86824 Federal Register / Vol. 85, No. 251 / Thursday, December 31, 2020 / Rules and Regulations 

misappropriating or using information 

from the database for improper 

purposes. The mechanical licensing 

collective’s terms of use or other 

policies governing use of the database 

shall comply with this section. 

(b) Point of contact for inquiries and 

complaints. In accordance with its 

obligations under 17 U.S.C. 

115(d)(3)(D)(ix)(I)(bb), the mechanical 

licensing collective shall designate a 

point of contact for inquiries and 

complaints with timely redress, 

including complaints regarding the 

public musical works database and/or 

the mechanical licensing collective’s 

activities. The mechanical licensing 

collective must make publicly available, 

including prominently on its website, 

the following information: 

(1) The name of the designated point 

of contact for inquiries and complaints. 

The designated point of contact may be 

an individual (e.g., ‘‘Jane Doe’’) or a 

specific position or title held by an 

individual at the mechanical licensing 

collective (e.g., ‘‘Customer Relations 

Manager’’). Only a single point of 

contact may be designated. 

(2) The physical mail address (street 

address or post office box), telephone 

number, and email address of the 

designated point of contact. 

§ 210.33 Annual reporting by the 

mechanical licensing collective. 

(a) General. This section prescribes 

the rules under which the mechanical 

licensing collective will provide certain 

information in its annual report 

pursuant to 17 U.S.C. 115(d)(3)(D)(vii), 

and a one-time written update regarding 

the collective’s operations in 2021. 

(b) Contents. Each of the mechanical 

licensing collective’s annual reports 

shall contain, at a minimum, the 

following information: 

(1) The operational and licensing 

practices of the mechanical licensing 

collective; 

(2) How the mechanical licensing 

collective collects and distributes 

royalties, including the average 

processing and distribution times for 

distributing royalties for the preceding 

calendar year. The mechanical licensing 

collective shall disclose how it 

calculated processing and distribution 

times for distributing royalties for the 

preceding calendar year; 

(3) Budgeting and expenditures for 

the mechanical licensing collective; 

(4) The mechanical licensing 

collective’s total costs for the preceding 

calendar year; 

(5) The projected annual mechanical 

licensing collective budget; 

(6) Aggregated royalty receipts and 

payments; 

(7) Expenses that are more than 10 

percent of the annual mechanical 

licensing collective budget; 

(8) The efforts of the mechanical 

licensing collective to locate and 

identify copyright owners of unmatched 

musical works (and shares of works); 

(9) The mechanical licensing 

collective’s selection of board members 

and criteria used in selecting any new 

board members during the preceding 

calendar year; 

(10) The mechanical licensing 

collective’s selection of new vendors 

during the preceding calendar year, 

including the criteria used in deciding 

to select such vendors, and key findings 

from any performance reviews of the 

mechanical licensing collective’s 

current vendors. Such description shall 

include a general description of any 

new request for information (RFI) and/ 

or request for proposals (RFP) process, 

either copies of the relevant RFI and/or 

RFP or a list of the functional 

requirements covered in the RFI or RFP, 

the names of the parties responding to 

the RFI and/or RFP. In connection with 

the disclosure described in this 

paragraph (b)(10), the mechanical 

licensing collective shall not be required 

to disclose any confidential or sensitive 

business information. For the purposes 

of this paragraph (b)(10), ‘‘vendor’’ 

means any vendor performing 

materially significant technology or 

operational services related to the 

mechanical licensing collective’s 

matching and royalty accounting 

activities; 

(11) Whether during the preceding 

calendar year the mechanical licensing 

collective, pursuant to 17 U.S.C. 

115(d)(7)(C), applied any unclaimed 

accrued royalties on an interim basis to 

defray costs in the event that the 

administrative assessment is inadequate 

to cover collective total costs, including 

the amount of unclaimed accrued 

royalties applied and plans for future 

reimbursement of such royalties from 

future collection of the assessment; and 

(12) Whether during the preceding 

calendar year the mechanical licensing 

collective suspended access to the 

public database to any individual or 

entity attempting to bypass the 

collective’s right to charge a fee to 

recover its marginal costs for bulk 

access outlined in 17 U.S.C. 

115(d)(3)(E)(v)(V) through repeated 

queries, or to otherwise be engaging in 

unlawful activity with respect to the 

database (including, without limitation, 

seeking to hack or unlawfully access 

confidential, non-public information 

contained in the database) or 

misappropriating or using information 

from the database for improper 

purposes. If the mechanical licensing 

collective so suspended access to the 

public database to any individual or 

entity, the annual report must identify 

such individual(s) and entity(ies) and 

provide the reason(s) for suspension. 

(c) December 31, 2021 Update. No 

later than December 31, 2021, the 

mechanical licensing collective shall 

post, and make available online for a 

period of not less than three years, a 

one-time written report that contains, at 

a minimum, the categories of 

information required in paragraph (b) of 

this section, addressing activities 

following the license availability date. If 

it is not practicable for the mechanical 

licensing collective to provide 

information in this one-time report 

regarding a certain category of 

information required under paragraph 

(b) of this section, the MLC may so state 

but shall explain the reason(s) for such 

impracticability and, as appropriate, 

may address such categories in an 

abbreviated fashion. 

Dated: December 21, 2020. 

Shira Perlmutter, 

Register of Copyrights and Director of the 

U.S. Copyright Office. 

Approved by: 

Carla D. Hayden, 

Librarian of Congress. 

[FR Doc. 2020–28958 Filed 12–30–20; 8:45 am] 

BILLING CODE 1410–30–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 423 

[CMS–4189–F] 

RIN 0938–AT94 

Medicare Program; Secure Electronic 

Prior Authorization For Medicare Part 

D 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS). 

ACTION: Final rule. 

SUMMARY: This final rule names a new 

transaction standard for the Medicare 

Prescription Drug Benefit program’s 

(Part D) e-prescribing program as 

required by the ‘‘Substance UseDisorder Prevention that Promotes 

Opioid Recovery and Treatment for 

Patients and Communities Act’’ or the 

‘‘SUPPORT Act.’’ Under the SUPPORT 

Act, the Secretary is required to adopt 

standards for the Part D e-prescribing 


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Federal Register / Vol. 85, No. 251 / Thursday, December 31, 2020 / Rules and Regulations 86825 

program to ensure secure electronic 

prior authorization request and response 

transmissions. In this final rule, we 

amend the Part D e-prescribing 

regulations to require Part D plan 

sponsors’ support of version 2017071 of 

the National Council for Prescription 

Drug Programs (NCPDP) SCRIPT 

standard for use in certain electronic 

Prior Authorization (ePA) transactions 

with prescribers regarding Part Dcovered drugs to Part D-eligible 

individuals. 

DATES: These regulations are effective 

on February 1, 2021. The incorporation 

by reference of certain publications 

listed in the rule was approved by the 

Director of the Federal Register as of 

July 28, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Joella Roland (410) 786–7638. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The purpose of this final rule is to 

adopt a new standard for certain 

transactions concerning Part D-covered 

drugs prescribed to Part D-eligible 

individuals under the Part D eprescribing program. Under this final 

rule, Part D plan sponsors will be 

required to support version 2017071 of 

the National Council for Prescription 

Drug Programs (NCPDP) SCRIPT 

standard for four electronic Prior 

Authorization (ePA) transactions, and 

prescribers will be required to use that 

standard when performing ePA 

transactions for Part D-covered drugs 

they wish to prescribe to Part D-eligible 

individuals. Part D plans, as defined in 

42 CFR 423.4, include Prescription Drug 

Plans (PDPs) and Medicare Advantage 

Prescription Drug Plans (MA–PDs); Part 

D sponsor, as defined in 42 CFR 423.4, 

means the entity sponsoring a Part D 

plan, MA organization offering a MA– 

PD plan, a Programs of All-Inclusive 

Care for the Elderly (PACE) organization 

sponsoring a PACE plan offering 

qualified prescription drug coverage, 

and a cost plan offering qualified 

prescription drug coverage. The ePA 

transaction standard will provide for the 

electronic transmission of information 

between the prescribing health care 

professional and Part D plan sponsor to 

inform the sponsor’s determination as to 

whether or not a prior authorization 

(PA) should be granted. The NCPDP 

SCRIPT standard version 2017071 was 

adopted as a Part D e-prescribing 

program standard for certain defined 

transactions in the April 16, 2018 final 

rule (83 FR 16440) titled ‘‘Medicare 

Program; Contract Year 2019 Policy and 

Technical Changes to the Medicare 

Advantage, Medicare Cost Plan, 

Medicare Fee-for-Service, the Medicare 

Prescription Drug Benefit Programs, and 

the PACE Program’’ that became 

effective June 15, 2018. 

A. Legislative Background 

1. Health Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

The Health Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

(Pub. L. 104–191) was enacted on 

August 21, 1996. Title II, Subtitle F, of 

HIPAA requires covered entities— 

health plans, health care providers that 

conduct covered transactions, and 

health care clearinghouses—to use the 

standards HHS adopts for certain 

electronic transactions. The standards 

adopted by HHS for purposes of HIPAA 

are in regulations at 45 CFR part 162. 

2. Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) 

The Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) (Pub. L. 108–173) was 

enacted on December 8, 2003. It 

amended Title XVIII of the Social 

Security Act (the Act) by redesignating 

Part D as Part E and inserting a new Part 

D to establish a voluntary prescription 

drug benefit program. As part of that 

program, section 1860D–4(e) of the Act, 

as added by the MMA, required the 

adoption of Part D e-prescribing 

standards for electronic prescriptions 

and prescription-related transactions 

between Part D plan sponsors, 

providers, and pharmacies. The 

Secretary’s selection of standards is 

informed by the National Committee on 

Vital and Health Statistics (NCVHS), an 

advisory committee that gives advice to 

the Secretary in accordance with the 

Federal Advisory Committee Act, 

including regarding implementation of 

the administrative simplification 

provisions of HIPAA. Under section 

1860D–4(e)(4)(B) of the Act, NCVHS 

develops recommendations for Part D eprescribing standards, in consultation 

with specified groups of organizations 

and entities. These recommendations 

are then taken into consideration when 

developing, adopting, recognizing, or 

modifying Part D e-prescribing 

standards. The statute further requires 

that the selection of standards be 

designed, to the extent practicable, so as 

not to impose an undue administrative 

burden on prescribers or dispensers, but 

to be compatible with standards 

established under Part C of title XI of 

the Act (the HIPAA standards), comport 

with general health information 

technology standards, and permit 

electronic exchange of drug labeling and 

drug listing information maintained by 

the Food and Drug Administration and 

the Library of Medicine. 

The standards adopted by CMS for 

purposes of the Part D e-prescribing 

program are in regulations at 42 CFR 

423.160. Part D plan sponsors are 

required to support the Part D eprescribing program transaction 

standards, and providers and 

pharmacies that conduct electronic 

transactions for which a program 

standard has been adopted must do so 

using the adopted standard. (For 

additional information about the MMA 

program authority, see the February 4, 

2005 proposed rule (70 FR 6256).) 

3. Substance Use-Disorder Prevention 

That Promotes Opioid Recovery and 

Treatment for Patients and Communities 

Act 

The Substance Use-Disorder 

Prevention that Promotes Opioid 

Recovery and Treatment for Patients 

and Communities Act (Pub. L. 115–271), 

hereinafter referred to as the ‘‘SUPPORT 

Act,’’ was enacted on October 24, 2018. 

Section 6062 of the SUPPORT Act 

amended section 1860D–4(e)(2) of the 

Act to require the adoption of 

transaction standards for the Part D eprescribing program to ensure secure 

ePA request and response transactions 

between prescribers and Part D plan 

sponsors no later than January 1, 2021. 

Such transactions are to include an ePA 

request transaction for prescribers 

seeking an ePA from a Part D plan 

sponsor for a Part D-covered drug for a 

Part D-eligible individual, as well as an 

ePA response transaction for the Part D 

plan sponsor’s response to the 

prescriber. A facsimile, a proprietary 

payer portal that does not meet 

standards specified by the Secretary or 

an electronic form are not treated as 

electronic transmissions for the 

purposes of ePA requests. The ePA 

standards adopted under this authority 

are to be adopted in consultation with 

the NCPDP or other standards 

development organizations the 

Secretary finds appropriate, as well as 

other stakeholders. 

Finally, the SUPPORT Act also 

authorized the adoption of ePA 

transaction standards for Part D-covered 

drugs prescribed to Part D-eligible 

individuals ‘‘notwithstanding’’ any 

other provision of law. 

B. Regulatory History 

In 2000, the Secretary adopted HIPAA 

transaction standards for the ‘‘referral 

certification and authorization 

transaction’’. The term ‘‘referral 

certification and authorization 

transaction’’ is defined at 45 CFR 


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162.1301 as the transmission of any of 

the following: (1) A request from a 

health care provider to a health plan for 

the review of health care to obtain an 

authorization for the health care; (2) a 

request from a health care provider to a 

health plan to obtain authorization for 

referring an individual to another health 

care provider; and (3) a response from 

a health plan to a health care provider 

to a request described in (1) or (2). The 

first HIPAA standard adopted for this 

transaction was version 4010 of the X12 

278 (65 FR 50371, August 17, 2000). In 

2003, the Secretary adopted another 

standard, the NCPDP version 5.1, for 

retail pharmacy drug referral 

certification and authorization 

transactions, and specified that version 

4010 of the X12 278 was to be used only 

for dental, professional, and 

institutional referral certification and 

authorization transactions. (For more 

detailed information, see the February 

20, 2003 Federal Register (68 FR 8398).) 

Still, as of 2003, the Secretary had not 

adopted a standard for ePA for 

medications specifically. 

In 2004, NCPDP formed a multiindustry, multi-Standards Development 

Organization (SDO) ePA Task Group to 

evaluate existing ePA standards and 

promote standardized ePA, with a focus 

on the medication context. The Task 

Group considered the X12 278 standard, 

but determined that there were certain 

gaps in the X12 278 standard that made 

the standard difficult to use for ePA for 

medications, including that the standard 

was unable to support attachments for 

PA determinations, did not incorporate 

free text in certain fields, and did not at 

the time allow functionality for realtime messaging. As a result of these 

findings, the Task Group wrote a letter 

to the HHS Secretary stating that the 

X12 278 standard offered limited 

support for ePA for medications. 

On January 16, 2009, the Secretary 

adopted later versions of the HIPAA 

transaction standards, requiring NCPDP 

Telecommunications D.0 instead of 

NCPDP 5.1, and version 5010 instead of 

version 4010 of the X12 278 for referral 

certification and authorization 

transactions (74 FR 3326). These 

standards are specified at 45 CFR 

162.1302(b)(2). 

In the meantime, the industry 

continued to work to develop and test 

alternative ePA transaction standards 

for use in the medication context. Such 

work led NCPDP to develop what would 

ultimately become its first standard to 

support ePA. In a May 15, 2014, letter 

to the HHS Secretary, NCVHS stated 

that they had received a letter from the 

NCPDP recommending its SCRIPT 

Standard Version 2013101 as a standard 

for carrying out medication ePA 

transactions. (For more information see, 

https://ncvhs.hhs.gov/wp-content/ 

uploads/2014/05/140515lt2.pdf.) In 

support of this recommendation, 

NCVHS reported that NCPDP 

investigators tasked with reviewing the 

X12 278 standards (the 278 v4010 or 

v5010) for medication ePA transactions 

found impediments. These impediments 

were grounded in the standards having 

been designed for requests for review 

and corresponding responses for the 

ePA of health care services (such as for 

procedures/services and durable 

medical equipment), resulting in an 

inability to facilitate medication ePA. 

NCPDP also noted the lack of 

widespread use of the X12 278 

transaction in the medication ePA 

context as evidence of its inadequacy for 

this purpose. 

Despite these findings and NCPDP 

recommendation to NCVHS, we did not 

pursue proposing the NCPDP SCRIPT 

Standard Version 2013101 as a Part D 

eRx program standard for medication 

ePA transactions because it was 

contrary to the HIPAA requirements, 

which continued to require use of the 

X12 278 standard. Similarly, when 

NCPDP wrote to CMS on May 24, 2017 

to recommend the adoption of its 

NCPDP SCRIPT Standard Version 

2017071, we were unable to consider it 

for the Part D e-Rx program due to the 

HIPAA transaction standards in effect at 

that time. 

Of note, the Part D e-Rx program’s 

authorizing statute requires the 

selection of Part D standards that are 

compatible with the HIPAA standards. 

See section 1860D–4(e)(2)(C) of the Act. 

However, given the new authority under 

the SUPPORT Act, we believe we now 

have authority to adopt Part D eRx ePA 

transaction standards 

‘‘notwithstanding’’ any other provision 

of law, if such proposals are framed in 

consultation with stakeholders and the 

NCPDP or other standard setting 

organizations the Secretary finds 

appropriate. See section 1860D–4(e) of 

the Act, as amended by section 6062 of 

the SUPPORT Act. We believe that this 

provision explicitly authorizes us to 

require the use of an ePA standard in 

the Part D context that is different from 

the HIPAA standard, as long as it is for 

use in the ePA of Part D-covered drugs 

prescribed to a Part D-eligible 

individuals. 

As previously described, Part D plan 

sponsors are required to establish 

electronic prescription drug programs 

that comply with the e-prescribing 

standards adopted under the Part D eprescribing program’s authorizing 

statute. There is no requirement that 

prescribers or dispensers implement 

eRx. However, prescribers and 

dispensers who electronically transmit 

and receive prescription and certain 

other information regarding covered 

drugs prescribed for Medicare Part Deligible beneficiaries, directly or 

through an intermediary, are required to 

comply with any applicable standards 

that are in effect. 

As of January 1, 2020, prescribers and 

dispensers are required to use the 

NCPDP SCRIPT standard, 

Implementation Guide Version 2017071, 

for the communication of the same 

prescription or prescription-related 

information between prescribers and 

dispensers for the transactions for 

which prior versions of the NCPDP 

SCRIPT standard were adopted, as well 

as a handful of new transactions named 

at § 423.160(b)(2)(iv). For more 

information, see the April 16, 2018 final 

rule (83 FR 16635) and for a detailed 

discussion of the regulatory history of 

the Part D e-prescribing standards see 

the November 28, 2017 proposed rule 

(82 FR 56437). 

While not currently adopted as part of 

the Part D eRx standard, the NCPDP 

SCRIPT standard version 2017071 

includes 4 transaction standards that 

will enable prescribers to initiate, 

request, and review the 4 response 

transactions from Part D plan sponsors 

at the time of the patient’s visit. These 

eight response transactions include: The 

PA initiation request/response, PA 

request/response, PA appeal request/ 

response, and PA cancel request/ 

response. As noted previously, 

historically we were unable to name this 

ePA transaction standard as a Part D eprescribing program standard. Prior to 

the passage of the SUPPORT Act, the 

Part D program was required to adopt 

standards that were compatible with the 

HIPAA standards, and HIPAA covered 

entities are currently required to use the 

X12 278 to conduct referral certification 

and authorization transactions between 

health plans and health care providers. 

