount, followed by the Rebate Report. Further, we proposed and finalized additional data elements within the Preliminary Rebate Reports and the Rebate Reports not listed in statute based on input from public comments (for example, the applicable benchmark period, the rebate period CPI–U). CMS did not finalize additional elements suggested, such as claims-level data, after weighing whether any such additional information fulfilled CMS’ statutory obligation and the potential benefits to VerDate Sep 2014 23:26 Jul 15, 2025 Jkt 265001 PO 00000 Frm 00286 Fmt 4701 Sfmt 4702 E:\FR\FM\16JYP3.SGM 16JYP3 3 S L A S O P O R P h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Proposed Rules 32637 manufacturers against the administrative burden additional reporting would impose on the agency and operational feasibility. The data elements set forth in § 427.501(b)(1) and (c)(1) satisfy these considerations. In this proposed rule, CMS clarifies that certain data elements provided to agency and operational feasibility. The data elements set forth in § 427.501(b)(1) and (c)(1) satisfy these considerations. In this proposed rule, CMS clarifies that certain data elements provided to manufacturers in Preliminary Rebate Reports, Rebate Reports, and reconciled reports of a rebate amount (which may each include the same elements, revised as applicable due to updates in the data), are provided to manufacturers of a Part B rebatable drug in a manner consistent with section 1927(b)(3)(D) and 1847A(f)(2)(D) of the Act. Section 1927(b)(3)(D) of the Act specifies that information disclosed by manufacturers or wholesalers under section 1927(b)(3) (submissions of drug product and pricing information under the National Drug Rebate Agreement (NDRA)) or under a Master Agreement with the Secretary of Veterans Affairs (other than WAC) ‘‘is confidential and shall not be disclosed by the Secretary or the Secretary of Veterans Affairs or a State agency (or contractor therewith) in a form which discloses the identity of a specific manufacturer or wholesaler, prices charged for drugs by such manufacturer or wholesaler, except’’ as otherwise allowed in section 1927(b)(2)(D)(i) through m which discloses the identity of a specific manufacturer or wholesaler, prices charged for drugs by such manufacturer or wholesaler, except’’ as otherwise allowed in section 1927(b)(2)(D)(i) through (vii) of the Act. Section 1927(b)(3)(D)(i) provides an exception to this confidentiality requirement ‘‘as the Secretary determines to be necessary to carry out’’ certain sections of the Act, including section 1847A of the Act (that is, the Part B Drug Inflation Rebate Program). Section 1847A(f)(2)(D) of the Act contains parallel confidentiality protections for ASP information reported by manufacturers and wholesalers, including a parallel exception for purposes of Part B rebate effectuation, and would apply to ASP data reported by entities that do not have a NDRA and that report ASP data outside the MDRP. Specifically, CMS anticipates that most data included in Preliminary Rebate Reports, Rebate Reports, reconciled Preliminary Rebate Reports, and reconciled Rebate Reports will not implicate sections 1927(b)(3)(D) or 1847A(f)(2)(D) of the Act, as CMS anticipates that in most cases the party that will receive these reports will be the same party that reported the relevant information. Ho e sections 1927(b)(3)(D) or 1847A(f)(2)(D) of the Act, as CMS anticipates that in most cases the party that will receive these reports will be the same party that reported the relevant information. However, CMS acknowledges that some situations may raise a possibility of disclosure by the Secretary of AMP or ASP information, or information derived therefrom, to a party besides the party that reported the information originally; such situations could implicate sections 1927(b)(3)(D) and/or section 1847A(f)(2)(D) of the Act. Such situations may include, but are not necessarily limited to: (1) transfer of a rebatable drug from one manufacturer to another manufacturer, such that the manufacturer identified in the Rebate Report differs from the manufacturer that originally reported certain benchmark pricing information (see also section III.E.2.a of this proposed rule regarding transfer of labeler codes); and (2) cases in which CMS displays a specified amount, the total HCPCS units, and the proportion of manufacturer-reported ASP units for reports associated with grouped HCPCS codes. In instances where the parties may be different, CMS emphasizes that the data included in a report of th proportion of manufacturer-reported ASP units for reports associated with grouped HCPCS codes. In instances where the parties may be different, CMS emphasizes that the data included in a report of the rebate amount is based on CMS’ independently performed calculations. Though these calculations rely on information disclosed by manufacturers as inputs, in most cases the data reported in a Preliminary Rebate Report and a Rebate Report (or a reconciled version of these reports) will not be identical to the information reported by manufacturers (for example, manufacturers report ASP data at the NDC–11 level, whereas the payment amount in the payment amount benchmark quarter reflects an aggregated, HCPCS-level value that was calculated using the NDC–11-level ASP data). Therefore, reporting such data elements to another manufacturer for purposes of the Part B Drug Inflation Rebate Program would not violate the confidentiality requirements in sections 1927 and 1847A of the Act. Second, on page 98265 of the CY 2025 PFS final rule, CMS stated that the purpose of providing additional data elements not explicitly listed in section 1847A(i)(1)(A)(i) through (iii) of the Act (for example, the ge 98265 of the CY 2025 PFS final rule, CMS stated that the purpose of providing additional data elements not explicitly listed in section 1847A(i)(1)(A)(i) through (iii) of the Act (for example, the payment amount in the payment amount benchmark quarter, specified amounts, and certain unit data) is based on CMS’ assessment of ‘‘data elements that are necessary for a manufacturer to review the Preliminary Report and for a Suggestion of Error.’’ Providing these data in the Preliminary Rebate Report (and corresponding subsequent reports) ensures that—(1) manufacturers will be able to submit a Suggestion of Error, thereby promoting accuracy in the implementation of the rebate program; and (2) manufacturers will have advanced notice of a potential rebate amount due. While section 1847A(i)(1)(A)(i) of the Act states that ‘‘[T]he Secretary shall, for each part B rebatable drug, report to each manufacturer . . . information on the total number of units of the billing and payment code’’ this level of information alone is not sufficient to support CMS’ goal of providing enough information for a manufacturer to submit a Suggestion of Error, if necessary. For Part B rebatable drugs, it is nec