II. Adoption of the NCPDP SCRIPT 

Standard Version 2017071 as the Part 

D ePA Transaction for the Part D 

Program 

A. PA in the Part D Context 

All Part D plans, as defined under 

§ 423.4, including PDPs, MA–PDs, 

PACE Plans offering qualified 

prescription drug coverage, or Cost 

Plans offering qualified prescription 

drug coverage, may use approved PA 

processes to ensure appropriate 

prescribing and coverage of Part Dcovered drugs prescribed to Part Deligible individuals. We review all PA 


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criteria as part of the formulary review 

process. In framing our PA policies, we 

encourage PDP and MA–PD sponsors to 

consistently utilize PA for drugs 

prescribed for non-Part D covered uses 

and to ensure that Part D drugs are only 

prescribed when medically appropriate. 

Non-Part D covered uses may be 

indicated when the drug is frequently 

covered under Parts A or B as 

prescribed and dispensed or 

administered, is otherwise excluded 

from Part D coverage, or is used for a 

non-medically accepted indication. (For 

more information, see the Medicare 

Prescription Drug Manual, chapter 6, 

section 30.2.2.3.) Part D sponsors must 

submit to CMS utilization management 

requirements applied at point of sale, 

including PA. 

We may also approve PA for 

prescriptions when the Part D plan 

desires to manage drug utilization, such 

as when step therapy is required, when 

it needs to establish whether the 

utilization is a continuation of existing 

treatment that should not be subject to 

the step therapy requirements, or to 

ensure that a drug is being used safely 

or in a cost-effective manner. Formulary 

management decisions must be based on 

scientific evidence and may also be 

based on pharmaco-economic 

considerations that achieve appropriate, 

safe, and cost-effective drug therapy. 

The PA process has historically been 

handled via facsimile exchange of 

information or telephone call, and only 

recently via payer-specific web portals. 

However, stakeholders testifying to 

NCVHS generally agree that there is a 

need to move to a user-friendly, realtime ePA for use by prescribers. Minutes 

from NCVHS meetings can be accessed 

at https://ncvhs.hhs.gov/meetingsmeeting/all-past-meetings/. Therefore, 

we believe the adoption of an ePA 

standard for the Part D eRx program will 

improve patient access to required 

medications. 

B. PA for Part D E-Prescribing 

In order to meet the SUPPORT Act’s 

mandate to adopt an ePA transaction 

standard for the Part D-covered drugs 

prescribed to Part D-eligible individuals, 

CMS identified ePA transaction 

standards currently available for use by 

pharmacies and prescribers. These 

included the X12 278 and NCPDP 

Telecommunications D.0 standards, the 

NCPDP SCRIPT standard version 

2017071, and earlier versions of the 

NCPDP SCRIPT standard. We quickly 

ruled out the use of older NCPDP 

SCRIPT standards based on the 

improvements incorporated in the 

current HIPAA Administrative 

Simplification transaction standards 

and our assessment of the enhanced 

functionality available in the NCPDP 

SCRIPT standard version 2017071. 

Then we considered the needs of the 

Part D eRx program; the functionalities 

offered by the remaining two sets of 

standards; NCVHS recommendations, 

stakeholder recommendations based on 

their experience developing, vetting, 

evaluating, revising, and using the 

standards constructed by the respective 

Standards Development Organizations 

(SDOs) including NCPDP, the burden on 

stakeholders to use the standards, the 

security offered by the standards; and 

the current EHR capabilities of the 

industry in order to estimate the 

potential burden each standard will 

impose if it were to be adopted in the 

Part D context. 

The NCPDP Telecommunications D.0 

standard was designed to be a standard 

for insurance companies to approve 

claims, and, to our knowledge, is only 

used in ‘‘pharmacy to plan’’ 

transactions. We found that it does not 

include all of the content fields that may 

be relevant to ePA for medications, and 

had understood that it does not have the 

ability to support transmission of 

information in real time. Then we 

considered the X12 278 standard. The 

X12 278 is already used as the HIPAA 

standard for referral certification and PA 

for dental, professional and institutional 

transactions, and retail pharmacy drugs 

transactions, respectively. 

Based on review of NCPDP’s 

testimony and the letters received from 

NCVHS, we had found that the NCPDP 

and its participant organizations have 

historically concluded (and presented to 

NCVHS via testimony at hearings) that 

the X12 278 standard is not adequate to 

enable ePA in the medication eprescribing context because it does not 

support ‘‘real-time’’ medication eprescribing, meaning a prescriber 

seeking an ePA determination during 

the patient encounter. We understood 

that this was due to the content logic of 

the standard not having the technical 

capabilities to allow for next question 

logic, which allows the prescriber to 

determine medication alternatives and 

determine within minutes if the 

medication will be authorized or if a 

coverage determination is required. In 

addition, we found that the fields, 

transaction messaging, and software 

functioning were not structured to 

include information relevant to ePA, 

and contained mandatory questions that 

were unnecessary for medication ePA. 

Unfortunately, we also found that 

prescribers are unable to customize 

these fields as may be needed for 

medication ePA. 

These findings were largely based on 

NCPDP’s 2016 written testimony to 

NCVHS, which is available via this web 

link: https://www.ncvhs.hhs.gov/wpcontent/uploads/2016/01/Part-2- 

Attachments-NCPDP-WrittenOnly.pdf. 

The NCPDP testimony urged the 

exemption of medication transactions 

from the X12 278 standard. The 

testimony also advocated for NCPDP’s 

May 24, 2017 recommendation to adopt 

the NCPDP SCRIPT Standard Version 

2017071 for ePA transactions in the 

HIPAA context, with a 24-month 

implementation time period due to the 

extensive coding required by health IT 

developers and Part D plans to 

implement the change. 

Although NCPDP’s recommendation 

was to adopt this standard for all HIPAA 

transactions, the Department did not 

elect to make the suggested changes to 

the HIPAA Administrative 

Simplification transaction standards. 

Based on conversations with the 

industry, our own assessment of the 

standard, and under the authority 

provided by Congress to require the use 

of a standard for Part D ePA 

notwithstanding any other provision of 

law, we concluded that the potential 

benefits of adopting user-friendly ePA 

for the Part D eRx program outweigh 

any difficulties that may arise by virtue 

of Part D using a different standard than 

the rest of the industry. 

More specifically, we concluded that 

the NCPDP SCRIPT standard version 

2017071 would support an electronic 

version of today’s PA process by 

providing standardized information 

fields that are relevant for medication 

use, mandatory questions, transaction 

messaging, and standardized ePA data 

elements and vocabulary for exchanging 

the PA questions and answers between 

prescribers and payers, while also 

allowing the payers to customize the 

wording of the questions using free form 

fields. Although the X12 278 standard 

has standard information fields, 

mandatory questions, transaction 

messaging, and standardized data 

element and values, we believed those 

fields were more relevant to use in 

dental, professional, and institutional 

requests for review and response, and 

would not be conducive to medication 

ePA. Since the X12 278 standard does 

not allow payers to customize the 

wording of questions, we believe it 

would be difficult for parties to decide 

how to fill out the fields. In contrast, we 

found that NCPDP SCRIPT Standard 

version 2017071 was specifically 

designed to support medication ePA. 

The standard supports features that 

minimize what the prescriber is asked, 

creating a customized experience based 


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on earlier answers or data automatically 

pulled by their EHR system. These 

features would reduce the amount of 

time a prescriber or their staff spend 

reviewing and responding to the ePA 

questions. We understood that this 

functionality exists in most EHR 

systems, and can be customized based 

on what information is requested by the 

plans. We found great value in this 

potential to automate the collection of 

data required for ePA from data 

available within most EHR systems. 

Furthermore, unlike the X12 278 

standard, NCPDP SCRIPT standard 

version 2017071 supports solicited and 

unsolicited models. A solicited model 

occurs when the prescriber notifies the 

payer that they wish to initiate the PA 

process to determine if an authorization 

is needed for the patient and their 

desired medication. The prescriber 

requests guidance as to what 

information will be required for an ePA 

request for a particular patient and 

medication. The payer then responds 

either with a description of the 

information required, or an indication 

that a PA is not required for that patient 

and medication. An unsolicited model 

can be used when the information 

generated in this first interchange of the 

solicited model is not required. In such 

a case, the prescriber presumes or 

knows that an authorization will be 

required based on past experience or 

other knowledge, anticipates what the 

payer needs, and submits the needed 

information. 

We also found that while X12 278 

uses Electronic Data Interchange (EDI) 

syntax, the NCPDP SCRIPT standard 

version 2017071 uses XML syntax. XML 

helps to ensure the security of 

transactions through the encryption of 

personal health information and 

through use of XML transaction 

processing. XML is a newer syntax that 

provides for an easier interaction among 

different formats and is more easily 

readable between disparate systems and 

when system issues arise. By contrast, 

EDI is an older syntax more commonly 

used when there are fewer companies 

that conduct standard interactions 

among one another. 

Based on this evaluation of the 

candidate standards, coupled with the 

recommendations from NCPDP, CMS 

concluded that the NCPDP SCRIPT 

standard version 2017071 was the most 

appropriate standard to propose for the 

Part D eRx program. 

We explicitly recognized that this 

final rule would not change the ePA 

transaction standards that will be used 

outside of the Part D context. We did 

not believe that it would be problematic 

to use one standard for Part D and 

another standard outside of Part D, 

because we believed that the industry 

was already equipped to use different 

standards for different health plans and 

programs. 

Finally, we considered whether 

adopting the NCPDP SCRIPT standard 

version 2017071 for Part D ePA would 

create any difficulties if an individual 

had multiple forms of drug coverage or 

wished to pay cash for a prescription. 

The SUPPORT Act specifies that the 

adopted standard shall be applicable for 

ePA of Part D-covered drugs prescribed 

to Part D-eligible individuals, but it 

stops short of requiring that the 

prescribed drug be paid for by the Part 

D plan. Thus, even if a prescriber were 

to use the NCPDP SCRIPT standard 

version 2017071 to seek Part D ePA, the 

beneficiary’s right to pay for the drug 

directly, or to use non-Part D coverage 

to pay for the drug would be unaffected. 

However, we noted that the prescriber 

may not use the NCPDP SCRIPT 

standard version 2017071 to seek ePA 

with non-Part D plans. We expected that 

their EHR’s eRx function would be 

capable of using the appropriate HIPAA 

standard or that they may use 

alternative means to seek PA outside of 

the Part D context. Furthermore, where 

a patient has both a Part D plan and a 

supplementary payer, the NCPDP 

SCRIPT standard version 2017071 could 

be used to process the Part D ePA 

transactions in real time, with the 

subsequent claims processing 

transactions made in the usual manner 

if the prescription is filled. Thus, we 

believed our proposal would not be 

overly burdensome for regulated parties, 

even if beneficiaries seek to use their 

non-Part D coverage or elect to self-pay. 

However, in recognition of patient 

rights, we also noted that while the 

prescriber can use the NCPDP SCRIPT 

standard version 2017071 for all Part Dcovered drugs prescribed to Part Deligible individuals, it should refrain 

from doing so in instances in which the 

patient specifically requests that the 

Part D benefits not be accessed. 

As a result of these observations and 

our understanding that most of the 

industry is able to support NCPDP 

SCRIPT standard version 2017071 using 

their current EHRs, we believed that 

requiring plans to support, and 

prescribers to use the NCPDP SCRIPT 

standard version 2017071 ePA 

transactions when prescribing Part Dcovered drugs to Part D-eligible 

individuals will not impose an undue 

administrative burden on plans, 

prescribers or dispensers. Therefore, 

based on its inherent features designed 

to accommodate prescriptions, we 

believed that the NCPDP SCRIPT 

standard version 2017071, which 

includes the following ePA transaction 

capabilities, would be the best available 

option to support ePA between 

prescribers and payers for Part D 

covered drugs prescribed to Part Deligible individuals: 

• PAInitiationRequest and 

PAInitiationResponse 

• PARequest and PAResponse 

• PAAppealRequest and 

PAAppealResponse 

• PACancelRequest and 

PACancelResponse. 

We believed finalization of the ePA 

transaction proposals would enable the 

electronic presentation of ePA questions 

and responses using secure transactions. 

The SUPPORT Act states that the 

Secretary must adopt, and a Part D 

sponsor’s electronic prescription 

program must implement the adopted 

ePA by January 1, 2021. As of January 

1, 2020, plans will already be required 

to use the NCPDP SCRIPT 2017071 

standard for certain Part D-specified 

transactions, so we believed that giving 

plans an additional year to add ePA to 

that list of other NCPDP SCRIPT 

2017071 transactions would not be 

overly burdensome and would ensure 

that the SUPPORT Act was 

implemented as required. 

In addition, the SUPPORT Act, allows 

us to finalize the adoption of an ePA 

standard for Part D-covered drugs to 

Part D-eligible individuals 

notwithstanding any other provision of 

law. Furthermore, we noted our belief 

that our proposal, if finalized, being 

later in time, more specific, and 

authorized by the SUPPORT Act, would 

prevail in a conflict of law analysis. 

Therefore, we proposed adding 

§ 423.160(b)(7) which would require 

Part D plans’ support the noted NCPDP 

SCRIPT standard version 2017071 ePA 

transactions beginning on January 1, 

2021, and that prescribers use that 

standard when conducting ePA for Part 

D-covered drugs prescribed to Part Deligible individuals by the same date. 

This applies to the following list of ePA 

transactions: 

• PAInitiationRequest and 

PAInitiationResponse 

• PARequest and PAResponse 

• PAAppealRequest and 

PAAppealResponse 

• PACancelRequest and 

PACancelResponse 

We welcomed comments on the 

proposed adoption of the NCPDP 

SCRIPT standard version 2017071 for 

these ePA transactions for Part D 

covered drugs prescribed to Part D 

eligible individuals. We also solicited 


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1https://www.cms.gov/About-CMS/story-page/ 

patients-over-paperwork.html. 

comments regarding the impact of the 

proposed transactions and the proposed 

effective date on industry and other 

interested stakeholders, including 

whether the implementation of these 

NCPDP SCRIPT standard version 

2017071 ePA transactions for use by 

prescribers and plans in the Part D 

program would impose an additional 

burden on the industry as a whole. We 

were also interested in hearing input as 

to whether implementation of the 

proposed transactions would constitute 

a significant change for Part D sponsors, 

such that a January 1, 2021 

implementation date would not be 

feasible. We also sought comment on 

strategies to mitigate burden in order to 

support successful adoption of this 

policy, should it be finalized. We also 

sought comment on any additional ways 

that we can support plans if they were 

to be required to transition to the ePA 

standard by the proposed 2021 

deadline. Finally, we solicited 

comments on the alternatives 

considered for the proposed rule. 

In the June 19, 2019 Federal Register 

(84 FR 28450), we published the 

proposed rule that would, if finalized, 

establish a new ePA transaction 

standard for the Part D e-prescribing 

program as required by SUPPORT Act. 

We received 53 timely pieces of 

correspondence in response to the June 

2019 proposed rule. Commenters 

included Part D sponsors, beneficiaries, 

beneficiary advocacy groups, pharmacy 

benefit managers (PBMs), 

pharmaceutical manufacturers, 

pharmacies, IT vendors, and other 

interested parties. Of the comments 

received, most commenters supported 

the rule. Summaries of the public 

comments, our responses to those 

public comments, and our final policies 

are set forth as follows. 

Comment: Many commenters 

supported the proposed rule, stating 

that the standard is already used in the 

industry, and that any encouragement to 

use it for ePA will help streamline the 

PA process. 

Response: We thank commenters for 

their support and agree that ePA will 

likely help streamline the PA process in 

the Part D eRx program context. 

Comment: A few commenters 

expressed their dissatisfaction with 

having to perform PAs so often and 

stated that providers should be paid to 

perform PA. 

Response: While we appreciate 

commenters’ concerns, the use of PA is 

outside the scope of this rule. This final 

rule is limited to establishing the means 

by which ePA will be conducted in the 

Part D eRx program context, not the 

frequency of PAs or provider 

reimbursement. However, we note that 

as a part of the agency’s Patients Over 

Paperwork initiative,1 we are working 

towards improving the priorauthorization process, and solicited 

comment on ways to do so in the June 

11, 2019, Request for Information; 

Reducing Administrative Burden to Put 

Patients Over Paperwork (84 FR 27070). 

We also solicited comment on how to 

improve prior authorization in Medicare 

fee-for-service through our Request for 

Information on the Future of Program 

Integrity issued in October 2019. 

Comment: A number of commenters 

provided comments relating to the 

proposed January 1, 2021, 

implementation date. Some of these 

commenters stated that the January 1, 

2021 deadline was achievable. However, 

other commenters encouraged a later 

deadline for implementation or the use 

of enforcement discretion for the first 2 

years. The reasons given for the 

requested delay include a desire to 

focus on the requirement for Part D 

plans to implement a prescriber real 

time benefit tool (RTBT) by January 1, 

2021 (84 FR 23832) and to allow more 

time for development and testing. One 

commenter requested that we allow 24 

months after the publication of the final 

rule for implementation: 12 months for 

development and testing and 12 months 

for providers to adopt software updates. 

Response: We are sympathetic to 

commenters requesting a longer period 

in which to implement these 

requirements, especially in light of the 

toll that the current public health 

emergency (PHE) related to the 2019 

Novel Coronavirus Disease (COVID–19) 

is taking on the industry, our prescriber 

RTBT requirement, and the need to test 

the technology before use. However, as 

noted in the proposed rule and 

previously in this final rule, the 

SUPPORT Act established the deadline 

by which we are required to implement 

this program standard. The SUPPORT 

Act requires that the Part D eRx program 

‘‘provide for the secure electronic 

transmission of . . . a prior 

authorization request . . .’’ by January 

1, 2021. In light of this mandate and the 

benefits of encouraging ePA, including 

increased interoperability between 

parties and a decrease in time spent 

performing prior authorizations, we are 

allowing Part D sponsors to use NCPDP 

SCRIPT 2017071 for prior 

authorizations beginning January 1, 

2021. In an attempt to balance the 

statutory mandate and the benefits of 

use of this standard with the concerns 

of the commenters requesting more time 

and the burden on Part D plans in light 

of the current PHE, we are only 

requiring use of the standard beginning 

January 1, 2022. We believe that the 

January 1, 2022 deadline affords 

sufficient time to ensure compliance 

with this rule. Although we understand 

the request for a 24-month 

implementation timeframe, we believe 

that the implementation date in this 

final rule appropriately balances the 

benefits of adoption of the standard and 

the time needed to ensure compliance. 

We also note that this is only a 

requirement for Part D plans—not 

providers—so we do not believe that the 

additional 12 months for providers to 

adopt updates needs to be accounted for 

in the implementation timeframe. As a 

result of our decision to delay requiring 

use of the standard until January 1, 

2022, we do not anticipate using 

enforcement discretion. 

As discussed later in this final rule, 

we are finalizing proposed 

§ 423.160(b)(7) as § 423.160(b)(8). 

Additionally, to effectively finalize the 

implementation date changes, we are 

restructuring the regulation text at 

§ 423.160(b)(8). As finalized, paragraph 

(b)(8)(i) allows for use of the NCPDP 

SCRIPT standard by January 1, 2021, 

and paragraph (b)(8)(ii) requires use of 

the standard by January 1, 2022. 

Accordingly, we have redesignated 

proposed paragraphs (b)(7)(i) through 

(iv), which list the covered electronic 

prior authorization transactions, as 

paragraphs (b)(8)(i)(A) through (D). 

Comment: Some commenters stated 

that although they applaud 

implementing the NCPDP SCRIPT 

standard version 2017071 ePA 

transactions for Part D, they believe that 

it should be acceptable for all pharmacy 

transactions. The reasons commenters 

gave for this were their belief that the 

SCRIPT standard is the most 

appropriate standard for all pharmacy 

transactions, regardless of payer or 

inclusion in Part D, and that using two 

standards for the same workflow will 

cause an unnecessary burden. 

Response: We thank the commenters 

for their support for implementing this 

rule, and appreciate their feedback. 

However, suggestions regarding the use 

of these standards outside of the Part D 

eRx program are outside the scope of 

this rule. This final rule implements 

section 6062 of the SUPPORT Act, 

which requires the program to provide 

for the secure electronic transmission of 

Part D drugs for a Part D eligible 

individual enrolled in a Part D plan. As 

such, electronic transmissions outside 

of the Part D context go beyond the 

scope of this rule. 


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Although we are sympathetic to 

concerns about having to support two 

standards within the same workflow, we 

are unable to remedy this issue within 

the scope of this final rule, which 

implements section 6062 of the 

SUPPORT Act. We believe that having 

the two standards is consistent with 

Congress’ intent when promulgating this 

section of the SUPPORT Act, since the 

statutory mandate only extended to 

providing for electronic transmissions 

in Part D. 

Comment: A commenter requested 

that CMS either issue clarifying 

guidance in the final rule to indicate 

that HIPAA’s Referral Certification and 

Authorization standards do not apply to 

ePA transactions for prescription drugs, 

or name the NCPDP SCRIPT standard 

version 2017071 as the HIPAA standard 

for ePA transactions for prescription 

drugs. The commenter stated that the 

ASC X12 prior authorization transaction 

named under HIPAA is for medical 

benefits and is not effective for the 

exchange of information related to prior 

authorizations of products covered 

under a pharmacy benefit. 

Response: We are unable to do as 

requested. Suggestions regarding the use 

of these standards outside of the Part D 

eRx program are outside the scope of 

this rule. This final rule implements 

section 6062 of the SUPPORT Act, 

which requires the program to provide 

for the secure electronic transmission of 

Part D drug for a Part D eligible 

individual enrolled in a Part D plan. As 

such, electronic transmissions outside 

of the Part D context go beyond the 

scope of this rule. 

Comment: Several commenters stated 

that CMS should allow and encourage 

other ePA standards, such as the Fast 

Healthcare Interoperability Resources 

(FHIR) standard promulgated by the 

standards development organization 

Health Level 7 (HL7). This standard 

supports application programming 

interfaces (APIs), and encouraged us to 

adopt these standards for other eRx 

contexts. 

Response: Although we appreciate 

this feedback, these comments are 

outside the scope of this rule. The 

proposed rule only covered our 

proposals to implement the SUPPORT 

Act’s mandate to implement an ePA 

standard under Part D. At this time, the 

suggested standard and application 

programming interfaces are not used to 

support most pharmacy transactions. 

We will continue to monitor the 

development, maturity, and industry 

adoption of HL7 FHIR standards for 

future rulemaking. 

In addition, to the extent the 

commenters were suggesting the 

adoption of more broadly applicable 

standards outside of the Part D eRx 

program, section 6062 of the SUPPORT 

Act, which this rule implements, only 

allows for the use of an ePA standard 

that is different from the HIPAA 

standard if it is for a Part D covered drug 

prescribed to a Part D eligible 

individual. Other ePA medication 

transactions outside of Part D are still 

governed by HIPAA standards. 

Comment: Some commenters 

requested more guidance surrounding 

the use of PA generally, including 

information about PA processing times 

allowed under Part D and how PAs 

interact with subregulatory guidance for 

Medicare health and drug programs. 

Response: Although we appreciate 

commenters’ interest in learning more 

about use of PA in the Medicare 

programs, these comments are not 

within the scope of this rule. As 

previously mentioned, the sole purpose 

of this rule is to implement the 

SUPPORT Act’s mandate that requires 

our adoption of a new standard for ePA 

in the Part D eRx program. However, we 

would note that PA is a key component 

of utilization management under a Part 

D plan, and consistent with § 423.153, 

we would further remind commenters 

that each Part D plan is required to 

review the effectiveness of its utilization 

management policies and systems. Such 

review should include ensuring the 

prevention of over-utilization and 

under-utilization of prescribed 

medications. To the extent that 

automation of the PA function will 

allow plans to improve their ongoing 

monitoring of utilization management 

programs through enhanced reporting, 

they should use that improved 

functioning. In addition, as coverage of 

drugs that undergo a PA constitutes a 

coverage determination, such 

determinations are subject to all 

applicable coverage determination 

standards, timelines, and requirements. 

Comment: A commenter requested 

clarification about whether the 

proposed rule, if finalized, would ban 

prescribers from conducting PA using 

non-electronic means or whether it 

would only require prescribers to use 

the NCPDP SCRIPT standard version 

2017071 ePA transactions if they intend 

to process PA via electronic means. 

Another commenter believed that 

naming the NCPDP SCRIPT standard 

version 2017071 ePA transactions was 

premature given the challenges inherent 

in the practice of rural medicine, which 

can be impacted by limited or 

inconsistent technological capabilities. 

Response: This rule only requires 

plans support the NCPDP SCRIPT 

standard version 2017071. Prescribers 

who elect to conduct PA electronically 

in the Part D eRx context will be 

required to do so using the adopted 

standards. Prescribers remain free to use 

non-electronic means of conducting PA, 

and Part D plans are still required to 

accept prior authorization requests via 

existing means, such as via facsimile 

(FAX). 

Comment: A commenter requested 

that CMS adopt the same electronic 

prescribing standards used for 

prescribers to communicate with 

Prescription Drug Management Program 

(PDMP) databases. The commenter did 

not identify the standard generally used 

by PDMPs. 

Response: We did not consider the 

standard the commenter alluded to 

because without knowing the details of 

the standard generally used by PDMPs 

we are unable to assess whether it was 

or was not a standard considered for 

Part D eRx ePA. We appreciate the 

commenter’s concerns about 

interoperability, but we are unable to 

delay naming of the proposed 

transactions while we evaluate the 

degree to which PDMPs may or may not 

be using the NCPDP SCRIPT standard 

version 2017071 or some alternative. 

Due to the statutory deadline to 

implement ePA in the Part D eRx 

program, we needed to select a standard 

that is ready for use in ePA transactions. 

Comment: Another commenter urged 

CMS to allow voluntary use of other 

standards if mutually agreed upon 

between trading partners. 

Response: We would like to 

emphasize that this rule proposed the 

NCPDP SCRIPT standard version 

2017071 ePA transactions in part 

because health plans are already 

required to support use of that same 

version of the standard for other 

transactions beginning January 1, 2020, 

in accordance with the April 2018 final 

rule. As the ePA transactions are part of 

version 2017071 of the NCPDP SCRIPT 

standard, we do not believe it would be 

advisable to allow voluntary use of a 

different version of the NCPDP SCRIPT 

standard as that would require all 

trading partners to support different 

versions of the standard at the same 

time in order to comply with Part D 

program requirements, which we 

believe would impose unnecessary 

burden. CMS will consider proposing 

use of future updates to the NCPDP 

SCRIPT standard in future Part D eprescribing rules as the need arises. 

In order to ensure that ePA permeates 

across the industry for Part D and that 

multiple Part D stakeholders can 

participate in it, we believe that one Part 

D ePA standard should be used rather 


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than simply allowing any stakeholder to 

use his/her preferred standard. 

In addition, based on our analysis of 

available standards that led to our 

proposing to adopt the NCPDP SCRIPT 

standard version 2017071 for ePA under 

Part D, we question how many trading 

partners would wish to support the 

added cost and complexity of using ePA 

transactions drawn from an entirely 

different standard. Requiring consistent 

use of the same ePA standards 

throughout the Part D eRx program also 

ensures all plans and prescribers serving 

Part D eligible patients are able to 

conduct ePA transactions with one 

another. 

Comment: One commenter noted that 

although they do not disagree with our 

characterization of the X12 278 

transaction as the wrong type of 

standard for this transaction, they did 

alert us to the fact that the X12 278 

transaction can now be used in real-time 

transactions, in addition to batched 

transactions. 

Response: We thank the commenter 

for alerting us to this new development, 

and have consequently amended the 

statement in the background section to 

clarify that the X12 278 standard was 

not a real-time transaction in 2004. 

Comment: A commenter disagreed 

with our statement that the SCRIPT 

transaction can determine whether the 

beneficiary’s plan requires a PA for a 

given transaction, stating that the 

standard is not designed to determine 

whether prior authorization is required 

for a given transaction. 

Response: We thank the commenter 

for this correction. We have not 

included this statement in the 

background section of this final rule. 

Comment: A commenter expressed 

concern that this final rule would 

conflict with the information blocking 

and certification requirements from the 

March 4, 2019, Office of the National 

Coordinator for Information Technology 

(ONC) notice of proposed rulemaking 

(NPRM) (84 FR 7424), should it be 

finalized. Another commenter urged 

HHS to incorporate the NCPDP ePA 

transaction standard into future 

certification editions from ONC. 

Response: In ONC’s May 1, 2020 final 

rule titled ‘‘21st Century Cures Act: 

Interoperability, Information Blocking, 

and the ONC Health IT Certification 

Program’’ (ONC 21st Century Cures Act 

final rule), ONC finalized policies 

which directly align with the standard 

adopted in this final rule that supports 

ePA transactions and standards (85 FR 

25642). Specifically, the ONC 21st 

Century Cures Act final rule adopted the 

NCPDP SCRIPT standard version 

20170701 for Health IT Modules seeking 

certification to the § 170.315(b)(3) 

electronic prescribing criterion under 

the ONC Health IT Certification 

Program. The ONC 21st Century Cures 

Act final rule also adopted the ePA 

transactions in the NCPDP SCRIPT 

standard version 2017071 as optional 

for the updated § 170.315(b)(3) 

electronic prescribing criterion (85 FR 

25685). As noted in the 21st Century 

Cures Act final rule, ONC believes the 

adoption of the ePA transactions 

included in version 2017071 of the 

NCPDP SCRIPT standard as optional 

transactions within this certification 

criteria supports alignment between the 

health IT certification program and Part 

D ePA policy. 

We also note that CMS published the 

Patient Access and Interoperability final 

rule (85 FR 25510) concurrently with 

ONC’s 21st Century Cures Act final rule 

on May 1, 2020. The CMS final rule 

requires certain payers, such as such as 

MA plans and Medicaid and CHIP 

programs, to make enrollee electronic 

health information held by the payer 

available through application 

programming interfaces (APIs) 

conformant to HL7 FHIR and other API 

standards that ONC adopted in 45 CFR 

170.215. 

Neither rule finalized a standard for 

conduct of ePA, nor did they require 

ePA be conducted through APIs 

conformant with the FHIR standard. The 

purpose of the current rule is to 

encourage the exchange of electronic 

health information by naming a 

standard suitable to support ePA by 

January 1, 2021. We will continue to 

monitor efforts within the health IT 

industry to support electronic 

prescribing transactions through 

emerging standards such as HL7 FHIR 

and technologies like APIs and will 

consider such developments in future 

rulemaking. 

Comment: A commenter expressed 

concern that this rule would conflict 

with the CMS Interoperability and 

Patient Access proposed rule that was 

issued on March 4, 2019 (84 FR 7610), 

should it be finalized. In CMS 

Interoperability and Patient Access 

proposed rule, we noted that in June 

2018, in support of the Da Vinci project 

(a private-sector initiative led by Health 

Level 7 (HL7), the CMS Medicare FFS 

program began: (1) Developing a 

prototype Documentation Requirement 

Lookup Service for the Medicare FFS 

program and (2) populating it with the 

list of items/services for which prior 

authorization is required by the 

Medicare FFS program (84 FR 7613). 

Response: This rule can be finalized, 

as proposed, without conflicting with 

the CMS Interoperability and Patient 

Access final rule (85 FR 25510) which 

did not require payers to develop a 

prototype Documentation Requirement 

Lookup Service (DRLS). The DRLS was 

described in the proposed rule as work 

CMS was doing related to HL7 FHIR 

standards. We believe that the listing of 

items or services for purposes of a 

DRLS, as encouraged by CMS, is 

separate and distinct from requiring that 

a certain standard be used for ePA 

transactions for prescribers. This rule 

would require only the latter in the Part 

D eRx program context. Although CMS 

has recently proposed a rule requiring 

payers to use DRLS (85 FR 82586), this 

requirement does not extend to Part D. 

As a result, we continue to believe that 

this is separate and distinct from the 

requirements of this final rule. 

Comment: A few commenters 

questioned whether pharmacies would 

be permitted to actively use the NCPDP 

SCRIPT standard version 2017071 

transactions for ePAs performed on 

behalf of a beneficiary enrolled in Part 

D. One of these commenters stated that 

pharmacies that serve beneficiaries in 

long term care (LTC) settings would 

benefit from using the ePA transactions. 

They noted that applicable state laws 

permit dispensers to fulfill the terms of 

a prior authorization and suggest that 

we change the verbiage of the proposed 

regulation to allow ‘‘dispensers (as 

applicable)’’ to the parties required to 

use the NCPDP SCRIPT standard 

version 2017071 ePA transactions 

adopted in this final rule. 

Response: We appreciate the 

commenters’ concerns. However, this 

rule does not seek to change the current 

regulation with regard to who may 

request a PA on behalf of the 

beneficiary. Under our regulation at 

§ 423.566(c), a pharmacy cannot request 

a coverage determination on behalf of an 

enrollee, unless the pharmacy is the 

enrollee’s appointed representative. We 

believe that changing who may request 

a PA is outside the scope of the 

proposed rule. However, we will take 

the suggestion under advisement. 

Comment: A commenter requested 

that CMS use this regulation as an 

opportunity to implement other 

provisions of the SUPPORT Act, such as 

section 2003 of the SUPPORT Act 

requiring the use of e-prescribing for 

opioids. 

Response: We understand the 

importance of ensuring that all 

provisions of the SUPPORT Act are 

implemented. However, what is 

suggested in this comment is outside the 

scope of this rule, as the proposed rule 

only sought to implement section 6062 

of the SUPPORT Act—not the entirety 

of the Act. 


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Comment: A commenter noted that 

the proposed NCPDP SCRIPT standard 

does not in itself prepopulate National 

Drug Codes (NDCs), rather NDCs are 

prepopulated by eRx and EHR systems 

if they are capable of doing so and set 

up to pre-fill such fields with known 

values. 

Response: Upon re-evaluation we now 

understand that these NDCs are indeed 

completed by eRx and EHR systems 

with certain capabilities that are set up 

to do this work. During our initial 

research we had seen that the NDCs 

were widely prepopulated and 

incorrectly attributed this to the NCPDP 

SCRIPT standard. We appreciate this 

correction. In light of this 

understanding, we believe that the 

promulgation of a single standard 

electronic ePA for Part D-covered drugs 

prescribed to Part D-eligible individuals 

will encourage any remaining eRx and 

EHR vendors that do not offer the 

functionality to prepopulate NDCs to 

begin to do so, and continue to follow 

the NCPDP SCRIPT implementation 

guide. 

Comment: A commenter clarified that 

the NCPDP Telecommunications 

standard D.0 is, indeed, a real time 

transaction. 

Response: We appreciate the 

opportunity to further explain our 

assertions in the proposed rule. As the 

commenter states, the NCPDP 

Telecommunications D.0 standard is, 

indeed, a real time standard. However, 

because it is designed as a transaction 

between the pharmacy and the plan, it 

does not allow a prescriber to transmit 

information necessary to satisfy a prior 

authorization in real time. In practical 

terms when a drug is subject to prior 

authorization the Telecommunications 

standard conveys a real-time rejection to 

the pharmacy but leaves the prescriber 

unaware of the rejection, and unable to 

convey information to the plan which 

would satisfy the terms of the PA. To 

our knowledge, the NCPDP SCRIPT 

standard version 2017071 remains the 

only mechanism by which a prescriber 

can satisfy the terms of a prior 

authorization electronically in real time. 

Comment: One commenter 

recommended that we amend our 

regulation text so that it states that the 

prescription-related information flows 

between prescribers and Part D 

sponsors, rather than prescribers and 

dispensers, which is what we stated in 

the proposed rule. 

Response: We thank the commenter 

for the correction and have amended the 

text accordingly. 

Comment: A commenter noted that 

since the May 2019 final rule amended 

the regulation text to include 

§ 423.160(b)(7), the proposed rule 

should have been amended to include a 

new § 423.160(b)(8). 

Response: We appreciate this 

comment and are finalizing the proposal 

in § 423.160(b)(8). 

Comment: A commenter noted that 

some of the citations to the HIPAA 

standards at section 1860D–4(e)(4) of 

the Act and the new SUPPORT Act 

mandate at section 1860D– 

4(e)(2)(E)(ii)(III) of the Act were 

incorrect. 

Response: We have revised the 

preamble to correct the citations noted 

by the commenter. 

After review and consideration of the 

comments received, and for the reasons 

discussed herein and in the proposed 

rule, we are finalizing our proposed 

revision, with the following 

modifications: 

• We are finalizing proposed 

§ 423.160(b)(7) as § 423.160(b)(8). 

• We are restructuring the final 

regulation text to permit Part D sponsors 

to use the standard beginning January 1, 

2021 at § 423.160(b)(8)(i), but not 

require its use until January 1, 2022 at 

§ 423.160(b)(8)(ii). 

• We are redesignating proposed 

§ 423.160(b)(7)(i) through (iv) which list 

the covered electronic prior 

authorization transactions, as 

§ 423.160(b)(8)(i)(A) through (D) in this 

final rule. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501 et seq.), 

we are required to provide 60-day notice 

in the Federal Register and solicit 

public comment before a ‘‘collection of 

information’’ requirement is submitted 

to the Office of Management and Budget 

(OMB) for review and approval. For the 

purposes of the PRA and this section of 

the preamble, collection of information 

is defined under 5 CFR 1320.3(c) of the 

PRA’s implementing regulations. 

In order to fairly evaluate whether an 

information collection should be 

approved by OMB, section 3506(c)(2)(A) 

of the PRA requires that we solicit 

comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

Our June 19, 2019 (84 FR 28450) 

proposed rule solicited public comment 

on each of the required issues under 

section 3506(c)(2)(A) of the PRA for our 

proposed information collection 

requirements, burden, and assumptions. 

Two comments were received. A 

summary of the comments is set out in 

this section of the document in this 

section of this rule along with our 

response. 

The following changes will be 

submitted to OMB for approval under 

control number 0938–TBD (CMS– 

10755). Please note that our proposed 

rule indicated that the changes would 

be submitted under control number 

0938–0763 (CMS–R–262). However, 

based on internal review we have since 

determined that the changes should be 

set out under a new collection of 

information request. Importantly, the 

new collection of information request 

(0938–TBD; CMS–10755) has no effect 

on our proposed and final requirements 

and burden estimates. Rather, we are 

simply changing the location of those 

requirements and burden estimates. 

Please note that OMB will issue the new 

control number when ready. In the 

meantime it is to be determined (or 

‘‘TBD’’). The new collection of 

information request’s CMS 

identification number (CMS–10755) is 

not subject to change. 

This rule implements section 6062 of 

the SUPPORT Act, which requires the 

adoption of technical standards for the 

Part D e-prescribing program to help 

ensure secure ePA requests and 

response transactions. Specifically, this 

final rule amends the Prescription Drug 

Benefit program (Part D) regulations to 

require under § 423.160(b)(8) that Part D 

plan sponsors (hereinafter, ‘‘Part D 

plans’’ or ‘‘plans’’) have the technical 

capability to support the National 

Council for Prescription Drug Programs 

(NCPDP) SCRIPT standard version 

2017071 when performing ePA for Part 

D-covered drugs prescribed to Part Deligible individuals. While this final 

rule will not impact the PA criteria 

which Part D plans have in place, the 

electronic process will make the PA 

process less burdensome for plans and 

prescribers. Prescribers who are 

currently capable of using an electronic 

prescribing software likely already have 

access to the ePA transaction standards, 

and would be expected to generally be 

able to access the transactions without 

cost. As ePA is implemented, the 

current system of manual processing 

(fax and phone calls) will fade in the 

Part D context since plans will be able 

to use the adopted standard, and 

incentivize their prescribers to conduct 

ePA. We expect that prescribers will be 

more likely to conduct ePA now that 


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Federal Register / Vol. 85, No. 251 / Thursday, December 31, 2020 / Rules and Regulations 86833 

this less burdensome standard is 

currently available to them. 

We estimate a one-time cost for plans 

to implement the necessary changes to 

support the ePA transactions within 

NCPDP SCRIPT standard version 

2017071. After consulting with industry 

stakeholders, we have concluded that 

implementing or building the type of 

logic which will allow systems 

engineers to produce the interactive 

logic which the NCPDP SCRIPT 

standard requires can vary based on 

how the PA criteria are currently 

documented, but $6,500 is the 

approximate average cost as the cost 

varies based on the size and expertise of 

the plan. The $6,500 figure includes 

only the plan’s internal costs including 

labor, initial development and 

programming, and systems support to 

transform each of its CMS-approved PA 

criteria from a free flowing manual 

process suitable for telephonic or 

facsimile communication with a clinical 

professional into a 2017071-compliant 

step-by-step query process that can be 

adapted for use by programmers. Based 

on our internal data, we estimate that 

this rule will apply to 774 plans. We 

estimate that only 2 percent (or 15) of 

the plans (774 plans × 0.02) do not 

already have the internal ePA process 

capabilities that will be required to 

build the logic to support NCPDP 

SCRIPT standard version 2017071’s ePA 

transactions. In that regard we estimate 

a one-time implementation cost of 

approximately $100,000 (15 plans × 

$6,500/plan) or $33,000 annually when 

factoring in OMB’s 3-year approval 

period, which is required for all new 

Paperwork Reduction Act activities 

($100,000/3 years). We are annualizing 

the one-time estimate since we do not 

anticipate any additional burden after 

the 3-year approval period expires. 

Based on our informal conversations 

with the industry, we believe that the 

ongoing cost that plans will incur to 

process ePA transactions range from 

$1.20 to $2.85 per transaction, which 

varies based on vendor and volume. 

Based on internal CMS data, for the 774 

plans we estimate that 560,430 PAs are 

performed every year and that each 

authorization requires two individual 

transactions, one for receiving and one 

for responding. Using $2.03 as the 

average cost per transaction ([$1.20 + 

$2.85]/2) we estimate $4.06 per 

authorization ($2.03/transaction × 2 

transactions/authorization). In aggregate 

we project an ongoing transaction (both 

receiving and responding) cost of 

$2,275,346 annually ($4.06/ 

authorization × 560,430 authorizations) 

for all plans. 

With regard to current practice, 98 

percent (or 15) of the plans (774 plans 

× 0.02) already have the capacity to 

process automated PAs. However, when 

they perform these processes manually, 

they spend an average of $10.00/fax PA 

for 549,221.4 authorizations (560,430 

authorizations × 0.98) at a cost of 

$5,492,214 (549,221 PAs × $10.00/PA). 

The remaining 15 plans that rely on 

phone or fax and manual review spend 

an average of $25.00/manual PA for 

11,209 authorizations (560,430 

authorizations × 0.02) at a cost of 

$280,225, (11,209 PAs × $25.00/PA). In 

this regard the transaction cost for the 

current practice is approximately 

$5,729,439 ($5,492,214 + $280,225). 

In addition, we believe that there will 

be added savings due to fewer appeals 

being processed. We estimate that 900 

appeals are processed annually due to 

mistakes emanating from the use of 

manual PA, including missing PA 

information and the PAs not being 

received by the correct party. We 

believe that these appeals would be 

eliminated, since ePA requires input of 

all necessary information for the 

transactions to be processed and 

provides a secure means of delivery to 

the recipients. We estimate that it costs 

$101.63 to process each of these appeals 

based on the 1.25 hours at $69.72/hr 

that it takes a quality officer at each 

organization to process the appeal and 

the cost of sending the appropriate 

notices, which would lead to a savings 

to plans of $91,467 (900 appeals × 

$101.63). When we add this savings to 

the $3,454,093 already saved, we project 

a total annual savings of $3,454,560 

($3,454,093 + $91,467). This figure 

differs slightly from the estimate that 

was set out in our June 19, 2019 

proposed rule. That rule had 

inadvertently excluded the savings 

emanating from the revised number of 

appeals. In addition, the rule had 

overestimated the amount of plans that 

would need to make changes to 

implement the standard and the burden 

to implement it. We are correcting that 

oversight in this final rule. 

Since this final rule only requires 

plans, and not prescribers, to implement 

the standard, we are not estimating costs 

that assume prescribers will transition 

to this standard. As a result, we did not 

include the aforementioned transaction 

costs and appeals savings in our 

tabulation of the final costs of 

implementing this rule. Therefore, we 

believe that the final cost of this rule 

will be the $100,000 for plans to 

implement this standard. As indicated, 

we received public comments related to 

the PRA. The following summarizes the 

comments and provides our response: 

Comment: A commenter requested 

that CMS include the burden to 

physicians. Another commenter 

expressed concern about the potential 

costs to practices to switch to the new 

standard, and requested that we bar 

EHR vendors from passing on additional 

transaction costs to providers or 

patients. Another commenter stated that 

they believe our assumption incorrectly 

assumed that a provider’s electronic 

prescribing software already has support 

for all NCPDP SCRIPT transactions. 

Response: We thank commenters for 

the information about other factors that 

we should consider when estimating the 

implementation costs for providers to 

implement a new standard. However, 

we clarify that this rule imposes 

requirements only on Part D plans—if 

physicians elect to utilize ePA in the 

Part D program context, they will be 

required to do so using the adopted 

standard, but they are free to conduct 

PA through other means. We believe our 

proposed rule incorrectly included 

prescriber costs in our estimates. We 

have removed these estimates from the 

calculations on this final rule. While we 

understand the potential costs for 

providers and EHR vendors to pass on 

transaction costs to providers or plans, 

we do not have the statutory authority 

to regulate EHRs. As previously 

mentioned, this final rule implements 

section 1860D–4(e)(2)(E) of the Act 

requiring that the program provide for 

the secure electronic transmission of 

prior authorization requests and 

responses. However, this section of the 

Act does not expand CMS’s authority to 

allow the agency to regulate EHR 

vendors or specify who may bear the 

cost of implementing the transaction. As 

a result, we are not able to adopt this 

commenter’s suggestion that we bar 

EHR vendors from passing on 

transactions costs to providers or 

patients. 

Comment: A commenter requested 

that CMS revise its estimates to account 

for ongoing maintenance costs 

associated with ePA. 

Response: We acknowledged in the 

proposed rule that there would be a cost 

associated with maintenance of systems 

to support electronic prior 

authorizations. These costs are included 

in our ongoing methodology which, 

based on our research, we estimated to 

range from $1.20 to $2.85 per 

transaction for a total of $2.27 million. 

Since commenters did not provide 

specific feedback on the veracity of this 

estimate, we will finalize the estimates 

as initially presented. 


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86834 Federal Register / Vol. 85, No. 251 / Thursday, December 31, 2020 / Rules and Regulations 

IV. Regulatory Impact Statement 

A. Statement of Need 

This rule implements provisions of 

the SUPPORT Act, which require the 

adoption of transaction standards for the 

Part D program that will help ensure 

secure electronic PA request and 

response transactions. Specifically, this 

final rule amends the Prescription Drug 

Benefit program (Part D) regulations to 

require that Part D sponsors have the 

technical capability to support the 

National Council for Prescription Drug 

Programs (NCPDP) SCRIPT standard 

version 2017071 when performing 

electronic Prior Authorization (ePA) for 

Part D-covered drugs prescribed to Part 

D-eligible individuals. 

B. Overall Impact 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Act, section 

202 of the Unfunded Mandates Reform 

Act of 1995 (March 22, 1995; Pub. L. 

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), the 

Congressional Review Act (5 U.S.C. 

804(2)), and Executive Order 13771 on 

Reducing Regulation and Controlling 

Regulatory Costs (January 30, 2017). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any one year). 

This rule does not reach the economic 

threshold and thus is not considered a 

major rule. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $7.5 million to $38.5 

million annually. Individuals and states 

are not included in the definition of a 

small entity. We are not preparing an 

analysis for the RFA, because we have 

determined, and the Secretary certifies, 

that this final rule will not have a 

significant economic impact on a 

substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare an RIA if a rule 

may have a significant impact on the 

operations of a substantial number of 

small rural hospitals. This analysis must 

conform to the provisions of section 604 

of the RFA. For purposes of section 

1102(b) of the Act, we define a small 

rural hospital as a hospital that is 

located outside of a Metropolitan 

Statistical Area for Medicare payment 

regulations and has fewer than 100 

beds. We are not preparing an analysis 

for section 1102(b) of the Act because 

we have determined, and the Secretary 

certifies, that this rule will not have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any one year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2020, that threshold is approximately 

$156 million. This rule will have no 

consequential effect on state, local, or 

tribal governments or on the private 

sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on state and local 

governments, preempts state law, or 

otherwise has Federalism implications. 

Since this rule does not impose any 

costs on state or local governments, the 

requirements of Executive Order 13132 

are not applicable. 

If regulations impose administrative 

costs on reviewers, such as the time 

needed to read and interpret this final 

rule, then we should estimate the cost 

associated with regulatory review. There 

are currently 774 PD contracts 

(excluding PACE organizations, since 

they are not affected by this regulation)). 

We assume each entity will have one 

designated staff member who will 

review the entire rule. Other 

assumptions are possible and will be 

reviewed after the calculations, in this 

section of this rule. 

Using the wage information from the 

Bureau of Labor Statistics (BLS) for 

medical and health service managers 

(code 11–9111), we estimate that the 

cost of reviewing this final rule is 

$107.38 per hour, including fringe 

benefits and overhead costs (http://

www.bls.gov/oes/current/oes_nat.htm). 

Assuming an average reading speed, we 

estimate that it will take approximately 

12.5 hours for each person to review 

this final rule. For each entity that 

reviews the rule, the estimated cost is 

therefore, $1,342 (12.5 hours × $107.38). 

Therefore, we estimate that the total cost 

of reviewing this final rule is $1,342,000 

($1,342 × 1,000 reviewers). 

Note that this analysis assumed one 

reader per contract. Some alternatives 

include assuming one reader per parent 

entity. Using parent organizations 

instead of contracts will reduce the 

number of reviewers to approximately 

500 (assuming approximately 250 

parent organizations), and this will cut 

the total cost of reviewing in half. The 

argument for this is that a parent 

organization might have local reviewers; 

even if that parent organization has 

several contracts that might have a 

reader for each distinct geographic 

region, to be on the lookout for effects 

of provisions specific to that region. 

Executive Order 13771, titled 

Reducing Regulation and Controlling 

Regulatory Costs, was issued on January 

30, 2017 (82 FR 9339, February 3, 2017). 

It has been determined that this rule 

does not impose more than a de 

minimis costs; and thus, is not a 

regulatory action for purposes of E.O. 

13771. 

C. Anticipated Effects 

As stated previously, section 6062 of 

the SUPPORT Act requires the adoption 

of technical standards for the Part D 

program that will ensure secure ePA 

request and response transactions no 

later than January 1, 2022, and allows 

for Part D sponsors to begin using the 

standard by January 1, 2021. We are 

codifying requirements at § 423.160, 

which require plans to support the 

National Council for Prescription Drug 

Programs (NCPDP) SCRIPT standard 

version 2017071 by January 1, 2022 

when performing ePA for Part Dcovered drugs prescribed to Part Deligible individuals. This final rule has 

the following impacts. 

Entities affected by the PA processes 

include pharmacies receiving ePAs from 

providers and filling the prescription, 

prescribers who use ePA, the Medicare 

Part D Program, Part D plans, EHR 

vendors who need to modify their 

products, and the Promoting 

Interoperability Programs, for any Part D 

prescribers in these programs. 

Information about what programs are 

included in the Medicare Promoting 

Interoperability Programs is available 

via this web link: https://www.cms.gov/ 

Regulations-and-Guidance/Legislation/ 

EHRIncentivePrograms/ 

index.html?redirect=/ 

EHRincentiveprograms. We do not 


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Federal Register / Vol. 85, No. 251 / Thursday, December 31, 2020 / Rules and Regulations 86835 

anticipate any impacts to the Medicare 

program, beneficiaries, or other 

stakeholders. 

There are three primary aspects of the 

provision that could affect its cost and 

the amount saved. The most immediate 

cost comes from the one-time 

implementation cost for the few EHR 

vendors that need to need to change 

their programming to use two standards; 

the NCPDP SCRIPT standard version 

2017071 for Part D ePA and the HIPAA 

standard for other contexts. Based on 

our conversations with EHR vendors, 

we believe that it will take the EHR 

vendors approximately 200 developing 

hours and 800 programming hours to 

enable the EHRs to utilize two 

standards. 

We also estimated what it will cost 

plan sponsors to implement this 

standard. After consulting with industry 

stakeholders, we have concluded that 

implementing or building to the SCRIPT 

standard can vary, but $6,500 is the 

approximate amount per plan and 

$100,000 is the approximate amount for 

the industry. We estimate that only 2 

percent of the 774 plans will have to 

make changes to their ePA process to 

implement the NCPDP SCRIPT standard 

version 2017071 ePA transactions, 

which gives us an approximate one time 

implementation cost of $100,000 (15 * 

$6,500). 

E. Alternatives Considered 

We considered requiring the adoption 

of the standard by January 1, 2021 to 

ensure that this important mandate was 

implemented quickly. However, we 

want to help ensure that plans have as 

much time to comply with the statutory 

mandate as possible. 

F. Accounting Statement and Table 

The following table summarizes 

overall costs for this rule. The cost 

comes from implementing the new 

standard. 

2022 2023 2024 2025 2026 

Total Costs ........................................................................... $100,000 ........................ ........................ ........................ ........................

Net Savings .......................................................................... ........................ ........................ ........................ ........................ ........................

List of Subjects in 42 CFR Part 423 

Administrative practice and 

procedure, Emergency medical services, 

Health facilities, Health maintenance 

organizations (HMO), Health 

professionals, Incorporation by 

reference, Medicare, Penalties, Privacy, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services amends 42 CFR part 

423 as set forth below: 

PART 423—VOLUNTARY MEDICARE 

PRESCRIPTION DRUG BENEFIT 

■ 1. The authority citation for part 423 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 1306, 1395w– 

101 through 1395w–152, and 1395hh. 

■ 2. Section 423.160 is amended by 

adding paragraph (b)(8) to read as 

follows: 

§ 423.160 Standards for electronic 

prescribing. 

* * * * * 

(b) * * * 

(8) Electronic prior authorization. (i) 

Beginning January 1, 2021, Part D 

sponsors and prescribers may use the 

National Council for Prescription Drug 

Programs SCRIPT standard, 

Implementation Guide Version 2017071 

approved July 28, 2017 (incorporated by 

reference in paragraph (c)(1)(vii) of this 

section), to provide for the 

communication of a prescription or 

prescription-related information 

between prescribers and Part D sponsors 

for the following transactions: 

(A) PAInitiationRequest and 

PAInitiationResponse. 

(B) PARequest and PAResponse. 

(C) PAAppealRequest and 

PAAppealResponse. 

(D) PACancelRequest and 

PACancelResponse. 

(ii) Beginning January 1, 2022, Part D 

sponsors and prescribers must use the 

standard specified in paragraph (b)(8)(i) 

of this section for the transactions listed 

in paragraphs (b)(8)(i)(A) through (D) of 

this section. 

* * * * * 

Dated: February 6, 2020. 

Seema Verma, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: March 13, 2020. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

Editorial note: This document was 

received for publication by the Office of the 

Federal Register on December 23, 2020. 

[FR Doc. 2020–28877 Filed 12–29–20; 4:15 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Federal Emergency Management 

Agency 

44 CFR Part 328 

[Docket ID FEMA–2020–0018] 

RIN 1660–AB01 

Prioritization and Allocation of Certain 

Scarce and Critical Health and Medical 

Resources for Domestic Use 

AGENCY: Federal Emergency 

Management Agency, Department of 

Homeland Security (DHS). 

ACTION: Temporary final rule; extension 

of effective date with modifications. 

SUMMARY: In April, the Federal 

Emergency Management Agency 

(FEMA) issued a temporary final rule to 

allocate certain health and medical 

resources for domestic use, so that these 

resources may not be exported from the 

United States without explicit approval 

by FEMA. The rule covered five types 

of personal protective equipment (PPE), 

outlined below. While this rule remains 

in effect, and subject to certain 

exemptions stated below, no shipments 

of such designated materials may leave 

the United States without explicit 

approval by FEMA. In August, FEMA 

modified the types of PPE covered and 

extended the duration of the temporary 

rule. Through this action, FEMA again 

extends and modifies the temporary 

final rule designating the list of scarce 

and critical materials that cannot be 

exported from the United States without 

explicit approval by FEMA. 

DATES: Effective date: This rule is 

effective from December 31, 2020 until 

June 30, 2021. 

ADDRESSES: You may review the docket 

by searching for Docket ID FEMA–2020– 

0018, via the Federal eRulemaking 

Portal: http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Daniel McMasters, Program Analyst, 

Office of Policy and Program Analysis, 

202–709–0661, FEMA-DPA@

fema.dhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On April 10, 2020, FEMA published 

a temporary final rule in the Federal 

Register allocating certain health and 


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